Exhibit 10.20

 

AGREEMENT

 

THIS AGREEMENT made as of the 20 day of December, 2019

 

B E T W E E N:

 

JERRY ZARCONE

 

(hereinafter referred to as “Jerry”)

 

- and –

 

TARGET GROUP INC.

 

(hereinafter referred to as “TGI”)

 

WHEREAS:

 

A.Canary RX Inc. (“Canary”) is a wholly owned subsidiary of Visava Inc.
(“Visava”).

 

B.Visava is a wholly owned subsidiary of TGI.

 

C.The By-Laws of TGI provide for a minimum of 1 director and 5 directors, and
that all vacancies of the board can be filled by the existing board of
directors.

 

D.Presently the board of directors for TGI consists of 4 directors, namely,
Rubin Schindermann, Saul Niddam, Frank Monte, and Anthony Zarcone.

 

E.Canary is a tenant at lands and premises municipally known as 385 Second
Avenue West, Simcoe, Ontario (the “Premises”) pursuant to a Lease made the 28th
day of June, 2018 between E. & E. McLaughlin Ltd., as Landlord, and Canary, as
Tenant (the “Lease”).

 

F.Jerry shall make a loan to TGI in the amount of $1,000,000.00 (CDN) pursuant
to the terms and provisions of this Agreement.

 

NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the respective
covenants and agreements hereinafter contained and the sum of One Dollar ($1.00)
now paid by the parties hereto each to the other (the receipt and sufficiency of
which is hereby acknowledged by each of the parties hereto), the parties hereto
agree as follows:

 

1.The Parties hereby declare and confirm the truth and accuracy of the Recitals
hereto and they form an integral terms and provisions of this Agreement.

 

2.Jerry shall loan (the “Loan”) to TGI the principal amount of One Million
($1,000,000.00) Dollars (CDN) upon the following terms and provisions:

 

(a)Upon execution hereof, Jerry shall advance to TGI or to whom it may direct,
the amount of Three Hundred and Fifty Thousand ($350,000.00) Dollars (the “First
Advance”).

 

(b)Jerry shall advance to the Borrowers or to whom it may direct, such
additional amount(s) as is, from time to time, acceptable to Jerry, in his sole
discretion, for the balance of Six Hundred and Fifty Thousand ($650,000.00)
Dollars, provided that no such further advances shall be made unless and until
the obtainment of Security (hereinafter defined) satisfactory to Jerry, acting
reasonably, and provided further that TGI and the Subsidiaries shall not be in
default of this Agreement or any other agreement as between Jerry and TGI and/or
any of its Subsidiaries (hereinafter defined).

 

 

 

(c)The term of the Loan shall be twelve (12) months commencing on the date
hereof (the “Term”).

 

(d)All monies outstanding under the Loan from time to time shall accrue interest
at a rate of 16% per annum, calculated monthly, which interest shall be payable
at the expiration of the Term or earlier demand of the loan following default.

 

(e)The Loan shall be secured by the following security (the “Security”), in
respect of which Security, TGI shall cause to be executed, delivered, and
registered within a reasonable time following presentation thereof by Jerry or
his counsel (but in no event more than five (5) business days following such
presentation):

 

(i)A Promissory Note having a form and containing content reasonably
satisfactory to Jerry provided that the terms and provisions thereof shall not
conflict with any of the terms and provisions of this Agreement;

 

(ii)The Guarantee for all amounts owing under the Loan by Canary, Visava, and
any other directly or indirectly owned subsidiaries of TGI, Canary, and Visava
(the “Subsidiaries”);

 

(iii)A registered first charge over and to all of the personal property of TGI
and its Subsidiaries (including without limitation intellectual property)
wherever situate pursuant to a general security agreement having a form and
containing content reasonably satisfactory to Jerry provided that the terms and
provisions thereof shall not conflict with any of the terms and provisions of
this Agreement, it also being understood and agreed that TGI and its
Subsidiaries do hereby covenant, agree, and undertake to procure and provide
evidence thereof satisfactory to Jerry of a discharge of the registration
against Canary bearing file number 709304283 and registration number 20150825
1563 1862 6201 to and in favour of Sidney Weinstein pursuant to the Personal
Property Security Act (Ontario) within 45 days of the First Advance; and

 

(iv)A registered first charge over and to Canary’s right, title, and interest in
and to the Lease and the Premises.

 

(f)As soon as reasonably possible following repayment of the Loan in full and
satisfaction of all other obligations hereunder and the Security, Jerry shall
discharge the Security and provide reasonable evidence of such discharge to TGI.

 

(g)All advances under the Loan shall not be used for any purpose other than for
such purposes and for such amounts as shall be approved by Jerry, acting
reasonably, in respect of which approval, TGI shall provide Jerry in writing
with the name, amount, invoice, and purpose of its intended disbursement which
it seeks to pay, and Jerry shall provide its approval (or non-approval) within
48 hours of receipt of such writing, provided that upon Barry Allan Katzman
serving as the 5th director of TGI, Jerry shall also approve the recommendations
from TGI’s board of directors as determined by either the unanimous written
consent of TGI’s board of directors or a resolution passed at a duly constituted
meeting of TGI’s board of directors.

 

3.Contemporaneous with the execution and delivery hereof, TGI shall deliver to
Jerry a corporate organizational chart in respect of TGI, Canary, Visava, and
the Subsidiaries.

 

4.As soon as possible following the execution of this Agreement (and no later
than December 31, 2019), the board of directors of TGI shall appoint Barry Allan
Katzman as a director and chief executive officer (which office he shall share
with Rubin Schindermann) of TGI, it being understood and agreed that
notwithstanding any repayment of the Loan prior to the next annual meeting of
shareholders, Barry Allan Katzman shall not be required to resign as a director
or executive officer of TGI.

 

 

 

5.Upon default of this Agreement or any other agreement as between Jerry and TGI
and/or its Subsidiaries, upon written demand made by Jerry, Anthony Zarcone
shall be appointed as an executive officer of TGI.

 

6.The Parties shall execute and deliver any further agreements and documents and
do all things and provide any further assurances, undertakings and information
as may be reasonably required by the requesting party to give full effect to
this Agreement.

 

7.Any notice, direction or other instrument required or permitted to be given
hereunder shall be in writing and may be given by mailing the same postage
prepaid or delivering the same as indicated below:

 

(a)Addressed to Jerry at:

 

By email: jerry.zarcone@zarkys.com

 

with a copy to:

 

Attn: John Vitulli Jr.

Vitulli Law Group

69 Hughson Street North

Hamilton, ON L8R 1G5

Email: jvitulli@vitullilawgroup.com

 

 

 

(b)addressed to TGI and its Subsidiaries at:

 

Target Group Inc.

55 Administration Road, Unit #13

Vaughan, ON L4K 4G9

 

By email to Rubin Schindermann at: rubin@targetgroupinc.com

 

By email to Barry Katzman at: barrykatzman@targetgroupinc.com

 

With copy to:

 

Robert C. Laskowski

Law Office

520 SW Yamhill, Suite 600

Portland, OR 97204-1329

Email: rcl@roblaw.us

 

Any notice, direction or other instrument aforesaid if delivered, shall be
deemed to have been given or made on the date on which it was delivered or if
mailed, shall be deemed to have been given or made on the 5th business day
following the day on which it was mailed.

 

8.This Agreement may be executed and delivered by the Parties in one or more
counterparts, each of which will be an original, and each of which may be
delivered by facsimile, e-mail or other functionally equivalent electronic means
of transmission, and those counterparts will together constitute one and the
same instrument.

 

9.All reasonable costs and expenses (including the fees and disbursements of
accountants, financial advisors, legal counsel and other professional advisers)
incurred by Jerry and TGI in connection with this Agreement including the
obligations under this Agreement, the completion of the transactions
contemplated by this Agreement and the enforcement of this Agreement, are to be
paid by TGI, and with respect to Jerry’s such costs and expenses, same may be
deducted from any advance under the Loan.

 

 

 

10.Neither this Agreement nor any right or obligation under this Agreement may
be assigned including, by operation of law, by any Party without the prior
written consent of the other Parties. This Agreement ensures to the benefit of
and is binding upon the Parties and their respective heirs, executors, trustees,
administrators, personal or legal representatives, successors and permitted
assigns.

 

11.This Agreement is governed by and is to be construed and interpreted in
accordance with, the laws of the Province of Ontario and the laws of Canada
applicable in that Province.

 

12.This Agreement constitutes the entire agreement between the Parties
pertaining to the subject matter of this Agreement and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties, and there are no representations, warranties or other
agreements between the Parties in connection with the subject matter of this
Agreement except as specifically set out in this Agreement.

 

Each of the Parties has executed and delivered this Agreement as of the date
first above written.

 

 

 

SIGNED IN THE PRESENCE OF   )       )       )       )   Witness   ) JERRY
ZARCONE               TARGET GROUP INC.       Per:                       Name:
Rubin Schindermann       Position: Director                       Name: Saul
Niddam       Position: Director                       Name: Frank Monte      
Position: Director                       Name: Anthony Zarcone       Position:
Director       We have authority to bind the Corporation