Fairfax Acquires Prime Restaurants

On November 21, 2011, Prime Restaurants Inc. (“Prime”) announced that it had received an offer from Fairfax Financial Holdings Limited (“Fairfax”) to acquire all of the issued and outstanding class A limited voting shares and restricted share units (“RSUs”) of Prime by way of a plan of arrangement (the “Fairfax Offer”).

The Fairfax Offer was solicited by Prime during the “go-shop” period permitted under its agreement with Cara Operations Limited (“Cara”).

The total consideration payable by Fairfax is approximately $71 million, equivalent to $7.75 per share or RSU. Under the Fairfax Offer, shareholders would receive $7.50 per share in cash from Fairfax. In addition, Fairfax would pay approximately $2.2 million to Prime to pay certain expenses associated with the Fairfax Offer including the termination payment to Cara, with any remainder available to be distributed to shareholders as a special dividend. The amount of the special dividend to be paid, if any, could not exceed $0.25 per share.

Prime had previously entered into an acquisition agreement (the Cara Agreement) with Cara, whereby Cara agreed to acquire all of the issued and outstanding Shares of the Company by way of plan of arrangement (the Cara Offer). Under the Cara Offer, Shareholders would receive a total of $7.00 per share on the effective date, comprised of $6.75 per Share payable by Cara in cash and $0.25 per share as a special dividend from Prime.

On November 28, 2011, Prime announced that it terminated the acquisition agreement between Cara and Prime and has entered into an acquisition agreement with Fairfax. Additionally, Prime announced that it entered into a settlement agreement with Cara, Fairfax and certain executive officers of Prime pursuant to which the parties have agreed to a full and mutual release of all obligations relating to the Cara Agreement and Cara's proposed acquisition of Prime.

On January 10, 2012, Fairfax completed its acquisition of Prime. Prime shareholders received $7.50 per share in cash from Fairfax and a special dividend in the amount of $0.08 per share from Prime.

Torys LLP acted as legal counsel to Fairfax Financial with a team that included David Chaikof, Glen Johnson, Robbie Leibel, Adam Armstrong, Alison Harnick, Omar Wakil, John Cameron, Andrew Gray, Natasha Banka, Reesha Hosein, Miranda Callaghan, Will Hooper and Ingrid VanderElst.

Goodmans LLP acted as legal counsel to Prime and Prime's Special Committee with a team that included Stephen Halperin, Tim Heeney, Keir Hunt, Katelyn Rancourt, Jason Wadden, Sara Gottlieb, Jon Northup and Richard Annan. Stikeman Elliott LLP acted as legal counsel to Prime and Prime's majority shareholder with a team that included Sidney Horn, Maxime Turcotte, Vanessa Coiteux and Adam Cieply.

Osler, Hoskin & Harcourt LLP acted as legal counsel to Cara with a team that included Mark Trachuk, Laurie Barrett, Michael Innes and Andrew Powers.

Lawyer(s)

Robbie Leibel Richard Annan Keir Hunt Michael D. Innes David A. Chaikof Glen R. Johnson Jason Wadden Ingrid VanderElst Andrew D. Powers Adam S. Armstrong Sara Gottlieb Maxime Turcotte Adam Cieply Omar K. Wakil Stephen H. Halperin Sidney M. Horn R. John Cameron Jon Northup Andrew D. Gray Tim Heeney Natasha Banka Laurie E. Barrett Reesha N. Hosein Katelyn Rancourt Vanessa Coiteux Alison Harnick Mark Trachuk