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BTM Advisory Services Inc.

Suite 300, # 5 Richard Way SW Calgary, AB T3E 7M8

September 12, 2017 To the Investors of La Terra Ventures Land Projects, In my capacity as court-appointed Inspector of La Terra Ventures Inc. I am forwarding to you the attached Presentation for your review and questions in advance of our court date scheduled for October 6, 2017. This Presentation has been prepared for investors in the five La Terra Ventures Land Projects: Eagle Ridge (Okotoks, Alberta), Iron Landing (Crossfield, Alberta), Heritage Heights Phases I and II (Strathmore, Alberta) and The Meadows (Claresholm, Alberta) (collectively, the “Land Projects”). Its purpose is to provide investors with sufficient information to understand the current ownership and financial matters negatively affecting the Land Projects, and the proposed plan (the “Restructuring Plan”) to restructure the Land Projects’ ownership. The Restructuring Plan will be presented for Court approval

• n October 6, 2017.

The investors affected by the Restructuring Plan include those who acquired undivided interests (“UDIs”) in the Land Projects and are referred to in the Presentation as “UDI Owners”, and to those who loaned funds to UDI Owners by way of land mortgages and are referred to in the Presentation as “Mortgagees”. UDI Owners and Mortgagees are referred to together as “Investors”. There is a Question & Answer section at the end of the Presentation which addresses questions that I expect Investors may have. I expect that Investors may have other questions. If you have questions arising from the Presentation or about your individual situation, please direct them by email to Rob Petersen at robp@wheelhousesupport.ca. Rob and I will endeavor to respond to all emails as quickly as we can. For those investors that do not have email, please call Rob at (403) 797-0266. Please note the following dates: No later than September 25, 2017 – Court Application documents relating to the Restructuring Plan will be sent by email to those Investors with email access, and mailed to those without email access. October 6, 2017 (2:00 PM) – Court Application hearing at the Court of Queen’s Bench in Calgary, Alberta Please read the Presentation very carefully as the matters discussed directly affect all Investors in the Land Projects. The Restructuring Plan that is being proposed provides, in my view, significant benefits to the Investors and will enable the Land Projects to proceed forward towards development or sale, neither

• f which can currently be accomplished.

Yours truly, Gary L. Bentham, CPA,CA,CIRP For BTM Advisory Services Inc., in its capacity as Inspector of La Terra Ventures Inc.

2

LA TERRA LAND PROJECTS – RESTRUCTURING PLAN PRESENTATION TO INVESTORS

SEPTEMBER 12, 2017

3

Table of Contents

NOTICE TO READER ............................................................................................................................................... 4 INTRODUCTION ....................................................................................................................................................... 5

• A. THE LAND PROJECTS – CURRENT OWNERSHIP AND FINANCIAL STRUCTURE ............................... 5

A) LA TERRA OPERATING HISTORY

................................................................................................................................ 6

B) LAND PROJECT VALUATION AND FINANCIAL/OWNERSHIP PROFILE ..........................................................................

6

C) MORTGAGEE PROFILE

................................................................................................................................................ 7

• B. RESTRUCTURING PLAN

.................................................................................................................................. 8

A) SUMMARY

.................................................................................................................................................................. 8

B) BENEFITS OF THE RESTRUCTURING PLAN ................................................................................................................

11

C) THE RESTRUCTURING PLAN – NEXT STEPS AND IMPLEMENTATION

......................................................................... 12

D) TAX AND SECURITIES IMPLICATIONS OF THE RESTRUCTURING PLAN ......................................................................

14

E) CURRENT AND FUTURE FINANCING ..........................................................................................................................

14

F) RESTRUCTURE OR LIQUIDATE? ................................................................................................................................

15

• C. POST REORGANIZATION OPERATIONS

.................................................................................................... 15

• D. LA TERRA VENTURES INC. FINANCIAL HISTORY AND CURRENT FINANCIAL POSITION ........... 16
• E. QUESTIONS AND ANSWERS ......................................................................................................................... 19

4 NOTICE TO READER In preparing the financial data in this Presentation, the Inspector has relied upon unaudited financial information and La Terra company records and records for the Land Projects and Mortgages, some of which are not complete. The Inspector has not audited, reviewed or otherwise attempted to verify the accuracy or completeness of the financial information in a manner that would wholly or partially comply with Generally Accepted Assurance Standards pursuant to the Chartered Professional Accountants Canada Handbook and, accordingly, the Inspector expresses no opinion or other form of assurance in respect of the information. Future orientated financial information relied upon in this report is based on the Inspector’s assumptions regarding future events and discussions with land management professionals, appraisers, and legal counsel. Actual results achieved will vary from this information and the variations may be material.

5 INTRODUCTION On April 25, 2017, BTM Advisory Services Inc. was appointed Inspector of La Terra Ventures Inc. (“La Terra”) by Order of the Court of Queen’s Bench of Alberta (the “Court Order”) with the consent of La Terra’s president and sole director, John Labun. This appointment was necessitated by the occurrence and disclosure of certain questionable financial transactions negatively affecting a number of Investors, and the disclosure that La Terra was financially unable to continue as Administrator of the Land Projects. Concurrently, an Advisory Committee of UDI Owners and Mortgagees was formed to provide advice and input to the Inspector in the fulfilment of its duties. The Advisory Committee has subsequently communicated with Investors through Rob Petersen at Wheelhouse Support Services. Orchestrate Inc., a land manager and developer, was appointed Interim Administrator of the Land Projects by the Court Order. The primary responsibility of the Inspector has been to review and investigate the financial affairs of La Terra, to report its findings to the Court and to the Advisory Committee, and to assist in the development

• f the Restructuring Plan that will enable the ongoing management and financing of the Land Projects for

the benefit of the Investors. This Presentation has been prepared by the Inspector with review by its legal counsel and has been provided to the Advisory Committee. The main topics addressed include: A –The Land Projects – Current Ownership and Financial Structure B – Restructuring Plan C – Post Reorganization Operations D – La Terra Ventures Inc. – Financial History and Current Financial Position E – Questions and Answers The questionable financial transactions that gave rise to the Inspectorship are not addressed in detail in this Presentation and are the subject of a detailed confidential report that will be presented by the Inspector to the Court and the investigative authorities. With the approval of the Court, the Inspector has communicated directly with those Investors directly affected by the questionable transactions.

• A. THE LAND PROJECTS – CURRENT OWNERSHIP AND FINANCIAL STRUCTURE

The current ownership and financing structure of the Land Projects directly impacts every Investor. It is important to differentiate between the Land Projects and La Terra as the Investors’ financial and

• wnership interests are in the Land Projects, and Investors have no financial interest in La Terra. For

context, some La Terra history and background is necessary to better understand the position of the Land Projects today.

6 a) La Terra Operating History La Terra was incorporated in 2008 for the purpose of acquiring and syndicating land to investors. John Labun is the remaining shareholder and director today, the other three founding individuals having resigned and sold their shareholdings back to La Terra. Between 2008 and 2012 La Terra acquired six parcels of land, including the “Land Projects” for $16.6 million and subsequently sold $31.5 million of UDIs in those lands to over 800 individual UDI Owners. The sixth parcel, which is not part of the Land Projects, is Discovery Plains, located in Olds, Alberta. La Terra reached an agreement in 2016 with Orchestrate Inc. (“Orchestrate”) a Calgary-based land manager and developer, to assume management and control of the Discovery Plains project. Although Discovery Plains may be referred to in this Presentation, it is not subject to the Restructuring Plan; only Eagle Ridge, Iron Landing, Heritage Heights Phases I and II, and The Meadows are addressed in the Restructuring Plan. In addition to selling UDIs to Investors for cash, La Terra also arranged financing for those Investors wishing to finance their UDIs. La Terra sold individual mortgages (the “Mortgages”)

• n the UDIs and today about 461of the 935 UDI Owner accounts holding UDIs in the five Land

Projects are mortgaged. Although La Terra does not have mortgage administration agreements with the Mortgagees, it has been the de facto administrator of the Mortgages since inception. In that capacity La Terra has collected and distributed interest, facilitated mortgage payouts and maintained the mortgage records. Each of the Projects is governed by a Joint Venture Agreement (“JVA”). A condition of each UDI Owner acquiring a UDI was that they sign the respective JVA pertaining to their property. The JVAs provide for the administering of the Joint Venture by La Terra and for the sale and/or development of the lands if supported by 60% of the joint venture participants of the relevant Land Project. La Terra has been struggling financially since 2014 and today has no cash to carry

• n operations as Administrator of the Land Projects. La Terra has significant unpaid debts to

suppliers and to Canada Revenue Agency. As further described below, the current ownership structure is very cumbersome in that there are hundreds of individual titles on each Land Project and over half of those titles have Mortgages registered against the titles. It is extremely difficult, if not impossible, for UDI Owners to sell their UDIs. It is also very difficult to develop or sell the Land Projects with the existence of multiple titles and Mortgages, many of which are in arrears. b) Land Project Valuation and Financial/Ownership Profile As detailed in the chart below, La Terra acquired six parcels of land between 2008 and 2012 for $16.57 million. La Terra subsequently sold UDIs in the Land Projects and Discovery Plains for $31.75 million generating a gross profit before selling and operating expenses of $16.5 million ($1.1 million of the lands were retained by La Terra). Excluding the Discovery Plains project, UDIs sold in the five Land Projects totaled $24.9 million. The Inspector has commissioned updated appraisals of the lands which indicate:

7

• The appraised value of the Land Projects is substantially less than the UDI Owners’
• investment. The cumulative appraised value of the five Land Projects (excluding

Discovery Plains) is $14.9 million. When compared to $24.9 million, the amount at which the five projects were syndicated to UDI Owners, the appraisals indicate a $10 million shortfall before selling expenses, if the Land Projects were sold today at their appraised value. On an individual project basis, the % loss to individual investors would range from 26% of their original investment to 71% of their original investment.

• The forced sale of the Land Projects would result in a higher loss to Investors.

Indicators are that if the Land Projects were liquidated today on a forced sale basis, the value of the five projects would decline from $14.9 million to $12.4 million, resulting in a further $2.5 million loss of value.

• The fair values assume one title per Land Project. The appraisers have assumed that

the UDI titles are consolidated in to one title for each Land Project. The appraisers advise that the UDI titles as they now exist would be very difficult to sell individually and that the value would therefore be substantially less, if sold individually. The following table outlines the estimated valuations for the Land Projects: A key objective of the Restructuring Plan as outlined later in the Presentation is to allow time for the Investors, under the direction of a Board of Directors and land manager, to consider alternative strategies for the development or sale of the Land Projects without the duress of forced sale liquidation. c) Mortgagee Profile Of the 887 ownership accounts in the Land Projects, 461 UDI Owners financed the purchase of their UDIs using funds provided by over 300 separate Mortgagees. Of the $24.9 million paid by the UDI Owners on the five Land Projects, $12.9 million was provided by Mortgagees. Many of the Mortgagees have a number of different Mortgages registered against a number of different UDIs by different UDI Owners. Of the 461 mortgaged land positions, 152 of the mortgages are held in Registered Savings Plans (RSPs). Another objective of the Restructuring Plan is to attempt to preserve the RSP eligibility of the Mortgages that are held in Mortgagees’ RSP accounts.

Eagle Ridge Iron Landing The Meadows Heritage Heights 1 Heritage Heights 2 Discovery Plains Total

Sale of UDIs $8,810,250 $5,298,500 $4,387,750 $3,066,600 $3,371,700 $6,816,600 $31,751,400 Land purchase 4,140,316 3,574,767 2,568,275 1,787,162 1,810,000 2,693,342 16,573,862 Gross profit $4,669,934 $1,723,734 $1,819,475 $1,279,438 $1,561,700 $4,123,258 $15,177,538 Date purchased 30-Sep-09 17-Mar-11 2-Dec-11 15-Feb-12 15-Feb-12 31-Dec-08 UDI Landowner accounts 265 246 189 95 92 N/A 887 UDIs sold 513 381 278 218 229 N/A Appraised value $6,500,000 $3,200,000 $1,256,000 $1,975,000 $2,000,000 N/A $14,931,000 Appraised value shortfall ($2,310,250) ($2,098,500) ($3,131,750) ($1,091,600) ($1,371,700) N/A ($10,003,800) % Shortfall

• 26%
• 40%
• 71%
• 36%
• 41%

N/A

• 32%

8 As noted in the chart below:

• There are about $10.8 million in Mortgages owing against the Land Projects.
• The appraised fair market value today of the mortgaged UDIs is less than the

amount owing under their respective Mortgages. The average Mortgage balance per mortgaged UDI ranges from about $13,700 per unit to $16,300 per unit, depending on the Land Project. The corresponding appraised value per UDI unit is in the range of $4,200 to $12,000 depending on the Land Project, indicating a substantial shortfall ranging from $4,272 to $11,956 per Mortgage unit held. Therefore, if the Land Projects were sold today at their appraised value, there would be no money going to the mortgaged UDI Owner and Mortgagees would suffer a substantial loss on their mortgage investments. Of the 461mortgaged accounts, 68 (15%) of those accounts (representing $3.091 million [29%] of mortgage principal) are in arrears. La Terra has continued through the efforts of its one remaining employee to collect interest from borrowers and to maintain the Mortgage records. Approximately $300,000 of interest has been collected and deposited to bank accounts since April 25, 2017 which have been frozen pending the conclusion of the Inspectorship. On October 6, 2017, the Court will be asked to approve the distribution of those funds to the Mortgagees.

• B. RESTRUCTURING PLAN

La Terra, with support from the Inspector and the Advisory Committee, will be seeking Court approval of the Restructuring Plan. a) Summary Under the Restructuring Plan:

• UDI Owners. The UDI Owners land interests will be transferred to a new company (“Landco")

and one consolidated land title will be issued for each Land Project. Landco will hold the lands in

Eagle Ridge Iron Landing The Meadows Heritage Heights 1 Heritage Heights 2 Total

Mortgages granted to UDI landowners $3,963,500 3,090,500 1,966,000 $1,599,400 2,374,700 $12,994,100 Mortgage repayments ($1,115,500) ($540,000) 116,500 ($245,600) (405,300) ($2,189,900) Mortgage balances,April 30, 2017 $2,848,000 $2,550,500 2,082,500 1,353,800 1,969,400 10,804,200 Landowner accounts mortgaged 90 94 41 25 59 309 Landowner accounts mortgaged - RSP accounts 74 31 29 18

• 152

Total landowner accounts mortgaged 164 125 70 43 59 461 Average mortgage per UDI unit financed $16,274 $15,842 $16,143 $13,675 $14,375 UDI value per unit $11,949 $8,000 $4,187 $8,333 $8,333 Value shortfall per financed UDI unit ($4,326) ($7,842) ($11,957) ($5,341) ($6,042)

9 trust in accordance with a Trust Agreement for the UDI Owners in exactly the same proportion that the UDI owners own their lands today. A central registry of Beneficial Interest owners will be maintained for each Land Project listing the owners’ names and amount of Beneficial Interests

• wned in each project. Certificates of Beneficial Interest will be issued to owners where

appropriate.

• Landco ownership. UDI Owners will be the shareholders of Landco and will elect a Board of

Directors who will oversee management of Landco and the Land Projects in accordance with the Trust Agreements. The Initial Board of Directors will be the Investor Advisory Committee.

• Management of the Land Projects. The Landco Board of Directors will retain Orchestrate Inc.

initially to manage the Land Projects. The Land Projects can only be sold with a 60% favourable vote of those Investors voting.

• Mortgagees. The Mortgages will be discharged from the Land Projects and a second new

Company (“Bondco”) will provide Bonds in exchange for the Mortgages. This ownership structure for the Mortgagees is intended to preserve RSP eligibility. The Bonds will be paid from the same Beneficial Interests in the Land Projects that they are now. The shareholders of Bondco will be the Mortgagees who will be entitled to elect a Board of Directors. The initial Board of Directors will be the Advisory Committee. The Bonds will accrue interest at the same interest rate as provided for in the Mortgages currently held by the Mortgagees. The financed UDI Owners will continue to make the payments they originally did under their Mortgages. If they choose not to continue making payment, they will be noted in default, as described below, and all future proceeds from the sale or development of the respective Beneficial Interests will be paid to the Mortgagees.

• Financed UDI Owners in Arrears. Those financed UDI Owners whose Mortgages are in arrears

at September 1, 2017 and those who fall behind on future payments will be noted in default and provided thirty days to pay outstanding interest and bring their Mortgages current. For those UDI Owners who do not bring their Mortgages current, their Landco shares and Beneficial Interests will be transferred to BondCo for the benefit of the Bondholders. The official name of Landco will be Phoenix West Land Corp. and the official name of Bondco will be Phoenix West Bond Corp. The following schematics illustrate the current ownership structure and the new ownership structure envisioned in the Restructuring Plan:

10 LA TERRA Project Lands - Current Structure

Problems with current structure

• mutltiple titles on each property
• multiple mortgages registered
• lands are not saleable, dvelopable
• r financeable
• no management structure

LA TERRA Project Lands - New Structure

Advantages of proposed struture

• single title
• Mortgages discharged
• Mortgagees protected through bonds with

prior rights to Beneficial Interests

• Lands are manageable, saleable, developable

and financeable

• governance and management structure

controlled by the Investors

Claresholm Lands 300 UDIs; 67 mortgages (31 in RSPs) Eagle Ridge Lands - 544 UDIs; 152 mortgages (74 in RSPs) Iron Landing Lands - 400 UDIs; 135 mortgages (32 in RSPs) HH1 Lands 237 UDIs; 46 mortgages(18 in RSPs) HH2 Lands 240 UDIs; 51 mortgages (0 in RSPs) UDI Owners (Cash) UDI Owners (Financed) Eagle Ridge Lands - 1 title Trust and Bond Agreement Iron Landing Lands - 1 title Trust and Bond Agreement Heritage Heights Phase 1 -1 title Trust and Bond Agreement Heritage Heights Phase 2-1 title Trust ahd Bond Agreement Claresholm Lands 1 Title Trust and Bond Agreement Phoenix West Land Corp. (Holds Beneficial Interests in Land for Land Owners Mortgagees (Cash and RSP) Registered on Multiple land titles Beneficial Interest Land Owners Phoenix West Bond Corp. (Holds Bond Agrements for Bondholders (former mortgagees) with prior rights to Beneficial Interests) Bondholders (former Mortgagees, Cash and RSP) Own shares and bonds Own shares and trust certificates

11 b) Benefits of the Restructuring Plan The Restructuring Plan is designed to preserve and protect the existing interests of the UDI Owners and the Mortgagees, while enabling the development or sale of the Land Projects and financing of their operations. The key benefits of the Restructuring Plan include: 1) Creation of single titles for each of the Land Projects. The undivided interest titles on each Land Project will be consolidated into one title for that Land Project. Once the titles have been consolidated, the Land Project can be financed and will be both saleable and developable and, it is expected, its value will be enhanced. 2) Preserving the current ownership interests of the UDI Owners and the interests of the

• Mortgagees. The Restructuring Plan seeks to preserve the ownership interests of UDI

Owners and the interests of the Mortgagees. Upon implementation of the Restructuring Plan, the UDI Owners and Mortgagees will continue to have their interests reflected in the new structure. 3) Discharge of Mortgages. By enabling the discharge of the individual Mortgages and replacement with the Bonds, the Land Projects can be financed, thus enabling development or sale of the lands while preserving the existing priority interests of the Mortgagees. 4) Mortgage administration. The Restructuring Plan will enable and facilitate the cleanup of the Mortgages, which are currently in disarray. Approximately 15% of the Mortgages (and 29% of the mortgage value) are in arrears and have been for some time. A number of Mortgages have been sold but not registered against the lands. Many Mortgages have matured and have not been renewed. There are a number of UDI Owners who wish to abandon their Mortgages and transfer their UDIs to the Mortgagees; in many cases this process was started but not finished. All of these issues will be addressed in a methodical and rational manner under the Restructuring Plan. 5) Financing. The Restructuring Plan enables third party financing of the Land Projects so that the Inspectorship costs and restructuring costs can be paid and enables financing of post- reorganization operations. 6) Preservation of RRSP eligibility. At present, 152 Mortgages are held in RSPs. Through the issuance of Bonds in exchange for the Mortgages, the Restructuring Plan will attempt to preserve the RSP eligibility of the interests of the Mortgagees. 7) Governance. Under the Restructuring Plan, the UDI Owners and Mortgagees will own Landco and Bondco, respectively. They will elect Boards of Directors from their constituents, who will then direct the operations of Landco and Bondco. The Investors’ interests in the Land Projects will be protected at all times through the Trust Agreements; the Land Projects can’t be sold or developed without the approval of the UDI Owners and the Bondholders.

12 c) The Restructuring Plan – Next Steps and Implementation The following steps are necessary to complete and implement the Restructuring Plan. 1) Execution of Purchase and Sale Agreements. Landco will enter into Purchase and Sale Agreements (“PSA”) with the UDI Owners of each Land Project whereby the UDI Owners will transfer their UDIs to Landco in exchange for shares in Landco and a Beneficial Interest in the lands. The Court Order will deem each of the UDI Owners to have signed the PSA. The Beneficial Interests will be proportionate to what the UDIs now hold. For example, if today a UDI Owner owns 2/544 UDIs in Eagle Ridge, upon implementation of the Restructuring Plan, the UDI Owner will be issued a Beneficial Interest equal to 2/544 of the Eagle Ridge lands. There will be a single land title for each of the five Land Projects, as compared to the hundreds of titles currently registered on each of the Land Projects. Further, the Purchase and Sale Agreements will provide for the issuance of shares in Bondco and Bonds in exchange for the Mortgages. Under the Trust Agreements, the Bonds will have first right to funds distributed from the respective Beneficial Interests and will be paid their interest and principal before payments are made to the financed UDI Owner. So, for example, if a Mortgagee has two mortgaged units totaling $29,000 secured by a 2/544 UDI in Eagle Ridge, upon implementation of the Restructuring Plan, he or she will hold Bonds and Shares

• f Bondco, with the Bonds having first right to proceeds of 2/544 Beneficial Interest. Under

the Trust Agreements, the financed UDI Owners will continue to pay interest monthly on the Bonds at the same interest rates that they currently pay on the Mortgages. 2) Settlement of Trust Agreements. For each Land Project, Landco will settle a Trust Agreement, subject to approval of the Court. Landco will be the Trustee. The Trust Agreement is the key document that provides for the custody and management of the lands and for the protection of the interests of the UDI Owners and Mortgagees. The Trust Agreements will provide for:

• The holding of the lands in trust for the UDI Owners as Beneficiaries
• The borrowing against the Land Projects by Landco, the sale and development of the

Land Projects with 60% approval of the UDI Owners and Mortgagees

• The preparation and distribution of annual financial statements
• The management of the Land Projects
• The maintenance of a Register of Beneficiaries, which will be a listing of the

existing UDI Owners but with their assigned Beneficial Interests, and where the UDIs were financed, the name and amount of the Bonds that will have prior rights to proceeds of development and sale of the Land Projects held by the Beneficial

• Interests. That Register will also track those Beneficiaries whose Bond liabilities are

in default

• Payment of the Land Project’s share of the Inspectorship and costs of the

Restructuring Plan

• Distribution of proceeds from the sale of the Land Projects

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• Meetings of Beneficiaries
• Voting by Bondholders. The voting of shares of any Beneficiary whose land interest

is secured by Bonds will be exercisable by the Bondholder until such time that the Bond is repaid. As long as a Bond exists against a Beneficial Interest, the Bondholder (formerly the Mortgagee) will have the voting rights and the financed UDI Owner will not have voting rights 3) Obtaining the Court Order on October 6, 2017. We will be requesting the Court Order to provide for the following:

• Approval of the Purchase and Sale Agreements
• Approval of the Trust Agreements permitting Landco to hold the Land Projects in

Trust for the Beneficiaries

• Issuance to the non-financed UDI Owners the shares in Landco and Beneficial

Interests in the Lands

• Issuance to financed UDI Owners the shares in Landco and Beneficial Interests in the

Lands, subject to the Bondco amounts to be paid

• Discharge of the Mortgages
• Issuance to the Mortgagees shares and Bonds of Bondco. Bonds issued shall be equal

to the mortgage principal plus accrued and unpaid interest, less an amount allocated to Bondco shares. To meet RSP eligibility requirements, approximately 5% of the Mortgages value will be allocated to Bondco shares and the remainder to the Bonds

• A declaration that the transactions constitute a restructuring of the JVAs
• Approval of interim financing and the charging of the Land Projects by the lender
• Approval of the costs of the Inspectorship and Restructuring and the allocation of

those costs to each of the Land Projects pro rata to the appraised value of the Land Projects 4) Implementation of the Restructuring Plan. If the Court Order is granted, the Restructuring Plan, subject to the conditions in the PSAs, will be implemented. Key implementation steps include:

• Consolidation of the UDI titles into one title for each Land Project and the discharge
• f the Mortgages. Our legal counsel will oversee this process.
• Development of the Register of Beneficiaries containing the names, Beneficial

Interests owned, contact information and amount charged by Bondholders of each

• Beneficiary. In preparation for the October 6, 2017 Court application, these registers

are being prepared.

• Retention of Orchestrate to manage Landco and Bondco for 180 days following the

Court Order. Orchestrate’s tasks are described in more detail in section C below.

• Completion of the interim financing.

5) Communications. The status of the Court application and subsequent Restructuring Plan will be communicated to Investors by Wheelhouse Support Services (Rob Petersen).

14 Communications will be by email to those who have access to email, and by regular mail for those who don’t. The status of all related matters will also be updated on a regular basis on the Wheelhouse website. d) Tax and Securities Implications of the Restructuring Plan The Restructuring Plan has been designed in an attempt to first address any potential Goods and Services Taxes arising on the transfer of the UDIs to Landco, and secondly, to provide that the shares and Bonds issued by Bondco to the Mortgagees qualify as investments for RSPs. The Inspector and legal counsel are working with tax advisors in an effort to put the appropriate agreement in place to meet legislative requirements. The appropriate tax election and application documents will be filed as soon as possible after approval of the Restructuring Plan by the Court. Although we believe that the shares and Bonds of Bondco will be eligible investments for RSPs, there is always a risk that the tax authorities will not approve them as eligible investments and there may be tax consequences to Investors should this occur. In that event, the Board of Directors may have to take such additional steps that may be available in an attempt to address such as amending the Bondco structure in an effort to obtain the required approvals. Similarly, the Restructuring Plan is designed in an effort to avoid potential securities issues in connection with the initial issuance of shares, Bonds and Beneficial Interests. e) Current and future financing As there were no funds remaining in La Terra, the Inspector, Orchestrate, legal counsel, tax advisors, the mortgage administrator individual, independent appraisers and the communications contractor are not being paid. Their future payment is secured with a charge on some of the UDIs

• wned by La Terra. It is not the intention of the parties referenced to rely on their charge on the
• UDIs. As part of the Restructuring Plan, Court approval will be sought on October 6, 2017 for

these parties to be paid from third party financing intended to be registered against the Land Projects. The Inspector is in discussion with third party lenders for Landco to borrow up to $1.75 million, which will be secured by a third party mortgage registered against the Land Projects. We expect the cost of financing, including financing fees, interest and legal fees to be in the range of 13% to 15%. We estimate the costs of the Inspectorship and Restructuring Plan to be approximately $675,000. We estimate one year of operating costs to be about $350,000. Including the Inspectorship costs and financing costs, and outstanding costs on the Land Projects preceding the Inspectorship, we estimate costs for one year will be approximately $1.33 million. The Inspector’s request to the lenders is for immediate financing availability of $1.25 million and for standby credit of an additional $500,000. Under the Restructuring Plan, costs that relate specifically to a Land Project will be charged to that Land Project; the Inspectorship and Restructuring Costs and ongoing operating costs that relate to all projects will be allocated on the basis of their respective appraised value. The following chart sets out the allocation of the estimated one year costs and allocation of the operating loan to each Land Project:

15 f) Restructure or Liquidate? The costs of the Restructuring Plan are substantial. It is therefore prudent to assess if an immediate liquidation of the Land Projects is financially better for Investors. We have estimated the cost of liquidating the Land Projects if a Receiver was appointed and compared the net proceeds expected from liquidation to the net proceeds expected if the lands were marketed and sold over the next year without the duress of a forced sale. This analysis does not take into account the upside value of the lands if they are developed in the medium term. The summarized net proceeds under each alternative are presented below. As indicated, the recoveries under the Restructuring Plan, net of the Inspectorship, restructuring costs and one year

• f operating costs are still about $2.4 million higher under the Restructuring Plan. This analysis

assumes that the lands would be sold under both scenarios and doesn’t take into account the potential longer term financial upside if one or more of the Land Projects are developed. To accomplish this advantage, Landco would have to be efficient and prudent in the management of the Land Projects’ ongoing operations and financial affairs.

• C. POST REORGANIZATION OPERATIONS

Upon granting of the order by the Court approving the Restructuring Plan, the Landco and Bondco Boards of Directors will assume control of those companies. The Landco Board intends to retain Orchestrate to manage the Land Projects for the initial 180 days after the granting of the order, and is

ALLOCATION OF RESTRUCTURING AND OPERATING COSTS - ONE YEAR Eagle Ridge Iron Landing The Meadows Heritage Heritage Total Heights Heights II Appraised value $6,500,000 $3,200,000 $1,256,000 $1,975,000 $2,000,000 $14,931,000 % of total value 44% 21% 8% 13% 13% 100% Inspectorship and Restructuring Costs $293,852 $144,665 $56,781 $89,286 $90,416 $675,000 Operating costs - one year 152,368 75,012 29,442 46,296 46,882 $350,000 Plan implementation fees and title disbursments 46,217 29,216 13,406 13,564 14,297 $116,700 Financing costs 85,554 42,119 15,485 24,776 24,776 $192,708 One year cost allocation 577,990 291,012 115,114 173,921 176,371 1,334,408 Additional financing room

• 415,592

Loan $577,990 $291,012 $115,114 $173,921 $176,371 $1,750,000

Net estimatd proceeds from the sale of the lands under the Restructuring Plan $5,696,171 $2,797,806 $1,096,200 $1,731,239 $1,752,591 $13,074,007 Net estimated proceeds from the forced sale of the lands 4,735,925 2,331,532 857,181 1,371,489 1,371,489 10,667,617 Benefit (disadvantage) of the Restructuring Plan $960,246 $466,274 $239,019 $359,749 $381,102 $2,406,390 Benefits (disadvantage)per UDI $1,765 $1,166 $797 $1,518 $1,588

16 in the process of negotiating a management agreement. Orchestrate is related to Rosetree Developments which is managing the restructuring of the Discovery Plains Land Project. As Orchestrate is currently the Interim Administrator of the Land Projects and has familiarity with each, Orchestrate is likely best suited to assist the Board with the transition to the new ownership structure and provide exit guidance. Orchestrate’s key management priorities for the first 180 days will include but not be limited to: a) Land Projects Value Preservation and Enhancement

• Protect the Land Projects against salability encumbrances; and
• Manage the Land Projects as reasonably required to, at minimum, preserve present land

values, and enhance it, as directed by the Boards of Directors, including meeting with development partners and corresponding with the municipal planning authorities b) Land Disposition Research and Advice

• Investigate developability of the Land Projects, to the extent as deemed warranted by the

Board of Directors; and

• Complete a sale / develop / hold strategy for each of the Land Projects and provide its

recommendations to the Boards of Directors. c) Corporate Administration and Communication

• Establish and maintain a secure and accurate Investor/Bondholder records database;
• Manage financed Investor/Bondholder interest payment and default processes;
• Obtain and manage legal, accounting, and communication consulting services as approved by

the Boards of Directors; and d) Financial Guidance and Management

• Assist the Boards of Directors with finalization of the third party financing to enable payment
• f the restructuring and Inspectorship costs and other Land Projects liabilities and to provide
• perating working capital;
• Develop a financing plan to raise sufficient capital to repay the third party interim financing;

and

• Establish bank accounts for Landco and Bondco, and processes for the approval and payment
• f third party invoices.
• D. LA TERRA VENTURES INC. FINANCIAL HISTORY AND CURRENT FINANCIAL

POSITION The following is a brief summary of La Terra’s financial history. It does not impact the proposed Restructuring Plan but is provided to address questions that Investors may have regarding the solvency of La Terra and its inability to maintain operations. A more detailed financial analysis has been provided in the Inspector’s confidential report to the Court.

17 a) Summary of revenue, expenses and income – 2008 to 2017 The following schedule is a summary of the revenue, expenses, operating loss and other cash items generated from land and mortgage operations for the nine-year period 2008 to 2017. These amounts are based on La Terra’s accounting records at April 25, 2017 and have not been subject to independent audit. Of note:

• La Terra lost approximately $96,000 from operations over the 9-year period, before

Mortgage administration transactions.

• The Corporation generated almost $16.5 million of gross profit from the sale of land in

the Land Projects. Of that amount, $8.0 million of management fees were paid to the four

• riginal owners.
• $3.5 million of finders’ fees were paid to agents who sold UDIs and Mortgages for La

Terra.

• La Terra paid $1.094 million of interest to Mortgagees whose Mortgages were in arrears.

Notwithstanding the interest obligation was with the financed UDI Owners who had defaulted on their mortgages, La Terra made the decision to fund the arrears interest.

• La Terra received advances of about $460,000 from a related development company and

$390,000 from a shareholder.

• Approximately $1.423 million of net revenue transactions are under review by the

Inspector.

• The cash on hand at April 25, 2017 is mortgage interest collected and not distributed.

Total revenue $31,353,066 Cost of land sales 15,168,732 Gross profit 16,686,957 Selling and operating expenses: Management fees to shareholders 8,003,039 Finders fees 3,549,796 Wages and employee benefits 1,818,821 Legal and accounting fees 1,039,633 Consulting fees 416,523 Other operating expenses 1,955,698 Total operating expenses 16,783,509 Loss from operations (96,552) Other cash items: Excess interest paid to mortgage investors (1,094,694) Mortgage discharges, 2015-2017 (344,750) UDI inventory acquired, not sold (715,595) Advances from related companies and shareholders 850,594 Transactions under review 1,423,695 Total other cash items 119,250 Cash on hand, April 25, 2017 $22,698

18 b) Current Financial Position As earlier stated, La Terra has no cash to continue to manage its land or mortgage administration

• perations. Orchestrate is managing the non-mortgage administration part of the Land Projects
• n an interim basis, in accordance with the Court Order. La Terra’s only remaining asset is the

UDI interests that it holds in the various projects which are valued in the range of $570,000 to $700,000, based on the recent appraised land values. The Inspector and Orchestrate have a charge against those UDIs for the cost of the Inspectorship and Canada Revenue Agency has filed a writ against those UDIs for amounts owed, as further outlined below. La Terra has estimated liabilities of approximately $2.9 million. Those liabilities include: 1) Two significant liabilities to CRA:

• CRA has assessed La Terra for $1.5 million of Goods and Services Taxes (“GST”) not

remitted on the sale of UDI’s. This assessment is ongoing. La Terra did contract with a Calgary law firm to attempt to reduce or eliminate the liability through a Court

• application. When the UDIs were sold, UDI Owners were to provide a GST account

number to eliminate the need for collection of GST and accordingly, GST was not

• collected. Not all UDI Owners provided a GST account number resulting in the assessed
• liability. The Inspector is in direct communication with CRA and the direction forward

remains unclear. If the GST liability can be reduced and CRA’s claim released, then the UDIs owned by La Terra will become available to creditors, including certain Investors who may have claims against La Terra. La Terra does not have the necessary resources to fund the appeals process respecting the assessed GST.

• La Terra has not remitted employee income taxes, CPP and EI withholdings, and La

Terra’s share of CPP and EI for at least two years. The Inspector has not been able to confirm the amounts owing, but estimates the amount at $50,000. 2) As a result of the Inspector’s review of those certain transactions giving rise to the Inspectorship, there are estimated potential Investor claims against La Terra of approximately $1.3 million. These claims are addressed in more detail in the Inspector’s confidential report to the Court. 3) There are estimated amounts of $150,000 owing to other suppliers.

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• E. QUESTIONS AND ANSWERS

The following questions and answers are intended to assist Investors in understanding the Restructuring Plan and how it may impact them individually. Investors will have other questions and we encourage all Investors to provide your questions to Rob Petersen at robp@wheelhouse.ca. Rob and the Inspector will respond to all questions.

• Q. Who will be managing the Land Projects on a go forward basis?
• A. The Board of Directors of Landco will be responsible for management of the Land Projects.

The initial Board intends to retain Orchestrate Inc., an experienced land manager and developer, to manage the Lands for the first 180 days. The Board of Directors will determine the longer-term management requirements for the Land Projects during the 180 day period.

• Q. Who will be the initial members of the Landco Board of Directors?
• A. The initial members will be some or all of the existing Advisory Committee. The Board

intends to call a meeting of the Investors within six months of the Court application date. The election of new Directors, or re-election of existing Directors, will be addressed at that meeting.

• Q. Who will be the initial members of the Bondco Board of Directors?
• A. The initial members will be some or all of the existing Advisory Committee. The Board

intends to call a meeting of the Investors within six months of the Court application date, at the same time as the Landco Investor meeting. The election of new Directors, or re-election of existing Directors, will be addressed at that meeting.

• Q. The reorganization seems overly complicated. Why do we need Bondco?
• A. We have tried to keep the reorganization as straight forward as possible. The fact though that

many of our Mortgagees hold their mortgages in RSPs adds a layer of complication. Today their mortgages qualify as eligible investments for RSPs. In order though to facilitate the sale and/or development of the Land Projects the many Mortgages now registered against the lands have to be discharged and replaced by an investment that is not only eligible for RSPs, but also maintains a prior right to proceeds of the lands. The Bond structure is the simplest structure that we expect will accommodate both of these objectives.

• Q. I am a UDI Owner and I have no mortgage on my units. You are telling me that my UDI

investment is worth substantially less than what I paid for it. Why has my investment gone down in value?

• A. We have valued the UDI units based on the current appraised value of the lands. Our review of

the La Terra records indicate that the lands have not changed materially in value since they were purchased by La Terra in the 2009 – 2012 time frame, except for The Meadows Land Project which has declined in value substantially below its 2011 appraised value. The La Terra records indicate though that the price you paid for your UDI was, depending on the Land Project, marked up from 57% to 130% over the appraised value. So, the value of the land has

20 not materially changed, but the price that you paid was substantially higher than its appraised value at the time.

• Q. I am a UDI Owner and I financed the purchase of my UDI interests using mortgage
• financing. You are telling me that the value of my land interest is substantially less than

the principal balance owing on my mortgage. And, you are telling me that under the Restructuring Plan that the Bonds which will have a first right to proceeds from my Beneficial Interest will have essentially the same value as the existing mortgage that is registered against my UDI. So, today, I have no equity in my UDI. Do I have to continue paying interest? What happens if I don’t?

• A. Yes, you will be required to pay interest on the Bonds in the same manner as you pay interest

today on the mortgages. If you choose to stop paying you will be given 30 days to pay the arrears amount. If you don’t pay the arrears, you will be noted in default and any future proceeds from your UDI will be paid to the Bondholder. Even if the proceeds from the ultimate sale of the Beneficial Interest exceed the Bond principal and accrued interest, the excess will still be paid to the Bondholder.

• Q. Why don’t we simply sell the land now and take what we can get?
• A. We believe that if we sell the lands now without a thorough review of the available options we

will, at best, receive forced sale prices which are at minimum 15% to 20% less than appraised

• value. In the first six months, the Board of Directors with input from Orchestrate, will assess

the various options for optimizing value from each of the Land Projects and will then recommend a course of action. It is highly possible that the best option for one or more of the Land Projects will be to immediately market and sell those lands.

• Q. I own UDIs in one of the projects. Will I be sharing the costs of the reorganization and
• ngoing operating expenses for each of the Land Projects?
• A. No. Each project will bear its own direct costs, such as insurance and property taxes. Costs

that are applicable to all of the Land Projects, such as the costs of the reorganization, will be allocated to each project on the basis of their respective fair value. For example, 44% of the reorganization costs will be allocated to the Eagle Ridge Land Project while just 8% of those costs will be allocated to The Meadows Land Project. Eagle Ridge will bear a higher percentage of costs because its fair value is over five times greater than the fair value of The Meadows lands.

• Q. I am a Mortgagee and my mortgage has been in arrears for a long period of time. Will

the UDI Owner bring my mortgage current under the Restructuring Plan? What are my options if the UDI Owner does not bring my mortgage current?

• A. You will be issued Bonds in exchange for your mortgage and accrued and unpaid interest.

The Bonds will accrue interest at the same rate as your mortgage and will have a prior right to payment with respect to the UDI Owner’s Beneficial Interest in the lands. The UDI Owner will be given thirty days to bring current the interest due on the Bonds. If he does not, he will be noted in default and all future proceeds from his Beneficial Interest will be paid to you. This process will be set out in the Trust Agreements and no enforcement action will be required by you.

21

• Q. I currently have a title certificate showing my interest in land. Under the Plan, I will no

longer have that title. What is the Beneficial Interest in land and how is it different from my title certificate?

• A. The Beneficial Interest in land is your share of the land that is being held in trust for you by
• Landco. Under the current structure, there are multiple titles on the lands and you have yours.

Under the new structure there will be just one title certificate which will be in the name of

• Landco. Under the Trust Agreement, Landco will hold your previous registered interest in the

land in trust under the Landco title. For example, if you previously held a 1/400 UDI in the Iron Landing Project, you will now have a Beneficial Interest of 1/400 in the Iron Landing Project, which will be held for you in Trust by Landco under the Trust Agreement. On your request, Landco will issue you a trust certificate showing your Beneficial Interest.

• Q. I am a Mortgagee and have a title certificate showing my mortgage registered against the
• property. How is owning a Bond from Bondco different from holding the mortgage that I

currently own and which is registered on a land title certificate?

• A. Owning the Bond will be similar to holding the mortgage and the value will be the same.

Instead of having a mortgage registered on a title certificate, you will have a Bond Certificate which will provide you with a prior right to a payment in respect to a specific Beneficial Interest.

• Q. You have indicated that Landco will borrow $1.75 million. How will interest on this loan

be paid and when will the principal balance be repaid?

• A. Because Landco will not be generating income, it will have no cash to pay interest to the
• lender. The lender will therefore hold back a portion of the loan and maintain that portion as

an interest reserve. The principal balance must be paid on maturity, which we expect to be 18 months from the first advance.

• Q. How will the loan be repaid?
• A. The loan will be apportioned to the Land Projects based on their fair value. We expect one or

more of the Land Projects will be sold. The amount of the loan apportioned to that Land Project will be repaid from the proceeds. For example, if one of the Land Projects is sold for $2 million, $1 million of the loan has been drawn, and 15% of the loan has been allocated to this project, then up to $150,000 of sale proceeds will be applied to the loan and the remainder will be distributed to the Beneficial Interests and Bondholders. If it is decided to hold certain Land Projects for a period longer than 18 months, then replacement financing must be

• btained and any loan still outstanding would be repaid.
• Q. Under the Restructuring Plan will La Terra Ventures or any of its principals have any

future involvement with the Land Projects?

• A. Neither La Terra Ventures nor its principals will have any future involvement with the

management of the Land Projects. If they own UDIs or Mortgages, their ownership will be treated in the same manner under the Restructuring Plan as any other Investor.