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Exchange and Standstill Agreement

EXCHANGE AND STANDSTILL AGREEMENT

WHEREAS, Mario J. Gabelli (Gabelli), Frederick J. Mancheski (Mancheski), David M. Perlmutter (Perlmutter), and GGCP, Inc., a New York corporation (GGCP), are parties to that certain Settlement and Stock Purchase Agreement dated May 31, 2006 (the Settlement and Purchase Agreement); and

WHEREAS, in accordance with the terms and conditions of the Settlement and Purchase Agreement, the parties thereto are executing and delivering, or are causing to be executed and delivered, among other things, the Additional Settlement Documents and the Stipulation of Settlement (as those terms are defined in the Settlement and Purchase Agreement), among others; and

WHEREAS, as a result of the transactions contemplated by the Settlement and Purchase Agreement, Perlmutter will receive 69,514 shares of the Class B Common Stock, $.001 par value (the Class B Common Stock), of GAMCO Investors, Inc., a New York corporation (the Company), and he has requested that the Company exchange those shares for the same number of shares of Class A Common Stock, $.001 par value (the Class A Common Stock and together with the Class B Common Stock, the Common Stock), of the Company; and

WHEREAS, the Company has agreed to the proposed exchange and the registration of the newly issued shares provided that Perlmutter agrees to certain limitations on his Class A Common Stock;

NOW, THEREFORE, this Exchange and Standstill Agreement (the Agreement) is made this 31st day of May, 2006, by and between Perlmutter and the Company.

REPRESENTATIONS AND WARRANTIES

Representations and Warranties of Perlmutter. Perlmutter represents and warrants to the Company as follows:

	a.		He is competent and has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby.

	b.		This Agreement has been duly and validly executed and delivered by Perlmutter and, assuming due and valid execution and delivery by the Company, constitutes a legal, valid and binding agreement of Perlmutter, enforceable against him in accordance with its terms, subject as to enforceability to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors rights and remedies generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). The performance of the terms of this Agreement does not conflict with, constitute a violation of, or require any notice or consent under, any certificate or articles of incorporation, limited partnership agreement, trust agreement, bylaws or any other agreement or instrument to which Perlmutter is a party or by which

			he is bound, and does not require any consent, approval or notice under any provision of any judgment, order, decree, statute, law, rule or regulation applicable to Perlmutter or Perlmutters shares of Common Stock, except as may be required by federal and state securities laws.

	c.		There are no other persons who, by reason of their personal, business, professional or other arrangement, relationship or affiliation with Perlmutter, whether written or oral and whether existing as of the date hereof or in the future, have agreed, explicitly or implicitly, to take any action on behalf of or in lieu of Perlmutter that would otherwise be prohibited by this Agreement.

	d.		As of the date hereof, Perlmutter expects to become the beneficial owner 69,514 shares of Class B Common Stock (the Class B Shares), free and clear of all liens and encumbrances, pursuant to the Settlement and Purchase Agreement. No other person will have any beneficial ownership interest in the Class B Shares, and no affiliate or associate of Perlmutter will have any rights, options or agreements to acquire or vote any other shares of Common Stock or other securities of the Company.

	e.		Any shares acquired hereunder by Perlmutter are being acquired solely for investment purposes and may not be resold or transferred except as permitted hereunder and in accordance with applicable securities laws.

Representations and Warrants of the Company. The Company represents and warrants to Perlmutter as follows:

The Company has been duly organized and is validly existing and in good standing, under the laws of the State of New York, and has the requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby.

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