Company: FRFXF
Filing Date: 2025-03-14
Form Type: F-4
Source: 0001104659-25-024010
Chunk: 41

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-03-14
Form: F-4
Chunk 41
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 prior to such subsidiary distributing amounts to us that we could use to make payments on the Exchange Notes. In addition,
if we caused any such subsidiary to pay a dividend to us to make payments on the Exchange Notes, and the dividend was determined to be
improperly paid, holders of the Exchange Notes who had received proceeds from such dividend payments could be required to return the
payment to the subsidiary’s creditors.

As of December 31,
2024, our subsidiaries (other than Allied World) had approximately $3.3 billion principal amount of indebtedness. Our subsidiary debt
may increase in the future. The terms of the Exchange Notes do not limit the ability of our subsidiaries to incur additional indebtedness
that is senior to the Exchange Notes.

We may incur additional indebtedness that may adversely affect our ability to meet our financial obligations under the Exchange Notes.

As of December 31, 2024, the Company and Allied World had approximately
$8.6 billion aggregate principal amount of total outstanding senior unsecured indebtedness, all of which would rank equally to the Notes.
The Company’s other subsidiaries had approximately $3.3 billion aggregate principal amount of total outstanding indebtedness, all
of which would be structurally senior to the Notes. The Indenture that will govern the Exchange Notes does not limit the amount
of additional indebtedness that we may incur. We may incur additional indebtedness in the future, which could have important consequences
to holders of the Exchange Notes, including the following:

| · | we                                                                                        
 could have insufficient cash to meet our financial obligations, including our obligations 
 under the Exchange Notes;                                                                 |

| · | our                                                                                         
 ability to obtain additional financing for working capital, capital expenditures or general 
 corporate purposes may be impaired; and                                                     |

| · | a                                                                                                   
 significant degree of debt could make us more vulnerable to changes in general economic conditions  
 and could also affect the financial strength ratings of our insurance and reinsurance subsidiaries. |

The Indenture governing
the Notes provides that certain restrictive covenants will be automatically eliminated or amended effective as of the Amendment Date,
including in respect of the limitation on liens on capital stock of restricted subsidiaries. The Indenture also provides that if we grant
any security interest to any collateral agent or trustee pursuant to such covenant in connection with any series created after the date
of the Third Supplemental Indenture, such security interest shall be automatically released on the Amendment Date and any such collateral
agent or trustee shall be authorized to take such