-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WugZqasapPBcJTAS8s26eN18bgEqFROqisOsZIQscuibYv2GZVnF3tPwevZlq8Yo zSaJrWrNiQ1CGuT0d0DOvQ== 0001144204-08-038894.txt : 20080708 0001144204-08-038894.hdr.sgml : 20080708 20080707205623 ACCESSION NUMBER: 0001144204-08-038894 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20080708 DATE AS OF CHANGE: 20080707 GROUP MEMBERS: MICHAEL KLEIN ADMINISTRATIVE TRUST GROUP MEMBERS: PACIFICOR FUND II LP GROUP MEMBERS: PACIFICOR FUND LP GROUP MEMBERS: PACIFICOR INSURANCE FUND LP GROUP MEMBERS: PACIFICOR OFFSHORE FUND LTD. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DURA AUTOMOTIVE SYSTEMS INC CENTRAL INDEX KEY: 0001016177 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 383185711 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-47581 FILM NUMBER: 08941960 BUSINESS ADDRESS: STREET 1: 4508 IDS CENTER CITY: MINNEAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: 6123422311 MAIL ADDRESS: STREET 1: 4508 IDS CENTER CITY: MINNEAPOLIS STATE: MN ZIP: 55402 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Pacificor LLC CENTRAL INDEX KEY: 0001439294 IRS NUMBER: 043633578 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 740 STATE STREET STREET 2: SUITE 202 CITY: SANTA BARBARA STATE: CA ZIP: 93101 BUSINESS PHONE: 805-680-8804 MAIL ADDRESS: STREET 1: 740 STATE STREET STREET 2: SUITE 202 CITY: SANTA BARBARA STATE: CA ZIP: 93101 SC 13D 1 v119315_sc13d.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------------------------------- SCHEDULE 13D Under the Securities Exchange Act of 1934 DURA AUTOMOTIVE SYSTEMS, INC. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $0.01 par value per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 26632V 10 2 - -------------------------------------------------------------------------------- (CUSIP Number) Andrew B. Mitchell CEO and Chief Investment Officer Pacificor, LLC 740 State Street, Suite 202 Santa Barbara, CA 93101 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 27, 2008 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this statement because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 1 of 21 SCHEDULE 13D CUSIP No. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Pacificor, LLC I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY). - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 2,262,724 OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 2,262,724 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 31.3%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IA - -------------------------------------------------------------------------------- _______________ * This figure is based on 7,234,060 shares of common stock, par value $0.01 per share (the "Common Stock"), of Dura Automotive Systems, Inc. (the "Issuer") issued and outstanding as reported in the Issuer's Form 8-K filed on June 27, 2008. As more fully described in Items 5 and 6 hereof, Pacificor, LLC is also deemed to be the beneficial owner of 907,017 shares of Series A Reedemable Voting Manditorily Convertible Preferred Stock (the "Convertible Preferred Stock") of the Issuer. The Convertible Preferred Stock, which votes with the Common Stock (on an as converted basis), and the Common Stock beneficially owned by Pacificor, LLC constitutes 37.9% of the voting power of the Issuer in the aggregate. Item 6 hereof contains additional information on the voting and conversion rights of the Convertible Preferred Stock. Page 2 of 21 CUSIP No. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Pacificor Fund LP I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY). - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 401,328 OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 401,328 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.5%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - -------------------------------------------------------------------------------- _______________ * This figure is based on 7,234,060 shares of common stock, par value $0.01 per share (the "Common Stock"), of Dura Automotive Systems, Inc. (the "Issuer") issued and outstanding as reported in the Issuer's Form 8-K filed on June 27, 2008. As more fully described in Items 5 and 6 hereof, Pacificor Fund LP is also the direct owner of 164,186 shares of Series A Reedemable Voting Manditorily Convertible Preferred Stock (the "Convertible Preferred Stock") of the Issuer. The Convertible Preferred Stock, which votes with the Common Stock (on an as converted basis), and the Common Stock, each owned directly by Pacificor Fund LP, constitutes 6.8% of the voting power of the Issuer in the aggregate. Item 6 hereof contains additional information on the voting and conversion rights of the Convertible Preferred Stock. Page 3 of 21 CUSIP No. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Pacificor Fund II LP I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY). - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 357,724 OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 357,724 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.0%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - -------------------------------------------------------------------------------- _______________ * This figure is based on 7,234,060 shares of common stock, par value $0.01 per share (the "Common Stock"), of Dura Automotive Systems, Inc. (the "Issuer") issued and outstanding as reported in the Issuer's Form 8-K filed on June 27, 2008. As more fully described in Items 5 and 6 hereof, Pacificor Fund II LP is also the direct owner of 115,474 shares of Series A Reedemable Voting Manditorily Convertible Preferred Stock (the "Convertible Preferred Stock") of the Issuer. The Convertible Preferred Stock, which votes with the Common Stock (on an as converted basis), and the Common Stock, each owned directly by Pacificor Fund II LP, constitutes 4.9% of the voting power of the Issuer in the aggregate. Item 6 hereof contains additional information on the voting and conversion rights of the Convertible Preferred Stock. Page 4 of 21 CUSIP No. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Pacificor Offshore Fund Ltd. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY). - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 410,027 OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 410,027 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.7%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO - -------------------------------------------------------------------------------- _______________ * This figure is based on 7,234,060 shares of common stock, par value $0.01 per share (the "Common Stock"), of Dura Automotive Systems, Inc. (the "Issuer") issued and outstanding as reported in the Issuer's Form 8-K filed on June 27, 2008. As more fully described in Items 5 and 6 hereof, Pacificor Offshore Fund Ltd. is also the direct owner of 131,796 shares of Series A Reedemable Voting Manditorily Convertible Preferred Stock (the "Convertible Preferred Stock") of the Issuer. The Convertible Preferred Stock, which votes with the Common Stock (on an as converted basis), and the Common Stock, each owned directly by Pacificor Offshore Fund Ltd., constitutes 5.6% of the voting power of the Issuer in the aggregate. Item 6 hereof contains additional information on the voting and conversion rights of the Convertible Preferred Stock. Page 5 of 21 CUSIP No. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Michael Klein Administrative Trust I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY). - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 2,262,724 OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 2,262,724 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 31.3%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) OO - -------------------------------------------------------------------------------- _______________ * This figure is based on 7,234,060 shares of common stock, par value $0.01 per share (the "Common Stock"), of Dura Automotive Systems, Inc. (the "Issuer") issued and outstanding as reported in the Issuer's Form 8-K filed on June 27, 2008. As more fully described in Items 5 and 6 hereof, the Michael Klein Administrative Trust is also deemed to be the beneficial owner of 907,017 shares of Series A Reedemable Voting Manditorily Convertible Preferred Stock (the "Convertible Preferred Stock") of the Issuer. The Convertible Preferred Stock, which votes with the Common Stock (on an as converted basis), and the Common Stock beneficially owned by the Michael Klein Administrative Trust constitutes 37.9% of the voting power of the Issuer in the aggregate. Item 6 hereof contains additional information on the voting and conversion rights of the Convertible Preferred Stock. Page 6 of 21 CUSIP No. - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Pacificor Insurance Fund LP I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY). - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER ----------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 0 OWNED BY ----------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - -------------------------------------------------------------------------------- _______________ * As more fully described in Items 5 and 6 hereof, Pacificor Insurance Fund LP is the direct owner of 48,023 shares of Series A Reedemable Voting Manditorily Convertible Preferred Stock (the "Convertible Preferred Stock") of Dura Automotive Systems, Inc. (the "Issuer"). The Convertible Preferred Stock, which votes with the common stock of the Issuer (on an as converted basis), constitutes 1.9% of the voting power of the Issuer in the aggregate. Item 6 hereof contains additional information on the voting and conversion rights of the Convertible Preferred Stock. Page 7 of 21 Item 1. Security and Issuer. This statement on Schedule 13D relates to the shares of common stock, par value $0.01 per share (the "Common Stock"), of Dura Automotive Systems, Inc., a Delaware corporation (the "Issuer"). The principal executive offices of the Issuer are located at 2791 Research Drive, Rochester Hills, Michigan 48309-3575. Item 2. Identity and Background. This Schedule 13D is being filed jointly on behalf of the following persons (each, a "Reporting Person" and collectively, the "Reporting Persons"): (i) Pacificor, LLC, a Delaware limited liability company ("Pacificor"), (ii) Pacificor Insurance Fund LP, a Delaware limited partnership ("Pacificor Insurance"), (iii) Pacificor Fund LP, a Delaware limited partnership ("Pacificor Fund"), (iv) Pacificor Fund II LP, a Delaware limited partnership ("Pacificor Fund II"), (v) Pacificor Offshore Fund Ltd., a Cayman corporation ("Pacificor Offshore") and (vi) the Michael Klein Administrative Trust, a trust formed under the laws of California (the "Klein Trust"). The address of the principal office of each of Pacificor, Pacificor Insurance, Pacificor Fund, Pacificor Fund II and the Klein Trust is 740 State Street, Suite 202, Santa Barbara, California, 93101. The address of the principal office of Pacificor Offshore is Pacificor Offshore Fund Ltd., c/o Appleby Trust (Cayman) Limited, Clifton House, P.O. Box 1350 GT, 75 Fort Street, Grand Cayman, Cayman Islands. Pacificor is principally engaged in the business of investing in securities in the capacity of an investment advisor and in serving as the sole general partner and/or investment manager of certain related entities, including Pacificor Insurance, Pacificor Fund, Pacificor Fund II and Pacificor Offshore. The principal business of each of Pacificor Insurance, Pacificor Fund, Pacificor Fund II and Pacificor Offshore is investing in securities. The principal business of the Klein Trust is managing the affairs of Michael Klein and acting as the managing member of Pacificor. Attached as Appendix A to Item 2 is information concerning the executive officers of Pacificor, the directors of Pacificor Offshore and the trustee of the Klein trust, as required to be disclosed in response to Item 2 and General Instruction C to Schedule 13D. During the last five years, none of the Reporting Persons, and to the best of the Reporting Persons' knowledge, none of the persons listed on Appendix A to Item 2 attached hereto, has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or has been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Page 8 of 21 Item 3. Source and Amount of Funds or Other Consideration. Pursuant to the Debtors' Revised Joint Plan of Reorganization of the Issuer and the other Debtors so named therein under Chapter 11 of the Bankruptcy Code (with further technical Amendments), dated May 12, 2008 and confirmed by the Bankruptcy Court for the District of Delaware pursuant to an order dated and entered on May 13, 2008 (as modified, the "Plan of Reorganization"), a final restructuring of the Issuer was effected on June 27, 2008 (the "Effective Date"). Pursuant to the Plan of Reorganization, which is filed as an exhibit to the Issuer's Form 8-K dated June 27, 2008, the Issuer issued, in the aggregate, 2,262,724 shares of Common Stock to the Reporting Persons, 1,093,645 shares of which were issued to discretionary accounts managed by the Reporting Persons as more fully set forth in Item 5 hereof. Also pursuant to the Plan of Reorganization, and as more fully described in Item 6 hereof, the Issuer issued, in the aggregate, 907,017 shares of Series A Redeemable Voting Manditorily Convertible Preferred Stock (the "Convertible Preferred Stock") to the Reporting Persons, 447,538 shares of which were issued to discretionary accounts managed by the Reporting Persons as more fully set forth in Item 5 hereof. The Convertible Preferred Stock is not a registered security under the Securities and Exchange Act of 1934, as amended. A summary of the voting and conversion rights of the Convertible Preferred Stock is set forth in Item 6 hereof. 401,328 shares of Common Stock were issued to Pacificor Fund pursuant to the Plan of Reorganization in exchange for unsecured claims arising from ownership of $22,191,000 in principal amount of 8.625% senior unsecured notes of the Issuer plus unpaid interest thereon. 357,724 shares of Common Stock were issued to Pacificor Fund II pursuant to the Plan of Reorganization in exchange for unsecured claims arising from ownership of $19,780,000 in principal amount of 8.625% senior unsecured notes of the Issuer plus unpaid interest thereon. 410,027 shares of Common Stock were issued to Pacificor Offshore pursuant to the Plan of Reorganization in exchange for unsecured claims arising from ownership of $22,672,000 in principal amount of 8.625% senior unsecured notes of the Issuer plus unpaid interest thereon. 1,093,645 shares of Common Stock were issued to discretionary accounts managed by Pacificor pursuant to the Plan of Reorganization in exchange for unsecured claims arising from ownership of $60,472,000 in principal amount of 8.625% senior unsecured notes of the Issuer plus unpaid interest thereon. Item 4. Purpose of Transaction. The Reporting Persons acquired the shares of Common Stock reported in Item 5 hereof pursuant to the Plan of Reorganization as described in Item 3 hereof, and currently hold such shares for investment purposes in the ordinary course of business. Pursuant to the Plan of Reorganization, the Reporting Persons appointed two of the seven directors on the Board of Directors of the Issuer. The Reporting Persons intend to review their holdings in the Issuer on a continuing basis and, depending upon the price and availability of the Issuer securities, subsequent developments affecting the Issuer, the business prospects of the Issuer, general stock market and economic conditions, tax considerations and other factors deemed relevant, may consider increasing or decreasing their investment in the Issuer. As part of this ongoing review, the Reporting Persons have engaged and/or may in the future engage, legal and financial advisors to assist them in such review and in evaluating strategic alternatives that are or may become available with respect to their holdings in the Issuer. Also based on such review, the Reporting Persons and/or other persons affiliated with them may, and reserve the right to, engage in discussions with management and the Board of Directors of the Issuer and other holders of shares of the Common Stock and/or the Convertible Preferred Stock, concerning the business and the future plans of the Issuer generally, and with regard to strategies and potential transactions to maximize shareholder value, change their intentions. Page 9 of 21 As of the date of this Schedule 13D, except as set forth in this Schedule 13D and in connection with the Plan of Reorganization described in Item 3, none of the Reporting Persons nor, to the best of the Reporting Persons' knowledge, any of the persons listed on Appendix A to Item 2 attached hereto, has any current plan or proposals that relate to or would result in any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D; however, the Reporting Persons, including those persons listed on Appendix A to Item 2 attached hereto, may, in the future, formulate plans or proposals for, and may from time to time explore, or make proposals relating to, transactions or actions which relate to or would result in any of the matters specified in subparagraphs (a) through (j) of Item 4 of Schedule 13D. As set forth in more detail in Item 6 hereof, the holders of Convertible Preferred Stock have separate class voting rights with respect to certain significant corporate actions of the Issuer. Item 5. Interest in Securities of the Issuer. Pacificor serves as the sole general partner of Pacificor Insurance, Pacificor Fund, and Pacificor Fund II and as the investment manager of Pacificor Insurance, Pacificor Fund, Pacificor Fund II and Pacificor Offshore. The Klein Trust is the managing member of Pacificor. (a)-(b) The responses of the Reporting Persons to Rows (7) through (13) of the cover page of this Schedule 13D and the information set forth or incorporated in Items 2, 3, 4, and 6 hereof are incorporated herein by reference. The responses of each of Pacificor Insurance, Pacificor Fund, Pacificor Fund II and Pacificor Offshore (each, a "Pacificor Entity" and collectively, the "Pacificor Entities") to Rows (7) through (13) of the cover page of this Schedule 13D include the shares of Common Stock held directly by the applicable Pacificor Entity. The responses of Pacificor and the Klein Trust to Rows (7) through (13) of the cover page of this Schedule 13D include the shares of Common Stock held directly by the Pacificor Entities, as well as 1,093,645 shares of Common Stock held in discretionary accounts of third parties which are managed by Pacificor (the "Managed Accounts"), as more fully described in Item 5(d) hereto. As of the date hereof, each of Pacificor and the Klein Trust may be deemed to be the beneficial owner of an aggregate of 2,262,724 shares of Common Stock of the Issuer due to its position as a control person or, with respect to Pacificor, investment advisor, in each case, with voting and dispository power over the shares of Common Stock held by the Pacificor Entities or in the Managed Accounts. Such shares of Common Stock constitute approximately 31.28% of the issued and outstanding shares of Common Stock of the Issuer as reported in the Issuer's Form 8-K filed on June 27, 2008. Page 10 of 21 As of the date hereof, as a result of the consummation of the transactions contemplated by the Plan of Reorganization, Pacificor Fund owns 401,328 shares of Common Stock of the Issuer directly, representing 5.5% of the issued and outstanding shares of Common Stock of the Issuer as reported in the Issuer's Form 8-K filed on June 27, 2008. As of the date hereof, as a result of the consummation of the transactions contemplated by the Plan of Reorganization, Pacificor Fund II owns 357,724 shares of Common Stock of the Issuer directly, representing 5.0% of the issued and outstanding shares of Common Stock of the Issuer as reported in the Issuer's Form 8-K filed on June 27, 2008. As of the date hereof, as a result of the consummation of the transactions contemplated by the Plan of Reorganization, Pacificor Offshore owns 410,027 shares of Common Stock of the Issuer directly, representing 5.7% of the issued and outstanding shares of Common Stock of the Issuer as reported in the Issuer's Form 8-K filed on June 27, 2008. As of the date hereof, as a result of the consummation of the transactions contemplated by the Plan of Reorganization, Pacificor holds voting and dispository power over 1,093,645 shares of Common Stock of the Issuer held in the Managed Accounts, representing 15.1% of the issued and outstanding shares of Common Stock of the Issuer as reported in the Issuer's Form 8-K filed on June 27, 2008. Except as set forth in Item 5(d) hereof, none of the persons on whose behalf Pacificor manages the Managed Accounts holds more than a 5% interest in the Common Stock of the Issuer. As set forth above, Pacificor holds voting and dispositive power over the shares of Common Stock held by the Pacificor Entities and in the Managed Accounts and may be deemed to be the beneficial owner of 2,262,724 shares of Common Stock in the aggregate. The Klein Trust, through its affiliation with Pacificor, may be considered to be the beneficial owner of the Common Stock of the Issuer directly held by all of the Pacificor Entities, including the shares of Common Stock held in the Managed Accounts. As set forth in Item 6 hereof, the Reporting Persons beneficially own, in the aggregate, 907,017 shares of Series A Reedemable Voting Manditorily Convertible Preferred Stock (the "Convertible Preferred Stock") of the Issuer, of which 48,023 shares are held by Pacificor Insurance, 164,186 shares are held by Pacificor Fund, 115,474 shares are held by Pacificor Fund II, 131,796 shares are held by Pacificor Offshore and 447,538 shares are held in the Managed Accounts. As of the date hereof, each of Pacificor and the Klein Trust may be deemed to be the beneficial owner of an aggregate of 907,017 shares of Convertible Preferred Stock due to its position as control person or, with respect to Pacificor, investment advisor, in each case, with voting and dispository power over the shares of Convertible Preferred Stock held by the Pacificor Entities or in the Managed Accounts. Such shares of Convertible Preferred Stock, which votes with the Common Stock (on an as converted basis), and the Common Stock beneficially owned by the Reporting Persons constitute, in the aggregate, 37.9% of the voting power of the Issuer. Item 6 hereof contains additional information on the voting and conversion rights of the Convertible Preferred Stock. (c) None of the Reporting persons nor, to the best knowledge of each of the Reporting Persons, without independent verification, any persons listed on Appendix A to Item 2 attached hereto, has engaged in any transaction during the past 60 days involving shares of Common Stock of the Issuer, other than as described below. Page 11 of 21 (d) Pacificor has the sole power, subject to termination rights, to dispose of or direct the disposition of the shares of Common Stock of the Issuer held in the Managed Accounts pursuant to written investment advisory agreements established between the Managed Accounts and Pacificor. Pacificor also has the sole power, subject to termination rights, to vote or direct the vote of such shares of Common Stock. The written investment advisory agreements are in most cases terminable, without penalty, by the Managed Account upon 90 days notice to Pacificor. Each of the Coca Cola Company Retirement Plan and Permal High Yield Value is a Managed Account that individually holds 5% or more of the Common Stock of the Issuer by reason of the consummation of the transactions contemplated by the Plan of Reorganization. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with respect to Securities of the Issuer. Series A Redeemable Voting Mandatorily Convertible Preferred Stock Pursuant to the Plan of Reorganization, the Issuer issued to the Reporting Persons an aggregate of 907,017 shares of Convertible Preferred Stock, 447,538 shares of which were issued to the Managed Accounts as more fully set forth in Item 5 hereof. The Certificate of Designations of the Convertible Preferred Stock (the "Certificate of Designations") is attached as an Exhibit to the Issuer's Form 8-K filed on June 27, 2008 and the following description of certain terms of the Convertible Preferred Stock is qualified in its entirety thereby. The Convertible Preferred Stock accrues dividends at a rate of 20% per year, which amount will be compounded semi-annually. All accumulated and unpaid dividends will be added to the initial liquidation value per share and shall continue accruing until the earlier of (i) the redemption of the shares of Convertible Preferred Stock by the Issuer, (ii) the conversion of the Convertible Preferred Stock in accordance with provisions of the Certificate of Designations and (iii) the date the Issuer otherwise acquires the Convertible Preferred Stock. The Issuer may elect to redeem all or any of the Convertible Preferred Stock outstanding at any time, in cash, at a price per share of Convertible Preferred Stock equal to the liquidation value of a share of Convertible Preferred Stock at such time, which amount is equal to the sum of (i) the initial liquidation value per share of Convertible Preferred Stock, (ii) accumulated dividends thereon and (iii) accrued but unpaid dividends thereon, in each case, from and including the last dividend reference date to and excluding the redemption date. If the Issuer calls for the redemption of all or any of the Convertible Preferred Stock prior to the third anniversary of the Effective Date, the holders of the affected shares of Convertible Preferred Stock are entitled to convert a specified number of those shares into Common Stock pursuant to the terms and conditions of the Certificate of Designations, which amount shall be apportioned on a pro rata basis per holder. If, prior to the third anniversary of the Effective Date, the Issuer were to redeem all of the issued and outstanding Convertible Preferred Stock and the Reporting Persons were to convert the maximum amount permissible of the shares of Convertible Preferred Stock held by each of them into Common Stock, assuming the Issuer shall not have paid any of the liquidation preference of the Convertible Preferred Stock or issued equity securities of the Issuer to management in accordance with the Plan, the Convertible Preferred Stock currently held by the Reporting Persons would, during such three-year period, convert, into a number of shares of Common Stock ranging from a minimum of 0 to a maximum of 682,434 shares of Common Stock in the aggregate, with such amounts increasing in a linear fashion from the Effective Date to the date immediately prior to the third anniversary of the Effective Date. Under the circumstances described in the preceding sentence and assuming that all holders of Convertible Preferred Stock were to elect to convert the maximum number of shares of Convertible Preferred Stock held by them, the Reporting Persons would hold from a minimum of 31.3% to a maximum of 32.7% of the issued and outstanding Common Stock in the aggregate, with such percentage increasing in a linear fashion from the Effective Date to the date immediately prior to the third anniversary of the Effective Date. Page 12 of 21 Except as provided in the preceding paragraph, no holder of Convertible Preferred Stock may convert its shares into shares of Common Stock prior to the third anniversary of the Effective Date. On the third anniversary of the Effective Date, all shares of Convertible Preferred Stock will automatically be converted into a number of shares of Common Stock equal to 94% of the total issued and outstanding Common Stock, subject to certain downward adjustments in the event that, prior to the third anniversary of the Effective Date, the Issuer shall have redeemed shares of Convertible Preferred Stock, paid any portion of the liquidation preference of the Convertible Preferred Stock or issued equity securities of the Issuer to management in accordance with the Plan of Reorganization, in each case, as more fully set forth in the Certificate of Designations. Assuming that the Issuer shall not have paid any of the liquidation preference of the Convertible Preferred Stock, redeemed any Convertible Preferred Stock or issued any equity securities of the Issuer to management, the shares of Convertible Preferred Stock held by the Reporting Persons would automatically convert, in the aggregate, into 43,469,942 shares of Common Stock on the third anniversary of the Effective Date. Under the circumstances described in the preceding sentence, on the third anniversary of the Effective Date the Reporting Persons would hold, in the aggregate, 37.93% of the issued and outstanding Common Stock. The Convertible Preferred Stock will have equal voting rights and will vote together as a single class with the Common Stock and any other class of preferred stock so entitled to vote with the Common Stock on an as-converted basis as if converted on the third anniversary of the Effective Date. The Convertible Preferred Stock will also have separate class voting rights with respect to certain activities of the Issuer. The affirmative vote of the holders of a majority of the outstanding Convertible Preferred Stock will be required for the Issuer to (or to permit a subsidiary of the Issuer to): o declare or pay dividends on a class or series of capital stock (other than on the Convertible Preferred Stock); o redeem, purchase or otherwise acquire capital stock or other equity securities; o issue any securities ranking evenly with, or superior to, the Convertible Preferred Stock with respect to dividend distributions or distributions of assets and rights upon liquidation, winding up or dissolution of the Issuer; o authorize, issue or reclassify any equity securities into notes or debt securities containing equity features; o merge or consolidate with an entity, or sell more than 25% of the Issuer's assets, if the holders would not receive a consideration equal to the liquidation preference; and o liquidate or dissolve the Issuer. Page 13 of 21 The affirmative vote of the holders of not less than 85% of the outstanding Convertible Preferred Stock, voting as a separate class, shall be required for the Issuer or any of its subsidiaries to: o become subject to an agreement or instrument that would restrict the Issuer's performance of its obligations under the Certificate of Designations; or o enter into or modify agreements with officers, directors, employers or affiliates, or persons or entities related thereto . For purposes of liquidation, dissolution or winding up of the Issuer, the Convertible Preferred Stock will rank senior to any other class or series of capital stock of the Issuer, the terms of which are not expressly senior to or partial with the Convertible Preferred Stock. Registration Rights On the Effective Date of the Plan of Reorganization, the Issuer entered into a Registration Rights Agreement (the "Registration Rights Agreement") with each of the creditors who received issuances of Convertible Preferred Stock pursuant to the Plan of Reorganization. The Registration Rights Agreement provides the holders of the Convertible Preferred Stock with registration rights applicable to their shares of Convertible Preferred Stock and Common Stock (the "Registrable Securities"). Under the Registration Rights Agreement, and subject to certain restrictions, the holders of not less than 20% of a class of Registrable Securities have the right to request that the Issuer effect the registration of such class of Registrable Securities held by such requesting holders, plus the Registrable Securities of any other holder giving the Issuer a timely request to join in such registration (a "Demand Registration"). Additionally, under the Registration Rights Agreement, and subject to certain restrictions, if the Issuer proposes to register any of its securities (other than pursuant to a Demand Registration), then the Issuer must provide the holders of Registrable Securities with piggyback registration rights to have their Registrable Securities included in such registration, subject to certain limitations. Page 14 of 21 This description of the Registration Rights Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which is filed as an Exhibit to the Issuer's Form 8-K filed on June 27, 2008. Managed Accounts Attached as Exhibit 2 to this Schedule 13D is a form of the investment advisory agreement (the "Investment Advisory Agreement") Pacificor has generally established with its Managed Account. The Investment Advisory Agreements are entered into in the normal and usual course of the business of Pacificor as an investment advisor and are generally applicable to all securities purchased and held for the benefit of each such Managed Account client. Item 7. Material to be Filed as Exhibits. Exhibit 1 Joint Filing Statement, dated July 7, 2008, among the Reporting Persons, relating to the filing of a joint statement on Schedule 13D. Exhibit 2 Form of Pacifior, LLC Investment Advisory Agreement. Page 15 of 21 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: July 7, 2008 Pacificor, LLC By: /s/ Andrew B. Mitchell ------------------------------------------- Name: Andrew B. Mitchell Title: CEO and Chief Investment Officer Pacificor Insurance Fund By: Pacificor LLC, its general partner By: /s/ Andrew B. Mitchell ------------------------------------------- Name: Andrew B. Mitchell Title: CEO and Chief Investment Officer Pacificor Fund LP By: Pacificor LLC, its general partner By: /s/ Andrew B. Mitchell ------------------------------------------- Name: Andrew B. Mitchell Title: CEO and Chief Investment Officer Pacificor Fund II LP By: Pacificor LLC, its general partner By: /s/ Andrew B. Mitchell ------------------------------------------- Name: Andrew B. Mitchell Title: CEO and Chief Investment Officer Pacificor Offshore Fund Ltd. By: Pacificor LLC, it's attorney-in-fact By: /s/ Andrew B. Mitchell ------------------------------------------- Name: Andrew B. Mitchell Title: CEO and Chief Investment Officer Michael Klein Administrative Trust By: /s/ Robert Klein -------------------------------------- Name: Robert Klein Title: Trustee Page 16 of 21 APPENDIX A TO ITEM 2 INFORMATION CONCERNING OFFICERS, DIRECTORS AND TRUSTEES OF CERTAIN REPORTING PERSONS The following table includes: (i) the names of the executive officers of Pacificor, the directors of Pacificor Offshore and the trustee of the Klein Trust (each a "Disclosed Party"), (ii) the titles and principal occupations of each Disclosed Party, (iii) the name, principal business and address of the entity in which such employment is conducted and (iv) the citizenship of each Disclosed Party.
- ------------------------------------------------------------------------------------------------------------------------------------ Name of Disclosed Party Title and Present Principal Residence or Business Name, Principal Business Citizenship of Occupation of Disclosed Party Address of Disclosed and Address of the Entity Disclosed Party Party in Which Such Employment is Conducted, if not Pacificor, Pacificor Offshore or the Klein Trust - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ Andrew Bryce Mitchell Chief Executive Officer and 740 State Street, Suite USA Chief Information Officer of 202 Pacificor; Santa Barbara, California Director of Pacificor Offshore 93101 - ------------------------------------------------------------------------------------------------------------------------------------ David Bree Director of Pacificor Offshore dms House USA 20 Genesis Close Add other PO Box 31910 KY1-1208 Grand Cayman, Cayman Islands - ------------------------------------------------------------------------------------------------------------------------------------ Aldo Ghislepta Director of Pacificor Offshore dms House Switzerland 20 Genesis Close Add other PO Box 31910 KY1-1208 Grand Cayman, Cayman Islands - ------------------------------------------------------------------------------------------------------------------------------------ Robert Klein Trustee of the Klein Trust (the 2910 Holly Road USA Klein Trust being the managing Santa Barbara, California member of Pacificor) 93105 - ------------------------------------------------------------------------------------------------------------------------------------
Page 17 of 21 EX-1 2 v119315_ex1.txt EXHIBIT 1 JOINT FILING AGREEMENT This Joint Filing Agreement (this "Agreement") is entered into by and among Pacificor, LLC, Pacificor Insurance Fund, Pacificor Offshore Fund Ltd, Pacificor Fund LP, Pacificor Fund II LP and the Michael Klein Administrative Trust (each a "Reporting Person" and collectively, the "Reporting Persons"). Each Reporting Person hereby agrees that the Schedule 13D to which this Agreement is attached as an exhibit, which is to be filed with the Securities and Exchange Commission, is to be filed on behalf of each such Reporting Person. This Agreement may be executed in multiple counterparts, each of which shall constitute an original. IN WITNESS HEREOF, each of the undersigned has executed this Agreement or caused this Agreement to be executed on its behalf this 7th day of July, 2008. Pacificor, LLC By: /s/ Andrew B. Mitchell ------------------------------------------- Name: Andrew B. Mitchell Title: CEO and Chief Investment Officer Pacificor Insurance Fund By: Pacificor LLC, its general partner By: /s/ Andrew B. Mitchell ------------------------------------------- Name: Andrew B. Mitchell Title: CEO and Chief Investment Officer Pacificor Fund LP By: Pacificor LLC, its general partner By: /s/ ------------------------------------------- Name: Andrew B. Mitchell Title: CEO and Chief Investment Officer Pacificor Fund II LP By: Pacificor LLC, its general partner By: /s/ Andrew B. Mitchell ------------------------------------------- Name: Andrew B. Mitchell Title: CEO and Chief Investment Officer Pacificor Offshore Fund Ltd. By: Pacificor LLC, it's attorney-in-fact By: /s/ Andrew B. Mitchell ------------------------------------------- Name: Andrew B. Mitchell Title: CEO and Chief Investment Officer Michael Klein Administrative Trust By: /s/ Robert Klein ------------------------------------------- Name: Robert Klein Title: Trustee EX-2 3 v119315_ex2.txt EXHIBIT 2 FORM OF PACIFICOR, LLC INVESTMENT ADVISORY AGREEMENT INVESTMENT MANAGEMENT AGREEMENT This Agreement is entered into this 1st day of [ ] by and between [ ], a [ ] [ ] (the "Company"), and Pacificor, LLC, a Delaware limited liability company (the "Manager"). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Confidential Offering Memorandum of the Company dated ________________ (the "Memorandum"). WHEREAS, the Company desires to engage the Manager to manage the investment and reinvestment of the cash, securities and other properties comprising the assets of the Company; and WHEREAS, the Manager has agreed to provide such management services. NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows: 1. Appointment of the Manager (a) The Company hereby appoints the Manager, and the Manager hereby accepts such appointment, as its agent and attorney-in-fact with respect to the management of the cash, securities and other properties comprising the assets of the Company (the "Assets"). The Manager shall have the authority, on behalf of and in the name of the Company, to invest and reinvest the Assets, at its discretion, provided that the Manager shall invest and reinvest the Assets in accordance with the objectives and strategies referenced in Paragraph (b) below. (b) All transactions authorized by this Agreement shall be made on behalf of and at the risk of the Company. The Manager shall not incur any liability for trading profits or losses resulting therefrom, provided the Manager would not otherwise be liable to the Company under the terms hereof. The Manager (i) agrees to act as the sole investment manager retained by the Company, and specifically, to exercise its discretion with respect to the Assets upon the terms and conditions, and for the purposes set forth in this Agreement, and (ii) shall have sole authority and responsibility for directing the investment and reinvestment of the Assets for the term of this Agreement pursuant to and in accordance with the Manager's best judgment in a manner that is permitted under the Articles of Association of the Company (the "Articles") and consistent with the objectives and strategies, as are described in the Memorandum, as each may be supplemented and modified from time to time. The Manager may, at its sole cost, engage sub-managers and consultants to assist it in the performance of its duties hereunder on such terms and conditions as it shall determine in its sole discretion, including, without limitation, the delegation of the powers and duties hereunder. (c) In furtherance, and not in limitation, of the foregoing, the Manager shall have the authority (except to the extent not permitted by the Articles, the Memorandum or applicable law) to: 1. invest and re-invest the Assets, and in connection therewith, to cause part or all of the Assets to be held in cash, and to purchase or otherwise acquire or sell, assign, negotiate, transfer, exchange or otherwise dispose of, or realize upon and trade in, on margin or otherwise, all forms of securities and other financial instruments of U.S. and non-U.S. issuers, including, without limitation of the generality thereof: listed and unlisted capital stock; preorganization certificates and subscriptions; shares of beneficial interests; partnership interests and similar financial instruments; bonds, notes, debentures (whether subordinated, convertible or otherwise); preferred stock, common stock, rights, units, certificates of beneficial interests, warrants, put and call options on equity securities, interests in real estate investment trusts; investment companies; currencies; commodities; interest rate, currency, commodity and equity derivative products, including, without limitation, (i) futures contracts (and options thereon) relating to currencies, stock indices, United States Government securities and securities of foreign governments, other financial instruments and all other commodities, (ii) swaps, options, warrants, rights, caps, puts, calls, collars, floors and forward rate agreements, (iii) spot and forward currency transactions, and (iv) agreements relating to or securing such transactions; equipment lease certificates; equipment trust certificates; loans and any participations therein; credit paper; accounts and notes receivable and payable held by trade or other creditors; trade acceptances; contract and other claims; executory contracts; participations therein; money market funds; mutual funds; commercial paper; certificates of deposit; bankers' acceptances; choses in action; trust receipts and other obligations; instruments or evidences of indebtedness of whatever kind or nature, whether or not publicly traded or readily marketable; in each case whether created or issued by U.S. or non-U.S. persons, firms, associations, corporations, partnerships, syndicates, combinations, trusts, organizations, governments, subdivisions thereof or any other entity (all such items being referred to herein collectively, as "Securities"); 2. purchase, hold, sell, exchange, transfer, mortgage, pledge, hypothecate and otherwise act to acquire and dispose of and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, Securities and other property or funds held or owned by the Company; 3. invest the cash balances of the Company in any money market, cash or cash equivalent instruments it deems appropriate and reinvest any income earned thereon in accordance with the investment program of the Company; 4. acquire a long position or a short position with respect to any Securities and to make purchases or sales increasing, decreasing or liquidating such positions or changing from a long position to a short position or from a short position to a long position, without any limitation as to the frequency of the fluctuation in such positions or as to the frequency of the changes in the nature of such positions; 5. borrow or raise monies, on behalf of the Company, and, from time to time without limitation as to amount or manner and time of repayment, issue, accept, endorse and execute promissory notes, drafts, bills of exchange, bonds, debentures and other negotiable or non-negotiable instruments and evidences of indebtedness, and secure the payment of such or other obligations by mortgage upon, granting a security interest in or pledge of, all or part of the property of the Company, whether at the time owned or thereafter acquired, to, among other things, (i) meet redemptions which would otherwise result in the premature liquidation of investments and (ii) enhance the Company's returns; 6. open, maintain and close bank accounts and brokerage accounts in the name of the Company as a whole and draw checks or other orders for the payment of monies in respect thereof, subject to the supervision of the Board of Directors of the Company; 7. do any and all acts on behalf of the Company, and exercise all rights of the Company, with respect to its interest in any person, firm, corporation or other entity, including, without limitation, the voting of shares, participation in arrangements with creditors, the institution and settlement or compromise of suits and administrative proceedings and other like or similar matters; -2- 8. lend, with or without security, any of the Securities, funds or other property of the Company; 9. organize one or more corporations formed to hold record title, as nominee for the Company, to Securities or funds attributable to the Company, subject to the approval of the Board of Directors; 10. supply the administrator of, or other service providers to, the Company with such information and instructions as may be necessary to enable such person or persons to perform their duties in accordance with the applicable agreements; 11. effect all necessary registrations with governmental and similar agencies in connection with the maintenance of the listing of any shares of the Company on any stock exchange; 12. authorize any employee or other agent of the Manager or agent or employee of the Company to act for and on behalf of the Company in all matters incidental to the foregoing; 13. engage personnel (whether part-time or full-time), attorneys and independent accountants, analysts, traders, or such other persons as the Manager may deem necessary or advisable; 14. select brokers (without the obligation to solicit competitive bids or solicit the lowest available commission cost) to execute trades on the basis of best execution in consideration of such factors as determined by the Manager, including one or more of the following: the ability to achieve prompt and reliable execution at favorable prices; the operational efficiency with which transactions are effected; the financial strength, integrity and stability of the broker; the quality, comprehensiveness and frequency of available research and related services and products considered to be of value to the Company, the Manager and related accounts (which may include written information and analyses concerning specific securities, companies or sectors; market, financial and economic studies and forecasts; statistics and pricing services; discussions with research personnel; provision of hardware, software, data bases and other news, technical and telecommunications services and equipment utilized in the investment management process; special execution capabilities, order of call and the availability of stocks to borrow for short trades; referral of prospective investors to the Company; and the payment of a portion of the Company's or the Investment Manager's costs and expenses of operations); and the competitiveness of commission rates in comparison with other brokers satisfying the Manager's other selection criteria, notwithstanding that brokerage commissions paid to such broker may be in excess of the lowest rates available if the Manager determines in good faith that the amount of commissions charged by a broker is reasonable in relation to the value of the brokerage and products or services provided by such broker; and 15. combine purchase or sale orders on behalf of the Company together with other accounts to which the Manager provides investment services or accounts of affiliates of the Manager (the "Other Accounts") and allocate the securities or other assets so purchased or sold, on an average price basis, among such accounts. The Manager may enter into arrangements with brokers to open "average price" accounts wherein orders placed during a trading day are placed on behalf of the Company and the Other Accounts and are allocated among such accounts using an average price. -3- 2. Obligations of the Manager. In addition to the foregoing, the Manager shall have the following obligations with respect to its management of the Assets. (a) The Manager shall provide the Company or its designee, upon its request, with any information, documentation, report or other materials which it may reasonably request in connection with its obligations hereunder in order to enable the Company or its designee to ensure that the Manager is managing the Assets in accordance with its obligations hereunder. (b) The Manager shall provide the Company or its designee, upon reasonable notice and during normal business hours, with access to the Manager's place of business where its books and records are kept, upon its reasonable request, in order to enable the Company or its designee to verify the accuracy and completeness of, or to supplement as necessary, the data and information furnished by the Manager pursuant to this Agreement and to ensure the Manager's compliance with the terms of this Agreement, including but not limited to, its compliance with the objectives and strategies set forth in the Memorandum. 3. Obligations of the Company. The Company will provide to the Manager (i) all such reports, documents and information as the Manager shall reasonably request, including without limitation, financial statements, reports to shareholders and calculations of net asset value and (ii) all supplements and modifications to the Memorandum. 4. Compensation. As compensation for the management services to be provided hereunder, the Company shall pay the Manager the compensation set forth in Schedule A appended hereto, determined in accordance with the formulas identified on such Schedule. 5. Expenses of the Company. The Company shall bear full responsibility for all of its operating and other expenses, which shall include, but not be limited to: (a) fees and salaries of directors, officers and other employees; (b) fees and expenses of the administrator, transfer agent, registrar, custodian and sub-custodians; (c) professional fees and disbursements, including for legal, audit, tax and accounting; (d) payment of taxes, including any registration fees payable in [ ]; (e) investment expenses (e.g., any expenses which the Manager determines to be related to the investment of Assets of the Company, such as any commissions and interest expense, clearing and settlement charges, costs of establishing subsidiary entities to help facilitate the making and settlement of certain investments, interest and commitment fees on debit balances or borrowings, and borrowing charges on securities sold short); (f) organization and conduct of all directors' and shareholders' meetings and the preparation and distribution of all of its shareholder reports and other communications with shareholders; (g) the calculation of the net asset value of the Company and any publication thereof; -4- (h) costs and expenses relating to the organization of the Company; (i) costs and expenses relating to issuing, transferring and redeeming shares of any class or series of capital stock of the Company and paying dividends or making other distributions thereon; (j) any stock exchange listing fees; and (k) costs and expenses of litigation or investigation involving activities of the Company. 6. Expenses of the Manager. The Manager will render the services set forth herein at its own expense, including, without limitation, the salaries of employees necessary for such services, the rent and utilities for the facilities provided, telephone lines and computer equipment. The Manager, in its discretion, may rely upon the advice of legal counsel to the Company in connection with the performance of its activities on behalf of the Company hereunder and the Company shall bear full responsibility therefore and the expense of any fees and disbursements arising therefrom. 7. Representations, Warranties, Covenants and Agreements of the Manager. The Manager hereby represents, warrants, covenants and agrees to and with the Company that: (a) It is an entity duly organized and validly existing under the laws of its jurisdiction of organization and is qualified to do business and is in good standing in each other jurisdiction in which the nature of conduct of its business requires such qualification and in which the failure to so qualify would materially adversely affect its ability to conduct its business activities. (b) It has full power and authority to perform its obligations under this Agreement. (c) This Agreement has been duly and validly authorized, executed and delivered on behalf of the Manager and is a valid and binding agreement of the Manager enforceable against the Manager in accordance with its terms. (d) None of the execution and delivery of this Agreement, the incurring of the obligations set forth in this Agreement and the performance of such obligations will violate, or constitute a breach of or default under, the governing instruments of the Manager or any agreement or instrument by which it is bound or any order or, to the best of the Manager's knowledge, rule, law or regulation applicable to the Manager of any court or any governmental body of administrative agency or self-regulatory authority having jurisdiction over the Manager. (e) There is not pending or, to the best of the Manager's knowledge, threatened, any action, suit or proceeding before or by any court or other governmental or self-regulatory authority to which the Manager is a party which might reasonably be expected to result in any material adverse change in the condition, financial or otherwise, of the Manager. (f) It will promptly notify the Company of any material changes in any of the foregoing representations and warranties. 8. Representations, Warranties, Covenants and Agreements of the Company. The Company hereby represents, warrants, covenants and agrees to and with the Manager that: -5- (a) It is a corporation duly organized and validly existing under the laws of [ ] and is qualified to do business and is in good standing in each other jurisdiction in which the nature or conduct of its business requires such qualification and in which the failure to so qualify would materially adversely affect its ability to conduct its business activities. (b) It has full corporate power and authority to perform its obligations under this Agreement. (c) This Agreement has been duly and validly authorized, executed and delivered on behalf of the Company and is a valid and binding agreement of the Company enforceable in accordance with its terms. (d) None of the execution and delivery of this Agreement, the incurring of the obligations set forth in this Agreement and the performance of such obligations will violate, or constitute a breach of or default under the governing instruments of the Company or any agreement or instrument by which it is bound or any order or, to the best of the Company's knowledge, rule, law or regulation applicable to the Company of any court or any governmental body of administrative agency or self-regulatory authority having jurisdiction over the Company. (e) There is not pending or, to the best of the Company's knowledge, threatened, any action, suit or proceeding before or by any court or other governmental or self-regulatory authority to which the Company is a party which might reasonably be expected to result in any material adverse change in the condition, financial or otherwise, of the Company. (f) It will promptly notify the Manager of any material changes in any of the foregoing representations and warranties. 9. Exculpation; Indemnification. (a) None of the Manager, its affiliates nor any of their respective officers, shareholders, partners, directors, trustees, members, managers, affiliates, employees or agents (collectively, "Affiliates") or the legal representatives of any of them shall be liable to the Company for, and the Company will indemnify such persons with respect to, any cost or expense arising from mistakes of judgment or any action or inaction that the person reasonably believes to be in the best interest of the Company or for any losses due to such mistakes, action or inaction or to the gross negligence, dishonesty or bad faith, of any employee, broker or other agent of the Manager, provided that such employee, broker or agent was selected, engaged or retained by the Manager with reasonable care. The Manager and each Affiliate may consult with counsel and accountants in respect of Company affairs and be fully protected and justified in any action or inaction which is taken in accordance with the advice or opinion of such counsel or accountants, provided that they shall have been selected without negligence. (b) The Company shall indemnify and hold harmless the Manager, each Affiliate and the legal representatives of any of them (each, an "Indemnified Party"), from and against any loss or expense suffered or sustained by an Indemnified Party by reason of the fact that she, he or it is or was an Indemnified Party, including, without limitation, any judgment, settlement, reasonable attorney's fees and other costs or expenses incurred in connection with the defense of any actual or threatened action or proceeding (collectively, "Losses"), provided that such Losses did not result from the gross negligence, willful misfeasance or bad faith of an Indemnified Party as finally determined by a court of competent jurisdiction and, in the case of criminal proceedings, the Indemnified Party had no reasonable cause to believe its actions were unlawful. The Company shall advance to any Indemnified Party reasonable attorney's fees and other costs and expenses incurred in connection with the defense of any action or proceeding that arises out of such conduct. In the event that such an advance is made by the Company, the Indemnified Party shall agree (or, if a party hereto, hereby agrees) to reimburse the Company of such fees, costs and expenses to the extent that it shall be determined that it was not entitled to indemnification under this Section 9(b). -6- (c) Notwithstanding the foregoing subsections (a) and (b), to the extent applicable, certain securities laws impose liabilities under certain circumstances on persons who act in good faith, and, therefore nothing herein shall in any way constitute a waiver or limitation of any rights which either party hereto may have under such securities laws. 10. Term and Termination. This Agreement will continue in effect until such time, if any, as (i) the Manager resigns by providing the Company with ninety (90) days written notice or (ii) this Agreement is terminated by the vote of the holders of all of the Shares entitled to vote thereon. Upon the effectiveness of such termination, (i) the Manager shall follow the reasonable instructions of the Company with respect to the Assets and (ii) the Manager shall be entitled to receive all fees and other monies accrued as of such date. 11. Status of the Manager. It is understood and agreed that the Manager shall be deemed to be an independent contractor of the Company and, except as specifically provided in this Agreement, that the Manager shall not have authority to act for or represent the Company in any way and shall not otherwise be deemed to be an agent of the Company. Nothing contained herein shall create or constitute the Manager and the Company as members of any partnership, joint venture, association, syndicate, unincorporated business, or other separate entity, nor shall be deemed to confer on any of them any express, implied, or apparent authority to incur any obligation or liability on behalf of any other such entity. 12. Management of Other Accounts. The Manager and its affiliates, including the principals thereof, may render advisory services to, and manage the accounts of, other accounts, and may utilize the same or different systems, strategies, policies and guidelines in connection therewith, provided that the rendering of such advisory or management services does not materially adversely affect the ability of the Manager to fulfill its obligations hereunder. The Manager agrees to devote such of its time and activity during normal business hours as it, in its sole discretion, shall deem necessary for the accomplishment of its duties hereunder. Nothing herein shall require the Manager to devote full time to its duties hereunder. Nothing shall preclude the Manager or its affiliates from acting, consistent with the foregoing, as director, officer or employee of any corporation, a trustee of any trust, a partner of any partnership, or an administrative official of any business entity, and from receiving compensation for services with respect to, or participating in profits derived from, the investments of any such corporation, trust, partnership or other business entity, or from investing in any investment medium for its own account. 13. Use of Name. The Company acknowledges that it has adopted its name with the permission of the Manager and the Manager hereby consents to the non-exclusive use by the Company of the name [ ] and [ ] only for so long as the Manager serves as investment manager of the Company. The Company agrees to indemnify and hold harmless the Manager and its affiliates from and against any and all costs, losses, claims damages or liabilities, including attorney's fees and expenses, which may arise out of the Company's use or misuse of such names. 14. Notices. All notices required to be delivered under this Agreement shall be in writing, shall be effective upon receipt and shall be delivered personally or sent by courier or telecopier as follows (or to such other address as designated in writing from one party to another): -7- If to the Company to: If to the Manager to: Pacificor, LLC 740 State Street Suite 202 Santa Barbara, CA 93101 Attn: 15. No Assignment; Amendment. No party hereto may assign any of its rights hereunder without the prior written consent of the other party hereto. This Agreement shall not be construed to confer any benefit on any person other than the parties hereto and their respective successors and assigns. This Agreement shall not be amended or modified except by the written agreement of the parties hereto. 16. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, U.S.A., without reference to the conflict of laws provisions thereof. 17. Entire Agreement; Counterparts. This Agreement sets forth the entire agreement of the parties relating to the subject matter hereof except as otherwise set forth herein and supercedes all prior agreements respecting the subject matter hereof. This Agreement may be executed in one or more counterparts, but all of which, when taken together, constitute one and the same document. 18. Survival. The provisions of Sections 2, 3, 4, 5, 6, 7, 8, 9, 13, 14, 16 and 18 hereof shall survive the termination of this Agreement. 19. Severability; Waiver. If any provisions of this Agreement is held to be invalid or unenforceable, the remaining provisions of this Agreement shall continue in full force and effect. No failure or delay on the party or any party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercising or any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. Any waiver granted hereunder must be in writing and shall be valid only in the specific instance in which given. -8- IN WITNESS WHEREOF, this Agreement has been executed for an on behalf of the undersigned as of the day and year first above written. [ ] By: _______________________________ Name: Title: PACIFICOR, LLC By: _____________________________ Name: Title: -9- -----END PRIVACY-ENHANCED MESSAGE-----