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EEA Investors’ Group WP20140901RO EEA Run-Off Shares – June 2014 Redemptions Updated 12th Sept 2014

© 2014 Medley Systems Ltd / 4 www.EEAInvestors.com

The following announcement from EEA confirms that the first redemptions and payments

will be made during September 2014, with payments going into shareholder bank accounts

(or to the platforms, where applicable) around 30th September 2014. Please see the

highlighted paragraph below.

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Date: 29 August 2014

Announcement from Mark Colton, Chairman of the Board of the EEA Life Settlements Fund PCC

Limited (the “Fund”), to holders of Run-Off Shares

As confirmed on 1 August 2014 the Fund will distribute in aggregate $14.6m to those persons

registered as holders of Run-Off Shares as at 1 September 2014.

In order to effect the distribution, the relevant portion of each holder’s Run-Off Shares will be

redeemed on 1 September 2014 and the distribution amount will be paid in cash on or around 30

September 2014. The estimated proposed distribution per Run-Off Share is as follows:

Cell Payment per

Share USD Fund Class X Run-Off $4.41

Euro Fund Class X Run-Off €4.01

Sterling Fund Class X Run-Off £3.52

Sterling Fund Dist Run-Off £2.61

USD Fund Dist Run-Off $2.77

Euro Fund Dist Run-Off €2.70

Sterling Fund Acc Run-Off £3.92

Meteor Senior Life Settlements Sterling Fund Run-Off £3.59

USD Fund Class I Run-Off $3.48

Meteor Senior Life Settlements Sterling Fund II Run-Off £3.25

WAY Life Settlements Fund Run-Off £3.17

Euro Fund Acc Run-Off €2.80

USD Fund Acc Run-Off $3.26

Swedish Krona Fund Class X Run-Off SEK2.90

Euro Fund Class Y Run-Off €2.63

The exact amount to be distributed will be confirmed on a contract note to be mailed to each holder

of Run-Off Shares towards the end of September.

The Administrator is in the process of collecting updated bank details, IRS W-8 forms, and other

paperwork to satisfy the verification of identity requirements, from shareholders. It is essential that

you have completed any such requests in order to receive your payment.

If you are unsure whether you have provided the necessary documentation please contact the

Administrator on +44 1481 740900,[email protected].

mailto:[email protected]



ATTACHMENT A

EEA INVESTORS’ GROUP COMMENTS

1. The 2013 Restructuring documents 1, which created the Run-off share classes with effect

from 1st January 2014, stated :

DISTRIBUTION POLICY

Distributions will be made to holders of Shares by way of compulsory

redemption of such Shares, or otherwise, on a twice-yearly basis, provided

that:

(1) at the relevant time, the Cell’s Available Cash exceeds

(a) 10 per cent. (or such lower percentage as the Directors may in their

discretion from time to time determine generally or in any particular

case) of the then Net Asset Value of the Cell plus

(b) the Performance Fee Retention; and

(2) the aggregate of all distributions in respect of all classes of Run-Off

Shares in all Run-Off Cells on each date is at least US$20 million (or

equivalent in the relevant currency), or such lower amount as the

Directors may in their discretion from time to time determine generally

or in any particular case.

The Company will not pay any dividends or distributions in respect of

[Run-Off] Shares save as set out above.

“Available Cash” means cash held directly by the Cell after deduction for any

accrued fees and expenses (for the avoidance of doubt, cash required to pay

two years' premia on Current Underlying Investments attributable to the Cell

from time to time will be retained by one or more subsidiaries of the Company

and will not be Available Cash for this purpose).

2. The Board confirmed the policy of two years’ premium payments and other expenses at

the October 2013 EGM and the December 2013 AGM. These amounts are currently

running at the rate of approximately $(73 + 16)m = $89m per year in total.

At 30th June 2014 the cash balance of the fund was stated as being $148m 2. Two years’

premiums and expenses at current rates would amount to around $178m, meaning that

there should be no cash available for the June redemptions. However, in a Letter to

Shareholders dated 7th July 2014 (See Attachment C), Mark Colton stated that the Board

expected to make $10-20m available across all Cells, and would change the scheme rules

if necessary to enable a $10m minimum redemption payment across all Cells.

1 Offering Memorandum dated 1

st January 2014 plus applicable Supplements for the Run-off Cells.

Available from http://www.eeafmg.gg/eea-life-settlements-fund/ 2 EEA Fact sheet July 2014

http://www.eeafmg.gg/eea-life-settlements-fund/



On 1st August 2014, Mark Colton wrote again to shareholders (See Attachment C) that

Based on $25m cash being available in the Fund as at 30 June 2014, the Fund will

distribute in aggregate $14.6m to those persons registered as holders of Run-Off Shares

as at 31 August 2014. The available cash is higher than the Board’s initial estimate of

$10-20m largely due to a recently notified maturity of $7m, which is a good example of

the variability of the Fund’s maturity experience.

By the end of July the cash balance had fallen to $142m 3. We don’t yet know the

August balance, but currently project it to rise again to around $148m 4.

3. There are two points of confusion in these aforementioned notices :

a) The $7m maturity (Policy Ref 18719E) actually occurred in April 2014, and

was part of a total of $19m of late maturity postings from September 2013

and April/May 2014 which were booked in June 2014, and appear to have

been already included in the $142m June cash balance mentioned above.

b) The reference to $10-20m or $25m being available across all cells is

irrelevant. Cash is allocated to all Continuing and Run-off Cells on a pro-rata

basis, as it arises. The only requirements for the run-off distribution is that

there must be at least 10% cash available within each Run-off Cell at the

appropriate time, and a minimum of $20m across all Run-off Cells. At 30th

June 2014 the total cash in all the Run-off Cells would have been $86m (58%

of $148m), which is also 17% of the $501m value of all the run-off Cells at

that time. However, the run-off Cells would have to bear a $85m portion of

the two-year premium reserve, which means that there should be no cash

available for redemptions.

3 EEA Fact sheet August 2014

4 Based on unconfirmed view of August Maturities and estimated expenses.



ATTACHMENT B

EARLIER EEA LETTERS RELATING TO JUNE 2014 RUN-OFF REDEMPTIONS

7 July 2014

Shareholders will be aware that, as a result of the restructuring of EEA Life Settlements Fund PCC Limited which became effective on 1 January 2014, distributions will be made to Run-Off Shareholders by way of compulsory redemption or otherwise on a twice-yearly basis upon certain conditions relating to Available Cash being met. For these purposes, Available Cash is the amount of cash held directly by a Cell after deduction for any accrued fees or expenses, which deductions include (without limitation) cash required to pay two years' premia on the portfolio of policies attributable to the Cell from time to time.

The Fund's board of directors (the "Board") currently anticipates that the aggregate Available Cash of all Cells (including both Run-Off Cells and Continuing Cells) as at 30 June 2014 is likely to be between US$10 million and US$20 million. The Board intends to exercise its discretion so as to waive any requirement in the Fund's offering memorandum and Run-Off supplements each dated 1 January 2014 for a Run-Off Cell's Available Cash to exceed 10% of the then Net Asset Value of that Cell and for the aggregate of all distributions in respect of all classes of Shares in all Run-Off Cells to be at least US$20 million before any distribution is made, so that Available Cash attributable to Run-Off Cells is distributed to Run-Off Shareholders. Run-Off Shareholders should note that the actual amount of Available Cash that will be available for distribution (if any) will only be known late in July, once the Net Asset Value calculations for 30 June 2014 have been completed, and that any distribution is expected to take place in August and will be made to Run-Off Shareholders who hold Run-Off Shares at that date.

Available Cash attributable to Continuing Cells will be invested in New Underlying Investments in due course, in accordance with the terms of the Fund's offering documents.

The Fund will provide Run-Off Shareholders with a further update once the Net Asset Value calculations for 30 June 2014 have been completed.

Yours sincerely

Mark Colton, Chairman

August 1, 2014

Mark Colton, Chairman of the Board of EEA Life Settlements Fund PCC Limited (the “Fund”), today

announced that “Based on $25m cash being available in the Fund as at 30 June 2014, the Fund will

distribute in aggregate $14.6m to those persons registered as holders of Run-Off Shares as at 31

August 2014. The available cash is higher than the Board’s initial estimate of $10-20m largely due to

a recently notified maturity of $7m, which is a good example of the variability of the Fund’s maturity

experience.

In order to effect the distribution, the relevant portion of each holder’s Run-Off Shares will be

redeemed on 1 September 2014 and it is anticipated the distribution amount will be paid in cash on or

around 30 September 2014. The amount to be paid in respect of each Run-Off Share will be

published in early September.

Holders of Continuing Shares are able to apply to redeem up to 5% of their shares on 2 January

2015. A redemption form is available here for this purpose and must be received by the administrator

no later than 28 November 2014. This transaction will only proceed if Available Cash in the

Continuing Cells is in excess of 10% of the net asset value of such cells as at 31 December 2014.”

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