BNX.B Bnp Resources

CALGARY, Oct. 15 /CNW/ -- /THIS DOCUMENT IS NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS/ TSX-V BNX.A/BNX.B CALGARY, Oct. 15 /CNW/ - BNP Resources Inc. ("BNP" or the "Corporation") has executed a term sheet for a $2,000,000 investment by a New York based private equity fund. The terms contemplated include a joint venture on the Jensen project and a convertible senior note. The deal is conditional upon BNP raising a minimum of $500,000 and up to $1,500,000 through a private placement of units consisting of once Class "A" BNP share at $0.10 per share and an associated warrant to acquire one Class "A" share of BNP at an exercise price of $0.10 exercisable over 24 months from the date of issue. The terms of the joint venture contemplate a $1,000,000 investment for a carried 50% working interest in the Jensen project reducing to 25% working interest once the investor has recouped $1,500,000. The working interest may for a limited time be converted to a 10% royalty interest or 10,000,000 units, each unit comprising one BNP Class "A" share and one share purchase warrant. The warrant is exercisable at $0.10 for 24 months after conversion into one BNP Class "A" share. In addition our joint venture partner has the option to fund ongoing development work at Jensen to a maximum of $5,000,000. The primary intent of the use of proceeds from the joint venture is to install a water disposal system at Jensen and subsequently put Jensen into production. The convertible senior notes in the amount of $1,000,000 are subject to an annual interest rate of 10% for a term of 36 months.  The convertible senior notes are convertible at any time into units consisting of one BNP Class "A" share at $0.10 per share and an associated warrant to acquire one Class "A" share of BNP at an exercise price of $0.10 exercisable over 24 months from date of issue.  The primary intent of the use of proceeds from the convertible notes are for payment of management back salaries, retirement of debt, payment of the ERCB refundable deposit and general operating capital. The joint venture and convertible notes are not convertible if an "insider person" would be created by their conversion. The Corporation has agreed to enter into a 12 month technical consulting agreement with a US based consulting company (the "consulting company"). The consulting company is an expert in unconventional reserves, complex oil and gas situations and mature assets and they specialize in addressing operational issues facing independent oil companies. The contract fee is $150,000 cash for the term and 1,500,000 warrants. Each warrant is exercisable for one BNP Class "A" share at a price of $0.10 per share for a period of 60 months following closing. In addition, BNP has executed a share for debt agreement with one (1) Creditor (the "Creditor") totaling approximately $72,888.48.  The debt obligation relates to services that have been provided by the Creditor. Under the shares for debt settlement BNP will issue approximately 728,888 Class "A" shares to the Creditor at a price of $0.10 per Class "A" share. The settlement constitutes full satisfaction of the $72,888.48 debt obligation that is owed by BNP to the Creditor. Upon issuance of the Class "A" shares to the creditor, the debt owed them and obligations of BNP related to the debt deal will be fully extinguished. BNP has granted options to Mr. Toby Schultz and Mr. Ralph M. Claussner to each acquire 100,000 BNP Class "A" shares at a price of $0.10 per share over a five (5) year term.  The options vest over a period of three (3) years (1/3(rd) on each of the first, second and third anniversary of the grant date). The above agreements are all subject to the TSX-Venture Exchange final approval. BNP is actively engaged in the exploration for and the development and production of oil and natural gas reserves. BNP's business strategy is to build sustainable and profitable per share growth through internally generated exploration and development drilling. BNP has approximately 26,552,434 Class A shares and 922,500 Class B shares issued and outstanding which trade on the TSX Venture Exchange under the symbols "BNX.A and "BNX.B". Neither the TSX Venture Exchange nor Its Regulation Services Provider (as the term Is defined In the Policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This document is not for dissemination or distribution in the United States.  Any failure to comply with this restriction may constitute a violation of U.S. securities laws. To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/October2010/15/c3039.html pGregory Bilcox, President and CEObr/ BNP Resources Inc.br/ Phone: 403.695.1091br/ Fax: 403.265.0413/p

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