8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 3, 2008 (October 2, 2008)

GAMCO INVESTORS, INC.

(Exact name of registrant as specified in its charter)

New York	1-14761	13-4007862
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

 One Corporate Center, Rye, NY

 (Address of principal executive offices)

  10580

 (Zip Code)

 (914) 921-3700

 Registrant's telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01                      Entry into a Material Definitive Agreement

On October 2, 2008, GAMCO Investors, Inc. (the "Company") issued and sold $60,000,000 principal amount of a convertible promissory note due 2018 (the "Note") to Cascade Investment L.L.C. ("Cascade"), pursuant to a Note Purchase Agreement (the "Purchase Agreement"). The Note bears interest at a rate of 6.5% per annum and is convertible into shares of the Company's Class A Common Stock at an initial conversion price of $70 per share. The Company is required to repurchase the Note at the request of the holder on specified dates and after certain circumstances involving a Change of Control or Fundamental Change and is subject to an escrow agreement (each as defined in the Note). The escrow arrangement may be converted to an irrevocable letter of credit when economically feasible.  A copy of the Note is attached hereto as Exhibit 4.1 and is incorporated by reference herein.  The Purchase Agreement includes customary representations, warranties and covenants. A copy of the Purchase Agreement is attached hereto as Exhibit 10.1 and is incorporated by reference herein.

Cascade is the holder of several convertible promissory notes due August 14, 2011 ("2011 Notes") which collectively have an aggregate principal amount of $40 million. The Company granted Cascade certain demand registration rights and piggyback registration rights with respect to the shares of Class A Common Stock issuable upon conversion of the 2011 Notes, pursuant to a Registration Rights Agreement, dated as of August 14, 2001, between the Company and Cascade. On October 2, 2008, in connection with the issuance and sale of the Note, the Company entered into a First Amendment to the Registration Rights Agreement (the "First Amendment to Registration Rights Agreement"), granting Cascade similar rights with respect to the shares of Class A Common Stock issuable upon conversion of the Note. A copy of the First Amendment to Registration Rights Agreement is attached hereto as Exhibit 10.2 and is incorporated by reference herein.

Except as described above, the Company and its affiliates do not have any material relationships with Cascade.

Item 2.03.                      Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangementof a registrant.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 3.02.                      Unregistered Sales of Equity Securities.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

The Company issued and sold the Note to Cascade in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"). The Company relied on the exemptions from registration based in part on representations made by Cascade in the Purchase Agreement. To the extent that any shares of the Company's Class A Common Stock are issued upon conversion of the Note, they will be issued in transactions anticipated to be exempt from registration under the Securities Act by virtue of Section 3(a)(9) thereof, because no commission or other remuneration is expected to be paid in connection with the conversion of the Note and any resulting issuance of shares of Class A Common Stock.

Item 9.01.                      Financial Statements and Exhibits.

Exhibits

4.1           Convertible Promissory Note, dated as of October 2, 2008

10.1           Note Purchase Agreement, dated as of October 2, 2008.

10.2           First Amendment to Registration Rights Agreement, dated as of October 2, 2008.

10.3           Escrow Agreement, dated as of October 2, 2008.

Exhibit Index

Exhibits

4.1           Convertible Promissory Note, dated as of October 2, 2008

10.1           Note Purchase Agreement, dated as of October 2, 2008.

10.2           First Amendment to Registration Rights Agreement, dated as of October 2, 2008.

10.3           Escrow Agreement, dated as of October 2, 2008.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

GAMCO Investors, Inc.

By:  /s/ Jeffrey M. Farber

Jeffrey M. Farber

EVP and Chief Financial Officer

Date: October 3, 2008

EX-10.1

EXECUTION VERSION

NOTE PURCHASE AGREEMENT

This NOTE PURCHASE AGREEMENT (the "Agreement") is made as of October 2, 2008, by and among Cascade Investment, L.L.C., a Washington limited liability company ("Buyer"), GAMCO  Investors, Inc., a New York corporation ("Seller"), Mario J. Gabelli ("Gabelli") and GGCP, Inc., a New York corporation ("Gabelli Group" and collectively with Gabelli, the "Gabelli Stockholders").

INTRODUCTION

1.Seller desires to sell to Buyer and Buyer desires to purchase from Seller the convertible promissory note (the "Note") in the form attached as Exhibit A hereto;

2.The Note is convertible into shares of Class A Common Stock, par value $0.001 per share (such shares and any other securities issued or distributed with respect to, or in exchange for, such shares pursuant to any reclassification, merger or other transaction, the "Class A Common Stock"), of the Seller on the terms and conditions set forth in the Note;

3.The Gabelli Stockholders beneficially own, directly or indirectly, approximately 20 million shares of Class B Common Stock, par value $0.001 per share ("Class B Common Stock"), of the Seller, representing approximately 95% of the combined voting power of the outstanding Capital Stock (as hereinafter defined) of the Seller; and

4.As a condition to its agreement to purchase the Note, Buyer has required, and in consideration for the benefits to the Seller from such purchase the Gabelli Stockholders have agreed to grant to Buyer, certain rights with respect to the Conversion Shares (as hereinafter defined).

NOW, THEREFORE, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1.Purchase and Sale.

1.1Purchase and Sale.  At the Closing, as defined in Section 1.3 below, Buyer shall purchase from Seller, and Seller shall issue and sell to Buyer, the Note, Buyer and Seller shall enter into the amendment to the Registration Rights Agreement, dated as of August 14, 2001 (the "Registration Rights Agreement"), in the form of Exhibit B hereto (the "First Amendment to Registration Rights Agreement"), and Buyer, Seller and JPMorgan Chase Bank, National Association shall enter into the Escrow Agreement in the form of Exhibit C hereto (the "Escrow Agreement"). The Registration Rights Agreement as amended by the First Amendment to the Registration Rights Agreement is referred to herein as the "Amended Registration Rights Agreement". The Note is convertible into shares of Class A Common Stock of the Seller (the "Conversion Shares") on the terms provided therein.

1.2Purchase Price.  In consideration for the Note, Buyer shall pay to Seller, by wire transfer in immediately available funds, Sixty Million U.S. Dollars (U.S. $60,000,000) (the "Consideration").

1.3Closing.  The closing of the purchase and sale of the Note hereunder (the "Closing") shall be held at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, at 10:00 A.M. on October 2, 2008, or at such other time and place upon which the parties shall agree (the "Closing Date").  The Closing shall be effective upon the receipt by the parties of the agreements, documents, instruments and consideration described in Section 3.

2.Representations and Warranties.

2.1Seller's Representations and Warranties.  Except as disclosed in Exhibit D hereto, Seller represents and warrants to Buyer as follows:

2.1.1Organization; Standing and Power.  The Seller is a corporation duly organized and validly existing under the laws of the State of New York, has all requisite power and authority to own, lease, and operate its properties and to carry on its business as now being conducted, and is duly qualified and in good standing to do business in each jurisdiction in which it is required to be so qualified by applicable laws.  Each of the Seller's Subsidiaries is a corporation or other business entity duly incorporated or organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, has all requisite power and authority to own, lease and operate its properties and to carry on its business as now conducted, and is duly qualified and in good standing in each jurisdiction in which it is required to be so qualified by applicable laws.

"Subsidiary" means (i) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by the Seller or one or more of the other Subsidiaries (or a combination thereof) and (ii) any partnership (A) the sole general partner or the managing general partner of which is the Seller or a Subsidiary or (B) the only general partners of which are the Seller or one or more Subsidiaries (or any combination thereof).

"Capital Stock" means (i) in the case of a corporation, corporate stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership, partnership interests (whether general or limited) and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

"Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or government or agency or political subdivision thereof (including any subdivision or ongoing business of any such entity or substantially all of the assets of any such entity, subdivision or business).

2.1.2Capital Structure; Ownership of Shares.  The authorized Capital Stock of the Seller consists of 100,000,000 shares of Class A Common Stock, of which approximately 7,395,483 shares are issued and outstanding (the "Class A Shares"), 100,000,000 shares of Class B Common Stock, of which approximately 20,550,006 shares are issued and outstanding (together with the Class A Shares, the "Shares"), and 10,000,000 shares of Preferred Stock, par value $.001 per share, none of which are issued and outstanding.  All of the Shares have been duly authorized and validly issued, are fully paid and nonassessable, and were issued in compliance with applicable federal and state securities laws.  The Conversion Shares have been duly authorized and reserved for issuance out of the Seller's authorized and unissued shares of Class A Common Stock and, when issued upon conversion of the Note, will be validly issued, fully paid and nonassessable.  Other than as disclosed in the SEC Reports (as defined below), there are no options, warrants, calls, convertible or exchangeable securities or rights, commitments, agreements, contracts, understandings, restrictions, arrangements, or rights of any character to which the Seller or any of its Subsidiaries is a party or by which any of them or any of their assets may be bound to issue, deliver, or sell, or cause to be issued, delivered, or sold, additional shares of the Capital Stock of the Seller or any of its Subsidiaries, or obligating the Seller or any of its Subsidiaries to grant, extend, or enter into any such option, warrant, call, conversion right, commitment, agreement, restriction, or right. There are no outstanding obligations of the Seller or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Capital Stock of the Seller or any of its Subsidiaries.  Other than as disclosed in the SEC Reports, there are no voting trusts or other agreements or understandings to which the Seller, any of its Subsidiaries or any of the Gabelli Stockholders is a party with respect to the holding, voting or disposing of Capital Stock of the Seller or any of its Subsidiaries.  Except as described in the SEC Reports, neither the Seller nor any of its Subsidiaries has any outstanding bonds, debentures, notes or other obligations or other securities (other than the Shares) that entitle the holders thereof to vote with the stockholders of the Seller or any of its Subsidiaries on any matter or which are convertible into or exercisable for securities having such a right to vote that are not owned by the Seller or another Subsidiary. Delivery of the Conversion Shares to Buyer upon conversion of the Note will vest valid title thereto in Buyer, free and clear of all liens, encumbrances, claims, and limitations of every kind (collectively, "Liens") other than any attributable to actions or omissions by Buyer or any of its Affiliates.

2.1.3Subsidiaries.  Seller's SEC Reports disclose each of its Subsidiaries required to be described in such SEC Reports.  Except as otherwise disclosed in the SEC Reports, all of the issued and outstanding shares of Capital Stock of each Subsidiary of the Seller have been duly authorized, are validly issued, fully paid and (except for general partner interests) nonassessable and are owned by the Seller, directly or through Subsidiaries, free and clear of all Liens.

2.1.4Authority.  Seller has all requisite corporate power and authority to enter into this Agreement, the First Amendment to Registration Rights Agreement, the Escrow Agreement and the Note and to consummate the transactions contemplated by this Agreement, the Amended Registration Rights Agreement, the Escrow Agreement and the Note. The execution and delivery by Seller of this Agreement, the First Amendment to Registration Rights Agreement, the Escrow Agreement and the Note and the consummation of the transactions contemplated by hereby and thereby have been duly authorized by all necessary corporate actions on the part of Seller.  Each of this Agreement, the First Amendment to Registration Rights Agreement, the Escrow Agreement and the Note has been duly executed and delivered by Seller and each of them and the Amended Registration Rights Agreement constitutes a valid and binding obligation of Seller enforceable in accordance with its terms, except that such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, or other similar laws relating to enforcement of creditors' rights generally and (ii) general equitable principles and (iii) to the extent that indemnification provisions of the Amended Registration Rights Agreement may be limited by applicable federal or state securities law.

2.1.5No Conflict.  The execution and delivery of this Agreement, the First Amendment to Registration Rights Agreement, the Escrow Agreement and the Note and the consummation of the transactions contemplated by this Agreement, the Amended Registration Rights Agreement, the Escrow Agreement and the Note will not violate, conflict with, constitute a default or breach under, (i) any laws, rules or regulations of any governmental, administrative or regulatory authority (including without limitation stock or commodity exchanges, securities associations and other self-regulatory bodies (collectively, "Self-Regulatory Organizations")) (collectively, "Governmental Authorities") that are applicable to the Seller or any of its Subsidiaries (collectively, "Applicable Laws"), (ii) any provisions of the certificate of incorporation or bylaws (or comparable constituent or governing documents) of the Seller or any of its Subsidiaries, or (iii) any material agreement, contract, or instrument to which Seller or any of its Subsidiaries or any of their assets may be bound or of any judgment, order or decree of any Governmental Authority to which Seller may be bound, nor will the execution, delivery and performance of this Agreement, the First Amendment to Registration Rights Agreement, the Escrow Agreement or the Note nor the performance of the Amended Registration Rights Agreement by the Seller result in the creation of any Lien upon the Note or the Conversion Shares or any material asset or right of the Seller or any of its Subsidiaries, except, in the case of clause (iii), for such violations, conflicts, defaults or breaches that would not, individually or in the aggregate, have a material adverse effect on (i) the business, operations, affairs, financial condition, assets, property, results of operations or prospects of the Seller and its Subsidiaries, taken as a whole, (ii) the ability of the Seller to perform any of its material obligations under this Agreement, the Amended Registration Rights Agreement, the Escrow Agreement or the Note or (iii) the validity or enforceability of this Agreement, the Amended Registration Rights Agreement, the Escrow Agreement or the Note (each, a "Material Adverse Effect"). No consent, approval, authorization or order of, or filing or registration with, any Governmental Authority is required for the execution, delivery and performance of this Agreement, the First Amendment to Registration Rights Agreement, the Escrow Agreement and the Note or the performance of the Amended Registration Rights Agreement or Escrow Agreement by the Seller and the consummation by the Seller of the transactions contemplated hereby and thereby.

2.1.6Litigation.  Except as disclosed in the SEC Reports, there is no pending or, to the best of Seller's knowledge, threatened legal or governmental actions, proceedings, suits or investigations or any arbitrations or labor disputes (collectively, "Litigation") to which the Seller or any of its Subsidiaries is a party or by which any material portion of any of their assets, taken as a whole, may be bound, which Litigation, if adversely determined, would have a Material Adverse Effect.

2.1.7Accuracy of Reports; Financial Statements.  All registration statements, reports or other documents required to be filed with, or furnished to, the Securities and Exchange Commission (the "SEC") by the Seller during the twelve month period preceding the date of this Agreement under the Securities Exchange Act of 1934, as amended (the "1934 Act") (to the extent so filed or furnished, collectively the "SEC Reports"), have been duly and timely filed, were in substantial compliance with the requirements of their respective forms when filed, were complete and correct in all material respects as of the dates at which the information was furnished, and contained (as of such dates) no untrue statement of a material fact or omitted to state material fact necessary in order to make the statements made therein in light of the circumstances in which made not misleading. True and complete copies of the SEC Reports have been delivered to Buyer by the Seller.  The financial statements of the Seller included in the SEC Reports (the "Financial Statements") comply as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto.  The Financial Statements have been prepared in accordance with generally accepted accounting principles ("GAAP") consistently applied and fairly present the consolidated financial position of the Seller and any its Subsidiaries at the dates thereof and the consolidated results of operations and consolidated cash flows of the Seller and its Subsidiaries for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments that are not material in amount or effect). Except as set forth in the SEC Reports, neither the Seller nor any of its Subsidiaries has any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on a balance sheet of the Seller or in the notes thereto, other than (i) liabilities and obligations in the respective amounts reflected or reserved against in the most recent consolidated balance sheet included in the Financial Statements or (ii) other liabilities and obligations incurred in the ordinary course of business since the date of the most recent consolidated balance sheet included in the Financial Statements (the "Balance Sheet Date") which, individually or in the aggregate, have not had and could not reasonably be expected to have a Material Adverse Effect. Since the Balance Sheet Date there have been no changes in the financial condition, results of operations, business, properties or prospects of the Seller or its Subsidiaries that, individually or in the aggregate, have had, or could be reasonably expected to have, a Material Adverse Effect.

2.1.8Solvency; No Default.  The Seller has sufficient funds, assets and cash flow to pay its debts and other liabilities as they become due, and does not have unreasonably small capital for the conduct of its business as currently conducted and proposed to be conducted in the future.  Neither the Seller nor any of its Subsidiaries is in violation of its certificate of incorporation or bylaws (or comparable constituent or governing documents) or is in default (or, with the giving of notice, lapse of time or both, would be in default) under any material loan, agreement or other obligation, except in the case of any material loan agreement or other obligation, for such defaults which, individually or in the aggregate, would not have a Material Adverse Effect.  Each of the Seller and each of its Subsidiaries has complied, and is in compliance, in all material respects with all Applicable Laws and has all material licenses, permits and other authorizations required to conduct its business as currently conducted ("Permits"), except where the failure to have any such Permits would not, individually or in the aggregate, have a Material Adverse Effect.  All such Permits are in full force and effect and no proceeding is pending or, to the knowledge of the Seller and its Subsidiaries, threatened to revoke, modify or rescind any such Permit.

2.1.9Disclosure.  No representation or warranty of the Seller contained in this Agreement, the First Amendment to Registration Rights Agreement and the Note or the exhibits attached hereto (when read together and taken as a whole), contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein in light of the circumstances under which they were made not misleading.

2.1.10Accounting Controls.  Each Subsidiary of the Seller that is registered as a broker-dealer has adopted recordkeeping systems that comply with the requirements of Section 17 of the 1934 Act, and the rules thereunder and the rules of all Self-Regulatory Organizations having jurisdiction over such Subsidiary, and maintains its records in accordance therewith.  Each of the Seller and its Subsidiaries has devised and maintained systems of internal accounting controls sufficient to provide reasonable assurances that (1) all transactions are executed in accordance with management's general or specific authorization, (2) all transactions are recorded as necessary to permit the preparation of financial statements in conformity with GAAP, or any other criteria applicable to such statements, (3) access to the property and assets of the Seller and its Subsidiaries is permitted only in accordance with management's general or specific authorization and (4) the recorded amounts for items is compared with the actual levels at reasonable intervals and appropriate action is taken with respect to any differences.

2.1.11Brokerage Fees.  Neither the Seller nor any of its Subsidiaries has paid, or is obligated to pay, to any Person any brokerage or finder's fees in connection with the transactions contemplated by this Agreement.

2.2Gabelli Stockholders' Representations and Warranties.  Each Gabelli Stockholder, solely with respect to itself, represents and warrants to the Buyer as follows:

2.2.1Authority.  Each Gabelli Stockholder (other than Gabelli) is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization and has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery by each Gabelli Stockholder (other than Gabelli) of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate actions on the part of such Gabelli Stockholder.  This Agreement has been duly executed and delivered by each Gabelli Stockholder and constitutes a valid and binding obligation of such Gabelli Stockholder enforceable in accordance with its terms, except that such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, or other similar laws relating to enforcement of creditors' rights generally, and (ii) general equitable principles.

2.2.2No Conflict.  The execution and delivery of this Agreement by each Gabelli Stockholder, and the consummation of the transactions contemplated hereunder will not violate, conflict with, constitute a default or breach under, (i) any laws, rules or regulations of any Governmental Authority that are applicable to such Gabelli Stockholder, (ii) except in the case of Gabelli, any provisions of the certificate of incorporation or bylaws of such Gabelli Stockholder, or (iii) any material agreement, contract, or instrument to which such Gabelli Stockholder may be bound or of any judgment, order or decree of any Governmental Authority to which such Gabelli Stockholder may be bound, nor will the execution, delivery and performance of this Agreement result in the creation of any Lien upon any of the Shares or Conversion Shares, except, in the case of clause (iii), for such violations, conflicts, defaults or breaches that would not, individually or in the aggregate, have a Material Adverse Effect. No consent, approval, authorization or order of, or filing or registration with, any Governmental Authority is required for the execution, delivery and performance of this Agreement by any Gabelli Stockholder and the consummation of the transactions contemplated hereby.

2.2.3Ownership of Securities.  Each Gabelli Stockholder is the record and/or beneficial owner, directly or indirectly, of the number of shares of Class B Common Stock and the number of shares of Class A Common Stock set forth on Schedule I to this Agreement.  No Gabelli Stockholder is the record or beneficial owner of any other securities of the Seller.

"Beneficial Owner" and "beneficial ownership" shall have the meaning assigned to such terms in Rules 13d-3 and 13d-5 promulgated under the 1934 Act (or any successor rules).

2.3Buyer's Representations and Warranties.  Buyer makes the following representations and warranties.

2.3.1Investment Purpose.  The Buyer is purchasing the Note as principal for its own account for investment only and not with a present view towards the public sale or distribution thereof, other than sales or distributions registered or exempt from registration under the Securities Act of 1933, as amended (the "1933 Act").

2.3.2Accredited Investor Status.  The Buyer is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D and has such business and financial experience as is required to give it the capacity to protect its own interests in connection with the purchase of the Note.

2.3.3Reliance on Exemptions.  The Buyer understands that the Note is being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Seller is relying upon the truth and accuracy of, and the Buyer's compliance with, the representations, warranties, agreements, covenants, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Note.

2.3.4Information.  The Buyer has been furnished with all materials relating to the business, finances and operations of the Seller and materials relating to the offer and sale of the Note which have been requested by the Buyer.  Buyer has been afforded the opportunity to ask questions of the Seller and has received what the Buyer believes to be satisfactory answers to any such inquiries.  None of the foregoing or any other due diligence investigation conducted by the Buyer or any of its advisors or representatives shall modify, amend or affect in any respect the Seller's representations and warranties contained in Section 2.1 above or the Buyer's right to rely on them.  The Buyer understands that its investment in the Note involves a significant degree of risk.

2.3.5Governmental Review.  The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Note.

2.3.6Transfer or Resale.  The Buyer understands that (i) no public market now exists for the Note and that the Seller has made no assurances that a public market will ever exist for the Note, (ii) the Note has not been and is not being registered under the 1933 Act or any applicable state securities laws, and may not be transferred unless (a) the transfer is registered pursuant to an effective registration statement under the 1933 Act, (b) the transfer qualifies for the exemption afforded by Rule 144A or Rule 144 under the 1933 Act (or a successor rule), (c) the Buyer shall have delivered to the Seller an opinion of counsel (which opinion shall be reasonably satisfactory to the Seller) to the effect that the Note to be sold or transferred may be sold or transferred pursuant to another exemption from such registration or (d) the transfer is pursuant to the Put Option or Change of Control Put Option (as such terms are defined in the Note), and (iii) neither the Seller nor any other person is under any obligation to register such Note under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case, other than pursuant to the Amended Registration Rights Agreement).

2.3.7Legends.  The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act as contemplated by the Amended Registration Rights Agreement, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Note) and any other legends required by the laws of any State in which such securities will be issued:

(i)Legend for the Note:

NEITHER THIS CONVERTIBLE PROMISSORY NOTE NOR THE SHARES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND EXCEPT FOR ANY TRANSFERS SPECIFICALLY AUTHORIZED UNDER THE TERMS OF THIS NOTE, NEITHER THIS NOTE NOR SUCH SHARES MAY BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT REGISTRATION THEREOF UNDER THE 1933 ACT OR COMPLIANCE WITH RULE 144 OR RULE 144A PROMULGATED UNDER THE 1933 ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED. TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN IS ALSO SUBJECT TO RESTRICTIONS UNDER THE TERMS HEREOF

(ii)Legend for the Conversion Shares:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT REGISTRATION THEREOF UNDER THE 1933 ACT OR COMPLIANCE WITH RULE 144 OR RULE 144A PROMULGATED UNDER THE 1933 ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.

The legends set forth above (other than the last sentence of the legend in clause (i)) shall be removed and the Seller shall issue a certificate without such legend to the holder of any certificate upon which it is stamped if, unless otherwise required by applicable state securities laws, (a) such security is sold pursuant to an effective registration statement filed under the 1933 Act, (b) such holder provides the Seller with an opinion of counsel, satisfactory to the Seller, to the effect that a public sale or transfer of such security may be made without registration under the 1933 Act and such sale or transfer is effected or (c) such holder provides the Seller with reasonable assurances that all of the securities represented by such certificate can then be sold pursuant to Rule 144 under the 1933 Act (or successor rule thereto). The Buyer agrees to sell all Conversion Shares, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any.

2.3.8Authorization; Enforcement.  The Buyer represents and warrants to the Seller that (i) the Buyer has all requisite limited liability company power and authority and has taken all requisite limited liability company action to execute and deliver this Agreement, the First Amendment to Registration Rights Agreement and the Escrow Agreement, to purchase the Note to be purchased by it and to carry out and perform all of its obligations under this Agreement, the Amended Registration Rights Agreement and the Escrow Agreement, and (ii) each of this Agreement, the First Amendment to Registration Rights Agreement and the Escrow Agreement constitutes the legal, valid and binding obligation of the Buyer, enforceable in accordance with its terms, except (1) as limited by applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors' rights generally and by equitable principles generally and (2) to the extent that indemnification provisions in the Amended Registration Rights Agreement may be limited by applicable federal or state securities laws.

2.3.9Brokerage Fees.  The Buyer has not paid, nor is obligated to pay, to any Person any brokerage or finder's fees in connection with the transactions contemplated by this Agreement.

3.Deliveries at Closing.

3.1Deliveries by Buyer at the Closing.  At the Closing, Buyer shall deliver the following items to Seller (and in the case of Section 3.1.2, to the Gabelli Stockholders):

3.1.1The Consideration, by wire transfer in immediately available funds;

3.1.2An executed copy of this Agreement;

3.1.3An executed copy of the First Amendment to Registration Rights Agreement; and

3.1.4A copy of the Escrow Agreement duly executed by Buyer.

3.2Deliveries by Seller at the Closing.  At the Closing, Seller shall deliver the following items to Buyer (and in the case of Section 3.2.2, to the Gabelli Stockholders):

3.2.1The executed Note;

3.2.2An executed copy of this Agreement;

3.2.3An executed copy of the First Amendment to Registration Rights Agreement;

3.2.4An opinion of Skadden, Arps, Slate, Meagher & Flom LLP, as special counsel to the Seller, dated as of the Closing Date, in substantially the form of Exhibit E hereto, and an opinion of Dorsey & Whitney LLP, as Washington special counsel to the Seller, in substantially the form of Exhibit F hereto;

3.2.5A copy of the Escrow Agreement duly executed by Seller and the Escrow Agent.

3.3Deliveries by the Gabelli Stockholders at the Closing.  At the Closing, the Gabelli Stockholders shall deliver the following items to Buyer (and, in the case of Section 3.3.1, to the Seller):

3.3.1An executed copy of the Agreement; and

3.3.2An opinion of Skadden, Arps, Slate, Meagher & Flom LLP, as special counsel to GGCP, Inc., dated as of the Closing Date, in substantially the form of Exhibit E hereto, and an opinion of Dorsey & Whitney LLP, as Washington special counsel to GGCP, Inc., in substantially the form of Exhibit F hereto.

4.Covenants.

4.1Reservation of Shares.  Seller shall at all times have authorized and reserved for the purpose of issuance pursuant to the conversion of the Note the total number of shares of Class A Common Stock into which the Note may be converted (as such number may be adjusted from time to time pursuant to the terms of the Note) (the "Maximum Number").  If at any time the number of shares of Class A Common Stock authorized and reserved for issuance pursuant to the conversion of the Note is for any reason below the Maximum Number, the Seller and the Gabelli Stockholders will promptly take or cause to be taken all corporate action necessary to authorize and so reserve a number of such shares equal to the Maximum Number, including without limitation calling a special meeting of shareholders to authorize additional shares to meet the Seller's and the Gabelli Stockholders' obligations hereunder, and using their reasonable best efforts to obtain shareholder approval of such an increase in the authorized number of shares.

4.2NYSE Listing.  Seller shall promptly secure the listing of all the Conversion Shares issued upon conversion of the Note upon the New York Stock Exchange, Inc. or such other national securities exchange, automated inter-dealer quotation system or over-the-counter market upon which shares of Class A Common Stock are then listed, and shall maintain, so long as any other shares of Class A Common Stock shall be so listed, such listing of such shares of Class A Common Stock.

4.3Escrow.

4.3.1If, on or prior to the Exercise Date, (i) the Buyer elects to exercise any of the Put Option, the Change of Control Put Option and/or the Fundamental Change Put Option (collectively, the "Note Put Options") or an Event of Default occurs and (ii) Seller fails to deliver all or any portion of the consideration due and payable in respect of such exercise or Event of Default (in each case, the "Unpaid Amount") when it becomes due under the Note (in each case, the "Due Date"), then Seller may, in its sole discretion, elect to make a claim under the Escrow Agreement for cash in an amount equal to the Unpaid Amount and upon receipt of such cash by the Buyer under the Escrow Agreement the Unpaid Amount shall be deemed to have been paid in full by the Seller. Cascade and Seller shall instruct the Escrow Agent to release all of the Escrowed Funds in excess of the Floor Amount (defined below) promptly after (i) each partial conversion of the Note into Common Stock or  partial exercise of any Note Put Option (each a "Partial Release Event") and (ii) receipt of each Monthly Statement (defined below).  The Escrow Agreement shall terminate (other than the provisions of Sections 7 and 8 which will survive termination) upon the earlier to occur of (i) the full conversion of the entire aggregate principal amount of the Note, (ii) the first Business Day after the entire aggregate principal amount of the Note has been paid in full, and (iii) the first Business Day after the Exercise Date on which all outstanding Payment Notices (as defined in the Escrow Agreement) have be fully discharged and paid in full.

4.3.2"Monthly Statement" means the monthly account statement provided by the Escrow Agent to the Buyer and Seller pursuant to Section 3 of the Escrow Agreement. "Floor Amount" means the sum of the Unpaid Principal Amount and six months of interest on the Unpaid Amount at the rate of 6.5% per annum. Capitalized terms used but not defined in this Agreement that are defined in the Note shall have the meanings assigned to such terms in the Note. Without limiting Section 4.3.1 , if the Exercise Date is extended as provided in the Note all references herein to the Exercise Date shall be to the Exercise Date as so extended.

4.3.3The Buyer agrees to engage in good faith discussions with the Seller regarding the possible subordination of the Note in September 2009, and regarding the release of earnings on the Escrow Deposit from time to time after September 2010.

4.4Tag-Along Right.  If any Gabelli Entity (as defined below), acting individually or together in any combination with any other Gabelli Entity (collectively, the "Transferor"), proposes to sell, contract to sell, or otherwise transfer or dispose of, directly or indirectly, in one transaction or a series of related transactions, (each, a "Transfer") Voting Stock (as defined below) of the Seller, which represents 20% or more of the total voting power of all the then outstanding shares of Voting Stock of Seller to a Person other than a Gabelli Entity (the "Purchaser"), the Transferor shall provide written notice (a "Transfer Notice") to the Buyer no later than 30 days prior to the consummation of the Transfer specifying all the material terms and conditions of the Transfer, including but not limited to the type and number of shares of Voting Stock to be transferred, the nature and amount of the consideration to be paid by the Purchaser, the identity of the Purchaser and any conditions to the Transfer. If a change occurs in the nature or amount of consideration to be paid by the Purchaser or in any other material terms or conditions of the Transfer, the Transferor shall promptly deliver to the Buyer a new Transfer Notice.  If the Buyer elects to sell Conversion Shares in connection with the Transfer by delivering written notice to the Transferor in writing within 10 days after the date on which the Buyer received the Transfer Notice, then the Transferor will not consummate the Transfer unless (i) it does so at a price at least as high and on other terms and conditions at least as favorable as those specified in the Transfer Notice and (ii) simultaneously with the consummation of the Transfer the Purchaser also purchases from the Buyer, at the same price and on the other terms and conditions specified in the Transfer Notice, a percentage of the number of Conversion Shares then beneficially owned by it equal to the percentage obtained by dividing (i) the number of shares of Voting Stock being sold by the Transferor in the Transfer by (ii) the total number of shares of Voting Stock then beneficially owned by all of the Gabelli Entities and multiplying that quotient by 100. Gabelli shall cause any Gabelli Entity that is not a party to this Agreement who becomes the record or beneficial owner of any Voting Stock of the Seller after the date of this Agreement (a "New Gabelli Stockholder") to comply with the requirements of this Section and to execute and delivery, on or prior to the date on which it acquires such record or beneficial ownership, a written undertaking to Buyer, in form and substance reasonably satisfactory to the Buyer, that such New Gabelli Stockholder will comply with the requirements of this Section 4.4 as if it was a Gabelli Stockholder, and thereafter such New Gabelli Stockholder shall be deemed to be a Gabelli Stockholder for all purposes of this Section.

A "Gabelli Entity" shall mean Gabelli, the spouse or any child or grandchild of Gabelli, or any Person in which Gabelli and/or one or more of such other individuals has a controlling interest or beneficially owns, directly or indirectly, (i) a majority of the number of outstanding shares of Capital Stock of such Person and/or (ii) Voting Stock of such Person which represents 50% or more of the total voting power of all the then outstanding shares of Voting Stock of such Person, and shall also mean any testamentary, charitable or similar trust or foundation of which Gabelli and/or one or more of such other individuals is a grantor, beneficiary, trustee or person having similar management authority.

"Voting Stock" means, with respect to any Person, Capital Stock of such Person that is entitled to vote generally in the election of directors (or, in the case of Persons that are not corporations, persons performing similar functions) of such Person.

5.Survival of Representations and Warranties.  All representations, warranties, agreements and covenants contained in this Agreement shall survive the Closing; provided, however, that a claim for a breach of a representation or warranty (but not for a breach of a covenant or agreement) must be brought within one (1) year of the execution of this Agreement.  In the event Buyer brings a claim within such one (1) year period, such representations and warranties shall continue to survive solely with regard to such claim until such claim has been finally resolved and satisfied.  Buyer's rights under this Agreement shall not be affected by any knowledge it may have with respect to the Seller, its Subsidiaries or their businesses.

6.Miscellaneous.

6.1Entire Agreement.  This Agreement and the documents listed in Section 3.2 (other than the opinion of Seller's legal counsel) represents the entire agreement among the parties with respect to the transactions contemplated herein and supersede all prior agreements, written or oral, with respect thereto.  This Agreement may be amended only by an instrument that is executed and authorized by all parties hereto.

6.2Expenses.  Without limiting Section 6.6, Buyer and Seller will pay their own respective expenses, including attorneys' fees, in connection with the negotiation of this Agreement, the performance of its obligations hereunder, and the consummation of the transactions contemplated by this Agreement.

6.3Successors and Assigns.  This Agreement and all of the provisions hereof will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided, however, that neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by either party without the prior written consent of the other party.

6.4Governing Law; Consent to Jurisdiction.  Except as stated below, this Agreement shall be governed by the laws of the State of Washington without regard to the conflict of laws rules thereof.  The parties hereby irrevocably and unconditionally submit in any legal action or proceeding relating to this Agreement to the non-exclusive general jurisdiction of the courts of the United States located in the Western District of Washington and, in any such action or proceeding, consent to jurisdiction in such courts and waives any objection to the venue in any such court.  In the event that the federal court selected by Buyer shall not have jurisdiction, Seller agrees to submit to the jurisdiction of the courts of the State of Washington located in King County.  In the event Buyer transfers or assigns the Note to a person not an affiliate (as defined in Rule 405 under the 1933 Act), then this Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to the conflicts of laws rules thereof and the consent to jurisdiction in the State of Washington stated above is hereby revoked.

6.5Nonwaiver.  The failure of either party to insist upon strict adherence to any one or more of the covenants and restrictions in this Agreement, on one or more occasion, shall not be construed as a waiver, nor deprive either party of the right to require strict compliance thereafter with the same.  All waivers must be in writing and signed by the waiving party.

6.6Attorneys' Fees and Expenses.  In any suit or action brought to enforce this Agreement, or to obtain adjudication, declaratory or otherwise, of rights hereunder, the losing party shall pay to the prevailing party reasonable attorneys' fees and all other costs and expenses that may be incurred by the prevailing party in such action.  The foregoing shall be in addition to, and shall not limit, any other rights that the non-breaching party may have against the breaching party at law or in equity.

6.7Publicity.  Seller shall not issue any public statement (such as press releases, letters to shareholders, speeches and similar statements) concerning the beneficial owner of Buyer without the prior written consent of the Buyer; provided, however, that such disclosure may be made if such approval has been requested and not received and the Seller concludes (after consulting with counsel) that it is required by law or stock exchange regulation to make such disclosure in a press release or other public statement. With respect to any press release issued by Seller, Seller shall use reasonable efforts to provide copies to Buyer prior to public dissemination thereof and shall incorporate Buyer's comments to such press release, if any, in good faith.

6.8Notices.  Any notice required or permitted to be given under the terms of this Agreement shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile and shall be effective for five days after being placed in the mail, if mailed by regular U.S. mail, or upon receipt, if delivered personally or by courier (including a recognized overnight delivery service) or by facsimile, in each case addressed to a party. The addresses for such communications shall be:

If to the Seller or any Gabelli Stockholder:

GAMCO Investors, Inc.

One Corporate Center

Rye, New York 10580

Attn:  General Counsel

Facsimile: (914) 921-5384

With copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attn: Richard Prins, Esq.

Facsimile: (212) 735-3000

If to Buyer:

Cascade Investment, L.L.C.

2365 Carillon Point

Kirkland, WA  98033

Attn:  General Counsel

Facsimile: (425) 803-0459

With copy to:

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

Attn: Duncan C. McCurrach

Facsimile: (212) 558-3588

Each party shall provide notice to the other of any changes in address.

6.9Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

6.10Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.  If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

6.11Construction.  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.  Where any provision herein refers to action to be taken by any person, or which such person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such person, whether or not expressly specified in such provision.  The construction of this Agreement shall not be affected by which party drafted this Agreement.

6.12Headings.  The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

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SIGNATURE PAGE - NOTE PURCHASE AGREEMENT

NOTICE:  ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first mentioned above.

SELLER	BUYER
GAMCO INVESTORS, INC.	CASCADE INVESTMENT, L.L.C.
By:      /s/  Douglas R. Jamieson	By:      /s/  Michael Larson
Douglas R. Jamieson President and Chief Operating Officer	Michael Larson Business Manager
GABELLI STOCKHOLDERS
By:       /s/  Mario J. Gabelli
MARIO J. GABELLI (Shares of Class A Common Stock) (Shares of Class B Common Stock)
GGCP, INC. (Shares of Class A Common Stock) (Shares of Class B Common Stock)
By:       /s/  Michael Chieco
Michael Chieco Secretary

EX-4.1

NEITHER THIS CONVERTIBLE PROMISSORY NOTE (THIS “NOTE”) NOR THE SHARES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND EXCEPT FOR ANY TRANSFERS SPECIFICALLY AUTHORIZED UNDER THE TERMS OF THIS NOTE, NEITHER THIS NOTE NOR SUCH SHARES MAY BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT REGISTRATION THEREOF UNDER THE 1933 ACT OR COMPLIANCE WITH RULE 144 OR RULE 144A PROMULGATED UNDER THE 1933 ACT, OR UNLESS GAMCO INVESTORS, INC. HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO GAMCO INVESTORS, INC., THAT SUCH REGISTRATION IS NOT REQUIRED.  TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN IS ALSO SUBJECT TO RESTRICTIONS UNDER THE TERMS HEREOF.

CONVERTIBLE PROMISSORY NOTE

$60,000,000.00	Dated:  October 2, 2008
	Rye, New York

FOR VALUE RECEIVED, the undersigned, GAMCO INVESTORS, INC., a New York corporation (“GAMCO”), promises to pay to the order of CASCADE INVESTMENT, L.L.C., a Washington limited liability company (“Cascade”), or its permitted registered assigns or at such other place or places as the Holder (as defined below) may designate in writing, on October 2, 2018 (the “Stated Maturity”), the principal sum of SIXTY MILLION and NO/100 DOLLARS ($60,000,000) minus the principal amount converted or sold pursuant to the Put Option, the Change of Control Put Option or the Fundamental Change Put Option (as each such term is defined below) (such amount, as of any determination date, the “Unpaid Principal Amount”) on or before October 2, 2018, and to pay interest thereon from and including October 2, 2008 (the “Issue Date”) or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, semi-annually on March 31 and September 30 in each year, commencing March 31, 2009, and at Maturity (each, an “Interest Payment Date”) at the rate of 6.5% per annum until the principal hereof is paid or made available for payment; provided, however, that (i) notwithstanding anything in this Note to the contrary the amount payable to the Holder at Stated Maturity shall be reduced by an amount equal to (A) the Teton Value (as defined below) minus (B) the aggregate Teton Deductions (as defined below) with respect to all prior exercises of the Put Option, the Change of Control Put Option and the Fundamental Change Put Option (the “Teton Adjustment”), (ii) upon the occurrence and during the continuance of an Event of Default (as defined below) this Note and (iii) any principal and any such installment of interest which is overdue, in each case shall bear interest at the rate of 15% per annum (or, if less, the maximum interest rate permitted by the laws of the State of Washington or any other applicable jurisdiction).  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the Person in whose name this Note is registered at the close of business on the day immediately prior to such Interest Payment Date (whether or not a Business Day).  Payment of the principal of and interest on this Note will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

Any payments in respect of this Note shall first be applied to Enforcement Costs (as defined below), then to interest and then to principal.  If it is ever determined that any rate of interest payable in respect of this Note exceeds the maximum rate (if any) prescribed by applicable law, then any portion of interest payments representing any amounts in excess of said maximum shall be applied as provided in the preceding sentence.

As used herein, “Maturity” means the date on which the principal of this Note becomes due and payable as provided herein, whether at its Stated Maturity, by declaration of acceleration or otherwise, “Holder” means, at any time, the person in whose name this Note is registered in the Note Register (as defined below) and “Business Day” means any day other than a Saturday, a Sunday or any other day on which banking institutions in the Borough of Manhattan, The City of New York are authorized or required by law or executive order to be closed.

This Note was issued by GAMCO pursuant to that certain Note Purchase Agreement, dated as of October 2, 2008 (the “Purchase Agreement”), among GAMCO, Cascade and the Gabelli Stockholders.  Capitalized terms not otherwise defined in this Note shall have the meaning set forth in the Purchase Agreement, which definitions are incorporated herein.

The Holder agrees to engage in good faith discussions with the GAMCO regarding the possible subordination of the Note in October 2009.

No Redemption or Prepayment Prior to October 2, 2013

GAMCO agrees and acknowledges that the conversion feature of this Note during the term of the Note is a valuable right and that the Holder would not have purchased this Note without assurances that the Note would not be called or prepaid by GAMCO.  Accordingly, GAMCO acknowledges and agrees that prior to October 2, 2013 it shall not be entitled to and will not, without the consent of the Holder, make any prepayments of principal on this Note other than pursuant to an acceleration of this Note or Forced Conversion (as hereinafter defined), in each case as provided below.  GAMCO may redeem this Note in whole but not in part on any date on or after October 2, 2013 (the “Redemption Date”) if (i) at least 30 days’ prior to the Redemption Date, GAMCO delivers to Holder a written notice stating that it intends to effect such a redemption and specifying the Redemption Date, (ii) on the Redemption Date, GAMCO delivers to Holder a certificate, dated the Redemption Date, duly executed and delivered by the chief executive officer of GAMCO certifying that, to the best of his knowledge after reasonable investigation, neither he nor GAMCO is then in possession of any non-public information concerning GAMCO, any of its subsidiaries or any of their businesses or operations which could reasonably be expected to have a material positive effect on the market price (or, if no such market price exists, the fair market value) of the Common Stock or other consideration issuable upon conversion of the Note and (iii) on the Redemption Date, GAMCO pays to Holder by wire transfer of immediately available funds cash in an amount equal to (A) (i) 101% of the Unpaid Principal Amount minus (ii) the Teton Adjustment plus (B) all accrued but unpaid interest thereon to but excluding the Redemption Date (the delivery of such notice and certificate and the making of such payment are referred to herein collectively as the “Required Actions”).  If the market price of the Common Stock could not reasonably be expected to exceed the then current Conversion Price after disclosure of any non-public information concerning GAMCO, any of its subsidiaries or any of their businesses of operations, then such non-public information shall be conclusive presumed not to have a material positive effect for purposes of the immediately preceding sentence.  This Note will be fully discharged and cease to have any further legal force or effect if and when GAMCO has fully performed all of the Required Actions on the Redemption Date, and the Holder agrees to return this Note to GAMCO promptly following such full performance.

Events of Default

“Event of Default”, wherever used with respect to this Note, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any Governmental Authority):

(a) Payment Default.  GAMCO shall fail to pay or cause to be paid all or any portion of the principal of or interest on this Note when it becomes due and payable, and, in the event of failure to pay interest on the Note, such failure continues for 10 days and time for payment has not been extended or deferred by the Holder; or

(b) Escrow Agreement Default.  The Escrow Agent shall fail to honor a request for disbursement of the funds under the Escrow Agreement to Cascade, or GAMCO shall breach its obligations with respect to the Escrow Agreement in Section 4.3 of the Purchase Agreement, and such failure continues for 5 days and time for payment has not been extended or deferred by the Holder.

(c) Put Option Default.  GAMCO shall fail to pay or cause to be paid all or any portion of the Put Consideration when it becomes due and payable, and such failure continues for 5 days and time for payment has not been extended or deferred by the Holder; or

(d) Change of Control Put Option or Fundamental Change Put Option Default.  GAMCO shall fail to pay or cause to be paid all or any portion of the Change of Control Put Consideration or the Fundamental Change Put Consideration when it becomes due and payable; or

(e) Breach of Representation or Warranty.  Any representation or warranty made by GAMCO in the Purchase Agreement shall prove to have been untrue or misleading when made in any respect that is material and adverse to the value of the Holder’s investment in the Note or the Conversion Shares; provided, however, that this shall constitute an Event of Default only if Cascade or one of its Affiliates (as defined below) is the Holder and if the Holder accelerates this Note as provided below during the period in which any such representation and warranty survives as provided in the Purchase Agreement; or

(f) Breach of Other Covenants or Failure of any Condition.  GAMCO shall fail to perform, keep or observe any agreement or covenant contained in this Note or the Purchase Agreement that is not covered by clauses (a) through (d) above, and any such failure shall remain unremedied for thirty (30) days after written notice thereof shall have been given to GAMCO by the Holder; provided, however, that if any such failure is not susceptible to cure within 30 days and GAMCO commences to cure such failure within said 30-day period, then no Event of Default shall be deemed to have occurred if GAMCO diligently prosecutes said cure thereafter to completion and cures said failure by the sixtieth (60th) day after the date of said notice; or

(g) Cross Defaults (Payment and Other).  GAMCO or any of its Subsidiaries that are at the time significant subsidiaries of GAMCO within the meaning of Rule 1-02(w) of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”) as of the date of this Note (each, a “Significant Subsidiary”) shall be in default under indebtedness for borrowed money with an aggregate principal amount of twenty five million dollars ($25,000,000) or more to any person or persons and such default (i) shall constitute a failure to make any payment of or with respect to such indebtedness or (ii) permits the holder thereof to accelerate the payment of such indebtedness or otherwise causes such indebtedness to become due and payable prior to its stated maturity.  Notwithstanding the foregoing, there shall not be an Event of Default under this section (f) until expiration of, without cure, any period for cure contained in any other agreement regarding such indebtedness; or

(h) Judgments.  A final judgment or final order (not covered by insurance, treating deductibles, self-insurance and retentions as not so covered) for the payment of money in excess of twenty-five million dollars ($25,000,000) in the aggregate for all such judgments and orders is entered by a court or courts of competent jurisdiction against GAMCO or any of its Significant Subsidiaries and shall not be paid or discharged, and there shall be a period of 60 consecutive days after the final judgment or order that causes such aggregate amount to exceed twenty-five million dollars ($25,000,000) during which a stay of enforcement of such final judgment or order is not in effect; or

(i) Involuntary Bankruptcy Events.  The entry by a court having jurisdiction in the premises of a decree or order (A) for relief in respect of GAMCO or any of its Significant Subsidiaries (each, a “Subject Entity”) in an involuntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization or other similar law or (B) adjudging any Subject Entity bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of any Subject Entity under any applicable Federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of any Subject Entity or of any substantial part of any property of any Subject Entity, or ordering the winding up or liquidation of the affairs of any Subject Entity, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or

(j) Voluntary Bankruptcy Events.  Any Subject Entity commences a voluntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated as bankrupt or insolvent, or the consent by any Subject Entity to the entry of a decree or order for relief in respect of it in an involuntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by any Subject Entity of a petition or answer or consent seeking reorganization or relief under any applicable Federal or state law, or the consent by any Subject Entity to the filing of such a petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of such Subject Entity or of any substantial part of such Subject Entity’s property, or the making by any Subject Entity of an assignment for the benefit of creditors, or the admission by any Subject Entity in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by any Subject Entity in furtherance of any such action.

If an Event of Default (other than an Event of Default specified in clause (i) or (j) above with respect to GAMCO) occurs and is continuing, the Holder may declare (A) (i) the Unpaid Principal Amount of this Note minus (ii) the Teton Adjustment and (B) all accrued and unpaid interest hereon to be immediately due and payable.  If an Event of Default specified in clause (i) or (j) above occurs with respect to GAMCO, the Unpaid Principal Amount of the Note and all accrued and unpaid interest hereon shall automatically become and be immediately due and payable without any declaration or other act on the part of the Holder or any other Person.

Conversion Rights

The Holder shall have the right to convert this Note as provided in Exhibit A hereto, which Exhibit shall be incorporated by reference herein.

If the Closing Price (as hereinafter defined) of the Common Stock is at least 125%, 150%, 175% or 200%, as the case may be, of the Conversion Price (as hereinafter defined) on each Trading Day (as hereinafter defined) during any period of 20 consecutive Trading Days (each, a “Qualified Trading Period”) occurring within any six month period beginning on the Exercise Date (as hereinafter defined) or any six month anniversary thereof and ending on the next six month anniversary of the Exercise Date (each, a “Six Month Period”), then on any date on or after the tenth Business Day following the last trading day of any such Qualified Trading Period during such Six Month Period (each a “Conversion Date”) GAMCO may convert any portion of the Unpaid Principal Amount which, together with the aggregate principal amount of this Note that has been converted by the Holder on or prior to such Conversion Date or by GAMCO pursuant to this provision with respect to such Six Month Period, does not exceed the Maximum Conversion Amount (as defined below) with respect to such Six Month Period, into fully paid and nonassessable shares of Common Stock (calculated as to each conversion to the nearest full share of Common Stock) at the Conversion Price in effect on the applicable Conversion Date by delivering written notice to that effect to the Holder on or prior to such Conversion Date; provided, however, that notwithstanding the foregoing to the extent that any prior conversions by the Holder prevented GAMCO from converting the full Maximum Conversion Amount with respect to any Six Month Period and GAMCO caused the conversion of all of the Unpaid Principal Amount that it was permitted to convert with respect to such Six Month Period, then to such extent such prior conversions by the Holder shall not be taken into account in calculating the Unpaid Principal Amount that GAMCO is entitled to convert in any subsequent Six Month Period pursuant to the foregoing provisions.  After any conversion pursuant to the foregoing, the Holder shall have the right and option (the “Share Put Option”), but not the obligation, exercisable by delivering a written notice (the “Share Put Notice”) to GAMCO no later than the tenth day after the Conversion Date, to cause GAMCO to purchase up to 50% of the Conversion Shares issued in such conversion (the “Forced Conversion Shares”) for a purchase price per share in cash equal to the average of the Closing Prices for the five Trading Days immediately following the date on which the Share Put Notice is delivered to GAMCO (the “Share Put Consideration”).  The closing of any Share Put Option will be held at 10:00 A.M. at the principal executive offices of the Holder on the later of the ninth Trading Day immediately following the date on which the Share Put Notice is delivered to GAMCO or the first day on which all regulatory approvals and requirements applicable to such closing shall have been obtained or satisfied, or at such other time and place upon which the Holder and GAMCO shall agree.  At such closing, GAMCO shall pay the Share Put Consideration to the Holder in cash by wire transfer of immediately available funds against the delivery to GAMCO of a certificate representing the Forced Conversion Shares with respect to which the Share Put Option has been exercised, duly endorsed to GAMCO or in blank, and concurrently with such delivery GAMCO shall, or shall cause the applicable transfer agent for such shares to, duly execute and deliver to the Holder a new share certificate representing the number of Forced Conversion Shares with respect to which the Share Put Option has not been exercised.

The “Maximum Conversion Amount” means, with respect to any Six Month Period, (i) $15 million, if the Closing Price during each of the 20 consecutive Trading Days during the first Qualified Trading Period in such Six Month Period with respect to which GAMCO has effected a conversion pursuant to the foregoing provisions (the “Qualified Trading Price”) is at least 125% but less than 150% of the Conversion Price, (ii) $30 million, if the Qualified Trading Price is at least 150% but less than 175% of the Conversion Price, (iii) $45 million, if the Qualified Trading Price is at least 175% but less than 200% of the Conversion Price, or (iv) $60 million, if the Qualified Trading Price is at least 200% of the Conversion Price.

Except as otherwise provided above, any conversion pursuant to the foregoing clauses (each, a “Forced Conversion”) shall be made in accordance with the provisions of Exhibit A.  If GAMCO effects a Forced Conversion, then on such Conversion Date the Holder shall surrender the Note at the principal executive offices of GAMCO (which, if GAMCO shall so require, shall be duly endorsed to GAMCO or in blank, or be accompanied by proper instruments of transfer to GAMCO or in blank), accompanied by irrevocable written notice to GAMCO specifying the name or names (with address or addresses) in which a certificate or certificates evidencing the full number of shares of Common Stock issuable upon such conversion are to be issued and GAMCO shall deliver such certificate or certificates registered in the name(s) and in the denominations set forth in such instructions, together with a cash adjustment in respect of any fraction of a share of Common Stock and, if less than all of the Unpaid Principal Amount is being converted, a new Note of like tenor with an Unpaid Principal Amount equal to the portion not being converted.  Any such conversion shall be deemed to have been made as of the applicable Conversion Date, and the person or persons entitled to receive the Common Stock deliverable upon conversion of this Note shall be treated for all purposes as the record holder or holders of such Common Stock on such date.

Put Option

The Holder shall have the right and option, but not the obligation, to cause GAMCO to purchase all or any portion of the Unpaid Principal Amount of this Note (the “Put Option”) on October 2, 2009 (the “Exercise Date”) for a purchase price in cash (the “Put Consideration”) equal to (i) 100% of the principal amount of the Note to be purchased plus accrued and unpaid interest thereon to but excluding the Exercise Date minus (ii) the Teton Deduction (as defined below). The Put Consideration shall be payable to the Holder by wire transfer of immediately available funds on the Exercise Date against the delivery to GAMCO of this Note duly endorsed to it or in blank; provided, however, that if only a portion of the principal amount of this Note is being purchased, then concurrently with such delivery GAMCO shall duly execute and deliver to the Holder a new Note of the same tenor as this Note but with a principal amount equal to the principal amount of this Note not being purchased.  In order to exercise the Put Option, the Holder must deliver a written notice of its election to exercise to GAMCO at least 30 days prior to the Exercise Date.  Notwithstanding the foregoing, if the Holder has not delivered written notice of its election to exercise the Put Option in whole, the Holder may change the Exercise Date to October 2, 2010 by delivering a written notice of such change to GAMCO at least 30 days prior to October 2, 2009 and from and after the delivery of such written notice the Exercise Date shall be deemed to be October 2, 2010 for all purposes of this Note. The closing of any exercise of the Put Option will be held at 10:00 A.M. at the principal executive offices of the Holder on the Exercise Date, or at such other time and place upon which the Holder and GAMCO shall agree.

 “Teton Deduction” shall mean, with respect to any exercise of the Put Option, the Change of Control Put Option or Fundamental Change Put Option, the product of (i) the Teton Value and (ii) a fraction the numerator of which shall be the principal amount of the Note to be purchased pursuant to such exercise and the denominator of which shall be $60,000,000.

Change of Control Put Option

If a Change of Control or a Key Executive Change occurs at any time, the Holder shall have the right and option, but not the obligation, to cause GAMCO to purchase on the Change of Control Exercise Date (as defined below) all or any portion of the Unpaid Principal Amount of this Note (the “Change of Control Put Option”) for a purchase price in cash (the “Change of Control Put Consideration”) equal to (i) 101% of the principal amount of the Note to be purchased plus accrued and unpaid interest thereon to but excluding the Change of Control Exercise Date minus (ii) the Teton Deduction.  The Change of Control Put Consideration shall be payable to the Holder by wire transfer of immediately available funds on the Change of Control Exercise Date against the delivery to GAMCO of this Note duly endorsed to it or in blank; provided, however, that if only a portion of the principal amount of this Note is being purchased, then concurrently with such delivery GAMCO shall duly execute and deliver to the Holder a new Note of the same tenor as this Note but with a principal amount equal to the principal amount of this Note not being purchased.  GAMCO shall give the Holder prompt written notice if a Change of Control or a Key Executive Change occurs (a “Notice”).  In order to exercise the Change of Control Put Option with respect to any Change of Control or Key Executive Change, the Holder must deliver a written notice of its election to exercise to GAMCO within 30 days after it has received the Notice relating thereto and the closing of any exercise of the Change of Control Put Option will be held at 10:00 A.M. at the principal executive offices of the Holder on the 30th day after GAMCO receives such written notice, or at such other time and place upon which the Holder and GAMCO shall agree (the “Change of Control Exercise Date”).

“Change of Control” means the occurrence of any of the following:  (i) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or more related transactions, of all or substantially all of the properties and assets of GAMCO and its Subsidiaries, taken as a whole, to any Person or group (as such term is defined for purposes of Rule 13d-5 under the Securities Exchange Act of 1934, as amended (the “1934 Act”) or any successor rule), (ii) the adoption of a plan relating to the liquidation or dissolution of GAMCO, (iii) the consummation of any transaction or other event (including, without limitation, any merger or consolidation) the result of which is that any “person” (as defined above), other than Mario J. Gabelli and the Gabelli Entities (considered as a single Person solely for this purpose), becomes the “beneficial owner” (as such term is defined in Rule 13d-3 and Rule 13d-5 under the 1934 Act), directly or indirectly, of more than 40% of the total voting power of all the then outstanding shares of Voting Stock of GAMCO or any Person with which GAMCO consolidates or into which GAMCO merges, and more of the total voting power of all such shares than is beneficially owned at such time by Mario J. Gabelli and the Gabelli Entities (considered as a single Person solely for this purpose), or (iv) the first day on which a majority of the members of the Board of Directors of GAMCO are not Continuing Directors.

“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of GAMCO who (i) was a member of such Board of Directors on the Issue Date or (ii) was nominated for election or elected to such Board of Directors with the approval, recommendation or endorsement of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.

“Key Executive Change” shall be deemed to have occurred at any time that (for any reason) Mario J. Gabelli ceases to provide the predominant executive leadership to GAMCO and its Subsidiaries, taken as a whole.

Fundamental Change Put Option

If a Fundamental Change (as defined below) occurs prior to October 2, 2013, then the Holder shall have the right and option, but not the obligation, to cause GAMCO to purchase on the Fundamental Change Exercise Date (as defined below) all or any portion of the Unpaid Principal Amount of this Note (the “Fundamental Change Option”) for a purchase price in cash (the “Fundamental Change Put Consideration”) equal to (i) the Fundamental Change Value (as defined below) of the principal amount of this Note to be purchased plus accrued and unpaid interest thereon to but excluding the Fundamental Change Exercise Date minus (ii) the Teton Deduction. The Fundamental Change Put Consideration shall be payable to the Holder by wire transfer of immediately available funds on the Fundamental Change Exercise Date against the delivery to GAMCO of this Note duly endorsed to it or in blank; provided, however, that if only a portion of the principal amount of this Note is being purchased, then concurrently with such delivery GAMCO shall duly execute and deliver to the Holder a new Note of the same tenor as this Note but with a principal amount equal to the principal amount of this Note not being purchased. GAMCO shall give the Holder prompt written notice if a Fundamental Change occurs (a “Fundamental Change Notice”). In order to exercise the Fundamental Change Put Option with respect to any Fundamental Change, the Holder must deliver a written notice of its election to exercise to GAMCO within 30 days after it has received the Fundamental Change Notice relating thereto and the closing of any exercise of such Fundamental Change Option will be held at 10:00 A.M. at the principal executive offices of the Holder on the 30th day after GAMCO receives such written notice, or at such other time and place upon which the Holder and GAMCO shall agree (the “Fundamental Change Exercise Date”). If the Holder does not exercise the Fundamental Change Put Option, this Note shall remain outstanding as adjusted pursuant to the provisions of Section 6 of Exhibit A to this Note.

“Fundamental Change” means (i) the occurrence of any of the events described in clauses (i), (ii) or (iii) of the definition of Change of Control, (ii) any recapitalization, reclassification or other transaction in which all or substantially all of the Common Stock is converted into, or exchanged for cash, securities or other property and (iii) any merger or consolidation of GAMCO with or into any other Person or other than any such merger or consolidation (a) pursuant to which the holders of 50% or more of the total voting power of all of the shares of capital stock of GAMCO entitled to vote generally in elections of directors immediately prior to such transaction have the right to exercise, directly or indirectly, 50% or more of the total voting power of all shares of capital stock entitled to vote generally in the election of directors of the continuing or surviving corporation immediately after such transaction, (b) that does not result in a reclassification, conversion, exchange or cancellation of the Common Stock, (c) which is effected solely to change our jurisdiction of incorporation and results in a reclassification, conversion or exchange of the Common Stock solely into shares of common stock of the surviving entity, or (d) in which more of the 90% or more of the consideration payable for the Common Stock (excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights) in such transaction consists of shares of common stock or American Depositary Receipts in respect of shares of common stock that are listed and publicly traded on any of The New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or any of their respective successors) or that will be so traded or quoted immediately following the transaction and as a result of such transaction or transactions this Note will become convertible into cash and/or such shares of such common stock or such American Depositary Receipts pursuant to Section 8 of Exhibit A to this Note.

“Fundamental Change Value” means, with respect to any principal amount of this Note, the fair market value of such principal amount, as determined by the Independent Expert (as defined below) appointed for such purpose, using one or more valuation methods that the Independent Expert in its best professional judgment determines to be the most appropriate, assuming such principal amount is to be sold in an arm’s length transaction where there is no compulsion on the part of any party to buy or sell and taking into account all relevant factors, including without limitation the option value of such principal amount.

“Independent Expert” means a nationally recognized investment banking firm mutually agreed by the Holder and GAMCO which does not have any material financial interest or other material economic relationship with either party or any of their Affiliates. If the parties cannot agree on an Independent Expert, each of them shall choose a Person otherwise qualified to be an Independent Expert and the Persons so selected will promptly select the Independent Expert.

Information Obligations

GAMCO will deliver to the Holder (without duplication):

(a) as soon as available and in any event within 90 days after the end of each fiscal year of GAMCO, a consolidated balance sheet of GAMCO and its Subsidiaries as of the end of such fiscal year and the related statements of operations and cash flow for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, and accompanied by a report thereon of an independent public accountant of nationally recognized standing;

(b) as soon as available and in any event within 45 days after the end of each of the first three quarters of each fiscal year of GAMCO, a consolidated balance sheet of GAMCO and its Subsidiaries as of the end of such quarter and the related statements of operations and cash flow for such quarter and for the portion of GAMCO’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding quarter and the corresponding portion of GAMCO’s previous fiscal year, all certified (subject to normal year-end adjustments) as to fairness of presentation, consistency and, except for the absence of footnotes, generally accepted accounting principles by the chief financial officer or the chief accounting officer of GAMCO;

(c) promptly upon the furnishing thereof to the security holders of GAMCO or any of its Subsidiaries generally, copies of all financial statements, reports, proxy statements and any other information or reports so furnished;

(d) promptly after they are so filed, or furnished, all documents filed with, or furnished to the SEC by GAMCO pursuant to the 1933 Act and the 1934 Act (other than Schedules 13D and 13G, Forms 13F and Forms 3, 4 and 5); and

(e) within five days after any officer of GAMCO obtains knowledge of any Event of Default or any event which, with notice or lapse of time or both, would constitute an Event of Default (a “Default”), if such Event of Default or Default is then continuing, a certificate of the chief financial officer or the chief accounting officer of GAMCO setting forth the details thereof and the action which GAMCO is taking or proposes to take with respect thereto.

Notwithstanding the foregoing, if GAMCO is then subject to the reporting requirements under Section 13 or 15(d) of the 1934 Act or any successor statute, (i) the delivery to the Holder of GAMCO’s Annual Report on Form 10-K or any successor form for the relevant fiscal year within the time periods provided for in clause (a) shall satisfy the requirements of such clause and (ii) the delivery to the Holder of GAMCO’s Quarterly Report on Form 10-Q or any successor form for the relevant fiscal quarter within the time periods provided for in clause (b) shall satisfy the requirements of such clause.

Consolidation, Merger and Sale of Assets

GAMCO will not consolidate or merge with or into (whether or not GAMCO is the surviving corporation), or directly and/or indirectly through its Subsidiaries sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the properties and assets of GAMCO and its Subsidiaries taken as a whole in one or more related transactions, to any other Person unless:

(a) the Person formed by or surviving any such consolidation or merger (if other than GAMCO) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made (the “Successor Company”) is a corporation, partnership, limited liability company or other similar business entity organized and validly existing under the laws of the United States, any state thereof or the District of Columbia;

(b) the Successor Company assumes all the obligations of GAMCO under the Notes and the Purchase Agreement pursuant an agreement in form and substance reasonably satisfactory to the Holder; and

(c) immediately after such transaction no Event of Default or event which, with notice or lapse of time or both, would constitute an Event of Default exists.

Upon any consolidation of GAMCO with, or merger of GAMCO into, any other Person or any transfer, conveyance, sale, lease or other disposition of all or substantially all of the properties and assets of GAMCO and its Subsidiaries taken as a whole in one or more related transactions in accordance with this paragraph, the Successor Company shall succeed to, and be substituted for, and may exercise every right and power of, GAMCO under this Note and the Purchase Agreement with the same effect as if such Successor Company had been named as GAMCO herein, and thereafter, except in the case of a lease, GAMCO shall be relieved of all obligations and covenants under this Note and the Purchase Agreement.

Transfer and Related Provisions

The Holder shall not offer, sell, contract to sell or otherwise dispose of this Note without the prior written consent of GAMCO; provided, however, that the Holder shall be permitted to transfer the Note (i) to any of its Affiliates and (ii) to any other Person (A) in connection with a transfer of substantially all of the investments of the original Holder, (B) if the Holder is legally precluded from holding this Note and (C) during the continuance of an Event of Default, provided, that such transferee agrees to be bound by the terms contained herein.

“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.  For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any specified Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

GAMCO shall keep at its principal office a register (the “Register”) in which shall be entered the name and address of the registered holder of this Note and particulars of this Note and of all permitted transfers of this Note.  Upon surrender for registration of a permitted transfer of this Note to GAMCO, GAMCO shall execute and deliver, in the name of the designated transferee or transferees, one or more new Notes, of any denominations of $1,000,000 and multiples thereof and like aggregate principal amount.  Notwithstanding the foregoing, GAMCO shall not be required to register the transfer of or exchange this Note unless it has been duly endorsed.  All Notes issued upon any registration of transfer or exchange of this Note shall be the valid obligations of GAMCO, evidencing the same debt, and entitled to the same benefits, as this Note.

No service charge shall be made for any registration of transfer or exchange of this Note, but GAMCO may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.

Prior to due presentment of this Note for registration of a permitted transfer, GAMCO and its agents may treat the Person in whose name it is registered as the owner of this Note for all purposes whatsoever, whether or not it is overdue and neither GAMCO nor any of its agents shall be affected by notice to the contrary.

Replacement of Note

If this Note has been mutilated and is surrendered to GAMCO, GAMCO shall execute and deliver in exchange a new Note of the same principal amount and bearing a number not then outstanding.  If the Holder shall deliver to GAMCO (i) evidence reasonably satisfactory to GAMCO that this Note has been destroyed, lost or stolen and (ii) such security or indemnity as may be required by GAMCO to hold it and its agents harmless, then, in the absence of notice that this Note has been acquired by a bona fide purchaser, GAMCO shall execute and deliver, in lieu of this Note, a new Note of a like principal amount and bearing a number not then outstanding.  The provisions of this paragraph are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

Miscellaneous

GAMCO waives presentment for payment, demand, notice of nonpayment, notice of protest and protest of this Note, and all notices in connection with the delivery, acceptance, or dishonor of this Note.

GAMCO agrees that (a) if for any reason any amount due hereunder is paid by cashier’s, certified teller’s check or other check, there shall be no discharge of GAMCO’s obligation until said check be finally paid by the issuer thereof; and (b) the provisions of RCW 62A.3-311 shall not entitle GAMCO to any accord and satisfaction of any now or hereafter existing claim in dispute between the Holder and GAMCO (or any of their respective successors and assigns), all of which provisions and rights are hereby waived.

The Holder shall not by any act or omission be deemed to waive any of its rights or remedies under this Note or the Purchase Agreement unless such waiver shall be in writing and signed by the Holder, and then only to the extent specifically set forth therein.

No right or remedy herein conferred upon or reserved to the Holder is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

This Note may not be amended other than with the written consent of the Holder and GAMCO.

Upon demand therefor, GAMCO agrees to pay to the Holder all costs and fees arising out of enforcing this Note, whether incurred in any court action, arbitration, or mediation, on appeal, in any bankruptcy (or state receivership or other insolvency or similar proceedings or circumstances), in any forfeiture, and for any post-judgment collection services (collectively, “Enforcement Costs”).

GAMCO and, by its acceptance of this Note, the Holder agree that, subject to the specific terms hereof and to the extent that Washington law applies, the provisions of Article 3 of the Uniform Commercial Code of Washington pertaining to instruments shall be applied to this Note, even if this Note is not deemed to be an “instrument” or a “negotiable instrument” thereunder.

If this Note will at any time become subject to the Trust Indenture Act of 1939, GAMCO will make appropriate revisions hereto and will enter into an indenture with an appropriate trustee so as to comply fully with such act.

Except as noted below, this Note shall be governed by and construed in accordance with the laws of the State of Washington without giving effect to the conflict of laws rules thereof.  In any court proceeding, GAMCO agrees to submit to the jurisdiction of the federal court selected by the Holder, and venue of any action concerning this Note shall be in King County, Washington state.  In the event that the federal court selected by the Holder shall not have jurisdiction, GAMCO agrees to submit to the jurisdiction of the Washington state court in King County selected by the Holder.  GAMCO hereby irrevocably waives to the fullest extent permitted by law any objection which it may now or hereafter have to the laying of such venue and any claim that any such forum is an inconvenient forum.  Nothing in this Section shall impair the right of the Holder to bring any action or proceeding against GAMCO or its property in the courts of any other county or jurisdiction and GAMCO irrevocably submits to the nonexclusive jurisdiction of the appropriate courts (as selected by the Holder) of the jurisdiction in which GAMCO is organized or any place where any property or any office of GAMCO is located.  In the event Holder transfers or assigns this Note to a person not one of its Affiliates, then this Note shall be governed by and construed in accordance with the laws of the State of New York without regard to the conflict of laws rules thereof and the consent to jurisdiction in the State of Washington stated above is hereby revoked concurrently with such transfer.

NOTICE: ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

IN WITNESS WHEREOF, and intending to be legally bound, the undersigned has duly executed and delivered this Note as of the date first written above.

GAMCO INVESTORS, INC.,

a New York corporation

By:   /s/  Douglas R. Jamieson                                                          

Douglas R. Jamieson

Its:President and Chief Operating Officer

Exhibit A

Conversion Rights

1.Right of Conversion.  At the option of the Holder, this Note or any portion of the principal amount hereof which is $1,000,000 or an integral multiple thereof, may be converted at the principal amount hereof, or such portion hereof, into fully paid and nonassessable shares of the Common Stock (calculated as to each conversion to the nearest 1/100 of a share of Common Stock) at the Conversion Price (as hereinafter defined) in effect at the time of conversion, or into such additional or other securities, cash or property and at such other rates as required in accordance with the provisions set forth herein.  Such conversion right shall expire at the close of business on October 2, 2018.  If this Note is redeemed in accordance with its terms, then such conversion right shall expire at the close of business on the Redemption Date unless GAMCO fails to take any of the Required Actions on or prior to the Redemption Date.

2.Conversion Procedures.  In order to exercise the conversion right, the Holder shall surrender this Note at the principal executive offices of GAMCO (which, if GAMCO shall so require, shall be duly endorsed to GAMCO or in blank, or be accompanied by proper instruments of transfer to GAMCO or in blank), accompanied by irrevocable written notice to GAMCO to the effect that the Holder elects so to convert this Note or, if less than the entire principal amount hereof is to be converted, the portion hereof to be converted (which notice shall specify the name or names (with address or addresses) in which a certificate or certificates evidencing the shares of Common Stock to be issued upon such conversion are to be issued).  Except as otherwise expressly set forth herein, no payment or adjustment shall be made upon any conversion of the Note on account of any interest accrued on this Note or on account of any dividends accrued on the shares of Common Stock issued upon such conversion.

GAMCO shall, as soon as practicable after the surrender of this Note at the office referred to above and compliance with the other conditions herein contained, deliver at such office, to the person or persons entitled thereto (as specified in the applicable written notice of conversion), a certificate or certificates evidencing the number of full shares of Common Stock to which such person or persons shall be entitled as aforesaid, together with a cash adjustment in respect of any fraction of a share of Common Stock as hereinafter provided.  Such conversion shall be deemed to have been made as of the date of such surrender of this Note (or, if later, the date of compliance with such other conditions), and the person or persons entitled to receive the Common Stock deliverable upon conversion of this Note shall be treated for all purposes as the record holder or holders of such Common Stock on such date.

If this Note is to be converted in part only, upon such conversion GAMCO shall execute deliver to the Holder, at the expense of GAMCO, a new Note or Notes of like tenor in denominations of $1,000,000 and any integral multiple thereof and with an aggregate principal amount equal to the unconverted portion of the principal amount of this Note.

3.No Fractional Shares.  No fractional shares of Common Stock shall be issued upon conversion of this Note.  Instead of any fractional share of Common Stock that would otherwise be issuable to the Holder upon conversion of this Note (or any specified portion hereof), GAMCO shall pay a cash adjustment in respect of such fractional share in any amount equal to the same fraction of the Closing Price (as hereinafter defined) on the day of conversion.

4.Reservation of Shares; Etc.  GAMCO shall at all times reserve and keep available, free from preemptive rights out of its authorized but unissued Common Stock, solely for the purpose of effecting the conversion of this Note, the full number of shares of Common Stock that would then be deliverable upon the conversion of all of the principal amount of this Note and any other outstanding Notes.  The shares of Common Stock issuable upon the conversion of this Note have not been registered under the Act, will carry a legend substantially the same as the legend set forth on this Note, and will be subject to the terms of the Registration Rights Agreement, dated as of August 14, 2001 and as amended on October 2, 2008, between the initial Holder and GAMCO, and the Purchase Agreement.

If any shares of Common Stock required to be reserved for purposes of conversion of this Note require registration with or approval of any governmental authority under any Federal or State law before such shares may be issued or freely transferred upon conversion, GAMCO will in good faith and as expeditiously as possible endeavor to cause such shares to be duly registered or approved as the case may be.  If the Common Stock is quoted on the New York Stock Exchange or any other U.S. national securities exchange, GAMCO will, if permitted by the rules of such exchange, list and keep listed on such exchange, upon official notice of issuance, all shares of Common Stock issuable upon conversion of this Note and any other outstanding Notes.  Notwithstanding the foregoing, the reference to free transferability in the first sentence of this paragraph and the reference to listing in the second sentence of this paragraph shall apply only when this Note shall have become freely transferable under the federal securities laws.

5.Prior Notice of Certain Events.  If GAMCO shall authorize any transaction that would require an adjustment to the Conversion Price (other than a transaction referred to in clauses (a) or (c) of Section 6 below) or there shall be a voluntary or involuntary dissolution, liquidation or winding up of GAMCO, then GAMCO shall notify the Holder, at least 20 days (or, in the case of a transaction referred to in clauses (b), (d) or (e) of Section 6 below, 10 days) prior to the applicable record, expiration or consummation date hereinafter specified, a notice stating (i) the record date fixed for the determination of holders of Common Stock entitled to the applicable issuance, dividend or distribution or (ii) the date of expiration of the applicable tender or exchange offer, as the case may be.

6.Adjustment of Conversion Price.

(a)In case GAMCO shall pay or make a dividend or other distribution on any class of Capital Stock of GAMCO payable in Common Stock, the Conversion Price in effect at the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be reduced by multiplying such Conversion Price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination and the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such reduction to become effective immediately after the opening of business on the day following the date fixed for such determination.  (For the purposes of determining adjustments to the Conversion Price as set forth herein, shares of Common Stock held in the treasury of GAMCO, and distributions or issuances in respect thereof shall be disregarded.)

(b)In case GAMCO shall issue rights or warrants to all or substantially all holders of its Common Stock entitling them, for a period of not more than 60 days, to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price (as hereinafter defined) on the date fixed for the determination of stockholders entitled to receive such rights or warrants, the Conversion Price in effect at the opening of business on the day following the date fixed for termination of such subscription or purchase period shall be reduced by multiplying such Conversion Price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock actually purchased upon exercise of such rights or warrants would have purchased at such Current Market Price and the denominator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock actually purchased upon exercise of such rights or warrants, such reduction to become effective immediately after the opening of business on the day following the date fixed for such termination.

(c)In case outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately reduced, and conversely, in case outstanding shares of Common Stock shall each be combined into a smaller number of shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately increased, such reduction or increase, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective.

(d)Subject to paragraph (g) below, in case GAMCO shall, by dividend or otherwise, distribute to all or substantially all holders of its Common Stock evidences of indebtedness, shares of capital stock of any class or series, other securities, cash or assets (other than Stapled Securities (as hereinafter defined), Common Stock, rights or warrants referred to in clause (b) of this Section 6, a dividend or distribution payable exclusively in cash or a Spin Off (as defined below)), the Conversion Price in effect immediately prior to the close of business on the date fixed for the payment of such distribution shall be reduced by multiplying such Conversion Price by a fraction of which the numerator shall be the Current Market Price on the date fixed for such payment less the then fair market value (as determined in good faith by the Board of Directors of GAMCO (the “Board of Directors”), whose good faith determination shall be conclusive and described in a resolution of the Board of Directors) (as to any securities or other property, the "Fair Market Value") of the portion of such evidences of indebtedness, shares of capital stock, other securities, cash and assets distributed per share of Common Stock and the denominator shall be such Current Market Price, such reduction to become effective immediately prior to the opening of business on the day following the date fixed for such payment.  Subject to paragraph (g) below, in case GAMCO shall, by dividend or otherwise, distribute to all or substantially all holders of Common Stock shares of any capital stock of, or other equity interest in, any Subsidiary or other business unit of GAMCO and, immediately after such distribution, such capital stock or other equity interest is registered under the 1934 Act and listed and publicly traded on a national securities exchange registered under Section 6 of the 1934 Act (each, a “Spin-Off”), then the Conversion Price in effect immediately prior to the close of business on the tenth day of such trading immediately following and including the effective date of the Spin Off (the “Tenth Trading Day”) shall be reduced by multiplying such Conversion Price by a fraction of which the numerator shall be (i) the average of the Closing Prices of the Common Stock on the first ten days of such public trading immediately following and including such effective date (the “Ten Trading Days”) less (ii) the average of the Closing Prices of the amount of such capital stock or other equity interests distributed per share of Common Stock on such exchange during the Ten Trading Days (the “Average Spin Off Price”) and the denominator shall be the average of the Closing Prices calculated pursuant to the preceding clause (i), such reduction to become effective immediately after the close of business on the Tenth Trading Day.

(e)In case GAMCO shall, by dividend or otherwise, make a distribution to all or substantially all holders of its Common Stock payable exclusively in cash in any twelve month period (excluding any distributions declared prior to the date of this Note) which, in the aggregate, exceed $1.12 per share of Common Stock (the “Twelve Month Dividend Threshold” and the amount of such excess per share of Common Stock, the “Excess Amount”), the Conversion Price in effect immediately prior to the close of business on the date fixed for such payment shall be reduced by multiplying such Conversion Price by a fraction of which the numerator shall be the Current Market Price on the date fixed for such payment less the Excess Amount and the denominator shall be such Current Market Price, such reduction to become effective immediately prior to the opening of business on the day following the date fixed for such payment; provided, however, that notwithstanding the foregoing whenever the Conversion Price is adjusted pursuant to this Section 6 the Twelve Month Dividend Threshold shall be proportionally adjusted in the same manner.

(f)In case GAMCO or any of its Subsidiaries shall consummate a tender or exchange offer for all or any portion of the Common Stock, the Conversion Price in effect immediately prior to the close of business on the date of expiration of such tender or exchange offer shall be reduced by multiplying such Conversion Price by a fraction of which the numerator shall be the Current Market Price on such date of expiration less the Per Share Premium Amount (as hereinafter defined) paid in such tender or exchange offer and the denominator shall be such Current Market Price, such reduction to become effective immediately prior to the opening of business on the day following such date of expiration.

(g)Notwithstanding anything to the contrary in Section 6(d), no adjustment to the Conversion Price shall be made as a result of the distribution to GAMCO's stockholders of common stock of Teton Advisors, Inc. (the “Teton Spin-off”) and, in lieu thereof, GAMCO shall deliver to the Holder such number of shares of common stock of Teton Advisors, Inc. (the “Teton Common Stock”) that it would have received in the Teton Spin-off if it had converted this Note immediately prior to the close of business on the day immediately prior to the record date fixed for such transaction. The "Teton Value" shall mean the product of (i) (A) if at the time of the Teton Spin-off the Teton Common Stock is registered under the 1934 Act and listed and publicly traded on a national securities exchange registered under Section 6 of the 1934 Act, the Average Spin Off Price of the Teton Common Stock or (B) in all other cases, the Fair Market Value of the amount of Teton Common Stock distributed per share of Common Stock and (ii) the number of shares of Teton Common Stock delivered to the Holder pursuant this Section 6(g). In order to participate in the Teton Spin-off, the Holder agrees to execute all agreements. questionnaires and other documents that are reasonably requested by the Company and that are required by the holders of the Common Stock.

(h)In case GAMCO or any of its Subsidiaries proposes to issue debt securities that are convertible at the option of the holder thereof into, or exercisable for, Common Stock after the Issue Date and prior to October 2, 2009 with a conversion price that is lower or an interest rate that is higher than this Note (the “New Debt Securities”), GAMCO shall, no later than  the tenth (10th) day  after the consummation of such transaction (a “Proposed Transaction”), give notice in writing to Holder of such  Proposed Transaction specifying the different terms in reasonable detail.  By written notice to GAMCO within thirty (30) days after the date on which the Holder receives such notice, the Holder may elect to have the Conversion Price reduced to the Proposed Transaction conversion price and/or the interest rate on this Note increased to that of the Proposed Transaction.  Notwithstanding anything to the contrary contained herein, this paragraph (h) shall not be applicable to: (i) any issuances or grants of equity securities (including preferred stock), (ii) the exercise or conversion of any options, warrants or convertible securities in existence as of the date hereof, (iii) the issuance of debt securities, either directly or indirectly, in connection with the Teton Spin-off or any acquisition, strategic business combination or investment by GAMCO or any of its subsidiaries in any party which is not prior to such transaction an Affiliate of GAMCO or any of its subsidiaries (whether by merger, consolidation, stock swap, sale of assets or securities, or otherwise), (iv) any issuance of  any mandatorily convertible security (utilizing a forward purchase contract, unit structure or otherwise) or any other debt security that is not convertible into or exercisable for Common Stock at the option of the holder thereof, or (v) any event that would otherwise result in an adjustment to the Conversion Price pursuant to this Section 6. This paragraph (h) shall terminate and be of no further force and effect on October 2, 2009.

(i)In case GAMCO shall, by dividend or otherwise, make a distribution referred to in paragraph (d) or (e) above, the Holder converting this Note (or any portion of the principal amount hereof) subsequent to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution and prior to the effectiveness of the Conversion Price adjustment in respect of such distribution shall also be entitled to receive, for each share of Common Stock into which this Note (or portion of the principal amount being converted), the portion of the evidences of indebtedness, shares of capital stock, other securities, cash and assets so distributed applicable to one share of Common Stock; provided, however, that, at the election of GAMCO (whose election shall be evidenced by a resolution of the Board of Directors) with respect to all holders so converting, GAMCO may, in lieu of distributing to such holder any portion or all of such evidences of indebtedness, shares of capital stock, other securities, cash and assets to which such holder is entitled as set forth above, (i) pay such holder an amount in cash equal to the Fair Market Value thereof or (ii) distribute to such holder a due bill therefor, provided that such due bill (A) meets any applicable requirements of the principal national securities exchange or other market on which the Common Stock is then traded and (B) requires payment or delivery of such evidences of indebtedness, shares of capital stock, other securities, cash or assets no later than the date of payment thereof to holders of shares of Common Stock receiving such distribution.

(j)GAMCO may make such reductions in the Conversion Price, in addition to those required by the foregoing paragraphs, as it considers to be advisable to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock resulting from any dividend or distribution of stock (or rights to acquire stock) or from any event treated as such for income tax purposes.  In addition, GAMCO from time to time may reduce the Conversion Price by any amount for any period of time if the period is at least twenty days, the reduction is irrevocable during the period, and the Board of Directors of GAMCO shall have made a determination that such reduction would be in the best interest of GAMCO, which determination shall be conclusive.  Whenever the Conversion Price is reduced pursuant to the preceding sentence, GAMCO shall provide written notice to the Holder of this Note and the holders of any other outstanding Notes of the reduction at least fifteen days prior to the date the reduced Conversion Price takes effect, and such notice shall state the reduced Conversion Price and the period it will be in effect.

(k)GAMCO may not engage in any transaction if, as a result thereof, the Conversion Price would be reduced to below the par value per share of the Common Stock.

(l)No adjustment in the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Conversion Price; provided, however, that any adjustments which by reason of this paragraph are not required to be made shall be carried forward and taken into account in any subsequent adjustment.

(m)Whenever the Conversion Price is adjusted as herein provided, GAMCO shall compute the adjusted Conversion Price and shall prepare a certificate signed by the Treasurer of GAMCO setting forth the adjusted Conversion Price and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall be given by GAMCO to the Holder of this Note and the holders of any other outstanding Notes.

7.Stapled Securities.

(a)Prior to a Separation Event (as hereinafter defined) with respect to any Stapled Securities, such Stapled Securities will be deemed, for purposes of the adjustments contemplated hereby, to comprise part of the shares of Common Stock to which such Stapled Securities appertain, and as a result, distributions in respect of such Stapled Securities will be deemed, for such purposes, to be distributions in respect of such shares.

(b)If the Holder converts this Note (or any portion of the principal amount hereof) after a Separation Event with respect to any Stapled Securities, it shall be entitled to receive upon such conversion, in addition to the shares of Common Stock issuable upon such conversion, the same rights to which the Holder would have been entitled under the Stapled Securities that would have appertained to such shares of Common Stock if the Holder had effected such conversion before such Separation Event.

8.Consolidations, Mergers or Sales of Assets.  In the event of any consolidation of GAMCO with, or merger of GAMCO into, any other Person, any merger of another Person to GAMCO (other than a merger which does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of the Common Stock) or any sale or transfer of all or substantially all of the assets GAMCO, the Person formed by such consolidation or resulting from such merger or which acquires such assets, as the case may be, shall enter into a written agreement with the Holder, in form and substance reasonably acceptable to the Holder, providing that the Holder shall have the right thereafter, during the period in which this Note shall be convertible, to convert this Note (or portion of the principal amount hereof) only into the kind and amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer by a holder of the number of shares of Common Stock into which this Note (or portion thereof) might have been converted immediately prior to such consolidation, merger, sale or transfer, assuming the Holder (i) is not a Person with which GAMCO consolidated or into which GAMCO merged or which merged into GAMCO or to which such sale or transfer was made, as the case may be, (a “Constituent Person”) or an Affiliate of a Constituent Person and (ii) failed to exercise his or her rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer; provided, however, that if the kind or amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer is not the same for each share of Common Stock held immediately prior to such consolidation, merger, sale or transfer by Persons other than a Constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised (each, a “Non-Electing Share”), then for purposes of this Section 8 the kind and amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer by each Non-Electing Share shall be deemed to be the kind and amount so receivable per share by a plurality of the Non-Electing Shares.  Such written agreement shall provide for adjustments which, for events subsequent to the effective date of such agreement, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Exhibit A.  The provisions of this Section 8 shall similarly apply to successive consolidations, mergers, sales or transfers.  If the conversion rights of the Holder of this Note shall be adjusted pursuant to this Section 8, then GAMCO shall cause to be given to the Holder and any other holders of outstanding Notes, within 5 days after consummation of the transaction triggering such adjustment, a notice describing such adjustment in appropriate detail.

9.Taxes.  GAMCO shall pay any and all stock transfer, documentary stamp and other taxes that may be payable in respect of any issuance or delivery of shares of Common Stock or other securities issued or delivered on conversion of this Note.  GAMCO shall not, however, be required to pay any such tax which may be payable in respect of any transfer involved in the issuance or delivery of shares of Common Stock or other securities in a name other than to the Holder, and shall not be required to make any such issuance or delivery unless and until the person otherwise entitled to such issuance or delivery has paid to GAMCO the amount of any such tax or has established, to the satisfaction of GAMCO, that such tax has been paid or is not payable.

10.Certain Definitions.  The following definitions shall apply to terms used in this Exhibit A:

“Closing Price” of any common stock on any day means the last reported per share sale price, regular way, of the common stock on such day, or, in case no such sale takes place on such day, the average of the reported closing per share bid and asked prices, regular way, of the common stock on such day, in each case on the New York Stock Exchange or, if the common stock is not listed or admitted to trading on the New York Stock Exchange, on the principal national securities exchange or quotation system on which the common stock is listed or admitted to trading or quoted, or, if the common stock is not listed or admitted to trading or quoted on any national securities exchange or quotation system, the average of the closing per share bid and asked prices of the common stock on such day in the over-the-counter market as reported by a generally accepted national quotation service or, if not so available in such manner, as furnished by any New York Stock Exchange member firm selected from time to time by the Board of Directors of GAMCO for that purpose or, if not so available in such manner, as otherwise determined in good faith by the Board of Directors (whose good faith determination shall be conclusive and described in a resolution of the Board of Directors).

“Common Stock” shall mean the Class A Common Stock, par value $0.001 per share, of GAMCO or, subject to Section 8, any shares of any class or classes resulting from any reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of GAMCO and which are not subject to redemption by GAMCO; provided, however, that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from such reclassification bears to the total number of shares of all such classes resulting from all such reclassifications.

“Conversion Price” initially means $70.00, subject to adjustment from time to time as set forth herein.

“Current Market Price” on any date in question means, with respect to any adjustment in conversion rights as set forth herein, the average of the daily Closing Prices for the Common Stock for the five consecutive Trading Days selected by the Board of Directors commencing not more than 20 Trading Days before, and ending not later than, the earlier of the date in question and the day before the Ex Date with respect to the transaction requiring such adjustment; provided, however, that (i) if any other transaction occurs requiring a prior adjustment to the Conversion Price and the Ex Date for such other transaction falls after the first of the five consecutive Trading Days so selected by the Board of Directors, the Closing Price for each such Trading Day falling prior to the Ex Date for such other transaction shall be adjusted by multiplying such Closing Price by the same fraction by which the Conversion Price is so required to be adjusted as a result of such other transaction and (ii) if any other transaction occurs requiring a subsequent adjustment to the Conversion Price and the Ex Date for such other transaction falls on or before the last of the five consecutive Trading Days so selected by the Board of Directors, the Closing Price for each such Trading Day falling on or after the Ex Date for such other transaction shall be adjusted by dividing such Closing Price by the same fraction by which the Conversion Price is so required to be adjusted as a result of such other transaction.

“Ex Date” means (i) when used with respect to any dividend, distribution or issuance, the first date on which the Common Stock trades regular way on the relevant exchange or in the relevant market from which the Closing Price is obtained without the right to receive such dividend, distribution or issuance, (ii) when used with respect to any subdivision or combination of shares of Common Stock, the first date on which the Common Stock trades regular way on such exchange or in such market after the time at which such subdivision or combination becomes effective, (iii) when used with respect to any tender or exchange offer, the first date on which the Common Stock trades regular way on such exchange or in such market after such tender or exchange offer expires and (iv) when used with respect to any other transaction, the date of consummation of such transaction.

“Per Share Premium Amount” means, with respect to any tender or exchange offer, (i) the Premium Amount paid as part of such tender or exchange offer divided by (ii) the Post-Tender Offer Number of Common Shares.

“Post-Tender Offer Number of Common Shares” means, with respect to any tender or exchange offer, the number of shares of Common Stock outstanding at the close of business on the date of expiration of such tender or exchange offer (before giving effect to the acquisition of shares of Common Stock pursuant thereto) minus the number of shares of Common Stock acquired pursuant thereto.

“Premium Amount” means, with respect to any tender or exchange offer, (i) the Tender Consideration paid in such tender or exchange offer minus (ii) the product of the Current Market Price on the date of expiration of such tender or exchange offer and the number of shares of Common Stock acquired pursuant to such tender or exchange offer.

“Separation Event” has the meaning set forth in the definition of the term “Stapled Securities” below.

“Stapled Securities” means securities issued under any plan or agreement providing in substance that, until such securities are redeemed or the rights thereunder are otherwise terminated or a specified event occurs (a “Separation Event”), (i) a specified number of such securities will appertain to each share of Common Stock then issued or to be issued in the future (including shares issued upon conversion of this Note) and (ii) each such security will be evidenced or represented by the certificate representing the share of Common Stock to which it appertains and will automatically trade with such share.

“Tender Consideration” means, with respect to any tender or exchange offer, the aggregate of the cash plus the fair market value (as determined in good faith by the Board of Directors, whose good faith determination shall be conclusive and described in a resolution of the Board of Directors) of all non-cash consideration paid in respect of such tender or exchange offer.

“Trading Day” means a day on which securities are traded on the national securities exchange or quotation system or in the over-the-counter market used to determine Closing Prices for the Common Stock.

EX-10.2

EXECUTION VERSION

FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENT

First Amendment, dated as of October 2, 2008 (the "First Amendment"), to the Registration Rights Agreement (the "Registration Rights Agreement"), dated as of August 14, 2001, by and among Cascade Investment, L.L.C., a Washington limited liability company (the "Investor") and GAMCO Investors, Inc., a New York corporation formerly known as Gabelli Asset Management Inc. (the "Company").

RECITALS

A.           Investor is the holder of several convertible promissory notes due August 14, 2011 which collectively have an aggregate principal amount of $40 million (collectively, the "2011 Notes") and were issued pursuant to a Note Purchase Agreement, dated as of August 10, 2001, by and among the Company, the Investor, Mario J. Gabelli and GGCP, Inc., as amended. The 2011 Notes are convertible into shares of Class A Common Stock, par value $0.001 per share (such shares and any other securities issued or distributed with respect to, or in exchange for, such shares pursuant to any reclassification, merger or other transaction, the "Class A Common Stock"), of the Company on the terms and conditions set forth in the 2011 Notes.

B.           Investor has agreed to purchase from the Company, and the Company has agreed to sell to the Investor, a $60 million convertible promissory note due October 2, 2018 (the "2018 Note") pursuant to a Note Purchase Agreement, dated as of October 2, 2008, by and among the Company, the Investor, Mario J. Gabelli and GGCP, Inc. (the "Purchase Agreement").  The 2018 Note is convertible into shares of Class A Common Stock of the Company on the terms and conditions set forth in the 2018 Note.

C.           The parties hereto desire to amend the Registration Rights Agreement in the manner set forth below.

D.           Except as amended below, the Registration Rights Agreement shall remain in full force and effect as it was prior to this First Amendment.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:

1.   Amendment of the Registration Rights Agreement.

1.1Notes.  The following definitions are  hereby inserted alphabetically in Section 2.1 of the Registration Rights Agreement to read as follows:

2011 Notes.  The term "2011 Notes" means: The convertible promissory notes due August 14, 2011 issued pursuant to a Note Purchase Agreement, dated as of August 10, 2001, by and among the Company, the Investor, Mario J. Gabelli and GGCP, Inc., as amended.

2018 Note.  The term "2018 Note" means: The $60 million convertible promissory note due October 2, 2018 pursuant to a Note Purchase Agreement, dated as of October 2, 2008, by and among the Company, the Investor, Mario J. Gabelli and GGCP, Inc., as amended.

Notes.  The term "Notes" means: The 2011 Notes and the 2018 Note.

1.2Registrable Securities.  The definition of "Registrable Securities" is hereby amended in its entirety to read as follows:

Registrable Securities.  The term "Registrable Securities" means: (a) the Class A Common Stock or other securities issuable upon conversion of the 2011 Note or the 2018 Note, (b) any securities (including Class A Common Stock) issued or distributed with respect to, or in exchange for, the 2011 Note or the 2018 Note, or such Class A Common Stock pursuant to any reclassification, merger, consolidation, reorganization or other transaction ("Other Securities") or upon conversion, exercise or exchange of Other Securities and (c) any securities issued or distributed with respect to, or in exchange for, Other Securities (whether directly or indirectly through a series of transactions) pursuant to any reclassification, merger, consolidation, reorganization or other transaction or upon conversion, exercise or exchange of Other Securities, in each case other than Unrestricted Securities.

1.3Unrestricted Security.  The definition of "Unrestricted Security" is hereby amended in its entirety to read as follows:

Unrestricted Security. The term "Unrestricted Security" means any Registrable Security that (i) has been effectively registered under the Securities Act, (ii) has been transferred in compliance with Rule 144 under the Securities Act (or any successor provision thereto) under circumstances in which such Registrable Securities become freely transferable under the Securities Act and any legend relating to restrictions on transfer under the Securities Act is removed, (iii) is transferable pursuant to the last sentence of paragraph (b)(1)(i) of Rule 144 under the Securities Act (or any successor provision thereto) or (iv) has otherwise been transferred and a new security not subject to transfer restrictions under the Securities Act has been delivered upon such transfer by or on behalf of the Company.

1.4References Generally.  References in Sections 1.1(c), 1.1(e), 3.1 and 3.3 of the Registration Rights Agreement to "the Note" shall be deemed to be references to "any Note". The  last sentence of Section 3.3 shall be deleted and replaced in its entirety with the following: “In the event Investor transfers or assigns any Note in whole, but not in part, to a Person not an affiliate (as defined in Rule 405 under the 1933 Act) then solely with respect to that Note: (a) this Agreement shall be governed by and construed in accordance with the laws of the State of New York, and (b) the consent to jurisdiction in the State of Washington stated above is hereby revoked.” The reference to "the Note" in the definition of "Registrable Securities Then Outstanding" in Section 2.1 and Section 3.10 of the Registration Rights Agreement shall be deemed to be a reference to "the Notes". Any indirect references to the Note such as "hereunder," "hereby," "herein" and "hereof" shall be deemed to be references to "any Note" or "the Notes" as the context requires.

1.5Demand Registration.  Section 2.2(c) of the Registration Rights Agreement is hereby amended in its entirety to read as follows: “Maximum Number of Demand Registrations.  The Company is obligated to effect not more than six (6) such Registrations in total during the effectiveness of this Agreement pursuant to this Section 2.2.”

1.6Registration. Section 2.4(b)(i) of the Registration Rights Agreement is hereby amended by changing the number “180” in clause (i) of the last sentence thereof to “360”.

1.7Termination of the Company’s Obligations. Section 2.8 of the Registration Rights Agreement is hereby amended by changing the phrase “more than twelve (12) years after the date of this Agreement” in clause (i) of such Section to “after October 2, 2018”.

1.8Notice.   The following information is hereby added to Section 3.6 with respect to notices to the be sent to the Investor: “With copy to the same address, Attn: General Counsel, Facsimile: (425) 803-0459.”

2.   Miscellaneous.

2.1Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.10, 3.11 and 3.12 of the Registration Rights Agreement are incorporated herein by reference, mutandis mutandi, with all references therein to the Agreement being changed to refer to the Agreement as amended by this First Amendment.

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IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to the Registration Rights Agreement as of the date and year first above written.

GAMCO INVESTORS, INC.,

a New York corporation

By:    /s/  Douglas R. Jamieson 

Name:  Douglas R. Jamieson

Title: President and Chief Operating Officer

CASCADE INVESTMENT, L.L.C.,

a Washington limited liability company

By:    /s/ Michael Larson

Name: Michael Larson

Title: Business Manager

EX-10.3

ESCROW AGREEMENT

THIS ESCROW AGREEMENT (as the same may be amended or modified from time to time pursuant hereto, this "Escrow Agreement") is made and entered into as of October 2, 2008, by and among GAMCO Investors Inc., a New York corporation ("GAMCO"), Cascade Investment, L.L.C., a Washington limited liability company ("Cascade", and together with GAMCO, sometimes referred to individually as "Party" or collectively as the "Parties"), and JPMorgan Chase Bank, National Association (the "Escrow Agent").  Capitalized terms used but not defined in this Escrow Agreement that are defined in the Purchase Agreement (defined below) shall have the meanings assigned to such terms in the Purchase Agreement.

WHEREAS, GAMCO and Cascade  have entered into a Note Purchase Agreement, dated as of the date hereof (the "Purchase Agreement"); and

WHEREAS, the Parties have agreed to deposit in escrow certain funds and wish such deposit to be subject to the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the parties hereto agree as follows:

1.Appointment.  The Parties hereby appoint the Escrow Agent as their escrow agent for the purposes set forth herein, and the Escrow Agent hereby accepts such appointment under the terms and conditions set forth herein.

2.Escrow Account.  GAMCO agrees to deposit with the Escrow Agent the initial sum of US$61,950,000  in cash (the "Escrow Deposit").  The Escrow Agent shall hold the Escrow Deposit and any investment proceeds thereof or interest thereon (collectively, the “Escrowed Funds”) in its name or the name of its nominee in a separate segregated and earmarked escrow account (the “Escrow Account”) until this Escrow Agreement has terminated and all of the Escrowed Funds have been released to the Parties, in each case in accordance with the terms and conditions of this Escrow Agreement. The Escrow Agent shall invest and reinvest the Escrow Deposit and the investment proceeds thereof and interest thereon as directed in Section 3. The Escrow Agent shall hold and safeguard the Escrowed Funds and any other property deposited or held from time to time in the Escrow Account during the term of this Escrow Agreement. The Escrowed Funds shall not be subject to any lien, attachment, claim, trustee process or any other judicial process of any creditor of any party hereto.

3.Investment of Escrowed Funds.  During the term of this Escrow Agreement, the Escrowed Funds shall be invested as instructed in writing by GAMCO in United States Treasury Bills ("Permitted Investments") as available under then-current market conditions and prices, and any income from such investments will become part of the Escrowed Funds.  In the event that United States Treasury Bills are unavailable or circumstances prevent GAMCO from providing written instructions to the Escrow Agent, the Escrow Agent shall invest the Escrowed Funds in a cash deposit account at JPMorgan Chase Bank, N.A. (“Cash Deposit Account”) selected by the Escrow Agent, which shall initially be the JPMorgan Cash Compensation Account.  Cash Deposit Accounts have rates of compensation that may vary from time to time based upon market conditions. Written investment instructions, if any, shall specify the type and identity of the investments to be purchased and/or sold.  The Escrow Agent is hereby authorized to execute purchases and sales of investments through the facilities of its own trading or capital markets operations or those of any affiliated entity.  The Escrow Agent or any of its affiliates may receive compensation with respect to any investment directed hereunder including without limitation charging an agency fee in connection with each transaction. The Escrowed Funds shall not be invested in any investment other than the Permitted Investments or the Cash Deposit Account without the prior written consent of both Parties. Promptly after the end of each calendar month during the term of this Escrow Agreement, the Escrow Agent shall provide to the Parties a statement setting forth in reasonable detail a breakdown of the cash and Permitted Investments comprising the Escrowed Funds (the "Monthly Statement"). If at any time during the term of this Escrow Agreement, the fair market value of the Escrowed Funds (with any cash in US dollars being valued at the face amount thereof and any United States Treasury Bills valued as quoted by Bloomberg.com, or any successor thereto, at 4:00 p.m. on the Business Day prior to the valuation date) is less than the sum of (i) the Unpaid Principal Amount and (ii) six months of interest on the Unpaid Amount at the rate of 6.5% per annum (the "Floor Amount"), then GAMCO shall deposit or cause to be deposited in the Escrow Account cash in an amount equal to such shortfall. The Parties recognize and agree that the Escrow Agent will not provide supervision, recommendations or advice relating to either the investment of moneys held in the Escrow Account or the purchase, sale, retention or other disposition of any investment described herein. The Escrow Agent shall not have any liability for any loss sustained as a result of any investment in an investment made pursuant to the terms of this Escrow Agreement or as a result of any liquidation of any investment prior to its maturity or for any failure of the Parties to give the Escrow Agent instructions to invest or reinvest the Escrowed Funds; provided, however, that the foregoing shall not relieve the Escrow Agent for any liability arising out of or resulting from its gross negligence, or willful misconduct.

4.Release and Termination.  The Escrow Agent shall only release Escrowed Funds from the Escrow Account as provided in this Section 4.

(a)   If, on or prior to the Exercise Date, (i) Cascade exercises any Note Put Option or an Event of Default occurs, and (ii) GAMCO fails to deliver all or any portion of the consideration due and payable in respect of such exercise or Event of Default (in each case, the “Unpaid Amount”) when it becomes due under the Note (in each case, the “Due Date”), Cascade, in its sole discretion, may deliver a written notice (each, a “Payment Notice”) to the Escrow Agent and GAMCO on or after the Due Date requesting payment of such Unpaid Amount.

(b)   Cascade and GAMCO shall, (i) promptly after the occurrence of each Partial Release Event, (ii) promptly after receipt of each Monthly Statement and (iii) at such other time as they shall mutually agree, deliver a joint written notice (each, a “Mutual Release Notice”) to the Escrow Agent instructing the Escrow Agent to release all of the Escrowed Funds in excess of the Floor Amount to GAMCO.  "Partial Release Event" means each partial conversion of the Note into Common Stock or a partial exercise of any Note Put Option.

(c)   This Escrow Agreement shall terminate (other than the provisions of Sections 7 and 8 which will survive termination) upon the earlier to occur of (i) the full conversion of the entire aggregate principal amount of the Note, (ii) the first Business Day after the entire aggregate principal amount of the Note has been paid in full, and (iii) the first Business Day after the Exercise Date on which all outstanding Payment Notices have be fully discharged and paid in full. The Parties shall give the Escrow Agent joint written notice of the termination of this Escrow Agreement (the “Termination Notice”).

(d)   Upon receipt of a Payment Notice, Mutual Release Notice or Termination Notice, the Escrow Agent shall, promptly and in no event later than one (1) Business Day after the date on which it receives such notice, to the extent necessary to make such payment, convert Escrowed Funds into cash in U.S. dollars, and release to Cascade or GAMCO, as specified in such notice, from the Escrow Account an amount in cash in U.S. dollars equal to the amount specified in the notice by wire transfer of immediately available funds to the account or accounts specified by Cascade or GAMCO, as applicable, in the notice.

(e)   All Payment Notices, Mutual Release Notices or Termination Notices provided under this Section 4 shall specify the amount and maturity date of the United States Treasury Bill which is to be liquidated in order to make such funds transfer and the Escrow Agent shall have no discretion thereto.

5.Escrow Agent.

(a)   The Escrow Agent shall have only those duties as are specifically and expressly provided herein, which shall be deemed purely ministerial in nature, and no other duties shall be implied.  The Escrow Agent shall neither be responsible for, nor chargeable with, knowledge of, nor have any requirements to comply with, the terms and conditions of any other agreement, instrument or document between the Parties, in connection herewith, if any, including without limitation the Purchase Agreement, nor shall the Escrow Agent be required to determine if any person or entity has complied with any such agreements, nor shall any additional obligations of the Escrow Agent be inferred from the terms of such agreements, even though reference thereto may be made in this Escrow Agreement.  Solely with respect to the duties of the Escrow Agent, in the event of any conflict between the terms and provisions of this Escrow Agreement, those of the Purchase Agreement, any schedule or exhibit attached to the Escrow Agreement, or any other agreement among the Parties, the terms and conditions of this Escrow Agreement shall control.  The Escrow Agent may rely upon and shall not be liable for acting or refraining from acting upon any written notice, document, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper Party or Parties without inquiry and without requiring substantiating evidence of any kind.  The Escrow Agent shall be under no duty to inquire into or investigate the validity, accuracy or content of any such document, notice, instruction or request.  The Escrow Agent shall have no duty to solicit any payments which may be due it or the Escrow Account, including, without limitation, the Escrow Deposit nor, except as expressly set forth herein, shall the Escrow Agent have any duty or obligation to confirm or verify the accuracy or correctness of any amounts deposited with it hereunder.

(b)   The Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken by it in good faith except to the extent that a final adjudication of a court of competent jurisdiction determines that the Escrow Agent's gross negligence, or willful misconduct was the cause of any loss to either Party.  The Escrow Agent may execute any of its powers and perform any of its duties hereunder directly or through attorneys, and shall be liable only for its gross negligence, or willful misconduct (as finally adjudicated in a court of competent jurisdiction) in the selection of any such attorney.  The Escrow Agent may consult with counsel, accountants and other skilled persons to be selected and retained by it.  The Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken by it in accordance with, or in reliance upon, the advice or opinion of any such counsel, accountants or other skilled persons so long as such persons were selected with reasonable care.  In the event that the Escrow Agent shall be uncertain or believe there is some ambiguity as to an investment instruction hereunder or shall receive instructions, claims or demands from any party hereto regarding the investment of the Escrowed Funds which, in its opinion, conflict with any of the provisions of this Escrow Agreement, it shall be entitled to refrain from taking any action and its sole obligation shall be to keep safely all property held in escrow until it shall be given a direction in writing by the Parties which eliminates such ambiguity or uncertainty as to investment of the Escrowed Funds to the satisfaction of Escrow Agent or by a final and non-appealable order or judgment of a court of competent jurisdiction.  The Parties agree, to the extent reasonably practicable, to pursue any redress or recourse in connection with any dispute without making the Escrow Agent a party to the same.  Anything in this Escrow Agreement to the contrary notwithstanding, in no event shall the Escrow Agent be liable for special, incidental, punitive, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

6.Succession.

(a)   The Escrow Agent may resign and be discharged from its duties or obligations hereunder by giving thirty (30) days advance notice in writing of such resignation to the Parties specifying a date when such resignation shall take effect. If the Parties have failed to appoint a successor escrow agent prior to the expiration of thirty (30) days following receipt of the notice of resignation (it being agreed that the appointment of a successor escrow agent shall require the written consent of each of the Parties), the Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor escrow agent or for other appropriate relief, and any such resulting appointment shall be binding upon all of the parties hereto.  Escrow Agent's sole responsibility after such thirty (30) day notice period expires shall be to hold the Escrowed Funds in the Escrow Account (without any obligation to reinvest the same) and to deliver the same to a designated substitute escrow agent, if any, or in accordance with the directions of a final order or judgment of a court of competent jurisdiction, at which time of delivery Escrow Agent's obligations hereunder shall cease and terminate, subject to the provisions of Sections 7 and 8 hereunder and any liability of the Escrow Agent arising hereunder prior to such resignation.

(b)   Any entity into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any entity to which all or substantially all the escrow business may be transferred, shall be the Escrow Agent under this Escrow Agreement without further act.

7.Compensation and Reimbursement.  GAMCO agrees to (a) pay the Escrow Agent for the services to be rendered hereunder, which unless otherwise agreed in writing shall be as described in Schedule 2 attached hereto, and (b) pay or reimburse the Escrow Agent upon request for all expenses, disbursements and advances, including, without limitation reasonable attorney's fees and expenses, incurred or made by it in connection with the performance of this Escrow Agreement.

8.Indemnity.  The Parties shall jointly and severally indemnify, defend and hold harmless the Escrow Agent and its affiliates and their respective successors, permitted assigns, directors, agents and employees (the "Indemnitees") from and against any and all losses, damages, claims, liabilities, penalties, judgments, settlements, litigation, investigations, costs or expenses (including, without limitation, the fees and expenses of outside counsel) (collectively "Losses") arising out of or in connection with (a) the Escrow Agent's execution and performance of this Escrow Agreement, tax reporting or withholding, the enforcement of any rights or remedies under or in connection with this Escrow Agreement, or as may arise by reason of any act, omission or error of the Indemnitee, except in the case of any Indemnitee to the extent that such Losses are finally adjudicated by a court of competent jurisdiction to have been primarily caused by the gross negligence or willful misconduct of such Indemnitee, or (b) its following any instructions or directions, whether joint or singular, from the Parties, except to the extent that its following any such instruction or direction is expressly forbidden by the terms hereof.  The Parties hereto acknowledge that the foregoing indemnities shall survive the resignation, replacement or removal of the Escrow Agent or the termination of this Escrow Agreement.  GAMCO agrees to pay on behalf of, or reimburse upon request, Cascade for all expenses, disbursements and other amounts paid by Cascade pursuant to this Section 8.

9.Patriot Act Disclosure/Taxpayer Identification Numbers/Tax Reporting.

(a)   Patriot Act Disclosure.  Section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 ("USA PATRIOT Act") requires the Escrow Agent to implement reasonable procedures to verify the identity of any person that opens a new account with it.  Accordingly, the Parties acknowledge that Section 326 of the USA PATRIOT Act and the Escrow Agent's identity verification procedures require the Escrow Agent to obtain information which may be used to confirm the Parties’ identities including without limitation name, address and organizational documents ("identifying information"). The Parties agree to provide the Escrow Agent with and consent to the Escrow Agent obtaining from third parties any such identifying information reasonably required as a condition of opening an account with or using any service provided by the Escrow Agent.

(b)   Taxpayer Identification Numbers ("TIN").  The Parties have provided the Escrow Agent with their respective fully executed Internal Revenue Service ("IRS") Form W-8, or W-9 and/or other required documentation.  Each Party represents that its correct TIN assigned by the IRS, or any other taxing authority, is set forth in the form delivered by such Party, as well as in the Substitute IRS Form W-9 for such Party set forth on the signature page of this Escrow Agreement.

(c)   Tax Reporting.  All interest or other income earned under the Escrow Agreement shall be allocated to GAMCO and reported, as and to the extent required by law, by the Escrow Agent to the IRS, or any other taxing authority, on IRS Form 1099 or 1042S (or other appropriate form) as income earned from the Escrow Deposit by GAMCO whether or not said income has been distributed during such year.  Any other tax returns required to be filed will be prepared and filed by GAMCO and/or Cascade with the IRS and any other taxing authority as required by law.  The Parties acknowledge and agree that Escrow Agent shall have no responsibility for the preparation and/or filing of any income, franchise or any other tax return with respect to the Escrowed Funds or any income earned by the Escrow Deposit.  The Parties further acknowledge and agree that any taxes payable from the income earned on the investment of any sums held in the Escrow Deposit shall be paid by GAMCO.  In the absence of written direction from the Parties, all proceeds of the Escrow Deposit and the investment proceeds thereof and interest thereon shall be retained in the Escrow Account and reinvested from time to time by the Escrow Agent as provided in this Escrow Agreement.  Escrow Agent shall withhold any taxes it deems appropriate, including but not limited to required withholding in the absence of proper tax documentation, and shall remit such taxes to the appropriate authorities.

10.Notices. All communications hereunder shall be in writing and shall be deemed to be duly given and received:

(a)   upon delivery, if delivered personally, or upon confirmed transmittal, if by facsimile;

(b)   on the next Business Day (as hereinafter defined) if sent by recognized overnight courier; or

(c)   four (4) Business Days after mailing if mailed by prepaid registered mail, return receipt requested, to the appropriate notice address set forth below or at such other address as any party hereto may have furnished to the other parties in writing by registered mail, return receipt requested.

If to GAMCO GAMCO Investors, Inc.

One Corporate Center

Rye, New York 10580

Attn:  General Counsel

Facsimile: (914) 921-5384

With copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attn: Richard Prins, Esq.

Facsimile: (212) 735-3000

If to Cascade Cascade Investment, L.L.C.

2365 Carillon Point

Kirkland, WA  98033

Attn:  General Counsel

Facsimile: (425) 803-0459

With copy to:

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

Attn: Duncan C. McCurrach

Facsimile: (212) 558-3588

If to the Escrow Agent JPMorgan Chase Bank, N.A.

Clearance and Agency Services

4 New York Plaza

New York, NY 10004

Attention:  Natalie Pesce/Sandra Frierson

Fax No.:212-623-6168

Notwithstanding the above, in the case of communications delivered to the Escrow Agent pursuant to (a), (b) and (c) of this Section 10, such communications shall be deemed to have been given on the date received by an officer of the Escrow Agent or any employee of the Escrow Agent who reports directly to any such officer at the above-referenced office.  In the event that the Escrow Agent, in its sole discretion, shall determine that an emergency exists, the Escrow Agent may use such other means of communication as the Escrow Agent deems appropriate.  "Business Day" shall mean any day other than a Saturday, Sunday or any other day on which the Escrow Agent located at the notice address set forth above is authorized or required by law or executive order to remain closed.

11.Security Procedures.  If a Payment Notice is given by Cascade, whether in writing, by facsimile or otherwise, the Escrow Agent is authorized to seek confirmation of such instructions by telephone call-back to the person or persons designated by Cascade for such purposes on schedule 1 hereto ("Schedule 1"), and the Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated. If a Mutual Release Notice or Termination Notice is given by the Parties, whether in writing, by facsimile or otherwise, the Escrow Agent is authorized to seek confirmation of such instructions by telephone call-back to at least one of the persons designated by each Party for such purposes on schedule 1 hereto ("Schedule 1"), and the Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated  The persons and telephone numbers for call-backs may be changed only in a writing actually received and acknowledged by the Escrow Agent.  The Escrow Agent and the beneficiary's bank in any funds transfer may rely solely upon any account numbers or similar identifying numbers provided by GAMCO or Cascade to identify (a) the beneficiary, (b) the beneficiary's bank, or (c) an intermediary bank.  The Escrow Agent may apply any of the escrowed funds for any payment order it executes using any such identifying number, even when its use may result in a person other than the beneficiary being paid, or the transfer of funds to a bank other than the beneficiary's bank or an intermediary bank designated. The Parties acknowledge that these security procedures are commercially reasonable.

12.Miscellaneous.  The provisions of this Escrow Agreement may be waived, altered, amended or supplemented, in whole or in part, only by a writing signed by the Escrow Agent and the Parties.  Neither this Escrow Agreement nor any right or interest hereunder may be assigned in whole or in part by the Escrow Agent or any Party, except as provided in Section 6, without the prior consent of the Escrow Agent and the other Parties.  This Escrow Agreement shall be governed by and construed under the laws of the State of New York.  Each Party irrevocably waives any objection on the grounds of venue, forum non-conveniens or any similar grounds and irrevocably consents to the jurisdiction of the courts located in the State of New York. The Parties further hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Escrow Agreement.  No party to this Escrow Agreement is liable to any other party for losses due to, or if it is unable to perform its obligations under the terms of this Escrow Agreement because of, acts of God, fire, war, terrorism, floods, strikes, electrical outages, equipment or transmission failure, or other causes reasonably beyond its control.  This Escrow Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. All signatures of the parties to this Escrow Agreement may be transmitted by facsimile, and such facsimile will, for all purposes, be deemed to be the original signature of such party whose signature it reproduces, and will be binding upon such party.  If any provision of this Escrow Agreement is determined to be prohibited or unenforceable by reason of any applicable law of a jurisdiction, then such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in such jurisdiction shall not invalidate or render unenforceable such provisions in any other jurisdiction.  A person who is not a party to this Escrow Agreement shall have no right to enforce any term of this Escrow Agreement. The parties represent, warrant and covenant that each document, notice, instruction or request provided by such Party to Escrow Agent shall comply with applicable laws and regulations.  Where, however, the conflicting provisions of any such applicable law may be waived, they are hereby irrevocably waived by the parties hereto to the fullest extent permitted by law, to the end that this Escrow Agreement shall be enforced as written.  Except as expressly provided in Section 8 above, nothing in this Escrow Agreement, whether express or implied, shall be construed to give to any person or entity other than the Escrow Agent and the Parties any legal or equitable right, remedy, interest or claim under or in respect of this Escrow Agreement or any funds escrowed hereunder.

IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of the date set forth above.

GAMCO INVESTORS, INC.,

a New York corporation

By:    /s/  Douglas R. Jamieson

Name:  Douglas R. Jamieson

Title: President and Chief Operating Officer

CASCADE INVESTMENT, L.L.C.,

a Washington limited liability company

By:    /s/  Michael Larson

Name: Michael Larson

Title: Business Manager

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

as Escrow Agent

By:   /s/  Natalie Pesce

Name: Natalie Pesce

Title: Vice PResident