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MANAGEMENT SERVICES AGREEMENT
THIS AGREEMENT by and between Gabelli Funds, Inc., to be renamed
Gabelli Group Capital Partners, Inc. (the "Parent") and Gabelli Asset Management
Inc. (the "Subsidiary") is made as of this 9th day of February, 1999.
WHEREAS, the Parent desires to retain the Subsidiary to provide the
services described herein and the Subsidiary is willing to provide such services
under the terms and conditions set forth herein.
WHEREAS, the Subsidiary desires to be reimbursed for the costs of
providing the services hereunder and the Parent is willing to reimburse the
Subsidiary for such costs.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the Parent and the Subsidiary agree as follows:
1. The Parent hereby retains the Subsidiary to (a) furnish office space
and facilities, utilities and office equipment as are adequate for the Parent's
needs, (b) oversee the administration of all aspects of the Parent's business
and affairs, including accounting, budgeting, tax planning, securities trading
and compliance matters, (c) provide personnel which it believes are competent to
(i) maintain the Parent's books and records in accordance with applicable laws
and regulations, (ii) arrange for the purchase and sale of securities and other
assets in the Parent's investment portfolio, (iii) prepare notices and agendas
for meetings of the Parent's shareholders and Board of Directors as well as
minutes of such meetings, and (d) provide reasonable levels of liability,
directors' and officers' and errors and omissions insurance coverage, which
coverage may be in the form of combined policies with the Subsidiary and its
subsidiaries, subject to the approval of the Parent's Board of Directors.
2. The Parent shall be responsible for the payment of its other
expenses not specified in Paragraph 1 above, including (a) brokerage fees and
commissions, (b) taxes, (c) interest charges on borrowings, (d) third-party
legal, auditing and accounting fees and expenses, (e) the compensation of any of
the Parent's directors, officers or employees who are not affiliated persons of
the Subsidiary, and (f) litigation and other extraordinary or non-recurring
expenses properly payable by the Parent. Nothing contained herein shall be
construed to restrict the Parent's right to hire its own employees or to
contract for administrative services to be performed by third parties.
3. The Subsidiary undertakes and agrees to perform its duties under
this Agreement in a manner consistent with this Agreement and any instructions
which may from time to time be given to it by the Parent, and in a manner
consistent with the provisions of applicable laws and regulations.
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Management Services Agreement
February 9, 1999
Page 2
4. The Subsidiary shall give the Parent the benefit of its best
judgment and effort in rendering services hereunder, but neither the Subsidiary
nor any of its officers, directors, employees or agents shall be liable for any
act or omission or for any loss sustained by the Parent in connection with the
matters to which this Agreement relates, except for a loss resulting from
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties under
this Agreement.
5. The Parent agrees to pay the Subsidiary for its services an annual
reimbursement charge of $200,000, which is the Subsidiary's estimated annual
cost of providing these services. To the extent that the Parent requests the
Subsidiary to provide services or incur expenses beyond those specified in
Paragraph 1 above, the Parent agrees to pay additional charges based on the
actual time and expenses incurred. The reimbursement charge and any additional
charges are payable quarterly in arrears.
6. This Agreement shall become effective on the date first written
above and shall continue in effect for one year and thereafter from year to
year, but only so long as such continuation is specifically approved by the
independent directors of the Subsidiary or a committee or subcommittee comprised
solely of such independent directors. Either party may terminate this Agreement
by giving the other party sixty days written notice.
7. This Agreement (a) represents the entire understanding between the
parties concerning these matters, (b) may not be amended or modified except in
writing signed by each of the parties, and (c) shall be governed by and
construed and enforced in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
GABELLI FUNDS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President, General Counsel and Secretary
GABELLI ASSET MANAGEMENT INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President and Chief Financial Office
