TRANSITIONAL ADMINISTRATIVE AND MANAGEMENT SERVICES AGREEMENT
TRANSITIONAL ADMINISTRATIVE
AND
MANAGEMENT SERVICES
AGREEMENT
THIS TRANSITIONAL ADMINISTRATIVE AND
MANAGEMENT SERVICES AGREEMENT (this “Agreement”)
is dated as of February 19, 2009, between GAMCO Investors, Inc., a New York
corporation (“GAMCO”),
and Teton Advisors, Inc., a Delaware corporation (“TETON”)
(sometimes referred to herein individually as “Party”, or together, as
“Parties”).
WHEREAS, following the
consummation of the distribution (the “Distribution”)
contemplated by the Separation and Distribution Agreement dated as of February
19, 2009 among GAMCO and TETON (the “Distribution
Agreement”), TETON desires that GAMCO provide certain administrative and
management services to TETON; and
WHEREAS, subject to the terms
and conditions of this Agreement, GAMCO is willing to provide such services to
TETON for a transitional period.
NOW, THEREFORE, GAMCO and
TETON agree as follows:
SECTION
1. Services.
GAMCO agrees to provide, or to coordinate the provision by others to TETON of,
the following transitional services (“Services”):
(a) Financial
accounting and consolidation;
(b) Treasury,
including, without limitation, insurance and risk management services and
administration of benefits;
(c) Human
resources, including but not limited to the sourcing of permanent and temporary
employees as needed, recordkeeping, performance reviews and
terminations;
(d) Legal and
compliance advice, including the services of a Chief Compliance
Officer;
(e) Technical/technology
consulting;
(f) Operations
and general administrative, including:
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1)
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Office
space;
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2)
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Office
equipment and furniture;
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3)
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Payroll;
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4)
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Procurement;
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5)
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Administrative
personnel; and
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(g) Management
services, as further described in Section 2.
Without
limiting the foregoing, the parties may modify the Services from time to time
and may identify additional services to incorporate into this Agreement.
In connection with the office space and the office equipment and furniture, in
accordance with Section 4.9 of the Distribution Agreement, TETON may elect to be
added with GAMCO to the lease for the premises at 000 Xxxxxxxx Xxxxx Xxxxxx,
Xxx, Xxx Xxxx and, to the extent feasible and appropriate, substituted on any
leased office equipment, paying its proportionate share of any expenses related
to such premises or equipment.
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SECTION
2.
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Provision
of Management Services.
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(a) Management
Services. As part of the Services, commencing at the time of the
Distribution, GAMCO shall provide general corporate management services (the
“Management
Services”) to TETON, which may include, but not be limited to,
operations, supervision of operating subsidiaries, strategic planning,
acquisition analysis, investment banking and financial advisory services,
supervision of the preparation of corporate tax returns, supervision of
financial reporting and other applicable regulatory matters. In providing
the Services, including the Management Services, GAMCO may, subject to the prior
written consent of TETON, employ consultants and other advisors in addition to
utilizing its own employees. Such Management Services are intended to be
generally comparable in type and quantity to that which GAMCO provided to TETON,
it affiliates and its businesses prior to the Distribution.
(b)Mutual Fund Administrative Services. As further part of the
Management Services, GAMCO shall provide mutual fund administration services to
Teton in connection with Teton’s management and administration of the GAMCO
Westwood Balanced Fund, GAMCO Westwood Equity Fund, GAMCO Westwood SmallCap
Equity Fund, GAMCO Westwood Income Fund, GAMCO Westwood Intermediate Bond Fund,
and the GAMCO Westwood MightyMites Fund (collectively the
“Funds”). GAMCO reserves the right to delegate all or a portion of
the mutual administration services to be performed by it to another
entity.
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(c) Limitation of
Liability; Indemnification of TETON. GAMCO shall have no liability
to TETON with respect to GAMCO’s furnishing any of the Management Services
hereunder except for liabilities arising out of willful misconduct or gross
negligence occurring after the Distribution. GAMCO will indemnify, defend
and hold harmless TETON, its affiliates and its businesses in respect of all
liabilities related to, arising from, asserted against or associated with such
willful misconduct or gross negligence. Such indemnification obligation
shall be a liability of GAMCO. In no event shall GAMCO have any liability
for any incidental, indirect, special or consequential damages, whether or not
caused by or resulting from negligence or breach of obligations hereunder and
whether or not informed or aware of the possibility of the existence of such
damages.
(d) Limitation of
Liability; Indemnification of GAMCO. TETON shall indemnify and hold
harmless GAMCO, its affiliates and its businesses in respect of all liabilities
related to, arising from, asserted against or associated with GAMCO’s furnishing
or failing to furnish the Management Services provided for in this Agreement,
other than liabilities arising out of the willful misconduct or gross negligence
of GAMCO following the Distribution. Such indemnification obligation shall
be a liability of TETON. In no event shall TETON have any liability for
any incidental, indirect, special or consequential damages, whether or not
caused by or resulting from negligence or breach of obligations hereunder and
whether or not informed or aware of the possibility of the existence of such
damages.
(e) Subrogation of
Rights Vis-A-Vis Third Party Contractors. In the event any
liability arises from the performance of Management Services hereunder by a
third party contractor, upon indemnification of GAMCO and/or its
representatives, including but not limited to GAMCO’s officers, directors,
employees, accountants, counsel, investment bankers, financial advisors and
consultants, TETON shall be subrogated to such rights, if any, as GAMCO may have
against such third party contractor with respect to the Management Services
provided by such third party contractor.
(f) Laws and
Governmental Regulations. TETON shall be solely
responsible for compliance with all laws, rules and regulations including the
Investment Advisers Act of 1940.
(g) Relationship of
Parties.
Nothing in this Agreement shall be deemed or construed by the parties or any
third party as creating the relationship of principal and agent, partnership or
joint venture between the parties, it being understood and agreed that no
provision contained herein, and no actions of the parties, shall be deemed to
create any relationship between the parties other than the relationship of
independent contractor nor be deemed to vest any rights, interest or claims in
any third parties.
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SECTION
3.
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Term;
Standard of Care. GAMCO shall provide the Services, including
the Management Services, to TETON as TETON may request for a period of up
to twenty-four (24) months from the date of the Distribution; provided
that any or all of the Services may be terminated by either Party at any
time and for any reason on not less than thirty (30) days’ prior written
notice to the other Party. In providing the Services hereunder,
GAMCO will exercise the same degree of care as it has exercised in
providing such Services to its affiliates prior to the date hereof,
including the same level of quality, responsiveness and timeliness as has
been exercised by GAMCO with respect to the
Services.
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SECTION
4.
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Compensation. GAMCO
will charge TETON a monthly fee of $15,000 for the provision of Services
pursuant to this Agreement; provided that in addition to the monthly fee,
GAMCO shall charge TETON all costs of GAMCO with respect to (i) the hiring and compensation of
individuals hired solely to provide TETON Services pursuant to this
Agreement or (ii) the purchase or
maintenance of equipment or furniture to be used solely by TETON
reasonably related to the provision of Services pursuant to this
Agreement. The cost of such Services in accordance with this Section 4
shall be invoiced to TETON on a quarterly basis and shall constitute full
compensation to GAMCO for providing the Services. TETON will pay or
otherwise satisfy quarterly, no later than 45 days after receipt of the
invoice, the aggregate costs incurred during the previous quarter;
provided, however, that if TETON disagrees with any such charge, TETON
shall send written notice to GAMCO specifying the reason for such
disagreement, and GAMCO and TETON will negotiate in good faith to promptly
resolve any such disagreement. In
addition Teton will pay GAMCO twenty basis points on
the net assets managed in the Funds as compensation to GAMCO for providing
mutual fund administration services to the
Funds.
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SECTION
5.
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Consents of
Third Parties. GAMCO shall use commercially reasonable
efforts, at TETON’s direction and expense, to obtain any consents or
software licenses from third parties necessary for the continuation of the
requested Services; provided, that GAMCO
shall have no obligation to provide Services for which such consent is
required and shall not have been
obtained.
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SECTION
6.
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Limitations;
Indemnity for Services Other Than Management Services.
Except as otherwise provided by Section 2 hereof with
respect to Management Services, GAMCO will indemnify, defend and hold
harmless TETON, its affiliates and its businesses in respect of all
liabilities related to, arising from, asserted against or associated with
the provision of the Services by GAMCO. Such indemnification
obligation shall be a liability of GAMCO. In no event shall GAMCO
have any liability for any incidental, indirect, special or consequential
damages, whether or not caused by or resulting from negligence or breach
of obligations hereunder and whether or not informed or aware of the
possibility of the existence of such damages. Teton will
indemnify, defend and hold harmless GAMCO, its affiliates and its
businesses in respect of all liabilities related to, arising from,
asserted against or associated with the provision of the Services by
GAMCO. Such indemnification obligation shall be a liability of
TETON. In no event shall TETON have any liability for any
incidental, indirect, special or consequential damages, whether or not
caused by or resulting from negligence or breach of obligations hereunder
and whether or not informed or aware of the possibility of the existence
of such damages.
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SECTION
7.
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Disclaimer
of Warranties. SUBJECT TO SECTION 3 HEREOF, GAMCO
DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, BUT NOT LIMITED TO, THE
IMPLIED WARRANTIES OR MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, WITH RESPECT TO THE SERVICES PROVIDED TO TETON. GAMCO
MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE QUALITY, SUITABILITY OR
ADEQUACY OF THE SERVICES FOR ANY PURPOSE OR
USE.
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SECTION
8.
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Miscellaneous
Provisions.
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(a) Complete
Agreement; Construction. This Agreement shall constitute the entire
agreement between the parties with respect to the subject matter hereof and
shall supersede all previous negotiations, commitments and writings with respect
to such subject matter.
(b) Counterparts.
For the convenience of the parties hereto, this Agreement may be executed in
separate counterparts, each such counterpart being deemed to be an original
instrument, and which counterparts shall together constitute the same
agreement.
(c) Notices.
Any notice, request, instruction or other document to be given hereunder by any
Party to the other shall be in writing and shall be deemed to have been duly
given (i) on the date of delivery if delivered by facsimile (upon confirmation
of receipt) or personally, (ii) on the first business day following the date of
dispatch if delivered by Federal Express or other next-day courier service, or
(iii) on the third business day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid.
All notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the Party to receive such
notice:
If to GAMCO,
at:
GAMCO Investors, Inc.
Xxx Xxxxxxxxx Xxxxxx
Xxx, XX 00000-0000
Attn: Legal Department
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
If to TETON,
at:
Teton Advisors, Inc.
000 Xxxxxxxx Xxxxx Xxxxxx
Xxx, XX 00000
Attn: Chief Executive Officer
Telecopy: (914) 921- 5105
Telephone: (914) 000- 0000
(d) Waivers.
The failure of any Party hereto to require strict performance by any other Party
of any provision in this Agreement will not waive or diminish that Party’s right
to demand strict performance thereafter of that or any other provision
hereof.
(e) Modification or
Amendments. The parties hereto may modify or amend this Agreement
by written agreement executed and delivered by authorized officers of the
respective parties.
(f) Assignment;
Successors and Assigns. No Party to this Agreement shall convey,
assign or otherwise transfer any of its rights or obligations under this
Agreement without the express written consent of each of the other parties
hereto in its sole and absolute discretion. Any such conveyance,
assignment or transfer without the express written consent of each of the other
parties shall be void ab
initio. No assignment of this Agreement or any rights hereunder
shall relieve each of the assigning parties of its obligations hereunder.
Any successor by merger to a Party to this Agreement shall be substituted for
such Party as a party to this Agreement, and all obligations, duties and
liabilities of the substituted party under this Agreement shall continue in full
force and effect as obligations, duties and liabilities of the substituting
party, enforceable against the substituting party as a principal, as though no
substitution had been made.
(g) Third Party
Beneficiaries. This Agreement is for the purpose of defining the
respective rights and obligations of the parties hereto and is not for the
benefit of any employee, creditor or other third party, except as may be
expressly set forth herein.
(h) Indemnification
for Expenses; Attorney Fees. A Party in breach of this Agreement
shall, on demand, indemnify and hold harmless the other parties hereto for and
against all out-of-pocket expenses, including, without limitation, reasonable
legal fees, incurred by such other Party by reason of the enforcement and
protection of its rights under this Agreement, should such Party prevail in such
action. The payment of such expenses is in addition to any other relief to
which such other Party may be entitled hereunder or otherwise.
(i) Captions.
All Article, Section and paragraph captions herein are for convenience of
reference only, do not constitute part of this Agreement and shall not be deemed
to limit or otherwise affect any of the provisions hereof.
(j) Specific
Performance. In the event of any actual or threatened default in,
or breach of, any of the terms, conditions and provisions of this Agreement, the
Party or Parties who are or are to be thereby aggrieved shall have the right of
specific performance and injunctive relief giving effect to its or their rights
under this Agreement, in addition to any and all other rights and remedies at
law or in equity, and all such rights and remedies shall be cumulative.
The parties agree that the remedies at law for any breach or threatened breach,
including monetary damages, are inadequate compensation for any loss and that
any defense in any action for specific performance that a remedy at law would be
adequate is hereby waived.
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(k) Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without reference to its
conflicts of law principles.
(l) Severability.
If any provision of this Agreement or the application thereof to any
Person or circumstance is determined to be invalid, void or unenforceable, the
remaining provisions hereof, or the application of such provision to Persons or
circumstances other than those remaining provisions hereof, or the application
of such provision to Persons or circumstances other than those as to which it
has been held invalid or unenforceable, shall remain in full force and effect
and shall in no way be affected, impaired or invalidated thereby, so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to any Party. Upon any such determination,
the parties shall negotiate in good faith in an effort to agree upon a suitable
and equitable substitute provision to effect the original intent of the
parties.
(m) Cooperation;
Further Assurances. The parties will use good faith efforts to
cooperate with each other in all matters relating to the provision of the
Services. Each Party will take such actions as may be necessary or reasonably
appropriate to implement or give effect to this Agreement.
(n) Records;
Confidentiality. GAMCO shall keep full and detailed records dealing
with all aspects of the Services performed by it and shall provide access to
TETON to such records at all reasonable times. Each Party hereto shall
keep, and shall cause its officer, directors, employees, accountants, counsel,
investment bankers, financial advisors, consultants and other representatives
("Representatives")
to keep, the other Party's’ information, whether furnished orally or in writing
or by any other means or gathered by inspection and regardless of whether the
same is specifically marked or designated as “confidential” or “proprietary,”
together with any and all notes, memoranda, analyses, compilations, studies or
other documents (whether in hard copy or electronic media) prepared by the
receiving Party or any of its Representatives which contain or otherwise reflect
such information, together with any and all copies, extracts or other
reproductions of any of the same (the "Information"),
strictly confidential and will disclose such Information only to such of its
Representatives who need to know such Information, and who agree to be bound by
this Section 7(n) and not to disclose such Information to any other
person. Without the prior written consent of the other parties, no Party
nor any of its respective Representatives shall disclose the other Party’s
Information to any person or entity except as may be required by law or judicial
process and in accordance with this Section 7(n). The term “Information”
does not include information that: (i) is or becomes generally available to the
public through no wrongful act of the receiving Party or its Representatives;
(ii) is or becomes available to the receiving Party on a non-confidential basis
from a source other than the providing Party or its Representatives, provided
that such source is not known by the receiving Party to be subject to a
confidentiality agreement with the providing Party; or (iii) has been
independently acquired or developed by the receiving Party without violation of
any of the obligations of the receiving Party or its Representatives under this
Agreement.
(o) Arbitration.
Any dispute with respect to this Agreement shall be arbitrated in Westchester
County, NY, in accordance with the rules of the American Arbitration Association
and judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. There will be a single neutral
arbitrator selected who resides in Westchester County, NY. The American
Arbitration Association will provide a list of five (5) neutral
arbitrators. The claimant and respondent will take turns, with the
respondent going first, striking one name at a time from the list of five
neutral arbitrators. Each Party will have no more than twenty-four (24)
hours to take its turn striking a name of a neutral arbitrator. The final
remaining arbitrator will serve as the neutral arbitrator. Either Party
may apply to the arbitrator seeking injunctive relief until the arbitrator's
award is rendered or the controversy is otherwise resolved. Either Party
also may, without waiving any remedy under this agreement, seek from any New
York court having jurisdiction, any interim or provisional relief that is
necessary to protect the rights and/or property of that Party, pending the
determination of the arbitrator.
[Signature Page
Follows]
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IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed as of the day and
year first above written.
GAMCO
INVESTORS, INC.
By_/s/ Xxxxxxx X.
Jamieson_____________
Name:
Xxxxxxx X. Xxxxxxxx
Title:
President and Chief Operating Officer
By_/s/ Xxxxxxxx X.
Galluccio___________
Name:
Xxxxxxxx X. Xxxxxxxxx
Title:
Chief Executive Officer and President
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