Israel Practice News -- Winter 2003
In this issue:
MoFo News
MoFo Launches Hebrew Website
Morrison & Foerster is the first international law firm to launch a Hebrew language website. The site is designed to provide
our Israeli clients and colleagues with a point of access to critical information and a source of timely updates on the numerous
legal issues they face in the global market.
The site contains a Hebrew language description of the firm’s Israel-related practice, a listing of attorneys who are members
of our Israel Practice Group, Hebrew language articles published by the firm, links to news about the firm and our Israel-related
practice, and links to the MoFo English language legal updates.
For more information please visit the website at www.mofo.co.il.
MoFo Assists Bet Tzedek in Recovery of Art Stolen by Nazis
Margot Metzner and Janie Schulman of our Los Angeles office led a team that represented Bet Tzedek Legal Services on a Pro-Bono
basis in submitting an amicus curiae brief in Altmann v. Austria. On December 12, 2002, The Ninth Circuit Court of Appeals
ruled that Ms. Altmann could sue the Austrian government in a U.S. court to recover six Gustav Klimt paintings that were stolen
from her family by the Nazis in 1938.
Lior Zorea joins the MoFo Israel Practice Group
Lior Zorea joins MoFo San Francisco office as an associate in the Business Department. Born in Haifa in 1970, Lior moved to
the U.S. as a teenager and received his B.A. from Yale University in 1990. He graduated with a J.D. from University of Michigan
Law School in 1995. Before joining Morrison & Foerster, Lior was an associate with Wilson Sonsini Goodrich & Rosati in Palo
Alto.
Events Hosted by MoFo
Meeting with the New Israeli Chief Scientist and with representatives of the Israeli Income Tax Commission
On December 16, 2002, the New York office hosted the Israel - U.S. Investor Advisory Forum for a breakfast meeting with Dr.
Eli Opper, Israel's Chief Scientist of the Ministry of Industry and Trade; Mr. Yaron Shidlo, Director of the International
Division of the Israeli Income Tax Commission; and Mr. Moshe Asher, Advisor to the Israeli Income Tax Commission.
Dr. Opper described the current situation in the Israeli high-tech industry and recent changes to the Israeli R&D law. Messrs.
Shidlo and Asher described the new Israeli tax-reform law.
Shortly after the breakfast meeting, a Hebrew language conversation took place with Israeli professionals and investors.
Israel - U.S. Investor Advisory Forum
On August 16, 2002, Oz Benamram of the New York office outlined for the Israel - U.S. Investor Advisory Forum the developments
that have taken place since the previous Forum meeting with the Israeli Minister of Industry and Trade, Ms. Dalia Itzik, in
the following fields:
- The impact of the recent Israeli tax reform on foreign investments in Israel;
- The impact of the new governmental grants on foreign venture investments in Israeli R&D start-up companies; and
- Restrictions on technology migration from Israel.
To read about these issues, please see our update
Proposed Amendments to the Israeli Research and Development Law, August 2002.
Israel Tax Reform
On July 30, 2002, Oz Benamram of the New York office hosted a Hebrew language seminar with Doron Sadan of PricewaterhouseCoopers
about the Israeli Tax Reform. The tax reform law, passed by the Knesset on July 24, 2002, imposes taxes on interest from savings,
stock market earnings and overseas income, and uses the revenue to reduce the marginal tax rate over the next five years.
Most of the provisions of the reform take effect on January 1, 2003.
A Hebrew version outline of the presentation is available online (pdf format).
Meeting with the Director General of the Ministry of Industry and Trade of Israel
On June 7, 2002, the New York office hosted a special presentation by the Director General of the Ministry of Industry and
Trade of Israel, Mr. Amir Hayek.
Mr. Hayek gave an update on the venture capital market in Israel and the government’s new seed fund initiative. He also discussed
the new biotech incubator projects, and the privatization of some technological incubators.
To read about the Israeli Government Seed Fund, please see the outline presentation visit the Ministry of Industry and Trade
English website at www.moit.gov.il/tamas_en.htm.
Articles of Interest
Sarbanes-Oxley: What Public Companies Need to Know
The Sarbanes-Oxley Act of 2002 is the most significant and comprehensive statutory revision to the federal securities laws
in over 60 years. The Act has wide-ranging ramifications for the conduct of business for all public companies (and private
companies about to go public), with some of its provisions becoming effective immediately.
Since its passage, Morrison & Foerster has been monitoring developments and keeping clients and friends of the firm informed
of the rules and regulations promulgated under the Act. To read a Hebrew language summary of The Act, please see Application
of Sarbanes-Oxley Act to Foreign Issuers on our hebrew language site.
Read the Policy - VC’s and D&O Insurance
It’s no secret: today’s venture capitalists seek to have their portfolio companies obtain director and officer (D&O) insurance
policies. This is especially true when the VC appoints one or more members to the board of directors. Many forms of venture
financing documents in use today include a covenant that obligates the company to purchase and maintain a D&O policy.
To read about D&O policies and venture capitalists, please see our update Read the Policy - VC’s and D&O Insurance, October 2002 (English version). The article is also available in hebrew on www.mofo.co.il.
Representation and Warranties Insurance as a new Strategic Negotiation Tool for Dealmakers
Today’s legal and business environment creates substantial risks of liability in connection with transactions. One of the
ways to cope with these risks is to buy insurance. A great deal has been written about Representations and Warranties Insurance
(RWI) since it was introduced by the insurance consortium known as the Tax and Financial Risks Indemnity Line Slip in 1997.
Despite the fact that more and more people in the business, financial and legal communities are aware of the existence of
this type of insurance, use of this insurance is still not widespread.
To read about RWIs, please see Representation and Warranties Insurance: A New Strategic Negotiation Tool for Dealmakers, January 2003 (English version). The article is also available on the hebrew language website at www.mofo.co.il.
Israel-Related Business News Hyperlinks to Israel-related news articles from the past months. Many of these links are to Globes[online] which requires
(free) user registration.
Notable Acquisitions:
12/24/02 RoboGroup buys Mentergy distance learning systems
12/24/02 Finjan completes purchase of startup Alchemedia
12/19/02 Veritas to buy Precise Software in $537 Million deal
12/18/02 Aman Computers acquires M-Insight
12/17/02 Omnicell of US acquires Medisafe
12/16/02 NetJet negotiating to buy Elta civil airliner defense system
12/11/02 Sanmina-SCI buying Elscint's medical manufacturing, assembly operations
12/9/02 Dmatek buys Mitsubishi’s alcohol monitoring product line
12/3/02 Alvarion buying ECI's InnoWave
10/29/02 WorkplaceIQ acquires BayLogics
10/24/02 Orsus buys Speedwise in $15m cash and share deal
10/17/02 Tecnomatix buys Teradyne CAD software
10/7/02 DSP Group buys Meicom’s technology
Recap of Investments:
12/31/02 MindGuard completes $3.1 million internal round
12/30/02 Dynamic Internet developer Zend raising $6 million
12/23/02 TopSpin Medical raises $16.5 million in second round
12/18/02 DeepBreeze raises $4 million
12/17/02 InterWise raises $12 million
12/15/02 Intel invests in Israeli start-up Passave
12/15/02 Wireless multimedia co Bamboo expands financing round to $7.5 million
12/15/02 Gyne-tech startup Common Sense in new financing round
12/12/02 ViryaNet raising $7 million from Shrem-Fudim-Kelner, GE Capital
12/9/02 Major optic communications companies bid for XLight
12/8/02 E-payment security company Cyota raises $8m
12/5/02 Catalyst Fund moves to 5% holding in Optibase
12/3/02 Cydoor raising $3 million
12/2/02 Ayeca raises $2 million, aiming for $5 million more
11/17/02 Movious obtains NIS 3.3 million R&D budget from Chief Scientist
11/17/02 Medical IT co Algotec intends raising $5-10 million
11/12/02 Vidyatel raising $3-5 million
11/12/02 Actimize raises $10 million in second round of funding
11/7/02 Virtio raises $4 million
11/7/02 Native Networks commencing $15 million private placement
11/4/02 Flat panel display technology co Flixel raising $4 million
10/31/02 Sapiens receives $10 million investment from Formula Systems
10/31/02 Supply chain solutions co Federation raises $6.75 million
10/31/02 Red Bend raising $5-10 million
10/30/02 Silverback raising $15 million
10/28/02 Nanopowders of Caesarea merging with Minnesotan company Aveka
10/24/02 Checkm8 in $6m financing round
10/23/02 Remon Medical raising $15 million
10/23/02 NanoMaterials raising $5 million
10/22/02 $4 million Business Layers cooperation with Schlumberger
10/22/02 NatSpears raises $400,000, joins Biomedical Incubator RAD-Ramot
10/21/02 Cancer diagnostics co TransScan raises $2.5 million
10/16/02 Fabless startup NoyoTec in advanced stage of $5 million financing round
10/15/02 Gilian Technologies raises $10 million in third round
10/15/02 InkSure Technologies completes $6.7 million financing
10/14/02 IXI Mobile raises $15 million in third funding round
10/13/02 Viewing and logging systems co Regard raising $4 million
10/13/02 Broadband video co Scopus negotiating to raise $10-15 million
10/9/02 Israeli start-up AqWise to raise $3 million
10/9/02 Power Paper raises $3 million in fourth round
10/8/02 AOL-Time Warner invests $3 million in BigBand Networks
10/6/02 Network integration co SANcastle completes $9 million internal round
10/2/02 Human-computer interaction co Commodio raising $3 million
10/2/02 JVP invests in BridgeWave financing round
10/1/02 Data sharing company Corigin about to complete $5 million first round
