[LEBOEUF, LAMB, GREENE & MACRAE, L.L.P. LETTERHEAD]
125 West 55th Street
New York, NY 10019-5389
(212) 424-8000
Facsimile: (212) 424-8500
December 17, 2003
Scottish Re Group Limited
Crown House, Third Floor
4 Par-la-Ville Road
Hamilton HM 08
Bermuda
Re: Scottish Re Group Limited 5,000,000 Hybrid Capital Units
Ladies and Gentlemen:
We have acted as special counsel for Scottish Re Group Limited, a Cayman
Islands exempted company (the "Company"), in connection with the sale to the
Underwriters (as defined below) by the Company of an aggregate of 5,000,000 of
its Hybrid Capital Units (the "Firm Units"), pursuant to the terms of the
Underwriting Agreement, dated December 11, 2003 (the "Underwriting Agreement"),
between the Company and Bear Stearns & Co. Inc., UBS Warburg Securities LLC and
J.P. Morgan Securities Inc., which also provides for an option to the
underwriters listed in Schedule I to the Underwriting Agreement (the
"Underwriters") to purchase up to an additional 750,000 Hybrid Capital Units
(the "Optional Units" and, together with the Firm Units, the "Units"). Each Unit
will initially consist of a unit comprised of: (a) a share purchase contract
(the "Purchase Contract") under which (i) the holder will purchase from the
Company no later than February 15, 2007, for $25, a number of ordinary shares,
par value $0.01 per share (the "Ordinary Shares"), equal to the Settlement Rate
set forth in the Purchase Contract Agreement (as hereinafter defined) and (ii)
the Company will pay to the holder contract adjustment payments; and (b) a share
of the Company's convertible preferred shares, liquidation preference $25 per
share (the "Preferred Shares"), convertible after May 21, 2007 (or earlier in
certain circumstances) into Ordinary Shares at an initial conversion rate of
1.0607 Ordinary Shares per $25 principal amount of Preferred Shares, subject to
adjustment. In accordance with the terms of a purchase contract agreement (the
"Purchase Contract Agreement") to be entered into by the Company and JPMorgan
Chase Bank, as purchase contract agent (the "Purchase Contract Agent") and
collateral agent (the "Collateral Agent"), the holders of the Units will
Scottish Re Group Limited
December 17, 2003
Page 2
pledge the Preferred Shares to the Collateral Agent, pursuant to a pledge
agreement (the "Pledge Agreement") to be entered into among the Company, the
Purchase Contract Agent, the Collateral Agent and JPMorgan Chase Bank, as
custodial agent (the "Custodial Agent") and securities intermediary (the
"Securities Intermediary"), to secure the holders' obligations to purchase
Ordinary Shares under the Purchase Contracts.
In connection therewith, we have examined (a) the registration statement on
Form S-3 (File No. 333-104545), including the prospectus, filed by the Company
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"), as it became
effective under the Securities Act (such registration statement, excluding the
documents incorporated therein by reference, being hereinafter referred to as
the "Registration Statement"), (c) the prospectus supplement of the Company
dated December 11, 2003 relating to the Units, as filed in final form with the
Commission on December 12, 2003, pursuant to Rule 424(b) under the Securities
Act (such prospectus supplement, together with the prospectus included in the
Registration Statement, excluding the documents incorporated therein by
reference, being hereinafter referred to as the "Final Prospectus"), (d) an
executed copy of the Underwriting Agreement and (e) the agreements and
instruments filed as exhibits to the Registration Statement or incorporated
therein by reference. In addition, we have examined the originals (or copies
certified or otherwise identified to our satisfaction) of such other agreements,
instruments, certificates, documents and records, and we have reviewed such
questions of law, as we have deemed necessary or appropriate for the purposes of
the opinions rendered herein.
In such examination, we have assumed, without inquiry, the legal capacity
of all natural persons, the genuineness of all signatures on all documents
examined by us, the authenticity of all documents submitted to us as originals,
the conformity to the original documents of all such documents submitted to us
as copies and the authenticity of the originals of such latter documents. We
have also assumed that the books and records of the Company are maintained in
accordance with proper corporate procedures. In addition, we have assumed,
without inquiry, that the Underwriting Agreement has been duly authorized,
executed and delivered by the Underwriters. As to any facts material to our
opinions, we have, when relevant facts were not independently established by us,
relied upon the aforesaid agreements, instruments, certificates, documents and
records and upon statements and certificates of officers and representatives of
the Company and public officials.
Based upon and subject to the foregoing, and subject to the further
limitations, qualifications and assumptions set forth below, we are of the
opinion that:
1. The Purchase Contract Agreement and the Pledge Agreement have been
duly executed and delivered by the Company to the extent the laws of
the State of New York apply and (assuming due execution and delivery
by the Purchase Contract Agent and the Collateral Agent and, in the
case of the Pledge Agreement, by the Custodial Agent and the
Securities Intermediary) constitute valid and binding agreements of
the Company enforceable against the Company in accordance with their
respective terms, subject to bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other
Scottish Re Group Limited
December 17, 2003
Page 3
similar laws affecting the enforcement of creditors' rights generally
and to general equitable principles (regardless of whether such
principles are considered in a proceeding in equity or at law) and to
an implied covenant of good faith and fair dealing; provided, however,
upon the occurrence of a Termination Event (as defined in the Purchase
Contract Agreement, the Bankruptcy Code (11 U.S.C.ss.ss.101-1330, as
amended) should not substantively limit the provisions of Sections
3.15 and 5.06 of the Purchase Contract Agreement and Section 2.03 of
the Pledge Agreement that require termination of the Purchase
Contracts and release of the Collateral Agent's security interest in,
as the case may be, (x) the Pledged Preferred Shares in the case of
the Corporate Units (as defined in the Pledge Agreement) or (y) the
Pledged Treasury Consideration (as defined in the Pledge Agreement),
in the case of Treasury Units (as defined in the Purchase Contract
Agreement); and provided further, that no opinion is expressed as to
whether a court exercising bankruptcy jurisdiction might issue a
temporary restraining order or provide other interim relief that would
delay the exercise of such termination right for a period of time
pending final adjudication of any challenge to the exercise of such
right during a bankruptcy case involving the Company.
2. The Units have been duly executed and delivered by the Company to the
extent the laws of the State of New York apply.
The opinions rendered herein are limited to the laws of the State of New
York and the Federal law of the United States.
We express no opinion in this letter as to the legality, validity, binding
effect or enforceability of any provision of, or incorporated in, the Purchase
Contract Agreement, Pledge Agreement, or Remarketing Agreement (collectively,
the "Transaction Documents"): (i) that is determined to be a penalty or a
forfeiture, including by reason of a party being required or allowed to pay,
deliver, receive or recover (or not to pay, deliver, receive or recover) any
amount or item; (ii) that may require a party to pay any consequential, special,
incidental, indirect, contingent or exemplary damages or amounts; (iii) that
relates to any waiver of rights or obligations; (iv) that relates to the
conclusiveness or binding effect of any calculation or determination made by any
person; (v) that purports to bind any affiliate of a party; (vi) that relates to
an oral agreement or waiver, or written but unsigned agreement or waiver, by a
party not satisfying applicable statutes of fraud; (vii) that requires any
amendment or waiver to be in writing, to the extent that an oral agreement or
waiver, or an implied agreement or waiver, by trade practice or course of
conduct has been created that modifies any such provision; (viii) that relates
to the subject matter jurisdiction of the United States federal courts located
in the Borough of Manhattan in the City of New York to adjudicate any
controversy relating to any of the Transaction Documents; (ix) that relates to
the creation, legality, validity, binding effect,
Scottish Re Group Limited
December 17, 2003
Page 4
attachment, perfection, enforceability or priority of any lien, charge, security
interest, pledge, transfer or encumbrance created or purported to be created or
that deals with accepting collateral in satisfaction of any obligation or
indebtedness; (x) that relates to any tax, duty, impost, levy, cost, fee,
commission or charge in connection with the execution, delivery, performance,
filing or recording of any of the Transaction Documents or any document or
instrument pursuant or relating thereto or in connection therewith; (xi) that
purports to create rights of set-off in favor of any party or that provides for
set-off to be made otherwise than in accordance with applicable laws; or (xii)
that relates to any indemnification to the extent limited by public policy or
relevant securities laws.
We express no opinion to the application of the securities or blue sky laws
of the several states to the sale of the Units. Without limiting the generality
of the foregoing, except as set forth herein, we express no opinion in
connection with the matters contemplated by the Registration Statement or Final
Prospectus, and on opinion may be implied or inferred, except as expressly set
forth herein.
We hereby consent to the filing with the Commission of this opinion as an
exhibit to the Registration Statement and to the use of our name in the Final
Prospectus under the caption "Tax Considerations--Taxation of Scottish Re and
its Subsidiaries--United States." In giving such consent, we do not admit that
we are within the category of persons whose consent is required under Section 7
of the Securities Act.
Very truly yours,
/s/ LeBoeuf, Lamb, Greene & MacRae, L.L.P.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.