Southern Pacific Resource Corp STPJF

Convertible Debentures

[fatheroffour]

Does anybody have any comment as to what happens with respect to the convertible debentures if a sale of the company occurs? According to the prospectus on the convertible debentures (found on Sedar (December 23, 2010), in the event of a change of control, the following occurs: In the event of a Change of Control, the Corporation shall be required to offer to purchase all of the outstanding Debentures (a “Change of Control Purchase Offer”) on the date (the “Change of Control Purchase Date”) that is 30 business days after the date that such offer is delivered, at a purchase price equal to 100% of the principal amount of the Debentures (“Change of Control Purchase Price”), plus accrued and unpaid interest, if any, to, but not including, the purchase date. If such purchase date is after a record date but on or prior to an Interest Payment Date, however, then the interest payable on such date will be paid to the holder of record of the Debentures on the relevant record date. My interpretation of this is that the Debentures will have to be redeemed at the $1,000 per debenture for a sale to occur (or as the debentures are traded at 1/10th of a debenture $100). Thus, irrespective of the purchase price the debenture holders will receive $100 for their $35 investment. I recommend that those who do not understand the debentures spend the time to understand them.