LOCK-UP AGREEMENT
THIS AGREEMENT, dated as of February 10, 1999, is by and among
Gabelli Asset Management Inc. (formerly known as Alpha G, Inc.), a New York
corporation (the "Company"), Gabelli Funds, Inc. (to be renamed Gabelli
Group Capital Partners, Inc.), a New York corporation ("GFI"), Rye
Holdings, Inc., a New York Corporation ("Rye Holdings"), and Rye Capital
Partners, Inc., a Delaware corporation ("Rye Capital," and together with
GFI and Rye Holdings, the "Class B Shareholders").
RECITALS
WHEREAS, GFI is currently the sole shareholder of the Company;
and
WHEREAS, the Company proposes to effectuate a reclassification of
its outstanding shares of common stock into Class A Common Stock, par value
$.001 per share (the "Class A Common Stock"), and Class B Common Stock, par
value $.001 per share (the "Class B Common Stock"), and to raise additional
capital by selling an aggregate of 6,000,000 shares of Class A Common Stock
(plus an additional 900,000 shares to cover over-allotments, if any) in an
underwritten public offering (the "Offering"); and
WHEREAS, prior to the consummation of the Offering, and as a
result of the transfer of assets pursuant to an Asset Transfer and
Assumption Agreement, dated as of February 9, 1999, between the Company and
GFI, GFI is the holder of 15,360,000 shares of Class B Common Stock of the
Company; and
WHEREAS, prior to the consummation of the Offering, and as a
result of the transfer of assets pursuant to an Asset Transfer and
Assumption Agreement, dated as of February 9, 1999, among the Company, Rye
Holdings and New Institutional Services, Inc., a wholly owned subsidiary of
the Company, Rye Holdings is the holder of 8,400,000 shares of Class B
Common Stock of the Company; and
WHEREAS, prior to the consummation of the Offering, and as a
result of the transfer of assets pursuant to an Asset Transfer and
Assumption Agreement, dated as of February 9, 1999, among the Company, Rye
Capital and New Fixed Income, Inc., a wholly owned subsidiary of the
Company, Rye Capital will be the holder of 240,000 shares of Class B Common
Stock of the Company; and
WHEREAS, Rye Holdings and Rye Capital are each wholly owned
subsidiaries of GFI; and
WHEREAS, the Company proposes to enter into a purchase agreement
(the "Purchase Agreement") with Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Salomon Smith Barney Inc. and Gabelli & Company, Inc., as
representatives of the several underwriters named therein (the
"Underwriters"), in connection with the Offering, which Purchase Agreement
will provide for the purchase by the Underwriters of the shares Class A
Common Stock from the Company and the resale by the Underwriters of such
shares to the public; and
WHEREAS, each of the parties recognizes that the raising of
capital in the Offering will benefit the Company and the Class B
Shareholders.
NOW, THEREFORE, in consideration of the foregoing, the agreements
contained herein and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree
as follows:
AGREEMENT
1. Upon the terms and subject to the conditions set forth in
this Agreement, the parties hereby agree that without the prior written
consent of the Company, the Class B Shareholders will not sell, offer to
sell, solicit an offer to buy, contract to sell, grant any option to
purchase, or otherwise transfer or dispose of, any shares of Class B Common
Stock of the Company, or any securities convertible into or exercisable or
exchangeable for such shares, for a period of three years after the date of
the final Prospectus relating to the public offering of the Class A Common
Stock of the Company (the "Lock-Up Termination Date"). The foregoing
restrictions, however, shall not apply to any transfer from one Class B
Shareholder to another Class B Shareholder.
2. In furtherance of the foregoing, the Company and State
Street Bank and Trust Company, its Transfer Agent, are hereby authorized to
decline to make any transfer of securities if such transfer would
constitute a violation or breach of this Agreement.
3. This Agreement will terminate upon the earlier of (i) the
Lock-Up Termination Date or (ii) if the Purchase Agreement does not become
effective or if the Purchase Agreement (other than provisions thereof which
survive termination) is terminated, on February 26, 1999.
4. This Agreement shall be binding also upon the successors,
assigns, heirs and personal representatives of the Class B Shareholders.
5. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York but without giving
effect to applicable principles of conflicts of law to the extent that the
application of the laws of another jurisdiction would be required thereby.
6. This Agreement may be executed in one or more counterparts,
each of which shall be an original and all of which when taken together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
GABELLI ASSET MANAGEMENT INC.
By: /s/ Robert S. Zuccaro
-------------------------
Name: Robert S. Zuccaro
Title: Vice President and Chief Financial
Officer
GABELLI FUNDS, INC.
By: /s/ James E. McKee
------------------------------
Name: James E. McKee
Title: Vice President, General Counsel and
Secretary
RYE HOLDINGS, INC.
By: /s/ James E. McKee
------------------------------
Name: James E. McKee
Title: Vice President, General Counsel and
Secretary
RYE CAPITAL PARTNERS, INC.
By: /s/ James E. McKee
--------------------------------
Name: James E. McKee
Title: Secretary