-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OI58BPfiOGD/k468KmQaegdWS9nGQqiS4FCyiLkkYOMTgG60QhrKZ+aLlOuwiWSQ 9Ts0TRP8a25Qg+tydUi1OA== 0000950130-03-000956.txt : 20030211 0000950130-03-000956.hdr.sgml : 20030211 20030211124701 ACCESSION NUMBER: 0000950130-03-000956 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20030211 GROUP MEMBERS: CONNING & COMPANY GROUP MEMBERS: CONNING CAPITAL PARTNERS VI, L.P. GROUP MEMBERS: CONNING CORPORATION GROUP MEMBERS: CONNING INVESTMENT PARTNERS VI, LLC GROUP MEMBERS: CONNING, INC. GROUP MEMBERS: SWISS RE AMERICA HOLDING CORPORATION FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SWISS REINSURANCE CO CENTRAL INDEX KEY: 0000315043 IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 50/60 MYTHENQUAI STREET 2: CH-8022 CITY: ZURICH STATE: V8 ZIP: 00000 BUSINESS PHONE: 0114112852162 FORMER COMPANY: FORMER CONFORMED NAME: SWISS REINSURANCE CO DATE OF NAME CHANGE: 19960313 FORMER COMPANY: FORMER CONFORMED NAME: SWISS RE ASSET MANAGEMENT AMERICAS INC DATE OF NAME CHANGE: 20021112 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NYMAGIC INC CENTRAL INDEX KEY: 0000847431 STANDARD INDUSTRIAL CLASSIFICATION: SURETY INSURANCE [6351] IRS NUMBER: 133534162 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-40907 FILM NUMBER: 03549386 BUSINESS ADDRESS: STREET 1: 330 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2125510600 MAIL ADDRESS: STREET 1: 330 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10017 SC 13D 1 dsc13d.txt SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------- SCHEDULE 13D Under the Securities Exchange Act of 1934 INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (Amendment No.__)1/ NYMAGIC, INC. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $1.00 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 629484106 - -------------------------------------------------------------------------------- (CUSIP Number) Markus U. Diethelm Chief Legal Officer and Member of Senior Management Swiss Reinsurance Company Mythenquai 50/60 CH-8022 Zurich, Switzerland (011-41-43-285-2162) with a copy to: Preston Kavanagh and Edward A. Reilly, Jr. Conning Capital Partners VI, L.P. Morgan, Lewis & Bockius LLP CityPlace II, 185 Asylum Street 101 Park Avenue Hartford, CT 06103 New York, NY 10178 (860-527-1131) (212-309-6000) - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) January 31, 2003 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-l(e), 13d-1(f) or 13d-1(g), check the following box [ ]. Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. (continued on following pages) (Page 1 of 27 Pages) - -------- 1/ The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 629484106 Schedule 13D Page 2 of 27 Pages - ---------- --------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Swiss Reinsurance Company - ---------- --------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - ---------- --------------------------------------------------------------------- 3 SEC USE ONLY - ---------- --------------------------------------------------------------------- 4 SOURCE OF FUNDS OO (See Item 3) - ---------- --------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ---------- --------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Switzerland - ---------- --------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY -0- (See Item 5) OWNED BY EACH -------- ----------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON WITH 1,000,000 (See Item 5) -------- ----------------------------------------- 9 SOLE DISPOSITIVE POWER -0- (See Item 5) -------- ----------------------------------------- 10 SHARED DISPOSITIVE POWER 1,000,000 (See Item 5) - ---------- --------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,000,000 (See Item 5) - ---------- --------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ---------- --------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.9% - ---------- --------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* HC, CO - ---------- --------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT CUSIP No. 629484106 Schedule 13D Page 3 of 27 Pages - ---------- --------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Swiss Re America Holding Corporation - ---------- --------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - ---------- --------------------------------------------------------------------- 3 SEC USE ONLY - ---------- --------------------------------------------------------------------- 4 SOURCE OF FUNDS OO (See Item 3) - ---------- --------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ---------- --------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ---------- --------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY -0- (See Item 5) OWNED BY EACH -------- ----------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON WITH 1,000,000 (See Item 5) -------- ----------------------------------------- 9 SOLE DISPOSITIVE POWER -0- (See Item 5) -------- ----------------------------------------- 10 SHARED DISPOSITIVE POWER 1,000,000 (See Item 5) - ---------- --------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,000,000 (See Item 5) - ---------- --------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ---------- --------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.9% - ---------- --------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* HC, CO - ---------- --------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT CUSIP No. 629484106 Schedule 13D Page 4 of 27 Pages - ---------- --------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Conning Corporation - ---------- --------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - ---------- --------------------------------------------------------------------- 3 SEC USE ONLY - ---------- --------------------------------------------------------------------- 4 SOURCE OF FUNDS OO (See Item 3) - ---------- --------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ---------- --------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Missouri - ---------- --------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY -0- (See Item 5) OWNED BY EACH -------- ----------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON WITH 1,000,000 (See Item 5) -------- ----------------------------------------- 9 SOLE DISPOSITIVE POWER -0- (See Item 5) -------- ----------------------------------------- 10 SHARED DISPOSITIVE POWER 1,000,000 (See Item 5) - ---------- --------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,000,000 (See Item 5) - ---------- --------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ---------- --------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.9% - ---------- --------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* HC - ---------- --------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT CUSIP No. 629484106 Schedule 13D Page 5 of 27 Pages - ---------- --------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Conning, Inc. - ---------- --------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - ---------- --------------------------------------------------------------------- 3 SEC USE ONLY - ---------- --------------------------------------------------------------------- 4 SOURCE OF FUNDS OO (See Item 3) - ---------- --------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ---------- --------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ---------- --------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY -0- (See Item 5) OWNED BY EACH -------- ----------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON WITH 1,000,000 (See Item 5) -------- ----------------------------------------- 9 SOLE DISPOSITIVE POWER -0- (See Item 5) -------- ----------------------------------------- 10 SHARED DISPOSITIVE POWER 1,000,000 (See Item 5) - ---------- --------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,000,000 (See Item 5) - ---------- --------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ---------- --------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.9% - ---------- --------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* HC - ---------- --------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT CUSIP No. 629484106 Schedule 13D Page 6 of 27 Pages - ---------- --------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Conning & Company - ---------- --------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - ---------- --------------------------------------------------------------------- 3 SEC USE ONLY - ---------- --------------------------------------------------------------------- 4 SOURCE OF FUNDS OO (See Item 3) - ---------- --------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ---------- --------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Connecticut - ---------- --------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY -0- (See Item 5) OWNED BY EACH -------- ----------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON WITH 1,000,000 (See Item 5) -------- ----------------------------------------- 9 SOLE DISPOSITIVE POWER -0- (See Item 5) -------- ----------------------------------------- 10 SHARED DISPOSITIVE POWER 1,000,000 (See Item 5) - ---------- --------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,000,000 (See Item 5) - ---------- --------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ---------- --------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.9% - ---------- --------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* HC, CO, IA - ---------- --------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT CUSIP No. 629484106 Schedule 13D Page 7 of 27 Pages - ---------- --------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Conning Investment Partners VI, LLC - ---------- --------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - ---------- --------------------------------------------------------------------- 3 SEC USE ONLY - ---------- --------------------------------------------------------------------- 4 SOURCE OF FUNDS OO (See Item 3) - ---------- --------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ---------- --------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ---------- --------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY -0- (See Item 5) OWNED BY EACH -------- ----------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON WITH 1,000,000 (See Item 5) -------- ----------------------------------------- 9 SOLE DISPOSITIVE POWER -0- (See Item 5) -------- ----------------------------------------- 10 SHARED DISPOSITIVE POWER 1,000,000 (See Item 5) - ---------- --------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,000,000 (See Item 5) - ---------- --------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ---------- --------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.9% - ---------- --------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* HC, OO - ---------- --------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT CUSIP No. 629484106 Schedule 13D Page 8 of 27 Pages - ---------- --------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Conning Capital Partners VI, L.P. - ---------- --------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - ---------- --------------------------------------------------------------------- 3 SEC USE ONLY - ---------- --------------------------------------------------------------------- 4 SOURCE OF FUNDS OO (See Item 3) - ---------- --------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ---------- --------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ---------- --------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY -0- (See Item 5) OWNED BY EACH -------- ----------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON WITH 1,000,000 (See Item 5) -------- ----------------------------------------- 9 SOLE DISPOSITIVE POWER -0- (See Item 5) -------- ----------------------------------------- 10 SHARED DISPOSITIVE POWER 1,000,000 (See Item 5) - ---------- --------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,000,000 (See Item 5) - ---------- --------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ---------- --------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.9% - ---------- --------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - ---------- --------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT CUSIP No. 629484106 Schedule 13D Pages 9 of 27 Pages Item 1. Security and Issuer. This statement relates to the common stock, par value $1.00 per share (the "Common Stock"), of NYMAGIC, Inc., a New York corporation ("NYMAGIC" or the "Company"). NYMAGIC has its principal executive offices at 330 Madison Avenue, New York, New York 10017. Item 2. Identity and Background. (a) This Schedule 13D is being filed jointly by the below-listed parties: Swiss Reinsurance Company ("Swiss Re"), which owns all of the outstanding capital stock of Swiss Re American Holding Corporation ("Swiss Re America"), which owns all of the outstanding capital stock of Conning Corporation ("Conning Corp."). Conning Corp. owns all of the outstanding capital stock of Conning, Inc., which owns all of the outstanding capital stock of Conning & Company ("Conning"), which is a member of Conning Investment partners VI, LLC ("Conning Investment"), which is the general partner of Conning Capital Partners VI, LP ("CCPVI"), which directly beneficially owns 1,000,000 shares of Common Stock of the Company. Swiss Re and Swiss Re America are, collectively, referred to herein as the "Swiss Re Entities". By virtue of certain arrangements between Conning or its affiliates, on the one hand, and Conning Investment or its manager members, on the other hand (the "Arrangements"), the Swiss Re Entities, Conning Corp., Conning, Inc. and Conning may be deemed to beneficially own the 1,000,000 shares of Common Stock directly beneficially owned by CCPVI. By virtue of being the general partner of CCPVI, Conning Investment may be deemed to beneficially own the 1,000,000 shares of Common Stock directly beneficially owned by CCPVI. A copy of the agreement among the reporting persons that this Schedule 13D is filed on behalf of (collectively, the "Reporting --------- Persons") is attached hereto as Exhibit 1. - ------- --------- Attached as Schedule A is information concerning each executive officer and director of Swiss Re. Attached as Schedule B is information concerning each director and executive officer of Conning. Attached as Schedule C is information concerning each manager member of Conning Investment and, by virtue of Conning Investment's position as general partner of CCPVI, of CCPVI. Schedules A through C each are incorporated into and made a part of this Schedule 13D. (b) The address of the principal business and principal office of Swiss Re is Mythenquai 50/60, CH-8022 Zurich, Switzerland. The address of the principal business and principal office of Swiss Re America is 175 King Street, Armonk, New York 10504. The address of the principal business and principal office of each of Conning Corp., Conning, Inc., Conning, Conning Investment, and CCPVI is CityPlace II, 185 Asylum Street, Hartford, Connecticut 06103-4105. (c) The principal business of Swiss Re and its subsidiaries (the "Swiss Re Group") is engaging in reinsurance and related activities throughout the world. The reinsurance companies in the Swiss Re Group transact almost all lines of reinsurance. There is no control person of Swiss Re. Conning Corp. is a holding company principally engaged, through its subsidiaries, in providing an array of investment management services for insurance companies and for other companies within the financial services sector. Conning, Inc. is a holding company principally engaged, through its subsidiaries in providing an array of investment management services for insurance companies and for other companies within the financial services sector. Conning is principally engaged in the private equity/venture capital investment business. CUSIP No. 629484106 Schedule 13D Pages 10 of 27 Pages Conning Investment acts as the general partner of CCPVI. CCPVI is a private equity firm focused on investing in financial services and healthcare services companies. (d) During the last five years, none of the Reporting Persons, nor, to the knowledge of each Reporting Person, any of their respective officers, directors or controlling persons has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the last five years, none of the Reporting Persons, nor, to the knowledge of each Reporting Person, any of their respective officers, directors or controlling persons has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Swiss Re is a Swiss corporation. Swiss Re America is a Delaware corporation. Conning Corp. is a Missouri corporation. Conning, Inc. is a Delaware corporation. Conning is a Connecticut corporation. Conning Investment is a Delaware limited liability company. CCPVI is a Delaware limited partnership. Except as otherwise indicated on Schedules A through C, to the knowledge of each Reporting Person, each executive officer and director named in Schedules A through C to this Schedule 13D are citizens of the United States of America. Item 3. Source and Amount of Funds or Other Consideration. CCPVI paid the purchase price of the securities described in Item 4 below with the proceeds of capital contributions from the partners of CCPVI. See Item 4 below for information regarding the amount of funds to be used in the purchase of the securities. Item 4. Purpose of Transaction. On January 31, 2003, CCPVI entered into a Securities Purchase Agreement (the "Company Purchase Agreement") with the Company pursuant to which CCPVI purchased from the Company and the Company issued to CCPVI, 400,000 shares (the "Company Shares") of Common Stock and options (the "Company Options") to purchase 400,000 shares (the "Company Option Shares") of Common Stock. The aggregate purchase price of the Company Shares and the Company Options was $8,400,000. The Company Options are initially exercisable for Common Stock at a price per share equal to (w) $19.75 plus (x) an additional $0.25 per share of Common Stock for each three month period commencing upon February 15, 2003 minus (y) the aggregate amount of any cash dividends paid per share on the Common Stock after the date of issuance of the Company Options minus, if CCPVI beneficially owns an aggregate of 50% of the Company Shares and the Company Option Shares and the Shareholder Shares (as hereinafter defined) and the Shareholder Option Shares (as hereinafter defined) and the Conning Designee (as hereinafter defined) is not elected to the Board of Directors of the Company or is removed from the Board of Directors of the Company (other than at the request CUSIP No. 629484106 Schedule 13D Pages 11 of 27 Pages of CCPVI), (z) $2.00, subject to adjustment, and expire on January 31, 2008. The Company Purchase Agreement and the Company Options are attached as Exhibit 2 and Exhibit 3, respectively, to this filing. In addition, on January 31, 2003, CCPVI entered into a Securities Purchase Agreement (the "Shareholder Purchase Agreement") with Blackman Investments, LLC (the "Shareholder") pursuant to which CCPVI purchased from the Shareholder and the Shareholder sold to CCPVI, 100,000 shares (the "Shareholder Shares") of Common Stock and options (the "Shareholder Options") to purchase 100,000 shares (the "Shareholder Option Shares") of Common Stock. The aggregate purchase price of the Shareholder Shares and the Shareholder Options was $2,100,000. The Shareholder Options are initially exercisable for Common Stock at a price per share equal to (x) $19.75 plus (y) an additional $0.25 per share of Common Stock for each three month period commencing upon February 15, 2003 minus (z) the aggregate amount of any cash dividends paid per share on the Common Stock after the date of issuance of the Shareholder Options, subject to adjustment, and expire on January 31, 2008. CCPVI may not exercise the Company Options or the Shareholder Options unless, in each case, CCPVI obtains the approval of the New York State Insurance Department to comply with Article 15 of the New York Insurance Law to the extent (but only to the extent) that such exercise would result in CCPVI beneficially owning in excess of 9.99% of the outstanding voting securities of the Company. The Shareholder Purchase Agreement and the Shareholder Options are attached as Exhibit 4 and Exhibit 5, respectively, to this filing. The Company Purchase Agreement provides for the Company to take all action within its power to have one individual designated by CCPVI to be appointed, nominated and elected to the Board of Directors of the Company (the "Conning Designee") and appointed to the Underwriting Committee, Human Resources Committee and the Audit Committee of the Board of Directors of the Company for so long as CCPVI and its affiliates beneficially own an aggregate of 50% of the Company Shares, the Company Option Shares, the Shareholder Shares and the Shareholder Option Shares it purchased pursuant to the Company Purchase Agreement and the Shareholder Purchase Agreement. On February 3, 2003, David Young, a member of Conning Investment, the general partner of CCPVI, was elected to the Company's Board of Directors as the Conning Designee. The Company Purchase Agreement also provides for CCPVI to have observation rights with respect to the meetings of the Company's Board of Directors for so long as CCPVI and its affiliates have beneficial ownership of an aggregate of 50% of the Company Shares, the Company Option Shares, the Shareholder Shares and the Shareholder Option Shares it purchased pursuant to the Company Purchase Agreement and the Shareholder Purchase Agreement. So long as CCPVI has exercised its rights to designate the Conning Designee, CCPVI has agreed to be subject to the "insider" trading restrictions policy of the Company. In addition, pursuant to a Registration Rights Agreement entered into on January 31, 2003 (the "Registration Rights Agreement"), the Company has granted certain registration rights to CCPVI. The Registration Rights Agreement is attached as Exhibit 6 to this filing. CUSIP No. 629484106 Schedule 13D Pages 12 of 27 Pages The foregoing descriptions do not purport to be complete and are qualified in their entirety by reference to the Company Purchase Agreement, the Company Options, the Shareholder Purchase Agreement, the Shareholder Options, the Registration Rights Agreement and the forms of exhibits thereto, copies of which have been filed as exhibits to this Schedule 13D and are incorporated herein by reference. The principal purpose of the transactions described above is for long-term investment in the Company. The Reporting Persons intend to review from time to time their investments in the Company and depending on such review may consider from time to time various alternative courses of action. In addition, depending on prevailing conditions from time to time, including, without limitation, price and availability of shares of Common Stock, future evaluations by the Reporting Persons of the business and prospects of the Company, regulatory requirements, other investment opportunities available to the Reporting Persons and general stock market and economic conditions, and subject to the applicable restriction discussed above, each of the Reporting Persons may determine to increase its investment or sell all or part of its investment in the Company through open-market purchases, privately negotiated transactions or otherwise. Except as described in this Schedule 13D, none of the Reporting Persons nor, to the best knowledge of each Reporting Person, any of the persons named in Schedules A through C to this Schedule 13D, has formulated any plans or proposals which relate to or would result in: (a) the acquisition by any person of additional securities of the Company, or the disposition of securities of the Company; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (d) any change in the present Board of Directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the Board; (e) any material change in the present capitalization or dividend policy of the Company; (f) any other material change in the Company's business or corporate structure; (g) any changes in the Company's charter or by-laws or other actions which may impede the acquisition or control of the Company by any person; (h) causing a class of securities of the Company to be delisted from a national securities exchange or cease to be authorized to be quoted in an interdealer quotation system of a registered national securities association; (i) causing a class of equity securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) any action similar to those enumerated above. Item 5. Interest in Securities of the Issuer. (a) As of the date of this filing, Swiss Re may be deemed to indirectly beneficially own, by virtue of the Arrangements, 1,000,000 shares of Common Stock directly beneficially owned by CCPVI, which represent 9.9% of all shares of Common Stock outstanding. As of the date of this filing, Swiss Re America, by virtue of the Arrangements, may be deemed to indirectly beneficially own 1,000,000 shares of Common Stock directly beneficially owned by CCPVI, which represent 9.9% of all shares of Common Stock outstanding. As of the date of this filing, Conning Corp., by virtue of the Arrangements, may be deemed to indirectly beneficially own 1,000,000 shares of Common Stock directly beneficially owned by CCPVI, which represent 9.9% of all shares of Common Stock outstanding. As of the date of this filing, Conning, Inc., by virtue of the Arrangements, may be deemed to indirectly beneficially own 1,000,000 shares of Common Stock directly beneficially owned by CCPVI, which represent 9.9% of all shares of Common Stock outstanding. As of the date of this filing, Conning, by virtue of the Arrangements, may be deemed to indirectly beneficially own 1,000,000 shares of Common Stock directly beneficially owned by CCPVI, which represent 9.9% of all shares of Common Stock outstanding. CUSIP No. 629484106 Schedule 13D Pages 13 of 27 Pages As of the date of this filing, Conning Investment, by virtue of being the general partner of CCPVI, may be deemed to indirectly beneficially own 1,000,000 shares of Common Stock directly beneficially owned by CCPVI, which represent 9.9% of all shares of Common Stock outstanding. As of the date of this filing, CCPVI directly has beneficial ownership of 1,000,000 shares of Common Stock, which represent 9.9% of all shares of Common Stock outstanding. Percentages are based on 9,276,398 shares of Common Stock issued and outstanding as of January 31, 2003 as set forth in the Company Purchase Agreement. (b) The number of shares of Common Stock as to which there is sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or direct the disposition, or shared power to dispose or direct the disposition for the Reporting Persons is set forth in the cover pages and such information is incorporated herein by reference. This statement is being filed jointly by the below-listed parties: Swiss Re, which owns all of the outstanding capital stock of Swiss Re America, which owns all of the outstanding capital stock of Conning Corp. Conning Corp. owns all of the outstanding capital stock of Conning, Inc., which owns all of the outstanding capital stock of Conning, which is a member of Conning Investment, which is the general partner of CCPVI, which directly beneficially owns 1,000,000 shares of Common Stock of the Company. By virtue of the Arrangements, the Swiss Re Entities, Conning Corp., Conning, Inc. and Conning may be deemed to beneficially own the 1,000,000 shares of Common Stock directly beneficially owned by CCPVI. By virtue of being the general partner of CCPVI, Conning Investment may be deemed to beneficially own the 1,000,000 shares of Common Stock directly beneficially owned by CCPVI. (c) Except for the transactions contemplated by the Company Purchase Agreement and the Shareholder Purchase Agreement each as described in Item 4, neither the Reporting Persons nor, to the best knowledge of each Reporting Person, any of the persons named in Schedule A through C to this Schedule 13D, has effected a transaction in shares of Common Stock during the past 60 days. (d) No person other than CCPVI has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Stock owned by CCPVI. (e) Not applicable. CUSIP No. 629484106 Schedule 13D Pages 14 of 27 Pages Item 6. Contracts, Arrangements, Understandings, or Relationships with Respect to Securities of the Issuer. Except as otherwise disclosed in this Schedule 13D, there are no contracts, arrangements, understandings or relationships with respect to securities of the Company. For the complete text of each contract, arrangement, understanding and relationship with respect to securities of the Company see the Company Purchase Agreement, the Company Options, the Shareholder Purchase Agreement, the Shareholder Options and the Registration Rights Agreement attached hereto as exhibits. The text of each such agreement is incorporated herein by reference. Item 7. Material to be Filed as Exhibits. Exhibit 1 Joint Filing Agreement, dated as of February 10, 2003, by and among Swiss Reinsurance Company, Swiss Re America Holding Corporation, Conning Corp., Conning, Inc., Conning & Company, Conning Investment Partners VI, LLC and Conning Capital Partners VI, L.P. Exhibit 2 Securities Purchase Agreement, dated as of January 31, 2003, by and between NYMAGIC, Inc. and Conning Capital Partners VI, L.P. Exhibit 3 Option Certificate, dated as of January 31, 2003, made by NYMAGIC, Inc. in favor of Conning Capital Partners VI, L.P. Exhibit 4 Securities Purchase Agreement, dated as of January 31, 2003, by and between Blackman Investments, LLC and Conning Capital Partners VI, L.P. Exhibit 5 Option Certificate, dated as of January 31, 2003, made by Blackman Investments, LLC in the favor of Conning Capital Partners VI, L.P. Exhibit 6 Registration Rights Agreement, dated as of January 31, 2003, by and between NYMAGIC, Inc. and Conning Capital Partners VI, L.P. CUSIP No. 629484106 Schedule 13D Pages 15 of 27 Pages After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. SWISS REINSURANCE COMPANY By: /s/ Herbert G. Buff -------------------------------- Name: Herbert G. Buff Title: Member of Senior Management and Group Compliance Officer By: /s/ Andre Pfanner -------------------------------- Name: Andre Pfanner Title: Member of Senior Management SWISS RE AMERICA HOLDING CORPORATION By: /s/ Raymond A. Eckert --------------------------------- Name: Raymond A. Eckert Title: Assistant Vice President and Chief Financial Officer By: /s/ W. Weldon Wilson --------------------------------- Name: W. Weldon Wilson Title: Assistant Vice President and General Counsel CUSIP No. 629484106 Schedule 13D Pages 16 of 27 Pages CONNING CORPORATION By: /s/ William M. Bourque -------------------------------- Name: William M. Bourque Title: General Counsel and Secretary By: /s/ Glenn R. Heiser -------------------------------- Name: Glenn R. Heiser Title: Chief Administrative Officer CONNING, INC. By: /s/ William M. Bourque -------------------------------- Name: William M. Bourque Title: General Counsel and Secretary By: /s/ Glenn R. Heiser ------------------------------- Name: Glenn R. Heiser Title: Chief Administrative Officer CONNING & COMPANY By: /s/ William M. Bourque ------------------------------- Name: William M. Bourque Title: President and General Counsel By: /s/ Glenn R. Heiser ------------------------------- Name: Glenn R. Heiser Title: Chief Administrative Officer CUSIP No. 629484106 Schedule 13D Pages 17 of 27 Pages CONNING INVESTMENT PARTNERS VI, LLC By: /s/ Gerard Vecchio --------------------------------- Name: Gerard Vecchio Title: Manager Member CONNING CAPITAL PARTNERS VI, L.P. By: Conning Investment Partners VI, LLC, its General Partner By: /s/ Gerard Vecchio ----------------------------------------- Name: Gerard Vecchio Title: Manager Member CUSIP No. 629484106 Schedule 13D Pages 18 of 27 Pages Schedule A Unless otherwise indicated, each individual is a United States of America citizen. If no address is given, the director's or executive officer's business address is Mythenquai 50/60, CH-8022 Zurich, Switzerland. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to such individual's position with Swiss Reinsurance Company. Name and Title Principal Occupation and Place of Business - -------------- ------------------------------------------ Peter Forstmoser Chairman of Swiss Reinsurance Company Director Switzerland Walter B. Kielholz Chairman of Credit Suisse Group Director Paradeplatz 8 Switzerland P.O. Box 1 CH-8070 Zurich Switzerland Thomas W. Bechtler Managing Director Director Hesta AG Switzerland Seestrasse 21, P.O. Box 1510 CH-8700 Kusnacht, Switzerland George L. Farr Managing Partner, Muirhead Holdings, LLC Director 69 Vineyard Lane Greenwich, Connecticut 06831 Rajna Gibson Professor, Swiss Banking Institute of the Director University of Zurich Switzerland Plattenstrasse 14 CH-8032 Zurich Switzerland Benedict G.F. Hentsch Retired Director Route de Suisse 322 Switzerland CH-1298 Celigny Switzerland Jorge Paulo Lemann Entrepreneur Director GP Investimentos Brazil and Switzerland Av. Brig. Faria Lima, 3729, 7o andar 04538-905 Sao Paulo, SP Brazil CUSIP No. 629484106 Schedule 13D Pages 19 of 27 Pages Name and Title Principal Occupation and Place of Business - -------------- ------------------------------------------ Robert A. Scott CBE Retired Director Axford Lodge United Kingdom and Australia Axford Basingstoke Hampshire RG25 2DZ United Kingdom John R. Coomber Chief Executive Officer, Member of the Executive Board Executive Officer Committee, Head of the Life & Health Business Group United Kingdom Jacques Aigrain Member of the Executive Board Committee, Head of the Executive Officer Financial Services Business Group Switzerland and France 55 East 52nd Street New York, New York 10055 Martin Albers Member of the Executive Board, Head of the Risk Executive Officer Solutions Unit in the Financial Services Business Group Switzerland Walter Anderau Member of the Executive Board, Head of the Executive Officer Communications & Human Resources Division Switzerland Andreas Beerli Member of the Executive Board, Head of the Americas Executive Officer Division within the Property & Casualty Business Group Switzerland 175 King Street Armonk, New York 10504 Giuseppe Benelli Chief Investment Officer, Member of the Executive Board Executive Officer Committee, Head of the Asset Management Unit within the Switzerland Financial Services Business Group Phillip Colebatch Member of the Executive Board, Head of the Capital Executive Officer Markets and Advisory Unit within the Financial Services Australia Business Group 35 Wilson Street London EC2M 2UB United Kingdom
CUSIP No. 629484106 Schedule 13D Pages 20 of 27 Pages Name and Title Principal Occupation and Place of Business - -------------- ------------------------------------------ Jacques E. Dubois Member of the Executive Board, Deputy Head of the Life & Executive Officer Health Business Group, Chairman, CEO and President of Swiss Re America Holding Corporation 175 King Street Armonk, New York 10504 John H. Fitzpatrick Chief Financial Officer, Member of the Executive Board Executive Officer Committee John J. Hendrickson Member of the Executive Board, Head of the former Executive Officer Capital Partners Unit within the Financial Services Business Group 150 California Street San Francisco, California 94111 Rudolf Kellenberger Deputy Chief Executive Officer, member of the Executive Executive Officer Board Committee Switzerland Michel M. Lies Member of the Executive Board, Head of the Europe Executive Officer Division within the Property & Casualty Business Group Luxembourg Stefan Lippe Member of the Executive Board Committee, Head of the Executive Officer Property & Casualty Business Group Germany Pierre L. Ozendo Member of the Executive Board, Head of the Asia Division Executive Officer within the Property & Casualty Business Group United States of America Central Plaza, 61 Floor and France 18 Harbour Road Hong Kong Bruno Porro Chief Risk Officer, Member of the Executive Board Executive Officer Committee, Head of the Risk & Knowledge Division Switzerland
CUSIP No. 629484106 Schedule 13D Pages 21 of 27 Pages Name and Title Principal Occupation and Place of Business - -------------- ------------------------------------------ Chris C. Stroup Member of the Executive Board, Vice President of Swiss Executive Officer Re America Holding Corporation, and Head of the Life & Health Business Group's North American Operations 175 King Street Armonk, New York 10504 Yury Zaytsev Group Information Officer, Member of the Executive Executive Officer Board, Head of the Information, Processes & Technology Division
CUSIP No. 629484106 Schedule 13D Pages 22 of 27 Pages Schedule B Unless otherwise indicated, each individual is a United States of America citizen. If no address is given, the directors or executive officer's business address is CityPlace II, 185 Asylum Street, Hartford, Connecticut 06103-4105. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to such individual's position with Conning & Company. Name and Title Principal Occupation and Place of Business - -------------- ------------------------------------------ Jeffrey Grous Controller & Assistant Secretary Director and Executive Officer Glenn R. Heiser Chief Administrative Officer Director and Executive Officer John J. Hendrickson Member of the Executive Board of Swiss Director Reinsurance Company 150 California Street San Francisco, California 94111 Kevin C. Lehman Chief Risk and Compliance Officer, Swiss Re Director Capital Partners (US) Inc. 55 East 52nd Street New York, New York 10055 William M. Bourque President, General Counsel & Secretary Executive Officer John B. Clinton Executive Vice President Executive Officer CUSIP No. 629484106 Schedule 13D Pages 23 of 27 Pages Schedule C Unless otherwise indicated, each individual is a United States of America citizen. If no address is given, the manager member's business address is CityPlace II, 185 Asylum Street, Hartford, Connecticut 06103-4105. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to such individual's position with Conning Investment Partners VI, LLC, and by virtue of Conning Investment Partners VI, LLC's position as general partner of Conning Capital Partners VI, L.P., of Conning Capital Partners VI, L.P. Name and Title Principal Occupation and Place of Business - -------------- ------------------------------------------ Michael E. Aspinwall, Investment Manager Manager Member John B. Clinton, Investment Manager Principal Manager Preston B. Kavanagh, Investment Manager Manager Member Steven F. Piaker, Investment Manager Manager Member Gerard Vecchio, Investment Manager Manager Member David W. Young, Investment Manager Manager Member CUSIP No. 629484106 Schedule 13D Pages 24 of 27 Pages Exhibit Index -------------
Exhibit No. - ----------- Exhibit 1 Joint Filing Agreement, dated as of February 10, 2003, by and among Swiss Reinsurance Company, Swiss Re America Holding Corporation, Conning Corp., Conning, Inc., Conning & Company, Conning Investment Partners VI, LLC and Conning Capital Partners VI, L.P. Exhibit 2 Securities Purchase Agreement, dated as of January 31, 2003, by and between NYMAGIC, Inc. and Conning Capital Partners VI, L.P. Exhibit 3 Option Certificate, dated as of January 31, 2003, made by NYMAGIC, Inc. in favor of Conning Capital Partners VI, L.P. Exhibit 4 Securities Purchase Agreement, dated as of January 31, 2003, by and between Blackman Investments, LLC and Conning Capital Partners VI, L.P. Exhibit 5 Option Certificate, dated as of January 31, 2003, made by Blackman Investments, LLC in the favor of Conning Capital Partners VI, L.P. Exhibit 6 Registration Rights Agreement, dated as of January 31, 2003, by and between NYMAGIC, Inc. and Conning Capital Partners VI, L.P.
CUSIP No. 629484106 Schedule 13D Pages 25 of 27 Pages Exhibit 1 Joint Filing Agreement This will confirm the agreement by and among all of the undersigned that this Schedule 13D with respect to the beneficial ownership by the undersigned of NYMAGIC, Inc. is being, and any and all amendments to such Schedule may be, filed on behalf of each of the undersigned. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned hereby execute this Agreement this 10th day of February, 2003. SWISS REINSURANCE COMPANY By: /s/ Herbert G. Buff ---------------------------------- Name: Herbert G. Buff Title: Member of Senior Management and Group Compliance Officer By: /s/ Andre Pfanner ---------------------------------- Name: Andre Pfanner Title: Member of Senior Management SWISS RE AMERICA HOLDING CORPORATION By: /s/ Raymond A. Eckert ---------------------------------- Name: Raymond A. Eckert Title: Assistant Vice President and Chief Financial Officer By: /s/ W. Weldon Wilson ---------------------------------- Name: W. Weldon Wilson Title: Assistant Vice President and General Counsel CUSIP No. 629484106 Schedule 13D Pages 26 of 27 Pages CONNING CORPORATION By: /s/ William M. Bourque -------------------------------- Name: William M. Bourque Title: General Counsel and Secretary By: /s/ Glenn R. Heiser -------------------------------- Name: Glenn R. Heiser Title: Chief Administrative Officer CONNING, INC. By: /s/ William M. Bourque -------------------------------- Name: William M. Bourque Title: General Counsel and Secretary By: /s/ Glenn R. Heiser -------------------------------- Name: Glenn R. Heiser Title: Chief Administrative Officer CONNING & COMPANY By: /s/ William M. Bourque -------------------------------- Name: William M. Bourque Title: President and General Counsel By: /s/ Glenn R. Heiser -------------------------------- Name: Glenn R. Heiser Title: Chief Administrative Officer CUSIP No. 629484106 Schedule 13D Pages 27 of 27 Pages CONNING INVESTMENT PARTNERS VI, LLC By: /s/ Gerard Vecchio ------------------------------------------------ Name: Gerard Vecchio Title: Manager Member CONNING CAPITAL PARTNERS VI, L.P. By: Conning Investment Partners VI, LLC, its General Partner By: /s/ Gerard Vecchio ------------------------------------------------ Name: Gerard Vecchio Title: Manager Member EX-99.2 3 dex992.txt SECURITIES PURCHASE AGREEMENT DATED AS OF 01/31/03 EXECUTION COPY EXHIBIT 2 ================================================================================ NYMAGIC, INC. - -------------------------------------------------------------------------------- SECURITIES PURCHASE AGREEMENT - -------------------------------------------------------------------------------- Dated as of January 31, 2003 ================================================================================ Morgan, Lewis & Bockius LLP New York, New York TABLE OF CONTENTS Page 1. PURCHASE AND SALE OF UNITS.................................................1 1.01. The Units.........................................................1 1.02. Purchase Price and Closing........................................1 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............................1 2.01. Organization and Qualification....................................2 2.02. Authorized Capital Stock..........................................2 2.03. Issuance, Sale and Delivery of the Shares and the Options.........3 2.04. Due Execution, Delivery and Performance of this Agreement.........3 2.05. No Defaults.......................................................4 2.06. No Actions........................................................4 2.07. No Material Change................................................4 2.08. Compliance........................................................5 2.09. Taxes.............................................................5 2.10. Transfer Taxes....................................................5 2.11. Investment Company................................................5 2.12. Compliance with Securities Laws...................................5 2.13. Public Filings; Undisclosed Liabilities...........................5 2.14. Reporting Company; Form S-3; New York Stock Exchange..............6 2.15. Governmental Permits, Etc.........................................7 2.16. Brokers...........................................................7 2.17. Regulatory Filings................................................7 2.18. A.M. Best Rating..................................................7 2.19. Subsequent Events.................................................7 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS...........................8 3.01. Organization and Standing of the Purchasers.......................8 3.02. Authority; Enforceability.........................................8 3.03. Acquisition for Investment........................................8 4. CONDITIONS AT CLOSING......................................................9 4.01. Purchasers' Obligation............................................9 5. COVENANTS OF THE COMPANY AND OTHER AGREEMENTS.............................10
i TABLE OF CONTENTS (continued) Page 5.01. Form D; Blue Sky Laws; Form 8-K..................................10 5.02. Reporting Status; Eligibility to Use Form S-3....................10 5.03. Listing..........................................................10 5.04. No Integration...................................................11 5.05. The Option Shares................................................11 5.06. Use of Proceeds..................................................11 5.07. Dealings with Affiliates.........................................11 5.08. Appointment to Board of Directors................................12 5.09. Observation Right................................................12 5.10. [Intentionally Deleted]..........................................12 5.11. Issuance of Certificates.........................................12 5.12. Unrestricted Securities..........................................12 5.13. Sale of Company Securities.......................................13 6. DEFINITIONS AND ACCOUNTING TERMS..........................................13 6.01. Certain Defined Terms............................................13 6.02. Accounting Terms.................................................16 7. INDEMNIFICATION...........................................................16 7.01. General Indemnity................................................16 7.02. Indemnification Procedure........................................16 8. MISCELLANEOUS.............................................................17 8.01. No Waiver; Cumulative Remedies...................................17 8.02. Amendments, Waivers and Consents.................................17 8.03. Addresses for Notices............................................18 8.04. Costs, Expenses and Taxes........................................18 8.05. Binding Effect; Assignment.......................................19 8.06. Survival of Representations and Warranties.......................19 8.07. Prior Agreements.................................................19 8.08. Severability.....................................................19 8.09. Confidentiality..................................................19 8.10. Governing Law....................................................20 ii
Page 8.11. Public Announcements.............................................20 8.12. Consent to Jurisdiction..........................................20 8.13. Waiver of Jury Trial.............................................20 8.14. Headings.........................................................21 8.15. Counterparts.....................................................21 8.16. Further Assurances...............................................21 8.17. Specific Enforcement.............................................21
iii SECURITIES PURCHASE AGREEMENT Dated as of January 31, 2003 Each of the Purchasers Listed on Schedule 1.01 Ladies and Gentlemen: NYMAGIC, INC., a New York corporation (the "Company"), hereby agrees with each of you as follows: 1. PURCHASE AND SALE OF UNITS 1.01. The Units. The Company has authorized the sale of (i) 400,000 shares of its authorized shares of Common Stock (the "Shares") held in the Company's treasury and (ii) options (the "Options") in the form of Exhibit A hereto to purchase an additional 400,000 shares of Common Stock (such additional 400,000 shares of Common Stock in the aggregate issuable from time to time upon exercise of the Options, collectively, the "Option Shares") at a purchase price of $21.00 per Unit, to the persons (individually, a "Purchaser" and collectively, the "Purchasers") and in the respective amounts set forth in Schedule 1.01 hereto. 1.02. Purchase Price and Closing. The Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the Purchasers, severally, but not jointly, agree to purchase that number of the Units set forth opposite their respective names in Schedule 1.01. The aggregate purchase price of the Units being acquired by each Purchaser is set forth opposite such Purchaser's name in Schedule 1.01. The closing of the purchase and sale of the Units to be acquired by the Purchasers from the Company under this Agreement (the "Closing") shall take place (including by means of courier, facsimile and electronic transmissions) at the offices of Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New York 10178 at 10:00 a.m. on January 31, 2003 (the "Closing Date"). At the Closing, the Company will deliver to each Purchaser certificates for the number of (i) Shares and (ii) Options, in each case, set forth opposite its name under the heading "Number of Common Shares" and "Number of Options", as applicable, in Schedule 1.01 registered, in each case, on the books of the Company in such Purchaser's name (or its nominee), against delivery of a transfer of funds to the account of the Company by wire transfer, representing the cash consideration for the Units set forth opposite such Purchaser's name under the heading "Aggregate Purchase Price" on Schedule 1.01. 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents and warrants to the Purchasers, as of the Closing Date, as follows: 2.01. Organization and Qualification. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of New York and the Company is qualified to do business as a foreign corporation in each jurisdiction in which qualification is required, except where failure to so qualify could not reasonably be expected to have a Material Adverse Effect. All of the Subsidiaries of the Company are listed on Schedule 2.01(a). All of the Insurance Subsidiaries of the Company are listed on Schedule 2.01(b). Each Subsidiary is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and is qualified to do business as a foreign entity in each jurisdiction in which qualification is required, except where failure to so qualify could not reasonably be expected to have a Material Adverse Effect. 2.02. Authorized Capital Stock. As of the date hereof, the authorized capital stock of the Company consists of 30,000,000 shares of Common Stock of which 9,276,398 shares are issued and outstanding, 5,855,826 shares are held in treasury and 618,700 shares are reserved for issuance under the Company's stock option plans and for the issuance upon the exercise or conversion of warrants and other convertible securities issued by the Company. All of such outstanding shares of capital stock, which are outstanding or held in treasury, are duly authorized, validly issued, fully paid and nonassessable and have been issued in compliance with all state and federal securities laws and were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. Except as disclosed in the Company's publicly available filings with the Commission filed before the date of this Agreement (the "Public Filings") and except for the transactions contemplated hereby, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever that could require the Company to issue additional shares of capital stock of the Company; (ii) there are no agreements or arrangements (other than the Registration Rights Agreement) under which the Company is or will be obligated to register the sale of any of its securities under the Securities Act; (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Shares, the Options and, upon exercise, the Option Shares; and (iv) there are no shareholders agreements, voting agreements or other similar agreements with respect to the Common Stock. The Company has furnished to the Purchasers true and correct copies of the Certificate of Incorporation as in effect on the date hereof, the Bylaws as in effect on the date hereof and the terms of all securities (other than employee stock options) convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The description of the Company's stock, stock bonus and other stock plans or arrangements and the options or other rights granted and exercised thereunder, set forth in the Public Filings accurately and fairly presents in all material respects the information required to be shown with respect to such plans, arrangements, options and rights. With respect to each Subsidiary, (i) all the issued and outstanding shares of each Subsidiary's capital stock have been duly authorized and validly issued, are fully paid and nonassessable, have been issued in compliance with applicable federal and state securities laws, were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities, and (ii) there are no outstanding options to purchase, or any preemptive rights or other rights to subscribe for or to 2 purchase, any securities or obligations convertible into, or any contracts or commitments to issue or sell, shares of the Subsidiary's capital stock or any such options, rights, convertible securities or obligations. All Subsidiaries included on Schedule 2.01(a) are one hundred percent (100%) owned, directly or indirectly, by the Company. 2.03. Issuance, Sale and Delivery of the Shares and the Options. (a) The Shares have been duly authorized and, when issued, delivered and paid for in the manner set forth in this Agreement, will be duly authorized, validly issued, fully paid and nonassessable and free and clear of all pledges, liens, restrictions, claims and encumbrances, and will conform in all material respects to the description thereof set forth in the Public Filings. No preemptive rights or other rights to subscribe for or purchase exist with respect to the issuance and sale of the Shares by the Company pursuant to this Agreement. The Board of Directors has approved the issuance from the treasury of the Shares pursuant to the terms hereof. No further corporate authorization or approval (including the approval of the Company's shareholders) is required under the rules of the New York Stock Exchange with respect to the transactions contemplated by this Agreement and the Related Agreements, including, without limitation, the issuance of the Shares and the inclusion thereof of the Shares for trading on the New York Stock Exchange. (b) When issued, delivered and paid for in the manner set forth in this Agreement, each Purchaser will acquire good and marketable title to the Options, free and clear of all pledges, liens, restrictions, claims and encumbrances. The Option Shares are duly authorized and reserved for issuance in the Company's treasury. Upon exercise of the Options, in whole or, from time to time, in part, and upon payment of the exercise price therefor, in accordance with the terms of the Options, each Purchaser will acquire good and marketable title to the Option Shares, free and clear from all pledges, liens, restrictions, claims and encumbrances, will not be subject to any preemptive rights or other similar rights of shareholders of the Company and, upon issuance, the Option Shares will be validly issued, fully paid and non-assessable and will conform in all material respects to the description of the Common Stock set forth in the Public Filings. The Board of Directors has approved the issuance of the Options and the Option Shares pursuant to the terms hereof. No further corporate authorization or approval (including the approval of the Company's shareholders) is required under the rules of the New York Stock Exchange with respect to the transactions contemplated by this Agreement and the Related Agreements, including, without limitation, the issuance of the Options and the inclusion thereof of the Option Shares for trading on the New York Stock Exchange. 2.04. Due Execution, Delivery and Performance of this Agreement. The Company has full legal right, corporate power and authority to enter into this Agreement, each Related Agreement and perform the transactions contemplated hereby and thereby. This Agreement and each Related Agreement has been duly authorized, executed and delivered by the Company. The execution, delivery and performance of this Agreement and each Related Agreement by the Company and the consummation of the transactions herein contemplated will not violate any provision of the organizational documents of the Company or any of its Subsidiaries and will not result in the creation of any lien, charge, security interest or encumbrance upon any assets of the Company or any of its Subsidiaries pursuant to the terms or provisions of, and will not (i) conflict with, result in the breach or violation of, or constitute, either by itself or upon notice or 3 the passage of time or both, a default under (A) any agreement, lease, franchise, license, permit or other instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries or any of their respective properties may be bound or affected and in each case which could have a Material Adverse Effect, or (B) any statute or any judgment, decree, order, rule or regulation of any court or any regulatory body, administrative agency or other governmental body applicable to the Company or any of its Subsidiaries or any of their respective properties where such conflict, breach, violation or default is likely to result in a Material Adverse Effect. No consent, approval, authorization or other order of any court, regulatory body, administrative agency or other governmental body is required for the execution and delivery of this Agreement, each Related Agreement or the consummation of the transactions contemplated by this Agreement and each Related Agreement, except for compliance with the federal securities laws applicable to the sale of the Units. Upon the execution and delivery of this Agreement and each Related Agreement, and assuming the valid execution thereof by each Purchaser, if applicable, this Agreement and each Related Agreement will constitute valid and binding obligations of the Company, enforceable in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' and contracting parties' rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 2.05. No Defaults. Except as disclosed in the Public Filings and except as to defaults, violations and breaches which individually or in the aggregate could not have a Material Adverse Effect, neither the Company nor any of its Subsidiaries is in violation or default of any provision of its certificate of incorporation or bylaws, or, to the Company's Knowledge, in breach of or default with respect to any provision of any agreement, judgment, decree, order, lease, franchise, license, permit or other instrument to which it is a party or by which it or any of its properties are bound; and, to the Company's Knowledge, there does not exist any state of fact which, with notice or lapse of time or both, would constitute an event of default on the part of the Company or any of its Subsidiaries as defined in such documents, except such defaults which, individually or in the aggregate, could not have a Material Adverse Effect. 2.06. No Actions. Except as disclosed in the Public Filings, there are no legal or governmental actions, suits or proceedings pending or threatened in writing to which the Company or any of its Subsidiaries is or may be a party or of which property owned or leased by the Company or any of its Subsidiaries is or may be the subject, or related to environmental or discrimination matters, which actions, suits or proceedings, individually or in the aggregate, might prevent the Company's execution, delivery and performance of this Agreement and/or each Related Agreement. 2.07. No Material Change. Except as disclosed in the Public Filings, since September 30, 2002 the Company and the Subsidiaries have conducted their businesses only in the ordinary course and in a manner consistent with past practice, and there has not occurred any event, condition, circumstance, change or development (whether or not in the ordinary course of business) that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect. 4 2.08. Compliance. Neither the Company nor any of its Subsidiaries has been advised that it is not conducting its business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting its business, except where failure to be so in compliance could not have a Material Adverse Effect. 2.09. Taxes. To the Company's Knowledge, each of the Company and its Subsidiaries has filed all necessary federal, state and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon, and neither the Company nor any of its Subsidiaries has been advised in writing of any tax deficiency which has been asserted or threatened against it which could have a Material Adverse Effect. 2.10. Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other than income taxes) which are required to be paid in connection with the sale and transfer of the Units to be sold to each Purchaser hereunder will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will be or will have been complied with. 2.11. Investment Company. Neither the Company nor any Subsidiary is an "investment company" or an "affiliated person" of, or "promoter" or "principal underwriter" for an investment company, within the meaning of the Investment Company Act of 1940, as amended. 2.12. Compliance with Securities Laws. Neither the Company nor any Person acting on behalf of the Company has conducted any "general solicitation," as described in Rule 502(c) under Regulation D promulgated under the Securities Act ("Regulation D"), with respect to any of the Units being offered hereby. Neither the Company, nor any of its Affiliates, nor any Person acting on their behalf, has directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would prevent the parties hereto from consummating the transactions contemplated hereby pursuant to an exemption from registration under the Securities Act pursuant to the provisions of Regulation D. The transactions contemplated by this Agreement and the Options are exempt from the registration requirements of the Securities Act, assuming the accuracy of the representations and warranties herein of each Purchaser to the extent relevant for such determination. The issuance of the Units to each Purchaser will not be integrated with any other issuance of the Company's securities (past, current or future) which requires shareholder approval under the rules of the New York Stock Exchange or which would result in a violation of the Securities Act. 2.13. Public Filings; Undisclosed Liabilities. Since December 31, 2001, the Company has filed all required reports, schedules, forms, proxy, registration and other statements and other documents with the Commission. As of the date of this Agreement, the last Public Filing filed by the Company was a Report on Form 8-K, dated November 14, 2002. As of their respective filing dates, the Public Filings complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the Commission promulgated thereunder applicable to the Public Filings. As of their respective filing dates, none of the Public Filings contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except to the extent such statements have been modified or superseded by a later Public Filing filed and publicly available prior to the Closing Date, the circumstances or bases for which 5 modifications or supersessions have not and will not individually or in the aggregate result in any material liability or obligation on behalf of the Company under the Securities Act, the Exchange Act, the rules promulgated under the Securities Act or the Exchange Act, or any federal, state or local anti-fraud, blue-sky, securities or similar laws. The Company does not have pending before the Commission any request for confidential treatment of information and to the Company's Knowledge no such request is contemplated by the Company prior to the time the Registration Statement which is contemplated by the Registration Rights Agreement is first ordered effective by the Commission and there is not pending nor, to the Company's Knowledge, is there contemplated, nor has there been any, investigation by the Commission involving the Company or any current or former director or officer of the Company. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing. The consolidated financial statements of the Company included in the Public Filings (as amended or supplemented by any later filed Public Filings filed and publicly available prior to December 31, 2002), comply as to form in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto, have been prepared in accordance with GAAP (except, in the case of unaudited statements, as permitted by Form 10-Q of the Commission) applied on a consistent basis during the periods involved (except as may be indicated in notes thereto) and fairly present the consolidated financial position of the Company and the Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in the Public Filings, neither the Company nor any Subsidiary has any obligation or liability of any nature whatsoever (direct or indirect, matured or unmatured, absolute, accrued, contingent or otherwise) either (i) required by GAAP to be set forth on a consolidated balance sheet of the Company and the Subsidiaries or in the notes thereto or (ii) which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, other than liabilities and obligations reflected or reserved against in the consolidated financial statements of the Company and its consolidated subsidiaries included in the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2002, or incurred since the date of the balance sheet included in such financial statements in the ordinary course of business which are not individually or collectively material to the Company and the Subsidiaries taken as a whole. 2.14. Reporting Company; Form S-3; New York Stock Exchange. The Company is subject to the reporting requirements of the Exchange Act, has one class of securities registered under Section 12 of the Exchange Act, and has filed all reports required thereby. The Company is eligible to register the Shares for resale by each Purchaser on a registration statement on Form S-3 under the Securities Act. There exist no facts or circumstances (including, without limitation, any required approvals or waivers or any circumstances that may delay or prevent the obtaining of accountant's consents) that reasonably could be expected to prohibit or delay the preparation and filing of the Registration Statement. No shareholder of the Company has any right (which has not been waived or has not expired by reason of lapse of time following notification of the Company's intent to file the Registration Statement) to require the Company to register the sale of any shares owned by such shareholder under the Securities Act in the Registration Statement. The Common Stock, the Shares and the Option Shares are listed on the New York Stock Exchange, and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or de-listing the Common Stock, the Shares and the Option Shares from the New York Stock 6 Exchange, nor has the Company received any notification that the Commission or the New York Stock Exchange is contemplating terminating such registration or listing. 2.15. Governmental Permits, Etc. To the Company's Knowledge, each of the Company and its Subsidiaries has all necessary franchises, licenses, certificates and other authorizations from any foreign, federal, state or local government or governmental agency, department or body that are currently necessary for the operation of the business of the Company and its Subsidiaries as currently conducted, except where the failure to possess currently such franchises, licenses, certificates and other authorizations could not reasonably be expected to have a Material Adverse Effect, and the Company and Subsidiaries have not received any notice of proceedings relating to the revocation or modification of any such permit or any circumstance which would lead the Company to believe that such proceedings are reasonably likely which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, could reasonably be expected to have a Material Adverse Effect. 2.16. Brokers. No broker, finder, investment banker or other Person is entitled to receive any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement and the Related Agreements based upon arrangements made by or on behalf of the Company. 2.17. Regulatory Filings. Except as set forth in the Public Filings or that could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, the Company and each Subsidiary has filed or otherwise provided all reports, data, other information and applications required to be filed with or otherwise provided to the office of the Superintendent of the New York State Insurance Department, and all other federal, state or local governmental authorities with jurisdiction over the Company and each Subsidiary and all required regulatory approvals in respect thereof are in full force and effect on the date hereof. All such regulatory filings were in compliance with applicable law when filed and no deficiencies have been asserted by such governmental authority with respect to any such regulatory filings that have not been satisfied. 2.18. A.M. Best Rating. Each Insurance Subsidiary is currently rated A-Excellent by A.M. Best Company, Inc. ("A.M. Best") and neither the Company nor any Insurance Subsidiary has received any communication from A.M. Best that A.M. Best intends to lower or remove such rating. 2.19. Subsequent Events. Since September 30, 2002, (a) All material Contracts to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or any of their respective assets may be bound have been filed with the Commission (and are publicly available), are described in the Public Filings or have been made available to the Purchasers and, in each case, are in full force and effect. (b) There has not been (i) any change by the Company in its accounting methods, principles or practices, (ii) any revaluation by the Company of any of its or any Subsidiary's material assets that could, individually or in the aggregate, result in a Material Adverse Effect, (iii) any entry outside the ordinary course of business by the Company or any 7 Subsidiary into any commitments or transactions material, individually or in the aggregate, to the Company and the Subsidiaries taken as a whole, (iv) any declaration, setting aside or payment of any dividends or distributions in respect of the shares of Common Stock or any redemption, purchase or other acquisition of any of the Company's securities, (v) any grant or issuance of any Equity Securities of the Company or any Subsidiary or (vi) any increase in, establishment of or amendment of any Employment, Consulting or Severance Agreement, bonus, insurance, deferred compensation, pension, retirement, profit sharing, stock option (including, without limitation, the granting of stock options, stock appreciation rights, performance awards, or restricted stock awards), stock purchase or other employee benefit plan or agreement or arrangement, or any other increase in the compensation payable or to become payable to any present or former directors, officers or employees of the Company or any Subsidiary, except in the ordinary course of business consistent with past practice. (c) No transaction has occurred between or among the Company, any of the Subsidiaries, officers or directors or any of their respective affiliates that will be required to be described under applicable securities laws in future Public Filings and that have not otherwise been disclosed to the Purchasers. 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS Each of the Purchasers, severally, but not jointly, hereby represents and warrants to the Company, as of the Closing Date, as follows: 3.01. Organization and Standing of the Purchasers. Each of the Purchasers that is not an individual (an "Entity Purchaser") is a corporation, partnership or limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. 3.02. Authority; Enforceability. Each of the Entity Purchasers has all requisite corporate, partnership or limited liability company power and authority to enter into this Agreement and each Related Agreement to which it is a party and to carry out its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and each Related Agreement to which it is a party by each of the Entity Purchasers have been duly and validly authorized by all requisite corporate, partnership or limited liability company proceedings, as the case may be, on the part of each of the Purchasers. This Agreement and each Related Agreement to which it is a party when executed and delivered by each of the Purchasers is a valid and binding obligation of such Purchaser, enforceable against it in accordance with its terms, except that (a) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium, rehabilitation, liquidation, conservatorship, receivership or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. 3.03. Acquisition for Investment. Each of the Purchasers is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D. Each of the Purchasers is acquiring the Units solely for its own account for the purpose of investment and not with a view to or for sale 8 in connection with any distribution thereof, and it has no present intention or plan to effect any distribution of the Units, the Shares, the Options or the Option Shares. Each of the Purchasers represents that it has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment in the Units and that it is able to bear the economic risk associated with such investment and can afford the complete loss of such investment. The Purchasers acknowledge that the offer and sale of the Shares, the Options and the Option Shares have not been registered under the Securities Act. 4. CONDITIONS AT CLOSING 4.01. Purchasers' Obligation. The obligation of each Purchaser to close the transactions contemplated by this Agreement and each Related Agreement is subject to the satisfaction on or prior to the date of the Closing of the following conditions: (a) The opinions of Mayer, Brown, Rowe & Maw, counsel to the Company and Paul J. Hart, the Company's General Counsel, each dated the Closing Date, addressed to the Purchasers, substantially in the form and to the effect of Exhibit B hereto. (b) (i) Copies, as of a recent date, of the certificate of incorporation, including all amendments thereto, of the Company and each of the Subsidiaries certified by the Secretary of State or other appropriate official of the jurisdiction of organization, (ii) certificates, as of a recent date, from the Secretary of State of New York to the effect that the Company is in good standing or subsisting in such jurisdiction, listing all charter documents of the Company on file and attesting to its payment of all franchise or similar taxes, and (iii) a certificate, as of a recent date, from the Secretary of State or other appropriate official in each jurisdiction in which each of the Subsidiaries is organized to the effect such Subsidiary is in good standing in such jurisdiction. (c) Fully executed copy of the Registration Rights Agreement, dated the Closing Date, which shall be in full force and effect. (d) Duly executed certificates representing the Shares and the Options, dated the Closing Date, being purchased by each Purchaser. (e) Fully executed copy of the Shareholder Purchase Agreement, dated the Closing Date, in form and substance satisfactory to the Purchasers which shall be in full force and effect. (f) Duly executed certificates representing the shares of Common Stock and options to purchase Common Stock being purchased by each Purchaser from the Shareholder. (g) A duly executed certificate of the secretary of the Company, dated as of the Closing Date, certifying (i) that true and complete copies of the Company's Certificate of Incorporation and Bylaws, as in effect on the Closing Date, are attached to such certificate as exhibits thereto; and (ii) the genuineness of the resolutions of the Board of Directors adopting the terms and conditions of this Agreement, the Related Agreements and the transactions contemplated thereby. 9 5. COVENANTS OF THE COMPANY AND OTHER AGREEMENTS 5.01. Form D; Blue Sky Laws; Form 8-K. The Company will file a Notice of Sale of Securities on Form D with respect to the Units, if required under Regulation D, and to provide a copy thereof to each Purchaser promptly after such filing. The Company will take such action as it reasonably determines to be necessary to qualify the Shares, the Options and the Option Shares for sale to the Purchasers under this Agreement under applicable securities (or "blue sky") laws of the states of the United States (or to obtain an exemption from such qualification), and will provide evidence of any such action so taken to the Purchasers on or prior to the date of the Closing. The Company will file with the Commission a Current Report on Form 8-K disclosing this Agreement and the transactions contemplated hereby within three (3) business days after the Closing Date. 5.02. Reporting Status; Eligibility to Use Form S-3. Throughout the Registration Period (as defined in the Registration Rights Agreement), the Company will timely file all reports, schedules, forms, statements and other documents required to be filed by it with the Commission under the reporting requirements of the Exchange Act, and the Company will not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would permit such termination. The Company will use its reasonable best efforts to continue to meet, the "registrant eligibility" requirements for a secondary offering set forth in the general instructions to Form S-3 to enable the registration of the Registrable Securities as defined in the Registration Rights Agreement. Notwithstanding the foregoing, (a) in the case of any consolidation or merger of the Company with or into any other corporation or Person, or any other corporate reorganization, in which the Company shall not be the continuing or surviving entity of such consolidation, merger or reorganization, or any sale of all or substantially all of the assets of the Company (any such transaction being hereinafter referred to as a "Reorganization"), in which, in each case, the consideration to be paid to the Purchasers upon the consummation or effective date of such Reorganization (the "Effective Date") is all cash for all of the securities of the Company beneficially owned by all of the Purchasers then, in each case, upon the Effective Date the obligations under this Section 5.02 shall terminate, (b) in the case of any Reorganization in which the consideration to be paid to all of the Purchasers upon the Effective Date is securities of a Person other than the Company for all of the securities of the Company beneficially owned by all of such Purchasers and such securities are listed on a national securities exchange or the NASDAQ National Market, then upon the Effective Date the obligations under this Section 5.02 shall not terminate; provided that the obligations under this Section 5.02 Reference source not found. shall terminate with respect to securities of the Company if all of such Purchasers do not beneficially own any securities of the Company as a result of such Reorganization or (c) in the case of any proposed Reorganization in which the consideration to be paid to all of the Purchasers upon the Effective Date is securities of a Person for all of the securities of the Company beneficially owned by such Purchasers and such securities are not listed on a national securities exchange or the NASDAQ National Market, then the Company shall obtain the prior written consent of the Purchasers who beneficially own a majority-in-interest of the Units (determined on an as-exercised basis) prior to effecting such Reorganization. 5.03. Listing. The Company will use its best efforts to obtain and, so long as any Purchaser beneficially owns any of the Shares, the Options and the Option Shares and the shares 10 of Common Stock, options and the shares of Common Stock underlying options to purchase Common Stock purchased from the Shareholder, maintain the listing and trading of its Common Stock (including the Shares and the Option Shares) on the New York Stock Exchange and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the New York Stock Exchange. Notwithstanding the foregoing, (a) in the case of any Reorganization in which the consideration to be paid to the Purchasers upon the Effective Date is all cash for all of the securities of the Company beneficially owned by all of the Purchasers, then upon the Effective Date the obligations under this Section 5.03 shall terminate, (b) in the case of any Reorganization in which the consideration to be paid to all of the Purchasers upon the Effective Date is securities of a Person other than the Company for all of the securities of the Company beneficially owned by all of such Purchasers and such securities are listed on a national securities exchange or the NASDAQ National Market, then upon the Effective Date the obligations under this Section 5.03 shall not terminate; provided that the obligations to list and maintain such listing of securities of the Company shall terminate if all of such Purchasers do not beneficially own any securities of the Company as a result of such Reorganization or (c) in the case of any proposed Reorganization in which the consideration to be paid to all of the Purchasers upon the Effective Date is securities of a Person for all of the securities of the Company beneficially owned by all of such Purchasers and such securities are not listed on a national securities exchange or the NASDAQ National Market, then the Company shall obtain the prior written consent of the Purchasers who beneficially own a majority-in-interest of the Units (determined on an as-exercised basis) prior to effecting such Reorganization. Until a Purchaser transfers, assigns or sells all of the Shares, the Options and the Option Shares and the shares of Common Stock, options and the shares of Common Stock underlying options to purchase Common Stock purchased from the Shareholder beneficially owned by it, the Company will promptly provide to each Purchaser copies of any notices it receives regarding the continued eligibility of the Shares and the Option Shares for listing on the New York Stock Exchange. 5.04. No Integration. The Company will not make any offers or sales of any security under circumstances that would cause the offering of the Shares, the Options and the Option Shares to be integrated with any other offering of securities by the Company (i) for the purpose of any shareholder approval provision applicable to the Company or its securities or (ii) for purposes of any registration requirement under the Securities Act. 5.05. The Option Shares. The Company has authorized and has reserved and covenants to continue to reserve, free of preemptive rights and other similar contractual rights of shareholders, a sufficient number of authorized shares of Common Stock held in its treasury to satisfy the exercise of the Options. 5.06. Use of Proceeds. The Company shall use the net cash proceeds from the issuance and sale of the Units for general corporate purposes. 5.07. Dealings with Affiliates. Except for transactions between or among the Company and any of the Subsidiaries, the Company will not enter into, or permit any Subsidiary to enter into, any transaction(s) (including, without limitation, any loans or extensions of credit, release of guarantee, management contract or royalty agreements, deferred or contingent compensation agreement, consulting or other agreement) with any Affiliate, except transactions in the ordinary 11 course of business and at prices and on terms not less favorable to the Company or such Subsidiary than could be obtained on an arms-length basis from unrelated third parties or otherwise approved by the disinterested and independent members of the Board of Directors. 5.08. Appointment to Board of Directors. So long as Conning Capital Partners VI, L.P. ("Conning") and its affiliates beneficially own an aggregate of 50% of the Shares and the Option Shares purchased hereunder and the shares of Common Stock and the shares of Common Stock underlying the options to purchase Common Stock purchased from the Shareholder pursuant to the Shareholder Purchase Agreement, the Company hereby agrees to take all action within its power to cause one (1) individual designated by Conning (the "Conning Designee") to be nominated, appointed and elected to the Board of Directors and appointed to the following committees of the Board of Directors: (i) Underwriting, (ii) Human Resources and (iii) Audit. 5.09. Observation Right. So long as Conning is entitled to designate the Conning Designee, the Purchasers shall have the right to designate one (1) individual (the "Observer") to attend any meeting of the Board of Directors; provided, however, at the reasonable request of the Chairman of the Board of Directors, Conning shall remove the individual serving as the Observer and designate another individual to be the Observer. The Observer shall not have the right to vote on any matter presented to the Board of Directors but the Observer may participate in discussions thereon. The Observer shall be entitled to receive all written materials and other information given to the directors in connection with such meetings at the same time such materials and information are given to the directors and the Observers shall execute and deliver to the Company a confidentiality agreement in the form and substance satisfactory to the Company. 5.10. [Intentionally Deleted]. 5.11. Issuance of Certificates. The Purchasers acknowledge that each certificate representing the Shares, the Options and the Option Shares shall be stamped or otherwise imprinted with a legend substantially in the following form: "THE OFFER AND SALE OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS THEREOF OR PURSUANT TO AN EXEMPTION THEREFROM." The Company will not give to its transfer agent of the Common Stock (the "Transfer Agent") any instruction with respect to the Shares and the Option Shares other than as described in this Section 5. 5.12. Unrestricted Securities. If (i) the Shares, the Options or the Option Shares represented by a certificate have been sold pursuant to an effective registration statement filed under the Securities Act, (ii) a holder of the Shares, the Options or the Option Shares provides the Company and the Transfer Agent, as applicable, with an opinion of counsel reasonably 12 satisfactory to the Company to the effect that a public sale or transfer of any of such securities may be made without registration under the Securities Act and such sale either has occurred or may occur without restriction on the timing or manner of such sale or transfer or (iii) the Shares, the Options or the Option Shares represented by a certificate can be sold without restriction as to the number of securities sold under Rule 144(k) promulgated under the Securities Act, the Company will permit the transfer of the Shares, the Options or the Option Shares, as the case may be, and the Transfer Agent or the Company, as applicable, will issue one or more certificates, free from any restrictive legend, in such name and in such denominations as specified by such holder. 5.13. Sale of Company Securities. So long as Conning has exercised its rights to designate the Conning Designee, Conning will and will use its reasonable best efforts to cause its affiliates to abide by the Company's policies relating to sales and purchases of securities of the Company by members of the Board of Directors and the executive officers of the Company. 6. DEFINITIONS AND ACCOUNTING TERMS 6.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Affiliate" shall mean any officer or director of the Company or any Subsidiary or holder of five percent (5%) or more of any class of capital stock of the Company or any Subsidiary, or any member of their respective immediate families or any corporation or other entity directly or indirectly controlled by one or more of such officers, directors or 5% shareholders or members of their immediate families. "Agreement" shall mean this Securities Purchase Agreement, including all amendments, modifications or supplements thereto. "A.M. Best" shall have the meaning assigned to such term in Section 2.18. "Board of Directors" shall mean the Board of Directors of the Company, as constituted from time to time. "Bylaws" shall mean the Bylaws of the Company, including all amendments, modifications or supplements thereto. "Certificate of Incorporation" shall mean the Certificate of Incorporation of the Company. "Closing" shall have the meaning assigned to such term in Section 1.02. "Closing Date" shall have the meaning assigned to such term in Section 1.02. "Commission" shall mean the Securities and Exchange Commission or any other federal agency then administering the Securities Act or Exchange Act. 13 "Common Stock" shall mean (a) the Company's Common Stock, par value $1.00 per share, (b) any other capital stock of any class or classes (however designated) of the Company, authorized on or after the date hereof, the holders of which shall have the right, without limitation as to amount, either to all or to a share of the balance of current dividends and liquidating dividends after the payment of dividends and distributions on any shares entitled to preference, and the holders of which shall ordinarily, in the absence of contingencies or in the absence of any provision to the contrary in the Certificate of Incorporation, be entitled to vote for the election of a majority of directors of the Company (even though the right so to vote has been suspended by the happening of such a contingency or provision), and (c) any other securities into which or for which any of the securities described in (a) or (b) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise. "Company" shall have the meaning assigned to such term in the introductory sentence hereof. "Confidential Information" shall mean information belonging to or in possession of the Company or its Subsidiaries which is of a confidential, proprietary or trade secret nature that is furnished or disclosed to any Purchaser under this Agreement. The Confidential Information to be disclosed by the Company under this Agreement includes, without limitation, information regarding its financial information (including, without limitation, projections) and its past, current and proposed business strategies. "Conning" shall have the meaning assigned to such term in Section 5.08. "Conning Designee" shall have the meaning assigned to such term in Section 5.08. "Contract" means any contract, agreement, commitment, indenture, lease, note, bond, mortgage, license, plan, arrangement or understanding, whether written or oral. "Effective Date" shall have the meaning assigned to such term in Section 5.02. "Employment, Consulting or Severance Agreements" means all oral and written (i) agreements for the employment for any period of time whatsoever, or in regard to the employment, or restricting the employment, of any employee of the Company or any Subsidiary, (ii) consulting, independent contractor or similar agreements, and (iii) policies, agreements, arrangements or understandings relating to the payment or provision of severance, termination or similar pay or benefits to any present or former employees, officers, directors, consultants, independent contractors or other agents of the Company or any Subsidiary. "Entity Purchaser" shall have the meaning assigned to such term in Section 3.01. "Equity Securities" shall mean, with respect to any Person, (a) shares of common stock, partnership interests or membership interests of such Person, (b) any other equity security of such Person, including, without limitation, shares of preferred stock, (c) any equity-linked securities including, without limitation, stock appreciation rights, "phantom" stock rights or rights to payment based on the performance (e.g., revenues, EBITDA, earnings, etc.) of such Person, (d) any notes or debt securities of such Person containing equity features (including any notes or debt securities convertible into or exchangeable for equity securities, issued in 14 connection with the issuance of equity securities or containing profit participation features) or (e) any right, option or warrant to acquire any such equity security or any such note or debt security. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated pursuant thereto. "GAAP" shall mean generally accepted accounting principles as set forth from time to time in the opinions of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements of the Financial Accounting Standards Board or in such opinions and statements of such other entities as shall be approved by a significant segment of the accounting profession, applied on a consistent basis. "indemnified party" shall have the meaning assigned to such term in Section 7.02. "Insurance Subsidiary" shall mean any corporation or other Person listed on Schedule 2.01(b). "Knowledge" the Company will be deemed to have "Knowledge" of a particular fact or other matter if the Company's Chief Executive Officer, Chief Financial Officer or Chief Claims Officer is actually aware of such fact or other matter. "Material Adverse Effect" shall mean any material adverse effect on the financial condition of the Company and the Subsidiaries, taken as a whole, which is in excess of $20.0 million in any 12 month period. "Observer" shall have the meaning assigned to such term in Section 5.09. "Options" shall have the meaning assigned to such term in Section 1.01. "Option Shares" shall have the meaning assigned to such term in Section 1.01 "Person" shall mean an individual, corporation, partnership, joint venture, limited liability company or partnership, trust, university, or unincorporated organization, or a government or any agency or political subdivision thereof. "Public Filings" shall have the meaning assigned to such term in Section 2.02. "Purchaser" shall have the meaning assigned to such term in Section 1.01 and shall include the original Purchaser and each holder of Shares, Options and Option Shares. "Registration Rights Agreement" shall mean that certain Registration Rights Agreement, dated as of the date hereof, attached hereto as Exhibit C. "Registration Period" shall have the meaning assigned to such term in the Registration Rights Agreement. "Registration Statement" shall mean any disclosure document that the Company is required to file under the Securities Act pursuant to the Registration Rights Agreement. 15 "Regulation D" shall have the meaning assigned to such term in Section 2.12. "Related Agreements" shall mean the Options and the Registration Rights Agreement, including all amendments, modifications or supplements thereto. "Reorganization" shall have the meaning assigned to such term in Section 5.02. "Securities Act" shall mean the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated pursuant thereto. "Shares" shall have the meaning assigned to such term in Section 1.01. "Shareholder" shall mean Blackman Investments, LLC. "Shareholder Purchase Agreement" shall mean the Securities Purchase Agreement, dated the Closing Date, among the Purchasers and the Shareholder. "Subsidiary" shall mean any corporation or other Person listed on Schedule 2.01(a). "Transfer Agent" shall have the meaning assigned to such term in Section 5.11. "Unit" shall mean one Share and one Option. 6.02. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP consistently applied, and all financial data submitted pursuant to this Agreement, unless otherwise specified, shall be prepared in accordance with GAAP. 7. INDEMNIFICATION 7.01. General Indemnity. The Company agrees to indemnify and save harmless each Purchaser (and its directors, officers, affiliates, consultants, partners, limited partners, successors and assigns) from and against any and all losses, liabilities, deficiencies, costs, damages and expenses (including, without limitation, reasonable attorneys' fees, charges and disbursements) incurred by such Purchaser as a result of any inaccuracy in or breach of the representations, warranties or covenants made by the Company or any Subsidiary herein or in any of the Related Agreements. Each Purchaser severally but not jointly agrees to indemnify and save harmless the Company and its directors, officers, Affiliates, successors and assigns from and against any and all losses, liabilities, deficiencies, costs, damages and expenses (including, without limitation, reasonable attorneys' fees, charges and disbursements) incurred by the Company as a result of any inaccuracy in or breach of the representations, warranties or covenants made by such Purchaser herein; provided that, with respect to each indemnifying party, the amount of indemnity provided to the indemnified party shall be limited to $10,500,000. 7.02. Indemnification Procedure. Any party entitled to indemnification under this Section 7 (an "indemnified party") will give written notice to the indemnifying party of any claim with respect to which it seeks indemnification promptly after the discovery by such party of any matters giving rise to a claim for indemnification; provided that the failure of any party 16 entitled to indemnification hereunder to give notice as provided herein shall not relieve the indemnifying party of its obligations under this Section 7 except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any action, proceeding or claim is brought against an indemnified party in respect of which indemnification is sought hereunder, the indemnifying party shall be entitled to participate in and, unless in the reasonable judgment of the indemnified party a conflict of interest between it and the indemnifying party may exist in respect of such action, proceeding or claim, to assume the defense thereof, with counsel reasonably satisfactory to the indemnified party. In the event that the indemnifying party advises an indemnified party that it will contest such a claim for indemnification hereunder, or fails, within thirty (30) days of receipt of any indemnification notice to notify, in writing, such party of its election to defend, settle or compromise, at its sole cost and expense, any action, proceeding or claim (or discontinues its defense at any time after it commences such defense), then the indemnified party may, at its option, defend, settle or otherwise compromise or pay such action or claim. In any event, unless and until the indemnifying party elects in writing to assume and does so assume the defense of any such claim, proceeding or action, the indemnified party's costs and expenses arising out of the defense, settlement or compromise of any such action, claim or proceeding shall be losses subject to indemnification hereunder. The indemnified party shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the indemnified party which relates to such action or claim. The indemnifying party shall keep the indemnified party fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. If the indemnifying party elects to defend any such action or claim, then the indemnified party shall be entitled to participate in such defense with counsel of its choice at its sole cost and expense. The indemnifying party shall not be liable for any settlement of any action, claim or proceeding effected without its written consent; provided that the indemnifying party shall not unreasonably withhold, delay or condition its consent. Anything in this Section 7 to the contrary notwithstanding, the indemnifying party shall not, without the indemnified party's prior written consent, settle or compromise any claim or consent to entry of any judgment in respect thereof which imposes any future obligation on the indemnified party or which does not include, as an unconditional term thereof, the giving by the claimant or the plaintiff to the indemnified party, a release from all liability in respect of such claim. The indemnity agreements contained herein shall be in addition to (a) any cause of action or similar right of the indemnified party against the indemnifying party or others, and (b) any liabilities the indemnifying party may be subject to pursuant to the law. 8. MISCELLANEOUS 8.01. No Waiver; Cumulative Remedies. No failure or delay on the part of any party to this Agreement or any Related Agreement in exercising any right, power or remedy hereunder or thereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder or thereunder. The remedies herein and therein provided are cumulative and not exclusive of any remedies provided by law. 8.02. Amendments, Waivers and Consents. Except as otherwise provided in this Agreement, (i) changes in, termination or amendments of or additions to this Agreement may be made, and compliance with any covenant or provision set forth herein may be omitted or waived, if the Company shall obtain consent thereto in writing from the holders of at least a majority of the then outstanding Shares, Options and Option Shares (determined on an "as-if exercised" basis) and shall deliver copies of such consent in writing to any holders who did not execute such consent and (ii) no consents shall be effective to reduce the percentage in interest of the Shares, the Options and the Option Shares the consent of the holders of which is required under this Section 8.02. Any waiver or consent may be given subject to satisfaction of conditions stated therein and any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 8.03. Addresses for Notices. Any notice, demand, request, waiver or other communication under this Agreement or any Related Agreement shall be in writing and shall be deemed to have been duly given on the date of service, if personally served, on the date of transmission, if sent by facsimile, receipt confirmed, or on the third day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered, return receipt requested and postage prepaid, in each case addressed as follows (or to such other address as shall be designated by the applicable party to the other party in writing in compliance with this Section): To the Company: NYMAGIC, Inc. 330 Madison Avenue New York, NY 10017 Attention: Executive Vice President, Vice President, General Counsel and Secretary Facsimile Number: 212-551-0717 With a copy to: Mayer, Brown, Rowe & Maw 190 South LaSalle Street Chicago, IL 60603 Attention: Laura Richman, Esq. Facsimile Number: 312-706-8333 If to the Purchaser: Conning Capital Partners VI, L.P. CityPlace II 185 Asylum Street Hartford, CT 06103 Attention: David Young Facsimile Number: 860-520-1299 With a copy to: Morgan, Lewis & Bockius LLP 101 Park Avenue New York, NY 10178-0060 Attention: Edward A. Reilly, Jr., Esq. Facsimile Number: 212-309-6273 8.04. Costs, Expenses and Taxes. As a condition precedent to the Closing, the Company hereby agrees to pay 50% of the reasonable fees and other out-of-pocket expenses of Morgan, Lewis & Bockius LLP, special counsel to the Purchasers, at the Closing in connection 18 with the preparation, execution and delivery of this Agreement, the Related Agreements, the Shareholder Purchase Agreement, the issuance of the Shares and the Options and the sale of the securities contemplated by the Shareholder Purchase Agreement at the Closing. In addition, the Company shall pay any and all stamp, or other similar taxes payable or determined to be payable in connection with the execution and delivery of this Agreement, the issuance of the Shares, the Options and, upon exercise of the Options, in whole or in part, from time to time, the Option Shares and the other instruments and documents to be delivered hereunder or thereunder, and agrees to save each holder of Shares, Options or Option Shares harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes. 8.05. Binding Effect; Assignment. This Agreement and each Related Agreement to which it is a party shall be binding upon and inure to the benefit of the Company and each of the Purchasers and their respective heirs, successors and assigns, except that the Company shall not have the right to delegate its obligations hereunder or to assign its rights hereunder or any interest herein except as otherwise provided herein and this Agreement may not be assigned by any Purchaser without the prior written consent of the Company. 8.06. Survival of Representations and Warranties. All representations and warranties made in this Agreement, each Related Agreement, the Shares, or any other instrument or document delivered in connection herewith or therewith, shall survive the execution and delivery hereof or thereof. 8.07. Prior Agreements. This Agreement and each Related Agreement and the other agreements executed and delivered herewith constitute the entire agreement between the parties and supersede any prior understandings or agreements concerning the subject matter hereof. 8.08. Severability. The provisions of this Agreement and each Related Agreement are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of a provision contained in this Agreement or any Related Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement and any Related Agreement; but the terms of this Agreement and each Related Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of a provision, had never been contained herein, and such provisions or part reformed so that it would be valid, legal and enforceable to the maximum extent possible. 8.09. Confidentiality. Each Purchaser agrees that it will keep confidential and will not disclose or divulge any Confidential Information which such Purchaser may obtain from the Company pursuant to financial statements, reports and other materials submitted by the Company to such Purchaser pursuant to this Agreement, unless such information is known, or until such Confidential Information becomes known, to the public or such Purchaser currently possesses such Confidential Information or subsequently acquires or independently develops such Confidential Information other than as a result of any disclosure made to such Purchaser in connection with the transactions contemplated by this Agreement; provided that a Purchaser may disclose such Confidential Information (a) on a confidential basis to its attorneys, accountants, 19 consultants and other professionals, (b) after notice to the Company to any prospective purchaser of any Shares, Options or Option Shares from such Purchaser, (c) to any entity controlling, controlled or under common control with such Purchaser, or to any shareholder, partner or member of a Purchaser which is a corporation, partnership or limited liability company, or (d) as required by applicable law; provided, that with respect to subsection (d) the Purchaser shall give the Company reasonable notice prior to such disclosure; and provided further, that the Purchaser shall remain liable for any breach by the individuals or entities referred to in subsections (a), (b) and (c) of this Section 8.09. Without limitation to the foregoing, Confidential Information shall not be used by or shared by any Purchaser with any Person, including its own affiliates, except for the purpose of evaluating, monitoring or reporting its investment in the Company. 8.10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, AND WITHOUT GIVING EFFECT TO CHOICE OF LAW PROVISIONS WHICH MIGHT REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. 8.11. Public Announcements. Neither the Company or any Subsidiary nor any Purchaser shall use any Purchaser's or the Company's name or refer to any Purchaser or the Company directly or indirectly in connection with such Purchaser's investment in the Company or such Subsidiary in any advertisement, news release or professional or trade publication, or in any other manner, unless otherwise required by law or with such party's prior consent. The parties hereto agree and acknowledge that the Company and the Purchasers jointly intend to issue a press release upon execution of this Agreement and further agree that each will provide the other the opportunity to review and include reasonable changes prior to such release and issuance. 8.12. Consent to Jurisdiction. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of any state or federal court sitting in New York, New York in any action or proceeding arising out of or relating to this Agreement or any of the transactions contemplated hereby and hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such state court or, to the extent permitted by law, in such federal court and each party hereto agrees to first initiate any such claim or proceeding in any such court. Each of the parties hereby irrevocably consents to the service of process in any such action or proceeding by the mailing by certified mail of copies of any service or copies of the summons and complaint and any other process to such party at the address specified in Section 8.03. The parties agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Section 8.12 shall affect the right of a party to serve legal process in any other manner permitted by law or affect the right of a party to bring any action or proceeding in the courts of other jurisdictions except as otherwise provided in this Section 8.12. 8.13. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY WAIVES, AND COVENANTS THAT HE OR IT WILL NOT ASSERT WHETHER AS PLAINTIFF, DEFENDANT, OR OTHERWISE, ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, CAUSE OF ACTION, 20 ACTION, SUIT OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT OR TORT OR OTHERWISE. ANY OF THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 8.13 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH OF THE PARTIES HERETO TO THE WAIVER OF HIS OR ITS RIGHT TO TRIAL BY JURY. 8.14. Headings. Article, section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. 8.15. Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart and shall become effective when one or more counterparts have been signed by each party thereto and delivered (including by facsimile) to the other parties. 8.16. Further Assurances. Each party hereto shall execute and deliver such instruments, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement, each Related Agreement, the Options and the Units. 8.17. Specific Enforcement. Each Purchaser and the Company acknowledges and agrees that irreparable damage would occur in the event that any of the provisions of this Agreement and each Related Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement, each Related Agreement and to enforce specifically the terms and provisions hereof and thereof in any court of the United States or any state thereof having jurisdiction, this being in addition to any other remedy to which they may be entitled at law or equity. [Remainder of Page Left Intentionally Blank; Next Page is the Signature Page] 21 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date and year first above written. NYMAGIC, INC. By: -------------------------------------- Name: Title: CONNING CAPITAL PARTNERS VI, L.P. By: Conning Investment Partners VI, LLC, its General Partner By: -------------------------------------- Name: Title: Signature Page to Securities Purchase Agreement SCHEDULE 1.01 Schedule of Purchasers Name and Address of Purchaser Aggregate Purchase Number of Shares of Number of Total Units Price Common Stock Options - --------------------------------------------------------------------------------------------------------------------------- Conning Capital Partners VI, L.P. c/o Conning & Company $8,400,000.00 400,000 400,000 400,000 CityPlace II 185 Asylum Street Hartford, CT 06103 Attn: David Young - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- TOTAL $8,400,000.00 400,000 400,000 400,000 - ---------------------------------------------------------------------------------------------------------------------------
SCHEDULE 2.01(a) Schedule of Subsidiaries New York Marine And General Insurance Company Gotham Insurance Company Mutual Marine Office, Inc. Pacific Mutual Marine Office, Inc. Mutual Marine Office of the Midwest, Inc. MMO EU, Ltd. MMO UK, Ltd. SCHEDULE 2.01(b) Schedule of Insurance Subsidiaries New York Marine And General Insurance Company Gotham Insurance Company EX-99.3 4 dex993.txt OPTION CERTIFICATE EXECUTION COPY EXHIBIT 3 THE OFFER AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY BE OFFERED AND SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. OPTION CERTIFICATE No. _________ JANUARY 31, 2003 NYMAGIC, INC. COMMON STOCK PURCHASE OPTION This Common Stock Purchase Option certifies that Conning Capital Partners VI, L.P., a Delaware limited partnership ("Conning"), or its registered assigns, is entitled at any time on or after the date hereof and prior to 5:00 p.m. (New York time) on the Expiration Date, to purchase from NYMAGIC, INC., a New York corporation (the "Company"), up to an aggregate of four hundred thousand (400,000) fully paid and nonassessable shares of Common Stock, $1.00 par value (the "Common Stock"), of the Company, at an initial purchase price per share of Common Stock equal to (w) $19.75 plus (x) the Quarterly Increase minus (y) the aggregate amount of any cash dividends paid per share on the Common Stock after the date of issuance of this Option minus, if Conning beneficially owns an aggregate of 50% of the Shares (as defined in the Purchase Agreement) and the Option Shares and the shares of Common Stock and the shares of Common Stock underlying options purchased pursuant to the Shareholder Purchase Agreement and the Conning Designee (as defined in the Purchase Agreement) is not elected to the Board of Directors of the Company or is removed from the Board of Directors of the Company (other than at the request of Conning), (z) $2.00 (the "Exercise Price"). The number of shares of Common Stock that may be purchased upon exercise of this Option set forth above, and the Exercise Price (including the Quarterly Increase) per share of Common Stock set forth above, are subject to adjustment as hereinafter provided. 1. EXERCISE OF OPTIONS; EXERCISE PRICE 1.01 Exercise of Options. At any time on or after the date hereof until the Expiration Date, the holder of this Option may exercise the rights evidenced hereby in whole or in part, by surrender of this Option, with an election to purchase (a form of which is attached hereto in Exhibit A) attached thereto duly executed, to the Company at its office referred to in Section 5.03 hereof, together with payment of the Exercise Price (payable as set forth below) for each share of Common Stock as to which this Option is exercised. The Exercise Price shall be payable (including any combination of) (x) in cash or by certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to the account of the Company, (y) by delivery of Options to the Company for cancellation in accordance with the following formula: in exchange for each share of Common Stock issuable upon exercise of each Option any holder thereof so delivers for cancellation, such holder shall receive such number of shares of Common Stock as is equal to the product of (i) the number of shares of Common Stock issuable upon exercise of such Option at such time multiplied by (ii) a fraction, the numerator of which is the Fair Market Value per share of Common Stock at such time minus the Exercise Price per share of Common Stock at such time, and the denominator of which is the Fair Market Value per share of Common Stock at such time or (z) the surrender to the Company of securities of the Company having a value equal to the aggregate Exercise Price of the Option Shares being purchased upon such exercise (which value in the case of debt securities shall be the principal amount thereof and in the case of shares of Common Stock shall be the Fair Market Value thereof). Notwithstanding any other provision hereof, if an exercise of any portion of this Option is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock or otherwise), such exercise may at the election of the holder be conditioned upon the consummation of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to consummation of such transaction. 1.02 Issuance of Common Stock. Upon timely receipt of this Option, with the form of election to purchase duly executed, and accompanied by payment of the Exercise Price for each of the shares to be purchased in the manner provided in Section 1.01 and an amount equal to any applicable transfer tax (if not payable by the Company as provided in Section 2.04 hereof), the Company shall thereupon promptly cause certificates for the number of shares of Common Stock then being purchased to be delivered within three (3) business days to or upon the order of the registered holder of this Option. 1.03 Unexercised Options. In case the registered holder of this Option shall purchase less than all the shares of Common Stock purchasable thereunder, a new Option evidencing the right to purchase the remaining shares of Common Stock hereunder shall be issued by the Company to the registered holder of this Option or to its duly authorized assigns within three (3) business days. 1.04 Common Stock Record Date. Each Person in whose name any certificate for shares of Common Stock is issued upon the exercise of this Option shall for all purposes be deemed to have become the holder of record of the Common Stock represented thereby on, and such certificate shall be dated the date upon which this Option was duly surrendered with an election to purchase attached thereto duly executed and payment of the aggregate Exercise Price (and any applicable transfer taxes, if payable by such Person) was made in accordance with the terms hereof. Prior to exercise, the holder of this Option shall not be entitled to any rights of a shareholder of the Company with respect to the shares for which this Option shall be exercisable, including, without limitation, the right to vote or to receive dividends or other distributions and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein or in any other applicable agreement between the Company and such holder. 2. RESERVATION OF COMMON STOCK; TRANSFER OF OPTIONS; TRANSFER TAXES; LISTING; CERTAIN ACTIONS PROHIBITED 2.01 Reservation of Common Stock. The Company shall at all times reserve and keep available out of its treasury shares of Common Stock or its authorized but unissued shares of Common Stock, solely for the purpose of effecting the exercise of the Options, such number of its shares of Common Stock as shall from time to time be the maximum amount which may be required to effect the exercise of all outstanding Options, and if at any time the number of 2 treasury shares or the authorized but unissued shares of Common Stock shall not be sufficient to effect the exercise of all then outstanding Options, the Company shall take such action as may be necessary to increase the number of shares of Common Stock in its treasury or increase its authorized but unissued shares of Common Stock to such number of shares, in either case, as shall be sufficient for such purpose. 2.02 Common Stock to be Duly Authorized and Issued, Fully Paid and Nonassessable. The Company covenants and agrees that it will take all such action as may be necessary to ensure that all shares of Common Stock delivered upon the exercise of any Options, at the time of delivery of the certificates for such shares, shall be duly and validly authorized and issued and fully paid and nonassessable and the issuance of such shares will not be subject to preemptive or other similar contractual rights of any other shareholder of the Company. 2.03 Transfer, Split Up, etc. This Option may be transferred, split up, combined or exchanged for another Option or Options, entitling the registered holder or transferee thereof to purchase a like number of shares of Common Stock as the Option or Options surrendered then entitled such registered holder to purchase; provided, however, this Option may only be transferred, in whole or in part, to any Person, but only with respect to the transferring holder's Options to purchase an aggregate of 50,000 or more Option Shares. Any registered holder desiring to transfer, split up, combine or exchange this Option shall make such request in writing delivered to the Company, and shall surrender the Option or Options to be transferred, split up, combined or exchanged at the office of the Company referred to in Section 5.03 hereof. Thereupon the Company shall deliver promptly to the Person entitled thereto (as set forth in the written notice) an Option or Options, as the case may be, as so requested. 2.04 Transfer Taxes. The Company covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges that may be payable in respect of the initial issuance or delivery of (a) each Option and (b) each share of Common Stock issued upon the exercise of any Option. The Company shall not, however, be required to (y) pay any transfer tax that may be payable in respect of the transfer or delivery of Options or the issuance or delivery of certificates for shares of Common Stock in a name other than that of the registered holder of any Option surrendered for exercise or (z) issue or deliver any such certificates for shares of Common Stock upon the exercise of any Option until any such tax shall have been paid (any such tax being payable by the holder of such Option at the time of surrender). 2.05 Listing. The Company shall promptly secure the listing of the Option Shares issuable upon exercise of this Option on the New York Stock Exchange and on each such national securities exchange or automated quotation system, if any, on which Option Shares are then listed or become listed and shall maintain, so long as any other Option Shares shall be so listed, such listing of all Option Shares from time to time issuable upon the exercise of this Option; and the Company shall so list on each national securities exchange or automated quotation system, as the case may be, and shall maintain such listing of any other shares of capital stock of the Company issuable upon the exercise of this Option so long as any shares of the same class shall be listed on such national securities exchange or automated quotation system. Notwithstanding the foregoing, (a) in the case of any Reorganization (as hereinafter defined) in which the consideration to be paid to the holder upon the Effective Date (as 3 hereinafter defined) is all cash for all of the securities of the Company beneficially owned by such holder, then upon the Effective Date the obligations under this Section 2.05 shall terminate, (b) in the case of any Reorganization in which the consideration to be paid to the holder upon the Effective Date is securities of a Person other than the Company for all of the securities of the Company beneficially owned by such holder and such securities are listed on a national securities exchange or the NASDAQ National Market, then upon the Effective Date the obligations under this Section 2.05 shall not terminate; provided that the obligation to list and to maintain such listing of securities of the Company shall terminate if such holder does not hold any Options exercisable for securities of the Company as a result of such Reorganization or (c) in the case of any proposed Reorganization in which the consideration to be paid to the holder upon the Effective Date is securities of a Person for all of the securities of the Company beneficially owned by such holder and such securities are not listed on a national securities exchange or the NASDAQ National Market, then the Company shall obtain the prior written consent of the Required Holders prior to effecting such Reorganization. 2.06 Certain Actions Prohibited. The Company will not, by amendment of its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Option and in the taking of all such actions as may reasonably be requested by the holder of this Option in order to protect the exercise privilege of the holder of this Option, consistent with the tenor and purpose of this Option. Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any Option Shares receivable upon the exercise of this Option above the Exercise Price then in effect, and (ii) will take all such actions as may be necessary or appropriate in order that the Company may at all time validly and legally issue fully paid Option Shares upon the exercise of this Option. 3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF OPTION SHARES; FRACTIONAL SHARES 3.01 Mechanical Adjustments. The number of shares of Common Stock purchasable upon the exercise of this Option and the Exercise Price (including the Quarterly Increase) shall be subject to adjustment as follows: (a) Subdivision or Combination of Common Stock. If the Company at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise) the Common Stock into a greater number of shares or pays a dividend or makes a distribution to holders of the Common Stock in the form of shares of Common Stock, the Exercise Price (including the Quarterly Increase) in effect immediately prior to such subdivision shall be proportionately reduced and the number of Option Shares obtainable upon exercise of this Option shall be proportionately increased. If the Company at any time combines (by reverse stock split or otherwise) the Common Stock into a smaller number of shares, the Exercise Price (including the Quarterly Increase) in effect immediately prior to such combination shall be proportionately increased and the number of Option Shares obtainable upon exercise of this Option shall be proportionately decreased. 4 (b) Reorganization. In case of any consolidation or merger of the Company with or into any other corporation or Person, or any other corporate reorganization, in which the Company shall not be the continuing or surviving entity of such consolidation, merger or reorganization, or any transaction in which in excess of 50% of the Company's voting power is transferred, or any sale of all or substantially all of the assets of the Company (any such transaction being hereinafter referred to as a "Reorganization"), then, in each case, the holder of this Option, on exercise hereof at any time after the consummation or effective date of such Reorganization (the "Effective Date"), shall receive, in lieu of the Common Stock issuable on such exercise prior to the Effective Date, the stock and other securities and property (including cash) to which such holder would have been entitled upon the Effective Date if such holder had exercised this Option immediately prior thereto (all subject to further adjustment as provided in this Option). The Company shall not effect any such Reorganization unless, prior to the consummation thereof, the successor entity (if other than the Company) resulting from such Reorganization (including a purchaser of all or substantially all the Company's assets) assumes by written instrument the obligation to deliver to each holder of Options such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to acquire upon exercise of Options. Notwithstanding the foregoing, if upon the Effective Date of any such Reorganization the consideration to be paid to the shareholders of the Company constitutes exclusively any of (including any combination of) (x) cash or (y) securities of a Person registered under the Securities Act of 1934, as amended, and listed on a national securities exchange or the NASDAQ National Market, then, in each case of clauses (x) and (y), unless the holder exercises this Option prior to or on the Effective Date this Option shall terminate. (c) Certain Events. If any event occurs of the type contemplated by the provisions of this Section 3 but not expressly provided for by such provisions, then the Company's Board of Directors will make an appropriate adjustment in the Exercise Price and the number of Option Shares obtainable upon exercise of this Option so as to protect the rights of the holders of the Options; provided, that no such adjustment pursuant to this Section 3 will increase the Exercise Price or decrease the number of Option Shares obtainable as otherwise determined pursuant to this Section 3. (d) Miscellaneous. If this Option shall be exercised subsequent to the record date for any of the events referred to in this Section 3.01, but prior to the effective date thereof, appropriate adjustments shall be made immediately after such effective date so that the holder of this Option on such record date shall have received, in the aggregate, the kind and number of shares of Common Stock or other securities or assets that it would have owned or been entitled to receive on such effective date had this Option been exercised prior to such record date. Shares of Common Stock owned by or held for the account of the Company shall not, for purposes of the adjustments set forth in this Section 3.01 be deemed outstanding. (e) Notice of Adjustment. Whenever the number of shares of Common Stock issuable upon the exercise of this Option or the Exercise Price in respect thereof is adjusted, as herein provided, the Company at its expense will furnish the holder of this Option with a certificate prepared by the Treasurer or Chief Financial Officer of the Company, showing such adjustment or readjustment, and stating in detail the facts upon which such adjustment or readjustment is based. 5 3.02 Elimination of Fractional Interests. The Company shall not be required upon the exercise of this Option to issue stock certificates representing fractions of shares of Common Stock, but shall instead promptly pay in cash, in lieu of any fractional shares of Common Stock to which such holder would otherwise be entitled if such fractional shares were issuable, an amount equal to the Fair Market Value per share of Common Stock as of the date of such exercise. 3.03 Right of Action. All rights of action in respect of the Options are vested in the respective registered holders of the Options and any registered holder of any Option, without the consent of the holder of any other Option, may, in its own behalf and for its own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, its right to exercise the Options held by it in the manner provided therein. 4. DEFINITIONS AND ACCOUNTING TERMS As used herein, the following terms shall have the following meanings: "Common Stock" shall have the meaning assigned to such term in the introductory sentence hereof. "Company" shall have the meaning assigned to such term in the introductory sentence hereof. "Conning" shall have the meaning assigned to such term in the introductory sentence hereof. "Effective Date" shall have the meaning assigned to such term in Section 3.01(b). "Exercise Price" shall have the meaning assigned to such term in the introductory sentence hereof. "Expiration Date" shall mean January 31, 2008. "Fair Market Value" shall mean (i) the average of the closing sales prices of the Common Stock on all domestic national securities exchanges on which the Common Stock is listed, or (ii) if there have been no sales on any such exchange on any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of such day or, (iii) if on any day the Common Stock is not so listed, the sales price for the Common Stock as of 4:00 P.M., New York time, as reported on the NASDAQ National Market or, (iv) if the Common Stock is not reported on the NASDAQ National Market, the average of the representative bid and asked quotations for the Common Stock as of 4:00 P.M., New York time, as reported on the NASDAQ interdealer system, or any similar successor organization, in each such case averaged over a period of 10 trading days consisting of the day as of which "Fair Market Value" is being determined and the nine (9) consecutive trading days prior to such day. Notwithstanding the foregoing, if at any time of determination either (x) the Common Stock is not registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, and is not either listed on a national securities exchange or authorized for quotation in the NASDAQ system, or (y) less than 25% of the 6 outstanding Common Stock is held by the public free of transfer restrictions under the Securities Act of 1933, as amended, then Fair Market Value shall mean the price that would be paid per share for the entire common equity interest in the Company in an orderly sale transaction between a willing buyer and a willing seller, taking into account the appropriate lack of liquidity of the Company's securities and any appropriate discount for the minority position represented by the Options and Option Shares, using valuation techniques then prevailing in the securities industry and assuming full disclosure of all relevant information and a reasonable period of time for effectuating such sale. Fair Market Value shall be determined by the Company's Board of Directors in its good faith judgment. The Required Holders shall have the right to require that an independent investment banking firm mutually acceptable to the Company and the Required Holders determine Fair Market Value, which firm shall submit to the Company and the Option holders a written report setting forth such determination. The expenses of such firm will be borne by the Company, and the determination of such firm will be final and binding upon all parties. "Options" shall mean this Option together with all Options issued in exchange, transfer or replacement thereof. "Option Shares" shall mean any shares of Common Stock that are issuable upon the exercise of any Option. "Person" shall mean an individual, corporation, partnership, joint venture, limited liability company or partnership, trust, university, or unincorporated organization, or a government or any agency or political subdivision thereof. "Purchase Agreement" means the Securities Purchase Agreement, dated as of January 31, 2003, among the Company and the signatories thereto, as such agreement may be amended or modified from time to time. "Quarterly Increase" shall mean an additional $0.25 per share of Common Stock for each three month period commencing upon February 15, 2003, as adjusted pursuant to Section 3. "Registration Rights Agreement" means the Registration Rights Agreement, dated as of January 31, 2003, among the Company and the signatories thereto, as such agreement may be amended or modified from time to time. "Reorganization" shall have the meaning assigned to such term in Section 3.01(b). "Required Holders" shall mean the holders of a majority of the purchase rights represented by the Options as originally issued which remain outstanding and unexercised. "Shareholder Purchase Agreement" has the meaning assigned to such term in the Purchase Agreement. 5. MISCELLANEOUS 5.01 No Waiver; Cumulative Remedies. No failure or delay on the part of the holder of this Option in exercising any right, power or remedy hereunder shall operate as a waiver 7 thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. 5.02 Amendments, Waivers and Consents. Any provision in this Option to the contrary notwithstanding, and except as hereinafter provided, changes in, termination or amendments of or additions to this Option may be made, and compliance with any covenant or provision set forth herein may be omitted or waived, if the Company (a) shall obtain consent thereto in writing from the Required Holders, and (b) shall deliver copies of such consent in writing to any holders who did not execute such consent; provided that no consents shall be effective (i) to amend any of the provisions of the Options pertaining to the Exercise Price or the number of shares of Common Stock purchasable upon the exercise of any Option or (ii) to reduce the percentage in interest of the Option Shares the consent of the holders of which is required under this Section 5.02 without the consent of the holders of all Options. Any waiver or consent may be given subject to satisfaction of conditions stated therein and any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 5.03 Addresses for Notices. Any notice, demand, request, waiver or other communication under this Option shall be in writing and shall be deemed to have been duly given on the date of service, if personally served, on the date of transmission, if sent by facsimile, receipt confirmed, or on the third day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered, return receipt requested and postage prepaid, in each case addressed as follows (or to such other address as shall be designated by the applicable party to the other party in writing in compliance with this Section): To the Company: NYMAGIC, INC. 330 Madison Avenue New York, NY 10017 Attention: Executive Vice President, Vice President, General Counsel and Secretary Facsimile Number: 212-551-0717 With a copy to: Mayer, Brown, Rowe & Maw 190 South LaSalle Street Chicago, IL 60603 Attention: Laura D. Richman, Esq. Facsimile Number: 212-262-1910 If to the Purchaser: Conning Capital Partners VI, L.P. CityPlace II 185 Asylum Street Hartford, CT 06103 Attention: David Young Facsimile Number: 860-520-1299
8 With a copy to: Morgan, Lewis & Bockius LLP 101 Park Avenue New York, NY 10178-0060 Attention: Edward A. Reilly, Jr., Esq. Facsimile Number: 212-309-6273
5.04 Binding Effect; Assignment. This Option shall be binding upon and inure to the benefit of each of the Company and the holder hereof and their respective heirs, successors and assigns, except that the Company shall not have the right to delegate its obligations hereunder or to assign its rights hereunder or any interest herein, except as otherwise provided herein. 5.05 Severability. The provisions of this Option are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of a provision contained in this Option shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Option; but the terms of this Option shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of a provision, had never been contained herein, and such provisions or part reformed so that it would be valid, legal and enforceable to the maximum extent possible. 5.06 Governing Law. THIS OPTION SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, AND WITHOUT GIVING EFFECT TO CHOICE OF LAW PROVISIONS WHICH MIGHT REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. 5.07 Headings. Article, section and subsection headings in this Option are included herein for convenience of reference only and shall not constitute a part of this Option for any other purpose. 5.08 Specific Enforcement. The Company acknowledges and agrees that irreparable damage would occur in the event that any of the provisions of this Option were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the holder hereof shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Option and to enforce specifically the terms and provisions hereof in any court of the United States or any state thereof having jurisdiction, this being in addition to any other remedy to which it may be entitled at law or equity. 5.09 Notices of Record Date. In the event of: (a) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of capital stock of any class or any other securities or property, or to receive any other right, or 9 (b) any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company, any merger or consolidation of the Company, or any transfer of all or substantially all of the assets of the Company to any other Company, or any other Person, or (c) any voluntary or involuntary dissolution, liquidation or winding up of the Company, then and in each such event the Company shall mail or cause to be mailed to the holder of this Option a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right and a description of such dividend, distribution or right, (ii) the date on which any such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding up is expected to become effective, and (iii) the time, if any, that is to be fixed, as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding up. Such notice shall be sent by a nationally recognized overnight courier, hand delivery or facsimile at least forty-five (45) days prior to the date specified in such notice on which such action is to be taken. 5.10 Option Register. The Company shall maintain at its principal executive offices books for the registration and the registration of transfer of Options. The Company may deem and treat the registered holder as the absolute owner hereof (notwithstanding any notation of ownership or other writing hereon made by anyone) for all purposes and shall not be affected by any notice to the contrary. 5.11 Registration Rights. The holder of this Option (and assignees thereof) is entitled to the benefit of the registration rights in respect of the Option Shares as are set forth in the Registration Rights Agreement. 5.12 Additional Restrictions on Exercise. Unless all required approvals shall have been obtained from the New York State Insurance Department to comply with Article 15 of the New York Insurance Law to authorize such exercise, this Option shall not be exercisable by Conning to the extent (but only to the extent) that, if exercised by it, Conning would beneficially own in excess of 9.99% of the outstanding voting securities of the Company. For purposes of this Section 5.12, beneficial ownership and all determinations and calculations, including, without limitation, with respect to calculations of percentage ownership, shall be determined in accordance with Article 15 of the New York Insurance Law. Conning shall be solely responsible for making the determinations and calculations of its beneficial ownership that are required pursuant to this Section 5.12. [Remainder of Page Left Intentionally Blank; Next Page is the Signature Page] 10 WITNESS the signature of the proper officer of the Company as of the date first above written. NYMAGIC, INC. By: -------------------------------------- Name: Title: ATTEST: - ----------------------------------- Name: Title: Exhibit A FORM OF ASSIGNMENT (To be executed by the registered holder if such holder desires to transfer the Option) FOR VALUE RECEIVED, __________________________ hereby sells, assigns and transfers unto __________________________ the accompanying Option, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint __________________________ attorney, to transfer the accompanying Option on the books of the Company of such Option, with full power of substitution. Dated: _______________, _______. [HOLDER OF OPTION] By: ___________________________ NOTICE The signature to the foregoing Assignment must correspond to the name as written upon the face of the accompanying Option or any prior assignment thereof in every particular, without alteration or enlargement or any change whatsoever. FORM OF ELECTION TO PURCHASE (To be executed by the registered holder if such holder desires to exercise the Option) To NYMAGIC, INC. The undersigned hereby irrevocably elects to exercise the accompanying Option to purchase shares of Common Stock issuable upon the exercise of such Option and requests that certificates for such shares be issued in the name of: ______________________________________________________________________________ (Please print name and address) ______________________________________________________________________________ (Please insert social security number or other identifying number) If such number of shares of Common Stock shall not be all the shares of Common Stock purchasable upon the exercise of the accompanying Option, a new Option for the balance of such remaining shares of Common Stock shall be registered in the name of and delivered to: ______________________________________________________________________________ (Please print name and address) ______________________________________________________________________________ (Please insert social security number or other identifying number) Dated: _______________, _______. [HOLDER OF OPTION] By: ___________________________________ NOTICE The signature to the foregoing Election to Purchase must correspond to the name as written upon the face of the accompanying Option or any prior assignment thereof in every particular, without alteration or enlargement or any change whatsoever. EX-99.4 5 dex994.txt SECURITIES PURCHASE AGREEMENT DATED AS OF 01/31/03 EXECUTION COPY ================================================================================ EXHIBIT 4 ------------------------------------------------------------------------- SECURITIES PURCHASE AGREEMENT ------------------------------------------------------------------------- Dated as of January 31, 2003 ================================================================================ Morgan, Lewis & Bockius LLP New York, New York ================================================================================ TABLE OF CONTENTS
Page 1. PURCHASE AND SALE OF UNITS ............................................................................ 1 1.01. The Units .................................................................................... 1 1.02. Purchase Price and Closing ................................................................... 1 2. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER ..................................................... 1 2.01. Lawful Owner; Title; Encumbrances ............................................................ 2 2.02. Authority .................................................................................... 2 2.03. Due Execution; Delivery and Performance ...................................................... 2 2.04. Consent; No Conflict ......................................................................... 2 2.05. Delivery Title ............................................................................... 2 2.06. Compliance with Securities Laws .............................................................. 2 2.07. Brokers ...................................................................................... 3 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS ...................................................... 3 3.01. Organization and Standing of the Purchasers .................................................. 3 3.02. Authority; Enforceability .................................................................... 3 3.03. Acquisition for Investment ................................................................... 3 4. CONDITIONS AT CLOSING ................................................................................. 4 4.01. Purchasers' Obligation ....................................................................... 4 5. COVENANTS OF THE SHAREHOLDER AND OTHER AGREEMENTS ..................................................... 4 5.01. Stop Transfer ................................................................................ 4 5.02. Taxes ........................................................................................ 4 5.03. No Integration ............................................................................... 5 5.04. Issuance of Certificates ..................................................................... 5 5.05. Unrestricted Securities ...................................................................... 5 6. DEFINITIONS AND ACCOUNTING TERMS ...................................................................... 5 6.01. Certain Defined Terms ........................................................................ 5 7. INDEMNIFICATION ....................................................................................... 7 7.01. General Indemnity ............................................................................ 7 7.02. Indemnification Procedure .................................................................... 7 8. MISCELLANEOUS ......................................................................................... 8 8.01. No Waiver; Cumulative Remedies ............................................................... 8
i TABLE OF CONTENTS (continued)
Page 8.02. Amendments, Waivers and Consents ............................................................. 8 8.03. Addresses for Notices ........................................................................ 9 8.04. Costs, Expenses and Taxes .................................................................... 9 8.05. Binding Effect; Assignment ...................................................................10 8.06. Survival of Representations and Warranties ...................................................10 8.07. Prior Agreements .............................................................................10 8.08. Severability .................................................................................10 8.09. Confidentiality ..............................................................................10 8.10. Governing Law ................................................................................10 8.11. Public Announcements .........................................................................11 8.12. Consent to Jurisdiction ......................................................................11 8.13. Waiver of Jury Trial .........................................................................11 8.14. Headings .....................................................................................11 8.15. Counterparts .................................................................................11 8.16. Further Assurances ...........................................................................12 8.17. Certain Events ...............................................................................12 8.18. Specific Enforcement .........................................................................12
ii SECURITIES PURCHASE AGREEMENT Dated as of January 31, 2003 Each of the Purchasers Listed on Schedule 1.01 Ladies and Gentlemen: BLACKMAN INVESTMENTS, LLC, a Connecticut limited liability company (the "Shareholder"), hereby agrees with each of you as follows: 1. PURCHASE AND SALE OF UNITS 1.01. The Units. The Shareholder has authorized the sale of (i) 100,000 shares of shares of Common Stock (the "Shares") of nymagic, Inc., a New York corporation (the "Company"), beneficially owned by the Shareholder and (ii) options (the "Options") in the form of Exhibit A hereto to purchase an additional 100,000 shares of Common Stock (such additional 100,000 shares of Common Stock in the aggregate issuable from time to time upon exercise of the Options, collectively, the "Option Shares") at a purchase price of $21.00 per Unit, to the persons (individually, a "Purchaser" and collectively, the "Purchasers") and in the respective amounts set forth in Schedule 1.01 hereto. 1.02. Purchase Price and Closing. The Shareholder agrees to sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the Purchasers, severally, but not jointly, agree to purchase that number of the Units set forth opposite their respective names in Schedule 1.01. The aggregate purchase price of the Units being acquired by each Purchaser is set forth opposite such Purchaser's name in Schedule 1.01. The closing of the purchase and sale of the Units to be acquired by the Purchasers from the Shareholder under this Agreement (the "Closing") shall take place (including by means of courier, facsimile and electronic transmissions) at the offices of Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New York 10178 at 10:00 a.m. on January 31, 2003 (the "Closing Date"). At the Closing, the Shareholder will deliver to each Purchaser certificates for the number of (i) Shares and (ii) Options, in each case, set forth opposite its name under the heading "Number of Common Shares" and "Number of Options", as applicable, in Schedule 1.01 registered, in each case, in such Purchaser's name (or its nominee), against delivery of a transfer of funds to the account of the Shareholder by wire transfer, representing the cash consideration for the Units set forth opposite such Purchaser's name under the heading "Aggregate Purchase Price" on Schedule 1.01. 2. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER The Shareholder hereby represents and warrants to the Purchasers, as of the Closing Date, as follows: 2.01. Lawful Owner; Title; Encumbrances. The Shareholder is the sole record and beneficial owner of the Shares and the Option Shares to be sold by the Shareholder pursuant to this Agreement and the Options and has good, valid and clear title to the Shares and Option Shares, free of any and all restrictions on transfer, liens, encumbrances, security interests, equities, claims, equity, option, proxy, voting restriction, voting trust or agreement, understanding, arrangement, right of first refusal, limitation of disposition and other defects whatsoever ("Encumbrances"). 2.02. Authority. The Shareholder has full legal right, capacity, power and authority, and all authorizations and approvals required by law, to enter into this Agreement and the Options and to sell, assign, transfer and deliver the Shares, the Options and, upon exercise, the Option Shares to be sold by the Shareholder in the manner provided herein or therein. The Shareholder is a sophisticated investor with knowledge and experience in business and financial matters and the transactions contemplated by this Agreement and the Options and are appropriate for the Shareholder to enter into and perform. 2.03. Due Execution; Delivery and Performance. This Agreement and the Options have been duly executed and delivered by or on behalf of the Shareholder and each is a legal, valid and binding agreement of the Shareholder, enforceable in accordance with their respective terms. 2.04. Consent; No Conflict. The execution, delivery and performance of this Agreement and the Options by the Shareholder, the compliance by the Shareholder with all the provisions hereof and thereof and the consummation by the Shareholder of the transactions contemplated hereby and thereby will not (A) require the Shareholder to obtain any consent, approval, authorization or other order of, or qualification with, any court or governmental body or agency (except as such may be required under the securities or blue sky laws of the various states or as have been or will be obtained), (B) conflict with or constitute a breach of any of the terms or provisions of, or a default under, any indenture, loan agreement, mortgage, deed of trust, lease, license or other agreement or instrument to which the Shareholder is a party or by which the Shareholder or any property of the Shareholder is bound or (C) to the Shareholder's Knowledge, violate or conflict with any applicable federal, state, local or foreign law, statute, rule, regulation or judgment, order or decree of any court or any governmental body or agency having jurisdiction over the Shareholder or any property of the Shareholder. 2.05. Delivery Title. Upon delivery of and payment for the Shares and the Options to be sold by the Shareholder pursuant to this Agreement, good, valid and clear title to such Shares and Options will pass to the Purchasers, free and clear of all Encumbrances. Upon exercise of the Options, in whole or in part, from time to time, and payment of the exercise price therefor in accordance with the terms of the Options, good, valid and clear title to the Option Shares will pass to the Purchasers, free and clear of all Encumbrances. 2.06. Compliance with Securities Laws. Neither the Shareholder nor any Person acting on behalf of the Shareholder has conducted any "general solicitation," as described in Rule 502(c) under Regulation D promulgated under the Securities Act ("Regulation D"), with respect to any of the Units being offered hereby. Neither the Shareholder nor any Person acting on its behalf, has directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would prevent the parties hereto from 2 consummating the transactions contemplated hereby pursuant to an exemption from registration under the Securities Act. The transactions contemplated by this Agreement and the Options are exempt from the registration requirements of the Securities Act, assuming the accuracy of the representations and warranties herein of each Purchaser to the extent relevant for such determination. The sale of the Units by the Shareholder to each Purchaser will not be integrated with any other sale of the Company's securities (past, current or future) by the Shareholder in a manner which would result in a violation of the Securities Act. 2.07. Brokers. No broker, finder, investment banker or other Person is entitled to receive any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement and the Options based upon arrangements made by or on behalf of the Shareholder. 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS Each of the Purchasers, severally, but not jointly, hereby represents and warrants to the Shareholder, as of the Closing Date, as follows: 3.01. Organization and Standing of the Purchasers. Each of the Purchasers that is not an individual (an "Entity Purchaser") is a corporation, partnership or limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. 3.02. Authority; Enforceability. Each of the Entity Purchasers has all requisite corporate, partnership or limited liability company power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution, delivery and performance of this Agreement by each of the Entity Purchasers have been duly and validly authorized by all requisite corporate, partnership or limited liability company proceedings, as the case may be, on the part of each of the Purchasers. This Agreement when executed and delivered by each of the Purchasers is a valid and binding obligation of such Purchaser, enforceable against it in accordance with its terms, except that (a) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium, rehabilitation, liquidation, conservatorship, receivership or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. 3.03. Acquisition for Investment. Each of the Purchasers is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D. Each of the Purchasers is acquiring the Units solely for its own account for the purpose of investment and not with a view to or for sale in connection with any distribution thereof, and it has no present intention or plan to effect any distribution of the Units, the Shares, the Options or the Option Shares. Each of the Purchasers represents that it has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment in the Units and that it is able to bear the economic risk associated with such investment and can afford the complete loss of such investment. The Purchasers acknowledge that the offer and sale of the Shares, the Options and the Option Shares have not been registered under the Securities Act. 3 4. CONDITIONS AT CLOSING 4.01. Purchasers' Obligation. The obligation of each Purchaser to close the transactions contemplated by this Agreement is subject to the satisfaction on or prior to the date of the Closing of the following conditions: (a) An opinion of Finn Dixon & Herling LLP, counsel to the Shareholder, dated the Closing Date, addressed to the Purchasers, substantially in the form and to the effect of Exhibit B hereto. (b) Fully executed copy of the Company Purchase Agreement, dated the Closing Date, in form and substance satisfactory to the Purchasers which shall be in full force and effect. (c) Fully executed copy of the Registration Rights Agreement, dated the Closing Date, in form and substance satisfactory to the Purchasers which shall be in full force and effect. (d) Duly executed certificates representing the Shares and the Options, dated the Closing Date, being purchased by each Purchaser. (e) Duly executed certificates representing the shares of Common Stock and options to purchase Common Stock being purchased by each Purchaser from the Company. 5. COVENANTS OF THE SHAREHOLDER AND OTHER AGREEMENTS 5.01. Stop Transfer. The Shareholder shall not request that the Company register the transfer (book-entry or otherwise) of any certificate or uncertificated interest representing any of such Shareholder's beneficially owned shares of Common Stock to the extent such transfer would result in the Shareholder being unable to deliver Option Shares upon any exercise of the Options, in whole or in part, unless such transfer is made in compliance with this Agreement and the Options. 5.02. Taxes. The Shareholder will pay, subject to a cap under which Shareholder's liability for such taxes is limited to $1,000, all federal, state and local transfer, sales or similar taxes or charges imposed on the transfers of the Shares and Options provided for herein or on the exercise of the Options or issuance of the Option Shares pursuant to an exercise of the Options; provided that the $1,000 limitation described above shall not apply to (i) any such taxes that would not have been imposed but for some connection between the Shareholder and the taxing jurisdiction (other than the mere transfer of Shares, Options and Option Shares hereunder or under the Option) and (ii) any such taxes imposed as a result of an aggregation of the transfers provided for herein or on exercise of the Options with other transfers made by the Shareholder or any Person related to the Shareholder. The Purchaser shall pay all federal, state and local transfer, sales or similar taxes or charges imposed on the transfers of the Shares and Options provided for herein or on the exercise of the Options or issuance of the Option Shares pursuant to an exercise of the Options that the Shareholder is not responsible for paying pursuant to the terms of the preceding sentence. The Shareholder will deliver to the Purchaser on or prior to the Closing Date a properly completed and executed United States Treasury Department Form W-9 4 (or other applicable form in lieu thereof). The Shareholder will not, however, be responsible under this Section 5.02 for any tax imposed as a result of the transfer or delivery of Option Shares upon an exercise of the Options to any Person other than the registered holder of the Option surrendered for exercise. 5.03. No Integration. The Shareholder will not make any offers or sales of any security under circumstances that would cause the offering of the Units to be integrated with any other offering of securities issued by the Company that are held by the Shareholder for purposes of any registration requirement under the Securities Act. 5.04. Issuance of Certificates. The Purchasers acknowledge that each certificate representing the Shares, the Options and the Option Shares shall be stamped or otherwise imprinted with a legend substantially in the following form: "THE OFFER AND SALE OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS THEREOF OR PURSUANT TO AN EXEMPTION THEREFROM." The Shareholder will not give to the transfer agent for the Common Stock (the "Transfer Agent") any instruction with respect to the Shares and the Option Shares inconsistent with this Agreement. 5.05. Unrestricted Securities. If (i) the Shares, the Options or the Option Shares represented by a certificate have been sold pursuant to an effective registration statement filed under the Securities Act, (ii) a holder of the Shares, the Options or the Option Shares provides the Company and the Transfer Agent, as applicable, with instructions to the effect that a public sale or transfer of any of such securities may be made without registration under the Securities Act and such sale either has occurred or may occur without restriction on the timing or manner of such sale or transfer or (iii) the Shares, the Options or the Option Shares represented by a certificate can be sold without restriction as to the number of securities sold under Rule 144(k) promulgated under the Securities Act, the Shareholder will use its reasonable best efforts to cause the Company to permit the transfer of the Shares, the Options or the Option Shares, as the case may be, and the Shareholder will use its reasonable best efforts to cause the Transfer Agent or the Company, as applicable, to issue one or more certificates, free from any restrictive legend, in such name and in such denominations as specified by such holder. 6. DEFINITIONS AND ACCOUNTING TERMS 6.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Affiliate" shall mean any officer or director of any Person or holder of five percent (5%) or more of any class of capital stock of any Person, or any member of their respective immediate 5 families or any corporation or other entity directly or indirectly controlled by one or more of such officers, directors or 5% shareholders or members of their immediate families. "Agreement" shall mean this Securities Purchase Agreement, including all amendments, modifications or supplements thereto. "Board of Directors" shall mean the Board of Directors of the Company, as constituted from time to time. "Certificate of Incorporation" shall mean the Certificate of Incorporation of the Company. "Closing" shall have the meaning assigned to such term in Section 1.02. "Closing Date" shall have the meaning assigned to such term in Section 1.02. "Common Stock" shall mean (a) the Company's Common Stock, par value $1.00 per share, (b) any other capital stock of any class or classes (however designated) of the Company, authorized on or after the date hereof, the holders of which shall have the right, without limitation as to amount, either to all or to a share of the balance of current dividends and liquidating dividends after the payment of dividends and distributions on any shares entitled to preference, and the holders of which shall ordinarily, in the absence of contingencies or in the absence of any provision to the contrary in the Certificate of Incorporation, be entitled to vote for the election of a majority of directors of the Company (even though the right so to vote has been suspended by the happening of such a contingency or provision), and (c) any other securities into which or for which any of the securities described in (a) or (b) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise. "Company" shall have the meaning assigned to such term in the introductory sentence hereof. "Company Purchase Agreement" shall mean that certain Securities Purchase Agreement, dated the date hereof, among the Purchasers and the Company. "Confidential Information" shall mean information belonging to or in possession of the Shareholder which is of a confidential, proprietary or trade secret nature that is furnished or disclosed to any Purchaser under this Agreement. "Encumbrances" shall have the meaning assigned to such term in Section 2.01. "Entity Purchaser" shall have the meaning assigned to such term in Section 3.01. "indemnified party" shall have the meaning assigned to such term in Section 7.02. "Knowledge" the Shareholder will be deemed to have "Knowledge" of a particular fact or other matter if the Shareholder is actually aware of such fact or other matter. "Options" shall have the meaning assigned to such term in Section 1.01. 6 "Option Shares" shall have the meaning assigned to such term in Section 1.01. "Person" shall mean an individual, corporation, partnership, joint venture, limited liability company or partnership, trust, university, or unincorporated organization, or a government or any agency or political subdivision thereof. "Purchaser" shall have the meaning assigned to such term in Section 1.01 and shall include the original Purchaser and each holder of Shares, Options and Option Shares. "Registration Rights Agreement" shall mean that certain Registration Rights Agreement, dated as of the date hereof, among the Purchasers and the Company. "Regulation D" shall have the meaning assigned to such term in Section 2.06. "Securities Act" shall mean the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated pursuant thereto. "Shareholder" shall have the meaning assigned to such term in the introduction to this Agreement. "Shares" shall have the meaning assigned to such term in Section 1.01. "Transfer Agent" shall have the meaning assigned to such term in Section 5.04. "Unit" shall mean one Share and one Option. 7. INDEMNIFICATION 7.01. General Indemnity. The Shareholder agrees to indemnify and save harmless each Purchaser (and its directors, officers, Affiliates, consultants, partners, limited partners, successors and assigns) from and against any and all losses, liabilities, deficiencies, costs, damages and expenses (including, without limitation, reasonable attorneys' fees, charges and disbursements) incurred by such Purchaser as a result of any inaccuracy in or breach of the representations, warranties or covenants made by the Shareholder herein or in the Options. Each Purchaser severally but not jointly agrees to indemnify and save harmless the Shareholder and its directors, officers, Affiliates, successors and assigns from and against any and all losses, liabilities, deficiencies, costs, damages and expenses (including, without limitation, reasonable attorneys' fees, charges and disbursements) incurred by the Shareholder as a result of any inaccuracy in or breach of the representations, warranties or covenants made by such Purchaser herein; provided that, with respect to each indemnifying party, the amount of indemnity provided to the indemnified party shall be limited to $2,100,000. 7.02. Indemnification Procedure. Any party entitled to indemnification under this Section 7 (an "indemnified party") will give written notice to the indemnifying party of any claim with respect to which it seeks indemnification promptly after the discovery by such party of any matters giving rise to a claim for indemnification; provided that the failure of any party entitled to indemnification hereunder to give notice as provided herein shall not relieve the indemnifying party of its obligations under this Section 7 except to the extent that the 7 indemnifying party is actually prejudiced by such failure to give notice. In case any action, proceeding or claim is brought against an indemnified party in respect of which indemnification is sought hereunder, the indemnifying party shall be entitled to participate in and, unless in the reasonable judgment of the indemnified party a conflict of interest between it and the indemnifying party may exist in respect of such action, proceeding or claim, to assume the defense thereof, with counsel reasonably satisfactory to the indemnified party. In the event that the indemnifying party advises an indemnified party that it will contest such a claim for indemnification hereunder, or fails, within thirty (30) days of receipt of any indemnification notice to notify, in writing, such party of its election to defend, settle or compromise, at its sole cost and expense, any action, proceeding or claim (or discontinues its defense at any time after it commences such defense), then the indemnified party may, at its option, defend, settle or otherwise compromise or pay such action or claim. In any event, unless and until the indemnifying party elects in writing to assume and does so assume the defense of any such claim, proceeding or action, the indemnified party's costs and expenses arising out of the defense, settlement or compromise of any such action, claim or proceeding shall be losses subject to indemnification hereunder. The indemnified party shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the indemnified party which relates to such action or claim. The indemnifying party shall keep the indemnified party fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. If the indemnifying party elects to defend any such action or claim, then the indemnified party shall be entitled to participate in such defense with counsel of its choice at its sole cost and expense. The indemnifying party shall not be liable for any settlement of any action, claim or proceeding effected without its written consent; provided that the indemnifying party shall not unreasonably withhold, delay or condition its consent. Anything in this Section 7 to the contrary notwithstanding, the indemnifying party shall not, without the indemnified party's prior written consent, settle or compromise any claim or consent to entry of any judgment in respect thereof which imposes any future obligation on the indemnified party or which does not include, as an unconditional term thereof, the giving by the claimant or the plaintiff to the indemnified party, a release from all liability in respect of such claim. The indemnity agreements contained herein shall be in addition to (a) any cause of action or similar right of the indemnified party against the indemnifying party or others, and (b) any liabilities the indemnifying party may be subject to pursuant to the law. 8. MISCELLANEOUS 8.01. No Waiver; Cumulative Remedies. No failure or delay on the part of any party to this Agreement or the Options in exercising any right, power or remedy hereunder or thereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder or thereunder. The remedies herein and therein provided are cumulative and not exclusive of any remedies provided by law. 8.02. Amendments, Waivers and Consents. Except as otherwise provided in this Agreement, (i) changes in, termination or amendments of or additions to this Agreement may be made, and compliance with any covenant or provision set forth herein may be omitted or waived, if the Shareholder shall obtain consent thereto in writing from the holders of at least a majority of 8 the then outstanding Shares, Options and Option Shares (determined on an "as-if exercised" basis) and shall deliver copies of such consent in writing to any holders who did not execute such consent and (ii) no consents shall be effective to reduce the percentage in interest of the Shares, Options and Option Shares the consent of the holders of which is required under this Section 8.02. Any waiver or consent may be given subject to satisfaction of conditions stated therein and any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 8.03. Addresses for Notices. Any notice, demand, request, waiver or other communication under this Agreement or the Options shall be in writing and shall be deemed to have been duly given on the date of service, if personally served, on the date of transmission, if sent by facsimile, receipt confirmed, or on the third day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered, return receipt requested and postage prepaid, in each case addressed as follows (or to such other address as shall be designated by the applicable party to the other party in writing in compliance with this Section): To the Shareholder: Finn Dixon & Herling LLP One Landmark Square, Suite 1400 Stamford, CT 06901-2689 Attention: Michael J. Herling, Esq. Facsimile Number: 203-348-5777 If to the Purchaser: Conning Capital Partners VI, L.P. CityPlace II 185 Asylum Street Hartford, CT 06103 Attention: David Young Facsimile Number: 860-520-1299 With a copy to: Morgan, Lewis & Bockius LLP 101 Park Avenue New York, NY 10178-0060 Attention: Edward A. Reilly, Jr., Esq. Facsimile Number: 212-309-6273 8.04. Costs, Expenses and Taxes. Except as expressly set forth in this Agreement, the Options or the Company Purchase Agreement, the Purchasers, on the one hand, and the Shareholder, on the other hand, shall each pay their respective expenses incurred in connection with the preparation, execution and delivery of this Agreement and the Options and the issuance of the Shares and the Options at the Closing. In addition and subject to the limitations set forth herein, the Shareholder shall pay any and all stamp, or other similar transfer taxes payable or determined to be payable in connection with the execution and delivery of this Agreement, the issuance of the Shares, the Options and, upon exercise of the Options, in whole or in part, from time to time, the Option Shares and the other instruments and documents to be delivered hereunder or thereunder, and agrees to save each holder of Shares, Options or Option Shares harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes. 9 8.05. Binding Effect; Assignment. This Agreement and the Options to which it is a party shall be binding upon and inure to the benefit of the Shareholder and each of the Purchasers and their respective heirs, successors and assigns, except that the Shareholder shall not have the right to delegate its obligations hereunder or to assign its rights hereunder or any interest herein except as otherwise provided herein and this Agreement may not be assigned by any Purchaser without the prior written consent of the Shareholder. 8.06. Survival of Representations and Warranties. All representations and warranties made in this Agreement, the Options or any other instrument or document delivered in connection herewith or therewith, shall survive the execution and delivery hereof or thereof. 8.07. Prior Agreements. This Agreement and the Options and the other agreements executed and delivered herewith constitute the entire agreement between the parties and supersede any prior understandings or agreements concerning the subject matter hereof. 8.08. Severability. The provisions of this Agreement and the Options are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of a provision contained in this Agreement or the Options shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement and the Options; but the terms of this Agreement and the Options shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of a provision, had never been contained herein, and such provisions or part reformed so that it would be valid, legal and enforceable to the maximum extent possible. 8.09. Confidentiality. Each Purchaser agrees that it will keep confidential and will not disclose or divulge any Confidential Information which such Purchaser may obtain from the Shareholder pursuant to materials submitted by the Shareholder to such Purchaser pursuant to this Agreement, unless such information is known, or until such Confidential Information becomes known, to the public or such Purchaser currently possesses such Confidential Information or subsequently acquires or independently develops such Confidential Information other than as a result of any disclosure made to such Purchaser in connection with the transactions contemplated by this Agreement; provided that a Purchaser may disclose such Confidential Information (a) on a confidential basis to its attorneys, accountants, consultants and other professionals, (b) after notice to the Shareholder to any prospective purchaser of any Shares, Options or Option Shares from such Purchaser, (c) to any entity controlling, controlled or under common control with such Purchaser, or to any shareholder, partner or member of a Purchaser which is a corporation, partnership or limited liability company, or (d) as required by applicable law; provided, that with respect to subsection (d) the Purchaser shall give the Shareholder reasonable notice prior to such disclosure; and provided further, that the Purchaser shall remain liable for any breach by the individuals or entities referred to in subsections (a), (b) and (c) of this Section 8.09. Without limitation to the foregoing, Confidential Information shall not be used by or shared by any Purchaser with any Person, including its own Affiliates, except for the purpose of evaluating, monitoring or reporting its investment in the Company. 8.10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF 10 NEW YORK, AND WITHOUT GIVING EFFECT TO CHOICE OF LAW PROVISIONS WHICH MIGHT REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. 8.11. Public Announcements. Neither the Shareholder nor any Purchaser shall use any Purchaser's or the Shareholder's name or refer to any Purchaser or the Shareholder directly or indirectly in connection with such Purchaser's investment in the Company in any advertisement, news release or professional or trade publication, or in any other manner, unless otherwise required by law or with such party's prior consent. The parties hereto agree and acknowledge that the Shareholder and the Purchasers jointly intend to issue a press release upon execution of this Agreement and further agree that each will provide the other the opportunity to review and include reasonable changes prior to such release and issuance. 8.12. Consent to Jurisdiction. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of any state or federal court sitting in New York, New York in any action or proceeding arising out of or relating to this Agreement or any of the transactions contemplated hereby and hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such state court or, to the extent permitted by law, in such federal court and each party hereto agrees to first initiate any such claim or proceeding in any such court. Each of the parties hereby irrevocably consents to the service of process in any such action or proceeding by the mailing by certified mail of copies of any service or copies of the summons and complaint and any other process to such party at the address specified in Section 8.03. The parties agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Section 8.12 shall affect the right of a party to serve legal process in any other manner permitted by law or affect the right of a party to bring any action or proceeding in the courts of other jurisdictions except as otherwise provided in this Section 8.12. 8.13. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY WAIVES, AND COVENANTS THAT HE OR IT WILL NOT ASSERT WHETHER AS PLAINTIFF, DEFENDANT, OR OTHERWISE, ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, CAUSE OF ACTION, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT OR TORT OR OTHERWISE. ANY OF THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 8.13 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH OF THE PARTIES HERETO TO THE WAIVER OF HIS OR ITS RIGHT TO TRIAL BY JURY. 8.14. Headings. Article, section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. 8.15. Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties 11 hereto may execute this Agreement by signing any such counterpart, and shall become effective when one or more counterparts have been signed by each party thereto and delivered (including by facsimile) to the other parties. 8.16. Further Assurances. Each party hereto shall execute and deliver such instruments, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement and the Options. 8.17. Certain Events. The Shareholder agrees that this Agreement, the Options and such Shareholder's obligations hereunder and thereunder shall attach to the Shareholder's shares of Common Stock and shall be binding upon any Person to which legal or beneficial ownership of such shares of Common Stock shall pass, whether by operation of law or otherwise, including, without limitation, the Shareholder's heirs, guardians, administrators, or successors. Notwithstanding any transfer of the Shares, the Options or the Option Shares, the Shareholder shall remain liable for the performance of all its obligations under this Agreement and the Options. 8.18. Specific Enforcement. Each Purchaser and the Shareholder acknowledges and agrees that irreparable damage would occur in the event that any of the provisions of this Agreement and the Options were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement, the Options and to enforce specifically the terms and provisions hereof and thereof in any court of the United States or any state thereof having jurisdiction, this being in addition to any other remedy to which they may be entitled at law or equity. [Remainder of Page Left Intentionally Blank; Next Page is the Signature Page] 12 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date and year first above written. BLACKMAN INVESTMENTS, LLC By: ______________________________ Name: John N. Blackman, Jr. Title: Member By: ______________________________ Name: Kathleen Blackman Title: Member CONNING CAPITAL PARTNERS VI, L.P. By: Conning Investment Partners VI, LLC, its General Partner By: ______________________________ Name: Title Signature Page to Securities Purchase Agreement 1-NY/1561131.1 SCHEDULE 1.01 Schedule of Purchasers
- ------------------------------------------------- -------------------- --------------------- ----------------- ---------------- Name and Address of Purchaser Aggregate Purchase Number of Shares of Number of Total Units Price Common Stock Options - ------------------------------------------------- -------------------- --------------------- ----------------- ---------------- Conning Capital Partners VI, L.P. c/o Conning & Company $2,100,000.00 100,000 100,000 100,000 CityPlace II 185 Asylum Street Hartford, CT 06103 Attn: David Young - ------------------------------------------------- -------------------- --------------------- ----------------- ---------------- - ------------------------------------------------- -------------------- --------------------- ----------------- ---------------- - ------------------------------------------------- -------------------- --------------------- ----------------- ---------------- - ------------------------------------------------- -------------------- --------------------- ----------------- ---------------- - ------------------------------------------------- -------------------- --------------------- ----------------- ---------------- - ------------------------------------------------- -------------------- --------------------- ----------------- ---------------- - ------------------------------------------------- -------------------- --------------------- ----------------- ---------------- - ------------------------------------------------- -------------------- --------------------- ----------------- ---------------- TOTAL $2,100,000.00 100,000 100,000 100,000 - ------------------------------------------------- -------------------- --------------------- ----------------- ----------------
EX-99.5 6 dex995.txt OPTION CERTIFICATE DATED 01/31/03 EXECUTION COPY Exhibit 5 THE OFFER AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY BE OFFERED AND SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. OPTION CERTIFICATE No. _________ JANUARY 31, 2003 NYMAGIC, INC. COMMON STOCK PURCHASE OPTION This Common Stock Purchase Option certifies that Conning Capital Partners VI, L.P., a Delaware limited partnership ("Conning"), or its registered assigns, is entitled at any time on or after the date hereof and prior to 5:00 p.m. (New York time) on the Expiration Date, to purchase from Blackman Investments, LLC, a Connecticut limited liability company (the "Shareholder"), up to an aggregate of one hundred thousand (100,000) fully paid and nonassessable shares of Common Stock, $1.00 par value (the "Common Stock"), of NYMAGIC, INC., a New York corporation (the "Company"), at an initial purchase price per share of Common Stock equal to (w) $19.75 plus (x) the Quarterly Increase minus (y) the aggregate amount of any cash dividends paid per share on the Common Stock after the date of issuance of this Option (the "Exercise Price"). The number of shares of Common Stock that may be purchased upon exercise of this Option set forth above, and the Exercise Price (including the Quarterly Increase) per share of Common Stock set forth above, are subject to adjustment as hereinafter provided. 1. EXERCISE OF OPTIONS; EXERCISE PRICE 1.01 Exercise of Options. At any time on or after the date hereof until the Expiration Date, the holder of this Option may exercise the rights evidenced hereby in whole or in part, by surrender of this Option, with an election to purchase (a form of which is attached hereto in Exhibit A) attached thereto duly executed, to the Shareholder at its office referred to in Section 5.03 hereof, together with payment of the Exercise Price (payable as set forth below) for each share of Common Stock as to which this Option is exercised. The Exercise Price shall be payable (including any combination of) (x) in cash or by certified or official bank check payable to the order of the Shareholder or by wire transfer of immediately available funds to the account of the Shareholder or (y) by delivery of Options to the Shareholder for cancellation in accordance with the following formula: in exchange for each share of Common Stock issuable upon exercise of each Option any holder thereof so delivers for cancellation, such holder shall receive such number of shares of Common Stock as is equal to the product of (i) the number of shares of Common Stock issuable upon exercise of such Option at such time multiplied by (ii) a fraction, the numerator of which is the Fair Market Value per share of Common Stock at such time minus the Exercise Price per share of Common Stock at such time, and the denominator of which is the Fair Market Value per share of Common Stock at such time. Notwithstanding any other provision hereof, if an exercise of any portion of this Option is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock or otherwise), such exercise may at the election of the holder be conditioned upon the consummation of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to consummation of such transaction. 1.02 Issuance of Common Stock. Upon timely receipt of this Option, with the form of election to purchase duly executed, and accompanied by payment of the Exercise Price for each of the shares to be purchased in the manner provided in Section 1.01, the Shareholder shall thereupon promptly cause certificates (duly endorsed or accompanied by appropriate instruments of transfer) for the number of shares of Common Stock then being purchased to be delivered within ten (10) business days to or upon the order of the registered holder of this Option. Upon such delivery by the Shareholder, good and valuable title to such Option Shares shall pass and vest unconditionally in holder, free and clear any pledge, lien, security interest, mortgage, charge, claim, equity, option, proxy, voting restriction, voting trust or agreement, understanding, arrangement, right of first refusal, limitation on disposition, adverse claim of ownership or use or encumbrance of any kind and any other defects whatsoever ("Encumbrances"). 1.03 Unexercised Options. In case the registered holder of this Option shall purchase less than all the shares of Common Stock purchasable thereunder, a new Option evidencing the right to purchase the remaining shares of Common Stock hereunder shall be issued by the Shareholder to the registered holder of this Option or to its duly authorized assigns within three (3) business days. 1.04 Common Stock Record Date. Each Person in whose name any certificate for shares of Common Stock is issued upon the exercise of this Option shall for all purposes be deemed to have become the holder of record of the Common Stock represented thereby on, and such certificate shall be dated the date upon which this Option was duly surrendered with an election to purchase attached thereto duly executed and payment of the aggregate Exercise Price (and any applicable transfer taxes, if payable by such Person) was made in accordance with the terms hereof. Prior to exercise, the holder of this Option shall not be entitled to any rights of a shareholder of the Company with respect to the shares for which this Option shall be exercisable, including, without limitation, the right to vote or to receive dividends or other distributions and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein or in any other applicable agreement between the Company and such holder. 2. RESERVATION OF COMMON STOCK; TRANSFER OF OPTIONS; TRANSFER TAXES; LISTING; CERTAIN ACTIONS PROHIBITED 2.01 Reservation of Common Stock. The Shareholder shall at all times beneficially own, reserve, hold and keep available out of its beneficially owned shares of Common Stock, solely for the purpose of effecting the exercise of the Options, such number of its shares of Common Stock as shall from time to time be the maximum amount which may be required to effect the exercise of all outstanding Options. Except as contemplated by these Options, the Shareholder shall not until Expiration Date take any action that would in any way restrict, limit or interfere with the performance of its obligations or the transactions hereunder. 2 2.02 Common Stock to be Duly Authorized and Issued, Fully Paid and Nonassessable. The Shareholder covenants and agrees that it will take all such action necessary to ensure that all shares of Common Stock delivered upon the exercise of any Options, at the time of delivery of the certificates for such shares, shall be duly and validly authorized and issued and fully paid and nonassessable and the delivery of such shares will not be subject to preemptive or other similar contractual rights of any other shareholder of the Company and shall be free of any and all Encumbrances. 2.03 Transfer, Split Up, etc. This Option may be transferred, split up, combined or exchanged for another Option or Options, entitling the registered holder or transferee thereof to purchase a like number of shares of Common Stock as the Option or Options surrendered then entitled such registered holder to purchase; provided, however, this Option may only be transferred, in whole or in part, to any Person, but only with respect to the transferring holder's Options to purchase an aggregate of 50,000 or more Option Shares. Any registered holder desiring to transfer, split up, combine or exchange this Option shall make such request in writing delivered to the Shareholder, and shall surrender the Option or Options to be transferred, split up, combined or exchanged at the office of the Shareholder referred to in Section 5.03 hereof. Thereupon the Shareholder shall deliver promptly to the Person entitled thereto (as set forth in the written notice) an Option or Options, as the case may be, as so requested. 2.04 Transfer Taxes. The Shareholder covenants and agrees that it will pay, subject to a cap under which the Shareholder's liability for such taxes is limited to $1,000, all federal, state and local transfer, sales or similar taxes or charges that may be payable in respect of the initial issuance or delivery of (a) each Option or (b) each share of Common Stock transferred upon the exercise of any Option; provided that the $1,000 limitation described above will not apply to (i) any such taxes that would not have been imposed but for some connection between the Shareholder and the taxing jurisdiction (other than the transfer of shares of Common Stock upon the exercise of any Option) and (ii) any such taxes imposed as a result of an aggregation of transfers occurring on the exercise of an Option with other transfers made by the Shareholder or any Person related to the Shareholder. The holder shall pay all federal, state and local transfer, sales or similar taxes or charges that may be payable in respect of the initial issuance or delivery of (a) each Option or (b) each share of Common Stock transferred upon the exercise of any Option that the Shareholder is not responsible for paying pursuant to the terms of the preceding sentence. The Shareholder will not, however, be responsible under this Section 2.04 for any tax imposed as a result of the transfer or delivery of shares of Common Stock upon an exercise of an Option to any Person other than the registered holder of the Option surrendered for exercise. The Shareholder will not be required to deliver any shares of Common Stock upon the exercise of any Option until any such tax for which the Shareholder is not liable under this Section 2.04 shall have been paid. 2.05 Certain Actions Prohibited. The Shareholder will not, by amendment of its organizational or operating documents or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities (including, without limitation, the Common Stock), or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Option and in the taking of all such actions as may reasonably be requested by the holder of this Option in order to protect the 3 exercise privilege of the holder of this Option, consistent with the tenor and purpose of this Option. 3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF OPTION SHARES; FRACTIONAL SHARES 3.01 Mechanical Adjustments. The number of shares of Common Stock purchasable upon the exercise of this Option and the Exercise Price (including the Quarterly Increase) shall be subject to adjustment as follows: (a) Subdivision or Combination of Common Stock. If the Company at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise) the Common Stock into a greater number of shares or pays a dividend or makes a distribution to holders of the Common Stock in the form of shares of Common Stock, the Exercise Price (including the Quarterly Increase) in effect immediately prior to such subdivision shall be proportionately reduced and the number of Option Shares obtainable upon exercise of this Option shall be proportionately increased. If the Company at any time combines (by reverse stock split or otherwise) the Common Stock into a smaller number of shares, the Exercise Price (including the Quarterly Increase) in effect immediately prior to such combination shall be proportionately increased and the number of Option Shares obtainable upon exercise of this Option shall be proportionately decreased. (b) Reorganization. In case of any consolidation or merger of the Company with or into any other corporation or Person, or any other corporate reorganization, in which the Company shall not be the continuing or surviving entity of such consolidation, merger or reorganization, or any transaction in which in excess of 50% of the Company's voting power is transferred, or any sale of all or substantially all of the assets of the Company (any such transaction being hereinafter referred to as a "Reorganization"), then, in each case, the holder of this Option, on exercise hereof at any time after the consummation or effective date of such Reorganization (the "Effective Date"), shall receive, in lieu of the Common Stock issuable on such exercise prior to the Effective Date, the stock and other securities and property (including cash) to which such holder would have been entitled upon the Effective Date if such holder had exercised this Option immediately prior thereto (all subject to further adjustment as provided in this Option). Notwithstanding the foregoing, if upon the Effective Date of any such Reorganization the consideration to be paid to the shareholders of the Company constitutes exclusively any of (including any combination of) (x) cash or (y) securities of a Person registered under the Securities Act of 1934, as amended, and listed on a national securities exchange or the NASDAQ National Market, then, in each case of clauses (x) and (y), unless the holder exercises this Option prior to or on the Effective Date this Option shall terminate. (c) Certain Events. If any event occurs of the type contemplated by the provisions of this Section 3 but not expressly provided for by such provisions, then the Shareholder, subject to the consent of the Required Holders, will make an appropriate adjustment in the Exercise Price and the number of Option Shares obtainable upon exercise of this Option so as to protect the rights of the holders of the Options; provided, that no such adjustment pursuant to this Section 3. will increase the Exercise Price or decrease the number of Option Shares obtainable as otherwise determined pursuant to this Section 3. 4 (d) Miscellaneous. If this Option shall be exercised subsequent to the record date for any of the events referred to in this Section 3.01, but prior to the effective date thereof, appropriate adjustments shall be made immediately after such effective date so that the holder of this Option on such record date shall have received, in the aggregate, the kind and number of shares of Common Stock or other securities or assets that it would have owned or been entitled to receive on such effective date had this Option been exercised prior to such record date. (e) Notice of Adjustment. Whenever the number of shares of Common Stock issuable upon the exercise of this Option or the Exercise Price in respect thereof is adjusted, as herein provided, the Shareholder at its expense will furnish the holder of this Option with a certificate prepared by the Shareholder, showing such adjustment or readjustment, and stating in detail the facts upon which such adjustment or readjustment is based. Notwithstanding the foregoing, to the extent the holder is notified by the Company of an event referred to in this Section 3.01, failure by the Shareholder to promptly deliver a certificate of such adjustment or readjustment shall not be a breach of this Section 3.019(e). 3.02 Elimination of Fractional Interests. The Shareholder shall not be required upon the exercise of this Option to issue stock certificates representing fractions of shares of Common Stock, but shall instead promptly pay in cash, in lieu of any fractional shares of Common Stock to which such holder would otherwise be entitled if such fractional shares were issuable, an amount equal to the Fair Market Value per share of Common Stock as of the date of such exercise. 3.03 Right of Action. All rights of action in respect of the Options are vested in the respective registered holders of the Options and any registered holder of any Option, without the consent of the holder of any other Option, may, in its own behalf and for its own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Shareholder to enforce, or otherwise act in respect of, its right to exercise the Options held by it in the manner provided therein. 4. DEFINITIONS AND ACCOUNTING TERMS As used herein, the following terms shall have the following meanings: "Common Stock" shall have the meaning assigned to such term in the introductory sentence hereof. "Company" shall have the meaning assigned to such term in the introductory sentence hereof. "Conning" shall have the meaning assigned to such term in the introductory sentence hereof. "Effective Date" shall have the meaning assigned to such term in Section 3.01(b). "Encumbrances" shall have the meaning assigned to such term in Section 1.02. 5 "Exercise Price" shall have the meaning assigned to such term in the introductory sentence hereof. "Expiration Date" shall mean January 31, 2008. "Fair Market Value" shall mean (i) the average of the closing sales prices of the Common Stock on all domestic national securities exchanges on which the Common Stock is listed, or (ii) if there have been no sales on any such exchange on any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of such day or, (iii) if on any day the Common Stock is not so listed, the sales price for the Common Stock as of 4:00 P.M., New York time, as reported on the NASDAQ National Market or, (iv) if the Common Stock is not reported on the NASDAQ National Market, the average of the representative bid and asked quotations for the Common Stock as of 4:00 P.M., New York time, as reported on the NASDAQ interdealer system, or any similar successor organization, in each such case averaged over a period of 10 trading days consisting of the day as of which "Fair Market Value" is being determined and the nine (9) consecutive trading days prior to such day. Notwithstanding the foregoing, if at any time of determination either (x) the Common Stock is not registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, and is not either listed on a national securities exchange or authorized for quotation in the NASDAQ system, or (y) less than 25% of the outstanding Common Stock is held by the public free of transfer restrictions under the Securities Act of 1933, as amended, then Fair Market Value shall mean the price that would be paid per share for the entire common equity interest in the Company in an orderly sale transaction between a willing buyer and a willing seller, taking into account the appropriate lack of liquidity of the Company's securities and any appropriate discount for the minority position represented by the Options and Option Shares, using valuation techniques then prevailing in the securities industry and assuming full disclosure of all relevant information and a reasonable period of time for effectuating such sale. Fair Market Value shall be determined in good faith negotiations between the Required Holders and the Shareholder. The Required Holders shall have the right to require that an independent investment banking firm mutually acceptable to the Shareholder and the Required Holders determine Fair Market Value, which firm shall submit to the Shareholder and the Option holders a written report setting forth such determination. The expenses of such firm will be borne by the Shareholder, and the determination of such firm will be final and binding upon all parties. "Options" shall mean this Option together with all Options issued in exchange, transfer or replacement thereof. "Option Shares" shall mean any shares of Common Stock that are issuable upon the exercise of any Option. "Person" shall mean an individual, corporation, partnership, joint venture, limited liability company or partnership, trust, university, or unincorporated organization, or a government or any agency or political subdivision thereof. "Quarterly Increase" shall mean an additional $0.25 per share of Common Stock for each three month period commencing upon February 15, 2003, as adjusted pursuant to Section 3. 6 "Reorganization" shall have the meaning assigned to such term in Section 3.01(b). "Required Holders" shall mean the holders of a majority of the purchase rights represented by the Options as originally issued which remain outstanding and unexercised. "Shareholder" shall have the meaning assigned to such term in the introductory sentence hereof. 5. MISCELLANEOUS 5.01 No Waiver; Cumulative Remedies. No failure or delay on the part of the holder of this Option in exercising any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. 5.02 Amendments, Waivers and Consents. Any provision in this Option to the contrary notwithstanding, and except as hereinafter provided, changes in, termination or amendments of or additions to this Option may be made, and compliance with any covenant or provision set forth herein may be omitted or waived, if the Shareholder (a) shall obtain consent thereto in writing from the Required Holders, and (b) shall deliver copies of such consent in writing to any holders who did not execute such consent; provided that no consents shall be effective (i) to amend any of the provisions of the Options pertaining to the Exercise Price or the number of shares of Common Stock purchasable upon the exercise of any Option or (ii) to reduce the percentage in interest of the Option Shares the consent of the holders of which is required under this Section 5.02. without the consent of the holders of all Options. Any waiver or consent may be given subject to satisfaction of conditions stated therein and any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 5.03 Addresses for Notices. Any notice, demand, request, waiver or other communication under this Option shall be in writing and shall be deemed to have been duly given on the date of service, if personally served, on the date of transmission, if sent by facsimile, receipt confirmed, or on the third day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered, return receipt requested and postage prepaid, in each case addressed as follows (or to such other address as shall be designated by the applicable party to the other party in writing in compliance with this Section): To the Shareholder: Finn Dixon & Herling LLP One Landmark Square, Suite 1400 Stamford, CT 06901-2689 Attention: Michael J. Herling, Esq. Facsimile Number: 203-348-5777 7 If to the Purchaser: Conning Capital Partners VI, L.P. CityPlace II 185 Asylum Street Hartford, CT 06103 Attention: David Young Facsimile Number: 860-520-1299 With a copy to: Morgan, Lewis & Bockius LLP 101 Park Avenue New York, NY 10178-0060 Attention: Edward A. Reilly, Jr., Esq. Facsimile Number: 212-309-6273 5.04 Binding Effect; Assignment. This Option shall be binding upon and inure to the benefit of each of the Shareholder and the holder hereof and their respective heirs, successors and assigns, except that the Shareholder shall not have the right to delegate its obligations hereunder or to assign its rights hereunder or any interest herein, except as otherwise provided herein. 5.05 Severability. The provisions of this Option are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of a provision contained in this Option shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Option; but the terms of this Option shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of a provision, had never been contained herein, and such provisions or part reformed so that it would be valid, legal and enforceable to the maximum extent possible. 5.06 Governing Law. THIS OPTION SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, AND WITHOUT GIVING EFFECT TO CHOICE OF LAW PROVISIONS WHICH MIGHT REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. 5.07 Headings. Article, section and subsection headings in this Option are included herein for convenience of reference only and shall not constitute a part of this Option for any other purpose. 5.08 Specific Enforcement. The Shareholder acknowledges and agrees that irreparable damage would occur in the event that any of the provisions of this Option were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the holder hereof shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Option and to enforce specifically the terms and provisions hereof in any court of the United States or any state thereof having jurisdiction, this being in addition to any other remedy to which it may be entitled at law or equity. 8 5.09 Notices of Record Date. In the event of: (a) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of capital stock of any class or any other securities or property, or to receive any other right, or (b) any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company, any merger or consolidation of the Company, or any transfer of all or substantially all of the assets of the Company to any other Company, or any other Person, or (c) any voluntary or involuntary dissolution, liquidation or winding up of the Company or the Shareholder, then and in each such event the Shareholder shall mail or cause to be mailed to the holder of this Option a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right and a description of such dividend, distribution or right, (ii) the date on which any such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding up is expected to become effective, and (iii) the time, if any, that is to be fixed, as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding up; provided that with respect to Sections 5.09(a) and 5.09(b) the Shareholder shall not be required to give notice of the events specified in such Sections until the holder has requested in writing that the Shareholder provide such notice upon such event(s). Such notice by the Shareholder shall be sent by a nationally recognized overnight courier, hand delivery or facsimile at least forty-five (45) days prior to the date specified in such notice on which such action is to be taken. 5.10 Additional Restrictions on Exercise. Unless all required approvals shall have been obtained from the New York State Insurance Department to comply with Article 15 of the New York Insurance Law to authorize such exercise, this Option shall not be exercisable by Conning to the extent (but only to the extent) that, if exercised by it, Conning would beneficially own in excess of 9.99% of the outstanding voting securities of the Company. For purposes of this Section 5.10, beneficial ownership and all determinations and calculations, including, without limitation, with respect to calculations of percentage ownership, shall be determined in accordance with Article 15 of the New York Insurance Law. Conning shall be solely responsible for making the determinations and calculations of its beneficial ownership that are required pursuant to this Section 5.10. [Remainder of Page Left Intentionally Blank; Next Page is the Signature Page] 9 WITNESS the signature of the proper officer of the Shareholder as of the date first above written. BLACKMAN INVESTMENTS, LLC By: ______________________________ Name: John N. Blackman, Jr. Title: Member By: ______________________________ Name: Kathleen Blackman Title: Member ATTEST: - ----------------------------------- Name: Title: Exhibit A FORM OF ASSIGNMENT (To be executed by the registered holder if such holder desires to transfer the Option) FOR VALUE RECEIVED, __________________________ hereby sells, assigns and transfers unto __________________________ the accompanying Option, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint __________________________ attorney, to transfer the accompanying Option on the books of the Shareholder of such Option, with full power of substitution. Dated: _______________, _______. [HOLDER OF OPTION] By: ___________________________ NOTICE The signature to the foregoing Assignment must correspond to the name as written upon the face of the accompanying Option or any prior assignment thereof in every particular, without alteration or enlargement or any change whatsoever. FORM OF ELECTION TO PURCHASE (To be executed by the registered holder if such holder desires to exercise the Option) To [SHAREHOLDER] The undersigned hereby irrevocably elects to exercise the accompanying Option to purchase shares of Common Stock issuable upon the exercise of such Option and requests that certificates for such shares be issued in the name of: ______________________________________________________________________________ (Please print name and address) ______________________________________________________________________________ (Please insert social security number or other identifying number) If such number of shares of Common Stock shall not be all the shares of Common Stock purchasable upon the exercise of the accompanying Option, a new Option for the balance of such remaining shares of Common Stock shall be registered in the name of and delivered to: ______________________________________________________________________________ (Please print name and address) ______________________________________________________________________________ (Please insert social security number or other identifying number) Dated: _______________, _______. [HOLDER OF OPTION] By: _______________________________ NOTICE The signature to the foregoing Election to Purchase must correspond to the name as written upon the face of the accompanying Option or any prior assignment thereof in every particular, without alteration or enlargement or any change whatsoever. EX-99.6 7 dex996.txt REGISTRATION RIGHTS AGREEMENT DATED AS OF 01/31/03 EXHIBIT 6 EXECUTION COPY ================================================================================ NYMAGIC, INC. - -------------------------------------------------------------------------------- REGISTRATION RIGHTS AGREEMENT - -------------------------------------------------------------------------------- Dated as of January 31, 2003 ================================================================================ Morgan, Lewis & Bockius LLP New York, New York TABLE OF CONTENTS Page ARTICLE I DEFINITIONS.............................................1 ARTICLE II REGISTRATION............................................2 2.1 Mandatory Registration......................................2 2.2 Effectiveness of the Registration Statement.................3 2.3 Piggyback Registrations.....................................3 2.4 Eligibility to use Form S-3..................................4 ARTICLE III ADDITIONAL OBLIGATIONS OF THE COMPANY....................4 3.1 Continued Effectiveness of Registration Statement............4 3.2 Accuracy of Registration Statement...........................4 3.3 Furnishing Documentation.....................................4 3.4 Additional Obligations.......................................5 3.5 Underwritten Offerings.......................................5 3.6 Suspension of Resale Rights..................................5 3.7 Review by the Purchasers.....................................6 3.8 Comfort Letter; Legal Opinion................................6 3.9 Due Diligence; Confidentiality...............................7 3.10 Listing......................................................8 3.11 Transfer Agent; Registrar....................................8 3.12 Share Certificates...........................................9 3.13 Plan of Distribution.........................................9 3.14 Securities Laws Compliance...................................9 3.15 Further Assurances...........................................9 ARTICLE IV OBLIGATIONS OF THE PURCHASERS............................9 4.1 Purchaser Information........................................9 4.2 Further Assurances...........................................9 4.3 Suspension of Sales.........................................10 4.4 Underwritten Offerings......................................10 ARTICLE V EXPENSES OF REGISTRATION................................10 ARTICLE VI INDEMNIFICATION.........................................11 ARTICLE VII CONTRIBUTION............................................13 i TABLE OF CONTENTS (continued) Page ARTICLE VIII EXCHANGE ACT REPORTING..................................13 ARTICLE IX ASSIGNMENT OF REGISTRATION RIGHTS.......................14 ARTICLE X AMENDMENT OF REGISTRATION RIGHTS........................14 ARTICLE XI MISCELLANEOUS...........................................14 11.1 Conflicting Instructions....................................14 11.2 Notices.....................................................15 11.3 No Waiver; Cumulative Remedies..............................15 11.4 Governing Law...............................................15 11.5 Severability................................................15 11.6 Entire Agreement............................................15 11.7 Successors and Assigns......................................15 11.8 Use of Pronouns.............................................15 11.9 Headings....................................................15 11.10 Counterparts................................................15 11.11 Further Assurances..........................................16 11.12 Consents....................................................16 11.13 No Strict Construction......................................16 11.14 Standoff Agreement..........................................16 ii REGISTRATION RIGHTS AGREEMENT This REGISTRATION RIGHTS AGREEMENT, dated as of January 31, 2003 (this "Agreement"), is made by and among NYMAGIC, Inc., a New York corporation (the "Company"), and the purchasers named on the signature pages hereto (the "Initial Purchasers"). RECITALS: WHEREAS, pursuant to that certain Securities Purchase Agreement, dated January 31, 2003 (the "Company Purchase Agreement"), among the Company and the Initial Purchasers, the Company has agreed, upon the terms and subject to the conditions of the Company Purchase Agreement, to issue and sell to the Initial Purchasers (a) an aggregate of 400,000 shares (collectively, the "Company Shares") of the Company's Common Stock, par value $1.00 per share ("Common Stock"), and (b) options (collectively, the "Company Options") to purchase an additional 400,000 shares (collectively, the "Company Option Shares") of Common Stock (collectively, the "Company Option Shares"); WHEREAS, pursuant to that certain Securities Purchase Agreement, dated January 31, 2003 (the "Blackman Purchase Agreement; and, together with the Company Purchase Agreement, the "Purchase Agreements"), among Blackman Investments, LLC ("Blackman") and the Initial Purchasers, Blackman has agreed, upon the terms and subject to the conditions of the Blackman Purchase Agreement, to issue and sell to the Initial Purchasers (a) an aggregate of 100,000 shares (collectively, the "Blackman Shares"; and, together with the Company Shares, collectively, the "Shares") of Common Stock and (b) options (collectively, the "Blackman Options; and, together with the Company Options, collectively, the "Options") to purchase an additional 100,000 shares (collectively, the "Blackman Option Shares"; and, together with the Company Option Shares, collectively, the "Option Shares") of Common Stock; and WHEREAS, in order to induce the Initial Purchasers to execute and deliver the Purchase Agreements, the Company has agreed to provide certain registration rights under the Securities Act and applicable state securities laws with respect to the Shares and the Option Shares. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Initial Purchasers hereby agree as follows: ARTICLE I DEFINITIONS Capitalized terms used and not otherwise defined herein have the respective meanings given them set forth in the Company Purchase Agreement. In addition, as used in this Agreement, the following terms have the following meanings: 1.1 "Commission" shall mean the Securities and Exchange Commission or any other federal agency then administering the Securities Act or Exchange Act. 1.2 "Permitted Transferee" means any Person to whom any Purchaser has transferred an aggregate of 50,000 or more of any of such Purchaser's beneficially owned shares of Common Stock, Shares, Options or Option Shares. 1.3 "Purchasers" means the Initial Purchasers and any of their Permitted Transferees who agree to become bound by the provisions of this Agreement in accordance with Article IX hereof. 1.4 "Registrable Securities" means the Shares and the Option Shares sold pursuant to the Purchase Agreements, any other shares of Common Stock beneficially owned by the Purchasers (including, without limitation, shares of Common Stock issuable upon the exercise of conversion of any warrants, options or convertible securities issued by the Company) and any shares of capital stock issued or issuable from time to time (with any adjustments) in exchange for or otherwise with respect to the Shares, the Option Shares and any other shares of Common Stock beneficially owned by the Purchasers; provided that the Shares, the Option Shares and any other shares of Common Stock beneficially owned by the Purchasers will cease to be Registrable Securities at such time as they have been sold under the Registration Statement or pursuant to Rule 144. 1.5 "Registration Period" means the period between the date of this Agreement and the date on which all of the Registrable Securities (in the opinion of the Purchasers' counsel) may be immediately sold by the Purchasers without registration and without restriction as to the number of Registrable Securities to be sold, pursuant to Rule 144 or otherwise. 1.6 "Registration Statement" means a Registration Statement of the Company filed under the Securities Act. 1.7 The terms "register," "registered," and "registration" refer to a registration effected by preparing and filing a Registration Statement or statements in compliance with the Securities Act and pursuant to Rule 415 and the declaration or ordering of effectiveness of such Registration Statement by the Commission. 1.8 "Rule 144" means Rule 144 under the Securities Act or any similar or successor rule or regulation of the Commission that may at any time permit the Purchasers to sell securities of the Company to the public without registration. 1.9 "Rule 415" means Rule 415 under the Securities Act, or any successor Rule providing for offering securities on a continuous basis, and applicable rules and regulations thereunder. ARTICLE II REGISTRATION 2.1 Mandatory Registration. The Company will file with the Commission a Registration Statement on Form S-3 registering the Registrable Securities for resale within one hundred and twenty (120) days after the Closing Date of the purchase of the Shares, the 2 Options and the Option Shares under the Purchase Agreements. If Form S-3 is not available at that time, then the Company will file a Registration Statement on such form as is then available to effect a registration of the Registrable Securities, subject to the consent of the Initial Purchasers, which consent will not be unreasonably withheld. 2.2 Effectiveness of the Registration Statement. The Company will use its best efforts to cause the Registration Statement to be declared effective by the Commission as soon as practicable after filing, and in any event no later than the 150th day after the Closing Date (the "Required Effective Date"). However, so long as the Company filed the Registration Statement within one hundred and twenty (120) days after the Closing Date, if the Registration Statement receives Commission review, then the Required Effective Date will be the 180th day after the Closing Date. The Company's best efforts will include, but not be limited to, promptly responding to all comments received from the staff of the Commission. If the Company receives notification from the Commission that the Registration Statement will receive no action or review from the Commission, then the Company will request that the Registration Statement become effective promptly after such Commission notification. 2.3 Piggyback Registrations. (a) If, at any time prior to the expiration of the Registration Period, a Registration Statement has not become effective with respect to all of the Registrable Securities or has become effective and is no longer effective and the Company decides to register any of its securities for its own account or for the account of others, then the Company will promptly give the Purchasers written notice thereof and will use its best efforts to include in such registration all or any part of the Registrable Securities requested by such Purchasers to be included therein (excluding any Registrable Securities previously included in a Registration Statement). This requirement does not apply to Company registrations on Form S-4 or S-8 or their equivalents relating to equity securities to be issued solely in connection with an acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans or to registration statements that would otherwise not permit the registration of resales of previously issued securities. Each Purchaser must give its request for registration under this paragraph to the Company in writing within fifteen (15) days after receipt from the Company of notice of such pending registration. If the registration for which the Company gives notice is a public offering involving an underwriting, the Company will so advise the Purchasers as part of the above-described written notice. In that event, if the managing underwriter(s) of the public offering impose a limitation on the number of shares of Common Stock that may be included in the Registration Statement because, in such underwriter(s)' judgment, such limitation would be necessary to effect an orderly public distribution, then, subject to the next sentence, the Company will be obligated to include only such limited portion, if any, of the Registrable Securities with respect to which such Purchasers have requested inclusion hereunder. Any exclusion of Registrable Securities will be made pro rata among all holders of the Company's securities seeking to include shares of Common Stock in proportion to the number of shares of Common Stock sought to be included by those holders; provided, however, if the Company is registering securities for its own account, the pro rata exclusion among the holders seeking to include shares of Common Stock shall apply after the Company has registered all of the securities that it is able to register. 3 (b) No right to registration of Registrable Securities under this Section 2.3 limits in any way the registration required under Section 2.1 above. 2.4 Eligibility to use Form S-3. The Company represents and warrants that, as of the date of this Agreement, it meets the requirements for the use of Form S-3 for registration of the resale by the Purchasers of the Registrable Securities. The Company will file all reports required to be filed by the Company with the Commission in a timely manner so as to preserve its eligibility for the use of Form S-3. ARTICLE III ADDITIONAL OBLIGATIONS OF THE COMPANY 3.1 Continued Effectiveness of Registration Statement. Subject to the limitations set forth in Section 3.6, the Company will use its best efforts to keep the Registration Statement covering the Registrable Securities effective under Rule 415 at all times during the Registration Period. In the event that the number of shares available under a Registration Statement filed pursuant to this Agreement is insufficient to cover all of the Registrable Securities issued, the Company will (if permitted) amend the Registration Statement or file a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover all of the Registrable Securities. The Company will file such amendment or new Registration Statement as soon as practicable. The Company will use its best efforts to cause such amendment or new Registration Statement to become effective as soon as is practicable after the filing thereof. 3.2 Accuracy of Registration Statement. Assuming the accuracy of information furnished by or on behalf of the Purchasers, any Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) filed by the Company covering Registrable Securities will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. The Company will prepare and file with the Commission such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to permit sales pursuant to the Registration Statement at all times during the Registration Period (but subject to Section 3.6), and, during such period, will comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statement until the termination of the Registration Period, or if earlier, until such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in the Registration Statement. 3.3 Furnishing Documentation. The Company will furnish to each Purchaser whose Registrable Securities are included in a Registration Statement, or to its legal counsel, (a) promptly after each document is filed with the Commission, one (1) copy of any Registration Statement filed pursuant to this Agreement and any amendments thereto, each preliminary prospectus (if any) and final prospectus and each amendment or supplement thereto; and (b) a number of copies of a prospectus, including a preliminary prospectus (if any), and all 4 amendments and supplements thereto, and such other documents as the Purchaser may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Purchaser. The Company will promptly notify by facsimile each Purchaser whose Registrable Securities are included in any Registration Statement of the effectiveness of the Registration Statement and any post-effective amendment. 3.4 Additional Obligations. The Company will use its best efforts to (a) register and qualify the Registrable Securities covered by a Registration Statement under such other securities or blue sky laws of such jurisdictions as each Purchaser who holds (or has the right to hold) Registrable Securities being offered reasonably requests, (b) prepare and file in those jurisdictions any amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain their effectiveness during the Registration Period, (c) take any other actions necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (d) take any other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions. Notwithstanding the foregoing, the Company is not required, in connection such obligations, to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3.4, (ii) subject itself to general taxation in any such jurisdiction, (iii) file a general consent to service of process in any such jurisdiction or (iv) provide any undertakings that cause material expense or burden to the Company. 3.5 Underwritten Offerings. If the Purchasers who hold a majority in interest of the Registrable Securities being offered in an offering pursuant to a Registration Statement or any amendment or supplement thereto under this Agreement select underwriters reasonably acceptable to the Company for such offering, the Company will enter into and perform its obligations under an underwriting agreement in usual and customary form including, without limitation, customary indemnification and contribution obligations, with the managing underwriter of such offering. 3.6 Suspension of Resale Rights. (a) The Company will notify (by telephone and also by facsimile and reputable overnight courier) each Purchaser who holds Registrable Securities being sold pursuant to a Registration Statement of the happening of any event of which the Company has knowledge as a result of which the prospectus included in the Registration Statement as then in effect includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company will make such notification as promptly as practicable after the Company becomes aware of the event (but in no event, without the prior written consent of the Purchaser, will the Company disclose to any Purchaser any of the facts or circumstances regarding the event (other than to the Observer and the Conning Designee so long as Conning is exercising such rights pursuant to the Company Purchase Agreement)), will promptly prepare a supplement or amendment to the Registration Statement to correct such untrue statement or omission, and will deliver a number of copies of such supplement or amendment to each Purchaser as such Purchaser may reasonably request. 5 (b) Notwithstanding the obligations under Section 3.6, if in the good faith judgment of the Company, following consultation with legal counsel, it would be detrimental to the Company and its shareholders for resales of Registrable Securities to be made pursuant to the Registration Statement due to (i) the existence of a material development or potential material development involving the Company which the Company would be obligated to disclose in the Registration Statement, which disclosure would be premature or otherwise inadvisable at such time or would have a Material Adverse Effect upon the Company and its shareholders, or (ii) in the good faith judgment of the Board of Directors, it would adversely affect or require premature disclosure of the filing of a Company-initiated registration of any class of its equity securities, the Company, in each case, will have the right to suspend the use of the Registration Statement until the earlier of (x) the event or circumstances requiring the suspension of use the Registration Statement is no longer existing or occurring or (y) a period of not more than thirty (30) days; provided, however, that the Company may so defer or suspend the use of the Registration Statement no more than three times in any eighteen-month period, and provided, further, that, after deferring or suspending the use of the Registration Statement, the Company may not again defer or suspend the use of the Registration Statement until a period of two hundred and seventy (270) days has elapsed after resumption of the use of the Registration Statement. (c) Subject to the Company's rights under this Article III, the Company will use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement and, if such an order is issued, will use its best efforts to obtain the withdrawal of such order (subject to the Company's right to contest such order) at the earliest possible time and to notify each Purchaser that holds Registrable Securities being sold (or, in the event of an underwritten offering, the managing underwriters) of the issuance of such order and the resolution thereof. (d) Notwithstanding anything to the contrary contained herein or in the Purchase Agreements, if the use of the Registration Statement is suspended by the Company, the Company will promptly give notice of the suspension to all Purchasers whose securities are covered by the Registration Statement, and will promptly notify each such Purchaser as soon as the use of the Registration Statement may be resumed. 3.7 Review by the Purchasers. The Company will permit a single firm of legal counsel, designated by the Purchasers who hold a majority in interest of the Registrable Securities being sold pursuant to a Registration Statement, to review the Registration Statement (other than documents incorporated by reference into such Registration Statement) and all amendments and supplements thereto (as well as all requests for acceleration or effectiveness thereof) a reasonable period of time prior to their filing with the Commission, and will not file any document in a form to which such counsel reasonably objects, unless otherwise required by law in the opinion of the Company's counsel. The sections of any such Registration Statement including information with respect to the Purchasers, the Purchasers' beneficial ownership of securities of the Company or the Purchasers' intended method of disposition of Registrable Securities must conform to the information provided to the Company by each of the Purchasers. 3.8 Comfort Letter; Legal Opinion. At the request of the Purchasers who hold a majority in interest of the Registrable Securities being sold pursuant to a Registration Statement in connection with an underwritten offering, and on the date that Registrable Securities are 6 delivered to an underwriter for sale in connection with the Registration Statement, the Company will furnish to the underwriters (i) a letter, dated such date, from the Company's independent certified public accountants, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters; and (ii) an opinion, dated such date, from counsel representing the Company for purposes of the Registration Statement, in form and substance as is customarily given in an underwritten public offering, addressed to the underwriters and Purchasers. 3.9 Due Diligence; Confidentiality. (a) The Company will make available upon reasonable advance notice during normal business hours for inspection by any Purchaser whose Registrable Securities are being sold pursuant to a Registration Statement, any underwriter participating in any disposition pursuant to the Registration Statement, and any attorney, accountant or other agent retained by any such Purchaser or underwriter (collectively, the "Inspectors"), all pertinent financial and other records, pertinent corporate documents and properties of the Company (collectively, the "Records"), as each Inspector reasonably deems necessary to enable the Inspector to exercise its due diligence responsibility. The Company will cause its officers, directors and employees to supply all information that any Inspector may reasonably request for purposes of performing such due diligence. (b) Each Inspector will hold in confidence, and will not make any disclosure (except to a Purchaser) of, any Records, unless (i) the release of such Records is ordered pursuant to a subpoena or other order from a court or government body of competent jurisdiction, (ii) the information in such Records has been made generally available to the public other than by disclosure in violation of this or any other agreement, (iii) the Records or other information was developed independently by an Inspector without breach of this Agreement, (iv) the information was known to the Inspector before receipt of such information from the Company, or (v) the information was disclosed to the Inspector by a third party not under an obligation of confidentiality. The Company is not required to disclose any confidential information in the Records to any Inspector unless and until such Inspector has entered into a confidentiality agreement (in form and substance satisfactory to the Company) with the Company with respect thereto, substantially in the form of this Section 3.9. Each Purchaser will, upon learning that disclosure of Records containing confidential information is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at the Company's expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein will be deemed to limit the Purchaser's ability to sell Registrable Securities in a manner that is otherwise consistent with applicable laws and regulations. (c) The Company will hold in confidence, and will not make any disclosure of, information concerning a Purchaser provided to the Company under this Agreement unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other order from a court or governmental body of competent jurisdiction, (iv) such 7 information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement, (v) the information was disclosed to the Company by a third party not under an obligation of confidentiality, (vi) such Purchaser consents to the form and content of any such disclosure, (vii) the information was developed independently by the Company without breach of this Agreement or (viii) the information was known to the Company before receipt of such information from the Inspector. If the Company learns that disclosure of such information concerning a Purchaser is sought in or by a court or governmental body of competent jurisdiction or through other means, the Company will give prompt notice to such Purchaser prior to making such disclosure and allow such Purchaser, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information. 3.10 Listing. The Company will (i) cause all of the Registrable Securities covered by each Registration Statement to be listed on each national securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) to the extent the securities of the same class or series are not then listed on a national securities exchange, secure the designation and quotation of all of the Registrable Securities covered by each Registration Statement on Nasdaq National Market ("NASDAQ"), and, in each case, maintain such listing or quotation for so long as any Purchaser beneficially owns any Registrable Securities. Notwithstanding the foregoing, (a) in the case of any consolidation or merger of the Company with or into any other corporation, Person, or any other corporate reorganization, in which the Company shall not be the continuing or surviving entity of such consolidation, merger or reorganization, or any sale of all or substantially all of the assets of the Company (any such transaction being hereinafter referred to as a "Reorganization"), in which, in each case, the consideration to be paid to all of the Purchasers upon the consummation or effective date of such Reorganization (the "Effective Date") is all cash for all of the securities of the Company beneficially owned by all of the Purchasers then, in each case, upon the Effective Date the obligations under this Section 3.10 shall terminate, (b) in the case of any Reorganization in which the consideration to be paid to all of the Purchasers upon the Effective Date is securities of a Person other than the Company for all of the securities of the Company beneficially owned by all of such Purchasers and such securities are listed on a national securities exchange or NASDAQ, then upon the Effective Date the obligations under this Section 3.10 shall not terminate; provided that the obligations under this Section 3.10 to list or include for quotation and to maintain such listing or inclusion for quotation, as applicable, securities of the Company shall terminate if all of such Purchasers do not beneficially own any securities of the Company as a result of such Reorganization or (c) in the case of any proposed Reorganization in which the consideration to be paid to all of the Purchasers upon the Effective Date is securities of a Person for all of the securities of the Company beneficially owned by all of such Purchasers and such securities are not listed on a national securities exchange or NASDAQ, then the Company shall obtain the prior written consent of the Purchasers who beneficially own a majority-in-interest of Registrable Securities (determined on an as-exercised basis) prior to effecting such Reorganization. 3.11 Transfer Agent; Registrar. The Company will provide a transfer agent and registrar, which may be a single entity, for the Registrable Securities not later than the effective date of the Registration Statement. 8 3.12 Share Certificates. The Company will cooperate with the Purchasers who hold Registrable Securities being sold and with the managing underwriter(s), if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing Registrable Securities to be offered pursuant to a Registration Statement and will enable such certificates to be in such denominations or amounts as the case may be, and registered in such names as the Purchasers or the managing underwriter(s), if any, may reasonably request, all in accordance with Article V of each of the Purchase Agreements. 3.13 Plan of Distribution. At the request of the Purchasers holding a majority in interest of the Registrable Securities registered pursuant to a Registration Statement, the Company will promptly prepare and file with the Commission such amendments (including post-effective amendments) and supplements to the Registration Statement, and the prospectus used in connection with the Registration Statement, as may be necessary in order to change the plan of distribution set forth in such Registration Statement. 3.14 Securities Laws Compliance. The Company will comply with all applicable laws related to any Registration Statement relating to the sale of Registrable Securities and to offering and sale of securities and with all applicable rules and regulations of governmental authorities in connection therewith (including, without limitation, the Securities Act, the Exchange Act and the rules and regulations promulgated by the Commission). 3.15 Further Assurances. The Company will take all other reasonable actions as any Purchaser or the underwriters, if any, may reasonably request to expedite and facilitate disposition by such Purchaser of the Registrable Securities pursuant to the Registration Statement. ARTICLE IV OBLIGATIONS OF THE PURCHASERS 4.1 Purchaser Information. As a condition to the obligations of the Company to complete any registration pursuant to this Agreement with respect to the Registrable Securities of each Purchaser, such Purchaser will furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as is reasonably required by the Company to effect the registration of the Registrable Securities. At least ten (10) business days prior to the first anticipated filing date of a Registration Statement for any registration under this Agreement, the Company will notify each Purchaser of the information the Company requires from that Purchaser if the Purchaser elects to have any of its Registrable Securities included in the Registration Statement. If, within three (3) business days prior to the filing date, the Company has not received the requested information from a Purchaser, then the Company may file the Registration Statement without including Registrable Securities of that Purchaser. 4.2 Further Assurances. Each Purchaser will cooperate with the Company, as reasonably requested by the Company, in connection with the preparation and filing of any Registration Statement hereunder, unless such Purchaser has notified the Company in writing of 9 such Purchaser's election (with respect to such registration statement only) to exclude all of such Purchaser's Registrable Securities from the Registration Statement. 4.3 Suspension of Sales. Upon receipt of any notice from the Company under Section 3.6, each Purchaser will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until (i) it receives copies of a supplemented or amended prospectus contemplated by Section 3.6 (a) or (ii) the Company advises the Purchaser that a suspension of sales under Section 3.6(b) has terminated. If so directed by the Company, each Purchaser will deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies in the Purchaser's possession (other than a limited number of file copies) of the prospectus covering such Registrable Securities that is current at the time of receipt of such notice. 4.4 Underwritten Offerings. (a) If Purchasers holding a majority in interest of the Registrable Securities being registered (with the approval of the Initial Purchasers) determine to engage the services of an underwriter, each Purchaser will enter into and perform such Purchaser's obligations under an underwriting agreement, in usual and customary form, including, without limitation, customary indemnification and contribution obligations, with the managing underwriter of such offering, and will take such other actions as are reasonably required in order to expedite or facilitate the disposition of the Registrable Securities, unless such Purchaser has notified the Company in writing of such Purchaser's election to exclude all of its Registrable Securities from such Registration Statement. (b) Without limiting any Purchaser's rights under Section 2.1 hereof, no Purchaser may participate in any underwritten distribution hereunder unless such Purchaser (a) agrees to sell such Purchaser's Registrable Securities on the basis provided in any underwriting arrangements approved by the Purchasers entitled hereunder to approve such arrangements, (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, and (c) agrees to pay its pro rata share of all underwriting discounts and commissions and other fees and expenses of investment bankers and any manager or managers of such underwriting, and legal expenses of the underwriter, applicable with respect to its Registrable Securities, in each case to the extent not payable by the Company under the terms of this Agreement. ARTICLE V EXPENSES OF REGISTRATION The Company will bear all reasonable expenses, other than underwriting discounts and commissions, and transfer taxes, if any, incurred in connection with registrations, filings or qualifications pursuant to Articles II, III and Section 4.4 of this Agreement, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, the fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of 10 one firm of legal counsel selected by the Initial Purchasers pursuant to Section 3.7 hereof not to exceed $20,000. ARTICLE VI INDEMNIFICATION In the event that any Registrable Securities are included in a Registration Statement under this Agreement: 6.1 The Company will indemnify and hold harmless each Purchaser that holds such Registrable Securities, any underwriter (as defined in the Securities Act) for the Purchasers, any directors or officers of such Purchaser or such underwriter and any Person who controls such Purchaser or such underwriter within the meaning of the Securities Act or the Exchange Act (each, an "Indemnified Person") against any losses, claims, damages, expenses or liabilities (joint or several) (collectively, and together with actions, proceedings or inquiries by any regulatory or self-regulatory organization, whether commenced or threatened in respect thereof, "Claims") to which any of them become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Claims arise out of or are based upon any of the following statements, omissions or violations in a Registration Statement filed pursuant to this Agreement, any post-effective amendment thereof or any prospectus included therein: (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (b) any untrue statement or alleged untrue statement of a material fact contained in the prospectus (as it may be amended or supplemented) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, or (c) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any other law, including without limitation any state securities law or any rule or regulation thereunder (the matters in the foregoing clauses (a) through (c) being, collectively, "Violations"). Subject to the restrictions set forth in Section 6.3 with respect to the number of legal counsel, the Company will reimburse the Purchasers and each such underwriter or controlling Person and each such other Indemnified Person. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6.1: (i) does not apply to a Claim arising out of or based upon a Violation that occurs in reliance upon and in conformity with information furnished in writing to the Company by any Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto; (ii) does not apply to Claim arising out of or based on any failure by an Indemnified Person to comply with prospectus delivery requirements (or the Securities Act, the Exchange Act or any other law or legal requirement applicable to them) or any covenant or agreement contained in the Purchase Agreements or this Agreement; and (iii) does not apply to amounts paid in settlement of any Claim if such settlement is made without the prior written consent of the Company, which consent will not be unreasonably withheld or delayed. This indemnity obligation will remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified 11 Persons and will survive the transfer of the Registrable Securities by the Purchasers under Article IX of this Agreement. 6.2 In connection with any Registration Statement in which a Purchaser is participating, each such Purchaser, severally and not jointly, will indemnify and hold harmless, to the same extent and in the same manner set forth in Section 6.1 above, the Company, each of its directors, each of its officers who signs the Registration Statement, each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act, and any other shareholder selling securities pursuant to the Registration Statement or any of its directors or officers or any Person who controls such shareholder within the meaning of the Securities Act or the Exchange Act (each an "Indemnified Person") against any Claim to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Claim arises out of or is based upon any of the following: (a) any matter of the type referred to clause (a) or (b) in Section 6.1 above in each case to the extent (and only to the extent) that such violation occurs in reliance upon and in conformity with written information furnished to the Company by such Purchaser expressly for use in connection with such Registration Statement or (b) any failure by such Purchaser to comply with prospectus delivery requirements (or the Securities Act, the Exchange Act or any other law or legal requirement applicable to sales under the Registration Statement). Subject to the restrictions set forth in Section 6.3, such Purchaser will reimburse any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Claim. However, the indemnity agreement contained in this Section 6.2 does not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Purchaser, which consent will not be unreasonably withheld or delayed, and no Purchaser will be liable under this Agreement (including this Section 6.2 and Article VII) for the amount of any Claim that exceeds the net proceeds actually received by such Purchaser as a result of the sale of Registrable Securities pursuant to such Registration Statement. This indemnity will remain in full force and effect regardless of any investigation made by or on behalf of an Indemnified Party and will survive the transfer of the Registrable Securities by the Purchasers under Article IX of this Agreement. 6.3 Promptly after receipt by an Indemnified Person under this Article VI of notice of the commencement of any action (including any governmental action), such Indemnified Person will, if a Claim in respect thereof is to be made against any indemnifying party under this Article VI, deliver to the indemnifying party a written notice of the commencement thereof. The indemnifying party may participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly given notice, assume control of the defense thereof with counsel mutually satisfactory to the indemnifying parties and the Indemnified Person. In that case, the indemnifying party will diligently pursue such defense. If, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person and the indemnifying party would be inappropriate due to actual or potential conflicts of interest between the Indemnified Person and any other party represented by such counsel in such proceeding or the actual or potential defendants in, or targets of, any such action including the Indemnified Person and such Indemnified Person reasonably determines that there may be legal defenses available to such Indemnified Person that are different from or in addition to those available to the indemnifying party, then the Indemnified Person is entitled to assume such defense and may retain its own counsel, with the fees and expenses to be paid by the indemnifying party (subject to the restrictions on settlement under 12 Section 6.1 or 6.2, as applicable). The Company will pay for only one (1) separate legal counsel for the Purchasers collectively, and such legal counsel will be selected by the Purchasers holding a majority in interest of the Registrable Securities. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action does not relieve an indemnifying party of any liability to an Indemnified Person under this Article VI, except to the extent that the indemnifying party is prejudiced in its ability to defend such action. ARTICLE VII CONTRIBUTION To the extent that any indemnification provided for herein is prohibited or limited by law, the indemnifying party will make the maximum contribution with respect to any amounts for which it would otherwise be liable under Article VI to the fullest extent permitted by law. However, (a) no contribution will be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Article VI, (b) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any seller of Registrable Securities who was not guilty of such fraudulent misrepresentation, and (c) contribution (together with any indemnification or other obligations under this Agreement) by any seller of Registrable Securities will be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities. ARTICLE VIII EXCHANGE ACT REPORTING In order to make available to the Purchasers the benefits of Rule 144, the Company will: (a) File with the Commission in a timely manner, and make and keep available, all reports and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains subject to such requirements and the filing and availability of such reports and other documents is required for the applicable provisions of Rule 144; and (b) Furnish to each Purchaser, so long as such Purchaser holds Registrable Securities, promptly upon the Purchaser's request, (i) a written statement by the Company that it has complied with the reporting requirements of the Securities Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents filed by the Company with the Commission and (iii) such other information as may be reasonably requested to permit the Purchasers to sell such securities pursuant to Rule 144 without registration. 13 ARTICLE IX ASSIGNMENT OF REGISTRATION RIGHTS The rights of the Purchasers hereunder, including the right to have the Company register Registrable Securities pursuant to this Agreement, will be assigned automatically by the Purchasers to Permitted Transferees of Registrable Securities, but only if (a) the Purchaser agrees in writing with the Permitted Transferee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (b) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of the name and address of such Permitted Transferee and the securities with respect to which such registration rights are being transferred or assigned, (c) such transfer or assignment was not made under the Registration Statement or Rule 144, (d) at or before the time the Company received the written notice contemplated by clause (b) of this sentence, the Permitted Transferee agrees in writing with the Company to be bound by all of the provisions contained herein, (e) such transfer is made in accordance with the applicable requirements of the Purchase Agreements, if any, and (f) the Permitted Transferee is an "accredited investor" as that term is defined in Rule 501 of Regulation D or the transfer to such Permitted Transferee is made in compliance with state and federal securities laws. Any Permitted Transferee of a Purchaser under Article IX shall be deemed a "Purchaser" for all purposes of this Agreement, and shall be entitled to all rights of, and subject to all obligations (including indemnification obligations) of, a Purchaser hereunder. ARTICLE X AMENDMENT OF REGISTRATION RIGHTS This Agreement may be amended and the obligations hereunder may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company and of the Purchasers who then hold a majority in interest of the Registrable Securities (but not including any Purchaser who is not affected by such amendment or waiver). Any amendment or waiver effected in accordance with this Article X is binding upon each Purchaser and the Company. Notwithstanding the foregoing, no amendment or waiver will retroactively affect any Purchaser without its consent, or will prospectively adversely affect any Purchaser who no longer owns any Registrable Securities without its consent. Neither Article VI nor Article VII hereof may be amended or waived in a manner adverse to a Purchaser without its consent. ARTICLE XI MISCELLANEOUS 11.1 Conflicting Instructions. A Person is deemed to be a holder of Registrable Securities whenever such Person owns of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two (2) or more Persons with respect to the same Registrable Securities, the Company will act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities. 14 11.2 Notices. Any notices required or permitted to be given under the terms of this Agreement will be given as set forth in the Purchase Agreements. 11.3 No Waiver; Cumulative Remedies. No failure or delay on the part of any party to this Agreement in exercising any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. 11.4 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, AND WITHOUT GIVING EFFECT TO CHOICE OF LAW PROVISIONS WHICH MIGHT REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. 11.5 Severability. The provisions of this Agreement are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of a provision contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement; but the terms of this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of a provision, had never been contained herein, and such provisions or part reformed so that it would be valid, legal and enforceable to the maximum extent possible. 11.6 Entire Agreement. This Agreement and the Purchase Agreements (including all schedules and exhibits thereto) executed and delivered herewith constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein. This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof. 11.7 Successors and Assigns. Subject to the requirements of Article IX hereof, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of each of the parties hereto. Notwithstanding anything to the contrary herein, including, without limitation, Article IX, the rights of a Purchaser hereunder are assignable to and exercisable by a bona fide pledgee of the Registrable Securities in connection with a Purchaser's margin or brokerage accounts. 11.8 Use of Pronouns. All pronouns refer to the masculine, feminine or neuter, singular or plural, as the context may require. 11.9 Headings. Article, section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. 11.10 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties 15 hereto may execute this Agreement by signing any such counterpart. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission, and facsimile signatures are binding on the parties hereto. 11.11 Further Assurances. Each party hereto shall execute and deliver such instruments, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement. 11.12 Consents. All consents and other determinations to be made by the Purchasers pursuant to this Agreement will be made by the Initial Purchasers or the Purchasers holding a majority in interest of the Registrable Securities. 11.13 No Strict Construction. The language used in this Agreement is deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. 11.14 Standoff Agreement. In connection with the underwritten public offering of any of the Company's equity securities, each Initial Purchaser (so long as they beneficially own at least five percent (5%) of the capital stock of the Company) agrees, that upon request of the underwriters managing any underwritten offering of the Company's equity securities, not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Registrable Securities without the prior written consent of such underwriters for such period of time (not to exceed 120 days) from the effective date of such registration statement as may be requested by the underwriters; provided that the (i) executive officers and directors of the Company who own equity securities of the Company and (ii) holders of five percent (5%) or more of the capital stock of the Company also agree to such restrictions. [Remainder of Page Left Intentionally Blank; Next Page is the Signature Page] 16 IN WITNESS WHEREOF, the undersigned Purchasers and the Company have caused this Agreement to be duly executed as of the date first above written. COMPANY: NYMAGIC, INC. By: ------------------------------------------- Name: Title: INITIAL PURCHASER: CONNING CAPITAL PARTNERS VI, L.P. By: Conning Investment Partners VI, LLC, its General Partner By: -------------------------------------- Name: Title: Signature Page to Registration Rights Agreement -----END PRIVACY-ENHANCED MESSAGE-----