ASI American Safety Insurance Holdings, Ltd.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This proxy statement, and the documents to which we refer you in this proxy statement, contain forward-looking statements within the meaning of the United States securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the United States securities laws. In some cases, these statements can be identified by the use of forward-looking words such as “may,” “should,” “could,” “anticipate,” “estimate,” “expect,” “plan,” “believe,” “predict,” “potential” and “intend.” Forward-looking statements contained in this proxy statement include information regarding possible or assumed future results of operations of American Safety, the expected completion and timing of the merger and other information relating to the merger. Forward-looking statements only reflect our expectations and are not guarantees of performance. These statements involve risks, uncertainties and assumptions. Actual events or results may differ materially from our expectations. Important factors that could cause actual events or results to be materially different from our expectations include:

Consequently, all of the statements we make in this proxy statement are qualified by the information contained or incorporated by reference herein, including, but not limited to, the information contained under this heading and the information contained under the headings “Risk Factors” and that is otherwise disclosed in our annual report on Form 10-K for the year ended December 31, 2012, as amended, filed with the SEC on March 15, 2013 and amended on April 30, 2013, and each quarterly report on Form 10-Q filed thereafter (see “ Where You Can Find More Information ” beginning on page 69). The foregoing list of important factors that may affect future results is not exhaustive. When relying on forward-looking statements to make decisions with respect to the proposed transaction, shareholders and others should carefully consider the foregoing factors and other uncertainties and potential events. We believe that the assumptions on which our forward-looking statements are based are reasonable. However, we cannot assure you that the actual results or developments we anticipate will be realized or, if realized, that they will have the expected effects on our business or operations. All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this proxy statement and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Forward-looking statements speak only as of the date of this proxy statement or the date of any document incorporated by reference in this proxy statement. Except as required by applicable law or regulation, we do not undertake to release the results of any revisions of these forward-looking statements to reflect future events or circumstances.

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PARTIES TO THE MERGER

American Safety Insurance Holdings, Ltd.

American Safety is a Bermuda-based specialty insurance and reinsurance underwriter with U.S. insurance and international reinsurance operations offering solutions for specialty risks. Through our domestic operating subsidiaries and affiliates, we market and underwrite a variety of specialty insurance products to small and medium-sized businesses in the United States. Through our Bermuda operating subsidiaries, we offer reinsurance products primarily to U.S. and international insurance companies. We compete in three specialty divisions: “excess and surplus lines” and “alternative risk transfer” in the U.S. and reinsurance in Bermuda. We believe that our market and specialty product focus has allowed us to develop underwriting expertise in the markets that we serve. We utilize a solution oriented approach to underwriting while focusing on underwriting profitability. We believe that our underwriting expertise, flexible platform and customer orientation set us apart from our competitors. Our goal is to offer a broad base of specialty insurance and reinsurance products for which we can build scale and consistently produce underwriting profits.

American Safety’s common shares are publicly traded under the symbol “ASI” in the United States on the NYSE.

American Safety was formed in Bermuda on January 2, 1986. American Safety’s principal executive offices are located at The Boyle Building, 2nd Floor, 31 Queen Street, Hamilton HM 11, Bermuda, and the telephone number at that address is (441)  296-8560.

Fairfax Financial Holdings Limited

Fairfax is a financial services holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management.

Fairfax’s subordinate voting shares are publicly traded in Canadian dollars under the symbol “FFH” and in U.S. dollars under the symbol “FFH.U” in Canada on the Toronto Stock Exchange.

Fairfax was incorporated under the Canada Corporations Act on March 13, 1951 and continued under the Canada Business Corporations Act in 1976. Fairfax’s registered and head office is located at 95 Wellington Street West, Suite 800, Toronto, Ontario M5J 2N7, and the telephone number at that address is (416) 367-4941.

Fairfax Bermuda Holdings Ltd.

Merger sub, a Bermuda exempted company and indirect wholly owned subsidiary of Fairfax, was formed on May 30, 2013, solely for the purpose of effecting the merger. At the effective time, merger sub will merge with and into American Safety, whereupon the separate existence of merger sub will cease to exist.

To date, merger sub has not conducted any activities other than those in connection with its formation and the transactions contemplated by the merger agreement. Merger sub’s registered office is located at Claredon House, 2 Church Street, Hamilton HM11, Bermuda, and the telephone number at that address is (416) 367-4941.

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THE SPECIAL GENERAL MEETING

This proxy statement is being furnished in connection with the solicitation of proxies from shareholders by our board for use at the special general meeting of our shareholders relating to the merger or any adjournment or postponement thereof.

Date, Time, and Place

The special general meeting will be held on [            ], 2013, at [        ], local time, at [        ], unless postponed or adjourned.

Purpose of the Special General Meeting

At the special general meeting, the shareholders will be asked to consider and vote on the following proposals:

Recommendation of the Board

After careful consideration, the board unanimously determined that the terms of the merger agreement are fair to and in the best interests of American Safety and unanimously approved the merger agreement, the merger and the other transactions contemplated thereby.

The board unanimously recommends that you vote “ FOR ” the proposal to approve and adopt the merger agreement and to approve the merger, “ FOR ” the adjournment proposal and “ FOR ” the merger-related compensation proposal.

Our shareholders must approve the proposal to approve and adopt the merger agreement and to approve the merger in order for the merger to occur. If our shareholders fail to approve the proposal to approve and adopt the merger agreement and to approve the merger, the merger will not occur. A copy of the merger agreement is attached as Annex A to this proxy statement. We encourage you to read the merger agreement carefully in its entirety.

Record Date; Shares Entitled to Vote; Quorum

Only holders of record of common shares at the close of business on [            ], 2013, the record date, are entitled to notice of, and to vote at, the special general meeting or any postponements or adjournments thereof. Holders of record of common shares are entitled to one vote for each common share they own on each matter submitted to a vote at the special general meeting. On the record date, [            ] common shares were issued and outstanding and held by [            ] holders of record.

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The presence of at least three persons at the start of the special general meeting representing in person or by proxy not less than 33 1/3% of the outstanding shares carrying the right to vote will constitute a quorum for the transaction of business at the special general meeting. Abstentions and “broker non-votes” are counted as present or represented for purposes of determining the presence or absence of a quorum.

Vote Required

The proposal to approve and adopt the merger agreement and to approve the merger requires the affirmative vote of 66 2/3% of the votes cast at the special general meeting at which a quorum is present, in accordance with American Safety’s bye-laws. The adjournment proposal and the merger-related compensation proposal each requires the affirmative vote of a simple majority of the votes cast at the special general meeting at which a quorum is present.

Common Shares Owned by Our Directors and Executive Officers

As of the record date, our directors and executive officers held and were entitled to vote, in the aggregate, [            ] common shares, which represented [    ]% of the aggregate voting power of the outstanding common shares entitled to vote at the special general meeting on such date. Each director, certain executive officers, certain relatives of such directors and executive officers and certain related family trusts have each agreed to vote all of the common shares held by them in favor of the proposal to approve and adopt the merger agreement and to approve the merger. See the section entitled “ Voting Agreements ” beginning on page 62 for more information. We currently expect that our directors and executive officers will vote their common shares in favor of the proposal to approve and adopt the merger agreement and to approve the merger, in accordance with the voting agreements.

How to Vote

Shareholders may vote using any of the following methods:

By telephone or via the Internet

You can vote by calling the toll-free telephone number on your proxy card. Please have your proxy card handy when you call. Easy-to-follow voice prompts allow you to vote your common shares and confirm that your instructions have been properly recorded.

Please follow the instructions on your proxy card and have it handy when you go online. As with telephone voting, you can confirm that your instructions have been properly recorded. If you vote via the Internet, you also can request electronic delivery of any future proxy materials.

Telephone and Internet voting facilities for shareholders of record will be available 24 hours a day beginning on or about [            ] on [            ], 2013 and closing at [            ] on [            ], 2013. The availability of telephone and Internet voting for beneficial owners will depend on the voting processes of your bank, brokerage firm or other nominee. Therefore, American Safety recommends that you follow the voting instructions in the materials you receive from your bank, brokerage firm or other nominee.

If you vote by telephone or via the Internet, you do not need to return your proxy card.

By mail

If you received your special general meeting materials by mail, you may complete, sign and date the proxy card or voting instruction card and return it in the prepaid envelope. If you are a shareholder of record and you return your signed proxy card but do not indicate your voting preferences, the persons named in the proxy card will vote the shares represented by that proxy in favor of each proposal.

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In person at the special general meeting

All shareholders as of the record date may vote in person at the special general meeting. You may also be represented by another person at the special general meeting by executing a proper proxy designating that person. Please note that if you are a beneficial owner of common shares, you must obtain a legal proxy from your bank, brokerage firm or other nominee and your account statement evidencing your beneficial ownership of common shares as of the record date, each of which must be presented to the inspectors of election with your ballot to be able to vote at the special general meeting.

By granting a proxy or submitting voting instructions

You may vote by granting a proxy to someone else or, for shares held in “street name”, by submitting voting instructions to your bank, brokerage firm or other nominee.

You may also authorize the persons named as proxies on the proxy card to vote your common shares by returning the proxy card by mail, through the Internet or by telephone. Although American Safety offers four different voting methods, American Safety encourages you to vote through the Internet, as American Safety believes it is the most cost-effective method. We also recommend that you vote as soon as possible, even if you are planning to attend the special general meeting, so that the vote count will not be delayed. Both the Internet and the telephone provide convenient, cost effective alternatives to returning your proxy card by mail. If you vote your common shares through the Internet, you may incur costs associated with electronic access, such as usage charges from Internet access providers. If you choose to vote your common shares through the Internet or by telephone, there is no need for you to mail back your proxy card.

Voting of Proxies

All common shares properly voted via the Internet or by telephone at or prior to [11:59 p.m. E.T.] on [            ], 2013, and all common shares represented by properly executed proxies received 48 hours prior to the special general meeting or any adjournment or postponement thereof and, in each case, not revoked, will be voted in accordance with the instructions so provided. If no specific instructions are given with respect to a particular proposal to be acted upon at the special general meeting, common shares represented by a properly executed proxy will be voted in favor of each such proposal. Proxy cards returned without a signature will not be counted as present at the special general meeting and cannot be voted.

A properly submitted proxy marked “ABSTAIN,” although counted for purposes of determining whether there is a quorum and for purposes of determining the aggregate voting power and number of common shares represented and entitled to vote at the special general meeting, will not be voted. Because the vote required to approve the proposals is based on a percentage of the votes cast assuming a quorum is present, an abstention with respect to any proposal to be voted on at the special general meeting will not have the effect of a vote for or against the relevant proposal, but will reduce the number of votes cast and therefore increase the relative influence of those shareholders voting.

Common shares represented by “broker non-votes” will also be counted for purposes of determining whether there is a quorum at the meeting. A broker non-vote occurs when shares held by a bank, brokerage firm or other nominee are represented at the meeting, but the nominee has not received voting instructions from the beneficial owner and does not have the discretion to direct the voting of the common shares on a particular proposal. Nominees may exercise discretion in voting on routine matters, but may not exercise discretion, and therefore will not vote, on non-routine matters. Under NYSE rules, all of the proposals in this proxy statement are non-routine matters and your bank, brokerage firm or other nominee may not vote on these matters without instructions from you. Because the vote required to approve the proposals is based on a percentage of the votes cast assuming a quorum is present, an abstention with respect to any proposal to be voted on at the special general meeting will not have the effect of a vote for or against the relevant proposal, but will reduce the number of votes cast and therefore increase the relative influence of those shareholders voting.

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If your common shares are held by your bank, brokerage firm or other nominee, you will receive a form from your bank, brokerage firm or other nominee seeking instruction as to how your common shares should be voted. If you do not issue voting instructions to your bank, brokerage firm or other nominee, your bank, brokerage firm or other nominee may not vote your common shares on any of the proposals. You should contact your bank, brokerage firm or other nominee with questions about how to provide or revoke your instructions.

Revocability of Proxies

You have the right to revoke your proxy at any time before the special general meeting by:

Any written notice of revocation or subsequent proxy should be sent or hand delivered so as to be received at American Safety Insurance Holdings, Ltd., Attention: Secretary, The Boyle Building, 2nd Floor, 31 Queen Street, Hamilton HM 11, Bermuda, at least two hours before the vote being taken.

Tabulation of Votes

The votes will be counted by one or more inspectors of votes appointed for the special general meeting.

Solicitation of Proxies

The board is soliciting your proxy for the special general meeting, and American Safety will bear the cost of soliciting proxies. In addition, we have retained MacKenzie to assist in the solicitation of proxies. We will pay MacKenzie approximately $75,000 to $125,000, plus reasonable out-of-pocket expenses, for its assistance. Our directors, executive officers and employees also may solicit proxies by personal interview, mail, e-mail, telephone, facsimile or other means of communication. These persons will not be paid additional remuneration for their efforts. We also will request banks, brokerage firms and other nominees to forward proxy solicitation materials to the beneficial owners of common shares that the banks, brokerage firms and other nominees hold of record, in which case these parties will be reimbursed for their reasonable out-of-pocket expenses. American Safety and Fairfax have agreed to share equally all costs and expenses incurred in connection with the filing fees and cost of printing and mailing this proxy statement.

Adjournments and Postponements

In addition to the proposal to approve and adopt the merger agreement and to approve the merger and the merger-related compensation proposal, the shareholders are also being asked to approve a proposal that will give the chairman of the special general meeting authority to adjourn the special general meeting for the purpose of soliciting additional proxies if there are insufficient votes at the time of the special general meeting to approve the proposal to approve and adopt the merger agreement and to approve the merger. If this proposal is approved, the special general meeting could be successively adjourned to any date, subject to Fairfax’s consent. In addition, the chairman of the special general meeting could, subject to Fairfax’s consent, postpone the special general meeting before it commences, whether for the purpose of soliciting additional proxies or for other reasons. If the special general meeting is adjourned for the purpose of soliciting additional proxies, shareholders who have already submitted their proxies will be able to revoke them at any time prior to their use by any of the methods

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described above in the section entitled “ — Revocability of Proxies .” If you return a proxy and do not indicate how you wish to vote on any proposal, or if you indicate that you wish to vote in favor of the proposal to approve and adopt the merger agreement and to approve the merger but do not indicate a choice on the adjournment proposal, your common shares will be voted in favor of the adjournment proposal. But if you indicate that you wish to vote against the proposal to approve and adopt the merger agreement and to approve the merger, your common shares will only be voted in favor of the adjournment proposal if you indicate that you wish to vote in favor of such proposal.

Householding

As permitted under the Exchange Act, only one copy of this proxy statement is being delivered to shareholders residing at the same address, unless such shareholders have notified American Safety of their desire to receive multiple copies of this proxy statement.

American Safety will promptly deliver, upon oral or written request, a separate copy of this proxy statement to any shareholder residing at an address to which only one copy was mailed. Requests for additional copies should be directed to Investor Relations, 31 Queen Street, Hamilton HM 11, Bermuda, (441) 296-8560. Shareholders residing at the same address and currently receiving only one copy of the proxy statement may contact American Safety at the address above to request multiple copies of the proxy statement in the future. Shareholders residing at the same address and currently receiving multiple copies of the proxy statement may contact American Safety at the address above to request that only a single copy of the proxy statement be mailed in the future.

Questions and Additional Information

If you have questions about the merger or other matters in this proxy statement, need assistance in submitting your proxy or voting your common shares, or need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact MacKenzie Partners, Inc., our information agent, at (800) 322-2885 (toll free) or (212) 929-5500 (collect) or by email at proxy@MacKenziepartners.com, or contact us in writing at our principal executive offices at American Safety Insurance Holdings, Ltd., The Boyle Building, 2nd Floor, 31 Queen Street, Hamilton HM 11, Bermuda, or by telephone at (441) 296-8560.

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THE MERGER

This discussion of the merger is qualified in its entirety by reference to the merger agreement, which is attached to this proxy statement as Annex A. You should read the entire merger agreement carefully because it is the legal document that governs the merger.

Effects of the Merger

The merger agreement provides for the merger of merger sub with and into American Safety upon the terms and subject to the conditions set forth in the merger agreement and in accordance with the Companies Act 1981 of Bermuda (the “Companies Act”). American Safety will be the surviving company in the merger and will continue to do business following the merger as an indirect wholly-owned subsidiary of Fairfax. As a result of the merger, American Safety will cease to be a publicly-traded company.

Upon the terms and subject to the conditions set forth in the merger agreement, at the effective time, each common share (other than (i) common shares held in the treasury of American Safety or (ii) common shares owned by merger sub, Fairfax or any direct or indirect wholly-owned subsidiary of Fairfax immediately prior to the effective time) issued and outstanding immediately prior to the effective time will be converted into the right to receive the merger consideration, less any applicable withholding taxes.

At the effective time, each option to purchase common shares under the Company incentive plans that is outstanding and unexercised as of immediately prior to the effective time will become fully vested and exercisable. Each holder of an option to purchase common shares that is outstanding and unexercised as of the effective time will have the right to receive, in exchange for the cancelation of such option, a cash payment equal to the aggregate number of common shares issuable upon the exercise of such option multiplied by the amount (if any) by which $29.25 exceeds the exercise price of such option, without interest and less any applicable withholding taxes.

At the effective time, each restricted common share outstanding immediately prior to the effective time will become fully vested and canceled and converted into the right to receive $29.25 in cash, without interest and less any applicable withholding taxes.

Background of the Merger

The board and American Safety’s management (“management”) have regularly reviewed and considered business alternatives that could enhance shareholder value, including strategic alternatives, financing alternatives and opportunities for growth. Periodically, the board and management have received unsolicited expressions of interest from third parties regarding the acquisition of American Safety and have periodically discussed with various financial advisors potential transactions involving American Safety and other business alternatives as a means to enhance shareholder value.

At meetings of the board on March 5 and 6, 2012, the board and management discussed American Safety’s projected financial performance and challenges in the insurance industry, including weakening investment returns and the infrastructure costs that impacted the benefits of the premium growth American Safety had been experiencing. At meetings of the board on July 23 and 24, 2012, the board discussed with management the potential opportunities that existed for companies of size and scale comparable to American Safety to achieve significant improvement in return on equity and discussed strategic alternatives potentially available to American Safety, including a potential sale of American Safety. After discussion, the board instructed management to work with a financial advisor to develop for the board analyses of American Safety’s financial performance measured against peer companies.

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From August to early November of 2012, management met with five parties, one of which is referred to as “Party A”. These discussions were exploratory in nature and did not involve a substantive discussion of a potential acquisition of American Safety.

At meetings of the board on October 22 and 23, 2012, management discussed with the board materials comparing American Safety’s financial and common share price performance relative to its peer group. Management also discussed with the board management’s projections for American Safety’s expected financial performance, including the potential opportunities that existed for companies of size and scale comparable to American Safety to achieve significant improvement in return on equity. Management also described the meetings it had with the four parties that had previously expressed an interest in potentially acquiring American Safety, including that each party indicated that it would be interested in holding further discussions regarding a potential acquisition of American Safety and requested access to non-public information about American Safety. After further discussion, the board directed management to continue its preliminary discussions with these parties and a limited number of other parties that management determined, with the assistance of BofA Merrill Lynch, which had previously provided financial advice to American Safety, could be interested in potentially acquiring American Safety.

In November and December of 2012 and January of 2013, management held meetings to review the financial performance and business plan of American Safety with three of the parties it met with in August and October (including Party A), Fairfax, and three additional parties, after execution of confidentiality agreements with these parties.

In January 2013, Shearman & Sterling LLP (“Shearman & Sterling”) was retained as outside legal counsel to American Safety in connection with a possible sale of American Safety.

During meetings of the board on January 21 and 22, 2013, representatives of BofA Merrill Lynch and Shearman & Sterling disclosed to the board relationships the two firms had with parties interested in potentially acquiring American Safety, including Fairfax. Representatives of Shearman & Sterling reviewed with the board its fiduciary duties in the context of a potential sale of American Safety and representatives of BofA Merrill Lynch provided an overview of financial performance of companies in the insurance industry generally and certain other information. Representatives of BofA Merrill Lynch also discussed with the board its views as to the level of interest in acquiring American Safety held by the parties that had met with management since the last board meeting and their views as to whether additional parties would be interested in such a transaction. After discussion of the foregoing and other matters, including the projected financial performance of American Safety, the board directed management, with the assistance of BofA Merrill Lynch, to continue discussions with those parties that had met with management and expressed an interest in further exploring a possible acquisition of American Safety, as well as additional parties BofA Merrill Lynch identified for the board.

On January 25, 2013, representatives of Shearman & Sterling discussed with the non-management directors the role of the board, management and American Safety’s financial advisor in connection with any process that might lead to a sale of American Safety.

Throughout February and early March of 2013, confidentiality agreements were executed with four additional parties interested in potentially acquiring American Safety. In February, BofA Merrill Lynch, at the direction of the board, requested that each party that had previously executed a confidentiality agreement and continued to express interest in potentially acquiring American Safety submit a preliminary, non-binding indication of interest on March 5, 2013. Parties that had signed confidentiality agreements were given access to certain limited non-public information to assist them in developing a preliminary valuation of American Safety.

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During a meeting of the board on March 4, 2013, in which representatives of BofA Merrill Lynch and Shearman & Sterling participated, representatives of BofA Merrill Lynch provided the board with an update on the discussions it and management had been having with the parties interested in potentially acquiring American Safety.

On March 5, 2013, Party A submitted a preliminary non-binding indication of interest of $27.00 per share. Although no other indications of interest were received at this time, certain parties indicated that they would require additional time to conduct due diligence in order to develop a preliminary indication of interest.

Also on March 5, 2013, Catalina Holdings (Bermuda) Ltd. (“Catalina”) filed a Schedule 13D stating that it had purchased an aggregate of 548,390 common shares because it believed the common shares were undervalued and represented an attractive investment opportunity. Catalina further stated, among other things, that it expected to engage in discussions with management, the board, other shareholders of American Safety and other relevant parties concerning the business, assets, strategy and future plans of American Safety, possibly including proposing or considering sales of a material amount of assets of American Safety or its subsidiaries. Catalina also indicated that it might propose a change in the board or management of American Safety.

On March 6, 2013, a representative of Catalina contacted management, indicating that Catalina was interested in potentially acquiring American Safety. Catalina had not previously contacted American Safety.

On March 7, 2013, representatives of BofA Merrill Lynch and Shearman & Sterling discussed with the board the Schedule 13D filed by Catalina and its potential impact on the board’s consideration of a possible sale of American Safety. After discussion, the board expressed the view that BofA Merrill Lynch should invite Catalina into the process pursuant to which parties were exploring the possibility of proposing to acquire American Safety and management should issue a press release announcing the fact that American Safety had been exploring strategic alternatives. BofA Merrill Lynch subsequently contacted Catalina to invite them to participate in the process, consistent with other parties considering a potential acquisition of American Safety.

On March 13, 2013, American Safety issued a press release announcing that the board had been undertaking a review of strategic alternatives available to American Safety, including a potential sale of American Safety.

Following the press release, throughout March of 2013, representatives of BofA Merrill Lynch were contacted by additional parties expressing an interest in potentially acquiring American Safety. Throughout March and April of 2013, American Safety entered into confidentiality agreements with eleven parties, which included Catalina and parties referred to as “Party B,” “Party C,” and “Party D”.

In late March of 2013, representatives of Party A contacted representatives of BofA Merrill Lynch, stating that they were withdrawing from the process as they decided they were unwilling to move forward with their $27.00 per share proposal.

On March 17, 2013, BofA Merrill Lynch, at the direction of the board, requested that the parties that had executed confidentiality agreements and remained interested in pursuing a potential transaction with American Safety submit preliminary, non-binding indications of interest on April 8, 2013. These parties were given access to additional non-public information regarding American Safety and its business.

Between March 17, 2013 and April 8, 2013, interested parties met with members of management and conducted due diligence in anticipation of submitting preliminary, non-binding indications of interest on April 8, 2013.

On April 8, 2013, American Safety received six preliminary, non-binding indications of interest, including from Fairfax. Fairfax indicated it would be willing to acquire American Safety at a price per share of $29.10, before taking into account the vesting of American Safety’s outstanding restricted common shares upon the consummation of such acquisition. For purposes of comparing this proposal to others American Safety received, the per share price was adjusted to give effect to the vesting of American Safety’s outstanding restricted common shares upon the consummation of such acquisition, which resulted in an implied price per share of approximately $27.55. Each of the proposals submitted was subject to completion of customary due diligence and negotiation of definitive documentation.

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At a meeting of the board on April 10, 2013, representatives of BofA Merrill Lynch summarized for the board the six preliminary, non-binding indications of interest received on April 8, 2013, and representatives of Shearman & Sterling reviewed with the board its fiduciary duties in the context of a potential sale of American Safety. Following discussion, including of the specific terms of each proposal, the board determined to invite each of the six parties that had submitted a preliminary indication of interest on April 8, 2013 to conduct additional due diligence on American Safety and, to the extent it wished to do so, to submit final proposals as promptly as practicable.

During the months of April and May of 2013, members of management and representatives of BofA Merrill Lynch met with each of the six parties that had submitted preliminary indications of interest on April 8, 2013 to discuss their proposals.

On May 6, 2013, Catalina’s financial advisor contacted a representative of BofA Merrill Lynch to reaffirm the proposal it had submitted on April 8, 2013 and request the ability to partner with a third party to potentially improve its ability to submit a more competitive proposal to acquire American Safety. American Safety’s management approved this request and after execution of a confidentiality agreement, the proposed partner was given access to diligence materials and met with management, and Catalina and its partner were permitted to share information with each other.

On May 14, 2013, representatives of Fairfax contacted representatives of BofA Merrill Lynch and stated that they had completed sufficient due diligence on American Safety to be prepared to acquire American Safety at a price of $27.50 per share taking into account the vesting of American Safety’s outstanding restricted common shares, provided that American Safety granted them exclusivity.

On May 15, 2013, during a conference call in which the board, BofA Merrill Lynch and Shearman & Sterling participated, representatives of BofA Merrill Lynch discussed with the board their conversation with Fairfax the previous day. After discussing the status of the other potential purchasers’ expressed interest in a possible acquisition of American Safety, the board discussed the fact that it would not be prepared to consider granting Fairfax exclusivity at that time unless Fairfax were to increase the price at which it proposed to acquire American Safety from $27.50 to at least $29.50 per share, which BofA Merrill Lynch communicated to Fairfax. Fairfax indicated to BofA Merrill Lynch that it was not prepared to offer $29.50 per share at that time, but would continue its evaluation of American Safety based on further due diligence.

On May 15, 2013, BofA Merrill Lynch, at the direction of the board, solicited final proposals for submission on May 30, 2013 from the six parties that had submitted preliminary, non-binding indications of interest on April 8 and distributed to these parties a draft merger agreement prepared by Shearman & Sterling in consultation with American Safety (the “draft merger agreement”).

On May 14, 2013, Tower Group International, Ltd. (“Tower”) contacted a representative of BofA Merrill Lynch expressing an interest in potentially acquiring all or a portion of American Safety. American Safety executed a confidentiality agreement with Tower, and Tower subsequently commenced its due diligence review of American Safety and met with management on May 20 and 21, 2013. Following the management presentation, Tower continued to express its interest in potentially acquiring either all of American Safety or only those assets related to American Safety’s reinsurance business, which is operated by American Safety Reinsurance Ltd., a subsidiary of American Safety (“ASR”). As representatives of Fairfax had previously communicated to representatives of BofA Merrill Lynch that they would not be interested in continuing to write new reinsurance business at ASR, at the direction of management, BofA Merrill Lynch suggested to Fairfax and Tower that they consider partnering in the submission of a final indication of interest, and Tower and Fairfax subsequently commenced discussions concerning the possibility of a mutually agreeable transaction.

On May 22, 2013, Party B contacted a representative of BofA Merrill Lynch to request the ability to partner with a third party to potentially improve its ability to submit a more competitive proposal to acquire American

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Safety. American Safety’s management approved this request and after execution of a confidentiality agreement, the proposed partner was given access to diligence materials and Party B and its partner were permitted to share information with each other.

On May 24, 2013, a representative of Fairfax contacted BofA Merrill Lynch, stating that Fairfax was considering increasing the per share price at which it would be prepared to acquire American Safety from the price indicated on April 8, 2013, provided that American Safety agreed to grant Fairfax exclusivity. In addition, the representative of Fairfax stated that Fairfax and Tower were close to reaching an agreement regarding the economic terms of the sale of ASR to Tower simultaneously with, or shortly following, the closing of the merger should Fairfax acquire American Safety. The representative of Fairfax confirmed that the consummation of the transaction with Tower would not be a condition to Fairfax’s obligation to consummate its acquisition of American Safety. Later that day, representatives of BofA Merrill Lynch discussed Fairfax’s statements with the board and representatives of Shearman & Sterling. After discussion, the board expressed the view that there was no compelling reason to grant exclusivity to Fairfax at such time and that the board would instead evaluate all proposals to acquire American Safety to be submitted on May 30, 2013.

On May 28, 2013, counsel to Catalina delivered to Shearman & Sterling a mark-up of the draft merger agreement. In addition, Fairfax submitted to BofA Merrill Lynch a mark-up of the draft merger agreement together with its proposal to acquire American Safety at price per share of $29.25, subject to confirmation that there was no decrease in the book value of American Safety’s investment portfolio since March 31, 2013 and requested that American Safety negotiate exclusively with Fairfax. Representatives of Shearman & Sterling separately contacted counsel to Catalina and Torys LLP (“Torys”), counsel to Fairfax, to discuss their respective mark-ups of the draft merger agreement.

On May 30, 2013, Catalina submitted a proposal to purchase 100% of the common shares of American Safety for a price per share of $29.00, a revised mark-up of the draft merger agreement, which addressed certain of the points discussed by Shearman & Sterling and counsel to Catalina, and documentation evidencing the debt financing it had obtained to finance a portion of the purchase price. Fairfax reiterated its proposal to purchase 100% of the common shares of American Safety for a price per share of $29.25 per share and a revised mark-up of the draft merger agreement, which addressed certain of the points discussed by Shearman & Sterling and Torys. Party C submitted a proposal to acquire American Safety at $29.00 per share, subject to additional due diligence but failed to submit a mark-up of the draft merger agreement.

On May 31, 2013, representatives of BofA Merrill Lynch, Shearman & Sterling and American Safety’s Oklahoma regulatory counsel Kerr, Irvine, Rhodes & Ables discussed with the board the proposals received to date. Representatives of BofA Merrill Lynch reported to the board that prior to the board meeting Fairfax had revised their proposal to remove any conditionality regarding the value of American Safety’s investment portfolio. A representative of Kerr, Irvine, Rhodes & Ables described for the board the approvals required to be obtained from the Oklahoma Insurance Department to consummate a sale of American Safety to either of the parties that had submitted definitive proposals. After discussion, the board determined not to grant exclusivity to Fairfax and to proceed only with Fairfax and Catalina, the only parties that had submitted definitive proposals not subject to further due diligence, and the board also directed BofA Merrill Lynch to contact each of Fairfax and Catalina to determine whether their proposals were their “best and final” offers.

Following the conclusion of the meeting, representatives of BofA Merrill Lynch contacted Fairfax and the financial advisor to Catalina and both Fairfax and Catalina’s financial advisor confirmed that, in fact, each party’s proposal was its “best and final” offer. In addition, Party D verbally indicated an implied range of interest between $26.74 and $27.70 per share, which was subject to further due diligence, without submitting any written proposal or mark-up of the draft merger agreement. Shearman & Sterling delivered revised draft merger agreements to each of Torys and the legal counsel to Catalina.

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On June 1, 2013, Party C submitted a mark-up of the draft merger agreement and confirmed that its proposal of $29.00 per share remained subject to further due diligence. Party B submitted a proposal of $27.44 per share and a mark-up of the draft merger agreement and confirmed that its proposal was subject to further due diligence.

On June 1, 2013, there were separate conference calls between representatives of Shearman & Sterling and each of counsel to Catalina and Torys for purposes of negotiating the terms of their respective draft merger agreements. Later that day, Torys provided a revised draft merger agreement to Shearman & Sterling.

At a meeting of the board on June 2, 2013, which representatives of BofA Merrill Lynch and Shearman & Sterling attended, the board considered the proposals submitted to BofA Merrill Lynch for the acquisition of American Safety. Representatives of Shearman & Sterling discussed with the members of the board their fiduciary duties in the context of a potential sale of American Safety and certain other process considerations. Representatives of BofA Merrill Lynch described the process it and management had undertaken at the direction of the board that led to the submission of proposals to acquire American Safety, including that 39 parties either contacted, or were contacted by, American Safety or BofA Merrill Lynch, and that 26 parties executed confidentiality agreements. In addition, representatives of BofA Merrill Lynch reviewed with the board the proposals received to date, and confirmed that the two parties that had submitted definitive proposals, Fairfax and Catalina, had confirmed that the proposals submitted on May 28 and 30, 2013, represented their “best and final” offers. Representatives of Shearman & Sterling discussed the status of their negotiations with each of Torys and legal counsel to Catalina, including the limited number of remaining open issues on the draft merger agreements.

The board discussed the proposals received from Party B, Party C, and Party D, as well as the relative merits of the proposals submitted by Fairfax and Catalina, including that: Fairfax proposed to acquire American Safety at a higher per share price than Catalina; the consummation of a sale of American Safety to Fairfax was not conditioned on the consummation of the sale by Fairfax of American Safety’s reinsurance business to Tower; and the board’s determination that a sale of American Safety to Fairfax had greater certainty of being approved by the applicable regulators in a shorter time period than a sale of American Safety to Catalina.

BofA Merrill Lynch then reviewed with the board, among other things, its financial analysis of the merger consideration proposed by Fairfax and delivered to the board an oral opinion, which was confirmed by delivery of a written opinion dated June 2, 2013, to the effect that, as of that date and based on and subject to various assumptions and limitations described in its opinion, such merger consideration to be received by American Safety’s shareholders was fair, from a financial point of view, to such shareholders.

Following further discussion, the board unanimously determined that pursuing a transaction with Fairfax would be in the best interest of American Safety and its shareholders and directed representatives of Shearman & Sterling to conclude negotiations of the merger agreement with Torys within certain parameters discussed with the board. On June 2, 2013, Shearman & Sterling continued to negotiate the definitive merger agreement with Torys, within the parameters set by the board.

On June 3, 2013, American Safety announced that it entered into the merger agreement with Fairfax pursuant to which Fairfax would acquire American Safety at a price per share of $29.25 in cash.

Reasons for the Merger

In evaluating the merger agreement and the merger, the board consulted with our management team and our outside legal and financial advisers and considered a number of factors weighing in favor of the merger, including, among others, the material factors set forth below (the order in which the following factors appear does not reflect any relative significance).

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The board also considered, among others, the following potentially negative factors in determining whether to approve the merger agreement (the order in which the following factors appear does not reflect any relative significance).

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The above discussion of the information and factors considered by the board includes the principal information and factors, both positive and negative, considered by the board in its evaluation of the merger agreement and the merger. The above discussion is not intended to be exhaustive and may not include all of the information and factors considered by the board. After considering the above factors, the board concluded that, in the aggregate, the positive factors relating to the merger agreement and merger significantly outweighed the potential negative factors.

In view of the variety of factors considered in connection with its evaluation, and the complexity of these matters, the board did not quantify or assign relative or specific weights to the factors considered in reaching its conclusion, nor did it consider it practical to do so. Rather, the board made its recommendation based on the totality of the information presented to and considered by it and the investigations it conducted. In addition, individual directors may have given different weights to different factors.

It should be noted that this explanation of the reasoning of the board and certain information presented in this section is forward-looking in nature and should be read in light of the factors discussed in the section titled “ Cautionary Statement Regarding Forward-Looking Information ” beginning on page 15 of this proxy statement.

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Recommendation of the Board

The board unanimously recommends that you vote “ FOR ” the proposal to approve and adopt the merger agreement and to approve the merger, “ FOR ” the adjournment proposal and “ FOR ” the merger-related compensation proposal.

Opinion of American Safety’s Financial Advisor

American Safety has retained BofA Merrill Lynch to act as American Safety’s financial advisor in connection with the merger. BofA Merrill Lynch is an internationally recognized investment banking firm which is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. American Safety selected BofA Merrill Lynch to act as American Safety’s financial advisor in connection with the merger on the basis of BofA Merrill Lynch’s experience in transactions similar to the merger and its reputation in the investment community.

On June 2, 2013, at a meeting of American Safety’s board held to evaluate the merger, BofA Merrill Lynch delivered to American Safety’s board an oral opinion, which was confirmed by delivery of a written opinion dated June 2, 2013, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations described in its opinion, the merger consideration to be received by holders of American Safety common shares was fair, from a financial point of view, to such holders.

The full text of BofA Merrill Lynch’s written opinion to American Safety’s board, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex B to this document and is incorporated by reference herein in its entirety. The following summary of BofA Merrill Lynch’s opinion is qualified in its entirety by reference to the full text of the opinion. BofA Merrill Lynch delivered its opinion to American Safety’s board for the benefit and use of American Safety’s board (in its capacity as such) in connection with and for purposes of its evaluation of the merger consideration from a financial point of view. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to American Safety or in which American Safety might engage or as to the underlying business decision of American Safety to proceed with or effect the merger. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and does not constitute a recommendation to any shareholder as to how to vote or act in connection with the proposed merger or any related matter.

In connection with rendering its opinion, BofA Merrill Lynch:

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In arriving at its opinion, BofA Merrill Lynch assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with it and relied upon the assurances of the management of American Safety that it was not aware of any facts or circumstances that would make such information or data inaccurate or misleading in any material respect. With respect to the American Safety management forecasts, BofA Merrill Lynch was advised by American Safety, and assumed, that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of American Safety as to the future financial performance of American Safety. BofA Merrill Lynch did not make and was not provided with any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of American Safety, nor did it make any physical inspection of the properties or assets of American Safety. BofA Merrill Lynch did not evaluate the solvency or fair value of American Safety or Fairfax under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. BofA Merrill Lynch is not an expert in the evaluation of reserves for property and casualty insurance losses and loss adjustment expenses, and it did not make an independent evaluation of the adequacy of the reserves of American Safety. In that regard, BofA Merrill Lynch did not make any analysis of, and expressed no opinion as to, the adequacy of the losses and loss adjustment expense reserves for American Safety. BofA Merrill Lynch assumed, at the direction of American Safety, that the merger would be consummated in accordance with its terms, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the merger, no delay, limitation, restriction or condition, including any divestiture requirements or amendments or modifications, would be imposed that would have an adverse effect on American Safety or the contemplated benefits of the merger. BofA Merrill Lynch also assumed, at the direction of American Safety, that the final executed Agreement and Plan of Merger would not differ in any material respect from the draft agreement reviewed by BofA Merrill Lynch on May 31, 2013 and that the merger agreement would not contain any provisions inconsistent with such draft agreement or the final executed Agreement and Plan of Merger or any additional material provisions.

BofA Merrill Lynch expressed no view or opinion as to any terms or other aspects of the merger (other than the merger consideration to the extent expressly specified in its opinion), including, without limitation, the form or structure of the merger. BofA Merrill Lynch’s opinion was limited to the fairness, from a financial point of view, of the merger consideration to be received by the holders of American Safety common shares, and no opinion or view was expressed with respect to any consideration received in connection with the merger by the holders of any other class of securities, creditors or other constituencies of any party. In addition, no opinion or view was expressed with respect to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to any of the officers, directors or employees of any party to the merger, or class of such persons, relative to the merger consideration. Furthermore, no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to American Safety or in which American Safety might engage or as to the underlying business decision of American Safety to proceed with or effect the merger. In addition, BofA Merrill Lynch expressed no opinion or recommendation as to how any shareholder should vote or act in connection with the merger or any related matter. Except as

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described above, American Safety imposed no other limitations on the investigations made or procedures followed by BofA Merrill Lynch in rendering its opinion.

BofA Merrill Lynch’s opinion was necessarily based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to BofA Merrill Lynch as of, the date of its opinion. It should be understood that subsequent developments may affect its opinion, and BofA Merrill Lynch does not have any obligation to update, revise or reaffirm its opinion. The issuance of BofA Merrill Lynch’s opinion was approved by BofA Merrill Lynch’s Americas Fairness Opinion Review Committee.

The following represents a brief summary of the material financial analyses presented by BofA Merrill Lynch to American Safety’s board in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by BofA Merrill Lynch, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by BofA Merrill Lynch. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by BofA Merrill Lynch.

American Safety Financial Analyses

Selected Publicly Traded Companies Analysis. BofA Merrill Lynch reviewed publicly available financial and stock market information for American Safety and the following seventeen publicly traded companies in the large cap and small cap property and casualty insurance business, which, based on its professional judgment and experience, BofA Merrill Lynch deemed relevant to consider in relation to American Safety and the merger:

Large Cap Composite

Small Cap Composite

BofA Merrill Lynch reviewed, among other things, earnings per share multiples based on closing stock prices on May 31, 2013, of the selected publicly traded companies as a multiple of calendar year 2013 estimated fully diluted earnings per share, commonly referred to as EPS. The range of EPS multiples for the selected publicly traded companies for calendar year 2013 was 8.5x to 20.4x for the large cap composite and 11.1x to 26.0x for the small cap composite. BofA Merrill Lynch also reviewed primary book value per share multiples, based on closing stock prices on May 31, 2013, of the selected publicly traded companies as a multiple of March 31, 2013

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primary book value per share. The range of primary book value per share multiples for the selected publicly traded companies based on March 31, 2013 primary book value per share was 0.70x to 1.92x for the large cap composite and 0.69x to 1.57x for the small cap composite. BofA Merrill Lynch then applied calendar year 2013 EPS multiples of 10.0x to 12.0x derived from the selected publicly traded companies to American Safety’s calendar year 2013 estimated fully diluted EPS based on both American Safety’s management estimates and research analyst estimates and applied multiples of 0.65x to 0.85x derived from the selected publicly traded companies to American Safety’s March 31, 2013 primary book value per share. Estimated financial data of the selected publicly traded companies were based on publicly available research analysts’ estimates, and estimated financial data of American Safety were based on the American Safety management forecasts. This analysis indicated the following approximate implied per share equity value reference ranges for American Safety, as compared to the merger consideration:

No company used in this analysis is identical or directly comparable to American Safety. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading or other values of the companies to which American Safety was compared.

Selected Precedent Transactions Analysis . BofA Merrill Lynch reviewed, to the extent publicly available, financial information relating to the following thirteen selected transactions involving companies in the property and casualty insurance business, which, based on its professional judgment and experience, BofA Merrill Lynch deemed relevant to consider in relation to American Safety and the merger:

BofA Merrill Lynch reviewed transaction values, calculated as the equity value implied for the target company, based on the consideration payable in the selected transaction, as a multiple of the target company’s one year forward operating earnings and as a multiple of the target company’s fully diluted book value for the most recent quarter ending before the date on which the transaction was announced. The range of forward operating earnings multiples for the selected precedent transactions was 3.1x to 13.7x. The range of fully diluted book value multiples for the selected precedent transactions was 0.55x to 1.66x. BofA Merrill Lynch then applied one year forward operating earnings multiples of 11.0x to 13.0x derived from the selected transactions to American Safety’s calendar year 2013 estimated fully diluted EPS based both on American Safety’s management estimates and research analyst estimates and applied fully diluted book value multiples of 0.75x to 0.95x derived from the

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selected transactions to American Safety’s March 31, 2013 primary book value per share. Estimated financial data of the selected transactions were based on publicly available information at the time of announcement of the relevant transaction. Estimated financial data of American Safety were based on the American Safety management forecasts. This analysis indicated the following approximate implied per share equity value reference ranges for American Safety, as compared to the merger consideration:

No company, business or transaction used in this analysis is identical or directly comparable to American Safety or the merger. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the acquisition or other values of the companies, business segments or transactions to which American Safety and the merger were compared.

Discounted Cash Flow Analysis. BofA Merrill Lynch performed a discounted cash flow analysis of American Safety to calculate the estimated present value of the standalone, distributable, levered cash flows that American Safety was forecasted to generate during American Safety’s fiscal years 2013 through 2017 based on the American Safety management forecasts, a summary of which is set forth under “American Safety Unaudited Prospective Financial Information” below. BofA Merrill Lynch calculated terminal values for American Safety by applying terminal multiples of 0.80x to 1.00x to American Safety’s December 31, 2017 estimated equity value. The cash flows and terminal values were then discounted to present value as of January 1, 2013 using discount rates ranging from 10.0% to 12.0%, which were based on an estimate of American Safety’s cost of equity. This analysis indicated the following approximate implied per share equity value reference ranges for American Safety as compared to the merger consideration:

Other Factors

In rendering its opinion, BofA Merrill Lynch also reviewed and considered other factors, including:

Miscellaneous

As noted above, the discussion set forth above is a summary of the material financial analyses presented by BofA Merrill Lynch to American Safety’s board in connection with its opinion and is not a comprehensive description of all analyses undertaken by BofA Merrill Lynch in connection with its opinion. The preparation of

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a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. BofA Merrill Lynch believes that its analyses summarized above must be considered as a whole. BofA Merrill Lynch further believes that selecting portions of its analyses and the factors considered or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying BofA Merrill Lynch’s analyses and opinion. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis referred to in the summary.

In performing its analyses, BofA Merrill Lynch considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of American Safety. The estimates of the future performance of American Safety in or underlying BofA Merrill Lynch’s analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by BofA Merrill Lynch’s analyses. These analyses were prepared solely as part of BofA Merrill Lynch’s analysis of the fairness, from a financial point of view, of the merger consideration and were provided to American Safety’s board in connection with the delivery of BofA Merrill Lynch’s opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently subject to substantial uncertainty and should not be taken to be BofA Merrill Lynch’s view of the actual values of American Safety.

The type and amount of consideration payable in the merger was determined through negotiations between American Safety and Fairfax, rather than by any financial advisor, and was approved by American Safety’s board. The decision to enter into the merger agreement was solely that of American Safety’s board. As described above, BofA Merrill Lynch’s opinion and analyses were only one of many factors considered by American Safety’s board in its evaluation of the proposed merger and should not be viewed as determinative of the views of American Safety’s board or management with respect to the merger or the merger consideration.

American Safety has agreed to pay BofA Merrill Lynch for its services in connection with the merger an aggregate fee of approximately $4.8 million to $5.7 million, a portion of which was payable in connection with the rendering of its opinion and a significant portion of which is contingent upon the completion of the merger. American Safety also has agreed to reimburse BofA Merrill Lynch for its expenses incurred in connection with BofA Merrill Lynch’s engagement and to indemnify BofA Merrill Lynch, any controlling person of BofA Merrill Lynch and each of their respective directors, officers, employees, agents and affiliates against specified liabilities, including liabilities under the federal securities laws.

BofA Merrill Lynch and its affiliates comprise a full service securities firm and commercial bank engaged in securities, commodities and derivatives trading, foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and financial advisory services and other commercial services and products to a wide range of companies, governments and individuals. In the ordinary course of their businesses, BofA Merrill Lynch and its affiliates invest on a principal basis or on behalf of customers or manage funds that invest, make or hold long or short positions, finance positions or trade or otherwise effect transactions in the equity, debt or other securities or financial instruments (including derivatives, bank loans or other obligations) of American Safety, Fairfax and certain of their respective affiliates.

BofA Merrill Lynch and its affiliates i n the past have provided, currently are providing, and in the future may provide investment banking, commercial banking and other financial services to Fairfax and certain of its affiliates and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as joint lead arranger and bookrunner for, and/or a lender under, certain credit or other facilities of, or loans to, Fairfax and/or certain of its affiliates, (ii) having acted or acting as manager or

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underwriter for various debt offerings of Fairfax and/or certain of its affiliates, (iii) having acted or acting as a dealer-manager in connection with certain debt and/or equity tender offers for Fairfax and/or certain of its affiliates, (iv) having acted as a financial advisor to an affiliate of Fairfax in connection with a merger and acquisition transaction, (v) having provided or providing certain swap, derivatives and foreign exchange trading services to Fairfax and/or certain of its affiliates, and (vi) having provided or providing certain treasury and trade management services and products to Fairfax and/or its affiliates. From June 1, 2011 through May 31, 2013, BofA Merrill Lynch and its affiliates received or derived, directly or indirectly, aggregate revenues of approximately $40.5 million from Fairfax and its affiliates for commercial, corporate and investment banking services.