Tax Indemnity Agreement

EXHIBIT 10.10


EXECUTION COPY


TAX INDEMNIFICATION AGREEMENT


TAX INDEMNIFICATION AGREEMENT, dated as of October 28, 2004 (this "Tax Agreement"), among Calamos Family Partners, Inc., a Delaware corporation (f/k/a Calamos Holdings Inc., "CFP"), Calamos Asset Management, Inc., a Delaware corporation ("CAM"), and Calamos Holdings LLC, a Delaware limited liability company ("CHLLC").


W I T N E S S E T H:


WHEREAS, on or prior to the date hereof, CFP has undertaken the Contribution of all of its assets and liabilities, including all of its ownership interests in the CFP Subsidiaries, to CHLLC, and the Conversion of each of the CFP Subsidiaries into a limited liability company in accordance with Delaware law;


WHEREAS, CAM intends to consummate a Public Offering and use the net proceeds (after the payment of expenses) to acquire membership interests in CHLLC; and


WHEREAS, CFP, CHLLC and CAM desire to address certain matters between them in respect of the allocation of taxable income and liability for Income Taxes for taxable periods (and portions of taxable periods) prior to the Public Offering;


NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, CFP, CHLLC and CAM agree as follows:


ARTICLE I


DEFINITIONS


1.1. DEFINITIONS.


The following terms are used in this Tax Agreement:


"Closing Date" means the date on which the Public Offering closes.


"Code" means the Internal Revenue Code of 1986, as amended.


"Contribution" means the contribution by CFP of all of its assets, including all of CFP's ownership interests in the CFP Subsidiaries, to CHLLC, and the assumption by CHLLC of all of the liabilities of CFP, pursuant to the Contribution Agreement, dated as of October 28, 2004, between CFP and CHLLC.


"Conversion" means the merger of Calamos Partners, Inc., an Illinois corporation, with and into Calamos Partners LLC, a Delaware limited liability company; the merger of Calamos Asset Management, Inc., an Illinois corporation, with and into Calamos Advisors LLC, a


Delaware limited liability company; the merger of Calamos Financial Services, Inc., an Illinois corporation with and into Calamos Financial Services LLC, a Delaware limited liability company; and the merger of Calamos Property Management, Inc., an Illinois corporation, with and into Calamos Property Management LLC, a Delaware limited liability company.


"Final Determination" means, with respect to any Income Tax liability, (i) a "determination" within the meaning of Section 1313(a) of the Code and the Treasury regulations thereunder, (ii) a comparable determination of an Income Tax liability under applicable state, local or non-U.S. Tax law or (iii) any other event that the parties hereto agree is a final resolution of the Income Tax liability at issue.


"Income Tax" or "Income Taxes" means any and all Taxes based upon or measured by overall net or gross income or overall gross receipts, and franchise Taxes imposed in lieu thereof.


"Post-Closing Period" means any taxable period (or portion of a taxable period) beginning after the Closing Date.


"Public Offering" means the initial offering of shares of Class A Common Stock, $0.01 par value per share, of CAM pursuant to the Registration Statement on Form S-1 (Registration No. 333-117847) originally filed by CAM with the Securities and Exchange Commission on August 2, 2004, as amended.


"Pre-Closing Period" means any taxable period (or portion of a taxable period) ending on or before the Closing Date.


"CFP Subsidiaries" means, prior to the Conversion, Calamos Partners, Inc., an Illinois corporation, Calamos Asset Management, Inc., an Illinois corporation, Calamos Financial Services, Inc., an Illinois corporation and Calamos Property Management, Inc., an Illinois corporation, and after the Conversion, Calamos Partners LLC, a Delaware limited liability company, Calamos Advisors LLC, a Delaware limited liability company, Calamos Financial Services LLC, a Delaware limited liability company and Calamos Property Management LLC, a Delaware limited liability company.


"Tax" or "Taxes" means any and all taxes and similar charges (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Taxing Authority.


"Taxing Authority" means the Internal Revenue Service or any comparable state, local or foreign taxing authority.


"Tax Benefit" means any amount by which the Income Tax liability of CHLLC or CAM or any of their respective subsidiaries in any taxable period is actually reduced by a loss, deduction or credit arising as a result of a claim, assessment or adjustment with respect to which a payment was made by CFP pursuant to Section 3.1 of this Tax Agreement, after taking into account all other available losses, deductions and credits.


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ARTICLE II


REPRESENTATIONS AND COVENANTS


2.1. TAX STATUS OF CFP AND SUBSIDIARIES.


CFP represents and warrants that at all times since its formation, it has been an "S corporation" within the meaning of section 1361(a)(1) of the Code, and each of the Subsidiaries was an "S corporation" within the meaning of section 1361(a)(1) of the Code at all times from its formation until December 31, 2001 and from that date, until the Conversion, has been a "qualified subchapter S corporation" within the meaning of section 1361(b)(3) of the Code.


2.2. TAX STATUS OF CHLLC.


CFP, CHLLC and CAM acknowledge and agree that, for federal income tax purposes (and, where permitted, state and local income tax purposes), CHLLC will be treated as a "disregarded entity" prior to the Closing Date, and as a partnership on and after the Closing Date. None of CFP, CHLLC or CAM shall make any election or take any other action or position that is inconsistent with such treatment of CHLLC.


2.3 CONVERSION


Each of the mergers that is a part of the Conversion will be effective prior to the Closing Date.


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