Exhibit 10.1
 
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JBI, Inc.
1783 Allanport Road
Thorold, Ontario
LOS 1K0
Phone: 905 384 4383
Fax: 905 384 0076

 
April 13, 2011
 
CONFIDENTIAL
 
Smurfit-Stone Container Corporation Attention: Andrea Bearish
 
RE: Referral Agreement with JBI, Inc. Dear Madams/Sirs:
 
This letter agreement (this "Agreement") sets forth the mutual understanding of
J131, Inc. ("JBI") and Smurfit-Stone Container Corporation ("Smurfit-Stone"
together with JBI, the "Parties" and each, a "Party") with respect to a referral
arrangement in which JBI has developed a proprietary process (the
"Plastic2Oil'rM Process") to convert waste plastic ("Plastic Feedstock") in
various liquid hydrocarbon fuels (each, a "Fuel") that it wishes to leverage and
Smurfit-Stone has a number of clients, including their respective subsidiaries
and affiliates, and any other Person (each, a "Smurfit-Stone Client") that
Smurfit-Stone shall refer to JBI that may be producing significant amounts of
Plastic Feedstock that it can introduce to JBI in order for JBI to leverage the
Plastic2Oilmi Process. "Person" shall be shall mean any natural person,
corporation, legal person, business trust, joint venture, association, company,
limited liability company, partnership or government, or any agency or political
subdivision thereof.
 
In consideration of the mutual covenants set forth in the letter and other good
and valuable consideration (the receipt and sufficiency of which are hereby
acknowledged by each Party), the Parties agree as follows:
 
1.    Smurfit-Stone Client Introductions
 
Smurfit-Stone shall use commercially reasonable efforts, but shall have no
affirmative obligation or a minimum commitment, to identify and introduce
Smurfit-Stone Clients to JBI. Upon each introduction of a Smurfit-Stone Client
to JBI, JBI shall assess, in its commercially reasonable discretion whether such
Smurfit-Stone Client generates a sufficient amount of Plastic Feedstock to
ensure that at least one JBI Machine (as hereinafter defined) operating at such
Smurfit-Stone Client's facility (with respect to such Smurfit-Stone Client, the
"Client Facility") will be able to operate at full capacity which is at least 10
metric tons/day.
 
 
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For the purposes of this Agreement, "JBI Machine" means a machine developed by
JBI that implements the Plastic2OilTM Process together with any related support
equipment and infrastructure required for such machine to operate; and "full
capacity" means, with respect to a JBI Machine, such JBI Machine processing the
maximum amount of Plastic Feedstock it can process while running 24 hours a
days, 7 days a week (subject to reasonable downtime for maintenance).
 
2.   Client Agreements
 
If JBI determines that such Smurfit-Stone Client generates a sufficient amount
of Plastic Feedstock at its facility to ensure that at least one JBT Machine
operating at the Client Facility will be able to operate at full capacity, JBI
shall notify Smurfit-Stone of the same and then JBI shall attempt to negotiate,
on a good faith basis, an agreement (each, a "Client Agreement") with such
Smurfit-Stone Client, on terms and conditions and in a form satisfactory to JBI
in its sole reasonable discretion, to have JBI: (a) install at least one JBI
Machine at such Client Facility to convert Plastic Feedstock generated by such
Smurfit-Stone Client into Fuel; and (h) sell the Fuel produced by the JBI
Machines at such Client Facility to such Smurfit-Stone Client for its
consumption or to third parties. If JBI enters into, amends or terminates a
Client Agreement with a Smurfit-Stone Client that has been introduced to MT by
Smurfit-Stone, JBI shall provide a copy of such Client Agreement, the amendment
thereto or the termination thereof to Smurfit-Stone promptly after execution of
the same.
 
3.   Royalty Payment
 
The royalties to be paid to Smurfit Stone is five percent: (5%) of the Gross
Revenue and five percent (5%) of the Third Party Gross Revenue realized from the
sale of Client Fuel produced by JBI Machines installed at Smurfit Stone Clients.
 
Within 30 days following the last day of each calendar quarter in which at least
one Client Agreement remained in force and effect, JBI shall provide
Smurfit-Stone with an accounting of the aggregate of Gross Revenue and Third
Party Gross Revenue for such calendar quarter and together with Smurfit-Stone's
aggregate royalty payment (either by cheque or wire transfer).
 
For the purposes of this Agreement:
 
(a) 
"Gross Revenue" means, during a period of time with respect to a Client
Agreement between JBI and a Smurfit-Stone Clients an amount equal to the
aggregate gross revenue invoiced by JBI during such period of time from such
Smurfit-Stone Client in connection with the sale of Client Fuel of such
Smurfit-Stone Client by JBI to such Smurfit-Stone Client for its consumption,
Gross Revenue excludes invoiced post-production line items like transportation,
taxes, and other charges that are not fuel revenue.

 
(b) 
"Third Party Gross Revenue" means, during a period of time with respect to a
Client Agreement between JBI and a Smurfit-Stone Client,, an amount equal to:
the aggregate gross revenue collected by JBI during such period of time from
those third persons that have purchased Client Fuel of such Smurfit-Stonc,
Client from JBI. Third Party Gross Revenue excludes invoiced post-production
line items like transportation, taxes, and other charges that are not fuel
revenue.

 
 
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(c) 
"Client Fuel" means, with respect to a Smurfit-Stone Client, Fuel generated by
JBI Machines operating at the Client Facility of such Smurfit-Stone Client that:
(i) was introduced by Smurfit-Stone to JBI pursuant to this Agreement; and (ii)
is a party to a Client Agreement with JBI.

 
4.   Dispute Resolution Process
 
If a Dispute arises, a Party shall first give written notice of the Dispute to
the other Party describing the Dispute and requesting it be resolved pursuant to
the dispute resolution process set forth in this section (for the purposes of
this section, a "Dispute Notice"). If the Parties are unable to resolve the
Dispute within 30 days of delivery of the Dispute Notice, then each Party shall
promptly (but no later than five business •• days thereafter): (a) appoint a
designated representative who has sufficient authority to settle the Dispute •
and who is at a higher management level than the person with direct
responsibility for the administration of this Agreement (for the purposes of
this section, each, a "Designated Representative"); and (b) notify the other
Party in writing of the name and contact information of such Designated
Representative. The Designated Representatives shall then meet as often as they
deem necessary in their reasonable judgment in order to discuss the Dispute and
negotiate in good faith to resolve the Dispute. The Designated Representatives
shall mutually determine the format for such discussions and negotiations,
provided that all reasonable requests for relevant information relating the
Dispute made by one Party to the other Party shall be honoured. If the Parties
are unable to resolve the Dispute within 60 days after the appointment of both
Designated Representatives, then either Party may proceed to arbitration in
accordance with section 5.
 
For purposes of this Agreement, "Dispute" means any dispute, controversy or
difference arising out of, or relating to, any provision in this Agreement,
including, without limiting the generality of the foregoing, its negotiation,
validity, existence, breach, termination, construction or application, or the
rights or obligations of any Party, or the relationship between the Parties.
 
5.   Arbitration
 
If a Dispute has not been resolved by the Parties in accordance with section 4,
the Dispute may he referred by either Party to and determined by arbitration
under International Commercial Arbitration .Act, 1990, R.S.O. 1990, c. 19, as
amended. The seat of arbitration shall be Ontario and hearings shall be
conducted in the City of Toronto. The language of the arbitration shall be
English. Any matter referred to arbitration shall be heard by three arbitrators
with JBI appointing one arbitrator, Smurfit-Stone appointing one arbitrator, and
such two arbitrators selecting the third arbitrator (for the purposes of this
section, the "Arbitral Tribunal"). The Arbitral Tribunal shall have jurisdiction
to award all remedies available at common law and equity, including specific
performance and injunctive relief. The costs of the arbitration shall be in the
discretion

 
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of the Arbitral Tribunal. The Parties shall keep confidential and not disclose
to a third party the existence of the arbitration 01 any element of it, except
to the Arbitral Tribunal, such Parties' respective legal counsel, any person
necessary to the conduct of the arbitration or as may he required by law. The
Parties further agree that, in the case of any court proceeding seeking to set
aside the decision of the Arbitral Tribunal, they will seek to maintain as
confidential any confidential financial or other information disclosed in
connection with the arbitration. It is understood and agreed that any
performance required under this Agreement shall continue without interruption or
delay during the course of any arbitration proceedings and any subsequent court
proceedings arising therefrom.
 
6.   Public Notices
 
The Parties shall jointly plan and co-ordinate any public notices, press
releases, and any other publicity concerning the transactions contemplated by
this Agreement and no Party shall act in this regard without the prior approval
of the other, such approval not to be unreasonably withheld, unless such
disclosure is required to meet timely disclosure obligations of any Party under
applicable laws or stock exchange rules in circumstances where prior
consultation with the other Party is not practicable and a copy of such
disclosure is provided to the other Party.
 
7.   Expenses
 
Except as otherwise provided in this Agreement, each Party shall pay all costs
and expenses (including the fees and disbursements of legal counsel and other
advisers) it incurs in connection with the negotiation, preparation and
execution of this Agreement and the transactions contemplated by this Agreement.
 
8.   Term
 
The term of this Agreement shall commence on the date hereof and shall continue
unless earlier terminated by either Party upon 30 days prior written notice to
the other Party. If this Agreement is terminated by MI and there shall still be
active: Client Agreements, MI shall still be bound to make Royalty payments.
 
9.   Amendment
 
No amendment to this Agreement shall be valid or binding unless set forth in
writing and duly executed by each of the Parties.
 
10.         Assignment
 
No Party may assign this Agreement or any rights or obligations under this
Agreement without the prior written consent of the other Party.
 
11.         Enurement
 
This Agreement shall enure to the benefit of and be binding upon the Parties and
their respective successors and permitted assigns.
 
 
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12.          Governing Law
 
This Agreement shall be governed by and construed in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable in the
Province of Ontario.
 
13.          Treatment and Protection of Confidential Information
 
Either Party (for purposes of this section 13, the "Receiving Party")
acknowledges that other Party (for purposes of this section 13, the "Disclosing
Party") may disclose Confidential Information (as hereinafter defined) to the
Receiving Party in connection with either Party's obligations under this
Agreement. The Receiving Party shall take reasonable steps to protect the
Confidential Information. The Receiving Party shall not use, disclose, copy, or
allow access to, the Confidential Information without the express prior written
consent of the Disclosing Party, except that the Receiving Party may disclose
the Disclosing Party's Confidential Information to the Receiving Party's
Representatives (as hereinafter defined) and allow such Representatives to use,
copy and have access to such Confidential Information, in each case, on a "need
to know" basis; provided that such Representatives are under an obligation of
confidentiality to the - Receiving Patty. •
 
For purposes of this Agreement:
 
(a)  
"Confidential Information" means all written, visual or oral information
concerning the relationship of the Parties pursuant to this Agreement which may
be of an operational, technical and/or sales nature, furnished by the Disclosing
Party to the Receiving Party and/or its respective Representatives by or on
behalf of the Disclosing Party, irrespective of the form of communication and
whether the information is furnished before, on or after the date hereof. Such
Confidential Information shall not include information which: (i) was rightfully
in the Receiving Party's possession or was rightfully known to the Receiving
Party's prior to its receipt from the Disclosing Party; (ii) is or becomes
public knowledge by acts other than those of the Receiving Party; (iii) is
developed by the Receiving Party independent of the Confidential •Information
received under.this Agreement; (iv) is rightfully received from a third party
without a duty of confidentiality to the Disclosing Party; (v) the Receiving
Party is required to disclose under operation of law; provided, however, that
the Receiving Party shall give the Disclosing Party sufficient advance notice to
allow the Disclosing Party to seek a protective order as may be available at law
to protect the confidentiality of the information; or (vi) is disclosed by the
Receiving Party with the Disclosing Party's prior written approval. Confidential
Information shall not be deemed to be in the public domain merely because any
part of such information is embodied in general disclosures by the Disclosing
Party or because individual features, components or combinations are now or
become known to the public.

 
(b)  
"Representatives" of a Party, means such Party's directors, officers, employees,
affiliates and advisors.

 
 
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14.          Return of Property
 
The Receiving Party shall return to the Disclosing Party promptly upon the
termination of this Agreement, or at any other time when requested, the
Disclosing Party's property, including but not limited to all Confidential
Information and copies thereof.
 
15.          Consequential Damages
 
In no event shall either party be liable for any direct, indirect, incidental,
special, exemplary, or consequential damages however, caused and on any theory
of liability, whether in contract, strict liability, or tort (including
negligence or otherwise) arising in any way out of this Agreement or the
Services to be performed hereunder, even if advised of the possibility of such
damage.
 
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If the foregoing correctly sets forth our mutual understanding, please execute
and return two copies of this Agreement to the undersigned to signify your
acceptance. Upon such signature, this Agreement shall constitute a binding
agreement between us.
 
Sincerely,
 
JBI, INC.
 
By:                   
Name:
Title:
 
Accepted and agreed to by:
 
SMURFIT-STONE CONTAINER CORPORATION
 
By: /s/ Michael Osulo           
Name: Michael Osulo
Title: SVP
 
 
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