Closing Agreement On Final Determination Covering Specific Matters

Closing Agreement On Final Determination Covering Specific Matters

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Exhibit 10.1


Form 906		Department of Treasury — Internal Revenue Service

(Rev. January 1994)

Closing Agreement On Final Determination
Covering Specific Matters

Under IRC section 7121, Enron Corp. (EIN 00-0000000) as Debtor, and each of the other Debtors that is a signatory hereto (each of which has a mailing address at 0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000) and the Commissioner of Internal Revenue make the following closing agreement on final determination covering specific matters (“Closing Agreement”):

WHEREAS, Debtors have filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court;

WHEREAS, the Bankruptcy Plan was confirmed by order of the Bankruptcy Court entered on July 15, 2004;

WHEREAS, Debtors have filed a request for ruling regarding the effect of the confirmation of the Bankruptcy Plan on the proper time for realization of COD Income by Debtors with respect to Claims;

WHEREAS, an issue has arisen concerning the proper time for realization of COD Income by Debtors with respect to Debt Instrument Claims, and consequent attribute reduction under IRC section 108; and

WHEREAS, Xxxxxxx and the Commissioner of Internal Revenue desire to resolve these issues with finality for all tax years beginning with the Debtors’ tax year ended December 31, 2001, and up to and including Debtors’ last taxable year including the Discharge Date.

NOW IT IS HEREBY DETERMINED AND AGREED that:

1. As used in this Closing Agreement, the following terms shall have the respective meanings specified below:

(a). Applicable Date: the Applicable Date as defined in paragraph 2(a) of this Closing Agreement.

(b). Bankruptcy Court: the United States Bankruptcy Court for the Southern District of New York.

(c). Bankruptcy Plan: Debtors’ Supplemental Modified Fifth Amended Joint Plan of Affiliated Debtors pursuant to Chapter 11 of the United States Bankruptcy Code, dated July 2, 2004.

(d). Claim: any Debt Instrument Claim or Other Claim.

(e). COD Income: amounts realized for federal income tax purposes as a result of discharge of indebtedness.

(f). COD Reference Value: adjusted issue price (as defined in Treasury Regulation §1.1275-1(b)) on December 2, 2001, increased by (i) any amount of accrued but unpaid qualified stated interest (as defined in Treasury Regulation §1.1273-1(c)(1)) deducted by the issuer of the debt instrument for federal income tax purposes for any period prior to the Applicable Date and (ii) any amount of original issue discount accrued after December 2, 2001, and deducted by the issuer of the debt instrument for federal income tax purposes for any period prior to the Applicable Date.

(g). Convenience Claim: except as otherwise provided in the Bankruptcy Plan, a Debt Instrument Claim or an Other Claim that is either equal to or less than Fifty Thousand Dollars ($50,000.00), or is greater than Fifty Thousand Dollars ($50,000.00) but with respect to which the holder thereof voluntarily reduces the Claim to Fifty Thousand Dollars.

(h). Debt Instrument Claim: any allowed claim under the Bankruptcy Plan against any Debtor which constitutes a right to payment on a debt instrument (as defined in Treasury Regulation §1.1275-1(d)), except to the extent that payment of the claim would give rise to a deduction (and that has not previously been deducted) for federal income tax purposes.

(i). Debtors: Debtors listed in section 1.77 of the Bankruptcy Plan in respect of whom the Bankruptcy Plan was confirmed.

(j). Discharge Date: the date that all creditors’ Claims against the Debtors are discharged and released in full pursuant to the Bankruptcy Plan.

(k). Effective Date: the Effective Date as defined in section 1.96 of the Bankruptcy Plan, but in no event a date later than December 31, 2004.

(l). IRC: the Internal Revenue Code of 1986, as amended.

(m). Liquidation Date: the date that the holder of a Claim has received all distributions to which the holder of the Claim is entitled under the Bankruptcy Plan.

(n). Other Claim: any allowed claim under the Bankruptcy Plan against any Debtor, other than: (i) a Debt Instrument Claim, (ii) a claim with respect to an equity interest in any Debtor, or (iii) a claim to the extent that payment of the claim would give rise to a deduction (and that has not previously been deducted) for federal income tax purposes.

2. (a). With respect to each Debt Instrument Claim other than a Convenience Claim, Debtors shall realize COD Income on the earliest of the following three dates (the “Applicable Date”):

	(i)		the *Liquidation Date* in respect of such *Debt Instrument Claim*;

	(ii)		the *Discharge Date*; or

	(iii)		December 31, 2006

in an amount equal to the excess, if any, of (x) the COD Reference Value of such Debt Instrument Claim on the Applicable Date over (y) the sum of the amounts paid or distributed under the Bankruptcy Plan with respect to the Debt Instrument Claim and the fair market value of the Debt Instrument Claims, if any, on the Applicable Date after taking such amounts paid or distributed into account;

(b). With respect to each Other Claim that is not a Convenience Claim, Debtors shall realize COD Income as determined under applicable federal income tax principles on the earlier of the Liquidation Date or the Discharge Date;

(c). With respect to each Convenience Claim that is not also a Debt Instrument Claim, Debtors shall realize COD Income on the Effective Date in an amount equal to the difference between the allowed amount of such Claim, before any voluntary reduction by the holder associated with treatment of the Claim as a Convenience Claim, and the amount of the distributions to be made with respect to such Claim pursuant to the Bankruptcy Plan;

(d). With respect to each Convenience Claim that is also a Debt Instrument Claim, Debtors shall realize COD Income on the Effective Date in an amount computed in accordance with paragraph 2(a) of this Closing Agreement, except that:

	(i)		the *Applicable Date* shall be the *Effective Date*, and

	(ii)		no adjustment shall be made to the adjusted issue price of such claim on December 2, 2001, due to any voluntary reduction by the holder associated with treatment of the *Claim* as a *Convenience Claim*; and

(e). Debtors shall realize COD Income at the times provided in paragraphs 2(a), 2(b), 2(c) and 2(d) of this Closing Agreement. Debtors shall not realize COD Income except as otherwise provided in paragraphs 2(a), 2(b), 2(c) and 2(d) of this Closing Agreement.

3. (a). Tax attributes of Debtors shall be reduced in accordance with the provisions of IRC section 108(b) to take account of the amount of COD Income realized by the respective Debtors in accordance with the terms of this Closing Agreement.

(b). Debtors represent that all Debtors currently have taxable years ending December 31st. Debtors will retain such taxable years during the period covered by this Closing Agreement, and Debtors agree that during the period covered by this Closing Agreement, Debtors shall not transfer assets in a transaction to which either IRC section 351 or 381(a) applies unless the transferee corporation has a taxable year ending December 31, and such transferee (and any transferee of such transferee in a tax-free transfer) shall retain a December 31 taxable year through the taxable year ending December 31, 2006. In the event that a Debtor transfers its assets to a transferee corporation that has a taxable year ending on a date other than December 31, or the transferee (or transferee of a transferee in a tax-free transfer) prior to December 31, 2006, changes its taxable year to a taxable year ending on a date other than December 31, then the transferor shall realize COD Income at the time of the transfer as measured by paragraphs 2(a), 2(b), 2(c), and 2(d) of this Closing Agreement.

(c). This Closing Agreement does not address or constitute verification of the existence or amount of any of Debtors’ tax attributes. Until Xxxxxxx’ tax attributes have been verified by the Commissioner of internal Revenue or become the subject of any other closing agreements entered into by the Debtors and the Commissioner of Internal Revenue, they are subject to verification and adjustment in accordance with applicable law.

4. This Closing Agreement is final and conclusive except:

the matter it relates to may be reopened in the event of fraud, malfeasance, or misrepresentation of material fact;

it is subject to the IRC sections that expressly provide that effect be given to their provisions (including any stated exception for IRC section 7122) notwithstanding any other law or rule of law; and

if it relates to a tax period ending after the date of this agreement, it is subject to any law, enacted after the agreement date, that applies to that tax period.

By signing, the parties certify that they have read and agreed to the terms of this document.

On behalf of Enron Corp. (E1N 00-0000000), EFS Construction Management Services, Inc. (EIN 00-0000000), Artemis Associates, LLC (EIN 00-0000000), Atlantic Commercial Finance, Inc. (EIN 00-0000000), BAM Lease Company (EIN 00-0000000) Calcasieu Development Company, L.L.C. (EIN 00-0000000), Xxxxxxx City Power I, L.L.C.

(EIN 00-0000000), (EIN 00-0000000), Calypso Pipeline, LLC (EIN 00-0000000), Clinton Energy Management Services, Inc. (EIN 00-0000000), DataSystems Group, Inc. (EIN 00-0000000); EBF LLC (EIN 00-0000000), ECI-Nevada Corp. (EIN 00-0000000), ECT Merchant Investments Corp. (EIN 00-0000000), ECT Securities GP Corp. (EIN 76577979), ECT Securities LP Corp. (EIN 00-0000000), ECT Strategic Value Corp. (EIN 00-0000000), EES Service Holdings, Inc. (EIN 00-0000000), EESO Merchant Investments, Inc. (EIN 00-0000000), EFS Holdings, Inc. (EIN 00-0000000), EFS I, Inc. (EIN 00-0000000), EFS II, Inc. (EIN 00-0000000), EFS III, Inc. (EIN 00-0000000), EFS IV, Inc. (EIN 00-0000000), EFS IX, Inc. (EIN 00-0000000), EFS V, Inc. (EIN 51-363392), EFS VII, Inc. (EIN 00-0000000), EFS VIII, Inc. (EIN 00-0000000), EFS X, Inc. (EIN 00-0000000), EFS XI, Inc. (EIN 00-0000000), EFS XII, Inc. (EIN 00-0000000), EFS XV, Inc. (EIN 00-0000000), EFS XVII, Inc. (ETN 00-0000000), EGP Fuels Company, (EIN 00-0000000), EGS New Ventures Corp. (EIN 00-0000000), ENA Upstream Company LLC (EIN 00-0000000), EnRock Management, LLC (EIN 00-0000000), Enron Acquisition III Corp. (EIN 00-0000000), Enron ACS, Inc. (EIN 00-0000000), Enron Alligator Alley Pipeline Company (EIN 00-0000000), Enron Asia Pacific/Africa/China LLC (EIN 00-0000000), Enron Asset Management Resources, Inc. (EIN 00-0000000), Enron Broadband Services, Inc. (EIN 00-0000000), Enron Broadband Services, L.P. (EIN 00-0000000), Enron Capital & Trade Resources International Corp. (EIN 00-0000000), Enron Caribbean Basin LLC (EIN 00-0000000), Enron Communications Group, Inc. (EIN 00-0000000), Enron Communications Leasing Corp. (EIN 00-0000000), Enron Credit Inc. (EIN 00-0000000), Enron Development Corp. (EIN 00-0000000), Enron Energy Information Solutions, Inc. (EIN 00-0000000), Enron Energy Marketing Corp. (EIN 00-0000000), Enron Energy Services North America, Inc. (EIN 00-0000000), Enron Energy Services Operations, Inc. (EIN 00-0000000), Enron Energy Services, Inc. EIN 00-0000000), Enron Energy Services, LLC (EIN 00-0000000), Enron Engineering & Construction Company (EIN 00-0000000), Enron Engineering & Operational Services Company (EIN 00-0000000), Enron Equipment Procurement Company (EIN 00-0000000), Enron Expat Services, Inc. (EIN 00-0000000), Enron Federal Solutions, Inc. (EIN 00-0000000), Enron Freight Markets Corp. (EIN 00-0000000), Enron Fuels International, Inc. (EIN 00-0000000), Enron Gas Liquids, Inc. (EIN 00-0000000), Enron Gathering Company (EIN 00-0000000), Enron Global LNG LLC (EIN 00-0000000), Enron Global Markets LLC (EIN 00-0000000), Enron India LLC (EIN 00-0000000), Enron Industrial Markets LLC (EIN 00-0000000), Enron International Asia Corp. (EIN 00-0000000), Enron International Asset Management Corp., (EIN 00-0000000), Enron International Fuel Management Company (EIN 00-0000000), Enron International Holdings Corp. (EIN 00-0000000), Enron International Inc. (EIN 00-0000000), Enron International Korea Holdings Corp. (EIN 00-0000000), Enron Liquid Fuels, Inc. (EIN 00-0000000), Enron Liquid Services Corp. (EIN 00-0000000), Enron LNG Marketing LLC (EIN 00-0000000), Enron Machine and Mechanical Services, Inc. (EIN 00-0000000), Enron Management, Inc. (EIN 00-0000000), Enron Metals & Commodity Corp. (EIN 00-0000000), Enron Methanol Company (EIN 00-0000000), Enron Middle East LLC (EIN 00-0000000), Enron Natural Gas Marketing Corp. (EIN 00-0000000), Enron Net Works LLC (EIN 00-0000000), Enron North America Corp. (EIN 00-0000000), Enron Operations Services Corp.

(EIN 00-0000000), Enron Permian Gathering Inc. (EIN 00-0000000), Enron Pipeline Construction Services Company (EIN 00-0000000), Enron Pipeline Services Company (EIN 00-0000000), Enron Power & Industrial Construction Company (EIN 00-0000000), Enron Power Corp. (EIN 00-0000000), Baron Power Marketing, Inc. (EIN 00-0000000), Enron Processing Properties, Inc. (EIN 00-0000000), Enron Property & Services Corp. (EIN 00-0000000), Enron Reserve Acquisition Corp. (EIN 00-0000000), Enron South America LLC (EIN 00-0000000), Enron Telecommunications, Inc. (EIN 00-0000000), Enron Trailblazer Pipeline Company (EIN 00-0000000), Enron Transportation Services Company (EIN 00-0000000), Enron Ventures Corp. (EIN 00-0000000), Enron WarpSpeed Services, Inc. (EIN 00-0000000), EnronOnline, LLC (EIN 00-0000000), ET Power 3 LLC (EIN 00-0000000), Intratex Gas Company (EIN 00-0000000), KUCC Cleburne, LLC (EIN 00-0000000), LGMI, Inc. (EIN 00-0000000), EFS XIII, Inc. fka Xxxxxx Mechanical Corporation (EIN 00-0000000), LOA, Inc. (EIN 00-0000000), Louisiana Gas Marketing Company (EIN 00-0000000), Louisiana Resources Company (EIN 00-0000000), LRCI, Inc. (EIN 00-0000000), Modulus Technologies, Inc. (F-IN 760376050), EPC Estate Services, Inc. f/k/a National Energy Production Corporation (EIN 00-0000000), NEPCO Power Procurement Company (EIN 00-0000000), NEPCO Services International, Inc. (EIN 00-0000000), Omicron Enterprises, Inc. (EIN 00-0000000), Operational Energy Corp. (EIN 00-0000000), Oswego Cogen Company, LLC (EIN — none), Palm Beach Development Company, L.L.C. (EIN 00-0000000), Paulista Electrical Distribution, L.L.C. (EIN 00-0000000), PBOG Corp. (EIN 00-0000000), Portland General Holdings, Inc. (EIN 00-0000000), Portland Transition Company, Inc. (EIN 00-0000000), Risk Management & Trading Corp. (EIN 00-0000000), Xxxxx Street Land Company (EIN 00-0000000), St. Xxxxxxx Development Company, L.L.C. (EIN 00-0000000), Superior Construction Company (EIN 00-0000000), Tenant Services, Inc. (EIN 00-0000000), The New Energy Trading Company (EIN 00-0000000), The Protane Corporation (EIN 00-0000000), TLS Investors, L.L.C. (EIN 00-0000000), Transwestern Gathering Company (EIN 00-0000000), Garden State Paper Company, LLC (EIN 00-0000000),

Debtors that join Enron Corp. in the filing of a consolidated federal income tax return:


By	/s/ Xxxxxx X. Xxxxx Xx.	Date Signed	8/31/04


Title:	Executive Vice President and
	General Counsel

By:	/s/ X. Xxxx Xxxxx

	X. Xxxx Xxxxx

Title:	Managing Director and Asst.
	General Counsel*

On behalf of all Debtors other than Enron Corp.

On behalf of Cabazon Holdings LLC (EIN 00-0000000), Cabazon Power Partners LLC (EIN 00-0000000), Enron Renewable Energy Corp. (EIN 00-0000000), Enron Wind Constructors Corp. (EIN 00-0000000), Enron Wind Corp. (EIN 00-0000000), Enron Wind Development LLC (EIN 00-0000000), Enron Wind Energy Systems Corp. (EIN 00-0000000), Enron Wind Lake Xxxxxx LLC (EIN 00-0000000), Enron Wind Maintenance Corp. (EIN 00-0000000), Enron Wind Storm Lake I LLC (EIN 00-0000000), Enron Wind Storm Lake II LLC (EIN 00-0000000), Enron Wind Systems, Inc. (EIN 00-0000000), EREC Subsidiary I, LLC (EIN 00-0000000), EREC Subsidiary II,

LLC (EIN 00-0000000), EREC Subsidiary III, LLC (EIN 00-0000000), EXEC Subsidiary IV, LLC (EIN 00-0000000), EREC Subsidiary V, LLC (EIN 00-0000000), Green Power Partners I LLC (E1N 00-0000000), Victory Garden Power Partners LLC (EIN 00-0000000), Zond Minnesota Construction Company LLC (EIN 00-0000000), Zond Pacific, LLC (EIN 00-0000000), ZVVHC LLC (EIN 00-0000000), Enron Brazil Power Holdings I Ltd. (EIN — none), Enron Brazil Power Holdings XI Ltd. (EIN — none), Enron Brazil Power Investments XI Ltd. (EIN — none), Enron Caribe VI Holdings Ltd. (EIN — none), Enron Commercial Finance Ltd. (EIN - none), Enron Development Funding Ltd. (EIN — none), Enron Development Management Ltd., (EIN — none), Enron do Brazil Holdings Ltd. (EIN — none), Enron LNG Shipping Company (EIN — none), Nowa Sarzyna Holding BV (EIN — none), San Xxxx Gas Company, Inc. (EIN 00-0000000), E Power Holdings Corp. (EIN 00-0000000), ECI-Texas, L.P. (EIN 00-0000000), ECT Securities Limited Partnership (EIN 00-0000000), EFS VI, L.P. (EIN 00-0000000), ENA Asset Holdings L.P. (EIN 00-0000000), XxXxxx, L.P. (EIN 00-0000000), Enron Global Power & Pipelines L.L.C. (EIN 00-0000000), Enron Holding Company L.L.C. (EIN 00-0000000), Jovinole Associates (EIN 00-0000000), LINGTEC Constructors L.P. (EIN 00-0000000), Richmond Power Enterprise, L.P (EIN 000000000),

Debtors (not affiliated with Enron Corp.) that do not join Enron Corp. in the filing of a consolidated federal income tax return:

COMMISSIONER OF INTERNAL REVENUE


By	/s/ Xxx X. Xxxxx	Date Signed	9/1/04

Title	Associate Chief Counsel (FIP)

By	/s/ Xxxxxx Xxxxxx	Date Signed	9/1/04


Title	Acting Associate Chief
	Counsel (ITA)

/s/ X. Xxxx Xxxxx

Date Signed

Managing Director and Asst.

General Counsel