Prepare your International Buyer

• OCS – Tell them upfront.

• Great improvements in law from former absolute ban ontransferring technology abroad

• With payment of transfer fees, technology can be taken out ofIsrael. But this is not simple.

• Transfer Fees can be expensive (newly capped at 6x theamount received plus interest or 3x with certain conditions)

• Technology has to be transferred out of Israel (sale for taxpurposes). If you need it in both countries, need to license

back with transfer pricing issues.

• Licensing problematic and can be just as costly.

Preparing your Buyer

• University staff who work for hi techcompanies: as a general rule - governmentowned institution owns all the resulting IP,even if not connected to what professorresearches at university.Some universities now think they should getroyalties instead of giving consent forfree. There is counter pressure by staffthough as this can have chilling effect on usingthem.

Preparing your Buyer

Employment Issues

• Collective bargaining agreements

• Options to employees and capital gainstreatment

• Effect of M&A on vested and unvested options

• Timing of negotiating with Key Employees

Unique To Israel

• The Art of Negotiating with Israelis

• Reopening points.

• Arguing – deals can take longer.

• Asking for unusual things like in IP reps – likerefusing to give an IP rep or indemnity on IPclaims

• Fighting Due Diligence

• Searching for Integrity

Look on the Bright Side - Corporate

• Once there was a perceived fear ofincorporating in Israel rather than Delaware toattract investors

• Valuations are not expected to be lower andIsraeli tax laws have become much morefavorable to investors. Just say “Waze”

• Sarbanes –Oxley continues to have a chillingeffect on incorporating in the US.

Look on the Bright Side - Tax

• Tax Benefits of Preferred Enterprise (replacedApproved Enterprises)

• Reduced tax on company tax (16% instead of26.5%) and tax on dividends (20% or lessunder a tax treaty, instead of 25% or 30%)

• No restriction on repatriation of investment

• General exemption from Capital Gains Tax onsales of shares purchased after 2009

Look on the Bright Side - Cultural

• Cultural bridge: Role of Advisors,

particularly foreign born or trained

• Law not that different

• Note – obligation to negotiate

in good faith. By statute.

• Reason - flip side of innovation, thinkingoutside the box; not making assumptions