EX-2 2 4602174dex2.him EX-2 ane? FAIRFAX FINANCIAL HOLDINGS LIMITED Septenber23, 2013, ‘BlackBer Lined 235 Pip Sucet ‘Wateto, Ontario (Canada NOL3WS Aste Me Timatee (Chai Special Commitee ofthe Board ear Me Datel: Further to our scent eephone conversation regarding BackBemy Lined (the “Comny”, we are pleased o provide the Boa of Dstors ofthe Company (the “Diestrs”) wih ‘urpropsal ofan allcash ofr pusuant o which anew company ("Neweo”) woul be fomed by Fa Fiancal HoMligs Lined FP") and one or mow other parts (he “Canrerthn snd cach such person, “Consortia Member’ )toScqui 1 of the conmmon shares ofthe Conpany (clidingshatsaeady held by us) for US $0.0 pershare, representa total ansaction value of US. S47 bili the “Transaction Value) We have devoted substan ie, sources and ener to studying the Conpany- We Baeve urofe provides an exremey conpoing conbiaton of atactive and cena vale fr sharcholis ‘Weare highly confident that the Consoniamcan fund he ill angunt ofthe consideration and all eld transaction ees and epenses, Weare seeking fancng ftom BofA Merl [ynch and BMO Capital Males (the "Lenders". ‘We have endeavoured to povide the suongest possible propesalto the Company and its sharcholes, inching: + AllCash Omer. Our poposalis for Newco to aoquie allofthe oustanding shares ofthe Conpany for IOP cash consideration + Antactie Long-Ferm Solutio ral takebulvrs.Underou proposal the Company can vais the benefis of pivateopeating envionment without the Aistaction ofthe public mts and the emphasis on shor-cnn ania sul. + Highest Certainy and Speedo Completion. Our props offers a hgh eve of craig o regulatory apo. Neweo wil be 2 Canaan buyer not subjee to laestment (Canad review and ve dna elleve tha here are any Competition dc iesues or sues under he antinst laws ofthe United Stites that woul inpde the transaction, This ‘wilead to aapid egubtory approval, delivering cash proceeds tothe shareholders as prop as possible. Our peoposal provides higher certain han acmatves hat Ihave been suggested inthe pres. + NoFinancing Condi after Due Diligence. Folowing completion ofthe equbsite due diligence discussed belo anciagrutements willbe fully commited atthe tine oftheewcution oa definkve transaction agement, which agreement willot conan financing condition, The ety conmittents wil provide tha () Newco wil ages to enfoce the equity conmaameats othe Conpany wilhave a customary ight o cause Neweo to sek specie performance ofthe equity conmatments ori the equty ‘onmiments wilhave been guaneed on customary tems bythe Consortumnenbers,2 + Maintain Process Resi to Maunize Value, The Consosumand the Lends will gui a6 week due diligence pevod which commences oa the date hero and ends at 540m (EST) on November 4, 2013 the “Diligence Perle), Weare avalible conmencc our dus diigence immediately and baove such diigence would be conducted using the negotiston of defntve agreements. During the Diligence Pero the Conpany shallbepemitec shop the Conpany and the proposal to othr thi pats. FF Sha dalver an inital dat ofthe Dfingive Agreement no ater than 10 days mth date hereof thea drat has not been delivered by seh in the Diligence Peso Shaltemmate onthe Ith ay folowing the date hero 1m ode to advance our proposal and fo good and valuable consideration, you and we have agreed as fos 1. Dung the Diligence Prin the paties will negotiate in good ith wth view to enteing into a deintve agreement the “Define Agreement” puss to which the CCoasctimillacquie he Company forthe Tasaction Value (the “Transaction” 2 The partis wis promptly as practicable, negotiate in god th a content agreement epaing acess 1 conden infomation to be provid 1 ws and out representatives (inludag the Lendets and cguty prtispants the Transseton, and the Conpany shall provide accesso Such confulentia infomation ss soon as possible following eecuton ofthe contdentalty green 3. Noiag hori shallbe construed as constraining the Company's abit to have discussions with ay other peson about any tnsactio, inching an Akemative ‘Transactin proto the eocuon ofthe Detntve Aproonent lath eter. detemAlternatve Transaction” shall ean a boa ide poposal or ofr made by any petson o g0up for (an anangereat,analganation, nego. wowaizatio, shar exchange, business combination, eaptakation, disolutn, uidation oe sine "wanssetion involving the Company which would esl in any peson or goup beneically owning more than 28% ofthe oustanding equity interests ofthe Conpany or any sucoessoror parent company thereto, (ithe acquisition by any pen or group Gnciding by any aset acquisition it venture o si transaction) ofarsts (ncding ‘au sccutee of any subsidiary ofthe Company) requescating rote than 10% ofthe asset, venues or act ince ofthe Conpany and is substlaes,on a consoliatd bass other than tasactons disclosed to FF a wing on or before the dat hereof i)any acquit (ineluding by way of take-over bil or exchange ofeby any person ‘or goup thatifeonsunmated would sult in any person or group bensicially owning mee han 29% ofthe voting power ofthe outstanding shares os) any combaation of ‘he foregoing, in each case of) vough Gi whether ina single Uansacton ora seis of wansacins. 4 Nothing hori shallonstin the ably of FF dving the Diigene Prod to have discussions with anyother person egading such person's patton inthe ‘Transactin, whotherby way of equity, deb or otherwise. The Cnpany ages Io provide access fo cohen formation to any Such peson as FF nay dive, on the same basis as such infomation provide to FF, subject o such peson eaonng into a confidentiality agreement substantially on the samme tems as that contenpbod ia patigiaph above. Pr eaterng into any Defaive Agreement, FF agrees not to ini, coatactaly or athewise the abit af any peson to have dscussions withthe (Company orto ener into any atangements wih the Company with espect an Ateratve Transaction,4 ‘During the DgencePoid, the Company shall cause the busines of the Company tobe conducted inthe oxtiaary couse and shlluse comme scasonable ffs 0 prsewe in allnateral spect its busess ouniation and maintain allaateral espects esting felons wih goverametalentitis, customers, suppers and craton, Provided tht ifrequie in onlerio satis the uci duis the board ofdecton ofthe Company nay tke ay action which they reasonably bebve necessary to pesewe the vale ofthe Company. and provided tha the Company aay tae any ston that thas disclosed 0 FF in wing on orbefre he date hereof ott thas, 08 oF etre the date hoof, publicly disclosed tis, or willbe, underakang i (@) Dung the DgencePeiad the Company shall enterin y ter of intent o denne agreement proving for an Akemative Tnsacton; (©) During the Dagence Paid the Company ceases to negotiate with the Consortiumin good fth with a view to entering into the Define Apresmont by the end ofthe Diigence Pod: (6) Dugg the 3 month prod following the end ofthe gence Peid, the Company shall enter iato any aprement roving fo an Akomatve rnsaction wih person with whomdscussions reading an ARemative Transaction were held before a during the Digence Peto, ot (@ During the DagencePoid, an Atematve Tansacton other than as contemplated in cause (9) oF (6s publely proposed or publely announced by thd petsoa and such Allematve Transaction wih such person is consummated Within 6 ons folbwing the end ofthe Diigence Peso ‘en the Company shall pay FF a fee of US. $030 for cach sued and oustanding Blacbeny sharin the case of a nmeditly upon entering into Such agreement inthe ‘ease of()imsitely pon such cession, and in the eas of) or) upon consummation ofthe Akemative Transaction; provied,howevet that no such ee shall be payable ithe Consoriumsbalhave reduced the pie ofeed belo US. $8.0 per share without the approval the boud of daceoes ofthe Compan. dung the DigencePesiod the Company proposes to enteinto an agreement rating oan Aematve Transaction, shallot do so unless thas Hist povided 8 hous* ‘wien notice fo FF ofsuch ft. ‘Upon the entering no ofthe Defintive Agreement, the tems and conditions ofthe Define Agreement wilsupesede this ker agreeneat.The tems and eons of the Definitive Ageement, ncudag ano-solitationcomnstnent wih auc exception, aight to match a super poposaland break le of US. $080 reach ssued and outstanding Blckbeny shave, willbe negated on em ha ar customary fra tansacton of ths nature“4 ‘nthe event thatthe Diigence Ped teminatss and no Defitve geement sented into hetwoon us because the Company ceases negotiations withthe Consontim, (which the Company can dost ny tine) other than in cicunstances where the Consortium shall have reduced the price offered below US, $900 pe share without the sppmovalofthe boa of decors of the Conny, you are oreinburse us our reasonable and docunnted out-ofpocket expenses incued in connection without ‘consideration ofthe Taansaetion,suchreinburscnea! o scade the easonable and documented expenses of ou egal accounting and financial aor: vied tat the ‘banumanutt ofeypenses subject to renbursenent hereunder sallae exceed US, Sion. Any anwunts padi respec of epense reinbursement beeunder ae ‘etal against any fe payable under pargraph & Un the date that Gms folowing the end ofthe Diligence Peviod, FF agrees to vote allcommon shaes ofthe Conpany that it owns, inca shares acquied afer the date hereof a) ihe Coapany’s board of dsvctors has commended o proved the Transaction () i favour ofthe Teascton and (i) against any Aematve Transaction ‘orany action thats easonaly Bey impede, tre wih, dey postpone or adversely affect in any teri spect he Transaction and () the Companys board of duets bas reonmend or approved an alleash Allematve Teasacton in espoct of which the Company has complied wih Seton Tan which the bande ductors has ‘conclaed is a Supa Poposal (in vour of the Super Poposal and i)agaast any other Atmatve Transact a ny ation that rasonably ly to impede, Interie with, del, postpone, or advescl afc i any mata respect such Superior Proposal lathe event thatthe Tansactin is suuetured a tbe-overbi othe Company's board of dzetom recommends a take-over that ia Super Proposal, ia wespet of which he Company has comple wth Section 7, FF agrees to tenders common shares ofthe Company iato such Supesor Proposal (and ot wihdfa ss shares pio the exp ofthe take-over bid) un the date that Goats folowing the end ofthe Digence Pood. FF represents thats has, and dug uch 6 month period wi hve, the abit to vote and dispose ofall such shares a accordance wih “blgations pursuant this paragraph 10."Superor Propisal” means bona fe writen Acquistion Transaction inde by an ans length thi party (that tesonably ‘apableofbeing completed without undue dey taking nto account al anc, Kal egulstor and other aspects of such proposal andthe peson aking such proposal, (Ghai not subjet to any de digence or access condition; a that snot subset ay ancing condition and in espetof which, where applicable, faancing ‘conmiment ters reasonably stisfictry to the Company have been funshed tothe Company. (v) that didnot su fom breach of any non-soleaion agreement between the pais contained inthe Defintive A grecnen, and that he boa of decors ofthe Cony detemines, ints good fath judgent, afte eshing the advice of ‘outside epaland fanci advisors and afer taling nto account athe tems and conditions ofthe Acqusion Transaction stchuing al esl, anc epson and loter aspects ofsuch Acquisition Transaction andthe person proposing such Acquisition Tassaction woul, fconsurmatod i acconlance Wilh ems (but not assuiag vay an) rakoaon-compltion sulin tansaction mre Bvourble, oma Financia pot of vi, othe shareholders ofthe Company thn those contemplated by this ‘Agreement ora Deinaive Agreement between the pats“5 1 Untttheend ofthe Digence Paid, FF apes shat it shall not widhout the prior writen consent ofthe Company, sell waste assign, pledge, orotherise dispose of, ot eter into any agreement or understanding ebting to these, rans, signment, voting (ther than as povided etein or ake disposition of any connon shares ofthe (Company that it hols onthe date hereof or any shares aequied during the Digonce Pood, 12 Weagreto coordinate public disclosure ofthis kttr agreement and out Proposal Fah pay acknowledges thatthe other pat has disclosure obligations under secures laws which wilseguze the othe party to pucly disclose ths proposal in ig wil the proves sceites conmasion andor the IS cuties and Bhange Commission and:o comply with these egutemeats, each pa willbe ing ths ter agreement wh he appcale secures commission on or aout Septenber 23,2013, 13, This teragreement shallbe govemed by the las ofthe Province af Ota 1M. Itisundestood that this ter doesnot ewate a binding obligation on ou pao yous to entra a defatve agreenea wth espect toa Tasacton and that a bading ‘obligation on: (a) ou par to aequte the Conpany wiles only upon ur determination that we a satis wit allarpeets ofthe due diigence we cay out during the Diigence Peto andthe executon ofthe Dende Agrees on tents and condeons tat are acesplable tous, and() the Conpanys pat wiles ony upon the ‘oecttion ofthe Defiave Agreement on terms and condtons that are aceptable tothe onpany and upon the Conpany's board of decors authoring the entering ito and delivery ofthe Definhive Agreement. However agreed that the provisions ofparigraphs | though 1 shallerate binding obligations between us, which shall survive ‘he temination of the Dlgence Ped ‘Weare enthusiastic about the future prospects ofthe Company and bok foal to advancing our proposil lease aclaowledge your agement with counterpart of this te fregoing by signing the ‘ours very uy, Fairfax nancial Holdings inte Per, /5/ Paul Rivet ‘None: Pal Rv Tek President, Ared this day of September 2013, Blackierry Linited Pe _/s/Stoven E Zippemtein ‘Nae: Seven E Zippers Tide: Chit Legal Omicer