This document and the comments included herein are for informational purposes only. Any statements made or opinions presented that relate to performance are based on information that has been compiled from sources believed to be reliable and the interpretation, compilation and narration of the factual, financial, industry and market information have been based on this material. This information, and the analysis derived therefrom, although believed to be accurate and complete, cannot be guaranteed to be accurate or complete by Pacificor, LLC. Claims made in the information above with regard to the potential for profit must be weighed with the potential for loss. Investing in corporate bonds, as with any fixed income investment, can involve risk to principal and future payments of interest. Past performance is not an indication or guarantee of future returns. This document is intended to and should be read in its entirety. Reliance on any specific portion of the document, independent of other portions, may lead to erroneous conclusions. This document is designed to explain and demonstrate the value of investing in corporate bonds and the services of Pacificor, LLC as a manager of corporate bond portfolios.

1) This material constitutes part of an investor kit and must be read in conjunction with the Private Placement Memorandum in order to understand more fully all of the implications and risks of the offering of the securities to which it relates. This material is not authorized for distribution unless accompanied by a Private Placement Memorandum.

2) The Pacificor Composite refers to the Pacificor Funds and any separately managed account accounts for which the firm is the legal advisor.

3) Returns are calculated in U.S. dollars.

4) Returns reflect the periodic use of margin leverage up to 25% of the aggregate composite value.

5) Returns from cash reserves and equivalents and/or short-term investment grade bonds used by the manager in place of high yield bonds are included in performance calculations.

6) Pacificor does not withhold taxes on any amounts earned through dividends, interest income or capital gains.

7) The composite return calculation has been weighted for the size of each account as of the beginning of the period. Since 1/1/01 all accounts are valued on a monthly basis and the aggregated performance is linked into the composite. Prior to 2001, accounts were valued quarterly.

8) Figures include accounts no longer managed by the firm. New portfolios are included in the appropriate composite when they are substantially converted to that composite's investment style.

9) The composite principally consists of high yield corporate debt securities, which are rated below investment grade. The price of such investments may react more to the ability of a company to pay interest and principal when due than to changes in interest rates. They have greater price fluctuations and are more likely to experience a default than investment grade securities. Reduced market liquidity for these investments may occasionally make it more difficult to value them.

10) Returns are shown net of management and trading fees. From inception until April 1, 2005, Pacificor’s management fees were 1.5% of total levered assets under management. As of April 1, 2005 onward, Pacificor’s management fees are as follows: a) for the Pacificor Onshore Funds and the Pacificor Insurance Dedicated Fund, 1.5% of total unlevered assets plus 20% of the net income earned by each respective fund, and b) for the Pacificor Offshore Fund, 1.0% of total unlevered assets plus 20% of the net income earned.

11) The Lehman Brothers U.S. High Yield Index is comparable to the Pacificor Composite in that it consists of below investment grade fixed income securities. The Pacificor Composite differs from the Lehman Brothers U.S. High Yield Index in its ability to invest in foreign securities and other asset classes, as described in Pacificor's ADV.

12) Pacificor's results include its predecessor companies. Peritus Asset Management, Inc. was founded in 1995 and became a Limited Liability Company in 2001. In April 2002, all asset and employees of Peritus Asset Management, LLC were acquired by Core Wealth Management, LLC. On January 1, 2007, Core Wealth Management, LLC changed its name to Pacificor, LLC.