Document:

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 CorporationExhibit 4.1

 

DESCRIPTION OF THE REGISTRANT’S
SECURITIES 

REGISTERED PURSUANT TO SECTION 12 OF
THE 

SECURITIES EXCHANGE ACT OF 1934 

 

General

 

Gulf Resources, Inc. has one class of securities, common stock,
registered under Section 12 of the Securities Exchange Act of 1934, as amended. The following is a summary of all material
characteristics of our common stock as set forth in our articles of incorporation and bylaws. The summary does not purport to be
complete and is qualified in its entirety by reference to our articles of incorporation and bylaws, all of which are incorporated
by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part, and to the provisions of the
Nevada Revised Statutes.

 

As of April 14, 2020, our authorized capital stock consists
of 80,000,000 shares of common stock, par value $0.0005 per share, of which 9,517,427 shares are issued and outstanding,
and 1,000,000 shares of preferred stock, par value $0.001 per share, of which none are outstanding.

 

Common Stock

 

The holders of our common stock are entitled to one vote for
each share held of record. The affirmative vote of a majority of shares present in person or represented by proxy at a meeting
of stockholders that commences with a lawful quorum is sufficient for approval of matters upon which stockholders may vote, including
questions presented for approval or ratification at the annual meeting. Our common stock does not carry cumulative voting rights,
and holders of more than 50% of our common stock have the power to elect all directors and, as a practical matter, to control our
company. Holders of our common stock are not entitled to preemptive rights, and our common stock may only be redeemed at our election.

 

After the satisfaction of requirements with respect to preferential
dividends, if any, holders of our common stock are entitled to receive, pro rata, dividends when and as declared by our board of
directors out of funds legally available therefore. Upon our liquidation, dissolution or winding-up, after distribution in full
of the preferential amount, if any, to be distributed to holders of the preferred stock, holders of our common stock are entitled
to share ratably in our assets legally available for distribution to our stockholders. All outstanding shares of common stock are
fully paid and non-assessable.

 

Our common stock is listed on The NASDAQ Global Select Market
under the symbol “GURE.” The transfer agent and registrar for our common stock is American Stock Transfer & Trust
Company.

 

Preferred Stock

 

Our board of directors is authorized to issue up to the total
of 1,000,000 shares of preferred stock, which includes without any further action by the stockholders. Our board of directors may
also divide the shares of preferred stock into series and fix and determine the relative rights and preferences of the preferred
stock, such as the designation of series and the number of shares constituting such series, dividend rights, redemption and sinking
fund provisions, liquidation and dissolution preferences, conversion or exchange rights and voting rights, if any. Issuance of
preferred stock by our board of directors will result in such shares having dividend and/or liquidation preferences senior to the
rights of the holders of our common stock and could dilute the voting rights of the holders of our common stock.

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