Acadian Timber : Annual Information Form (2025 Annual Information Form VF)

About this update from Acadian Timber Corp.

ACADIAN TIMBER CORP. Annual Information Form March 27, 2026 TABLE OF CONTENTS CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS 1 THE CORPORATION 2 BUSINESS OF THE CORPORATION 3 Overview of Acadian's Business 3 Development of the Business Over the Last Three Years 3 DESCRIPTION OF THE BUSINESS 4 Products and Services 4 Timberland Assets 5 Acadian's Business Strengths 8 Acadian's Business Strategy 9 Acadian's Operations 10 Forest Management 13 Regulatory Environment 14 Environmental Matters 14 Public Relations 15 RISK FACTORS 15 Risks Related to the Business and Industry 16 Risks Related to the Structure of the Corporation 22 CAPITAL STRUCTURE 23 Common Shares 23 Book-Entry Only System 23 DIRECTORS AND OFFICERS OF THE CORPORATION 23 Board of Directors 23 Officers of the Corporation 25 Ownership of Voting Securities 25 Cease Trade Orders or Bankruptcies 25 Penalties or Sanctions 25 Conflicts of Interest 26 DEBT FINANCING 26 PRINCIPAL AGREEMENTS 27 Crown Lands Services Agreement 27 Fibre Supply Agreement 27 DIVIDENDS AND DIVIDEND POLICY 29 Dividend Policy of the Corporation 29 Dividend Reinvestment Plan 29 MARKET FOR SECURITIES 30 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS 30 INTERESTS OF EXPERTS 30 TRANSFER AGENT AND REGISTRAR 30 MATERIAL CONTRACTS 30 LEGAL PROCEEDINGS 30 AUDIT COMMITTEE INFORMATION 31 Audit Committee Mandate 31 Composition of the Audit Committee 31 Relevant Education and Experience 31 Audit Committee Oversight 32 Pre-Approval Policies and Procedures 32 External Auditor Service Fees (by Category) 33 ADDITIONAL INFORMATION 33 GLOSSARY OF TERMS 34 SCHEDULE A ............................................................................................................................................................... A-1 CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS This Annual Information Form ("AIF") contains forward-looking information and statements within the meaning of applicable Canadian securities laws that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Acadian Timber Corp. and its subsidiaries (collectively, "Acadian"), or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking information is included in this AIF and includes statements made in sections entitled "Description of the Business", "Acadian's Business Strengths", "Risk Factors - Land Claims", and "Legal Proceedings", and without limitation other statements regarding management's beliefs, intentions, results, performance, goals, achievements, future events, plans and objectives, business strategy, growth strategy and prospects, access to capital, liquidity and trading volumes, dividends, taxes, capital expenditures, projected costs, market trends and similar statements concerning anticipated future events, results, achievements, circumstances, performance or expectations that are not historical facts. All forward-looking statements in this AIF are qualified by these cautionary statements. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, should not be unduly relied upon and will not necessarily be accurate indications of whether or not such results will be achieved. Actual results may vary. These forward-looking statements, include, but are not limited to: Expectations regarding future estimates of annual harvest based on forest management plans, which may be impacted by weather conditions, timber growth cycles, availability of trained labour, insect infestations, disease outbreak, forestry and environmental regulations, variability associated with forestry measurements or risks related to climate changes. Expectations regarding the number and timing of carbon credits that will be successfully registered and available for sale. Actual credit issuances will be adjusted each reporting period based on actual harvesting, natural disturbances and other factors, as well as periodic updating for inventory and verification activities. Expectations regarding potential future revenue to be earned from newly acquired timberlands through either expanding harvesting operations or realizing other land use revenue opportunities, which may be impacted by future contractor availability, product demand, pricing and end use markets. Expectations regarding future production volumes and costs associated with internal harvesting operations which may be impacted by operational efficiency, the regional supply of skilled operators, product demand, pricing and end use markets. Expectations regarding the outcome of ongoing litigation, which may be impacted by negotiations and actions taken by the Province of New Brunswick or the Attorney General of Canada, judicial decisions in this matter or other matters that may create precedent. Expectations regarding the impacts of escalated duties on softwood lumber and tariffs or potential tariffs levied on U.S. imports from Canada, which may include direct impacts related to changes to the price of and demand for Acadian's products, and indirect impacts associated with changes in the price of and demand for the products of Acadian's key customers and the greater economy. Other risks and factors are discussed in the section entitled "Risk Factors" beginning on page 16. Forward-looking information is based on various material factors or assumptions, which are based on information currently available to Acadian. Readers are cautioned that the preceding list of material factors or assumptions is not exhaustive. Although the forward-looking statements contained in this AIF are based upon what management believes are reasonable assumptions, Acadian cannot assure readers that actual results will be consistent with these forward-looking statements. The forward-looking statements contained in this AIF are made as of the date of this AIF based on information currently available to management and should not be relied upon as representing Acadian's views as of any date subsequent to the date of this AIF. Acadian assumes no obligation to update or revise these forward-looking statements to reflect new information, events, circumstances or otherwise, except as required by applicable law. THE CORPORATION Acadian Timber Corp. (the "Corporation" or "Acadian") is governed by the Canada Business Corporation Act (the "CBCA") pursuant to articles of arrangement dated January 1, 2010 (the "Articles"). The Corporation is a reporting issuer and its Common Shares are publicly traded on the Toronto Stock Exchange (the "TSX") under the stock symbol "ADN". The principal and head office of the Corporation is located at 6 Crabtree Ave., Edmundston, New Brunswick, E3V 3K5. The following chart illustrates the structure of Acadian (including the jurisdiction of establishment/incorporation of the various entities) as of December 31, 2025: BUSINESS OF THE CORPORATION OVERVIEW OF ACADIAN'S BUSINESS Acadian is one of the largest timberland owners in Eastern Canada and the Northeastern U.S. and has a total of approximately 2.4 million acres of land under management. Acadian directly and indirectly through its subsidiaries, owns and manages approximately 775,000 acres of freehold timberlands in New Brunswick ("New Brunswick Timberlands") and approximately 300,000 acres of freehold timberlands in Maine ("Maine Timberlands") and provides timber services relating to approximately 1.3 million acres of Crown licensed timberlands in New Brunswick. Acadian's primary business is forest management and the production of timber products, including softwood and hardwood sawlogs, pulpwood, and biomass by-products, sold to approximately 85 regional customers. Acadian also generates income through other operations, including real estate and environmental solutions. DEVELOPMENT OF THE BUSINESS OVER THE LAST THREE YEARS Non-timber income While forest management continues to be Acadian's priority, beginning in 2020 Acadian increased its focus on opportunities to grow its non-timber income. During 2021, Acadian executed its first carbon development and marketing agreement to develop voluntary carbon credits on the portion of its Maine Timberlands that is subject to a working forest conservation easement. The first significant sales occurred in 2024 (see "Description of the Business - Environmental Solutions"). In November 2024, Acadian installed a meteorological tower to collect wind data on the New Brunswick land base. In 2025 Acadian initiated environmental studies and associated bird and wildlife monitoring necessary for renewable energy projects, and submitted a proposal for one such renewable energy project to the regional energy utility. These investments enable further exploration of the opportunities available to Acadian to participate in the renewable energy sector. In addition to these activities, Acadian has identified multiple commercial, recreational, and residential real estate development opportunities in New Brunswick and Maine, which are currently in varying stages of feasibility, permitting, and development. Acquisitions On March 14, 2024, Acadian completed the acquisition of approximately 16,000 acres of timberland in New Brunswick at a price of $9.0 million. The timberlands are close in proximity to Acadian's existing operations and customer base. The property is well stocked, benefiting from historical silviculture investments, which will allow Acadian to expand its harvesting operations. The property also presents significant potential for revenue diversification through other land use opportunities With the goal of expanding harvesting capacity in Maine and reducing operating costs, Acadian commenced its own logging operations in 2025. In January 2025, Acadian purchased several pieces of harvesting equipment for $2.4 million and hired equipment operators. On February 28, 2025, Acadian completed the purchase of certain logging and related assets of A & A Brochu, LLC ("A & A Brochu") and its affiliates for a total price of U.S.$4.8 million to further expand its internal harvesting operations. The assets include harvesting, trucking and road maintenance equipment and related real estate which, combined with an established workforce, constitute a portion of A & A Brochu's logging operation in Maine. DESCRIPTION OF THE BUSINESS PRODUCTS AND SERVICES Forest Products Acadian's timberlands have been used for timber production for more than a century and continue to be managed sustainably. Annual harvesting has been consistent with long-term forest management plans and the operations in both New Brunswick and Maine are certified under the Sustainable Forestry Initiative ® (SFI) Standard 1 . Acadian's timber products include softwood and hardwood sawlogs, pulpwood, and biomass by-products, sold to approximately 85 regional customers. Acadian engages in forest management, including planning, growing, harvesting, marketing, and sales of trees in order to realize value from its timberlands, selling its fibre to regional consumers including lumber mills, pulp and paper mills, and other buyers of primary forest products. Access to long-term, sustainable, high quality timber resources is important to Acadian's customers. Acadian strives to: (1) harvest timber in a cost-effective manner consistent with sound environmental and sustainable forestry practices; (2) optimize the product mix with effective marketing and merchandising; and (3) find new markets for its products. Management Services Acadian provides forest management and harvesting services on a contractual basis relating to approximately 1.3 million acres of Crown licensed timberlands in New Brunswick (see "Principal Agreements - Crown Lands Services Agreement"). Real Estate Acadian earns additional income from its timberlands through land sales, private and commercial leases to third parties, and the sale of access passes for recreational activities such as fishing, hunting and camping. Acadian continuously evaluates higher and better use potential on its timberlands with a focus on opportunistic sales of properties that are of relatively low operational or strategic value to Acadian and do not risk, hinder, encumber, or disrupt current or future business activities and opportunities. Acadian enters into recreational land leases with individuals for waterfront lots, and into commercial leases for a variety of uses such as cell towers, commercial outfitting, and peat moss development. Complementing this program, Acadian is advancing real estate development opportunities within its land base, whereby properties may be sold to third parties for commercial, recreational, or other forms of development. Acadian also actively explores and evaluates renewable energy project opportunities, monitoring emerging markets and technologies. This approach ensures that Acadian remains well - positioned to capitalize on high - quality prospects that align with its long - term sustainability and growth objectives. In November 2024, Acadian installed a meteorological tower to collect wind data on the New Brunswick land base. In 2025 Acadian initiated environmental studies and associated bird and wildlife monitoring necessary for renewable energy projects. These investments enable further exploration of the opportunities available to Acadian to participate in the renewable energy sector. Environmental Solutions Environmental Solutions leverages the ecological functions of Acadian's land and the operational expertise of its team to address pressing environmental challenges, such as climate change and biodiversity. In line with these objectives, ‌ 1 SFI ® marks are registered marks owned by Sustainable Forestry Initiative Inc . Acadian has undertaken a voluntary carbon credit project which ensures carbon sequestration and provides environmental benefits on the portion of our Maine Timberlands that is subject to a working forest conservation easement. Acadian may continue to explore and potentially develop additional opportunities in the future. The existing project is registered on the ACR under the name Anew - Katahdin Forestry Project, and commits Acadian to balancing harvest and growth, long-term planning, periodic carbon inventory verification, and maintenance of the Acadian's sustainable forestry certification. On June 8, 2023, 770,071 voluntary carbon credits relating to the first reporting period of the project were registered and made available for sale. During 2024, 752,100 credits were sold at an average price of approximately U.S.$24/credit. The ACR has developed Version 2.1 of the Improved Forest Management protocol, which is fundamentally the same approach as the previous protocol but introduces dynamic baselines. Carbon credits assessed using the new protocol are expected to be more appealing to customers. Acadian's project is currently being transitioned to the new protocol, which has resulted in a delay in the registration process for the next tranche of carbon credits. Registration is expected in 2026 and is expected to result in approximately 0.4 million credits. The transition to the new protocol may result in slightly fewer total carbon credits being issued than was expected under the initial protocol. However, all credits generated are expected to be carbon removal credits, and no conservation credits will be generated. Actual credit issuances will be adjusted each reporting period based on actual harvesting, natural disturbances, and other factors, as well as periodic updating for inventory and verification activities. TIMBERLAND ASSETS The map below shows the location of Acadian's timberlands as well as the Crown Timber License that Acadian services. Acadian's operations are conducted entirely in New Brunswick and Maine. The land base is operated by management teams located in Edmundston and Plaster Rock, New Brunswick and Millinocket, Maine. Total merchantable inventory amounts to 34.1 million m 3 with an annual sustainable harvest volume of approximately 1.0 million m 3 . New Brunswick Timberlands Maine Timberlands Combined Land Area 775,000 acres 300,000 acres (2) 1,075,000 acres Productive Forested Area (1) 94% 94% 94% Notes: Productive Forested Area means land excluding roads, wetlands, water and other non-forested areas. Includes land managed under perpetual timber deeds covering approximately 9,000 acres. Benefits of Freehold Timberlands Revenue is generated primarily from owning and managing approximately 1.1 million acres of freehold timberlands and from providing land management services relating to approximately 1.3 million acres of Crown licensed timberlands. The location of freehold timberlands provides good market access into the Maritime, Quebec, and New England markets. Freehold timberlands typically have higher operating flexibility and stronger cash flows than the Crown land management activities due to the following factors: Ownership of Timber: Acadian captures the full economic benefit from freehold timberlands by its entitlement to the market selling price of the product. In addition, freehold timberlands enable their owner to take advantage of pricing increases that favourably impact financial returns. Harvest Flexibility: Although users of wood from Crown Lands are entitled to a certain amount of volume flexibility on an annual basis, freehold timberlands benefit from considerably greater flexibility with regard to volumes harvested, selection of harvest areas and product specification changes, allowing Acadian to harvest in response to market opportunities and customer demand. Export Markets: Acadian has the ability to export fibre from its freehold timberlands, enabling it to access markets in the U.S., Canada, and overseas. Fibre from New Brunswick Crown Lands is not generally exported from the province due to restrictions. Limited exports of Crown wood may occur on a case-by-case basis subject to government approval. Lower Administrative Costs: Freehold timberlands are subject to fewer restrictions than Crown Lands, and, accordingly, are not subject to the same administrative burden imposed by provincial legislation on Crown Lands. Therefore, administrative costs can be better controlled and maintained at lower levels. Conservation on Crown Lands: In Canada, efforts to establish conservation areas focus on Crown Lands and are driven by government, while conservation requirements on private lands are voluntary. Increased conservation lands may result in elevated pricing of products from Acadian's private lands. Alternative Land Uses: Acadian has flexibility with respect to the uses of its freehold timberlands, including land leases, land sales, and the development and sale of carbon credits. These uses may be complementary and additional to the traditional land use of timber harvesting, and may benefit from future population growth and economic development. New Brunswick Timberlands The New Brunswick Timberlands are freehold lands comprising approximately 775,000 acres in three large contiguous blocks of land, primarily in the Madawaska and Victoria counties of New Brunswick, which are currently owned by AT Limited Partnership. These lands have been used for timber production for more than 120 years. The New Brunswick Timberlands are characterized by high soil quality, with well drained glacial till, and are attractive for both farming and timber growth. The region's climate favours the development of tolerant hardwood forests, composed of sugar maple, yellow birch, red maple, and beech. Coniferous stands of balsam fir and red, white, and black spruce are also found across the region. Precipitation amounts in the region result in a relatively low frequency of forest fires. Approximately 94% of the New Brunswick Timberlands' total acreage is classified as productive forestland. The remaining area is comprised of roads, wetlands and water. Access to and throughout the New Brunswick Timberlands is supported by over 6,000 kms of roads. The New Brunswick Timberlands have approximately 23.7 million m 3 of merchantable timber, of which approximately 68% is softwood. In 2021, the New Brunswick Timberlands forest management plan was updated to reflect improved growth and information, and to align sustainable yield forecasting with customer product requirements. The current annual harvest forecast is as per the following table. Estimates of Merchantable Forest Inventory and Sustainable Harvest for New Brunswick Timberlands Indicator (thousands m 3 ) Softwood (3) Hardwood Total Inventory (1,2) 16,100 7,600 23,700 Annual harvest 2026-2030 (3) 492 251 743 Annual harvest 2031-2035 (3) 627 271 898 Notes: Management's current inventory estimate is based on assignment of forest stands to yield functions as part of the forest management planning process. Merchantable forest inventory includes all trees with a diameter greater than 10 cm (4 inches) measured at a height of 1.4 m (4.5 feet) from the ground, excluding limbs and tops, and cull trees. Annual harvest is based on the New Brunswick Timberlands forest management plan. Annual softwood harvest number includes a sustainable volume of spruce-fir saw material plus incidental pulpwood volumes resulting from sawlog harvesting plus volume of other softwoods. Total softwood harvest volumes include approximately 25% spruce-fir pulpwood. The forecast increase in annual harvest in 2031 reflects the age class structure of the forest and timing of operability of stands. Forest stands under 30 years of age make up approximately 34% of the New Brunswick Timberlands productive forest. These are typically regenerating, sapling and young stands. A significant portion of these younger forest stands are plantations and pre-commercial thinning areas. These treatment areas are strategic components for the wood supply requirement calculated as part of Acadian's long-term forest management planning process that has been in place since 1982. A five-year planning cycle is part of Acadian's adaptive management process used to ensure longterm sustainability of the forest resource. Maine Timberlands The Maine Timberlands are freehold lands and consist of approximately 300,000 acres located in north-central Maine, in Penobscot and Piscataquis counties. These lands have been used for timber production for over 120 years. Approximately 94% of the total acreage is considered productive. Access to and throughout the Maine Timberlands is supported by approximately 1,400 kms of both main roads and access roads developed for forest management purposes. In 2023, the Maine Timberlands forest management plan was updated to reflect improved growth information, and to align sustainable yield forecasting with customer product requirements. The Maine Timberlands have a merchantable inventory of approximately 11.3 million m 3 . The current annual harvest forecast is as per the following table. Estimates of Merchantable Forest Inventory and Sustainable Harvest for Maine Timberlands Indicator (thousands m 3 ) Softwood Hardwood Total Inventory (1) 7,800 3,400 11,200 Annual harvest 2026-2027 (2) 169 74 243 Annual harvest 2028-2032 (2) 191 67 258 Annual harvest 2033-2037 (2) 182 73 255 Notes: Management's current inventory estimate is based on assignment of forest stands to yield functions as part of the forest management planning process. Merchantable forest inventory includes all trees with a diameter greater than 10 cm (4 inches) measured at a height of 1.4 m (4.5 feet) from the ground, excluding limbs and tops, and cull trees. Annual harvest forecast is based on the Maine Timberlands forest management plan. Forest stands under 30 years of age make up approximately 29% of the Maine productive forest and are typically regenerating, sapling and young stands. Stands with merchantable timber generally are in immature through overmature development classes and comprise 62% of productive forest area. A significant portion of the younger stands include intensively managed areas that are contributing to harvest operations. ACADIAN'S BUSINESS STRENGTHS Management believes that the following business strengths will enable Acadian to maintain the stability of its financial performance and build upon its position as a leading supplier of primary forest products in its markets: Attractive Asset Class In contrast to depletable natural resources, management believes that timber resources can be managed on a sustainable basis to yield a predictable and stable volume of timber over an infinite period. Due to the natural growth of trees, value can be accumulated and stored in the form of unharvested timber over time. These characteristics of timberlands provide for stable, long-term cash flows and value appreciation over time. Diversified End-Use Markets A critical success factor for a timber business is having robust markets for all species and products present on its land base. Timberlands provide fibre for diverse solid and manufactured wood applications as well as energy production, the demand for which is naturally linked to population and economic growth. Acadian works with its customers to develop markets for all its products in order to utilize its resource to the maximum economic benefit and Acadian continues to seek new markets for its products. Large Scale of Operations Acadian owns approximately 1.1 million acres of freehold timberlands and manages, through the Crown Lands Services Agreement, approximately 1.3 million acres of land pursuant to the Carleton-Restigouche-Tobique Crown Timber License, issued by the Government of the Province of New Brunswick (the "Crown Timber License"). Large scale operations provide Acadian with the benefit of offering a reliable supply of roundwood to several large regional industrial consumers. Acadian has developed a reputation as a reliable, high-quality supplier of sawlogs, pulpwood, and niche products. Acadian's large timberland scale allows it to spread its costs over a large harvest volume and management area. Large scale operations also provide Acadian with a larger customer base and a broad range of regional market intelligence, which management believes increases the opportunity to get premium value for harvested roundwood. The scale of operations also provides stability for the contractor workforce that relies upon Acadian for their livelihood. Historical Silviculture Investment Acadian is expected to continue to benefit in the future from historical silviculture investments. Historical silviculture programs on the freehold timberlands were targeted towards softwood availability and included planting, pre-commercial thinning and softwood release treatments. The goal of silviculture investments is to encourage the rapid growth of high value species and increase both the yield and value of timber growing on Acadian's more productive land areas. Experienced Management Team Acadian has an accomplished management team with substantial experience in the timber industry and strong capability to carry out timber planning, harvesting, marketing, sales and distribution activities. Those leading operations each have over 25 years experience of operating timberlands in the northeast region. ACADIAN'S BUSINESS STRATEGY Acadian's business strategies are designed to maximize shareholder value, with an emphasis on enhancing the value of its timberland asset base, and are outlined below: Strong Safety Culture Acadian places a strong emphasis on safety responsibility and accountability and believes a good safety record is a leading indicator of success in the broader business. Excellence in safety performance contributes to good morale, employee retention, and sustainable production. Acadian uses leading indicators and regular management-employee-contractor interaction to ensure safety is a priority. Maintain a Low and Flexible Cost Structure Acadian's harvesting, transportation, and timberland management is largely performed by owner-operators and contractors in New Brunswick. This results in a flexible cost structure enabling Acadian to vary its harvesting levels to adapt to market conditions. This structure was also in place in Maine through 2024. In response to persistent challenges in retaining sufficient contractor capacity and elevated contractor rates in Maine, Acadian established internal harvesting operations in 2025 in Maine (see "Development of The Business Over The Last Three Years"). While a portion of operations in Maine will continue to be performed by owner-operators and contractors, this change in structure is expected to improve Acadian's ability to achieve its targeted annual harvesting volumes and control costs. Maintain Distribution Channels for All Products Acadian focuses on adding value to the business by maintaining and enhancing its customer relationships and sales channels. Acadian has approximately 85 customers and leverages relationships with them in order to maximize value from all fibre derived from its timberlands. Sustainable Harvesting Practices Management believes that, through a combination of sophisticated wood supply analysis and focused implementation, Acadian harvests at levels consistent with its sustainable forest management plans across its timberland asset base. Independent third-party verification of the New Brunswick Timberlands and Maine Timberlands to the SFI Program standard provides assurance that Acadian's operations are compliant with sustainable forestry practices. Management intends to continue to maintain these practices. Targeted Silviculture Activities Acadian employs various silviculture treatments, which management believes increase the long-term value of its timberlands. These include planting, pre-commercial thinning, softwood release, and other timber stand improvement treatments. Strategic Acquisitions On February 28, 2025, Acadian completed the purchase of certain logging and related assets to improve Acadian's ability to achieve its targeted annual harvesting volumes and control costs (see "Development of The Business Over The Last Three Years"). Acadian continues to consider opportunistic timberland acquisitions. There can be no guarantee that an acquisition will be undertaken, or, if an acquisition is undertaken, its terms or timing. Realize the Value of Selected Properties Through Sale or Exchange Within the forest management sector, opportunities arise to sell or exchange tracts of land on a beneficial basis according to the species mix, location and other attributes of those lands and the intended uses for such properties. Due to its significant freehold land ownership, management believes that Acadian will realize increased value and improved profitability through such sales or exchanges. Develop New Income Opportunities Acadian is developing opportunities to generate additional income from existing timberlands, including through participation in both compliance and voluntary carbon credit markets and renewable energy projects. Acadian will continue to explore additional opportunities in the future. For example, during 2021, Acadian executed its first carbon development and marketing agreement to develop voluntary carbon credits on the portion of its Maine Timberlands that is subject to a working forest conservation easement. On June 8, 2023, Acadian registered the project's first credits on the American Carbon Registry (see "Description of the Business - Environmental Solutions"). In November 2024, Acadian installed a meteorological tower to collect wind data on the New Brunswick land base. In 2025 Acadian initiated environmental studies and associated bird and wildlife monitoring necessary for renewable energy projects. These investments enable further exploration of the opportunities available to Acadian to participate in the renewable energy sector. ACADIAN'S OPERATIONS Customers and Marketing Acadian has a large client base that includes approximately 85 customers. Acadian manages its customer base to meet the goal of having economic markets for all grades and species of fibre harvested from its timberlands. Acadian's customers are generally located within 250 kilometers from sites where the timber is harvested, but the radius may vary over time, driven by fibre demand, pricing, and freight costs. Customer relationships are the responsibility of senior management, who maintain close contact to market activity. Acadian's broad customer base and experienced management team provide strong support for full utilization of harvested timber into the foreseeable future. Acadian's customer base is comprised largely of mills that have relied upon wood supply from the Acadian Timberlands for many years. Long-term relationships and reliability of delivery commitments help to qualify Acadian as a preferred supplier. Preferred suppliers are generally less impacted by abrupt price reductions and delivery curtailments, thereby leading to greater and more stable free cash flow over time. Fibre Supply Agreement A portion of the New Brunswick Timberlands' sales of spruce and fir sawlogs are directed towards the lumber mill in Plaster Rock, New Brunswick owned by Groupe Lebel, pursuant to a Fibre Supply Agreement (see "Principal Agreements - Fibre Supply Agreement"). Additional sales are also made to Groupe Lebel facilities outside the province of New Brunswick and the Fibre Supply Agreement. Approximately 7% and 2% of Acadian's total sales for the years ended December 31, 2025, and December 31, 2024, respectively, were derived from sales through the Fibre Supply Agreement. Pricing Timber pricing is determined through direct negotiation with each customer and is, consequently, dependent on species, size, quality, location, and other factors. Pricing may, in certain situations, be determined by reference to a publicly available index of wood product prices. Terms are often flexible and usually remain in place for between six months to one year. There is no reliable formal or independent pricing index for roundwood sold from freehold timberlands in New Brunswick and Maine. The pricing for each sale of voluntary carbon credit pricing is determined through negotiation with the end customer by Acadian's third-party sales agent, and is dependent on quality, volume, and other factors. Crown Lands Services and Activities AT Limited Partnership acts as a manager, on behalf of Twin Rivers Paper Corporation ("Twin Rivers"), of the approximately 1.3 million acres of New Brunswick Crown Lands that make up the Crown Timber License under the Crown Lands Services Agreement (See "Principal Agreements - Crown Lands Services Agreement"). Under the terms of this agreement, AT Limited Partnership receives a land management service fee for every cubic metre of wood harvested on the Crown Timber License based upon a Department of Natural Resources and Energy Development schedule. As manager, AT Limited Partnership undertakes certain forest management planning activities that are the responsibility of the Crown licensees, including development of forest operating plans based upon calculated allowable harvest levels. The current plan in effect was developed by AT Limited Partnership on behalf of Twin Rivers and approved by the Government of the Province of New Brunswick (the "Province"). In addition, AT Limited Partnership performs silviculture activities for the Crown on behalf of Twin Rivers and is responsible for the construction and maintenance of all designated roads on the New Brunswick Crown Lands; however, sub-licensees on these lands build and maintain their own logging access roads. AT Limited Partnership provides harvesting services on the Crown License in consideration for cost recovery and service fees. Harvesting Operations Acadian's harvesting, trucking, road building and silviculture activities in New Brunswick were performed entirely by contractors throughout the year ended December 31, 2025. Approximately 59 contractor firms were employed throughout the year. During 2025, Acadian established internal harvesting operations in Maine (see "Development of The Business Over The Last Three Years"). Contractor firms continue to be employed in Maine and approximately 16 contractor firms were employed throughout the year. Management believes that all of its harvesting crews are well-trained and focused on working safely. There is a long history of cooperation with harvesting crews in implementing efficiencies and operating changes in response to changing markets. Management expects to be able to maintain the appropriate resources to harvest its timberlands for the foreseeable future. Employees Acadian had 77 active employees as at December 31, 2025, of which 41 were forestry or administration employees and 36 were directly engaged in the internal harvesting operations in Maine. Seasonality Acadian's business is seasonal. Harvesting activity is typically highest during the winter months with a significant decrease in activity during the spring. This seasonality is driven by road and ground conditions. During the winter months, the frozen ground provides a solid base for harvesting and hauling equipment. During the spring, soft ground conditions lead to a reduction or curtailment of harvesting activities. As the ground dries in the early summer, harvesting activity resumes and is consistent during the summer and fall. Working capital requirements are highest during the first quarter and lowest at the end of the second quarter. While customers accept wood deliveries year-round, most customers match their buying patterns to the harvesting patterns and purchase significant wood inventories during the winter months to ensure enough wood supply for manufacturing through the spring period. Capital Expenditures The majority of Acadian's capital expenditures have historically been for road and bridge construction. While costs associated with access road construction and all road maintenance are expensed annually, costs relating to major bridge construction and main road construction are capitalized. Management expects these investments in bridges and main roads to remain stable in the future, given the extensive road network that currently provides access to the timberlands. As included within "Development of The Business Over The Last Three Years", Acadian commenced direct logging activities during 2025. This has increased Acadian's annual capital expenditures as compared to historical amounts, primarily for logging equipment and vehicles. However, annual contractor expenses have decreased. Foreign Exchange All timber sales and expenses of the Maine Timberlands for the year ended December 31, 2025 were denominated in U.S. dollars. Approximately 94% of the total timber sales and services for the year ended December 31, 2025, and substantially all of the expenses of the New Brunswick Timberlands are denominated in Canadian dollars. Management believes that a declining Canadian dollar results in a favorable translation of the Maine Timberlands and cash flows into Canadian dollars, offsetting the impact of lower demand for roundwood in Maine as Canadian demand shifts back to Canada. Likewise, management believes that a rising Canadian dollar results in higher U.S. dollar-denominated net sales and earnings from the Maine Timberlands as demand increases for roundwood in Maine, providing a hedge against the impact of the rising value of the Canadian dollar. Acadian's U.S. dollar-denominated debt also provides a natural hedge for the U.S. dollar-denominated cash flows generated. Management has determined, therefore, not to hedge foreign exchange risk. Acadian may, from time to time, re-evaluate the impact of changes in foreign exchange rates and use derivative financial instruments to manage its foreign currency exposure. Competition Timberland companies operate in a highly competitive business environment in which companies compete, to a large degree, on the basis of price and also on the basis of service and ability to provide a steady supply of products over the long term. In Canada, Acadian's prime competitors are other large forestland owners, government, and small private forestland owners, while Acadian's prime competitors in the U.S. are freehold forestland owners. There are many suppliers of softwood and hardwood logs located in Eastern Canada and the Northeastern U.S., who compete in Acadian's markets, including: J.D. Irving Ltd., Prentiss & Carlisle, Seven Islands Land Company, LandVest, Tall Timbers Trust, Weyerhaeuser Company, and Wagner Forest Management. Management believes that Acadian may also be subject to import competition from worldwide suppliers of forest products. Health and Safety Acadian requires its employees and contractually requires its contractors and service providers to follow certain safety standards. Operations are audited, incidents are reported, and Serious Accident Frequency is reported monthly to Acadian. FOREST MANAGEMENT Forest Management Strategy Acadian's forest management strategy is designed to support Acadian Timberlands' capacity to produce long-term stable cash flows from sustainable harvest volumes and to ensure that the asset base is appreciating over time by growing high value species and products. Acadian prepares 80-year forecasts of its future timber yields, based on forest inventories and growth estimates, which are updated approximately every five years. Annual operating reviews and audits ensure that activities are consistent with long-term plans. Forest Inventory Assessment Management estimates its merchantable forest inventory based upon independently and internally measured ground sample plots and forest cover type information. Forest inventory methodologies are changing and Acadian is evaluating the use of remote sensing technologies for updating forest conditions on the private lands. Forest inventory is recalculated annually by deducting actual harvest levels and adding inventory based upon regional growth estimates. Management keeps a detailed classification of all forest stands on a geographic information system ("GIS"). The GIS data is updated annually to account for all forestry activity and significant natural events. Sustainable Harvest Levels Acadian calculates its sustainable harvest levels as part of its forest management plan development. The New Brunswick Timberlands forest management plan is effective through 2030. The Maine Timberlands forest management plan is effective through 2027. Forest management plans utilize new information available from forest inventories, growth and yield revisions and reflect regular updating of harvesting and silviculture activities implemented since the previous plan. The overall management objective for the New Brunswick Timberlands and the Maine Timberlands is to ensure that the lands are managed consistent with the principles of sustainable forestry based on the SFI program standard. Silviculture Investment Acadian places a heavy reliance on natural regeneration for ensuring sustainability of forest resources. Where natural regeneration in insufficient, targeted investments in intensive silviculture are used to ensure the forest regenerates to commercial forest species. Silviculture investment offers many benefits to Acadian such as improving the yields of future harvests, shortening rotations, improving productivity, increasing value, balancing age class distribution and allowing for greater flexibility in future forest management options. Acadian's forest management activities, which can vary from year to year, require approximately two to three million seedlings per year to fulfill its regeneration plans. Silviculture expenditures have included planting spruce species, thinning of young, overstocked softwood stands, softwood release and ongoing plantation maintenance. Forest Certification Acadian's forest planning and operations for the New Brunswick Timberlands and management of the Crown Timber License have been third-party certified to the Sustainable Forestry Initiative (SFI) program since 2000 and the Maine Timberlands have been third-party certified since 2011. In 2025, Acadian's Timberlands were subject to a SFI multi-site audit process and was successful with zero non-conformances. The audit was conducted by PricewaterhouseCoopers LLP to the 2022 SFI Program Standard. Third party sustainable forestry audits are conducted annually as either surveillance audits or full re-certification audits. Third party certifications provide the public, Acadian's customers, and environmental groups with knowledge that the assets are well managed in accordance with industry best practices. The SFI Program Standard is a comprehensive system of principles, objectives, and performance measures of forest sustainability. Forest Protection The Acadian Timberlands are protected from insects, disease, and fire through co-operative efforts amongst other large landowners and provincial and state agencies. In New Brunswick, the government is the lead agency for forest protection efforts. Forest Protection Limited provides surveillance and direct action in the event of a fire or infestation and is funded by the Government of the Province of New Brunswick, Crown licensees and large industrial freehold timberlands owners. Acadian is a member of Forest Protection Limited. In Maine, the Maine Forest Service acts in a similar manner, providing expertise and resources in the field of forest resource protection, suppression and investigation of fires that threaten Maine's forests. Fire surveillance and suppression activities in Maine are funded by large landowners through a special tax. Acadian is also a member of the Healthy Forest Partnership, which is a cooperative formed among government, industry and research institutions focused on developing, testing and implementing an Early Intervention Strategy (EIS) to manage spruce budworm populations. REGULATORY ENVIRONMENT New Brunswick Freehold and Crown Lands Regulations in New Brunswick are governed primarily by the Crown Lands and Forests Act, Clean Water Act, and the Clean Environment Act. Additional regulations are prescribed by the Government of the Province of New Brunswick to ensure compliance with a variety of health and safety standards. Forestry activities in New Brunswick have benefited from a relatively stable regulatory regime over time. Management believes that Acadian is in compliance, in all material respects, with all laws and regulations governing its operations in New Brunswick. Where the Crown Lands and Forest Act relates to the specifics of Crown Lands' obligations, freehold timberlands fall under the auspices of the Clean Water Act and the Clean Environment Act. Maine Freehold Regulations in Maine are administered primarily by the Maine Land Use Planning Commission, Maine Forest Service, and the Maine Department of Environmental Protection. The operations of the Maine Timberlands are subject to federal, state, and local environmental laws and regulations relating to the protection of the environment, including regulations relating to forest practices, air, water, solid waste, hazardous substances and threatened or endangered species. Management believes that Acadian is in compliance, in all material respects, with all laws and regulations governing its operations in Maine. In 2025, the Maine Timberlands renewed its Outcome-Based Forestry agreement with the State of Maine. This agreement is designed to relieve some of the regulatory burden and allow the property to be managed more efficiently and effectively, while ensuring achievement of state sustainability objectives. ENVIRONMENTAL MATTERS Acadian recognizes that the environment is fundamental to its existence and management believes in sustainable forest management. Acadian strives for continual improvement in its environmental performance and management of forest land through forest certification and uses safety, environmental, and operational inspection systems to ensure compliance with regulations, policies and best operating practices. Acadian's environmental management system is designed around a continual improvement model that focuses on prevention. All of Acadian's New Brunswick and Maine timberlands are third-party certified under the SFI program. Annual audits occur each year to verify that the requirements of forest certification standards are maintained. In 2002, a conservation easement on the Maine Timberlands was put in place covering approximately 190,000 acres. The State of Maine, which now holds the easement, monitors Acadian's activities in the easement area for compliance with easement objectives. While this conservation easement restricts the future development potential of the land for industrial or residential purposes, it does not materially impact the use of the timberlands for economically viable commercial timber harvesting while ensuring sustainability of the forest. PUBLIC RELATIONS Acadian is committed to consulting interested parties in a structured manner through regional forest advisory committees in New Brunswick. Local associations, businesses and Aboriginal communities are invited to meetings held in the areas that Acadian operates. The committees help improve government relations and act as a pulse of the community regarding forestry and environmental issues related to forest lands. The forest advisory committees are used as a resource for reviewing forest management plans and identifying environmental and community concerns. RISK FACTORS The following information is a summary of certain risk factors and the potential impact these factors could have on the business, assets, financial condition, results of operations, cash flows, and liquidity of Acadian, as well as on the ability of Acadian to pay dividends on its common shares. Additional risks and uncertainties not presently known to Acadian, or that Acadian currently deems immaterial, may also impair the operations of Acadian. RISKS RELATED TO THE BUSINESS AND INDUSTRY Trade Restrictions A portion of Acadian's products produced in Canada and a portion of the products manufactured by Acadian's customers in Canada are exported to the U.S. for sale. The imposition of tariffs and duties by the U.S. government may, therefore, directly and/or indirectly impact the price of and demand for Acadian's products. It is unclear if and when changes in tariffs or duties will occur. Strength in lumber markets, combined with supply side factors may support a pass through of tariffs and/or duties to markets. Should additional costs not be passed through to markets, the price of Acadian's products derived from Canada may be adversely impacted. Conversely, the price of and demand for Acadian's products derived from the U.S. may be favourably impacted. Tariffs on U.S. Imports The U.S. government has imposed tariffs of varying amounts on various U.S. imports from Canada. There are currently no tariffs directly applicable to Acadian's products. A 10% tariff on softwood lumber and a 25% tariff on certain other wood products became effective in October 2025, which impacts some of Acadian's customers. Softwood Lumber Agreement Since 2006, Canadian softwood lumber exports to the U.S. have been subjected to export duties that were imposed under the Softwood Lumber Agreement between Canada and the U.S. (the "SLA"). On October 12, 2015, the 2006 SLA expired. At the end of 2017, the U.S. Department of Commerce began applying countervailing duties and anti-dumping rates for most Canadian producers. Since this time, the U.S. International Trade Commission has voted to maintain the anti-dumping and countervailing duty orders on softwood lumber from Canada. In response, Canada launched initiatives under NAFTA and with the WTO to review the U.S. duties on softwood lumber imports, which are ongoing. In September 2025, increased softwood lumber duties became effective at a combined rate of 35%. Significant Contracts The Corporation has two significant contracts, being the Fibre Supply Agreement ("FSA") and the Crown Lands Services Agreement ("CLSA"). The FSA between the Corporation and Groupe Lebel, an Eastern Canadian lumber manufacturer and North American forest products producer, expires in 2031. Pursuant to the FSA, Groupe Lebel has the right to purchase the majority of the spruce and fir softwood produced each year from the New Brunswick Timberlands. The terms of this agreement permit Groupe Lebel to permanently reduce its purchases by any amount, subject to certain notice periods. Groupe Lebel also has the right to temporarily reduce the volume of fibre that it purchases as a result of market factors, while retaining the right to increase such volumes in the future up to the committed level. These rights may restrict Acadian's ability to find replacement customers given the uncertainty of ongoing supply to which such replacement customers would be subject. Approximately 7% of Acadian's total sales for the year ended December 31, 2025 (2024 - 2%) were derived from sales made under the FSA. In addition, a portion of Acadian's revenue is generated from services provided under the CLSA with Twin Rivers Paper Company ("Twin Rivers"). The CLSA has a term equal to the term of the Crown license, including any renewal terms. The Crown license has been assigned to Twin Rivers as the owner/operator of its mills. If under any scenario, the mills were to close, the license would likely revert to the Crown resulting in the termination of the CLSA. Such events could eliminate the revenue earned by Acadian in providing services relating to the CLSA, and thus would result in a reduction of Free Cash Flow and could result in the impairment of intangible assets. Approximately 9% of Acadian's total sales for the year ended December 31, 2025 (2024 - 7%) were derived from services provided under the CLSA. Dependence on and Scarcity of Trained Labour Acadian relies significantly on a limited number of entities to cut and haul harvested timber, as well as to conduct road building and silviculture activities. If any of these entities were to stop doing business with Acadian, Acadian's operations could be negatively impacted. In addition, there is a limited supply of trained foresters and trained operators/contractors in the New Brunswick and Maine regions. Any decreases in this workforce could impact Acadian's ability to harvest and deliver products to its customers and may result in increased costs to Acadian to retain its workforce. The ability of trained contractors to operate across the U.S./Canada border may also depend upon regional and/or political constraints, which would further limit Acadian's ability to obtain skilled labour if such constraints were to materialize. Dependence on the Lumber and Pulp and Paper Industries Acadian's financial performance depends on the state of the lumber and pulp and paper industries, which can be cyclical. Demand for products from the lumber and pulp and paper industries is correlated with global economic conditions. In periods of economic weakness, reduced spending by consumers and businesses results in decreased demand for such products, resulting in lower product prices and possibly manufacturing downtime. The demand for logs and wood products is particularly affected by the level of new residential construction activity, repair and remodeling activity and, to a lesser extent, other industrial uses. Decreases in the level of residential construction activity generally reduce demand for logs and wood products, resulting in lower revenues, profits, and cash flows for lumber mills who are important customers to Acadian. This, in turn, may result in lower net sales, profits and cash flows for Acadian. In addition to impacting Acadian's sales, profits and cash flows, weakness in the market prices of its timber products may also have an effect on Acadian's ability to attract additional capital, its cost of that capital, and the value of its timberland assets. Lack of Control Over Government Set Land Management Service Fees, Fair Market Values and Allowable Annual Cut Acadian's revenue from operations in respect of the New Brunswick Crown Lands is generated from the harvesting service fees negotiated with wood users and land management service ("LMS") fees set by the Government of the Province of New Brunswick. Acadian has little control over the revenues from LMS fees as the Province dictates the LMS fees that Acadian receives. There is a risk that Acadian's overhead expenses incurred to provide services relating to the New Brunswick Crown Lands may not be fully recovered through the LMS fees set by the Province. The Province periodically establishes the fair market values to be paid for the right to harvest timber on Crown Lands. Fair market values are established for each product and species harvested. Charges levied on timber harvested from Crown Lands are based on the amount of timber cut and the fair market value then in effect. A reduction in the fair market value charged on Crown Lands could make Acadian's timber harvested from the New Brunswick Timberlands less competitive. The Allowable Annual Cut ("AAC") on Crown Lands for New Brunswick is determined by the Minister of Natural Resources and Energy Development of New Brunswick and reflects timber conditions, regional and local economic and social interests, and environmental considerations. A significant increase in the AAC on Crown Lands in any given year could have a negative impact on Acadian's ability to market its timber harvested from the New Brunswick Timberlands, particularly its spruce and fir sawlogs, which could have an adverse effect on Acadian's operating results. Fuel and Energy Costs Acadian relies almost exclusively on land transportation for delivering its timber and is therefore exposed to fluctuations in fuel cost. An increase in fuel cost may result in lower earnings and cash flows. In addition, many of Acadian's customers are high-energy consumers and, as a result, are themselves vulnerable to energy cost increases. If energy costs increase significantly, Acadian's customers may not be able to compete effectively and may have to reduce current operating volumes or close mills. Limitations on Ability to Harvest Weather conditions, timber growth cycles, property access limitations, availability of contract loggers and haulers, and regulatory requirements associated with the protection of wildlife and water resources may restrict Acadian's harvesting, as may other factors, including damage by fire, insect infestation, disease, prolonged drought, windstorms, flooding and other weather conditions, and natural and man-made disasters. Changes in global climate conditions could intensify one or more of these factors. Although damage from such causes usually is localized and affects only a limited percentage of standing timber, there can be no assurance that any damage affecting Acadian's timberlands will in fact be so limited. There can be no assurance that Acadian will achieve harvest levels in the future necessary to maintain or increase revenues, earnings and cash flows. Insect Infestations - Spruce Budworm Eastern Spruce budworm (Choristoneura fumiferana) is an insect that exists at endemic levels in the forest. However, every 30-40 years, the insect's population has the potential to reach epidemic levels and cause extensive defoliation of balsam fir and spruce that may lead to tree mortality after several years of occurrence. While management has taken steps to monitor regional trends in spruce budworm activity and is prepared to adjust harvesting to mitigate potential losses of commercial timber, there can be no assurances that future harvest levels of the affected species will be achievable. While spruce budworm outbreaks are widespread in Quebec, the Early Intervention Strategy started in New Brunswick in 2014 has resulted in no material impact to Acadian lands to date. During 2024, an increase in spruce budworm activity was noted in Maine, although not on Acadian's Maine Timberlands. The Maine Forest Service began implementing an early intervention program expected to be similar to that in New Brunswick to manage the spruce budworm population. There has been no material impact to Acadian's Maine Timberlands to date. Restrictions Imposed by Forestry and Environmental Regulations While a significant portion of Acadian's timberlands are comprised of freehold timberlands and as such are subject to less regulation than the New Brunswick Crown Lands, provincial, state, and federal government regulations relating to forestry practices and sale of logs may result in increased costs for Acadian and accordingly, impact its financial results and operations. In addition, forestry and environmental regulations may restrict timber harvesting and may otherwise restrict the ability of Acadian to conduct its business. Although Acadian believes that it is in material compliance with these requirements, there can be no assurance that it will not incur significant costs, civil and criminal penalties and liabilities, including those relating to claims for damages to property or natural resources, resulting from its operations. Laws, regulations and related judicial decisions and administrative interpretations affecting Acadian's business are subject to change and new laws and regulations that may affect its business are frequently enacted. Some of these laws and regulations could impose significant costs, penalties, and liabilities on Acadian for violations or existing conditions whether or not Acadian caused or knew about them. Acadian is subject to laws and regulations which relate to, among other things: the protection of timberlands, the protection of endangered species, air and water quality, and timber harvesting practices. Regions with frequent policy changes add volatility to revenue streams and depress timberland values. Historically, New Brunswick has had relatively stable forestry regulations. Forest regulations in Maine have experienced volatility in the past but have not significantly impacted forest operations to date. In connection with a variety of Acadian's operations, the Corporation may be required to make regulatory filings. Any of the government agencies could delay the review of or reject any of Acadian's filings which could result in a delay or restriction in harvesting, replanting, thinning, insect control or fire control. Disease Outbreak An outbreak or escalation of a contagious disease may adversely affect Acadian's business. A local, regional, national, or international outbreak or escalation of a contagious disease, including the COVID-19 coronavirus, Middle East Respiratory Syndrome, Severe Acute Respiratory Syndrome, H1N1 influenza virus, avian flu, or any other similar illness, or fear of the foregoing, could interrupt the businesses of Acadian's customers, cause labour shortages, interrupt services from third parties upon which Acadian relies, increase operating costs, result in governmental regulation adversely impacting its business, and otherwise have an adverse effect on its business, financial condition and results of operations. Highly Competitive Industry Timberland companies operate in a highly competitive business environment in which companies compete, to a large degree, on the basis of price and also on the basis of service and ability to provide a steady supply of products over the long-term. In Acadian's markets, there are many suppliers of softwood and hardwood logs. In addition, Acadian may also be subject to increased competition from worldwide suppliers importing forest products, and/or subject to increased competition from a variety of substitute products. Acadian's competitive position is also influenced by a number of other factors including: the availability, quality, and cost of labour; the cost of energy; the ability to attract and maintain long-term customer relationships; the quality of products and customer service; and foreign currency fluctuations. Currency Risk All of the sales from Maine Timberlands, including all sales of voluntary carbon credits to date, and a portion of the sales from New Brunswick Timberlands, representing a significant portion of gross revenues earned, are in U.S. dollars. In addition, all expenses incurred in respect of Maine Timberlands and a nominal amount of the expenses of New Brunswick Timberlands are in U.S. dollars and all of Acadian's debt financing and all interest payable thereon is in U.S. dollars. As a result, Acadian's cost competitiveness could be impacted by unfavourable fluctuations in currency exchange rates. In addition, the apparent historical correlation between currency rates and timber prices in regions within close proximity to the U.S./Canada border may weaken over time thereby undermining any hedge relating to Maine Timberlands. Acadian's customers are also susceptible to currency value fluctuations which may negatively impact the sawmills and pulp and paper mills to which Acadian sells its fibre, and accordingly the quantity of fibre sales to such customers could decline. Forest Management Although management believes it follows best practices with regard to forest sustainability and general forest management, there can be no assurance that the established harvest levels of New Brunswick Timberlands and Maine Timberlands and management's forest management planning, including silviculture, will have the intended result of ensuring that Acadian's asset base remains stable or appreciates over time. If management's estimates of merchantable inventory are incorrect or the annual harvest is too high, harvesting levels of Acadian's timberlands may result in depletion of Acadian's timber assets. Geographic Concentration Acadian's timberlands are located exclusively in Maine and New Brunswick. Accordingly, if the level of production from forests in this region substantially declines or demand in the region were to decline for any reason, including closure of pulp, paper or lumber manufacturing operations in the region, such changes could have a material adverse effect on Acadian's overall harvest levels and its financial results. Insurance Acadian's business is subject to risks from fire, insect infestation, disease, drought, severe weather, unforeseen equipment breakdowns, and other events, including events of force majeure, which could result in material damages to Acadian. As is common in the forest products industry, Acadian does not maintain insurance coverage for damage to its timberlands, but Acadian is insured against most other conventional business risks. Seasonality Acadian's operations are subject to seasonal variations and, as a result, Acadian's operating results vary from quarter to quarter. Harvesting activity can be compromised by inaccessibility to some sites during wet seasons resulting in decreased harvest levels. Results of one quarter will not be indicative of results that may be achieved in other quarters or for the full year. Non-Timber Income New Brunswick Timberlands and Maine Timberlands have several sources of non-timber income including sales of carbon credits, various land leases for recreational and commercial use, and a recreational access permit program. Most of these revenues are not subject to long-term agreements and as a result, any decrease in the activities that lead to those revenues could impact Acadian. Protection of Threatened or Endangered Species and Waterways Federal, state, and provincial laws and regulations protecting threatened or endangered species, waterways and wetlands or other environmental values may limit or prevent timber harvesting, road building and other activities of Acadian. The size of the area subject to restriction will vary depending on the protected species at issue, the time of year, and other factors, but can range from less than one to several thousand acres. As Acadian gains additional information regarding the presence of threatened or endangered species on its timberlands, or if regulations become more restrictive, the amount of its timberlands subject to harvest restrictions could increase. Climate-Related Legislation or Regulation There are several international, federal, provincial and state-level proposals addressing domestic and global climate issues. Generally, such proposals could impose regulation or taxation on the production of carbon dioxide and other "greenhouse gases" in an attempt to reduce emissions to the atmosphere and provide tax and other incentives to produce and use more "clean energy". Any future legislative and regulatory activity in this area could affect Acadian and its operations. Physical Risks Related to Climate Change Acadian's timberlands may be adversely affected by changes in global climate conditions, including increases in average temperatures, that may increase risks of severe weather events, such as prolonged drought or flooding. Climate change could exacerbate current risks including damage by fire, insect infestation and disease which could in turn impact the health, growth rate, and species mix of Acadian's timber. Cybersecurity Acadian relies on information technology to carry out its operational activities, maintain its business records, collect and store sensitive data, including intellectual property, other proprietary and personally identifiable information. A security failure of that technology could impact Acadian's ability to operate its businesses effectively, adversely affect its reported financial results, impact its reputation, and expose it to potential liability or litigation. Some systems are internally managed, and some are maintained by third-party service providers. Acadian and its service providers employ what are believed to be reasonably adequate security measures, but notwithstanding these efforts, systems could be compromised as a result of a cyber incident, natural disaster, hardware or software corruption, failure or error, telecommunications system failure, service provider error or failure, intentional or unintentional actions by personnel or other disruption. If by any cause systems or information resources were compromised, or if data were destroyed, misappropriated or inappropriately disclosed Acadian could suffer significant loss or incur significant liability, including: damage to reputation; loss of customer confidence or goodwill; and significant expenditures of time and money to address and remediate resulting damages to affected individuals or business partners, or to defend Acadian in resulting litigation or other legal proceedings, by affected individuals, business partners or regulators. Loss of Key Management and Inability to Attract and Retain Key Staff Acadian's success depends, to a significant extent, upon its ability to attract, retain, and develop senior management, operations management, and other key personnel. Its financial condition or results of operations could be significantly adversely affected if Acadian were to fail to recruit, retain, and develop such personnel, or if there were to occur any significant increase in the cost of providing such personnel with competitive total compensation and benefits. Land Claims Land claims could adversely affect Acadian's ability to harvest timber. Canadian courts have recognized that Aboriginal people may possess rights at law in respect of land used or occupied by their ancestors where treaties have not been concluded to deal with these rights. In Canada, Aboriginal groups have made claims in respect of land governed by Canadian authorities as well as land owned by private land owners, which could affect a portion of the land covered by Twin Rivers' Crown licenses as well as the land owned by Acadian. Any settlements in respect of these claims could lower the volume of timber managed by Acadian and could increase the cost to harvest timber on such lands. On November 30, 2021, the Wolastoqey Nation (made up of six Maliseet First Nations) filed an Action in the Court of King's Bench of New Brunswick naming the Province of New Brunswick and the Attorney General of Canada and several other forestry and other companies operating in New Brunswick as defendants. Acadian's subsidiaries Acadian Timber Limited Partnership by its General Partner, Acadian Timber GP Inc., and Acadian Timber GP Inc. are among the defendants in this Action. The Action seeks, in part, a declaration of Aboriginal Title to the land currently owned by the defendants in New Brunswick, including Acadian. On November 14, 2024, a Motion to Dismiss was granted by the Court removing Acadian, but not removing their lands, from the claim. Acadian appealed certain aspects of the dismissal, namely that its lands be removed from the outstanding claim against the Crown. On December 11, 2025, Acadian's appeal was successful. Wolastoqey Nation has sought leave to appeal the decision to the Supreme Court of Canada. It could be many years before any court decision is rendered if the Action proceeds further. The outcome of the claim is not determinable at this time. No assurances can be given that the claim would not have a material effect on Acadian's financial position, results or operations. Should such claim be resolved by government or the courts in favour of the Wolastoqey Nation, it could materially adversely affect the business of Acadian. Litigation Acadian is subject to litigation risks. Defence and settlement costs of legal claims can be substantial, even with respect to claims that have no merit. Due to the inherent uncertainty of the litigation process, the resolution of any particular legal proceeding to which Acadian is or may become subject could have a material effect on its financial position, results of operations or Acadian's operations. Undetected Environmental Liabilities Acadian may currently own or may acquire properties subject to environmental and other liabilities, such as obligations to clean up or pay for the cleanup of contamination. While timberlands do not generally carry as high of a risk of environmental contamination as industrial properties, the cost of cleanup of contaminated properties could increase Acadian's operating costs. Ability to Identify and Complete Investment Opportunities Acadian's growth strategy is to acquire high-quality timberland investments with the objective of achieving appropriate risk-adjusted returns on its invested capital over the long-term. However, there is no certainty that Acadian will be able to find and complete sufficient investment opportunities that meet its investment criteria. Acadian's investment criteria considers, among other things, the financial, operating, governance and strategic merits of a proposed acquisition. Competition for assets is significant and competition from other well-capitalized investors or companies may significantly increase the purchase price or prevent Acadian from completing an acquisition. RISKS RELATED TO THE STRUCTURE OF THE CORPORATION Payment of Dividends As a corporation, the Corporation's dividend policy will be at the discretion of the Corporation's Board of Directors. Future dividends, if any, will depend on the operations and assets of the Corporation and its subsidiaries, and will be subject to various factors, including, without limitation, the Corporation's financial performance, fluctuations in its working capital, the sustainability of its margins, its capital expenditure requirements, obligations under its credit facilities, provisions of applicable law and other factors that the Board of Directors may deem relevant from time to time. Accordingly, the payment of dividends by the Corporation and the level thereof will be uncertain. Market Price of Common Shares The market price of the Common Shares may be subject to wide fluctuations in response to many factors, including variations in the operating results of Acadian, divergence in financial results from expectations, changes in the business prospects for Acadian, general economic conditions, legislative changes, and other events and factors outside of the Corporation's control. In addition, stock markets have from time-to-time experienced extreme price and volume fluctuations, which, as well as general economic and political conditions, could adversely affect the market price for the Common Shares. The Corporation is unable to predict whether substantial amounts of Common Shares will be sold in the open market. Any sales of substantial amounts of Common Shares in the public market, or the perception that such sales might occur, could materially and adversely affect the market price of the Common Shares and the ability of the Corporation to raise capital. Dilution of Existing Shareholders The Corporation is permitted to issue an unlimited number of Common Shares pursuant to its Articles and may do so, subject to compliance with the rules and regulations of the TSX and other applicable securities regulations, for that consideration and on those terms and conditions as shall be established by the Corporation's Board of Directors without the approval of any Shareholders. The Shareholders will have no pre-emptive rights in connection with such further issuances. Leverage and Restrictive Covenants in Agreements Relating to Indebtedness The ability of the Corporation and its subsidiaries to pay dividends or make other payments or advances is subject to applicable laws and contractual restrictions contained in the instruments governing any indebtedness of those entities (including the credit facilities). The degree to which the Corporation is leveraged could have important consequences to the Shareholders including: the Corporation's ability to obtain additional financing for working capital, capital expenditures or acquisitions; a significant portion of the Corporation's cash flow from operations may be dedicated to the payment of the principal and interest on its indebtedness, thereby reducing funds available for future operations; certain borrowings may be at variable rates of interest, which exposes the Corporation to the risk of increased interest rates; and the Corporation may be more vulnerable to economic downturns and be limited in its ability to withstand competitive pressures. The terms of the credit facilities include numerous restrictive covenants that limit the discretion of the Corporation's management with respect to certain business matters. These covenants place significant restrictions on, among other things, the ability of the Corporation and its subsidiaries to create liens or other encumbrances, or make certain other payments, investments, loans and guarantees and to sell or otherwise dispose of assets and merge or consolidate with another entity. In addition, the terms of the credit facilities include financial covenants that require the Corporation to meet certain financial ratio tests. A failure by the Corporation to comply with the obligations relating to the credit facilities could result in a default which, if not cured or waived, could result in a termination of dividends by the Corporation and require accelerated repayment of the relevant indebtedness. If the repayment of indebtedness under the credit facilities were to be accelerated, there can be no assurance that the assets of the Corporation would be sufficient to repay in full that indebtedness. There can be no assurance that the credit facilities will be able to be refinanced or refinanced on acceptable terms or that future borrowings or equity financings will be available to the Corporation, or available on acceptable terms, in an amount sufficient to fund the Corporation's needs. This could, in turn, have a material adverse effect on the business, financial condition and results of operations of the Corporation and could therefore affect the ability of the Corporation to pay dividends on its Common Shares. CAPITAL STRUCTURE COMMON SHARES The Corporation is authorized to issue an unlimited number of Common Shares of which 18,455,847 are issued and outstanding as at March 27, 2026. Each Common Share entitles the holder thereof to receive notice of, to attend, and to one vote at, all meetings of the Shareholders. The holders of Common Shares are entitled to receive dividends if, as and when declared by the Directors of the Corporation. The holders of Common Shares will also be entitled to share equally, share-for-share, in any distribution of the assets of the Corporation upon the liquidation, dissolution or winding-up of the Corporation or other distribution of its assets among its Shareholders for the purpose of winding-up its affairs. Additional information relevant to the Common Shares, the rights of holders thereof and the operation and conduct of the Corporation can be found in the Corporation's by-law, which has been filed under the Corporation's profile on SEDAR+ at www.sedarplus.ca . BOOK-ENTRY ONLY SYSTEM Registration of interests in and transfers of the Common Shares are made through a book-based system (the "Book-Entry System") administered by CDS Clearing and Depository Services Inc. ("CDS"). Common Shares may be purchased or transferred through a participant in the CDS depository service (a "CDS Participant"). All rights of Shareholders must be exercised through, and all payments or other property to which such Shareholder is entitled will be made or delivered by, CDS or the CDS Participant through which the Shareholder holds such Common Shares. Upon a purchase of any Common Shares, the Shareholder will receive only a customer confirmation from the registered dealer which is a CDS Participant and from or through which the Common Shares are purchased. References in this AIF to a Shareholder means, unless the context otherwise requires, the owner of the beneficial interest in such Common Shares. The Corporation has the option to terminate registration of the Common Shares through the Book-Entry System, in which case certificates for the Common Shares in fully registered form would be issued to beneficial owners of such Common Shares or their nominees. DIRECTORS AND OFFICERS OF THE CORPORATION BOARD OF DIRECTORS The name, province or state, and country of residence of each of the Directors as at December 31, 2025, their respective principal occupations, business or employment within the five preceding years (in each instance based upon information furnished by such person), the Board committees to which they belong and the years in which they became Directors of the Corporation is set out below. The term of office for each of the current Directors will expire at the time of the next annual meeting of the Shareholders. Name Business or employment and principal occupation Committee membership Director or Trustee since Malcolm Cockwell (1) Ontario, Canada Interim President and Chief Executive Officer, Acadian Timber Corp., effective February 18, 2026 Managing Director, Haliburton Forest & Wildlife Reserve Principal, Macer Forest Holdings Inc. ("Macer") Audit Committee (2) and CNCG Committee Director: May 8, 2018 Heather Fitzpatrick Ontario, Canada President and Chief Executive Officer, Halmont Properties Corporation Former Commercial Account Manager, Bank of Montreal Audit Committee and CNCG Committee Director: August 20, 2019 Karen Oldfield Nova Scotia, Canada Interim President and Chief Executive Officer, Nova Scotia Health Former President and Chief Executive Officer, Halifax Port Authority Audit Committee and CNCG Committee Director: May 9, 2019 Erika Reilly British Columbia, Canada Former Senior Vice President, Brookfield Asset Management Former President and Chief Executive Officer, Acadian Timber Corp. Audit Committee and CNCG Committee Director: May 6, 2021 Bruce Robertson Ontario, Canada Former Vice President, Investments, The Woodbridge Company Limited Audit Committee and CNCG Committee Director: February 14, 2018 Adam Sheparski (1) New Brunswick, Canada Former President and Chief Executive Officer, Acadian Timber Corp. Former Chief Financial Officer, Acadian Timber Corp. Director: July 30, 2021 Mr. Sheparski was a Director and held the position of President and Chief Executive Officer until February 18, 2026. Mr. Malcolm Cockwell was appointed Interim President and Chief Executive Officer as of the same date. Mr. Cockwell was a member of the Audit Committee until May 6, 2025. As a result of Macer assuming greater than 50% ownership of Acadian Timber Corp, Mr. Cockwell was determined to no longer be independent, as defined by National Instrument 52-110 - Audit Committees. Mr. Cockwell holds the position of Board Chair and Ms. Oldfield holds the position of Lead Director. OFFICERS OF THE CORPORATION The name, province or state, and country of residence of each of the executive officers of the Corporation as at December 31, 2025 and their respective principal occupations, business or employment within the five preceding years (in each instance based upon information furnished by such person) is set out below: Name Business or employment and principal occupation Adam Sheparski (1) New Brunswick, Canada Former President and Chief Executive Officer, Acadian Timber Corp. Former Chief Financial Officer, Acadian Timber Corp. Susan Wood New Brunswick, Canada Chief Financial Officer, Acadian Timber Corp. Former Director of Finance, Acadian Timber Corp. Mr. Sheparski held the position of President and Chief Executive Officer until February 18, 2026. Mr. Malcolm Cockwell was appointed Interim President and Chief Executive Officer as of the same date. OWNERSHIP OF VOTING SECURITIES As of the date of this AIF, the Directors and executive officers of the Corporation, as a group, beneficially own or exercise control or direction over approximately 9,584,122 Common Shares, representing approximately 51.9% of the issued and outstanding Common Shares. CEASE TRADE ORDERS OR BANKRUPTCIES To the knowledge of the Corporation, none of the Directors or officers of the Corporation are, as at the date of this AIF, or have been, within the 10 years before the date of this AIF, a director, chief executive officer or chief financial officer of any company (including the Corporation) that, (i) was subject to a cease trade order, an order similar to a cease trade order, or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days (an "Order") that was issued while the person was acting in the capacity as director, chief executive officer or chief financial officer; or (ii) was subject to an Order that was issued after the person ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer. To the knowledge of the Corporation, none of the Directors or officers of the Corporation, nor any shareholders holding a sufficient number of Common Shares to affect materially the control of the Corporation: (a) are, as at the date of this AIF, or have been within 10 years before the date of this AIF, a director or executive officer of any company (including the Corporation) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (b) have, within the 10 years before the date of this AIF, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the person. PENALTIES OR SANCTIONS To the knowledge of the Corporation, none of the Directors or officers of the Corporation, nor any personal holding company thereof owned or controlled by them nor any shareholders holding a sufficient number of Common Shares to affect materially the control of the Corporation, has been subject to: (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision. CONFLICTS OF INTEREST There are potential conflicts of interest to which the Directors and officers of the Corporation are subject in connection with the operations of the Corporation. In particular, certain of the Directors and officers of the Corporation may be involved with other companies whose operations may, from time to time, be in direct competition with those of the Corporation or with entities which may, from time to time, provide financing to, or make equity investments in, competitors of the Corporation. Conflicts, if any, will be subject to the procedures and remedies available under the CBCA. The CBCA provides that in the event a director or officer of a company is a party to, or is a director or officer of a party to, or has a material interest in any person who is a party to, a material contract or material transaction with the Corporation, whether made or proposed, the director or officer will disclose his or her interest in such contract or transaction and, in the case of directors, will refrain from voting on any matter in respect of such contract or transaction, subject to certain limited exceptions set out in the CBCA. As at March 27, 2026, none of the Directors or officers of the Corporation are aware of any existing or potential material conflicts of interest with the Corporation or any of its subsidiaries. DEBT FINANCING In February 2011, Acadian established its U.S. dollar denominated Credit Facilities by entering into a first mortgage loan agreement with The Metropolitan Life Insurance Company (the "Loan Agreement"). The Loan Agreement was amended in September 2015 to extend the maturity date to October 1, 2020, and was further amended on March 6, 2020 to, among other things, extend the maturity date and increase the amount available under the term credit facilities. The Partnership and certain other subsidiaries of the Corporation are borrowers, and certain of the Corporation's other subsidiaries are guarantors under the Loan Agreement. As at December 31, 2025, the Corporation had term credit facilities (the "Term Facilities") totaling up to US$80.0 million with Maturity Dates ranging from March 6, 2027, to March 6, 2030. As at December 31, 2025, the Corporation had borrowings of US$80.0 million under the Term Facilities. On March 6, 2025, US$32.0 million of the term loan matured and was refinanced under essentially the same terms as the existing facilities, and with a maturity date of March 6, 2030. There are no scheduled repayments of principal required prior to the maturity dates of the Term Facilities. The Loan Agreement also includes a revolving credit facility of up to US$10.0 million (the "Revolving Facility") for general corporate purposes, of which US$1.7 million is reserved to support the minimum cash requirement of the Term Facilities. The Term Facilities and the Revolving Facility are collectively referred to herein as the "Credit Facilities". There can be no assurance that future borrowings, whether as a refinancing of the Credit Facilities or otherwise, will be available to the Partnership, or available on acceptable terms, in an amount sufficient to fund the Partnership's needs. See "Risk Factors - Risks Related to the Business and Industry - Leverage and Restrictive Covenants in Agreements Relating to Indebtedness of the Partnership". Borrowings under the Term Facilities bear interest at fixed rates ranging from 2.83% to 5.25%. Advances under the Revolving Facility bear interest at floating rates based the Secured Overnight Financing Rate plus applicable margin. Up to 10% per annum of the initial borrowings under the Term Facilities are prepayable prior to maturity without penalty. As security for the Credit Facilities, the Partnership granted the lenders a security interest over the majority of its assets. AT Limited Partnership, Acadian Timber GP Inc., and Katahdin Forest Management LLC, guaranteed the indebtedness of the Partnership under the Credit Facilities and granted security interests over all of their respective assets. In addition, each of Acadian Timber (U.S.) Inc. and Acadian US Timber GP Inc. guaranteed the indebtedness of the Partnership under the Credit Facilities. The Credit Facilities are subject to customary terms and conditions for borrowers of this nature, including limits on incurring additional indebtedness, granting liens or selling assets without the consent of the lenders. The Credit Facilities are also subject to the maintenance of a maximum ratio of loan to appraised value and the Partnership is in compliance as of March 27, 2026. The Credit Facilities may in certain circumstances restrict the Partnership's ability to pay distributions, should the Credit Facilities be in default or such distributions cause an event of default. The failure to comply with the terms of the Credit Facilities would entitle the lenders to accelerate all amounts outstanding under the Credit Facilities and, upon such acceleration, the lenders would be entitled to begin enforcement procedures against the assets of the Partnership, AT Limited Partnership, Acadian Timber GP and/or their subsidiaries. The lenders would then be repaid from the proceeds of such enforcement proceedings, using all available assets. Only after such repayment and the payment of any other secured and unsecured creditors would the holders of Common Shares receive any proceeds from the liquidation of the assets of the Corporation. PRINCIPAL AGREEMENTS The following is a description of certain principal agreements to which Acadian is a party. CROWN LANDS SERVICES AGREEMENT Twin Rivers currently holds a license from the Government of the Province of New Brunswick in respect of the New Brunswick Crown Lands. Twin Rivers has the right to approximately 15% of the annual harvest from the Crown Timber License #9 in consideration for a fair market value paid to the Crown. Approximately 85% of the annual harvest from the New Brunswick Crown Lands is sub-licensed to third parties who are entitled to cut and harvest timber for their own use on payment of the fair market value to the Crown. AT Limited Partnership and Twin Rivers are parties to the Crown Lands Services Agreement pursuant to which AT Limited Partnership provides services under Twin Rivers' direction relating to the New Brunswick Crown Lands. Under the Crown Lands Services Agreement, AT Limited Partnership charges Twin Rivers for Acadian's cost for the provision of harvesting services (including harvest cost, transportation, access road construction and maintenance) and receives LMS fees set by the Government of the Province of New Brunswick in consideration for the required services. As manager of the New Brunswick Crown Lands under the Crown Timber License, Twin Rivers is responsible for collecting and paying to the government a fair market value (calculated in $/m 3 that varies based on species and product type). Acadian assists Twin Rivers by collecting and remitting such amounts from sub-licensees. Pursuant to the Crown Lands Services Agreement, AT Limited Partnership provides services to Twin Rivers and the sub-licensees, including: harvest planning; filing and administration of certain requirements; scaling administration services; management of transportation certificates; road construction and maintenance on designated roads; and accounting services; consistent with services provided by Twin Rivers to sub-licensees in the past. AT Limited Partnership is obligated to, among other things, conduct all operations in compliance with all laws and regulations, acting reasonably, and to comply with all terms, conditions and obligations set out in the Crown Timber License. Pursuant to the Crown Lands Services Agreement, Twin Rivers covenants to take all commercially reasonable actions required in order to maintain the Crown Timber License in good standing. The Crown Lands Services Agreement has a term equal to the term of the Crown Timber License, including any renewal terms. The Crown Lands Services Agreement may be terminated in the event of the insolvency or receivership of another party, or in the case of default by one of the other parties in the performance of a material obligation of the Crown Lands Services Agreement (other than as a result of the occurrence of a force majeure event) which is not remedied within 60 days following delivery of written notice thereof, subject to any applicable cure periods. FIBRE SUPPLY AGREEMENT AT Limited Partnership and Groupe Lebel are parties to the Fibre Supply Agreement pursuant to which AT Limited Partnership agrees to sell forest products of the types described therein, which are harvested from the New Brunswick Timberlands, at prescribed volumes and according to established specifications. The Fibre Supply Agreement has a term ending in 2031. Pursuant to the Fibre Supply Agreement, quantities of fibre to be made available to Groupe Lebel for purchase for its lumber mill in Plaster Rock, New Brunswick, will be as set out in AT Limited Partnership's annual plan ("Annual Plan") for harvesting, subject to minimum volumes for any given calendar year of not less than the Allowable Cut (as defined below) for such calendar year. Pursuant to the Fibre Supply Agreement, Groupe Lebel will have the right to purchase the majority of the spruce and fir softwood harvested each year from the New Brunswick Timberlands. AT Limited Partnership has fulfilled its obligation to develop and update a five-year forest management plan (the "Forest Management Plan") with respect to the New Brunswick Timberlands to establish an annual allowable volume of fibre in each calendar year (the "Allowable Cut") for each five-year period. The Allowable Cut for any given year, as set forth in the Forest Management Plan, will be included in the Annual Plan. AT Limited Partnership is required to consult with Groupe Lebel in connection with the adoption of the Forest Management Plan, any subsequent modification thereto and any Annual Plan pursuant thereto. Approval of the Forest Management Plan and each Annual Plan and any modifications thereto (other than modifications required in order to comply with applicable law or regulations) requires the prior consent of Groupe Lebel, which consent may not be unreasonably withheld or delayed. Groupe Lebel is entitled to change the specifications relating to its fibre requirements, provided that in no event will AT Limited Partnership be required to cut more than the Allowable Cut to meet such changes. Under the terms of the Fibre Supply Agreement, for each six calendar month period (a "Price Period"), the price for each category of fibre will be equal to the weighted average, freight-adjusted prices charged to the lumber mill by unaffiliated suppliers for such category of fibre (and excluding deliveries from the Acadian Timberlands), calculated with reference to deliveries made during the six-month period immediately preceding such Price Period. When deliveries by un-affiliated suppliers are ...

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