Oracle Corporation et al v. SAP AG et al

Filing 1054

Declaration of Michael Junge in Support of 1051 MOTION to Stay Defendants' Motion For Stay of Execution of Judgment Through Appeal and Approval of Proposed Security Pursuant to FRCP 62 filed bySAP AG, SAP America Inc, Tomorrownow Inc. (Related document(s) 1051 ) (Froyd, Jane) (Filed on 3/24/2011)

Oracle Corporation et al v. SAP AG et al

Doc. 1054

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Robert A. Mittelstaedt (SBN 060359) Jason McDonell (SBN 115084) Elaine Wallace (SBN 197882) JONES DAY 555 California Street, 26th Floor San Francisco, CA 94104 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] [e-mail] Tharan Gregory Lanier (SBN 138784) Jane L. Froyd (SBN 220776) JONES DAY 1755 Embarcadero Road Palo Alto, CA 94303 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] Scott W. Cowan (Admitted Pro Hac Vice) Joshua L. Fuchs (Admitted Pro Hac Vice) JONES DAY 717 Texas, Suite 3300 Houston, TX 77002 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] Attorneys for Defendants SAP AG, SAP AMERICA, INC., and TOMORROWNOW, INC. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION ORACLE USA, INC., et al., Plaintiffs, v. SAP AG, et al., Defendants. Case No. 07-CV-1658 PJH (EDL) DECLARATION OF MICHAEL JUNGE IN SUPPORT OF DEFENDANTS' MOTION TO STAY EXECUTION OF JUDGMENT THROUGH APPEAL AND APPROVAL OF PROPOSED SECURITY PURSUANT TO FRCP 62 Date: May 4, 2011 Time: 9:00 a.m. Courtroom: 3, 3rd Floor Judge: Hon. Phyllis J. Hamilton
JUNGE DECL. ISO DEFS.' MOT. TO STAY EXECUTION OF JUDGMENT Case No. 07-CV-1658 PJH (EDL)

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I, Michael Junge, declare as follows:

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I.

I am General Counsel of SAP AG. I have personal knowledge orthe facts stated

in this declaration and could competently testify to them ifrcquircd. Nothing in this declaration
is intended to waive, or should be construed as a waiver of, the attorney-client privilege or

attorney work product immunity. 2.
SAP AG is a party to (i) a 1.5 billion syndicated revolving credit facility

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agreement dated 15 December 2010 (the "ReF"), among SA P AG as "Borrower" and

Commerzbank Akticngcscllschaft, Deutsche Bank AG, The Royal Bank orScotlalld pic, Societe

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Generale Corporate & Investment Banking as "Mandated Lead Arrangers and Bookrunners" and Deutsche Bank Luxembourg S.A. as "Agent" and Others; (ii) a 2.7S billion credit facility agreement dated 21 May 2010 (as amended, the "Sybase Facility"), among SAP AG as "Borrower" and Bardays Capital, Deutsche Bank AG as "Mandated Lead Arrangers" and Deutsche Bank Luxembourg S.A. as "Agent" and Others; and (iii) a note purchase agreement made by SAP Ireland US-Financial Services Limited on 14 October 2010 (the "USPP"), among SAP Ireland US-Financial Services Limited and SAP AG and certain purchasers.
3.

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If SAP AG were to obtain a supersedeas bond as judgment security in this action,

the bond issuer would require that SAP AG enter into an indemnity or reimbursement agreement, pursuant to whieh SAP would agree to indemnify and/or reimburse the issuer if the issuer had to make a payment in respect to the bond. Such an indemnity or reimbursement agreement would constitute "Financial Indebtedness" as defined in each of the ReF, the Sybase Facility and the
USPP.

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4.

The potential bond issuers would also require as a condition of issuing a bond that

SAP AG or its affiliates post cash collateral or other in rem security, or agree in the future to post cash collateral or other in rem security, to secure the obI igation of SA P AG under the indemnity or reimbursement agreements. The granting oran in rem security in respect of"Financial Indebtedness" is prohibited under the ReF and the Sybase Facility. 5. The USPP similarly limits the incurrence of "Financial Indebtedness" by certain

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subsidiaries of SAP AG, including by SAP America, and therefore, the entry into the
-1JUNGG DECL. ISO DEFS.· MOT. TO STAY EXECUTION 01' JUDGMENT Case No, 07·CV-165N PJH (EDL)

reimbursement or indemnity agreement by certain subsidiaries of SAP AG, including SAP 2 America, would be prohibited. 6. While SAP AG might be able to secure the agreement of the creditors under the

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Sybase Facility, the ReF, or the USPP allowing Defendants to enler into reimbursement agreements or to grant any required ill rem security interest to a bond issuer, this might cause creditors to seek additional concessions from Defendants, such as a fee for the consent, a requirement that the current unsecured creditors be provided in rem security, an increased interest rate, or other fees.

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7.

None urthe ReF, the Sybase Facility, the USPP or the Notes restricts the ability of

SAP or its subsidiaries to enter into the Proposed Escrow Agreement submitted with Defendants' Motion to Stay Execution of Judgment Through Appeal and Approval of Proposed Security Pursuant to FRCP 62. I declare under penalty of perjury under the laws of the United States and the State of California that the foregoing is true and correct. Executed this 24th day of March, 201 I in Walldorf, Germany.

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Michael Junge

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JUNGE DEC!.. ISO UCFS,' MOT. TO STAY EXECUTION OF

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Case No. 07-CV~1658 PHI

JUIXiMENT