Common use of Preparation of Records and Returns; Tax Matters Member Clause in Contracts

Preparation of Records and Returns; Tax Matters Member. Subject to the terms of this Section 2.1 and the other provisions of this Agreement, (i) all federal, state and local income tax returns, and financial and accounting books and records of the Company shall be prepared under the direction of the Managing Member in its sole and absolute discretion, (ii) all tax audits and litigation shall be conducted under the direction of the Managing Member in its sole and absolute discretion, and (iii) the determination of whether the Company shall make available elections for accounting or federal, state or local income tax purposes shall be made by the Managing Member in its sole and absolute discretion. The Managing Member is hereby designated as the “tax matters partner” for the Company (as such term is defined in Section 6231(a)(7) of the Code). The tax matters partner shall promptly notify Members who do not qualify as “notice partners” within the meaning of Code Section 6231(a)(8) at the beginning and completion of an administrative proceeding at the Company level promptly upon such notice being received by the tax matters partner. Moreover, the tax matters partner shall keep Non-Managing Member informed as to the status of any audit of the Company’s tax affairs, including the status of any resulting administrative and judicial proceedings relating thereto, and Non-Managing Member, if is so requests, may attend any such proceedings and negotiations related thereto and receive copies of any and all notices and other communications received by the Company from the taxing authority in connection with any such audit or other proceeding; provided further, that the tax matters partner shall obtain the prior written consent of Non-Managing Member before settling, compromising or otherwise altering the defense of any tax matter or proceeding before any taxing authority if Non-Managing Member or any of its direct or indirect beneficial owners would be materially adversely affected thereby.