The court noted that an indication of the authenticity of the non-competition clause is a logical division of the consideration between the consideration for the purchase of the activity of the Eisenberg Company and its non-compete undertaking, and the consideration for the undertaking of כהנא non-competition. In this regard, the District Court ruled that no attempt was made on the part of the appellants to assess the true economic value of each of the considerations, so that the concern arises that the splitting of the considerations was done retroactively for reasons of tax reduction only.
Subsequently, the court ruled that the answer to the question of who initiated the split of the consideration also constitutes an indication of the authenticity of the non-competition clause. In this regard, the court noted that the appellants' claim that the demand to split the consideration between the agreements was a demand of the acquiring company was not proven, since it turned out that the witness brought by the appellants in this matter, Ms. Rosalie Baran (hereinafter: Ms. Baran), which was part of the M&A team in the acquiring company, is irrelevant, since it confirmed in its interrogation that the calculation of the split of the consideration was made by a team of which it was not a member. The court also ruled that the failure to bring him to testify Mr. Tom Bartline, which conducted the negotiations on behalf of the acquiring company (hereinafter: Mr. Bertelaine), is at the door of the appellants, since it is possible that his testimony could have shed light on the question of who initiated the splitting of the consideration between the agreements.
The court further ruled that the fact that the non-compete agreement emphasized that the consideration paid to Kahane constitutes an integral component of the value of the acquired assets, shows that the payment to Kahane was split from the total consideration to Eisenberg for its activities and assets, and therefore does not reflect a real payment for Kahane's non-compete obligation.