Exhibit 10.1

 

MANAGEMENT SERVICES AGREEMENT

 

MANAGEMENT AGREEMENT (this "Agreement"), dated as of February 1, 2015, between
Industrial Management LLC, a Colorado limited liability company ("IM"), and RMR
IP, Inc., a Nevada corporation (the "Company").

 

For good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:

 

Section 1. Services. During the term of this Agreement, IM will provide such
services to the Company, all of its Subsidiaries and affiliated entities as the
Company shall reasonably request which shall include assistance in operational
and administrative matters, identifying, analyzing, and structuring growth
initiatives, and potential strategic acquisitions.

 

Section 2. Compensation. In consideration of the services provided in accordance
with Section 1 above, the Company shall compensate IM as follows:

 

(a)                Management Fee. An annual cash management fee (the
"Management Fee") in an amount equal to the greater of 2% of the Company's
annual gross revenues as shown on the Company's audited financial statements
each year or $1,000,000. The Management Fee shall be paid promptly following
completion of each annual audit, but no later than ninety days past the prior
year's annual audit.

 

(b)               Royalty Fee Assignment. IM shall have the option to be
assigned all available royalties from the Company’s mineral holdings, leases or
interests greater than 75% of Net Revenue Interest (as defined below) for all
mineral rights or production of minerals. This royalty assignment will follow
the title of the property as is customary in transactions of this kind. Accrual
of Royalties will be subject to Section 1 (d) and begin immediately following
the acquisitions of producing properties and/or development leading to
production.

 

(c)                Development Fee. A cash development fee with respect to any
capital project incurred by the Company or Subsidiary (as defined below) equal
to 2% of total project costs.

 

(d)               Compensation in lieu of Cash. At IM’s sole discretion it may
choose to accept convertible preferred stock of the Company or any of its
affiliated entities in lieu of cash for some or all of the fees set forth in
Section 1(a) through (c) above (the “Preferred Stock”) The Preferred Stock will
(i) provide for a 15% dividend accruing quarterly, (ii) may be in more than one
series and be convertible into either the Company’s Class A Common Stock or
Class B Common Stock (as applicable) at a conversion price equal to fifty
percent of the Market Price of the applicable Class B Common Stock on the
business day immediately preceding the date of Preferred Stock issuance, (iii)
be callable for cash for a period of six months following the date of issuance;
provided, however, that if called, IM shall have the option to convert the
called Preferred Stock into either the Company’s Class A Common Stock or Class B
Common Stock (as applicable) at a conversion price equal to sixty-six and two
thirds percent of the Market Price for the applicable Class B Common Stock on
the business day immediately preceding the date of Preferred Stock issuance, and
(iv) include a Blocker Provision (as defined below). IM shall have customary
registration rights with respect to any shares of common stock into which the
above-described Preferred Stock is converted (“Conversion Shares”) in accordance
with the registration rights agreement required to be entered into pursuant to
Section 3 of this Agreement. IM may establish a 10b5-1 trading plan pursuant to
which it may sell any or all of the Conversion Shares or subject to compliance
with securities laws, IM may distribute any or all of its Conversion Shares to
its owners or employees.

 

 

 

  

(e)                Expense Reimbursement. Reimbursement of documented and
reasonable out-of-pocket expenses incurred in connection with IM’s performance
of its duties hereunder, including but not limited to (i) expenses of third
party legal, accounting, tax and other advisors or consultants, (ii) postage,
courier and other direct office expenses, and (iii) travel and entertainment
expenses.

 

Section 3. Certain Definitions. For purposes of this Agreement, the following
terms shall have the definitions ascribed to them below:

 

(a) "Market Price" means the price determined by the first of the following
clauses that applies: (i) if the Common Stock is then listed or quoted on the
NYSE MKT, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global
Select Market or the NYSE (or any successors to any of the foregoing), the daily
volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the market on which the Common Stock is then listed or quoted
as reported by Bloomberg L.P. (based on a trading day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time)), (ii)  if the Common Stock is then
quoted on the OTCQX or OTCQB Marketplace, the volume weighted average price of
the Common Stock for such date (or the nearest preceding date) on the OTCQX or
OTCQB Marketplace, (iii) if the Common Stock is not then listed or quoted for
trading on the OTCQX or OTCQB Marketplace and if prices for the Common Stock are
then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a
similar organization or agency succeeding to its functions of reporting prices),
the most recent bid price per share of the Common Stock so reported, or (iv) in
all other cases, the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Company and reasonably
acceptable to the holder(s) of a majority of the Warrant, the fees and expenses
of which shall be paid by the Company.

 

(b) “Net Revenue Interest” means funds received from the production of oil or
gas, and other minerals, free of costs, except taxes.

 

(c) “Blocker Provision” means a provision contained in the rights of the
Preferred Stock class which prohibits conversion of the Preferred Stock if the
conversion would require a vote of the Company’s stockholders pursuant to any
applicable NYSE or NASDAQ rules, including because it would result in the
holder(s) beneficially owning (as determined in accordance with Section 13(d))
in excess of 19.99% of all of the Common Stock (of the applicable publicly
listed entity) outstanding at such time, which provision may be waived only upon
(i) the holder providing the issuer of the Preferred Stock with 61 days' notice
that the holder would like to waive the Blocker Provision, and (ii) approval of
the waiver of the Blocker Provision by the stockholders of such issuer , with
regard to any or all shares of Common Stock issuable upon conversion of the
Preferred Stock.

 

2

 

  

Section 4. Representations and Warranties.

 

(a)                The Company Understands Agreement. The Company represents and
warrants that it has read and understands each provision of this Agreement and
has freely and voluntarily entered into it. The Company further represents and
warrants that it has had sufficient opportunity to consult legal and other
counsel of its choice regarding its review of and entry into this Agreement.

 

(b)               The Company May Enter Into The Agreement. The Company
represents and warrants to IM that it can engage an independent contractor and
has full right and power to enter into and perform this Agreement.

 

(c)                Limitations to Obligations of IM. As a material inducement to
IM to enter into this Agreement, the Company represents and warrants the
following:

 

(1)               IM will not be required to engage in any negotiation(s) for
the sale of any securities of the Company or its affiliates with any of the
potential Investors;

 

(2)               IM may limit its duties in connection with any of the Services
to the offering of strategic financial guidance and advice, and shall not be
required or allowed to perform anything more than ministerial functions, such as
introducing or arranging meetings between potential investors and the Company;

 

(3)               The Company will not involve IM in the negotiation or
establishment of the terms of any investment in the Company or its affiliates;

 

(4)               The Company will not require IM to advise it or a Potential
Third Party as to the value of the Company or the securities potentially being
offered; and

 

(5)               IM will not be required to discuss, either orally or in
writing, with the Potential Third-Parties any details of any potential
securities to be sold by the Company, or otherwise make recommendations to the
Potential Third-Parties to purchase any securities of the Company.

 

(d)               Broker-Dealer Status. The Company and IM represent and warrant
that they acknowledge and fully understand that Section 15(a) of the Securities
and Exchange Act of 1934 generally requires any person who effects securities
transactions through U.S. jurisdictional means to register with the Securities
and Exchange Commission (the “SEC”) as a broker-dealer. The Company further
represents and warrants that it acknowledges and understands that IM has not
registered as a broker-dealer with the SEC, the Financial Industry Regulatory
Association (“FINRA”), or any state securities agency. IM further represents and
warrants that (a) IM is under no obligation to register as a broker-dealer with
the SEC, FINRA, or any state securities agency; and (b) IM’s performance of the
Services described herein will not require IM to register as a broker-dealer
with the SEC, FINRA, or any state securities agency.

 

(e)                Reliance on Representations. The Company hereby understands
and acknowledges that IM’s entry into this Agreement is specifically contingent
on the representations and warranties set forth in this Section 4, and IM would
not enter this Agreement absent these representations and warranties. Further,
IM hereby specifically prohibits the Company from taking any action, or
requiring IM to take any action, directly or indirectly, described in this
Section 4, and in the event that the Company engages in, or asks IM to engage
in, any of the aforesaid activities, then IM may immediately terminate this
Agreement.

 

3

 

  

Section 5. Registration Rights. The Company and IM shall enter into the
Registration Rights Agreement in the form of Exhibit A simultaneously with
entering into this Agreement.

 

Section 6. Information. The Company will provide IM with reasonable access to
the Company's officers and employees and its financial and business records,
financial statements and other information, to enable IM to perform its services
hereunder.

 

Section 7. Acknowledgement of Ownership of Industrial Management LLC. The
Company acknowledges that Gregory M. Dangler, its President and Chad Brownstein,
Chief Executive Officer, each have an ownership interest in IM.

 

Section 8. No Liability.

 

(a)                None of IM, any of its affiliates or any of their respective
principals, officers, directors, members, stockholders, agents or employees
(each, an "Indemnified Party") shall have any liability to the Company for any
services provided pursuant to this Agreement, except as may result from such
Indemnified Party's gross negligence or willful misconduct.

 

(b)               The Company hereby agrees to indemnify each Indemnified Party
from and against all losses, liabilities, damages, deficiencies, demands,
claims, actions, judgments or causes of action, assessments, costs or expenses
(including, without limitation, interest, penalties and reasonable fees,
expenses and disbursements of attorneys, experts, personnel and consultants
reasonably incurred by the Indemnified Party in any action or proceeding between
the Companies and the Indemnified Party or between the Indemnified Party and any
third party, or otherwise) based upon, arising out of or otherwise in respect of
this Agreement or any Indemnified Party's equity interest in the Company.

 

Section 9. Confidential and Proprietary Information. IM acknowledges and agrees
that in the performance of the Services, it may learn about, acquire, have
access to, be provided with, develop, generate, and/or have possession, custody
or control of information, data, records and materials confidential and
proprietary to the Company, the use or disclosure of which would cause the
Company substantial loss and damage, including, but not limited to: client or
customer or prospect names, address, lists and other information; marketing
plans, proposals or strategies; promotional plans, proposals or strategies;
policies or procedures; software programs, computer disk drives and databases;
business forecasts or plans or strategies; financial information; internal
records or files; product information; business methods; and other such
information which relates to the Company’s business and operations, as
applicable; which is not available generally to the public and which has been
developed or acquired by the Company with considerable effort and expense
(hereinafter referred to collectively as “Confidential and Proprietary
Information”). IM acknowledges and agrees that to the extent its performance of
the Services brings it into contact with, provides it access to, or permits it
to become informed of Confidential and Proprietary Information, it shall be
under an obligation to maintain the strictest confidentiality of all
Confidential and Proprietary Information at all times during and after the term
of this Agreement, and not to, directly or indirectly, at any time, in any
fashion, form, or manner whatsoever, disclose, divulge, reveal or communicate
the same to any entity or person, or retain or use the same in any manner
whatsoever, except (a) in the performance of the Services hereunder acting upon
the express authorization of the Company and under the terms and conditions
specified by the Company, or (b) in connection with the enforcement of its
rights under this Agreement, in which case IM shall use commercially reasonable
efforts to minimize the extent of such disclosure. This Section 9 is not
intended to restrict and does not restrict IM from disseminating or using any:

 

4

 

  

a.information that is published or available to the general public (other than
as a result of an improper or unauthorized disclosure by IM or some other person
or entity);

 

b.information that is obtainable from a third party having the right to disclose
such information without restriction; or

 

c.information required by any court or other administrative entity with the
legal authority to so require, provided that IM notifies the Company
sufficiently to enable the Company to protect the confidentiality of such
information through protective order or other administrative remedy.

 

Section 9. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed delivered upon personal
delivery, facsimile transmission or the next business day if by recognized
overnight courier service, in each case as follows:

 

(a)if to the Company:

 

9595 Wilshire Blvd., Suite 310

Beverly Hills, CA 90212

Attention: Gregory M. Dangler

email: gdangler@rmrholdings.com

 

if to Industrial Management LLC:

 

9595 Wilshire Blvd., Suite 310

Beverly Hills, CA 90212

Attention: Chad Brownstein

email: chad@ctbmgt.com

 

Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.

 

Section 10. Governing Law; Submission to Jurisdiction. ALL QUESTIONS CONCERNING
THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAW (AND NOT THE LAW OF
CONFLICTS) OF THE STATE OF COLORADO.

 

5

 

  

Section 11. Termination; Amendment. This Agreement may be terminated by either
party upon 30 days written notice. The provisions of Section 8 shall survive any
termination of this Agreement. No termination of this Agreement, whether
pursuant to this paragraph or otherwise, will affect the obligations of the
Company with respect to earned and accrued fees, costs and expenses incurred by
IM in rendering services hereunder and not paid or reimbursed by the Company as
of the effective date of such termination. This Agreement may not be amended or
modified except by a writing signed by IM and the Company.

 

Section 12. Independent Contractor. In the performance of the Services
hereunder, it is mutually understood and agreed that IM shall be, and at all
times shall act and perform as, an independent contractor to, and not as an
employee or partner of, the Company. Neither IM nor any of its employees,
subcontractors or agents is or shall be deemed to be an employee or partner of
the Company for any purpose.

 

Section 13. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

 

Section 14. No Third Party Rights. Except as expressly provided herein, the
provisions of this Agreement are solely for the benefit of IM and the Company,
and no other Person, will have any right or claim against the IM or the Company
by reason of this Agreement or any provision hereof or be entitled to enforce
any provision of this Agreement.

 

Section 15. Integration. This Agreement, together with the Registration Rights
Agreement, contains the entire agreement of the parties with respect to the
subject matter hereof and supersedes all prior oral or written agreements and
understandings with respect to the subject matter.

 

Section 16. Severability. If one or more terms or provisions of this Agreement
are declared invalid, illegal or unenforceable by a court or any other tribunal
of competent jurisdiction, such term or provision shall be limited or eliminated
only to the extent of such invalidity and without rendering invalid or
unenforceable the remaining provisions of this Agreement.

 

Section 17. Counterparts. This Agreement may be executed in counterparts,
including by the exchange of copies of originally executed counterpart signature
pages delivered by facsimile or as a PDF file by e-mail, all of which taken
together, shall be deemed one original.

 

6

 

  

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first written above.

 

  Industrial Management LLC                     By:       Chad Brownstein,
Manager               RMR IP, INC.               By:       Gregory M. Dangler,
President

 

7

 

   

Exhibit A

 

Form of Registration Rights Agreement

 

8