Foley Hoag LLP

SUMMARY

On November 17, 2008, the Massachusetts Department of Environmental Protection (“MassDEP”) announced a proposed new set of regulations to implement a statewide stormwater management program. Whereas current stormwater regulations focus on the operators of municipal stormwater systems and owners of certain construction and industrial sites, the proposed regulations would also enlist private property owners of impervious surfaces (roadways, parking lots, roofs, etc.) of five acres or more in stormwater management. These proposed rules are intended to reduce nonpoint sources of pollution, but will have significant effects on commercial property owners.

SUMMARY

We know that the recent financial crisis and related economic downturn unfortunately are causing many employers to consider ways to reduce operational expenses, including through workforce restructuring and layoffs. We offer a few preliminary considerations: any such reduction-in-force (RIF) must be carefully planned and executed both to minimize exposure to liability under various employment laws and to mitigate negative effects on employee morale and operations. The following are some issues for employers to consider as they grapple with whether and how to implement a layoff.

Questions Include:

• Is a Layoff Necessary?
• Voluntary or Involuntary Program?
• Develop Uniform Selection Criteria
• Conduct a Layoff Analysis
• Is Advance Notice Required
• Severance and ERISA
• Asking for a Release
• Don't Forget Immigration Implications
• Don't Lose Sight of Termination Basics

SUMMARY

On October 31, 2008, the Department of Energy Resources (“DOER”) issued its Imports Feasibility Study (the “Report”), finding that it is not feasible to implement a capacity commitment or netting requirement for generators seeking renewable energy credits (“RECs”) in Massachusetts for energy imported into ISO-NE. The Report is mandated by subsection 105(g) of the Green Communities Act (the “Act”), which directs DOER to determine the feasibility of implementing two subsections, 105(c) and 105(e), governing the eligibility for RECs for energy imported from outside the ISO-NE control area. Subsection 105(c) would have required an importer to commit its capacity to the Forward Capacity Market (the “FCM”). Where an entity has generation assets both inside and outside ISO-NE, subsection 105(e) would have netted the entity’s energy exports against renewable energy imports when calculating the number of RECs that may be sought. Although the Report concluded that both provisions are not feasible to implement as drafted, it proposed a series of recommendations designed to capture what DOER believes is the policy behind those subsections. Those recommendations may appear as part of DOER’s new regulations governing renewable portfolio standards (“RPS”), due to be promulgated by January 1, 2009. Although the contours of those regulations are unknown, the Report’s proposals indicate potential new business opportunities and regulatory risks for renewable energy generators.

SUMMARY

Included in this Issue:

• A Market Perspective
  
• Selected New England "Series A" Round Transactions
  Commentary from Bruce Kinn
  
• Terms of Selected New England Series A Rounds 2008
  Commentary from Mark Haddad
  
• The Activity Level Summary: New England Series A and First Round Transactions by Industry
  
• Size of New England 2008 Year to Date Series A and First Round Transactions by Industry
  Commentary from Paul Sweeney

SUMMARY

Foley Hoag LLP’s interdisciplinary team counsels and protects the interests of its clients facing new realities, challenges and risks framed by today’s tumultuous economic and market conditions. By maintaining an active and engaged dialogue with our clients during this period of economic distress, our lawyers are better able to adapt to the changing legal needs of clients affected in the short term. More importantly, our immersion in their businesses and industries enables our lawyers to provide sound, strategic counsel to protect our clients’ interests in the longer term. The Economic Crisis Team delivers forward-thinking advice, focusing on long-standing core, integrated strengths of the firm.

Topics include:

• Financial investigations, enforcement proceedings and litigation
• Federal and state securities regulation
• Deal-making, corporate finance and investment restructuring
• Bankruptcy, corporate reorganization and financial disputes

SUMMARY

Extenders for a series of key tax credits aimed at supporting the development of renewable energy generating facilities were passed today by the House 263 to 171 as part of the financial rescue bill, H.R. 1424 (the “Bill”), aimed at addressing the recent credit crisis. The renewable energy production tax credit (“PTC”) gives qualified facilities placed into service by a statutory cutoff date a tax credit equal to 1.5 cents per kilowatt hour of electricity generated. The PTC cutoff date had been set for January 1, 2009, and legislation to extend that cutoff date had been stalled in Congressional negotiations. The PTC extenders were among the amendments added by the Senate, which took up the Bill after the House failed to pass its version of a financial rescue bill on September 29, 2008. The President is expected to sign the Bill.

SUMMARY

The operators of the Regional Greenhouse Gas Initiative, or RGGI Inc., announced yesterday  that all of the 12,565,387 CO^₂ allowances offered for sale in the first RGGI auction on September 25, 2008 were purchased at $3.07 per allowance. This is above the auction reserve price of $1.86 per allowance, and below recent prices on the Chicago Climate Futures Exchange.

SUMMARY

Included in this Issue:

• A Market Perspective

  Ham Lord, Managing Director, Launchpad Ventures

  Angel financing is more than just seed round financing for future venture capital deals. In fact, angels fund 10 to 20 times more companies than venture firms do on an annual basis. This is because many angel deals will never need the type of large financing ($10M+) that is typical of most venture deals.

• Structuring a Seed Stage Investment

  David A. Broadwin, Partner, Foley Hoag LLP

  Many of the entrepreneurs who walk through our doors at the EEC are at the seed/angel stage and are looking for those kinds of investments as well as advice around how to structure the investments so as to (a) fund the early needs of the business and (b) not create barriers to a larger investment later in the life of the business.

SUMMARY

The Green Communities Act (the “Act”) authorized the Department of Energy Resources (“DOER”) to promulgate regulations implementing Massachusetts’ new renewable portfolio standard (RPS) and alternative energy portfolio standard (APS) programs.  To meet the deadlines established by the Act, DOER is currently accepting comments on (1) the feasibility of regulations governing renewable energy credit (REC) imports, (2) Class I and Class II RPS regulations, and (3) APS regulations.  The Act gives DOER only a brief window of time to make its determinations and promulgate regulations, so stakeholders wishing to participate in this process should take immediate action to formulate and submit comments.

SUMMARY

On August 7, 2008, Massachusetts Governor Deval Patrick signed the "Global Warming Solutions Act," which will impose the most stringent greenhouse gas (GHG) reduction requirements in the nation. The Act creates Chapter 21N, which mandates a reduction of GHG emissions of 10% to 25% below 1990 levels by 2020 and 80% below 1990 levels by 2050, with intermediate caps for 2030 and 2040. Although the details for implementing these caps will not be known until regulations are promulgated, the emission reductions required to meet these caps must be measurable and enforceable.

Whereas most existing GHG reduction programs in the United States focus on the electric generating sector, this Act empowers the Executive Office of Energy and Environmental Affairs (EEA) to regulate a wide variety of sources across the commonwealth, and sets in motion the regulatory process to enforce an economy-wide cap on GHGs. Failure to meet the required reductions can result in administrative civil penalties for violators as high as $25,000 per day.

SUMMARY

In a notice published in the August 1, 2008 Federal Register, the United States Environmental Protection Agency (“EPA”) announced that it will begin following a new approach to applying its policy on Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations (65 Fed. Reg. 19618) (“Audit Policy”) to new owners that wish to make a “clean start” at newly acquired facilities. EPA will begin applying the Interim Approach to Applying the Audit Policy to New Owners (the “Interim Approach”) in order to encourage new owners to audit newly acquired facilities and to disclose, correct and prevent to recurrence of instances of environmental noncompliance.

SUMMARY

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

SUMMARY

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.

SUMMARY

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.

SUMMARY

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.

SUMMARY

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.

SUMMARY

On June 16, 2008, the SJC issued its much-anticipated decision in Michael D. Bank et al v. Thermo Elemental, Inc. et al., clarifying that line-by-line compliance with “every detail” of the Massachusetts Contingency Plan (MCP) is not a prerequisite to recovery of any of the response costs incurred by a property owner via the cost-recovery provisions of the MCP in MGL Chapter 21E.  The SJC also confirmed that attorneys fees incurred in implementing a site cleanup – as opposed to litigation-related attorneys’ fees – are recoverable as response costs under Chapter 21E.

SUMMARY

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

SUMMARY

Preface:

Patenting generally offers a superior means for legally protecting most inventions, particularly since:

• copyright, when available, does not provide a broad scope of protection; and
• the ability to effectively protect an invention as a trade secret is in constant jeopardy, due to publication or oral disclosure.

Unfortunately, the patenting process can be complicated, time-intensive and costly. However, costs can often be minimized and opportunities for establishing value in products and technology maximized if scientists and business professionals with an understanding of the patenting process are actively involved throughout.

This publication was prepared to provide an overview of patenting, particularly as it pertains to innovative technologies such as biotechnology and information technology.

SUMMARY

While the debate over federal climate change regulation continues, several US states and regions have enacted their own programs. One of the first to act was Massachusetts, which in 2001 promulgated carbon limitations applicable to six existing power plants. Those regulations established an emission limit of 1,800 pounds of carbon per MWh and sharply limited the use of many types of carbon credits to meet the specified carbon targets. The regulations also allowed Massachusetts Department of Environmental Protection (“DEP”) to invoke a “safety value” if DEP determined that the Massachusetts requirements could not otherwise be achieved. Earlier this month, DEP determined just that and opened up its carbon markets. Although this individual action affects only a few sources and only for emissions generated in 2008, it is indicative of some of the regulatory flexibility that will be needed as regulators and regulated sources begin to grapple with the practicalities of climate change regulation. Most interested observers believe that climate change regulation will only continue to increase, but precisely how that process will unfold remains to be seen.