Annual Information Form

THEWESTAIMCORPORATION

ANNUALINFORMATIONFORM

in respect of the year ended December 31, 2021

APRIL13,2022

TABLE OF CONTENTS

INTERPRETATION ..................................................................................................................................................... 1

FORWARD-LOOKING STATEMENTS ..................................................................................................................... 1

CORPORATE STRUCTURE ....................................................................................................................................... 2

Name and Incorporation ........................................................................................................................................... 2

Intercorporate Relationships ..................................................................................................................................... 4

BUSINESS OF THE COMPANY ................................................................................................................................. 5

General Development of the Business ...................................................................................................................... 5

Summary Description of the Business ...................................................................................................................... 6

CURRENT INVESTMENTS ........................................................................................................................................ 9

Skyward Specialty .................................................................................................................................................... 9

Arena ...................................................................................................................................................................... 11

RISK FACTORS ......................................................................................................................................................... 17

Risks Relating to Westaim ...................................................................................................................................... 17

Risks Relating to Skyward Specialty's Business.................................................................................................... 20

Risks Relating to Arena .......................................................................................................................................... 34

Risks Relating to the Arena FINCOs ...................................................................................................................... 41

DESCRIPTION OF CAPITAL STRUCTURE ........................................................................................................... 44

Common Shares ...................................................................................................................................................... 44

Class A Preferred Shares ........................................................................................................................................ 45

Class B Preferred Shares ......................................................................................................................................... 46

Fairfax Private Placement ....................................................................................................................................... 46

MARKET FOR SECURITIES .................................................................................................................................... 47

Trading Price and Volume ...................................................................................................................................... 47

DIVIDENDS AND DISTRIBUTIONS ....................................................................................................................... 47

DIRECTORS AND EXECUTIVE OFFICERS ........................................................................................................... 48

Name, Residency and Principal Occupation ........................................................................................................... 48

Shareholdings of Directors and Executive Officers ................................................................................................ 48

Cease Trade Orders, Bankruptcies, Penalties or Sanctions ..................................................................................... 49

Conflicts of Interest ................................................................................................................................................ 50

AUDIT COMMITTEE ................................................................................................................................................ 50

The Audit Committee's Charter.............................................................................................................................. 50

Composition of the Audit Committee ..................................................................................................................... 50

Relevant Education and Experience ....................................................................................................................... 50

Pre-Approval of Audit and Non-Audit Services by Independent Auditors ............................................................ 51

Audit Committee Oversight .................................................................................................................................... 51

Audit Fees ............................................................................................................................................................... 51

Exemption ............................................................................................................................................................... 52

PROMOTERS ............................................................................................................................................................. 52

LEGAL PROCEEDINGS AND REGULATORY ACTIONS .................................................................................... 52

Legal Proceedings ................................................................................................................................................... 52

Regulatory Actions ................................................................................................................................................. 52

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS ........................................... 52

TRANSFER AGENT AND REGISTRAR .................................................................................................................. 52

MATERIAL CONTRACTS ........................................................................................................................................ 53

INTERESTS OF EXPERTS ........................................................................................................................................ 53

ADDITIONAL INFORMATION ................................................................................................................................ 53

APPENDIX"A"- AUDIT COMMITTEE CHARTER ........................................................................................... A -1

INTERPRETATION

As used in this Annual Information Form (the"AIF"), unless the context indicates or requires otherwise, the term(s): (a)"Company"or"Westaim"refer to The Westaim Corporation (including, where applicable, its predecessor entities) and its subsidiaries; (b)"Skyward Specialty"refers to Skyward Specialty Insurance Group, Inc. and its subsidiaries; (c)"Arena Investors"refers to Arena Investors Group Holdings, LLC ("AIGH") and its subsidiaries (including, but not limited to Arena Investors, LP ("AI")); (d)"Arena FINCOs"refers collectively to Westaim Origination Holdings, Inc. ("WOH") and Arena Finance Holdings Co., LLC, ("AFHC") and each of their respective subsidiaries; and (e)"Arena"refers collectively to Arena Investors and the Arena FINCOs. Unless otherwise stated, the information contained in this AIF is as of April 13, 2022.

All dollar amounts herein are expressed in United States dollars unless otherwise indicated. Unless otherwise indicated, financial information in this AIF regarding the Company has been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board. Skyward Specialty and Arena maintain their accounts in United States dollars. The annual consolidated financial statements of Skyward Specialty are prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") and the annual financial statements of Arena are prepared in accordance with either IFRS or U.S. GAAP.

FORWARD-LOOKING STATEMENTS

This AIF contains certain"forward-looking statements"and"forward-looking information"which reflect the current expectations of management regarding the Company's future growth, results ofoperations, performance and business prospects and opportunities. In particular, the words "strategy", "may", "will", "continue", "developed", "objective", "potential", "exploring", "could", "expect", "expected", "expects", "tends", "indicates", and words andexpressions of similar import, are intended to identify forward-looking statements. Such forward-looking statements include but are not limited to statements concerning: strategies; alternatives and objectives to maximize value for shareholders; expectations and assumptionsrelating to the Company's business plan; expectations and assumptions relating to the business and operations of Skyward Specialty and Arena; expectations regarding the Company's assets and liabilities; the Company's ability to retain key employees; management's belief that its estimates fordetermining the valuation of the Company's assets and liabilities are appropriate; the Company's views regarding potential future remediation costs; the effect of changes to interpretations of tax legislation on income tax provisionsin future periods; and the Company's determination that the adoption of new accounting standards will not have a material impact on its consolidated financial statements. These statements are based on current expectations that are subject to risks, uncertainties and assumptions and Westaim can give no assurance that these expectations are correct.

The Company's actualresults or financial position could differ materially from those anticipated by these forward-looking statements for various reasons generallybeyond the Company's control, including, without limitation, the following factors: risks inherent in acquisitions generally; fluctuations in the United States dollar to Canadian dollar exchange rate; the Company's cash flow; future sales of a substantial number of the Company's common shares(the"Common Shares"); the Company's ability to raiseadditional capital; regulatory requirements may delay or deter a change in control of the Company; the potential treatment of the Company as a passive foreign investment company ("PFIC") for U.S. federal income tax purposes; market turmoil, risk of volatile markets and market disruption risk; exposure toepidemics; Company employee error or misconduct; the Company's cybersecurity; Skyward Specialty'sability to accurately assess underwriting risk; the effect of intense competition and/or industry consolidation on Skyward Specialty's business; Skyward Specialty's reliance on brokers and third partiesto sell its products to clients; Skyward Specialty's ability to alleviate risk through reinsurance; Skyward Specialty's reserves may prove to be inadequate; Skyward Specialty'sability to maintain its financial strength and issuer credit ratings; the occurrence of catastrophic events including terrorist attacks and weather related natural disasters on SkywardSpecialty'sbusiness; the cyclical nature of the property and casualty ("P&C") insurance industry on Skyward Specialty'sbusiness; the effects of emerging claim and coverage issues on Skyward Specialty's business; the effect ofgovernment regulations designed to protect policyholders and creditors rather than investors; the effect of climate change on the risks that Skyward Specialty insures; the effect of retentions in various lines of business; dependence by Skyward Specialty on key employees; the effect of litigation and regulatory actions; Skyward Specialty's abilityto successfully manage credit risk (including credit risk related to the financial health of reinsurers); Skyward

Specialty's ability to compete against larger more well-established competitors; unfavourable capital market developments or other factors which may affect the investments of Skyward Specialty (including meeting liquidity requirements); Skyward Specialty's ability to manage growth effectively; Skyward Specialty's ability to obtain additional capital; Skyward Specialty's ability to receive dividends from its subsidiaries; Skyward Specialty employee error or misconduct; Skyward Specialty's reliance on information technology and telecommunications systems; dependence by Skyward Specialty on certain third party service providers and program administrators;

Skyward Specialty's policies will be enforceable in the manner it intends; Skyward Specialty receiving reimbursement for claims by reinsurers on a timely basis; Skyward Specialty's ability to pay claims accurately and timely; Skyward Specialty's reliance on renewal of existing insurance contracts; the effect of environmental, social and governance matters on Skyward Specialty's business; the effect of any changes in accounting practices and future pronouncements on Skyward Specialty's business; the effect of additional legislation or market regulation enacted by the U.S. federal government on Skyward Specialty's business; Skyward Specialty's ability to utilize net operating loss carryforwards and certain other tax attributes; the effect of change of control requirements under Texas insurance laws and regulations onSkyward Specialty's ability to successfully pursue its acquisition strategy; the effect of Skyward Specialty's debt obligations and other financial obligations on its business; Skyward Specialty's reliance on its intellectual property rights; Skyward Specialty not infringing the intellectual property rights of others; the effect of changes in underwriting guidelines on Skyward Specialty's business; the condition of the global financial markets and economic and geopolitical conditions affecting Arena's business; the variable nature of Arena Investors'revenues, results of operations and cash flows; the effect of rapid changes and growth in assets under management ("AUM") on Arena Investors; Arena Investors'ability to mitigate operational and due diligence risks; the subjective nature of the valuation of the Arena FINCOs'investments; Arena Investors'ability to mitigate regulatory and other legal risks; Arena Investors'ability to find appropriate investment opportunities; Arena Investors' abilityto successfully navigate and secure compliance with regulations applicable to it and its business; Arena Investors'ability to mitigate private litigation risks; Arena Investors'ability to manage conflicts of interest; the effects of a decrease in revenues as a result of significant redemptions in AUM on Arena Investors'

business; the investment performance of Arena Investors'; Arena Investors investment in illiquid investments; Arena Investors'ability to retain qualified management staff; Arena Investors'ability to mitigate the risk of employee misconduct and employee error; the effect of the COVID-19 pandemic on Arena's business; effect of market conditions on the Arena FINCOs; Arena Investors'ability to implement effective risk management systems; the performance of the investments of the Arena FINCOs; the Arena FINCOs'investment in illiquid investments; Arena Investors'ability to manage risks related to its risk management procedures;Arena Investors'ability to compete against current and potential future competitors;Arena's ability to finance borrowers in a variety of industries; dependence by the Arena FINCOs on the creditworthiness of borrowers; the ability of the Arena FINCOs to mitigate the risk of default by and bankruptcy of a borrower; the ability of the Arena FINCOs to adequately obtain, perfect and secure loans; the ability of the Arena FINCOs to limit the need for enforcement or liquidation procedures; the ability of the Arena FINCOs to protect against fraud; the Arena FINCOs'ability to realize profits; changes to the regulation of the asset-based lending industry; United States tax law implications relating to the conduct of a U.S.

trade or business; Arena Investors'cybersecurity; and other risk factors set forth herein or in the Company's annual report or other public filings.

Westaim disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments, or otherwise, except as required by law. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. Although Westaim has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause unanticipated actions, events or results. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The reader is cautioned not to place undue reliance on forward-looking statements.

CORPORATE STRUCTURE

Name and Incorporation

Westaim was incorporated under theBusiness Corporations Act(Alberta) (the"ABCA") by Articles of Incorporation dated May 7, 1996 (the"Articles"). The Articles were amended effective June 26, 1996 to remove theprivate company restrictions on the transfer of securities, to create preferred share classes designated as Class A preferred shares and Class B preferred shares and to increase the maximum number of directors to fifteen. Restated Articles of Incorporation were issued under the ABCA on April 17, 2000 and the Articles were further amended on

May 24, 2000 to permit meetings of shareholders to be held in certain specified cities outside of Alberta, or in any other city in Canada or the United States and to allow the board of directors of the Company (the"Board") to appoint additional directors between annual meetings, subject to certain limitations. The Articles were amended again on February 8, 2010, February 26, 2010 and September 11, 2012 in connection with the creation of the Non-Voting Shares (as defined herein) and the removal of the conversion restrictions attaching thereto. On October 1, 2013, the Articles were further amended to effect a 50:1 share consolidation of the Common Shares.

Westaim's registered office is located at 1500, 850-2 Street SW, Calgary, Alberta T2P 0R8 and its head office is located at 70 York Street, Suite 1700, Toronto, Ontario M5J 1S9.

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The Westaim Corporation published this content on 13 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 April 2022 12:49:51 UTC.