Exhibit 10.2
 
ECONOMIC DEVELOPMENT AGREEMENT

This CHAPTER 380 ECONOMIC DEVELOPMENT AGREEMENT (this Agreement) is entered into
by and between the City of Pasadena, Texas (the City), a Texas Home Rule 
Municipal Corporation, and Indoor Harvest Corporation (IHC), a corporation of
the State of Texas with its principal place of business in Houston, Texas.

PREAMBLE

WHEREAS, Indoor Harvest Corp. (IHC) proposes to fund the establishment and
provisioning of an indoor agricultural research facility (vertical farm) to be
located in Pasadena, Texas at the buildings at 112 and 114 Walter Street (The
Premises) as further described on Exhibit A, Parcel Descriptions of Tracts 1 and
2 and Exhibit B, Survey of Tracts 1 and 2, referred to herein as CLARA
(Community Located Agricultural Research Area). This location encompasses two
unused facilities owned by the City; formerly used for various municipal
purposes including a community services satellite office, a jail, and a fire
station. This location would house a production floor(s) and any customary and
usual equipment necessary for the normal operations of a vertical farming
operation including production, packaging and point of distribution. In
addition, classrooms or other education facilities would be accommodated in
either or both buildings to promote technical training through partnership with
San Jacinto College and Pasadena Independent School District (Education
Partners) that is intended to further the goal of developing local employment in
the field of indoor agriculture facility management.

WHEREAS, the purpose of this commercial operation would be to showcase IHC
design, engineering and build technology to clients within an active production
facility, generating business through engineering and project consultancy
employment; and

WHEREAS, IHC proposes that a minimum of $4.0 million in capital and equipment
acquisition will be invested in the repair, refurbishment and equipping of these
facilities during the term of the agreement, bringing them to full City code
compliance and to a standard equal to or exceeding that of similar commercial
facilities; and

WHEREAS, operation of the vertical farm is expected to create new jobs and tax
value for the City, and will promote local economic development and stimulate
business and commercial activity in Pasadena in general and in an area of the
community specifically that has seen economic opportunities decline; and

WHEREAS, under Chapter 380 of the Texas Local Government Code, the City has
adopted an economic development program to promote local economic development
and stimulate business, agriculture, education and training and commercial
activity within the City; and

WHEREAS, the agreement between IHC and the City meets the criteria established
under Chapter 380 of the Texas Local Government Code as a program established to
promote local economic development and stimulate business, agriculture,
education and training and commercial activity within the City; and

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WHEREAS, to ensure that the benefits that the City provides are utilized in a
manner consistent with Chapter 380 and other laws, IHC agrees that its receipt
of such benefits shall be conditioned upon its satisfaction of those conditions
enumerated herein, including performance conditions related to the construction
and development of the vertical farm and job creation;

NOW THEREFORE, for and in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the City and IHC agree as follows:

ARTICLE I. GENERAL TERMS AND DEFINITIONS

The recitations herein above set forth in the Preamble are hereby adopted by
this reference and incorporated herein, the same is so set forth in full
context.

This agreement is made and entered into this ______ day of
_____________________, A. D., 2015 by and between the City of Pasadena, Texas, a
Home Rule Municipal Corporation situated in Harris County, Texas (the “City”),
and Indoor Harvest Corporation (IHC), a corporation of the State of Texas. In
consideration of the covenants and agreements hereinafter contained the parties
do hereby agree as follows:

It is agreed that the following documents, to wit: this CHAPTER 380 ECONOMIC
DEVELOPMENT AGREEMENT, a signed certification by IHC that sufficient funding is
available to commence the repair, refurbishment and equipping of these
facilities as set out hereinafter, as well as any and all addenda, are a part of
this Agreement, as if set out in full at this part of the Agreement.

DEFINITIONS

As used in this agreement, the following terms shall have the meanings set forth
below:

INDOOR AGRICULTURAL FACILITY (VERTICAL FARM). The extent buildings at 112 and
114 Walter Street containing a community services building and fire station and
their approaches, to be utilized in research, testing and prototyping of
hydroponic and aeroponic plant nutrient growing systems, and as a showroom of
the various equipment/technology used in these environments. It will contain
such growing areas as deemed appropriate to provide proof-of-concept for IHC
design and engineering, and education facilities, classrooms or other areas
where training in vertical farm management may be accomplished. This definition
does not preclude the employment of other greenhouse or hoop-type growing
structures which may be utilized as business demands dictate.

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EFFECTIVE DATE. The effective date of the transfer of the City facilities to the
constructive use of IHC or its assigns, and the binding of IHC and the City to
all terms of this agreement, will commence on the date IHC certifies in writing
by separate signature that an adequate level of funding to be determined by IHC
no later than April 15, 2016, exists to undertake the repurposing of the City
buildings and to commence the operations envisioned by this agreement. Unless
and until such written certification is presented by IHC to the City, this
agreement is contemplative of future agreement only but is not binding on either
party.

TERM. The entire duration of the agreement period when conditions and
performance requirements are adequately met by both parties.

BUILD PARTNERSHIP - The Harris County BUILD Partnership (Partnership) is an
extension of Healthy Living Matters (HLM), a county-wide collaborative of
organizations chartered to address childhood obesity in Harris County. The City
of Pasadena is one of eight participatory members that join three convener
organizations in the partnership. The partnership’s policy priorities and
charter as addenda to this document are herein included by reference as attached
hereto on Exhibit C.

ARTICLE II. THE PROJECT AND THE IMPROVEMENTS

PURPOSE. The City of Pasadena has an interest in redeveloping the historical
area of Pasadena to provide more economic opportunity for residents as well as
revitalizing an area that has declined over time as newer development moved to
the south of the city. The Vertical Farm facility proposed by this Economic
Development Agreement offers a foundation upon which further development in the
area may expand, should the present model prove successful. The education and
public health benefits in development with San Jacinto College, Pasadena
Independent School District and the Harris County Public Health & Environmental
Services department are recognized as potentially significant in contributing to
the overall economic vitality and well-being of Pasadena residents, and the City
acknowledges the rewards inherent in supporting small-scale economic
redevelopment through projects such as this agreement offers.

ARTICLE III. REPRESENTATIONS OF THE PARTIES

REPRESENTATIONS OF THE CITY. The City hereby represents to the Company that as
of the date hereof:

The City is a duly created and existing Municipal Corporation and Home Rule
Municipality of the State of Texas under the laws of the State of Texas and is
duly qualified and authorized to carry on the governmental functions and
operations as contemplated by this Agreement.

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The City has the power, authority, and legal right under the laws of the State
of Texas and the City Charter to enter into and perform this Agreement and the
execution, delivery, and performance hereof (i) will not, to the best of its
knowledge, violate any applicable judgment, order, law, or regulation, and (ii)
do not constitute a default under, or result in the creation of, any lien,
charge, encumbrance, or security interest upon any assets of the City under any
agreement or instrument to which the City is a party or by which the City or its
assets may be bound or affected.

This Agreement has been duly authorized, executed, and delivered by the City and
constitutes a legal, valid, and binding obligation of the City, enforceable in
accordance with its terms, except to the extent that (i) the enforceability of
such instruments may be limited by bankruptcy, reorganization, insolvency,
moratorium, or other similar laws of general application in effect from time to
time relating to or affecting the enforcement of creditors' rights, and (ii)
certain equitable remedies including specific performance may be unavailable.

The execution, delivery, and performance of this Agreement by the City do not
require the consent or approval of any person that has not been obtained.

REPRESENTATIONS OF THE COMPANY. The Company hereby represents to the City that
as of the date hereof:

The Company is duly authorized and existing under the laws of the State of Texas
and in good standing under the laws of the State of Texas, and is qualified to
do business in the State of Texas.

The Company has the power, authority, and legal right to enter into and perform
its obligations set forth in this Agreement, and the execution, delivery, and
performance hereof (i) have been duly authorized, and will not, to the best of
its knowledge, violate any judgment, order, law or regulation applicable to the
Company, and (ii) do not constitute a default under or result in the creation
of, any lien, charge, encumbrance, or security interest upon any assets of the
Company under any agreement or instrument to which the Company is a party or by
which the Company or its assets may be bound or affected.

This Agreement has been duly authorized, executed, and delivered and constitutes
a legal, valid, and binding obligation of the Company, enforceable in accordance
with its terms, except to the extent that the enforceability of such instruments
may be limited by bankruptcy, reorganization, insolvency, moratorium, or other
similar laws of general application in effect from time to time relating to or
affecting the enforcement of creditors' rights.

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 ARTICLE IV. INDOOR HARVEST CORP. OBLIGATIONS

PROPERTY LEASE. As a condition of the City of Pasadena leasing its facilities to
IHC for development of the Vertical Farm, IHC agrees to use the space only for
those purposes specifically intended for and agreed to by the City and IHC.  IHC
shall not use or permit the use of the facilities or premises in any manner that
may result in waste, or constitutes a nuisance, or violates any law, ordinance,
rule, restriction, or regulation, or for any illegal purpose.  IHC shall permit
the City of Pasadena, its agents, representatives and employees to enter into
and on the Premises when reasonably necessary for the purpose of inspection or
any other purpose necessary to protect the City of Pasadena’s interest in the
Premises. All arrangements and expense for any pest and/or rodent control shall
be the sole responsibility of IHC.  The City of Pasadena shall not be
responsible for or make any repair occasioned by the act or negligence of IHC or
any of its officers, agents, or employees.  IHC is responsible for and agrees to
pay for costs related to its use of all utilities including electricity, gas,
heat, air conditioning, telephone, water, sewage and garbage removal.  IHC is
solely responsible for securing and maintaining insurance at its own expense for
property and equipment contained on the property/within the facilities, and any
trade fixtures that IHC may attach thereto.  Any damages incurred upon said
property/facilities during the term of this Agreement, whether by fire, storm,
natural disaster or otherwise, shall be the responsibility of IHC to repair
and/or replace so that the property/facilities are returned to City in a
condition similar to the condition at the time IHC received the
property/facilities.

IHC CONFIRMS BY ENTERING INTO THIS AGREEMENT THAT IT HAS INSPECTED AND ACCEPTS
THE PROPERTY/FACILITIES “AS IS”.  THE CITY HAS NOT MADE AND DOES NOT MAKE ANY
REPRESENTATIONS AS TO THE COMMERCIAL SUITABILITY, ENVIRONMENTAL CONDITIONS NOW
EXISTING, PHYSICAL CONDITION, LAYOUT, FOOTAGE, EXPENSES, OPERATION OR ANY OTHER
MATTER AFFECTING OR RELATING TO THE PROPERTY/FACILITIES AND THIS AGREEMENT
EXCEPT AS SPECIFICALLY HEREIN SET FORTH OR REFERRED TO, AND IHC HEREBY EXPRESSLY
ACKNOWLEDGES THAT NO SUCH REPRESENTATIONS HAVE BEEN MADE.  THE CITY MAKES NO
OTHER WARRANTIES, EXPRESS OR IMPLIED, MERCHANTABILITY, MARKETABILITY, FITNESS OR
SUITABILITY FOR A PARTICULAR PURPOSE OR OTHERWISE, EXCEPT AS SET FORTH HEREIN. 
ANY IMPLIED WARRANTIES ARE EXPRESSLY DISCLAIMED AND EXCLUDED.  THE
REPRESENTATIONS, WARRANTIES, COVENANTS, TERMS, CONDITIONS, AND WAIVERS SET FORTH
IN THIS SECTION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.

ENGINEERING AND MANUFACTURING - IHC agrees to project manage all activities
directly related to engineering and product design development and to be held
liable for capital expenditures to produce designs, build, install, source crop
genetics and establish and maintain system settings.

OPERATIONAL EXPENSES. Ongoing costs for production from seed to packaging, IHC
equipment and resources, and building maintenance as referred to under UPKEEP
will be the responsibility of IHC.

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HARVESTING, PACKAGING AND SHIPPING. IHC will coordinate harvesting, packaging
suppliers and branded elements as required. An equitable distribution of
available produce, crops, plants and like agricultural products shall be guided
by the BUILD partnership’s policy goals, to be made in consideration of specific
growing cycles, research priorities and unforeseen exigencies, IHC making such
reasonable efforts as to maximize availability of produce consistent with sound
business practices. Such products shall be offered at the facility site only and
IHC shall have no responsibility to provide additional means or methods of
distribution beyond it. Any surplus, extraneous or unused production not timely
requested by the partnership may be used by IHC in any way it sees fit, to sell,
distribute or dispose of in whatever manner it deems appropriate.

EDUCATION AND TRAINING. Ongoing costs for resources including but not limited to
faculty and student materials to support the curriculum will be the
responsibility of the education program partners as they may be mutually agreed
upon. These include Pasadena Independent School District, San Jacinto College,
BUILD Partnership grant funds currently budgeted for such programs and any
subsequent support that may be provided by other entities. IHC agrees to provide
reasonable accommodation to the education partners for an appropriate venue to
exercise the training and educational components of this agreement and to act as
expert advisers in regards to the development of an indoor agriculture core
curriculum by the education program partners that leads to professional
certification in this field. IHC may at their sole discretion provide other
resources or monetary support as they determine is appropriate.

ASSESSMENT. IHC agrees to a calendar quarterly assessment of operations to be
provided to the City in writing to assure terms and conditions of this agreement
are being met. An oversight committee will be established between City of
Pasadena and IHC to review financial and operational standards not less than one
time per calendar year in an effort to maintain a healthy and innovative project
model that will enhance the project's utility in showcasing economic development
goals while remaining within the parameters of agreed performance. IHC shall
establish and maintain during the term of this Agreement records and accounts
relating to the operation of its activities, including but not limited to
capital investments, expenditures, taxes, and employees, which records and
accounts shall be subject to examination, copying and review by the City at any
reasonable time.

UPKEEP. Routine maintenance and upkeep of the buildings will be shared between
the City and IHC, with facilities' routine exterior and landscape upkeep the
responsibility of the City and interior areas, improvements and alterations of
the buildings’ interiors the responsibility of IHC during the term of the
agreement. Any construction, repair, or material changes, additions or
alterations of the buildings’ exteriors or landscaping done at IHC’s request and
with the City’s written permission by an authorized City representative will
become the responsibility of IHC to maintain for the remaining term of this
agreement, whether for business necessity or aesthetic appeal.

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ECONOMIC BENEFITS INCLUDING EMPLOYMENT. Contingent on the success of IHC to
raise $4.0 million or a lesser sum IHC agrees to on or before April 15, 2016,
and the certification of such funding by way of separate notice by IHC, IHC
warrants to the City to fund the CLARA Project as an agricultural research,
education and public health facility. IHC proposes the following economic
benefits to the City in return for the facilities' use and other named benefits:
 

· A minimum of 12 short to intermediate term jobs in the fields of construction,
plumbing, electrical and materials handling as the buildings are refitted;

· An additional minimum of 1.15 full time (35 hr/wk) positions per $1,000,000 of
capital expenditures on the project;

· A total of $3,500,000 in cash or like-kind expensing by April 15, 2017; or
three-hundred sixty-five (365) days from the date of the separate certification
of funding by IHC of the agreement if earlier, for capital expenditures relating
to equipping the facilities for production, packaging and delivery make-ready.
The City may request, and IHC will deliver if so requested, a summary accounting
of expenditures to-date at any time after ninety (90) days since the
certification of funding by IHC. The addenda USE OF PROCEEDS table is hereby
incorporated by reference.

CONDITION OF FACILITIES UPON TERMINATION OF AGREEMENT. Should this agreement be
terminated for cause, or no cause, as prescribed in ARTICLE VI. DEFAULT AND
REMEDY, IHC recognizes that any additions, improvements or other appurtenances
attached to the property, and made during the term of this agreement, shall pass
to the custody and ownership of the City at the time of termination without
recourse by IHC.

ARTICLE V. CITY OF PASADENA, TEXAS OBLIGATIONS

The City of Pasadena will provide both facilities named above for the sum of $10
per annum for a period not to exceed twenty (20) years to IHC. As additional
consideration for IHC’s performance of its obligations under this Agreement, for
a period of ten (10) years beginning January 1, 2017 and ending December 31,
2027, the City will rebate property taxes levied by the City and paid by IHC on
all personal property acquired and installed within said facilities each
calendar year and any property taxes paid by IHC on the increase in the value of
the land associated therewith.  Any personal property, equipment or machinery
replaced or installed must be new to be eligible for rebate under this
Agreement.

With respect to the tax rebates described above, on or before March 1st of each
year during the first ten (10) years of this Agreement, IHC shall notify the
City in writing of the amount of City property taxes timely paid by IHC per the
property tax notice for the preceding year. Any eligible rebates will be paid by
the City to IHC on an annual basis for the preceding year on or before October
30th following the tax year for which they were paid.

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CITY ISSUANCE AND PERMITS. The City will diligently work to expedite all
permitting and approvals required for the refurbishment and refitting of the
facility within the limits of regulatory constraints and the usual and customary
time required for such approvals. Such permits include but are not limited to
building, electrical, plumbing, environmental and other such permits as will be
necessary to allow reasonable progress on refurbishing of the facility.

PRODUCTION. The City’s material interest in production shall be limited to
working with the BUILD partnership policy goals for distribution as a public
health initiative in North Pasadena, and that IHC’s crop production is of a
frequency and volume that are appropriate to a facility of its size and purpose,
and is made available at suitable times to meet the partnership’s objectives for
improving the public wellbeing. The City shall have no obligation as
contributing to production expenses, harvesting or packaging. Distribution of
such products shall be the sole responsibility of the BUILD partnership as they
determine by the BUILD policy guidelines and not the responsibility of the City.
Any surplus, extraneous or unused production not timely requested by the
partnership may be used by IHC in any way it sees fit, to sell, distribute or
dispose of in whatever manner it deems appropriate.

TRAINING AND EMPLOYMENT. The City of Pasadena may it its option work through a
designated City representative with its education partners and IHC to assist in
developing a course of teaching. The curriculum goal will seek approval for
appropriate secondary, vocational and continuing career education of such
standard that graduates successfully completing their studies may be considered
by general agreement and appropriate professional certification among the
parties to meet all relevant education requirements and to be competent to seek
employment within the field of indoor agriculture, facility management and
related fields.

ARTICLE VI. DEFAULT AND REMEDY

 As the City and IHC agree a mutually supportive environment is useful in
ensuring the successful operation of this project and subsequent economic
benefits that may flow from it, the goal of any lapse in performance by either
party shall be to amicably resolve the issue in a timely way and return the
project to compliance within the terms of the agreement.

If IHC fails to perform any term of this Agreement, the City shall provide the
City's designated representative adequate information to provide IHC with a
reasonable description of the performance term in default. IHC will have 15 days
to evaluate and respond in writing to this information and an additional 30 days
to develop a plan to resolve the term in default that is acceptable to the City.
Should such plan be deemed inadequate to cure the term in default, and no
further progress is made in resolving the issue, the City may terminate this
Agreement upon thirty (30) days written notice to IHC or City may terminate this
Agreement at any time without cause upon ninety (90) days written notice to IHC.
Upon any determination of IHC’s default, including but not limited to failure to
complete construction as contemplated by the parties, failure to create and
maintain those minimum numbers of jobs specified by Agreement, failure to make
timely payments of taxes assessed, failure to support educational benefits
intended to result from this Agreement, and/or termination of this Agreement by
the City, the leased Premises shall be returned to the City and City shall be
entitled to recapture all amounts rebated to IHC, said amounts become due and
payable to the City upon thirty (30) days written notice to IHC.

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Notice of termination of the agreement by either party, for cause or no cause,
must be made in writing and provided to the other party according to the terms
of the ARTICLE VII. GENERAL PROVISIONS, NOTICES section below.
 

ARTICLE VII. INDEMNIFICATION

IHC AGREES TO INDEMNIFY FULLY AND TO SAVE WHOLE AND HARMLESS THE CITY OF
PASADENA FROM ALL COSTS, EXPENSES AND DAMAGES OR LOSSES, INCLUDING ALL COSTS OF
LITIGATION, ARISING OUT OF ANY REAL OR ASSERTED CAUSES OF ACTION, AND FROM ALL
COSTS OR LOSSES FROM WRONG, OR INJURY OR DAMAGES WHICH MAY BE OCCASIONED BY IHC,
ITS AGENTS, SERVANTS OR EMPLOYEES IN ITS OPERATIONS, OR CONNECTED THEREWITH AND
IHC, ITS AGENTS, SERVANTS OR EMPLOYEES IN THE PROSECUTION OF SAID WORK, OR
THEREWITH, WHERE SUCH INJURIES, DEATH OR DAMAGES ARE CAUSED BY THE JOINT
NEGLIGENCE OF CITY OF PASADENA AND ANY OTHER PERSON OR ENTITY.

IHC AGREES TO AND SHALL INDEMNIFY AND HOLD HARMLESS THE CITY OF PASADENA, ITS
OFFICERS, AGENTS, AND EMPLOYEES, FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES,
CLAIMS OF ACTION, SUITS, AND LIABILITY OF EVERY KIND, INCLUDING ALL EXPENSES OF
LITIGATION, COURT COST, AND ATTORNEY’S FEES, FOR INJURY OR DEATH OF ANY PERSON
OR FOR DAMAGE TO ANY PROPERTY, ARISING OUT OF OR IN CONNECTION WITH THE WORK
DONE BY IHC, ITS AGENT, SERVANTS OR EMPLOYEES UNDER THIS CONTRACT OR CONNECTED
THEREWITH WHERE SUCH INJURIES, DEATH OR DAMAGE ARE CAUSED BY THE JOINT
NEGLIGENCE OF:

(1)    IHC OR ANY OF ITS EMPLOYEES; AND
(2)    THE CITY OF PASADENA, ITS OFFICERS, AGENTS OR  EMPLOYEES.

IT IS THE EXPRESSED INTENTION OF BOTH THE CITY OF PASADENA AND IHC THAT THE
INDEMNITY PROVIDED FOR IN THIS SECTION IS INDEMNITY BY IHC TO INDEMNIFY AND
PROTECT THE CITY OF PASADENA FROM THE CONSEQUENCES OF THE NEGLIGENCE OF THE
CITY, ITS OFFICERS, AGENTS OR EMPLOYEES WHERE SUCH NEGLIGENCE IS A CONCURRING
CAUSE OF THE INJURY, LOSS, DEATH OR DAMAGE.  FURTHERMORE, IT IS THE EXPRESSED
INTENTION OF BOTH THE CITY OF PASADENA AND IHC THAT THE INDEMNITY PROVIDED FOR
IN THIS SECTION SHALL HAVE NO APPLICATION TO ANY CLAIM, LOSS, DAMAGE CAUSE OF
ACTION, SUIT OR LIABILITY WHERE THE INJURY, DEATH OR DAMAGE RESULTS FROM THE
SOLE NEGLIGENCE OF THE CITY OF PASADENA UNMIXED WITH THE FAULT OF THE IHC OR ANY
OF ITS EMPLOYEES.

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In the event that any of the foregoing indemnification provisions shall be
inapplicable or held unenforceable, IHC and the City of Pasadena shall each
contribute to any judgment against any party for which indemnity would otherwise
be due from it hereunder, according to the percentage of fault of such
indemnifying party, in accordance with the laws of the State of Texas.
 
INSURANCE.  IHC shall maintain the following insurance during the term of this
Agreement:

1. Comprehensive General Liability Insurance in the amount of not less than one
million dollars $1,000,000 combined single limit for personal injury, products,
completed operations, and property damage.

2. Worker's Compensation Insurance for all IHC employees employed at the
Facilities, including Employer's Liability Insurance.

 
Within thirty (30) calendar days of the date hereof, IHC shall furnish the City
of Pasadena with satisfactory proof of such insurance, given the CITY while this
Agreement is in effect. These policies will be in effect at the time IHC
commences to lease the City’s Facilities.
 
The City of Pasadena shall be included as a fully covered and named additional
insured according to its interest during the term of this Agreement and
thereafter as claims may be made.

ARTICLE VIII. GENERAL PROVISIONS
 
NOTICES. Any notice or other communication ("Notice") given under this Agreement
must be in writing and may be given by depositing the Notice in the United
States Mail, postage paid. For the purposes of Notice, the addresses of the
Parties will, until changed as provided below, be as follows:

If to the Company:

Indoor Harvest Corp.
Attention: Chad Sykes
5300 East Freeway, Suite A.
Houston, TX. 7702

If to the City:

City of Pasadena, Texas
P.O. Box 672
Pasadena, Texas 77501

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A Party may designate a different address at any time by giving Notice to the
other Parties.

AMENDMENTS AND WAIVERS. Any provision of this Agreement may be amended or waived
if such amendment or waiver is in writing and is approved by the Company and the
City. No course of dealing on the part of the Company or the City nor any
failure or delay by the Company or the City with respect to exercising any
right, power or privilege pursuant to this Agreement shall operate as a waiver
thereof.

INVALIDITY. In the event that any of the provisions contained in this Agreement
shall be held unenforceable in any respect, such unenforceability shall not
affect any other provisions of this Agreement and, to that end, all provisions,
covenants, agreements or portions of this Agreement are declared to be
severable.

SUCCESSORS AND ASSIGNS. No Party shall have the right to assign its rights under
this Agreement or any interest herein without the prior written consent of the
other Parties.

EXHIBITS, HEADINGS, TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS. The exhibits
attached to this Agreement are incorporated herein and are deemed a part of this
Agreement for the purposes stated herein, except that in the event of any
conflict between any of the provisions of such exhibits and the provisions of
this Agreement, the provisions of this Agreement shall prevail. All titles or
headings are only for the convenience of the Parties and shall not be construed
to have any effect or meaning as to the agreement between the Parties hereto.
Any reference herein to a section or subsection will be considered a reference
to such section or subsection of this Agreement unless otherwise stated. Any
reference herein to an exhibit will be considered a reference to the applicable
exhibit attached hereto unless otherwise stated.

APPLICABLE LAW. This Agreement is a contract made under and shall be construed
in accordance with and governed by the laws of the United States of America and
the State of Texas, and any actions concerning this Agreement shall be brought
in either the State Courts of Harris County, Texas, or the United States
District Court for the Southern District of Texas.

ENTIRE AGREEMENT. This Agreement represents the final agreement between the
Parties and may not be contradicted by evidence of prior, contemporaneous, or
subsequent oral agreements of the Parties. There are no unwritten oral
agreements between the Parties.

APPROVAL BY THE PARTIES. Whenever this Agreement requires or permits approval or
consent to be given by either of the Parties, the Parties agree that such
approval or consent will not be unreasonably withheld or delayed.

COUNTERPARTS. This Agreement may be executed in several counterparts, each of
which shall be an original and all of which constitute but one and the same
agreement.

INTERPRETATION. This Agreement has been jointly negotiated by the Parties and
shall not be construed against a Party because that Party may have assumed
primary responsibility for the drafting of this Agreement.

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ORDINANCE NO. 2015-164

An Ordinance authorizing and approving a Chapter 380 Economic Development
Agreement between the City of Pasadena and Indoor Harvest Corporation for the
purpose of establishing a vertical farm facility that utilizes build design
engineering and production.

                WHEREAS, Indoor Harvest Corp. (IHC) proposes to fund the
establishment and provisioning of an indoor agricultural research facility
(vertical farm) to be located in Pasadena, Texas at the buildings at 112 and 114
Walter Street (The Premises). This location would house a production floor(s)
and any customary and usual equipment necessary for the normal operations of a
vertical farming operation including production, packaging and point of
distribution. In addition, classrooms or other education facilities would be
accommodated in either or both buildings to promote technical training through
partnership with San Jacinto College and Pasadena Independent School District;
and
 
               WHEREAS, the purpose of this commercial operation would be to
showcase IHC design, engineering and build technology to clients within an
active production facility, generating business through engineering and project
consultancy employment; and
 
               WHEREAS, IHC proposes that a minimum of $4.0 million in capital
and equipment acquisition will be invested in the repair, refurbishment and
equipping of these facilities during the term of the agreement, bringing them to
full City code compliance and to a standard equal to or exceeding that of
similar commercial facilities; and
 

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              WHEREAS, operation of the vertical farm is expected to create new
jobs and tax value for the City, and will promote local economic development and
stimulate business and commercial activity in Pasadena in general and in an area
of the community specifically that has seen economic opportunities decline; and
 
              WHEREAS, under Chapter 380 of the Texas Local Government Code, the
City has adopted an economic development program to promote local economic
development and stimulate business, agriculture, education and training and
commercial activity within the City; and
 
              WHEREAS, the agreement between IHC and the City meets the criteria
established under Chapter 380 of the Texas Local Government Code as a program
established to promote local economic development and stimulate business,
agriculture, education and training and commercial activity within the City; and
 
              WHEREAS, to ensure that the benefits that the City provides are
utilized in a manner consistent with Chapter 380 and other laws, IHC agrees that
its receipt of such benefits shall be conditioned upon its satisfaction of those
conditions enumerated herein, including performance conditions related to the
construction and development of the vertical farm and job creation;
 
NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PASADENA:

SECTION 1.  That that certain Chapter 380 Economic Development Agreement, a
facsimile of which is annexed hereto, incorporated herein for all purposes and
designated Exhibit “1”, by and between the City of Pasadena, Texas and Indoor
Harvest Corporation for the
purpose of establishing a vertical farm facility that utilizes build design
engineering and production, is hereby authorized and approved.
 

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SECTION 2.  The Mayor of the City of Pasadena, Texas is hereby authorized and
directed to execute for and on behalf of the City the annexed agreement document
and counterparts thereof.
 
SECTION 3.  That the City Council officially determines that a sufficient
written notice of the date, hour, place and subject of this meeting of the City
Council was posted at a place convenient to the public at the City Hall of the
City for the time required by law preceding this meeting, as required by the
Open Meetings Law, Chapter 551, Texas Government Code; and that this meeting has
been open to the public as required by law at all times during which this
ordinance and the subject matter thereof has been discussed,
considered and formally acted upon.  The City Council further confirms such
written notice and the contents and posting thereof.
 
 

(SIGNATURE AND APPROVAL – NEXT PAGE)
 
 

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PASSED ON FIRST READING by the City Council of the City of
Pasadena, Texas in regular meeting in the City Hall this the

17th day of November, A.D., 2015.

APPROVED this the 17th day of November, A.D., 2015.

Johnny Isbell
_______________________________
JOHNNY ISBELL, MAYOR
OF THE CITY OF PASADENA, TEXAS

ATTEST:                                                                                                                     
APPROVED:
Linda
Rorick                                                                                                            
 Lee Clark
__________________________                                                    ________________________________
LINDA
RORICK                                                                                                 
LEE CLARK
CITY
SECRETARY                                                                                          CITY
ATTORNEY
CITY OF PASADENA, TEXAS                                                         
CITY OF PASADENA, TEXAS

PASSED ON SECOND AND FINAL READING by the City Council of the

City of Pasadena, Texas in regular meeting in the City Hall

this the 1st day of December, A. D., 2015.

APPROVED this the 1st day of December, A.D., 2015.

Johnny Isbell
________________________________
JOHNNY ISBELL, MAYOR
OF THE CITY OF PASADENA, TEXAS

ATTEST:                                                                                                                    
APPROVED:
Linda
Rorick                                                                                                           
 Lee Clark
_________________________                                                     
 _________________________________
LINDA
RORICK                                                                                               
 LEE CLARK
CITY
SECRETARY                                                                                        
CITY ATTORNEY
CITY OF PASADENA, TEXAS                                                       
 CITY OF PASADENA, TEXAS