As described above, clause 4.7 of the Activity Purchase Agreement stipulates a broadly worded non-compete clause so that Eisenberg must avoid competition both for itself and for or through another (a formula of the stipulation was cited above inParagraph 2). Thus, prima facie, by virtue of the agreement for the purchase of the activity, Kahane is obligated not to compete with the acquiring company. If this is not enough, the clause E In the preamble to the Activity Purchase Agreement, it was determined that Kahane would sign a personal guarantee in his name (and on behalf of the holding company) for the purpose of securing the Eisenberg Company's obligations (see above in paragraph 2). Therefore, prima facie, to the extent that there remains doubt as to whether the non-competition clause in the activity purchase agreement restricts Kahane, the personal letter of guarantee removes this doubt and binds Kahane. Therefore, prima facie, there is no real need for a non-compete agreement with Kahane, and thus there is a very strong indication of the inauthenticity of the agreement.
I am of the opinion that the above argument, despite its internal logic, is too simplistic and is liable to lead to an erroneous conclusion. In my view, the question is not Is a separate non-compete agreement superfluous?, given that the parties entered into an agreement to purchase the activity and given that Kahane agreed to sign the letter of personal guarantee, but Was there a real need for a personal commitment on Kahane's part not to compete with the acquiring company? (Whether in a separate agreement, or in a personal commitment within the framework of the activity purchase agreement). I will clarify.
In my view, the relationship between the parties (the acquiring company, Eisenberg and Kahane) should be looked at as follows:
In order to operate on its own in the electron microscope market in Israel, the acquiring company sought to acquire Eisenberg's activity and prevent it, effectively, from competing with it. To this end, prima facie, the agreement for the purchase of the activity with Eisenberg, and Eisenberg's commitment to non-competition, were sufficient.