Foley Hoag LLP

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Included in this Issue:

• A Market Perspective: Foster Hinshaw on 'B' Rounds - Opportunity in 'Gloom and Doom'

  In 2002, during the valley of the tech bubble burst, one of the most respected VC’s in the tech community said to me, "It’s all about survival, survival, survival – I don’t know if we will ever recover". Notwithstanding, the resiliency of our tech community proved its intrinsic value to the economy and there were some nice IPO’s and exits from companies that were incubating during the bubble years (including FAST, EqualLogic and Netezza). Today the news is similar: (a) zero IPOs in Q2 2008; (b) the financial sector is in a major, albeit predictably cyclical, reset; and worse (c) another 1970’s style energy crisis is on us. (continues...)

• Selected New England "Series B" and Later Round Transactions
• Terms of New England Series B and Later Rounds
• The Activity Level Summary

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Massachusetts substantially changed its energy portfolio programs on July 2, 2008, when Governor Deval Patrick signed into law the state’s long-awaited energy bill, the Green Communities Act (the “Act”). The changes include replacing the existing renewable energy portfolio standard (“RPS”) program with a two-tiered RPS program and creating a new alternative energy portfolio standards (“APS”) program to promote lower emission, non-renewable power generation technologies. The changes give the Department of Energy Resources (“DOER”) (formerly the “Division of Energy Resources”) additional influence over the development of renewable energy in Massachusetts and create new market opportunities for businesses in the energy technology and renewables sector.

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Three recent Massachusetts Supreme Judicial Court (“SJC”) decisions have clarified two areas of uncertainty relative to the Massachusetts Comprehensive Permit Statute, Mass. Gen. Laws Chapter 40B. The SJC has provided much-needed guidance as to (1) when municipalities can challenge Subsidized Housing Inventory (SHI) calculations, and (2) when developers are entitled to challenge comprehensive permit conditions. These decisions are of importance to anyone involved in the development, financing, or permitting of affordable housing projects in Massachusetts.

In two related cases decided on May 27, 2008, the SJC ruled that a municipality must exhaust its administrative remedies before bringing a court action contesting the Department of Housing and Community Development (DHCD)’s calculation of the municipality’s SHI. In the third case, decided on June 10, 2008, the SJC ruled that developers cannot successfully challenge conditions attached by local zoning boards to comprehensive permits unless they can demonstrate that those conditions render the proposed project uneconomic.

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A recent decision by the Massachusetts Court of Appeals on standing to sue may have important implications for projects seeking to qualify to sell renewable energy credits (RECs) in Massachusetts. In Indeck Maine Energy vs. Commissioner of the Division of Energy Resources, the Court held that a renewable energy company that sells RECs pursuant to Massachusetts’ renewable portfolio standard program (RPS) has standing to challenge the Massachusetts Division of Energy Resource’s (DOER’s) decision to qualify a competitor in the REC market. The Commonwealth has only met its RPS goals through the sale of RECs one year since the program began in 2003, and the Indeck decision may make achieving that goal even more difficult in the future.

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Law to affect permitting of energy facilities and commercial developments .

On May 28, 2008, Massachusetts Governor Deval Patrick signed the Oceans Act of 2008. This legislation makes Massachusetts the first state in the nation to create a uniform mechanism for managing projects and uses in ocean areas. The Act requires the development of a comprehensive plan for the management of Massachusetts's ocean resources (“the Plan”), focused on balancing the need for both commercial uses of the ocean and conservation of its resources. Prior to the Act, regulation of ocean activities in the Commonwealth was divided between numerous state agencies, each with its own jurisdictional and regulatory standards.

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Contents

1. Exposure to Liability in the Hiring Process

2. Failure to Adequately Document Terms and Conditions of Employment

3. Misclassification Issues
    - Employee or Independent Contractor
    - Exempt or Non-exempt

4. Failure to Comply with Wage Payment Laws

5. Inadequate Protection of Intellectual Property

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Established in December 1980 by the partners of law firm Foley Hoag, The Foley Hoag Foundation is a private foundation that seeks to combat racism, especially among youth, in the City of Boston. The Foundation awards grants to organizations working to improve the racial climate in Boston by addressing issues of diversity and racism. Grantee organizations achieve their goals through a variety of means, including arts and cultural activities, youth leadership and recreational programs. Other grantees provide advocacy assistance, enabling individuals to confront racism through legal or political action. Some grantee organizations work to prepare young children to live in the reality of a multicultural society, others engage teens, and a few target a primarily adult constituency.

The Foley Hoag Foundation was the first—and remains the only— foundation to focus exclusively on the improvement of race relations in Boston. The trustees are fortunate to have the unqualified endorsement of Foley Hoag, which has provided an enormous amount of financial, administrative and moral support.

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Included in this Issue:

• A Market Perspective: Axel Bichara on the State of the Technology Industry

  Technology innovation has been accelerating during the last centuries and will continue to do so. Innovation helps drive entrepreneurship and new business opportunities. That’s good news for entrepreneurs and early-stage investors in the US where the state of innovation andentrepreneurship continue to be exceptional. There are plenty of excellent startup opportunities. The funding environment for start-ups will remain strong, with an abundance of capital from both VC and private investors. (continues...)

• New England First Round Transactions

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Excerpt:

Corporate globalization presents companies with unanticipated risks and challenges. Businesses are held to higher standards of accountability with respect to social, environmental and ethical practices. Companies unresponsive to these demands risk damage to their reputations, brand image and competitiveness. We help savvy business leaders limit their companies’ risk by incorporating internationally recognized standards into their strategic planning, crisis response strategies and relationships with stakeholders.

Benefits of our counsel include:

• Reduction of threat to corporate reputation
• Reduction of legal risks associated with the uncertainties of globalization
• Enhanced brand image
• Increased customer and employee loyalty and retention Improved relationships with external stakeholders and public opinion leaders

Download the Foley Hoag Corporate Social Responsibility Brochure (.pdf)

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The directors of a not-for-profit corporation are bound by two general types of legal duties:

A duty of care

The duty to perform their responsibilities in good faith, in a manner reasonably believed to be in the best interest of the corporation, and with such care as an ordinarily prudent person would be in similar circumstances; and

A duty of loyalty

The duty to keep the interests of the corporation paramount above personal interests when acting for or on behalf of the corporation.

The following Ten Commandments provide examples of some of the actions a board of directors should take to act in accordance with its legal duties... (continues)

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