Indoor Harvest, Corp. 8-K 


 


Exhibit 10.3


 


Note:
January 16, 2018


 


NEITHER
THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES
AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. 


 


THIS
NOTE DOES NOT REQUIRE PHYSICAL SURRENDER OF THE NOTE IN THE EVENT OF A PARTIAL REDEMPTION OR CONVERSION. AS A RESULT, FOLLOWING
ANY REDEMPTION OR CONVERSION OF ANY PORTION OF THIS NOTE, THE OUTSTANDING PRINCIPAL SUM REPRESENTED BY THIS NOTE MAY BE LESS THAN
THE PRINCIPAL SUM AND ACCRUED INTEREST SET FORTH BELOW.


 


8%
FIXED CONVERTIBLE PROMISSORY NOTE 


 


OF


 


INDOOR
HARVEST CORP.


 


Issuance
Date: January 16, 2018


Total
Face Value of Note: $550,000


Initial
Consideration: $75,000


Initial
Original Issue Discount: $7,500


Initial
Principal Sum Due: $82,500


 


This
Note is a duly authorized Fixed Convertible Promissory
Note of Indoor Harvest Corp. a corporation duly organized and existing under the laws of the State of Texas (the
“Company”), designated as the Company's 8% Fixed Convertible Promissory Note in the principal amount of $550,000
(the “Note”). This Note will become effective only upon execution by both parties and delivery of the first
payment of consideration by the Holder (the “Effective Date”).


 


For
Value Received, the Company hereby promises to
pay to the order of Tangiers Global, LLC or its registered assigns or successors-in-interest (the “Holder”)
the Principal Sum of $550,000 (the “Principal Sum”) and to pay “guaranteed” interest on the principal
balance hereof at an amount equivalent to 8% of the Principal Sum, to the extent such Principal Sum and “guaranteed”
interest and any other interest, fees, liquidated damages and/or items due to Holder herein have not been repaid or converted
into the Company's Common Stock (the “Common Stock”), in accordance with the terms hereof. Upon the execution
of this Note the sum of $75,000 shall be remitted and delivered to the Company, and $7,500 shall be retained by the Holder through
an original issue discount (the “OID”) for due diligence and legal bills related to this transaction. The OID
is set at 10% of any consideration paid. The Company covenants that within  _____  months of the Effective Date of the
Note, it shall utilize approximately $75,000 of the proceeds in the manner set forth on Schedule 1, attached hereto (the
“Use of Proceeds”), and shall promptly provide evidence thereof to Holder, in sufficient detail as reasonably
requested by Holder.


 






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The
Holder may pay additional consideration (each, a “Consideration”) to the Company in such amounts and at such
dates (each, an “Additional Consideration Date”) as Holder may choose in its sole discretion. The Principal
Sum due to Holder shall be prorated based on the Consideration actually paid by Holder (plus the “guaranteed” interest
and 10% OID, both which are prorated based on the Consideration actually paid by the Holder, as well as any other interest or
fees) such that the Company is only required to repay the amount funded and the Company is not required to repay any unfunded
portion of this Note. The Maturity Date is six months from the Effective Date of each payment (the “Maturity Date”)
and is the date upon which the Principal Amount of this Note, as well as any unpaid interest and other fees, shall be due and
payable.


 


In
addition to the “guaranteed” interest referenced above, and in the Event of Default pursuant to Section 2.00(a), additional
interest will accrue from the date of the Event of Default at the rate equal to the lower of 18% per annum or the highest rate
permitted by law (the “Default Rate”).


 


This
Note will become effective only upon the execution by both parties, including the execution of Exhibits B, C, D and E and the
Irrevocable Transfer Agent Instructions (the “Date of Execution”) and delivery of the initial payment of consideration
by the Holder (the “Effective Date”).


 


This
Note may be prepaid by the Company, in whole or in part, according to the following schedule:


 


	Days
    Since Effective Date	Prepayment
    Amount
	Under
    90	115%
    of Principal Amount
	91-135	120%
    of Principal Amount
	136-180	125%
    of Principal Amount


 


After
180 days from the Effective Date this Note may not be prepaid without written consent from Holder, which consent may be withheld,
delayed or denied in Holder’s sole and absolute discretion. Whenever any amount expressed to be due by the terms of this
Note is due on any day which is not a Business Day (as defined below), the same shall instead be due on the next succeeding day
which is a Business Day. If the Note is in default, per Section 2.00(a) below, the Company may not prepay the Note without written
consent of the Holder.


 


For
purposes hereof the following terms shall have the meanings ascribed to them below:


 


“Business
Day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the City of New York
are authorized or required by law or executive order to remain closed.


 


“Conversion
Price” shall be equal to $.30.


 






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“Principal
Amount” shall refer to the sum of (i) the original principal sum of this Note (including the original issue discount,
prorated if the Note has not been funded in full), (ii) any additional payments made by the Holder towards the Principal Sum (iii) all
guaranteed and other accrued but unpaid interest hereunder, (iv) any fees due hereunder, (v) liquidated damages, and (vi) any
default payments owing under the Note, in each case previously paid or added to the Principal Amount.


 


“Principal
Market” shall refer to the primary exchange on which the Company’s common stock is traded or quoted.


 


“Trading
Day” shall mean a day on which there is trading or quoting for any security on the Principal Market.


 


“Underlying
Shares” means the shares of common stock into which the Note is convertible (including interest, fees, liquidated
damages and/or principal payments in common stock as set forth herein) in accordance with the terms hereof.


 


The
following terms and conditions shall apply to this Note:


 


Section
1.00 Conversion.


 


(a)       Conversion
Right. Subject to the terms hereof and restrictions and limitations contained herein, the Holder shall have the right, at
the Holder's sole option, at any time and from time to time to convert in whole or in part the outstanding and unpaid Principal
Amount under this Note into shares of Common Stock as per the Conversion Price, but not to exceed the Restricted Ownership Percentage,
as defined in Section 1.00(f). The date of any conversion notice (“Conversion Notice”) hereunder shall be referred
to herein as the “Conversion Date”. The Conversion Price shall be equitably adjusted in the event of a forward
split, stock dividend, or the like, but shall not be adjusted in the event of a reverse split, recombination, or the like.


 


(b)       Stock
Certificates or DWAC. The Company will deliver to the Holder, or Holder’s authorized designee, no later than 2 Trading
Days after the Conversion Date, a certificate or certificates (which certificate(s) shall be free of restrictive legends and trading
restrictions if the shares of Common Stock underlying the portion of the Note being converted are eligible under a resale exemption
pursuant to Rule 144(b)(1)(ii) and Rule 144(d)(1)(ii) of the Securities Act of 1933, as amended) representing the number of shares
of Common Stock being acquired upon the conversion of this Note. In lieu of delivering physical certificates representing the
shares of Common Stock issuable upon conversion of this Note, provided the Company's transfer agent is participating in DTC’s
FAST program, the Company shall instead use commercially reasonable efforts to cause its transfer agent to electronically transmit
such shares issuable upon conversion to the Holder (or its designee), by crediting the account of the Holder’s (or such
designee’s) broker with DTC through its DWAC program (provided that the same time periods herein as for stock certificates
shall apply).


 


(c)      
Charges and Expenses. Issuance of Common Stock to Holder, or any of its assignees, upon the conversion of this Note shall
be made without charge to the Holder for any issuance fee, transfer tax, legal opinion and related charges, postage/mailing charge
or any other expense with respect to the issuance of such Common Stock. Company shall pay all Transfer Agent fees incurred from
the issuance of the Common Stock to Holder, as well as any and all other fees and charges required by the Transfer Agent as a
condition to effectuate such issuance. Any such fees or charges, as noted in this Section that are paid by the Holder (whether
from the Company’s delays, outright refusal to pay, or otherwise), will be automatically added to the Principal Sum of the
Note and tack back to the Effective Date for purposes of Rule 144.


 






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(d)       Delivery
Timeline. If the Company fails to deliver to the Holder such certificate or certificates (or shares through the DWAC program)
pursuant to this Section (free of any restrictions on transfer or legends, if eligible) prior to 3 Trading Days after the Conversion
Date, the Company shall pay to the Holder as liquidated damages an amount equal to $2,000 per day, until such certificate or certificates
are delivered. The Company acknowledges that it would be extremely difficult or impracticable to determine the Holder’s
actual damages and costs resulting from a failure to deliver the Common Stock and the inclusion herein of any such additional
amounts are the agreed upon liquidated damages representing a reasonable estimate of those damages and costs. Such liquidated
damages will be automatically added to the Principal Sum of the Note and tack back to the Effective Date for purposes of Rule
144.


 


(e)       Reservation
of Underlying Securities. The Company covenants that it will at all times reserve and keep available for Holder, out of its
authorized and unissued Common Stock solely for the purpose of issuance upon conversion of this Note, free from preemptive rights
or any other actual contingent purchase rights of persons other than the Holder, five times the number of shares of Common
Stock as shall be issuable (taking into account the adjustments under this Section 1.00, but without regard to any ownership limitations
contained herein) upon the conversion of this Note (consisting of the Principal Amount) under the formula in Section 2.00(c) below
to Common Stock (the “Required Reserve”). The Company covenants that all shares of Common Stock that shall
be issuable will, upon issue, be duly authorized, validly issued, fully-paid, non-assessable and freely-tradable (if eligible).
If the amount of shares on reserve in Holder’s name at the Company’s transfer agent for this Note shall drop below
the Required Reserve, the Company will, within 2 Trading Days of notification from Holder, instruct the transfer agent to increase
the number of shares so that the Required Reserve is met. In the event that the Company does not instruct the transfer agent to
increase the number of shares so that the Required Reserve is met, the Holder will be allowed, if applicable, to provide this
instruction as per the terms of the Irrevocable Transfer Agent Instructions attached to this Note. The Company agrees that the
maintenance of the Required Reserve is a material term of this Note and any breach of this Section 1.00(e) will result in a default
of the Note.


 


(f)       Conversion
Limitation. The Holder will not submit a conversion to the Company that would result in the Holder beneficially owning more
than 9.99% of the then total outstanding shares of the Company (“Restricted Ownership Percentage”).


 


(g)       Conversion
Delays. If the Company fails to deliver shares in accordance with the timeframe stated in Section 1.00(b), the Holder, at
any time prior to selling all of those shares, may rescind any portion, in whole or in part, of that particular conversion attributable
to the unsold shares. The rescinded conversion amount will be returned to the Principal Sum with the rescinded conversion shares
returned to the Company, under the expectation that any returned conversion amounts will tack back to the Effective Date.


 


(h)       Shorting
and Hedging. Holder may not engage in any “shorting” or “hedging” transaction(s) in the Common Stock
prior to conversion.


 


(i)        Conversion
Right Unconditional. If the Holder shall provide a Conversion Notice as provided herein, the Company's obligations to deliver
Common Stock shall be absolute and unconditional, irrespective of any claim of setoff, counterclaim, recoupment, or alleged breach
by the Holder of any obligation to the Company.


 






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Section
2.00    Defaults and Remedies.


 


(a)       Events
of Default. An “Event of Default” is: (i) a default in payment of any amount due hereunder which default
continues for more than 5 Trading Days after the due date; (ii) a default in the timely issuance of underlying shares upon and
in accordance with terms of Section 1.00, which default continues for 2 Trading Days after the Company has failed to issue shares
or deliver stock certificates within the 3rd Trading Day following the Conversion Date; (iii) if the Company does not issue the
press release or file the Current Report on Form 8-K, in each case in accordance with the provisions and the deadlines referenced
Section 4.00(j); (iv) failure by the Company for 3 days after notice has been received by the Company to comply with any material
provision of this Note; (v) failure of the Company to remain compliant with DTC, thus incurring a “chilled” status
with DTC; (vi) any default of any mortgage, indenture or instrument which may be issued, or by which there may be secured or evidenced
any indebtedness, for money borrowed by the Company or for money borrowed the repayment of which is guaranteed by the Company,
whether such indebtedness or guarantee now exists or shall be created hereafter; (vii) if the Company is subject to any Bankruptcy
Event; (viii) any failure of the Company to satisfy its “filing” obligations under the Securities Exchange Act of
1934, as amended (the “1934 Act”) and the rules and guidelines issued by OTC Markets News Service, OTCMarkets.com
and their affiliates; (ix) failure of the Company to remain in good standing with its state of domicile; (x) any failure of the
Company to provide the Holder with information related to its corporate structure including, but not limited to, the number of
authorized and outstanding shares, public float, etc. within 1 Trading Day of request by Holder; (xi) failure by the Company to
maintain the Required Reserve in accordance with the terms of Section 1.00(e); (xii) failure of Company’s Common Stock to
maintain a closing bid price in its Principal Market for more than 3 consecutive Trading Days; (xiii) any delisting from a Principal
Market for any reason; (xiv) failure by Company to pay any of its Transfer Agent fees in excess of $2,000 or to maintain a Transfer
Agent of record; (xv) failure by Company to notify Holder of a change in Transfer Agent within 24 hours of such change; (xvi) any
trading suspension imposed by the United States Securities and Exchange Commission (the “SEC”) under Sections
12(j) or 12(k) of the 1934 Act; (xvii) failure by the Company to meet all requirements necessary to satisfy the availability of
Rule 144 to the Holder or its assigns, including but not limited to the timely fulfillment of its filing requirements as a fully-reporting
issuer registered with the SEC, requirements for XBRL filings, and requirements for disclosure of financial statements on its
website; (xviii) failure of the Company to abide by the Use of Proceeds or failure of the Company to inform the Holder of a change
in the Use of Proceeds; or (xix) failure of the Company to abide by the terms of the right of first refusal contained in Section
4.00(l).


 


(b)       Remedies.
If an Event of Default occurs the outstanding Principal Amount of this Note owing in respect thereof through the date of acceleration,
shall become, at the Holder's election, immediately due and payable in cash at the “Mandatory Default Amount”.
The Mandatory Default Amount means 150% of the outstanding Principal Amount of this Note, will be automatically added to the Principal
Sum of the Note and tack back to the Effective Date for purposes of Rule 144. Commencing 5 days after the occurrence of any Event
of Default that results in the eventual acceleration of this Note, this Note shall accrue additional interest, in addition to
the Note’s “guaranteed” interest, at a rate equal to the lesser of 18% per annum or the maximum rate permitted
under applicable law. In connection with such acceleration described herein, the Holder need not provide, and the Issuer hereby
waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of
any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable
law. Such acceleration may be rescinded and annulled by the Holder at any time prior to payment hereunder and the Holder shall
have all rights as a holder of the note until such time, if any, as the Holder receives full payment pursuant to this Section
2.00(b). No such rescission or annulment shall affect any subsequent event of default or impair any right consequent thereon.
Nothing herein shall limit the Holder's right to pursue any other remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Issuer's failure to timely deliver certificates
representing shares of Common Stock upon conversion of the Note as required pursuant to the terms hereof.


 






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(c)       Conversion
Right. At any time and from time to time after a default occurs solely due to the fact the Note is not retired on or before
the Maturity Date (“Maturity Date”), subject to the terms hereof and restrictions and limitations contained
herein, the Holder shall have the right, at the Holder’s sole option, to convert in whole or in part the outstanding and
unpaid Principal Amount under this Note into shares of Common Stock at the Maturity Default Conversion Price. The “Maturity
Default Conversion Price” shall be equal to the lower of: (a) the Conversion Price or (b) 65% of the lowest trading
price of the Company’s common stock during the 15 consecutive Trading Days prior to the date on which Holder elects to convert
all or part of the Note. For the purpose of calculating the Maturity Default Conversion Price only, any time after 4:00 pm Eastern
Time (the closing time of the Principal Market) shall be considered to be the beginning of the next Business Day. If the Company
is placed on “chilled” status with the DTC, the discount shall be increased by 10%, i.e., from 35% to
45%, until such chill is remedied. If the Company is not DWAC eligible through their Transfer Agent and DTC’s FAST system,
the discount will be increased by 5%, i.e., from 35% to 40%. In the case of both, the discount shall be a cumulative
increase of 15%, i.e., from 35% to 50%.


 


Section
3.00 Representations and Warranties of Holder.


 


Holder
hereby represents and warrants to the Company that:


 


 (a)          Holder
is an “accredited investor,” as such term is defined in Regulation D of the Securities Act of 1933, as amended (the
“1933 Act”), and will acquire this Note and the Underlying Shares (collectively, the “Securities”)
for its own account and not with a view to a sale or distribution thereof as that term is used in Section 2(a)(11) of the 1933
Act, in a manner which would require registration under the 1933 Act or any state securities laws. Holder has such knowledge and
experience in financial and business matters that such Holder is capable of evaluating the merits and risks of the Securities.
Holder can bear the economic risk of the Securities, has knowledge and experience in financial business matters and is capable
of bearing and managing the risk of investment in the Securities. Holder recognizes that the Securities have not been registered
under the 1933 Act, nor under the securities laws of any state and, therefore, cannot be resold unless the resale of the Securities
is registered under the 1933 Act or unless an exemption from registration is available. Holder has carefully considered and has,
to the extent Holder believes such discussion necessary, discussed with its professional, legal, tax and financial advisors, the
suitability of an investment in the Securities for its particular tax and financial situation and its advisers, if such advisors
were deemed necessary, and has determined that the Securities are a suitable investment for it. Holder has not been offered the
Securities by any form of general solicitation or advertising, including, but not limited to, advertisements, articles, notices
or other communications published in any newspaper, magazine, or other similar media or television or radio broadcast or any seminar
or meeting where, to Holders’ knowledge, those individuals that have attended have been invited by any such or similar means
of general solicitation or advertising. Holder has had an opportunity to ask questions of and receive satisfactory answers from
the Company, or any person or persons acting on behalf of the Company, concerning the terms and conditions of the Securities and
the Company, and all such questions have been answered to the full satisfaction of Holder. The Company has not supplied Holder
any information regarding the Securities or an investment in the Securities other than as contained in this Agreement, and Holder
is relying on its own investigation and evaluation of the Company and the Securities and not on any other information.


 






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 (b)         The
Holder is a limited liability company duly organized, validly existing and in good standing under the laws of the state of its
incorporation and has all requisite corporate power and authority to carry on its business as now conducted. The Holder is duly
qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material
adverse effect on its business or properties.


 


 (c)          All
corporate action has been taken on the part of the Holder, its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Note. The Holder has taken all corporate action required to make all of the obligations of the
Holder reflected in the provisions of this Note, valid and enforceable obligations.


 


 (d)         Each
certificate or instrument representing Securities will be endorsed with the following legend (or a substantially similar legend),
unless or until registered under the 1933 Act or exempt from registration:


 


THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES,
THE TRANSFER IS MADE IN COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR
THE HOLDER OF THESE SECURITIES WHICH IS REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.


 


Section
4.00     General.


 


(a)
      Payment of Expenses. The Company agrees to pay all reasonable charges and expenses,
including attorneys' fees and expenses, which may be incurred by the Holder in successfully enforcing this Note and/or collecting
any amount due under this Note.


 


(b)
      Assignment, Etc. The Holder may assign or transfer this Note to any transferee
at its sole discretion. This Note shall be binding upon the Company and its successors and shall inure to the benefit of the Holder
and its successors and permitted assigns.


 


(c)       Amendments.
This Note may not be modified or amended, or any of the provisions of this Note waived, except by written agreement of the Company
and the Holder.


 






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(d)       Funding
Window. The Company agrees that it will not enter into a convertible debt financing transaction with any party other than
the Holder for a period of 30 Trading Days following the Effective Date and each Additional Consideration Date, as relevant. The
Company agrees that this is a material term of this Note and any breach of this Section 4.00(d) will result in a default of the
Note.


 


(e)       Piggyback
Registration Rights. The Company shall include on the next registration statement that the Company files with the SEC (or
on the subsequent registration statement if such registration statement is withdrawn) all shares issuable upon conversion of this
Note. Failure to do so will result in liquidated damages of 30% of the outstanding Principal Sum of this Note, but not less than
$20,000, being immediately due and payable to the Holder at its election in the form of a cash payment or an addition to the Principal
Sum of this Note.


 


(f)        Terms
of Future Financings. So long as this Note is outstanding, upon any issuance by the Company or any of its subsidiaries of
any convertible debt security (whether such debt begins with a convertible feature or such feature is added at a later date) with
any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly
provided to the Holder in this Note, then the Company shall notify the Holder of such additional or more favorable term and such
term, at the Holder's option, shall become a part of this Note and its supporting documentation. The types of terms contained
in the other security that may be more favorable to the holder of such security include, but are not limited to, terms addressing
conversion discounts, conversion look back periods, interest rates, original issue discount percentages and warrant coverage.


 


(g)       Governing
Law; Jurisdiction.


 


(i)       
Governing Law. This Note will be governed by, and construed and interpreted in accordance with, the laws of the Commonwealth
of Puerto Rico without regard to any conflicts of laws or provisions thereof that would otherwise require the application of the
law of any other jurisdiction.


 


(ii)      Jurisdiction
and Venue. Any dispute, claim, suit, action or other legal proceeding arising out of or relating to this Note or the rights
and obligations of each of the parties shall be brought only in the San Juan, Puerto Rico or in the federal courts of the United
States of America located in San Juan, Puerto Rico.


 


(iii)     No
Jury Trial. The Company hereto knowingly and voluntarily waives any and all rights it may have to a trial by jury with respect
to any litigation based on, or arising out of, under, or in connection with, this Note.


 


(iv)      Delivery
of Process by the Holder to the Company. In the event of an action or proceeding by the Holder against the Company, and only
by the Holder against the Company, service of copies of summons and/or complaint and/or any other process that may be served in
any such action or proceeding may be made by the Holder via U.S. Mail, overnight delivery service such as FedEx or UPS, email,
fax, or process server, or by mailing or otherwise delivering a copy of such process to the Company at its last known attorney
as set forth in its most recent SEC filing.


 


(v)       Notices.
Any notice required or permitted hereunder (including Conversion Notices) must be in writing and either personally served, sent
by facsimile or email transmission, or sent by overnight courier. Notices will be deemed effectively delivered at the time of
transmission if by facsimile or email, and if by overnight courier the business day after such notice is deposited with the courier
service for delivery.


 






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(h)       No
Bad Actor. No officer or director of the Company would be disqualified under Rule 506(d) of the Securities Act of 1933, as
amended, on the basis of being a “bad actor” as that term is established in the September 13, 2013 Small Entity Compliance
Guide published by the SEC.


 


(i)        Usury.
If it shall be found that any interest or other amount deemed interest due hereunder violates any applicable law governing usury,
the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully do so) that it will not seek to claim or take advantage
of any law that would prohibit or forgive the Company from paying all or a portion of the principal, fees, liquidated damages
or interest on this Note.


 


(j)        Securities
Laws Disclosure; Publicity. The Company shall (a) by 9:30 a.m. Eastern Time on the Trading Day immediately following the Date
of Execution, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current
Report on Form 8-K, including a copy of this Note as an exhibit thereto, with the SEC within the time required by the 1934 Act.
From and after the filing of such press release, the Company represents to the Holder that it shall have publicly disclosed all
material, non-public information delivered to the Holder by the Company, or any of its officers, directors, employees, or agents
in connection with the transactions contemplated by this Note. The Company and the Holder shall consult with each other in issuing
any other press releases with respect to the transactions contemplated hereby, and neither the Company nor the Holder shall issue
any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to
any press release of the Holder, or without the prior consent of the Holder, with respect to any press release of the Company,
none of which consents shall be unreasonably withheld, delayed, denied, or conditioned except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Holder, or include the name of the Holder
in any filing with the SEC or any regulatory agency or Principal Market, without the prior written consent of the Holder, except
to the extent such disclosure is required by law or Principal Market regulations, in which case the Company shall provide the
Holder with prior notice of such disclosure permitted hereunder.


 


The
Company agrees that this is a material term of this Note and any breach of this Section 4.00(j) will result in a default of the
Note.


 






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(k)       Attempted
Below-par Issuance. In the event that the Holder delivers a Conversion Notice to the Company and, if as of such date, (i)
the Conversion Price would be less than par value of the Company’s Common Stock and (ii) within three business days of the
delivery of the Conversion Notice, the Company shall not have reduced its par value such that all of the requested conversion
transaction may then be accomplished, then the Company and the Holder shall utilize the following conversion protocol for Par
Value Adjustment. The Holder shall transmit to the Company: (X) a “preliminary” Conversion Notice for the full number
of shares of Common Stock that would be issued at the Conversion Price without regard to any below-par value conversion issues;
followed by (Y) a “par value” Conversion Notice for the number of shares of Common Stock with the Conversion Price
increased from the “preliminary” Conversion Price to a Conversion Price at par value; and, finally, (Z) a “liquidated
damages” Conversion Notice for that number of shares of Common Stock that represents the difference between the “preliminary”
Conversion Notice full number of shares and the “par value” Conversion Notice limited number of shares. The Conversion
Price of such “liquidated damages Common Shares” would be the par value of the Common Stock. Accordingly, through
this protocol, the Company would issue, in two transactions, an amount of shares of its Common Stock equivalent to the full number
of shares of Common Stock that would have been issued in accordance with the “preliminary” Conversion Notice without
regard to any below-par value conversion issues. In the event that the Holder is precluded from exercising any or all of its conversion
rights hereunder as a result of a proposed “below par” conversion, the Company agrees that, in lieu of actual damages
for such failure, liquidated damages may be assessed and recovered by the Holder without being required to present any evidence
of the amount or character of actual damages sustained by reason thereof. The amount of such liquidated damages shall be an amount
equivalent to the trading price utilized in the “preliminary” Conversion Notice multiplied by the number of shares
calculated on the “liquidated damages” Conversion Notice. Such amount shall be assessed and become immediately due
and payable to the Holder (at its election) in the form of a (i) cash payment, (ii) an addition to the Principal Sum of this Note,
or (iii) the immediate issuance of that number of shares of Common Stock as calculated on the “liquidated damages”
Conversion Notice. Such liquidated damages are intended to represent estimated actual damages and are not intended to be a penalty,
but, by virtue of their genesis and subject to the election of the Holder (as set forth in the immediately preceding sentence),
will be automatically added to the Principal Sum of the Note and tack back to the Effective Date for purposes of Rule 144, as
the Company’s failure to maintain the par value of its Common Stock at an amount that would not result in a “below
par” conversion failure is equivalent to a default as of the Issuance Date of the Note.


 


(l)        Right
of First Refusal. From and after the date of this Note and at all times hereafter while the Note is outstanding, the Parties
agree that, in the event that the Company receives any written or oral proposal (the “Proposal”) containing
one or more offers to provide additional capital or equity or debt financing (the “Financing Amount”), the
Company agrees that it shall provide a copy of all documents received relating to the Proposal together with a complete and accurate
description of the Proposal to the Holder and all amendments, revisions, and supplements thereto (the “Proposal Documents”)
no later than 3 business days from the receipt of the Proposal Documents. Following receipt of the Proposal Documents from the
Company, the Holder shall have the right (the “Right of First Refusal”), but not the obligation, for a period
of 5 business days thereafter (the “Exercise Period”), to invest, at similar or better terms to the Company,
an amount equal to or greater than the Financing Amount, upon written notice to the Company that the Holder is exercising the
Right of First Refusal provided hereby. In furtherance of the Right of First Refusal, the Company agrees that it will cooperate
and assist the Holder in conducting a due diligence investigation of the Company and its corporate and financial affairs and promptly
provide the Holder with information and documents that the Holder may reasonably request so as to allow the Holder to make an
informed investment decision. However, the Company and the Holder agree that the Holder shall have no more than 5 business days
from and after the expiration of the Exercise Period to exercise its Right of First Refusal hereunder. This Right of First Refusal
shall extend to all purchases of debt held by, or assigned to or from, current stockholders, vendors, or creditors, all transactions
under Sections 3(a)9 and/or 3(a)10 or the Securities Act of 1933, as amended, and all equity line-of-credit transactions.


 


[Signature
Page to Follow.]


 






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IN
WITNESS WHEREOF, the Company has caused this Fixed Convertible Promissory Note to be duly executed on the day and in the year
first above written.


	 	 	 
	 	INDOOR HARVEST CORP.
	 	 	 
	 	By:	 
	 	 	 
	 	Name: 
	 	 
	 	Title:
	 	 
	 	Email:
	 	 
	 	Address:



 


This
Fixed Convertible Promissory Note of January 16, 2018 is accepted this ____ day of January, 2018 by





	 	 	 
	TANGIERS GLOBAL, LLC	 
	 	 	 
	By:	 	 
	 	Name: Justin Ederle	 
	 	Title: Managing Member	 



 






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EXHIBIT
A


 


FORM
OF CONVERSION NOTICE


 


(To
be executed by the Holder in order to convert all or part of that certain $550,000 Fixed Convertible Promissory Note identified
as the Note)


 





	DATE:	 	 
	FROM:	Tangiers Global, LLC (the “Holder”)



 


		Re:	$550,000
                                         Fixed Convertible Promissory Note (this “Note”) originally issued
                                         by Indoor Harvest Corp., a Texas corporation, to Tangiers Global, LLC on January 16,
                                         2018.



 


The
undersigned on behalf of Tangiers Global, LLC, hereby elects to convert $_______________________ of the aggregate
outstanding Principal Amount (as defined in the Note) indicated below of this Note into shares of Common Stock, $0.001 par value
per share, of Indoor Harvest Corp.(the “Company”), according to the conditions hereof, as of the date written
below. If shares are to be issued in the name of a person other than undersigned, the undersigned will pay all transfer taxes
payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company
in accordance therewith. No fee will be charged to the Holder for any conversion, except for such transfer taxes, if any. The
undersigned represents as of the date hereof that, after giving effect to the conversion of this Note pursuant to this Conversion
Notice, the undersigned will not exceed the “Restricted Ownership Percentage” contained in this Note.


 


	Conversion information:	 
	 	Date to Effect Conversion
	 	 
	 	 
	 	Aggregate Principal Sum of Note Being Converted
	 	 
	 	 
	 	Aggregate Interest/Fees Being Converted
	 	 
	 	 
	 	Remaining Principal Balance
	 	 
	 	 
	 	Number of Shares of Common Stock to be Issued
	 	 
	 	 
	 	Applicable Conversion Price
	 	 
	 	 
	 	Signature
	 	 
	 	 
	 	Name
	 	 
	 	 
	 	Address






 



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EXHIBIT B


 


WRITTEN CONSENT OF THE BOARD OF DIRECTORS
OF


 


INDOOR HARVEST CORP.


 


The undersigned, being directors of Indoor Harvest Corp., a
Texas corporation (the “Company”), acting pursuant to the Bylaws of the Corporation, do hereby consent to, approve
and adopt the following preamble and resolutions:


 


Convertible Note with Tangiers Global, LLC


 


The board of directors of the Company has reviewed and authorized
the following documents relating to the issuance of a Fixed Convertible Promissory Note in the amount of $550,000 with Tangiers
Global, LLC.


 


The documents agreed to and dated January 16, 2018 are as follows:


 


8% Fixed Convertible Promissory Note of
Indoor Harvest Corp.


Irrevocable Transfer Agent Instructions


Notarized Certificate of Chief Executive Officer


Disbursement Instructions


Company Capitalization Table


Schedule 1 – Use of Proceeds


 


The board of directors further agree to authorize and approve
the issuance of shares to the Holder at Conversion prices that are below the Company’s then current par value.


 


IN WITNESS WHEREOF, the undersign member(s) of the board of
the Company executed this unanimous written consent as of January 16, 2018.


 





	 	 



 


By:


 


Its:


 



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EXHIBIT C


 


NOTARIZED CERTIFICATE OF CHIEF EXECUTIVE
OFFICER OF


 


INDOOR HARVEST CORP.


 


(Two Pages)


 


The undersigned, _______________________
is the duly elected Chief Executive Officer of Indoor Harvest Corp., a Texas corporation (the “Company”).


 


I hereby warrant and
represent that I have undertaken a complete and thorough review of the Company’s corporate and financial books and records,
including, but not limited to, the Company’s records relating to the following:


 


		(A)	The issuance of that certain Fixed Convertible Promissory Note dated January 16, 2018 (the “Note
Issuance Date”) issued to Tangiers Global, LLC (the “Holder”) in the stated original principal amount
of $550,000 (the “Note”);



 


		(B)	The Company’s Board of Directors duly approved the issuance of the Note to the Holder;



 


		(C)	The Company has not received and does not contemplate receiving any new consideration from any
persons in connection with any later conversion of the Note and the issuance of the Company’s Common Stock upon any said
conversion;



 


		(D)	To my best knowledge and after completing the aforementioned review of the Company’s stockholder
and corporate records, I am able to certify that the Holder (and the persons affiliated with the Holder) are not officers, directors,
or directly or indirectly, ten percent (10.00%) or more stockholders of the Company and none of said persons has had any such status
in the one hundred (100) days immediately preceding the date of this Certificate;



 


		(E)	The Company’s Board of Directors have approved duly adopted resolutions approving the Irrevocable
Instructions to the Company’s Stock Transfer Agent dated January 16, 2018;



 


		(F)	Mark the appropriate selection:



 


___ The Company represents that
it is not a “shell company,” as that term is defined in Section 12b-2 of the Securities Exchange Act of 1934, as amended,
and has never been a shell company, as so defined; or


 


___ The Company represents that
(i) it was a “shell company,” as that term is defined in Section 12b-2 of the Securities Exchange Act of 1934, as amended,
(ii) since ______, 201__, it has no longer been a shell company, as so defined, and (iii) on _______, 201__, it provided Form
10-type information in a filing with the Securities and Exchange Commission.


 



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		(G)	I understand the constraints imposed under Rule 144 on those persons who are or may be deemed to
be “affiliates,” as that term is defined in Rule 144(a)(1) of the Securities Act of 1933, as amended.



 


		(H)	I understand that all of the representations set forth in this Certificate will be relied upon
by counsel to Tangiers Global, LLC in connection with the preparation of a legal opinion.



 


 


I hereby affix my signature to this Notarized
Certificate and hereby confirm the accuracy of the statements made herein.


 





	Signed:	 	 	Date:	 
	 	 	 	 	 
	Name:	 	 	Title:	 







 


SUBSCRIBED AND SWORN TO BEFORE ME ON
THIS ________ DAY OF ____________________ 2018.




	 	Commission Expires:	 	 
	 	 	 	 
	Notary Public	 	 	 




 



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EXHIBIT D


 





	TO:	Tangiers Global, LLC
	 	 
	FROM:	Indoor Harvest Corp.
	 	 
	DATE:	January 16, 2018
	 	 
	RE:	Disbursement of Funds







 


Pursuant to that certain Fixed Convertible Promissory Note between
the parties listed above and dated January 16, 2018, a disbursement of funds will take place in the amount and manner described
below:


 


	Please disburse to:	 
	Amount to disburse:	$75,000
	Form of distribution	Wire
	Name	Indoor Harvest Corp.
	Company Address	
         

         

	Wire Instructions:	
        Bank: 

        ABA Routing Number: 

        Account Number: 

        SWIFT Code:

        Account Name:

        Phone:



 


TOTAL: $75,000


For: Indoor Harvest Corp.


 


	By:	 	 	Dated: January 16, 2018
	 	 	 	 
	Name:	 	 	 
	 	 	 	 
	Its:	 	 	 




 



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EXHIBIT E


 


COMPANY CAPITALIZATION TABLE AS OF JANUARY
16, 2018


 


COMMON STOCK AND COMMON STOCK EQUIVALENTS


ISSUED, OUTSTANDING AND RESERVED


 


	DESCRIPTION	AMOUNT
	Authorized Common Stock	        
	Authorized Capital Stock	 
	Authorized Common Stock	        
	Issued Common Stock  	         
	Outstanding Common Stock	 
	Treasury Stock	                      
	*Authorized, but unissued	       
	 	 
	Authorized Preferred Stock	 
	Issued Preferred Stock	          
	 	 
	Reserved for Equity Incentive Plans	 
	Reserved for Convertible Debt	 
	Reserved for Options and Warrants	 
	Reserved for Other Purposes	 
	 	 
	
        TOTAL COMMON STOCK AND COMMON

        STOCK EQUIVALENTS OUTSTANDING
	
         

         



 


* This number includes all shares reserved
for Convertible Debt


 


Note: If not applicable, enter “n/a”
or “zero” in Column 2.


 



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CURRENT DEBT AND LIABILITIES TABLE


 


FIXED CONVERTIBLE PROMISSORY NOTE BALANCES
AND PROMISSORY NOTE BALANCES


 


	DESCRIPTION	     ISSUANCE DATE	AMOUNT
	Convertible Promissory Note	        	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	Promissory Note	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	Other Debt and Liabilities	        	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 


 


Note: If not applicable, enter “n/a”
or “zero” in Column 2.


 


To my best knowledge and after completing
the aforementioned review of the Company’s stockholder and corporate records, I am able to certify the accuracy of the statements
made herein.


 





	INDOOR HARVEST CORP.	 	 	 
	 	 	 	 
	By:	 	 	Dated:	January 16, 2018
	 	 	 	 
	Name:	 	 	 
	 	 	 	 
	Title:	 	 	 







 



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SCHEDULE 1


 


USE OF PROCEEDS


 


Pursuant to that certain Fixed Convertible Promissory Note
between the parties listed above and dated January 16, 2018, the Company covenants that it will within,  __________ month(s)
of the Effective Date of the Note, it shall use approximately $75,000 of the proceeds in the manner set forth below (the
“Use of Proceeds”):


 





	 
	 
	 
	 



 





	INDOOR HARVEST CORP.	 	 	 
	 	 	 	 
	By:	 	 	Dated:	January 16, 2018
	 	 	 	 
	Name:	 	 	 
	 	 	 	 
	Title:	 	 	 


 



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