It should be noted that, in our case, the negotiations with the acquiring company were conducted by Kahane both in his name and in the name of the Eisenberg company (when the Eisenberg company is owned by him). On the other hand, when each of the parties to the tripartite transaction is represented separately, it has an independent and separate interest, and negotiations are conducted between Clal "Ribs" The triangle, it is possible that it can be seen in the manner in which the consideration is split as a result of these negotiations. However, these are not the circumstances at hand.
In view of the aforesaid, in my view, weight must be given to the fact that the appellants have not been able to point to a calculation that establishes the economic logic in the manner in which the consideration was split, and thus there is some indication of the lack of authenticity of the agreement (and see my comment below, at paragraph 39, regarding the relationship between the authenticity of the non-compete agreement and the authenticity of the consideration in respect thereof).
- The existence of a real need for a non-compete agreement: Another indication that may assist in the question of whether we are dealing with an authentic non-compete agreement is whether there was a real need for the non-compete agreement in which Kahane entered, other than the tax savings for Kahane. In my view, it is this indication that expresses the heart of the matter and is usually capable of deciding the question in dispute: insofar as there was no real need for a separate non-compete agreement with Kahane, there is room to assume that the agreement is not authentic and was made solely for tax considerations, and vice versa.
I will mention that with regard to this indication, the District Court ruled that it is doubtful whether it was necessary to charge Kahane in a separate non-compete agreement. This is in view of the non-competition clause set forth in the agreement for the purchase of the activity with Eisenberg, according to which Eisenberg must refrain from competition even through another means. In support of this, the District Court found in the obligation imposed on Kahane, By virtue of the Activity Purchase Agreement, to sign a personal guarantee to secure the obligations of the Eisenberg company. Therefore, according to the District Court, even without the non-compete agreement, Kahane could not compete with the acquiring company, without violating the principle of good faith.