To this, Fate replied that same day:
"Gil, look at the yellow markings I made in the agreement.
A few notes:
- Nowhere is it written that they have to be paid before money enters the company, quite the opposite, only after money enters the company.
- In the clause that you inserted regarding the situation that there is no issue b3.1.2 they are supposed to return a lower amount than what they receive and we also have an obligation to buy back the CLA from them (probably at the same price, although it is not necessarily clear from the clause), and what happens if they do not return the money? It would have been good if we had the right of offset in such a case with the CLA
- They also have options in an unclear amount - see highlighted in clause 3.1.4, in my opinion we must present this commitment in the prospectus and in the cap table.
In short, a complete mess, you make sure to bother me with a lot of agreements, but you tend to skip important agreements like this agreement and the agreement with Armada and others, and it's a shame, I assume that a lawyer didn't go through the changes in this agreement either, at least that's how it looks.
I still think that we are not obligated by the agreement to pay in advance for the offering, and if you still want to do so beyond the letter of the law, I agree with you, but against the fact that they send a letter that allows them to offset their CLA if they do not return the $185,000 within sixty days, and I also suggest that they cancel clause 3.1.4 of the options in the agreement against the advance, because it will make a mess of the prospectus, and it is also unlikely that we will give them and Armada options (that they will take). From Armada)" [my emphasis L.B.]
To this, Don replied:
"See attached - the options clause has been canceled and the subject of the 60-day period and the offset have been added."
- In parallel with the correspondence between Don and Fayette, Don conducted a WhatsApp correspondence with Peleg (attached as Appendix 26 to Peleg's affidavit) in which he wrote:
Don on 12/11/18 at 15:10: "Send me our last finder agreement in which it is written that if there is no IPO what happens Alon wants to see him and then he will sign the transfer"