tetonex10_3.htm


    SEPARATION AND DISTRIBUTION
AGREEMENT

     

    This
Separation and Distribution Agreement (the “Agreement”) is dated as of ________,
among GAMCO Investors, Inc. (“GAMCO”) and Teton Advisors, Inc.
(“TETON”).  As used herein, GAMCO on the one hand, and TETON, on the
other hand, are sometimes referred to individually as a “Party”, or together, as
“Parties”.

    


    WHEREAS,
the Board of Directors of GAMCO has determined that it is appropriate and
advisable to separate and transfer certain assets of GAMCO and its subsidiaries
so that such assets will be owned by TETON;

    WHEREAS,
following the separation and division of such assets and the ownership of such
assets by TETON, the Board of Directors of GAMCO has determined that it is
appropriate and advisable for the common stock of TETON that GAMCO owns to be
distributed to holders of GAMCO common stock;

    WHEREAS,
GAMCO and TETON intend to adopt this Agreement as a plan of reorganization
within the meaning of Section 368 of the Internal Revenue Code of 1986, as
amended (the “Code”), and the Treasury Regulations promulgated thereunder (the
“Plan”) and that the transactions contemplated by this Agreement be undertaken
pursuant to such Plan;

    WHEREAS,
GAMCO and TETON intend that the transactions contemplated in Article II of this
Agreement shall constitute a reorganization within the meaning of Section 368 of
the Code and the Treasury Regulations promulgated thereunder and the
Distribution (as defined in Article II) shall qualify under Section 355 of the
Code and the Treasury Regulations promulgated thereunder; and

    WHEREAS,
GAMCO and TETON have determined that it is necessary and desirable to set forth
agreements that will govern certain matters (other than those matters governed
by the Transitional Administrative Services and Management Agreement, dated as
of the date hereof, between GAMCO and TETON (the "Transition Agreement"),
following the transactions described above.

    NOW,
THEREFORE, GAMCO and TETON agree as follows:

    


    ARTICLE
I

    Definitions

    


    1.1 Definitions.  As
used in this Agreement, the following terms shall have the following respective
meanings:

    “Affiliate”
of any Person shall mean another Person that directly or indirectly through one
or more intermediaries, controls, is controlled by or is under common control
with, such first Person; provided, however, that for the
purposes of this Agreement from and after the Distribution, no GAMCO Company
shall be deemed to be an Affiliate of any TETON Company, and no TETON Company
shall be deemed to be an Affiliate of any GAMCO Company.

    


    “TETON
Assets” shall mean all assets of TETON at the time of the
Distribution.

    “TETON
Businesses” shall mean all of the businesses conducted at or at any time prior
to or after the Distribution by the TETON Companies.

    “TETON
Companies” shall mean TETON (determined after giving effect to the
Distribution).

    “TETON
Liabilities” shall mean (i) all Liabilities or portions of Liabilities arising
primarily out of or in connection with the TETON Assets, TETON Businesses or
TETON Companies; (ii) all Liabilities of the TETON Companies pursuant to this
Agreement; and (iii) all Liabilities for payment of outstanding drafts and
checks of TETON Businesses existing at the time of the
Distribution.

    “Distribution”
shall have the meaning set forth in Article II.

    “Former
Employee(s)” shall mean each employee of GAMCO other than its employees at the
time of the Distribution.

    “Information”
of a Party shall mean any and all information that such Party or any of its
Representatives, 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;
provided, however, that
for the purposes hereof all information relating to GAMCO Companies and the
GAMCO Businesses in the possession of any TETON Company at the time of the
Distribution shall be deemed to have been furnished by the GAMCO Companies and
all information relating to the TETON Companies and the TETON Businesses in the
possession of any GAMCO Company at the time of the Distribution shall be deemed
to have been furnished by the TETON Companies; and further provided that the
term “Information” does not include information that:

    (a) is or
becomes generally available to the public through no wrongful act of the
receiving Party or its Representatives;

    (b) 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

    (c) 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.

    “Liabilities”
shall mean any and all debts, liabilities, commitments and obligations, whether
fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated,
accrued or not accrued, known or unknown, whenever or however arising and
whether or not the same would be required by generally accepted accounting
principles to be reflected in financial statements or disclosed in the notes
thereto.

    “GAMCO
Assets” shall mean all assets of GAMCO and its Subsidiaries (other than TETON
Assets) at the time of the Distribution.

    “GAMCO
Businesses” shall mean all of the businesses conducted at any time prior to or
after the Distribution by the GAMCO Companies (other than the TETON Businesses
conducted prior to the Distribution).

    “GAMCO
Companies” shall mean GAMCO and its Subsidiaries.

    “GAMCO
Liabilities” shall mean (i) all Liabilities or portions of Liabilities arising
primarily out of or in connection with the GAMCO Assets, GAMCO Businesses or
GAMCO Companies; (ii) all Liabilities of the GAMCO Companies pursuant to this
Agreement; and (iii) all Liabilities for payment of outstanding drafts and
checks of GAMCO Businesses existing at the time of the
Distribution.

    “Person”
shall mean any natural person, corporation, general or limited partnership,
limited liability company, joint venture, trust, association or entity of any
kind.

    “Representatives”
of a Party shall mean such Party’s officers, directors, employees, accountants,
counsel, investment bankers, financial advisors, consultants and other
representatives.

    “Subsidiary”
shall mean, with respect to any Person, any corporation or other organization,
whether incorporated or unincorporated, of which (i) such Person or any other
Subsidiary of such Person is a general partner or (ii) at least 50% of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization or at least 50%
of the value of the outstanding equity is directly or indirectly owned or
controlled by such Person or by any one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries.

    


    ARTICLE
II

    Plan
of Reorganization Transactions

    


    2.1 The Contributions and
Distributions.  In pursuance of the Plan:

    (a)  GAMCO
will distribute all of the common stock of TETON that it owns to GAMCO
stockholders pursuant to the board resolutions attached hereto as Exhibit C (the
“Distribution”).

    2.2 Conditions
Precedent.  The obligations of the Parties to consummate the
Distribution contemplated by Section 2.1(c) shall be subject to the following
conditions:

     

    (a) no event
or development has occurred or exists that in the judgment of GAMCO’s board of
directors, in its sole discretion, makes the spin-off inadvisable;

     

     

    (b)  the
Form 10 shall be effective under the Exchange Act, with no stop order in effect
with respect thereto, and this information statement shall have been mailed to
GAMCO’s stockholders;

     

     

    (c) the
actions and filings necessary under securities and blue sky laws of the states
of the United States and any comparable laws under any foreign jurisdictions
must have been taken and become effective; and

     

     

    (d) no order,
injunction, decree or regulation issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition preventing the consummation
of the spin-off will be in effect and no other event outside GAMCO’s control
will have occurred or failed to occur that prevents the consummation of the
spin-off.

     

    


    ARTICLE
III

    Payment
of Liabilities

    


    3.1 Payment of
Liabilities.  Subject to Article V and Article VI of this
Agreement, from and after the Distribution, (i) TETON shall indemnify GAMCO, and
its respective Representatives with respect to any claims relating to TETON
Businesses, TETON Companies or TETON Liabilities, and (ii) GAMCO indemnify TETON
and its Representatives with respect to any claims relating to GAMCO Assets,
GAMCO Businesses, GAMCO Companies or GAMCO Liabilities.


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
IV

    Other
Agreements

    


    4.1 Use of Names. TETON shall
have all rights in and use of the name Teton Advisors, Inc.

    4.2 Books and
Records.  Prior to or as promptly as practicable after the
Distribution, and from time to time thereafter as requested by TETON, GAMCO
shall deliver, or cause to be delivered, to TETON all corporate books and
records of the TETON Companies in the possession of GAMCO and the relevant
portions (or copies thereof) of all corporate books and records of GAMCO or any
other GAMCO Company relating directly and primarily to the TETON Assets, TETON
Companies, the TETON Businesses or the TETON Liabilities, including, in each
case, all agreements, litigation files and government filings.  From
and after the Distribution, all such books, records and copies shall be the
property of TETON.  GAMCO may retain copies of all such corporate
books and records, subject to the provisions of Section 4.5 below.

    4.3 Access to
Information.  Upon reasonable notice, each Party shall, and
shall cause its Subsidiaries to, afford to Representatives of the other Party
reasonable access, during normal business hours throughout the period prior to
and following the Distribution, to all of its properties, books, contracts,
commitments and records (including, but not limited to, tax returns) relating to
the other Party, its business or its Liabilities and, during such period, each
Party shall, and shall cause its Subsidiaries to, furnish promptly to the other
Party (i) access to each report, schedule and other document filed or received
by it or any of its Subsidiaries pursuant to the requirements of federal or
state securities laws or filed with or sent to any federal or state regulatory
agency or commission, and (ii) access to all information concerning themselves,
their Subsidiaries, directors, officers and stockholders and such other matters
as may be reasonably requested by any other Party in connection with any
filings, applications or approvals required or contemplated by this Agreement or
for any other reason related to the transactions contemplated by this Agreement;
provided, however, that
TETON and the TETON Companies shall be required to grant such access only with
respect to information necessary to or required by GAMCO in preparation of tax
returns.  Subject to Section 4.6, nothing in this Section 4.3 shall
require the Parties to take any action or furnish any access or information
which would cause or could reasonably be expected to cause the waiver of any
applicable attorney client privilege.  All information for which
access is provided hereunder shall be subject to the confidentiality provisions
of Section 4.5.

    4.4 Retention of
Records.  If any information relating to the businesses, assets
or liabilities of a GAMCO Company or TETON Company is retained by a TETON
Company or GAMCO Company, respectively, each of GAMCO and TETON shall, and shall
cause the other GAMCO Companies and TETON Companies, respectively, to retain all
such information in the GAMCO Companies’ or TETON Companies’ possession or under
its control until such information is at least ten (10) years old, except that
if, prior to the expiration of such period, any GAMCO Company or TETON Company
wishes to destroy or dispose of any such information that is at least three
years old, prior to destroying or disposing of any of such information, (a)
GAMCO or TETON, on behalf of the GAMCO Company or the TETON Company that is
proposing to dispose of or destroy any such information, shall provide no less
than 45 days prior written notice to the other Party, specifying the information
proposed to be destroyed or disposed of, and (b) if, prior to the scheduled date
of such destruction or disposal, the other Party requests in writing that any of
the information proposed to be destroyed or disposed of be delivered to such
other Party, GAMCO or TETON, as applicable, promptly shall arrange for the
delivery of the requested information to a location specified by, and at the
expense of, the requesting Party.  Regardless of any of the above,
each Party shall retain those documents as required by law, rule, regulation or
court order.

    4.5 Confidentiality.

    (a) Each
Party hereto shall keep, and shall cause its Representatives to keep, each of
the other Parties’ 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 4.5 and not to disclose
such Information to any other Person.  Without the prior written
consent of the other Party, no Party nor any of its respective Representatives
shall disclose any 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
4.5.

    (b)  In
the event that any Party or any of its Representatives receives a request or is
required by law or judicial process to disclose to a court or other tribunal all
or any part of any of the other Party’s Information, each receiving Party or its
Representatives shall promptly notify the other Party of the request in writing,
and consult with and assist the other Party in seeking a protective order or
request for other appropriate remedy.  In the event that such
protective order or other remedy is not obtained or the other Party waives
compliance with the terms hereof, such receiving Party or its Representatives,
as the case may be, shall disclose only that portion of the Information or facts
which, in the written opinion of each receiving Party’s outside counsel, is
legally required to be disclosed, and each Party will exercise its respective
commercially reasonable best efforts to assure that confidential treatment will
be accorded such Information or facts by the Persons or entities receiving the
same.  Each providing Party will be given an opportunity to review the
Information or facts prior to disclosure.

    4.6 Privileged
Information.

    (a)  Each
Party hereto acknowledges that (i) each GAMCO Company and each TETON Company has
or may obtain Information regarding a TETON Company or GAMCO Company,
respectively, or any of its operations, employees, assets or Liabilities, as
applicable, that is or may be protected from disclosure pursuant to
attorney-client privilege, the work product doctrine or other applicable
privileges ("Privileged Information"); (ii) actual, threatened or future
litigation, investigations, proceedings (including arbitration), claims or other
legal matters have been or may be asserted by or against, other otherwise
affect, each of both of GAMCO or TETON (or the GAMCO Companies or TETON
Companies) ("Litigation Matters"); (iii) GAMCO and TETON have a common legal
interest in Litigation Matters, in the Privileged Information, and in the
preservation of the confidential status of the Privileged Information, in each
case relating to the GAMCO Assets, GAMCO Businesses, GAMCO Companies or GAMCO
Liabilities or the TETON Assets, TETON Businesses, TETON Companies or TETON
Liabilities as it or they existed at the time of the Distribution or relating to
or arising in connection with the relationship between the constituent elements
of the GAMCO Companies and the TETON Companies on or prior to the time of the
Distribution; and (iv) GAMCO and TETON intend that the transactions contemplated
by this Agreement, the Transition Agreement and any transfer of Privileged
Information in connection herewith or therewith shall not operate as a waiver of
any potentially applicable privilege.

    (b)  Each of GAMCO and TETON
agrees, on their own behalf and on behalf of the GAMCO Companies and the TETON
Companies, respectively, not to disclose or otherwise waive any privilege
attaching to any Privileged Information relating to the GAMCO Assets, GAMCO
Businesses, GAMCO Companies or GAMCO Liabilities or the TETON Assets, TETON
Businesses, TETON Companies or TETON Liabilities as it or they existed at the
time of the Distribution or relating to or arising in connection with the
relationship between the constituent elements of the GAMCO Companies and the
TETON Companies on or prior to the time of the Distribution, without providing
prompt written notice to and obtaining the prior written consent of the other,
which consent shall not be unreasonably withheld, conditioned or delayed if the
other Party certifies that such disclosure is to be made in response to a likely
threat of suspension, debarment, criminal indictment or similar action;
provided, however, that GAMCO and TETON may make disclosure or waiver with
respect to Privileged Information if such Privileged Information related, in the
case of GAMCO, solely to the GAMCO Assets, GAMCO Businesses, GAMCO Companies or
GAMCO Liabilities as each existed prior to the time of the Distribution, or in
the case of TETON, solely to the TETON Assets, TETON Businesses, TETON Companies
or TETON Liabilities each existed prior to the time of the
Distribution.  The Parties will use commercially reasonable efforts to
limit any such disclosure or waiver to the maximum extent possible and shall
seek the execution of a confidentiality agreement by the third party or parties
to which such disclosure or waiver is made.

    (c)  Upon any GAMCO Company
or TETON Company, as the case may be, receiving any subpoena or other compulsory
disclosure notice from a court, other governmental agency or otherwise that
requests disclosure of Privileged Information, in each case relating to the
GAMCO Assets, GAMCO Businesses, GAMCO Companies or GAMCO Liabilities or the
TETON Assets, TETON Businesses, TETON Companies or TETON Liabilities as it or
they existed at the time of the Distribution or relating to or arising in
connection with the relationship between the constituent elements of the GAMCO
Companies and the TETON Companies on or prior to the time of the Distribution,
the recipient of the notice shall promptly provide to GAMCO, in the case of
receipt by a TETON Company, or to TETON, in the case of receipt by a GAMCO
Company, a copy of such notice, the intended response, and all materials or
information relating to the other Party (or its Subsidiaries) that might be
disclosed.  In the event of a disagreement as to the intended response
or disclosure, unless and until the disagreement is resolved as provided in
subsection (b) above, GAMCO and TETON shall cooperate to assert all defenses to
disclosure claimed by either Party (or its Subsidiaries), at the cost and
expense of the Party claiming such defense to disclosure, and shall not disclose
any disputed documents or information until all legal defenses and claims of
privilege shall have been determined.

    4.7 Further
Assurances.  Each of the Parties hereto, at its own cost and
expense, promptly shall, or shall cause its Subsidiaries to, execute such
documents (the “Transaction Documents”) and take such further actions as may be
reasonably required or desirable to carry out the provisions hereof and to
consummate the transactions contemplated hereby.

    4.8 Cooperation.  The
Parties shall cooperate with each other in all reasonable respects to ensure
that the transactions contemplated herein are carried out in accordance with
their terms.

    4.9 No Representations as to TETON
Assets. TETON AGREES THAT THE TRANSFER BY GAMCO AND ITS AFFILIATES TO
TETON OF THE TETON ASSETS AND THE TETON BUSINESSES IS ON AN “AS IS, WHERE IS”
BASIS, AND, EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT OR THE AGREEMENT
CONTEMPLATED HEREBY, NO REPRESENTATIONS OR WARRANTIES ARE BEING MADE BY GAMCO OR
ITS AFFILIATES WITH RESPECT THERETO.

    4.10 Rent, Furniture, Equipment,
etc.  TETON may elect to lease premises at 401 Theodore Fremd
Avenue, Rye, NY and, to the extent
feasible and appropriate, lease office equipment.  TETON shall bear
the cost of such leases.

    4.11 Transaction
Expenses.  Except as otherwise agreed between the Parties,
GAMCO and TETON shall each be responsible for its out-of-pocket expenses
(including attorney’s fees) incurred in connection with the
Distribution.

    4.12 Receivables Collection and Other
Payments.  If, after the Distribution, any GAMCO Company or any
TETON Company receives payments belonging to any TETON Company or GAMCO Company,
respectively, the recipient shall promptly account for and remit same to the
other Party.

    4.13 Insurance.  From
and after the time of the Distribution, (a) GAMCO shall maintain, at its sole
cost and expense, all insurance coverage existing at the time of the
Distribution related to the TETON Assets, the TETON Companies and the TETON
Businesses for periods prior to the Distribution (and shall include TETON or the
TETON Companies, as applicable, as a named insurer thereunder), (b) GAMCO shall
be responsible for obtaining and maintaining all insurance coverage relating to
the GAMCO Assets, GAMCO Companies and GAMCO Businesses for periods prior to and
after the Distribution and (c) TETON shall be responsible for obtaining and
maintaining all insurance coverage relating to the TETON Assets, TETON Companies
and TETON Businesses for period from and after the
Distribution.  Without limiting the foregoing, the assets of TETON
insured pursuant to clause (a) above shall include any and all rights of an
insured party, including without limitation rights of indemnity, the right to be
defended by or at the expense of the insurer and the right to receive insurance
proceeds.  The Parties hereto shall cooperate with regards to the
administration of insurance policies contemplated hereunder (including
accounting and reporting obligations and the distribution of insurance proceeds)
and shall share material information concerning such matters so that both GAMCO
and TETON are aware on a continuing basis of material matters relevant to joint
dealings with insurers.  Except as set forth herein, nothing in this
Agreement shall be construed or deemed to limit the right of GAMCO or TETON to
obtain and administer future insurance policies on whatever terms it believes to
be advisable.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
V

    Indemnification
and Releases

     

    5.1 Mutual
Release.  Effective as of the Distribution and except as
otherwise specifically set forth in this Agreement, each of GAMCO on the one
hand, and TETON, on the other hand, releases and forever discharges the other
Party or Parties and their respective Affiliates, and its and their directors,
officers, employees and agents of and from all debts, demands, actions, causes
of action, suits, accounts, covenants, contracts, agreements, damages, and any
and all claims, demands and liabilities whatsoever of every name and nature,
both in law and in equity, against each such other Party or any of its assigns,
which each releasing Party has or ever had, which arise out of or relate to
events, circumstances or actions taken by each such other Party prior to the
Distribution; provided,
however, that the foregoing general release shall not apply to this Agreement,
or the transactions contemplated hereby, and shall not affect each Party’s right
to enforce this Agreement or any other agreement contemplated hereby in
accordance with its terms.  Each Party understands and agrees that,
except as otherwise specifically provided herein, neither the other Party or
Parties nor any of their Subsidiaries is, in this Agreement or any other
agreement or document, representing or warranting to any Party in any way as to
the assets, business or Liabilities transferred or assumed as contemplated
hereby or thereby or as to any consents or approvals required in connection with
the consummation of the transactions contemplated by this
Agreement.

    5.2 Indemnification by
GAMCO.  From and after the time of the Distribution, GAMCO
shall indemnify, defend and hold harmless the TETON Companies and each of their
respective directors, officers, employees, agents and Affiliates, and each of
the heirs, executors, successors and assigns of any of the foregoing (the “TETON
Indemnitees”) from and against any and all losses, Liabilities and damages,
including the costs and expenses of any and all actions, threatened actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such actions or threatened
actions (collectively, “TETON Indemnifiable Losses” and, individually, a “TETON
Indemnifiable Loss”) incurred or suffered by a TETON Indemnitee arising out of
(a) the failure or alleged failure of GAMCO or any of its Subsidiaries to pay,
perform or otherwise discharge in due course any of the GAMCO Liabilities, (b)
the breach by GAMCO of any its obligations under this Agreement, and (c) any
untrue statement or alleged untrue statement of a material fact (i) contained in
any document filed with the Securities and Exchange Commission (the "SEC") by
GAMCO pursuant to the Securities Act of 1933, as amended (the "Securities Act"),
the Securities Exchange Act of 1934, as amended (the "Exchange Act") or any
other applicable securities rule, regulation or law, (ii) otherwise disclosed to
investors or potential investors in any GAMCO Company by any GAMCO Company, or
(iii) furnished to any TETON Indemnitee by any GAMCO Company for inclusion in
any public disclosures to be made by any TETON Indemnitee, including filings
with the SEC or disclosures to investors or potential investors in any TETON
Company; or any omission or alleged omission to state in any information
described in clauses (i), (ii) or (iii) above a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.  Notwithstanding the foregoing, indemnification
will be available under this clause (c) only to the extent that those TETON
Indemnifiable Losses are caused by any such untrue statement or omission or
alleged untrue statement or omission, and the information which is the subject
of such untrue statement or omission or alleged untrue statement or omission was
not supplied after the Distribution by a TETON Company or an agent thereof
acting on its behalf.

    5.3 Indemnification by
TETON.  From and after the time of the Distribution, TETON
shall indemnify, defend and hold harmless the GAMCO Companies and each of their
respective directors, officers, employees, agents and Affiliates, and each of
the heirs, executors, successors and assigns of any of the foregoing (the “GAMCO
Indemnitees”) from and against any and all losses, Liabilities and damages,
including the costs and expenses of any and all actions, threatened actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such actions or threatened
actions (collectively, “GAMCO Indemnifiable Losses” and, individually, a “GAMCO
Indemnifiable Loss”) incurred or suffered by a GAMCO Indemnitee arising out of
(a) the failure or alleged failure of TETON or any of its Subsidiaries to pay,
perform or otherwise discharge in due course any of the TETON Liabilities, (b)
the breach by TETON of any of its respective obligations under this Agreement,
and (c) any untrue statement or alleged untrue statement of a material fact (i)
contained in any document filed with the SEC by TETON following the Distribution
pursuant to the Securities Act, the Exchange Act or any other applicable
securities rule, regulation or law, (ii) otherwise disclosed following the
Distribution to investors or potential investors in any TETON Company by any
TETON Company, or (iii) furnished to any GAMCO Indemnitee by any TETON Company
for inclusion in any public disclosures to be made by any GAMCO Indemnitee,
including filings with the SEC or disclosures to investors or potential
investors in any GAMCO Company; or any omission or alleged omission to state in
any information described in clauses (i), (ii) or (iii) above a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.  Notwithstanding the
foregoing, indemnification will be available under this clause (c) only to the
extent that those GAMCO Indemnifiable Losses are caused by any such untrue
statement or omission or alleged untrue statement or omission, and the
information which is the subject of such untrue statement or omission or alleged
untrue statement or omission was not supplied by an GAMCO Company or an agent
thereof acting on its behalf.  The TETON Indemnifiable Losses and the
GAMCO Indemnifiable Losses are collectively referred to as the “Indemnifiable
Losses.”

    5.4 Taxes - TETON agrees to
indemnify and hold harmless each of the GAMCO Companies from and against
(i) any and all Distribution Taxes resulting from or attributable to any
act or failure to act on the part of any of the TETON Companies following the
Distribution; and (ii) all Liabilities, costs, expenses (including, without
limitation, reasonable expenses of investigation and attorney’s fees and
expenses), losses, damages, assessments, settlements or judgments arising out of
or incident to the imposition, assessment or assertion of any Tax or adjustment
described in this subsection.


    5.5 Insurance Proceeds, Tax Benefits;
Mitigation.  The amount which any Party (an “Indemnifying
Party”) is or may be required to pay to any other Person (an “Indemnitee”)
pursuant to Sections 5.2 or 5.3 shall be reduced (including retroactively) by
(i) any insurance proceeds or other amounts actually recovered by or on behalf
of each such Indemnitee in reduction of the related Indemnifiable Loss, and (ii)
any tax benefits realized or realizable by each such Indemnitee based on the
present value thereof by reason of such loss (and shall be increased by any tax
liability incurred by each such Indemnitee based on such indemnity
payment).  If an Indemnitee shall have received the payment required
by this Agreement from an Indemnifying Party in respect of an Indemnifiable Loss
and shall subsequently actually receive insurance proceeds, tax benefits or
other amounts in respect of such Indemnifiable Loss as specified above, then
each such Indemnitee shall pay to each such Indemnifying Party a sum equal to
the amount of such insurance proceeds, tax benefits or other amounts actually
received.  Each Indemnitee shall take all reasonable steps to mitigate
all Losses, including availing itself of any defenses, limitations, rights of
contribution, claims against third parties and other rights at law (it being
understood that any out-of-pocket costs paid to third parties in connection with
such mitigation shall constitute Losses), and shall provide such evidence and
documentation of the nature and extent of any Loss as may be reasonably
requested by each Indemnifying Party.

    5.6 Procedure for
Indemnification.

    (a)  If
an Indemnitee shall receive notice or otherwise learn of the assertion by a
person (including any governmental entity) who is not a party to this Agreement
or to any of the Transaction Documents of any claim or of the commencement by
any such Person of any action (a “Third-Party Claim”) with respect to which an
Indemnifying Party may be obligated to provide indemnification pursuant to this
Agreement, each such Indemnitee shall give each such Indemnifying Party written
notice thereof promptly after becoming aware of such Third-Party Claim; provided, however, that the
failure of any Indemnitee to give notice as required by this Section 5.5 shall
not relieve each Indemnifying Party of its obligations under this Article V,
except to the extent that each such Indemnifying Party is prejudiced by such
failure to give notice.  Such notice shall describe the Third-Party
Claim in reasonable detail, and shall indicate the amount (estimated if
necessary) of the Indemnifiable Loss that has been or may be sustained by each
such Indemnitee.

    (b)  An
Indemnifying Party may elect to defend or to seek to settle or compromise, at
such Indemnifying Party’s own expense and by such Indemnifying Party’s own
counsel reasonably acceptable to each Indemnitee, any Third-Party Claim, provided that the
Indemnifying Party must confirm in writing that it agrees that each Indemnitee
is entitled to indemnification hereunder in respect of such Third-Party
Claim.  Within 30 days of the receipt of notice from an Indemnitee in
accordance with Section 5.5(a) (or sooner, if the nature of such Third-Party
Claim so requires), the Indemnifying Party shall notify each Indemnitee of its
election whether to assume responsibility for such Third-Party Claim (provided
that if the Indemnifying Party does not so notify each Indemnitee of its
election within 30 days after receipt of such notice from each Indemnitee, the
Indemnifying Party shall be deemed to have elected not to assume responsibility
for such Third-Party Claim), and each Indemnitee shall cooperate in the defense
or settlement or compromise of such Third-Party Claim.  After notice
from an Indemnifying Party to each Indemnitee of its election to assume
responsibility for a Third-Party Claim, such Indemnifying Party shall not be
liable to each such Indemnitee under this Article V for any legal or other
expenses (except expenses approved in advance by the Indemnifying Party)
subsequently incurred by each such Indemnitee in connection with the defense
thereof; provided,
however, that if the defendants in any such claim include both the Indemnifying
Party and one or more Indemnitees and in such Indemnitees’ reasonable judgment
there exists a conflict of interest between such Indemnitees and the
Indemnifying Party such Indemnitees shall have the right to employ separate
counsel and in that event the reasonable fees and expenses of such separate
counsel (but not more than one separate counsel reasonably satisfactory to the
Indemnifying Party) shall be paid by each such Indemnifying Party.  If
any Indemnifying Party elects not to assume responsibility for a Third-Party
Claim (which election may be made only in the event of a good faith dispute that
a claim was inappropriately tendered under Section 5.2 or 5.3, as the case may
be), each such Indemnitee may defend or (subject to the following sentence) seek
to compromise or settle such Third-Party Claim without prior written notice to
each such Indemnifying Party, which shall have the option within fifteen days
following the receipt of such notice (i) to reject the settlement and assume all
past and future responsibility for the claim, including reimbursing each
Indemnitee for prior expenditures in connection with the claim, or (ii) to
reject the settlement and continue to refrain from participation in the defense
of the claim, in which event each such Indemnifying Party shall have no further
right to contest the amount or reasonableness of the settlement if each
Indemnitee elects to proceed therewith, or (iii) to approve the amount of the
settlement, reserving each such Indemnifying Party’s right to contest each
Indemnitee’s right to indemnity, or (iv) to approve and agree to pay the
settlement.  In the event such Indemnifying Party makes no response to
such written notice from an Indemnitee, the Indemnifying Party shall be deemed
to have elected option (ii).

    (c)  If
an Indemnifying Party chooses to defend or to seek to compromise any Third-Party
Claim, each Indemnitee shall make available to such Indemnifying Party any
personnel and any books, records or other documents within its control or which
it otherwise has the ability to make available that are necessary or appropriate
for such defense, within the reasonable discretion of each such Indemnifying
Party.

    (d)  Notwithstanding
anything else in this Section 5.5 to the contrary, an Indemnifying Party shall
not settle or compromise any Third-Party Claim unless (i) such settlement or
compromise contemplates as an unconditional term thereof the giving by such
claimant or plaintiff to each Indemnitee of a written release from all liability
in respect of such Third-Party Claim, and (ii) such settlement does not provide
for any non-monetary relief by any Indemnitee unless each such Indemnitee
consents thereto.  In the event any Indemnitee shall notify the
Indemnifying Party in writing that such Indemnitee declines to accept any such
settlement or compromise, each such Indemnitee may continue to contest such
Third-Party Claim free of any participation by such Indemnifying Party, at each
such Indemnitee’s sole expense.  In such event, the obligation of such
Indemnifying Party to each such Indemnitee with respect to such Third-Party
Claim shall be equal to (i) the costs and expenses of each such Indemnitee prior
to the date such Indemnifying Party notifies each such Indemnitee of such offer
of settlement or compromise (to the extent such costs and expenses are otherwise
indemnifiable hereunder), plus (ii) the lesser of (A) the amount of any offer of
settlement or compromise which each such Indemnitee declined to accept and (B)
the actual out-of-pocket amount each such Indemnitee is obligated to pay
subsequent to such date as a result of each such Indemnitee’s continuing to
pursue such Third-Party Claim.

    (e)  Any
claim on account of an Indemnifiable Loss which does not result from a
Third-Party Claim shall be asserted by written notice given by an Indemnitee to
each applicable Indemnifying Party.  Each such Indemnifying Party
shall have a period of 30 days after the receipt of such notice within which to
notify each applicable Indemnitee of the Indemnifying Party’s response to the
claim.  If each such Indemnifying Party does not so notify each such
Indemnitee during such 30-day period, such Indemnifying Party shall be deemed to
have refused to accept responsibility to make payment.  If each such
Indemnifying Party does not respond within such 30-day period or rejects such
claim in whole or in part, each such Indemnitee shall be free to pursue such
remedies as may be available to such Party under applicable law or under this
Agreement or any other agreement or arrangement between the
Parties.

    (f)  In
addition to any adjustments required pursuant to Section 5.4, if the amount of
any Indemnifiable Loss shall, at any time subsequent to the payment required by
this Agreement, be reduced by recovery, settlement or otherwise, the amount of
such reduction, less any expenses incurred in connection therewith, shall
promptly be repaid by each Indemnitee to each Indemnifying Party.

    (g)  In
the event of payment by an Indemnifying Party to any Indemnitee in connection
with any Third-Party Claim, such Indemnifying Party shall be subrogated to and
shall stand in the place of such Indemnitee as to any events or circumstances in
respect of which such Indemnitee may have any right or claim relating to such
Third-Party Claim against any claimant or plaintiff asserting such Third-Party
Claim.  Such Indemnitee shall cooperate with such Indemnifying Party
in a reasonable manner, and at the cost and expense of such Indemnifying Party,
in prosecuting any subrogated right or claim.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.7 Contribution.  If
for any reason the indemnification provided for in Section 5.2 and 5.3 is
unavailable to any Indemnitee, or insufficient to hold it harmless, then the
Indemnifying Party shall contribute to the amount paid or payable by that
Indemnitee as a result of the untrue statement or omission or alleged untrue
statement or omission of a material fact, in that proportion as is appropriate
to reflect the relative fault of the Indemnifying Party, on the one hand, and
the Indemnitee, on the other hand.  The relative fault shall be
determined by reference to, among other things, whether the untrue statement or
omission or alleged untrue statement or omission relates to information supplied
by the Indemnifying Party or the Indemnitee, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by the Indemnitee referred to
above in this Section 5.6 shall be deemed to include, for purposes of this
Section 5.6, any legal or other expenses reasonably incurred by the Indemnitee
in connection with investigating or defending any such action or
claim.  Notwithstanding the foregoing, no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

    5.8 Remedies
Cumulative.  The remedies provided in this Article V shall be
cumulative and shall not preclude assertion by any Indemnitee of any other
rights or the seeking of any and all other remedies against any Indemnifying
Party.

    5.9 Survival of
Indemnities.  The obligations of each of TETON and GAMCO under
this Article V shall survive the sale or other transfer by it of any assets or
businesses or the assignment by it of any Liabilities, with respect to any
Indemnifiable Loss of the other Parties related to such assets, businesses or
Liabilities.

    5.10 Tax Matter Not Covered Under This
Agreement.  Notwithstanding anything to the contrary in this
Agreement, any claim for indemnification with respect to any tax Liabilities of
the GAMCO.


    
       

    

    ARTICLE
VI

    Miscellaneous
and General

     

    6.1 Representations and
Warranties.  Each Party represents and warrants to the other
Party that (a) it is validly existing and in good standing under the laws of the
jurisdiction of incorporation, (b) it has the requisite corporate power and
authority to carry on its business as conducted on the date hereof, (c) it has
the corporate power and authority to execute, deliver and perform its
obligations under this Agreement and, with respect to GAMCO and TETON, the
Transition Agreement, (d) each of Agreement and, with respect to GAMCO and
TETON, the Transition Agreement, has been duly and validly executed by such
Party and is the legal, valid and binding obligation of such Party enforceable
in accordance with its terms, and (e) the execution and delivery of this
Agreement and, with respect to GAMCO and TETON, the Transition Agreement, do not
and will not (i) violate any provisions of such Party's certificate or articles
of incorporation or bylaws, (ii) violate any law applicable to such Party, (iii)
violate any order, judgment, award or decree of any court or governmental
authority applicable to such Party, or (iv) result in any breach or default
under any material contract by which such Party is bound.

    6.2 Modification or
Amendment.  The Parties hereto may modify or amend this
Agreement by written agreement executed and delivered by authorized officers of
the respective Parties.

    6.3 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.

    6.4 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.

    6.5 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:

    


    GAMCO
Investors, Inc.

    One
Corporate Center

    Rye, NY
10580

    Attn:
Chief Operating Officer

    Telecopy:
(914) 921-5098

    Telephone:
(914) 921-5020

     

    If to
TETON:

     

    Teton
Advisors, Inc.

    401
Theodore Fremd Avenue

    Rye, NY
10580

    Attn:
Chief Executive Officer and President

    Telecopy:
(914) 921-5091

    Telephone:
(914) 457-1071

     

    6.6 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.

    6.7 No Third Party
Beneficiary.  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.

    6.8 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.

    6.9 Certain
Obligations.  Whenever this Agreement requires any of the
Subsidiaries of any Party to take any action, this Agreement will be deemed to
include an undertaking on the part of such Party to cause such Subsidiary to
take such action.

    6.10 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.

    6.11 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.

    6.12 Arbitration.  Any
dispute with respect to this Agreement, the Transition 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, the Transition 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.

      
        
           


        

        
           


          
            

          

        

        
           


        

      



    


    


    IN
WITNESS WHEREOF, this Agreement has been duly executed

    and
delivered by the duly authorized officers of the Parties hereto as of the date
first above written.

    


    


    GAMCO
INVESTORS, INC.

     

    By:                                                               

          Name:   Douglas
R. Jamieson

    Title:   President
and Chief Operating Officer

     

    Teton
Advisors, Inc.

     

    By:                                                               

        Name:   Nicholas
F. Galluccio

    Title:     Chief
Executive Officer and President