Introductory Note

                              On November 30, 2012, Validus Holdings, Ltd. (“Validus”) completed its acquisition of Flagstone Reinsurance Holdings, S.A. (“Flagstone”), pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of August 30, 2012, by and among Validus, Flagstone, Flagstone Reinsurance Holdings (Bermuda) Limited (“Flagstone Bermuda”) and Validus UPS, Ltd. (“Validus UPS”). Pursuant to the terms of the Merger Agreement, the acquisition was completed by means of two mergers. First, Flagstone became a Bermuda entity through a first-step merger with and into Flagstone Bermuda, a newly-formed subsidiary of Flagstone (the “First-Step Merger”). Second, immediately following the First-Step Merger, Flagstone Bermuda merged through a second-step merger with and into Validus UPS, a newly-formed Validus subsidiary (the “Second-Step Merger,” and together with the First-Step Merger, the “Mergers”). Following the Second-Step Merger, the successor-in-interest to Flagstone became wholly owned by Validus. Upon completion of the Mergers, each share of Flagstone issued and outstanding immediately prior to the First-Step Merger was converted into the right to receive 0.1935 Validus common shares, $2.00 in cash, without interest, and cash in lieu of any fractional share to which the holder was entitled (the “Merger Consideration”).

                              The foregoing description of the Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is attached as Exhibit 2.1 to Flagstone’s Current Report on Form 8-K filed on September 4, 2012 and incorporated by reference herein.

                               A copy of the press release dated November 30, 2012 announcing the completion of the Mergers is attached hereto as Exhibit 99.1 and incorporated by reference herein.

                              The information provided in the Introductory Note of this Current Report on Form 8-K is incorporated by reference herein.

                              Effective November 26, 2012, in connection with the completion of the Mergers, Flagstone voluntarily terminated its secured letter of credit facility with Barclays Bank Plc (the “Barclays Facility”). At the time of termination, there were no outstanding letters of credit issued under the Barclays Facility.

                              The information provided in the Introductory Note of this Current Report on Form 8-K is incorporated herein by reference.

                              On November 30, 2012, Validus UPS, the successor-in-interest to Flagstone, notified the New York Stock Exchange (“NYSE”) of the effectiveness of the Mergers and requested that the NYSE file with the Securities and Exchange Commission (the “SEC”) a Form 25 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in order to effect the delisting of Flagstone shares from the NYSE. Such delisting will result in the termination of the registration of Flagstone’s shares under Section 12(b) of the Exchange Act. Additionally, Validus UPS will be filing a Form 15 with the SEC, requesting the termination of the registration of Flagstone’s shares under Section 12(g) of the Exchange Act and suspension of reporting obligations of Flagstone under Sections 13 and 15(d) of the Exchange Act.

                              The information provided in the Introductory Note of this Current Report on Form 8-K is incorporated herein by reference.

                              In connection with the completion of the Mergers, each Flagstone share issued and outstanding immediately prior to the First-Step Merger was converted into the right to receive the Merger Consideration, and Flagstone’s shareholders immediately prior to the First-Step Merger ceased to have any rights as shareholders of Flagstone (other than their right to receive the Merger Consideration). Because Flagstone shareholders will receive Validus common shares as a portion of the Merger Consideration, they will have the rights of a shareholder of Validus.