PlainSite · 2019-11-01 · 17 For Tesla Motors Director Defendants: 18 CRAVATH, SWAINE & MOORE LLP 19 BY: HELAM GEBREMARIAM, ESQ. 20 825 Eighth Avenue 21 New York, New York 10019-7475

PlainSite

Legal Document

®

A joint project of Think Computer Corporation and Think Computer Foundation.Cover art © 2015 Think Computer Corporation. All rights reserved.Learn more at http://www.plainsite.org.

Delaware Court of ChanceryCase No. 12711-VCSIn Re Tesla Motors, Inc. Stockholder Litigation

Document 328, Attachment 2

View Document

View Docket

https://www.plainsite.org/dockets/32atfyhh5/delaware-court-of-chancery/in-re-tesla-motors-inc-stockholder-litigation/

EXHIBIT 11

CONFIDENTIAL

1 IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

2 ----------------------------------------------

3 IN RE: TESLA MOTORS, INC. Consolidated

4 STOCKHOLDER LITIGATION C.A. No. 12711-VCS

5

6 ----------------------------------------------

7

8

9

10

11 CONFIDENTIAL

12

13

14 VIDEO-RECORDED DEPOSITION OF LYNDON RIVE

15 WEDNESDAY, MAY 15, 2019

16

17

18

19

20

21

22 Reported by:

23 Anrae Wimberley

24 CSR No. 7778

25 Job No. NY 3276314

Page 1

Veritext Legal Solutions212-267-6868 www.veritext.com 516-608-2400

PUBLIC VERSION

CONFIDENTIAL

Page 2

1 IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

2 ----------------------------------------------

3 IN RE: TESLA MOTORS, INC. Consolidated

4 STOCKHOLDER LITIGATION C.A. No. 12711-VCS

5

6 ----------------------------------------------

7

8

9

10

11 CONFIDENTIAL

12

13

14 Transcript of video-recorded deposition

15 of LYNDON RIVE, taken at Wilson, Sonsini, Goodrich &

16 Rosati, 650 Page Mill Road, Palo Alto, California

17 94304, beginning at 9:30 a.m. and ending at 4:11

18 p.m. on Wednesday, May 15, 2019, before Anrae

19 Wimberley, Certified Shorthand Reporter No. 7778.

20

21

22

23

24

25

Page 3

1 APPEARANCES:2 For Plaintiffs:3 GRANT & EISENHOFER P.A.4 BY: DANIEL L. BERGER, ESQ.5 485 Lexington Avenue, 29th Floor6 New York, New York 100177 (646) 722-85008 [email protected] -and-

10 GRANT & EISENHOFER P.A.11 BY: CHRISTINE MACKINTOSH, ESQ.12 VIVEK UPADHYA, ESQ.13 123 Justison Street, 7th Floor14 Wilmington, Delaware 1980115 (302) 622-70811617 For Tesla Motors Director Defendants:18 CRAVATH, SWAINE & MOORE LLP19 BY: HELAM GEBREMARIAM, ESQ.20 825 Eighth Avenue21 New York, New York 10019-747522 (212) 474-118023 [email protected]

Page 4

1 For the Deponent:

2 WILSON, SONSINI, GOODRICH & ROSATI, P.C.

3 BY: BRADLEY D. SORRELS, ESQ.

4 222 Delaware Avenue, Suite 800

5 Wilmington, Delaware 19801-1600

6 (302) 304-7617

7 [email protected]

8

9 Also Present:

10 VERITEXT LEGAL SOLUTIONS

11 DAVID HALVORSON, VIDEOGRAPHER

12 (415) 274-9977

13 [email protected]

14 --oOo--

15

16

17

18

19

20

21

22

23

24

25

Page 5

1 I N D E X

2 EXAMINATION BY: PAGE

3 MR. BERGER 12, 115, 210

4 MR. SORRELS 206, 212

5 --oOo--

6 E X H I B I T S

7

8 EXHIBIT DESCRIPTION PAGE

9 Exhibit 1 Rive Lyndon Post Tax Net 13

10 Worth (Estimate); Bates

11 SC_Third_Parties_0013363,

12 3 pages total

13

14 Exhibit 2 E-mail chain of August 2016; 26

15 Bates TESLA00087930 thru 931

16

17 Exhibit 3 E-mail chain of September 2015; 30


19

20 Exhibit 4 E-mail chain of October 2015; 33

21 Bates SC_Third_Parties_0002148;

22 and attachment Bates

23 SC_Third_Parties_0002149 thru

24 SC_Third_Parties 0002156

25

2 (Pages 2 - 5)


CONFIDENTIAL

Page 6

1 E X H I B I T S (Cont'd)


3 Exhibit 5 E-mail dated 10/21/15 from Ellis 38

4 to various individuals; Bates


6

7 Exhibit 6 E-mail chain of November 2015; 48


9

10 Exhibit 7 E-mail dated 10/31/15 from 53

11 Phillips to various individuals

12 w/attachments; Bates

13 TESLADIR0074111 thru 132

14

15 Exhibit 8 E-mail chain of February 2016 60

16 w/attachment; Bates

17 TESLA00137197 thru 199

18

19 Exhibit 9 E-mail dated 2/1/16 from Chew 60

20 to various individuals

21 w/attachments; Bates

22 TESLA00002321 thru 355

23



Page 7



3 Exhibit 11 Appointment Invite dated 2/10/16 71

4 from L. Rive to various

5 individuals; Bates TESLA00056953

6

7 Exhibit 12 E-mail chain of April 2016; 76


9

10 Exhibit 13 E-mail chain of April 2016 78


12 TESLA00527954 thru 984

13

14 Exhibit 14 E-mail dated 5/20/16 from Serra 82

15 to L. Rive w/attachments; Bates

16 TESLA00527848 thru 855

17

18 Exhibit 15 E-mail dated 6/2/16 from Ellis 86

19 to various individuals


21 TESLA00710234 thru 243

22

23 Exhibit 16 E-mail dated 7/9/16 from L. 104

24 Rive to undisclosed recipient;

25 Bates TESLA00083765

Page 8




4 Rive to E. Musk; Bates

5 TESLA00022462 thru 463

6


8 Rive to various individuals;


10

11 Exhibit 19 Form 10-Q for period ended 115

12 3/31/16; 70 pages

13

14 Exhibit 20 E-mail chain of July 2016 118


16 TESLA00138588 thru 592

17

18 Exhibit 21 Minutes of a Meeting of the 121

19 Special Committee of the Board

20 of Directors held 7/18/16; Bates

21 TESLA00001872 thru 874

22

23

24

25

Page 9



3 Exhibit 22 Presentation document re 123

4 Project Daedalus; Bates

5 SC_Third_Parties_0042367 thru

6 874

7

8 Exhibit 23 E-mail dated 7/17/16 from Mir 124

9 to various individuals; Bates

10 SC_Third_Parties_0043466

11

12 Exhibit 24 E-mail chain of July 2016; 138


14

15 Exhibit 25 E-mail chain of August 2016 140


17 TESLA00585366 thru 900

18

19 Exhibit 26 SolarCity Fourth Quarter 2015 150

20 Shareholder Letter; Bates

21 TESLA00308848 thru 864

22

23 Exhibit 27 SolarCity First Quarter 2016 152


25 TESLA00605997 thru 6014

3 (Pages 6 - 9)


CONFIDENTIAL

Page 10



3 Exhibit 28 SolarCity Second Quarter 2016 152


5 EVR-TESLA_0198295 thru 311

6

7 Exhibit 29 SolarCity Third Quarter 2016 157


9 LAZ_TES00041787 thru 803

10

11 Exhibit 30 E-mail chain of September 2016; 193


13



16



19 --oOo--

20

21 QUESTIONS WITNESS INSTRUCTED NOT TO ANSWER:

22 (None)

23

24 --oOo--

25

Page 11

1 WEDNESDAY, MAY 15, 2019; PALO ALTO, CALIFORNIA;

2 9:30 A.M.

3 - - -

4 THE VIDEOGRAPHER: Good morning.

5 We are on the record at 9:30 a.m. on

6 May 15th, 2019.

7 This is Media Unit 1 in the video-recorded

8 deposition of Lyndon Rive In Re: Tesla Motors Inc.

9 Stockholder Litigation filed in the Court of the

10 Chancery of the State of Delaware. The case number

11 is 12711-VCS.

12 This deposition is being held at Wilson

13 Sonsini Goodrich & Rosati located at 650 Page Mill

14 Road in Palo Alto.

15 My name is David Halvorson. I'm from

16 Veritext. I'm the videographer. I'm here with the

17 court reporter, Anrae Wimberley, also from Veritext.

18 Counsel, can you please all identify

19 yourselves so the witness can be sworn in.

20 MR. BERGER: Daniel Berger, Grant & Eisenhofer,

21 on behalf of the plaintiffs.

22 MR. UPADHYA: Vivek Upadhya, Grant &

23 Eisenhofer.

24 MS. MACKINTOSH: Christine Mackintosh, Grant &

25 Eisenhofer.

Page 12

1 MR. SORRELS: Brad Sorrels, Wilson Sonsini

2 Goodrich & Rosati, on behalf of the witness.

3 MS. GEBREMARIAM: Helam Gebremariam, Cravath

4 Swaine & Moore, on behalf of the director

5 defendants.

6 LYNDON RIVE,

7 sworn as a witness by the Certified

8 Shorthand Reporter, testified as follows:

9 EXAMINATION

10 BY MR. BERGER:

11 Q. Good morning, Mr. Rive.

12 A. Morning.

13 Q. I'm going to ask you some questions about

14 Solar Roof, in particular years 2015 and 2016. But

15 just a quick amount of background.

16 You founded SolarCity in 2006, I believe;

17 is that right?

18 A. Correct.

19 Q. And you were the chief executive officer

20 from that time through the time it was acquired by

21 Tesla?

22 A. Correct.

23 Q. You founded it with your brother; correct?

24 A. Correct.

25 Q. During the time that you were the chief

Page 13

1 executive officer, Elon Musk was the board chair; is

2 that right?

3 A. Yes.

4 Q. Elon Musk is your cousin?

5 A. Yes.

6 Q. As of 2015, 2016, how much SolarCity stock

7 did you own?

8 A. Probably -- in terms of percentage?

9 Q. Sure, percentage or shares.

10 A. I don't know the share count, but call it

11 roughly 3 1/2 percent.

12 Q. I'm going to show you a document.

13 But would it be fair to say that in 2015

14 and 2016, you had a substantial amount of your net

15 worth tied up in SolarCity?

16 A. Yes. I started the company. That's my

17 company.

18 Q. But in terms of your net worth -- I mean,

19 you might have had lots of other things, but most of

20 your net worth was tied up in SolarCity?

21 A.

22 MR. BERGER: Let me ask the reporter to mark as

23 Exhibit 1 -- it's a document that we got in the

24 case. It's -- it has Production No. 13363.

25 (Plaintiffs' Exhibit 1 was marked.)

4 (Pages 10 - 13)


CONFIDENTIAL

Page 14

1 BY MR. BERGER:

2 Q. If you take a look at the second page of

3 Exhibit 1, it appears to be a schedule of your net

4 worth as of October 18th, 2016.

5 Does this look accurate to you?

6 (Witness reviews document.)

7 A. This doesn't include my liabilities,

8 though. This is only my assets. It doesn't include

9 any of my liabilities.

10 Q. It does have a column that says, "Debt,"

11 so it at least does have some of your liabilities;

12 correct?

13 A. Where do you see the "Debt"?

14 Q. It looks like it's the sixth column.

15 A. Oh, there we go. There's "Debt."


17 A. So there's the debt. So this is just

18 missing a total then

19 Q. I'm sorry. What's missing?

20 A. This is missing a total then.

21 MR. UPADHYA: Just to clarify, I think the

22 total is on page 3.

23 MR. BERGER: Oh, I'm sorry.

24 MR. UPADHYA: It just printed differently.

25 MR. BERGER: Oh, it did? My apologies. The

Page 15

1 copy I was looking at was --

2 BY MR. BERGER:

3 Q. Okay. There is a total.

4 A. That explains more.

5 MR. SORRELS: And there's a date there on the

6 top of page 3.

7 THE WITNESS: Yeah, so this is 2018.

8 BY MR. BERGER:

9 Q. Got it. No, 2016.

10 A. You're right, 2016.

11 Q. October 18th, 2016, right before the Tesla

12 acquisition of SolarCity closed. I think it closed

13 November -- I think November 18th or 21st.

14 But it looks accurate to you in terms of

15 your assets and liabilities and net worth; correct?

16 A. Yes.

17 Q. You did own some Tesla stock; correct?

18 A. Yes. Yes.

19 Q. But most of that stock you had pledged for

20 certain other debts?

21 A. Half. I wouldn't say -- yeah, half.

22 Q. In terms of the value -- yes, you had

23 almost

24

25 A.

Page 16

1 Q. About half.

2 So if I'm right, just roughly in this, you

3 had about ; is

4 that correct?

5 A. Yeah, roughly about that amount.

6 Q. Did you also have SolarCity stock or other

7 SolarCity assets that you held in accounts for your

8 children, separate from this?

9 A.

10 Q. At this time, how much SolarCity stock did

11 Mr. Musk own, Elon Musk?

12 A. I don't know the exact number, but roughly

13 call it 20 percent.

14 Q. 20, 22 percent of the stock, would that be

15 fair?

16 A. Yeah. Sure.

17 Q. Okay. Thank you. We're done with that.

18 Now, would it be fair to say that

19 throughout the time that SolarCity was a public

20 company -- just so I have it, when did SolarCity go

21 public?

22 A. End of 2012.

23 Q. So thereafter, from that point on, would

24 it be fair to say that SolarCity's liquidity was

25 always a concern to you?

Page 17

1 A. Managing cash flow is always top priority

2 for a growing company.

3 Q. And in particular, how liquid you are,

4 what your liquidity was, that was something that you

5 tracked?

6 A. Well, once going public, the access to

7 liquidity is fairly easy. If you're a highly traded

8 stock, you always have access to liquidity.

9 Q. Of course, that wasn't what I asked you.

10 I asked you if you tracked it.

11 A. I did track it.

12 Q. You tracked it.

13 And it was important.

14 A. But you also asked me access to it or

15 concern around it. And, yeah, being a publicly

16 traded company, you have access to liquidity all the

17 time.

18 Q. All the time, whenever you want?

19 A. Well, more accessible than being private.

20 Q. Just can raise money whenever you want; is

21 that what you're saying?

22 A. More accessible than when being private.

23 Q. Got it.

24 But the nature of your business model at

25 SolarCity required you to raise significant cash to

5 (Pages 14 - 17)


CONFIDENTIAL

Page 18

1 run your business; correct?

2 A. Yes.

3 Q. And am I right that -- let's say from the

4 time you went public through the end of 2015,

5 SolarCity was never cash flow positive from its

6 business operations, was it?

7 A. If you just looked at a static picture, we

8 could be cash flow positive, but if you're growing

9 at 80 percent per year, you cannot be.

10 Q. Well, were you or weren't you --

11 A. We were growing 80 percent per year.

12 Q. No, were you or weren't you cash flow

13 positive?

14 A. We were not because --

15 Q. Okay. That's not what I asked you --

16 (Reporter seeks clarification.)

17 Q. So what I asked you was -- I'll ask it

18 differently.

19 At any time between the time you went

20 public and the end of 2015, was SolarCity cash flow

21 positive?

22 A. No.

23 Q. Am I also right that during this period of

24 time, you reported publicly to your shareholders and

25 investors about your liquidity?

Page 19

1 A. Every three months.

2 Q. And just so I'm clear about the cash flow

3 negative, would I be right that, throughout 2015,

4 SolarCity spent more cash than the cash it generated

5 from its operations and from its financing; correct?

6 A. No, I think you're misinterpreting that.

7 So the business model is to deploy assets and then

8 get a long-term recurring revenue stream off those

9 assets. So each asset that we deployed is net

10 accretive to the company. It may have a short-term

11 cash impact, by the net present value of the future

12 cash flows far exceed the short-term cash impact.

13 Q. Maybe that's an answer to a different

14 question.

15 But here's the question I asked you: From

16 the time you were public to the end of 2005 [sic],

17 SolarCity spent more cash than the cash it generated

18 from its operations and the cash it raised from its

19 financing; correct?

20 MR. SORRELS: I'll object to form.

21 BY MR. BERGER:

22 Q. Is that true?

23 A. Then you don't understand the full

24 business model --

25 Q. Try answering yes or no first and then you

Page 20

1 can explain to me whatever you want.

2 Is that true, what I said?

3 A. The net cash -- it's the same question you

4 asked early, has the company ever been cash flow

5 positive, and the answer was no.

6 Q. Is no.

7 I mean, I could show you all your 10-Qs

8 and your 10-Ks, which have beginning cash -- you

9 know what a statement of cash flows is in a 10-Q?

10 A. I do.

11 Q. Right.

12 And you start at the beginning, what you

13 spend, what you take in, what goes out, and you have

14 ending cash.

15 And I can show you each quarter ending

16 cash was worse than the previous.

17 A. Yes.

18 Q. Thank you.

19 MR. SORRELS: Let him finish his answers.

20 THE WITNESS: But the part that you need to

21 include --

22 BY MR. BERGER:

23 Q. Your counsel can ask you those questions.

24 I don't need to know that now.

25 A. Have you ever built a real estate

Page 21

1 building? I can --

2 Q. Stop. I ask the questions; you answer

3 them. If you want to ask me questions, we can do it

4 at the end of the deposition. Okay?

5 MR. SORRELS: Just let him go.

6 BY MR. BERGER:

7 Q. Agreed?

8 Now, in addition to liquidity being

9 important -- withdrawn.

10 During this period of time, you also had

11 debt covenants with your lenders; correct?

12 A. Correct.

13 Q. And your lenders required you to meet

14 certain cash covenants under these lending

15 agreements; correct?

16 A. Correct.

17 Q. And you tracked that pretty carefully,

18 didn't you?

19 A. Yes.

20 Q. So the ability to meet your debt covenants

21 was very important to you in 2015 and 2016; correct?

22 A. Yes.

23 Q. One of the lenders that SolarCity had debt

24 covenants with was the lender for its revolving

25 credit agreement, is that right, in 2015, 2016?

6 (Pages 18 - 21)


CONFIDENTIAL

Page 22

1 MR. SORRELS: Object to form.

2 BY MR. BERGER:

3 Q. That was a bad question, so I withdraw it.

4 I'm sorry.

5 I've seen reference to something called

6 Cronor, C-r-o-n-o-r.

7 What's Cronor?

8 A. So Cronor is a -- I'm running on memory

9 right now. I think it was our code name -- all

10 these different code names -- just a name of the

11 revolver that we established.

12 Q. "The revolver" being the revolving credit

13 agreement that SolarCity had?

14 A. Yes.

15 Q. And was that one of the agreements that

16 had debt covenants that you had to satisfy?

17 A. Well, the revolver is debt, and so it does

18 have covenants.

19 Q. Fair enough.

20 So there were covenants associated with

21 that revolver?

22 A. Yes.

23 Q. And that was the Cronor revolver; correct?

24 You called it Cronor?

25 A. Yeah -- I wasn't sure. I never -- when I

Page 23

1 looked at the covenants, I never looked at it as is

2 it tied to Cronor or is it tied to so some other

3 covenants. I just looked at the overall covenants.

4 Q. The particular covenants that you had,

5 they required SolarCity to maintain a certain level

6 of liquidity; is that true?

7 A. In terms of cash, yes.

8 Q. In terms of cash.

9 And that was something that you and your

10 management team at SolarCity tracked very carefully;

11 correct?

12 A. Yes.

13 Q. What would have been the implication if

14 you had breached those cash debt covenants?

15 A. Most likely outcome is you would have to

16 go back to the banks and renegotiate the covenants.

17 Q. If you had breached those debt covenants,

18 the liquidity covenants, would it have also

19 triggered breaches of other lending agreements that

20 you had?

21 A. I don't know.

22 Q. It could have, you just don't know?

23 A. I don't know.

24 Q. It would have been a very serious event,

25 though, correct, if you had breached the debt

Page 24

1 covenants?

2 A. Actually, in business it happens all the

3 time. So when you're operating a business, certain

4 times cash flow goes up and down, and the banks

5 understand that you may not meet your covenants at

6 that exact time. They will give you -- often they

7 will give you relief on that covenant as you work

8 through whatever challenge you have at that given

9 time. Like the banks aren't in the business to

10 destroy a company; they want the company to succeed.

11 Q. But at SolarCity in 2015, 2016, you

12 thought that breaching your liquidity covenants on

13 your revolver would have been a very serious matter;

14 correct?


16 BY MR. BERGER:

17 Q. You can answer.

18 A. The -- you should never plan on breaching

19 a covenant. If you do, your banks, in most cases,

20 will work with you through it. It is serious. You

21 don't underestimate it. But most of the time the

22 banks will work with you, give you a period to get

23 out of the covenant issue and solve the problem.

24 Q. But the question I asked you is, during

25 '15 and '16, you thought that breaching the

Page 25

1 liquidity covenant on your revolver would have been

2 a very serious matter; correct?


4 THE WITNESS: You asked me that question and --

5 BY MR. BERGER:

6 Q. I'm asking it again.

7 A. -- I'll give you the same answer.

8 Q. You didn't think it was serious or --

9 MR. SORRELS: Object.

10 THE WITNESS: No, that's not what I said. I

11 said, in business, breaching covenants happens all

12 the time. Banks will work with you to solve it.

13 It's still a serious issue. You don't want to just

14 go, oh, willy-nilly breach a covenant. So you still

15 want to take it seriously, but if you have a good

16 business, the banks will work with you to solve it.

17 BY MR. BERGER:

18 Q. That's a theoretical answer about what

19 might happen. I asked you a very specific question

20 about you and your thinking in '15 and '16.

21 The question is, in 2015 and '16, didn't

22 you think, didn't you believe, weren't you convinced

23 that breaching your liquidity covenant on your

24 revolver would have been a very serious matter?

25 MR. SORRELS: Objection; asked and answered.

7 (Pages 22 - 25)


CONFIDENTIAL

Page 26

1 BY MR. BERGER:

2 Q. Can you answer that?

3 A. I have answered you.

4 Q. That's your best? Okay.

5 Let me see that document.

6 MR. BERGER: Let's mark this as Exhibit 2.


8 BY MR. BERGER:

9 Q. Mr. Rive, would you take a look at

10 Exhibit 2, please. Thank you. It's a series of

11 e-mails dated August 31. I would like you to look

12 at the last one in the second page, 87931. It's

13 from you to your team, 31 August 2016.

14 Do you see that?

15 A. Give me a second. I want to read this.

16 Q. Sure.


18 Q. Did you write that e-mail, Mr. Rive?

19 A. I did write that e-mail.

20 Q. And your team would have been who?

21 A. This would probably be my finance team.

22 Q. Okay. And the "Cronor" that you're

23 referring there is your revolver credit facility;

24 correct?

25 A. Correct.

Page 27

1 Q. And "breaching" it meant breaching your

2 liquidity covenants; correct?

3 A. No, this was a different issue. This is

4 relating to billing, collections of our customers.

5 We moved to a new billing platform. And this new

6 billing platform -- as you move from one ERP system

7 to a new ERP system, that migration is always

8 painful. So this was in that phase of migration.

9 So we were not sending out the bills to the

10 customers to collect the payments, and so that was

11 the focus.

12 Q. Got it.

13 Do you see you wrote,

14

15 Do you see that? Did you write that?

16 A. I did write this.

17 Q. And "breach" meant breaching the liquidity

18 covenants because that was the only thing you could

19 breach with Cronor; yes or no?

20 A. I'm not 100 percent sure on that.

21 Q. You're not. Okay. That's all I need.

22 Thank you.

23 A. Of course, this is me telling the team to

24 get their shit together.

25 Q. I got it.

Page 28

1 What you said is,

2 ; right? You told them that?

3 A. That's what the e-mail says.

4 Q. Okay. Now, if we go back to 2015 -- I

5 want to go back in time a little bit.

6 A. Just understanding, nothing to do with the

7 current covenants that you're referring to. Billing

8 covenants -- so maybe a different covenant.

9 Q. What other covenants were there? Did you

10 have billing covenants with Cronor?

11 A. I -- I don't know.

12 Q. You don't know, but you know you --

13 A. I know I had a cash --

14 Q. Okay.


16 MR. BERGER: It's okay.

17 THE REPORTER: It's okay not to get the record

18 correctly?

19 MR. BERGER: Okay.

20 THE REPORTER: Is that true, sir?

21 MR. BERGER: No.

22 THE REPORTER: Please let me know. Because I'm

23 not making the record; you guys are. You know

24 you're going too fast and overlapping each other.

25 It's not a clear record. I need to get that on the

Page 29

1 record. Thank you. Proceed.

2 BY MR. BERGER:

3 Q. I assume if you don't bill people, you

4 can't get paid; and if you don't get paid, you can't

5 get cash; right?

6 A. You got to bill people.

7 Q. You got to bill people to get cash so that

8 you can have enough cash to satisfy your liquidity

9 covenants; correct?

10 A. Yes.

11 Q. Thank you.

12 Now, if we go back to 2015, in the fall of

13 2015, SolarCity had a serious issue with its

14 liquidity under Cronor at that time.

15 Do you remember that?


17 THE WITNESS: You have to be more elaborate.

18 BY MR. BERGER:

19 Q. Okay. So do you recall that in the fall

20 of 2015, the end of September 2015, there was a

21 serious liquidity crisis at SolarCity with respect

22 to its debt covenants?


24 THE WITNESS: You have to give me more

25 information.

8 (Pages 26 - 29)


CONFIDENTIAL

Page 30

1 BY MR. BERGER:

2 Q. All right. I'll show you a document.


4 THE WITNESS: The way he's phrasing the

5 question, it sounds like -- yeah. Yeah.

6 BY MR. BERGER:

7 Q. Fair enough.

8 MR. BERGER: Let me ask the reporter to mark as

9 Exhibit 3 a Tesla document, TESLA 3404 to 3405,

10 which is a series of e-mails on September 30th,

11 2015.


13 BY MR. BERGER:

14 Q. Mr. Rive, just so we have it for the

15 record, would you tell us, who is Tanguy Serra? Did

16 I say his name right?

17 A. Yeah.

18 Q. Is it Tanguy?

19 A. Tanguy.

20 Q. Tanguy.

21 And what was his position at SolarCity in

22 December of 2015?

23 A. Either my -- I think he was my chief

24 operating officer.

25 Q. And Hayes Barnard, what was his position

Page 31

1 at SolarCity?

2 A. He's my chief revenue officer.

3 Q. Would you look at the top e-mail, which is

4 an e-mail from Mr. Barnard to you on September 30.

5 Let me know when you've finished reading it.


7 A. I'm finished reading the top one.

8 Q. So does that refresh your memory that

9 SolarCity had a liquidity crisis in the fall of

10 2015?


12 THE WITNESS: No. You got to understand the

13 business. The business moves about $200 million of

14 cash in and out every single month. So within that,

15 you have volatility. If for some reason the bank

16 who's going to give you that 200 million -- multiple

17 banks are giving you that 200 million -- delays it

18 by a week or two weeks, you have a $100 million cash

19 flow swing.

20 So we would have -- throughout the entire

21 history of the company, we would have these big

22 swings. So whenever it was low, people would be

23 very concerned, but then two weeks later, it comes

24 back.

25 In this specific case, Tanguy and Brad did

Page 32

1 not get along well, and Tanguy was really wanting us

2 to replace Brad.

3 BY MR. BERGER:

4 Q. Brad is Mr. Buss?

5 A. Yes.

6 Q. So he just made up that there was a

7 liquidity crisis so he could get Mr. Buss out of

8 there; is that what you're saying?

9 A. No, at that time, we were in a dip.

10 Q. So you weren't in a crisis.

11 A. No, in a dip.

12 Q. He used the word

13 A. Sure. Yes, because -- I've been managing

14 the business for 10 years. We go up and down for 10

15 years. That's the way the business works. When you

16 raise $200 million at a time, it dips down. And if

17 it gets delayed a week, sometimes maybe even get

18 delayed a month, then you have a $200 million cash

19 dip or swing.

20 Q. How is it you can't raise the money? Then

21 you're -- then you're really dead.

22 A. No, then you have to raise equity markets.

23 Q. What happens if you can't raise equity?

24 A. Well, that's the benefit of being a

25 publicly traded company with high volume, lowest

Page 33

1 cost in the industry, number one solar company in

2 the country. So that's the benefit of being there,

3 that we should be able to raise liquidity.

4 Q. Should be. No guarantee, though.

5 A. But nothing is a guarantee.

6 Q. Nothing is a guarantee.

7 But one thing that you did know at the end

8 of September is that you were having a cash problem.


10 THE WITNESS: Cash flow was tight because it

11 was in a dip, and there was nothing preventing us

12 from raising equity if we wanted to raise equity.

13 BY MR. BERGER:

14 Q. As a result of this, did you decide to

15 raise money, to do a convertible issue?

16 A. I think we ended up doing a convert in

17 December.

18 Q. So let's look at Exhibit 4, please.

19 MR. BERGER: Well, we can start with this.

20 We'll mark as Exhibit 4 a series -- two e-mails from

21 October 2015, Production Nos. SC 2148.


23 BY MR. BERGER:


25 Exhibit 4, please.

9 (Pages 30 - 33)


CONFIDENTIAL

Page 34


2 A. Okay.

3 Q. So as a result of this liquidity crisis,

4 as Mr. Serra said in his e-mail, you concluded that

5 SolarCity should do an equity raise --


7 BY MR. BERGER:

8 Q. -- is that right?

9 A. So I struggle with your sentence.

10 As I described, the business has high cash

11 in, high cash out. The word liquidity "crisis" is

12 not something I would agree to. Yes, we were cash

13 tight and, yes, I did suggest that we need to raise

14 a little equity to address that volatility.

15 Q. And you spoke to the board about that;

16 correct?

17 A. I have to get the board approval for these

18 things.

19 Q. I have to show you this one.

20 I'm going to show you -- which we'll mark

21 as Exhibit -- really was part of this exhibit. It's

22 pages 2149 to 2155. We're going to make it a part

23 of Exhibit 4. Unfortunately, I just have my copy,

24 so you can look at it.

25 Just put it on the back there.

Page 35

1 You sent the board an attachment along

2 with the e-mail that we had before, is that right,

3 as Exhibit 4?

4 A. I guess. I'm just assuming that that

5 little picture there is this one.

6 Q. Yeah, what it looks like from the e-mails

7 is that there was going to be a conference call

8 about the issue of raising equity, and you sent the

9 board members the attachment, which I've now given

10 you, which laid out some of the background and some

11 of the reasons for the proposed equity raise; is

12 that fair?

13 A. Yes.

14 Q. Would you just take a look at the last

15 page of the attachment. You can look at the whole

16 thing, if you'd like.


18 A. Okay.

19 Q. Just so we're clear, that attachment is

20 what you sent to the board in connection with the

21 conference call that you had with them to discuss

22 raising equity in October?

23 A. I cannot confirm that. I don't know if

24 this is that. I'm assuming you know that is that

25 (indicating).

Page 36

1 Q. Yes, because it's the next -- you'll see

2 the numbers follow sequentially as they printed out.

3 A. Okay. Great.

4 Q. So would you look at the last page of the

5 attachment.

6 MR. BERGER: And, Counsel, we'll substitute a

7 clean copy without my highlighting, if you don't

8 mind.

9 BY MR. BERGER:

10 Q. The very last page. It's double-sided so

11 you've got to turn it over. There you go.

12 And that contains your recommendation to

13 the board; is that right?

14 A. Yes.

15 Q. And did you recommend to the board that

16 you raise -- that you do a transaction to raise cash

17 with Silver Lake?

18 A. Yes.

19 Q. And how much were you seeking to get from

20 Silver Lake?

21 A. The recommendation to the board was --

22 we're targeting

23 Q. And there was some other recommendations

24 that you made as well; is that right?

25 A. Yeah.

Page 37

1 Q. Did you discuss those recommendations with

2 Elon Musk before you went to the board?

3 A. I don't recall.

4 Q. Did the board approve your

5 recommendations?

6 A. They did not.

7 Q. What did they approve?

8 A. We ended up doing a $100 million convert.

9 Q. Why did it move from to

10 100 million?

11 A. In general, the board prefers us to have

12 less -- you don't want to have too much cash in the

13 bank because it creates bad behavior. People become

14 complacent. You always want people to feel cash

15 tight. You always want that pressure. And then

16 that teaches everyone to operate more effectively.

17 And so often when you see companies raise

18 too much money, they fail because they aren't used

19 to -- they don't know how to run the business well

20 enough. So by keeping it lean, that forces the

21 management team to think of creative ideas on how to

22 run the business more efficiently.

23 Q. So the board disagreed with you. You

24 wanted ; they said, no, it's too much?

25 A. The board did what the board is supposed

10 (Pages 34 - 37)


CONFIDENTIAL

Page 38

1 to do.

2 Q. I understand.

3 A. It forced the management team to operate

4 at a higher level.

5 Q. So they disagreed with you?

6 A. Yes, they disagreed with me and they had

7 us operate at a higher level.

8 Q. So you ended up raising 100 million?

9 A. Correct. It was 103 or 100-something. It

10 was a little over 100.

11 Q. Let me show you a document.

12 MR. BERGER: No. 5, please.


14 BY MR. BERGER:

15 Q. 523068 and 69, it's an e-mail from a

16 Mr. Ellis to you and a number of other persons.

17 You can still hold on to those, if you

18 don't mind.

19 Mr. Rive, do you remember getting this

20 e-mail from Mr. Ellis on about October 21st, 2015?


22 A. Yes, I do remember this e-mail.

23 Q. And what was Mr. Ellis' job at SolarCity?

24 A. He was our VP of finance.

25 Q. And was it the case that -- looks like

Page 39

1 he's referring to a weekly cash meeting.

2 Was it the case that it was the practice

3 at SolarCity at this time to have weekly meetings

4 about the company's cash position?

5 A. Yes.

6 Q. And did that continue through 2016?

7 A. Yes.

8 Q. Did you attend those meetings?

9 A. Many of them.

10 Q. So it looks like in the week after the

11 October 15th conference call with the board, the

12 company's cash position got worse.


14 THE WITNESS: Say the question again.

15 BY MR. BERGER:

16 Q. Yes.

17 Exhibit 4 -- I think we established that

18 you had a conference call with the board on

19 October 15th, 2015 at which you discussed raising

20 equity; correct?

21 A. Yes.

22 Q. And in the next week, the company's cash

23 position worsened from how it had been at the time

24 you had the conference call with the board.

25 A. I'm missing the correlation of you sayingn

Page 40

1 it's worsened.

2 Q. Well, look at No. 2.

3

4

5

6 Do you see that?

7 A. I see that.

8 Q. So that was actually -- that forecast was

9 worse than the situation had been that led you to go

10 to the board on October 15th?

11 A. How do you -- where do you see that? I'm

12 missing that.

13 Q. If you go back to Exhibit 3, which is the

14 e-mail from Mr. Serra.

15 Do you have that?

16 A. I do.

17 Q. If you look at the second e-mail that he

18 writes to Mr. Ellis and a number of other people,

19 including yourself, do you see that the second line,

20 Mr. Serra says,

21

22 Do you see that?

23

24 " do you see that in his e-mail?

25 You see that; right?

Page 41

1 That means ; right?

2 A. Yes.

3 Q. So it got worse between the end of

4 September, when he thought there was a crisis, and

5 October 21st, when now Mr. Ellis is projecting

6 you're going to end at ?


8 BY MR. BERGER:

9 Q. Or 90 million?

10 A. No, these are two different things. So

11 one is the average monthly cash flow, and one would

12 be end-of-year cash flow.

13 Q. So look at No. 1.

14

15

16 That's ; right?

17 A. Yes.

18 Q. So it had gotten worse from the time

19 Mr. Serra was worried about it; yes or no?

20 A. Well, it all depends on the -- when the

21 next funding will come in. So if the funding is

22 delayed by two weeks, as I've described to you

23 before, then absolutely it will --

24 Q. I thought you said to me, at the end of

25 September, this was not a crisis because you're

11 (Pages 38 - 41)


CONFIDENTIAL

Page 42

1 going to get something in in October. But now by

2 the end of December, you're going to be down to


4 THE WITNESS: So the business does 200 million

5 in, 200 million out. If it is delayed by two weeks,

6 it's a $100 million swing. So that's what happens

7 in the business.

8 BY MR. BERGER:

9 Q. At least what we know is, at the end of

10 September, Mr. Serra was upset, concerned, thought

11 there was a crisis because you were going to end the

12 year with . And now Mr. Ellis is telling

13 you you're going to end the year with

14 right?

15 A. Unless we take action to --

16 Q. Unless you take action, correct.

17 A. Yes.

18 Q. And you were also in danger of violating

19 your covenant on your revolver; correct? That's

20 what Mr. Ellis told you in No. 2.

21 A. Yeah. Mr. Ellis' job is to say based on

22 current costs of directing, we need to modify spend

23 to make sure that equity is not a concern.

24 Q. Got it. But that wasn't what I asked you.

25 What I asked you was, he told you that you

Page 43

1 were in danger of violating your revolver covenants

2 in December.

3 A.

4 Q.

5 So you needed to raise this money from

6 Silver Lake.

7 A. And we needed to modify the way we were

8 spending.

9 Q. Got it.

10 Both those things.

11 A. And make sure the capital that we raised

12 comes in on time.

13 Q. We haven't talked about this before, but

14 we're going to be talking about it a lot, so I just

15 want to make sure that we're clear.

16 Mr. Ellis refers to the revolver covenant

17 threshold of approximately 115 million. That was

18 the number that -- that the covenant required

19 SolarCity to keep in cash; correct?

20 A. Correct. Somewhere around there.

21 Q. 115. I've seen others at 116.

22 And there was a formula for it; is that

23 right? It had to do with 20 percent of -- actually

24 I have it written down, so let's get it right.

25 It was unencumbered cash. It was a

Page 44

1 certain percentage of unencumbered cash plus the

2 amount of SolarCity bonds that were coming due

3 within a year; is that right?

4 A. I don't remember that part too well.

5 Q. But there was a formula for how the

6 liquidity was calculated?


8 A. Yes, there was a formula.

9 Q. And as best you remember it, the threshold

10 was about 115 or 116 million?

11 A. Yes.

12 Q. So I believe I understand your testimony

13 that the board approved your doing a financing or

14 raising money from Silver Lake, specifically

15 $100 million in convertible debt; is that right?

16 A. Yes.


18 BY MR. BERGER:

19 Q. As part of that, was it contemplated that

20 Mr. Musk and you were going to be part of that

21 capital raise?

22 A. It wasn't contemplated. It was something

23 that Musk and I decided to do, as we normally invest

24 in the equity raises that we do.

25 Q. So you and he talked about that?

Page 45

1 A. Yes.

2 Q. Before the Silver Lake -- can I call it

3 the transaction? I'm not sure what else to call

4 it -- but the Silver Lake $100 million

5 transaction --

6 A. Sure.

7 Q. -- got done, isn't it true that Mr. Musk

8 objected to it?

9 A. He helped with the negotiations on it.

10 Q. That's an interesting way of putting it

11 when somebody says, no, I don't want to go with

12 Silver Lake.

13 Isn't that what he said to you? I don't

14 want to do Silver Lake, he said. I don't like those

15 guys.

16 Did he say that to you, in sum or

17 substance?

18 A. No. So the way he negotiates -- he's an

19 incredibly strong negotiator. He would tell Silver

20 Lake, look, I don't want you. And, in fact, he may

21 have even said, the deal is off. And then they will

22 come back with better terms, and then he will accept

23 it.

24 Q. Okay. But that's what he told you.

25 Was he negotiating with you or with Silver

12 (Pages 42 - 45)


CONFIDENTIAL

Page 46

1 Lake?

2 A. He hasn't shown me -- he can't show me his

3 cards either. Because the way he negotiates -- he's

4 very, very good at this.

5 Q. Who was running this company, you or him?

6 A. Well, he's the chairman.

7 Q. So he was running it?

8 A. No, I'm -- me and the management team are

9 running it.

10 Q. It's just funny that somebody else comes

11 in and says -- doesn't show you his cards.

12 Because you guys are running the company;

13 right? Or not?

14 MR. SORRELS: Objection.

15 THE WITNESS: No. I'm the chairman of another

16 company. I do the same thing. Absolutely -- that's

17 the chairman's job.

18 BY MR. BERGER:

19 Q. The chairman's job is to not tell the

20 chief executive what he's doing?


22 THE WITNESS: No, you're misleading it.

23 BY MR. BERGER:

24 Q. Okay.

25 A. The chairman's job is to make sure you

Page 47

1 help the management team get the best deal or the

2 best operations for the company. That's the job.

3 Q. If we go back, before the Silver Lake deal

4 was done, he told you he didn't want Silver Lake;

5 correct?

6 A. He -- I can't remember the exact details.

7 I do know he sent an e-mail to Silver Lake at some

8 point saying

9 Q. At the time he sent that e-mail to Silver

10 Lake, hadn't you already asked -- withdrawn.

11 Because you and Mr. Musk were involved, it

12 was necessary, wasn't it, to get the consent of the

13 independent SolarCity directors to approve this

14 transaction with Silver Lake?

15 A. Not just independent, the whole board.

16 Q. The whole board.

17 A. Yeah.

18 Q. Okay. Hadn't -- withdrawn.

19 Before Mr. Musk sent that e-mail saying he

20 , hadn't

21 you already gone to the board and asked their

22 approval for the $100 million deal with all of the

23 terms?

24 A. I can't remember the sequence.

25 MR. BERGER: All right. Let's have the

Page 48

1 reporter mark as Exhibit No. 6 a series of e-mails

2 from November 12th, 2015.


4 MR. BERGER: This is Production No. TESLA

5 83075, 76 and 77.


7 BY MR. BERGER:

8 Q. Sorry to ask you to read such a long

9 document.

10 So Mr. Buss wrote to the board on

11 November 11th at 10:33 at night and gave them an

12 update on the transaction with Silver Lake; correct?

13 A. Correct.

14 Q. And he asked them for -- he told them he

15 would like to have their signed consent to the deal

16 the next day; correct?

17 A. Correct.

18 Q. Just for the record, it was necessary for

19 the independent directors to sign off on it because

20 you and Mr. Musk were involved in it?


22 THE WITNESS: The entire board has to sign off

23 on it, but, yes, the independent absolutely has to

24 sign off on it.

25 BY MR. BERGER:

Page 49

1 Q. Okay. And so this was ready to go, but

2 then Elon Musk came in and said, no?


4 THE WITNESS: Elon Musk wants to get the best

5 thing done for the company.

6 BY MR. BERGER:

7 Q. I don't doubt that.

8 But the question I asked you was, it was

9 all ready to go, the board of directors had been

10 told it was ready to go, they were asked to send

11 their consent by the next day, and then Mr. Musk

12 came in and said, no; is that what happened?

13 A.

14 Q. Did he have -- he had a veto power?

15 A. He did not have a veto power.

16 Q. So you didn't ask for the board's consent.

17 You said wait --

18 A. No.

19 Q. -- because he doesn't like it?

20 A. So the outcome was he negotiated a much

21 better deal for us. So I want that for my chairman.

22 Q. No, I understand that may be, but that's

23 not what I'm asking you.

24 What I'm asking you is -- because I'm kind

25 of interested in the process.

13 (Pages 46 - 49)


CONFIDENTIAL

Page 50

1 So board is all set to go, consents by the

2 next day, e-mail goes to them at midnight, and then

3 Musk comes in and says, no, it's not going to happen

4 and the whole thing stops.


6 THE WITNESS: No. So Musk says he wants more

7 review on this, which is the job of the chairman.

8 I'm the chairman of a company. And if they bring a

9 debt, I absolutely want to look into it.

10 He got involved. And if you look at this

11 e-mail, you will see the coupon rate was 1 1/2 to

12 2 percent. He got involved and he got rid of that.

13 He got a zero percent coupon, which is an incredible

14 achievement. If it was not for Musk, the company

15 would have paid more for this debt, so I was happy

16 he got involved.

17 BY MR. BERGER:

18 Q. Did Mr. Musk invest 30 million?

19 A. I think he did. I'm not 100 percent sure

20 on the final number.

21 Q. I think it was actually 10.

22 A. Was it 10?

23 Q. Yeah. He reduced his investment.

24 A. Okay.

25 Q. Why?

Page 51

1 A. Don't know.

2 Q. Now, am I correct that one of the things

3 that SolarCity decided to do, at the time that it

4 was having these cash issues, was to change its

5 business approach or business strategy?


7 BY MR. BERGER:

8 Q. Does that ring a bell?

9 A. I don't understand.

10 Q. I've seen it referred to something called

11 a pivot, but I don't know if that's a term that you

12 used at SolarCity or others used to describe a

13 change in business strategy at SolarCity in the fall

14 of 2015.

15 Does that ring a bell?

16 A. Overall, we had a business change. And I

17 think you may be referring to this, but I'm not

18 100 percent sure. Currently the business model, at

19 the time, is you deploy an asset -- and let's just

20 use simple math. Let's say the asset costs you

21 $100. So it costs you $100.

22 And then you roughly get about $80 up

23 front, so you have $20 of negative cash flow. But

24 you get $200 net present value in today's value over

25 time. So anyone who makes that type of investment

Page 52

1 gets an incredible return.

2 If you look at our financial statements,

3 the income statement doesn't recognize any of those

4 future cash flows. That's not the way GAAP works.

5 It's on the balance sheet. And it's called -- and

6 we actually represented this in our earnings calls.

7 It's called retained value.

8 So the company had well over $3 billion of

9 retained value that was coming in in future cash

10 flows. Good investments yielded good returns.

11 What we were moving towards is to get a

12 blend of making upfront cash sales. So instead of

13 just leasing out the equipment and then getting a

14 rental income on that over 20 years, we would just

15 sell the equipment.

16 Now, that gives you a short-term cash

17 improvement, so you make money up front, but the

18 long-term revenue stream is not nearly as good as

19 the leased systems.

20 And so the pivot, as we may have called it

21 or you referenced it -- the pivot there was to do a

22 blend so we can have the upfront cash combined with

23 the leased systems.

24 MR. BERGER: Okay. Let's mark as Exhibit 9 a

25 cover e-mail and a copy of SolarCity's third-quarter

Page 53

1 shareholder letter.

2 MR. UPADHYA: It's Exhibit 7.

3 MR. BERGER: Exhibit 7. My fault.


5 BY MR. BERGER:

6 Q. Mr. Rive, if you take a look at the second

7 page of the document, this is something called

8 SolarCity third-quarter 2015 shareholder letter.

9 Do you see that?

10 A. Yes.

11 Q. And that is something that SolarCity did,

12 that is it sent letters to its shareholders every

13 quarter?

14 A. Correct.

15 Q. Just take a look at page 7, please. At

16 the bottom, it says, "2016 Focus and Guidance."

17 If you read that to yourself, does that --

18 is that referencing the pivot or change in strategy

19 that we've just been discussing?


21 A. So it's part of it. The other part was

22 the investment into growth.

23 Q. But was the change in what you're telling

24 shareholders, that you were going to actually be

25 reducing your growth to focus more on generating

14 (Pages 50 - 53)


CONFIDENTIAL

Page 54

1 cash?

2 A. Yes. So there's two components. So the

3 message here is to focus on cost reduction and cash

4 flow. And so of course we will continue reducing

5 costs. One big part of cost is investing into

6 massive growth. And so historically the company

7 grew at 70 or 80 percent per year for 10 years.

8 And so the forecast that we gave was to

9 reduce that growth to manage the team best into how

10 to growth, because debt comes in as cash.

11 Q. So the goal was -- or one of the goals was

12 to generate more cash or even positive cash flow;

13 correct?

14 A. Correct.

15 Q. Just for my edification, please.

16 The financial statements are attached to

17 this shareholder report. Could you take a look at

18 the balance sheet. And could you point out to me

19 which entry on the balance sheet has that future

20 asset that you were talking about.

21 A. So it doesn't -- retained value does not

22 get recorded.

23 Q. I thought you said it was.


25 THE WITNESS: It's a different metric on the

Page 55

1 balance sheet. So on the balance sheet, look at

2 solar energies leased and to be leased is

3 3.8 billion there.

4 BY MR. BERGER:

5 Q. Yep.

6 Is that what you were referring to in your

7 earlier answer?

8 A. It is a supplement to that. Most of the

9 retained value is in there.

10 Q. But not all of it.

11 A. Not all of it.

12 Q. Where is the rest of it?

13 A. The rest of it is in the uncontracted

14 period. So you have a 30-year asset. If I remember

15 correctly, this captures the 20-year span --

16 actually, no, I take it back.

17 This is the cost basis of the assets we

18 deployed and -- as where the income is higher than

19 the cost basis.

20 Q. So the income you were talking about in

21 the future, that doesn't appear on your financial

22 statements anywhere, does it?

23 A. No. But the assets -- you can see part of

24 it here. So you can see it's 3.8 billion.

25 Q. Which is the cost basis of the assets that

Page 56

1 you've leased or intend to lease.

2 A. Yes, again, but it's also the -- of that,

3 you generate income off that.

4 Q. I understand that.

5 But that income, whatever it might be in

6 the future, is not in your financial statements

7 anywhere.

8 A. It's highly contracted, so it's

9 contracted, so your --

10 Q. Is it in your financial statements? That

11 was the question.

12 MR. SORRELS: Let him finish his answer.

13 MR. BERGER: No, because he's got to answer the

14 question.

15 BY MR. BERGER:

16 Q. The question was, is it in the financial

17 statements?

18 MR. SORRELS: He is answering your --

19 THE WITNESS: It is in my earnings report. So

20 in my presentations that I give, I give earnings

21 report, I give supplemental information. This

22 happens all the time with companies where they give

23 non-GAAP business metrics.

24 This is GAAP. GAAP has certain kind of

25 rules. It does not let you account for that future

Page 57

1 income stream.

2 BY MR. BERGER:

3 Q. I understand that. I was only asking you

4 because, in your earlier answer, which I'm happy to

5 go back and look up, you said, no, it's on our

6 balance sheet.

7 And I wanted to find out where on your

8 balance sheet it is, but now I guess I understand

9 it's really not on your balance sheet.


11 THE WITNESS: Can you put --


13 MR. SORRELS: So pause.

14 Object to form. I don't believe that's

15 what he testified to previously.

16 Now you can answer.

17 THE WITNESS: Again, you can see a good

18 indication of the amount that is on the balance

19 sheet. There's $3.8 billion of assets deployed.

20 Those are assets we own that generate positive

21 income. So absolutely. If you owned $3.8 billion

22 worth of real estate, how would you account for

23 that?

24 BY MR. BERGER:

25 Q. I just wanted -- all I asked you was

15 (Pages 54 - 57)


CONFIDENTIAL

Page 58

1 whether it appeared on the balance sheet or not.

2 A. There is a good indication.

3 Q. It's an indication.

4 A. No. A good percentage of the value is on

5 the balance sheet. That's the words, "good

6 percentage." Not all of it, but a good percentage

7 is on the balance sheet.

8 Q. Now, going back to liquidity. And tell me

9 whenever you want to stop and take a break, that's

10 fine.

11 A. I'm good.

12 Q. You good? I'm good. Okay.

13 So the liquidity problems that you had in

14 2015, in September, that led to Mr. Serra's e-mail

15 and raising money from Silver Lake, they continued

16 in early 2016, didn't they?


18 THE WITNESS: So certain events happened in

19 December that caused the business to slow down.

20 That was an unforeseen event, and that was Nevada

21 shutting down. The Nevada policy markets caused us

22 to have a slowdown in Q1.

23 BY MR. BERGER:

24 Q. Were there any other events at the end of

25 2015 that caused the business to slow down besides

Page 59

1 the Nevada?

2 A. The tax credit extension, although very

3 good for the industry, actually had a short-term

4 slowdown in bookings. As customers know that the

5 tax credit is going to expire, they know that they

6 have to move before it expires. That's been

7 extended, they take a little breather, and then they

8 will do the project when they have more time.

9 Q. Any other events?

10 A. Those are the two primary events.

11 Q. And in Nevada, did that relate to -- did

12 it relate to net energy metering, NEM, or not?

13 A. Yeah, it's net metering.

14 Q. Net metering. I've seen it referred to as

15 NEM.

16 A. Yeah. That's the --

17 Q. That's the acronym?

18 A. Yes.

19 Q. And Nevada stopped that; is that right?

20 A. Correct.

21 Q. So the result of that is that there was

22 another liquidity -- potential liquidity crisis in

23 early 2016; right?

24 A. The result of that, our cost increased as

25 the volume that we installed was less. So when you

Page 60

1 install less volume, your contributing margin to

2 overhead is less, so it consumed a little more cash.

3 Q. So that led to a concern as to whether you

4 were going to violate the debt covenants; correct?

5 A. We were always monitoring the debt

6 covenants. I'm not sure if we were at that point,

7 but we were always monitoring the debt covenants.

8 With a $200 million swing, you always have to

9 monitor the debt covenants.

10 Q. Let me show you a document we'll mark as

11 Exhibit 8.


13 BY MR. BERGER:

14 Q. This is a document from Mr. Ellis to

15 various people, including yourself, on February 9th,

16 2016, TESLA 137197 through 199.


18 MR. BERGER: Would you mark that as Exhibit 9,

19 please. Thank you.


21 BY MR. BERGER:

22 Q. Mr. Rive, are you ready?

23 A. I am.

24 Q. So Mr. Ellis wrote you on February 9th,

25 2016; is that right? You and a number of the other

Page 61

1 senior management?

2 A. Yes.

3 Q. And he was informing you that the company

4 had a liquidity crisis or liquidity issues at this

5 time; correct?

6 A. He was highlighting a projection for us

7 breaching our covenants.

8 Q. And the breach was projected to occur in

9 ; correct?

10 A. Correct.

11 Now, I need you to understand --

12 Q. I'll ask you a question. Okay.

13 Did you -- did you inform the company's

14 board of these liquidity issues that you had in

15 February of 2016?


17 THE WITNESS: I've updated the bullet at

18 different stages of the company. This specific one

19 was incorrect. This was a concern from Bryan

20 regarding the tax effect of selling off the assets.

21 He was wrong in the tax effect.

22 BY MR. BERGER:

23 Q. So his numbers were wrong?

24 A. This was a forecast.

25 Q. Yes.

16 (Pages 58 - 61)


CONFIDENTIAL

Page 62

1 A. He assumed the tax effect of selling the

2 assets off would have these numbers.

3 Q. Right.

4 A. After running it down, we did not have

5 that tax effect.

6 Q. So how were the numbers wrong?

7 A. I don't know where -- what the final

8 numbers were.

9 Q. Take a look at Exhibit 9, please. Thank

10 you.

11 This is a copy of the board package that

12 you sent to the board in connection with their

13 February 2016 meeting; is that right?

14 A. Yes, this is . . . Q1. Board of directors

15 Q1, 2016, Feb.

16 MR. SORRELS: And I'll just note that this is

17 dated February 1, 2016. It predates Exhibit 8.

18 MR. BERGER: And the point of that noting is

19 what?

20 MR. SORRELS: Just for the record.

21 MR. BERGER: For what record? I can ask

22 questions in any order I want, February, January,

23 December, 2010, 1940.

24 MR. SORRELS: You are free to ask whatever --

25 MR. BERGER: You don't need to comment. You

Page 63

1 don't need to comment. I mean, obviously it's

2 important to you. So when you get a chance, ask him

3 a question about it.

4 MR. SORRELS: I was just noting the face of the

5 document.

6 MR. BERGER: Okay.

7 BY MR. BERGER:

8 Q. So are you with me?

9 A. Okay.

10 Q. You sent this to your board; right?

11 A. I did.

12 Q. Take a look at page No. 12, lower

13 right-hand corner. The title of this schedule you

14 sent to the board is "2016 Liquidity by Month."

15 Is that the title?

16 A. Yes.

17 Q. And you told the board that

18 ,

20 A. I did.

21 Q. The numbers are different from the numbers

22 that Mr. Ellis sent you the following week, but they

23 still show the company

24 ; right?

25 A. On current trajectory, right.

Page 64

1 Q. So is what you told the board wrong too?

2 A. Things move all the time.

3 Q. That's not what I asked you.

4 Because you said to me that Mr. Ellis'

5 numbers were wrong.

6 A. At the time, this is exactly what I

7 thought the numbers were.

8 Q. And when did you -- and you told the board

9 what you honestly thought the numbers were?

10 A. Absolutely.

11 Q. Okay. And when did you tell the board,

12 you know what, those numbers weren't right?

13 A. I don't know.

14 Q. Because I've looked. I haven't seen

15 anything like that.

16 I mean, if you thought that you told the

17 board something that wasn't correct, you certainly

18 would have told them that you made a mistake; right?

19 A. Well, it depends on the variance. But I

20 don't know when I updated the board.

21 Q. Did -- the mistake that you said that

22 Mr. Ellis made, did that lead you to conclude that

23 you were not going to be in danger of violating your

24 liquidity covenants?

25 A. So Mr. Ellis sent a report that we ran

Page 65

1 down to make sure that the tax effect of the

2 liquidity did not occur. So his whole job, as I

3 mentioned earlier, is to notify us if we are going

4 to trip or run out of cash. Like that's his job.

5 He's going to manage the cash flow of the business.

6 That's what he does. So he gives us a

7 forecast based on the current trajectory. So we

8 have got to modify trajectory the entire time.

9 That's called navigating the company.

10 MR. BERGER: Could you read the question back,

11 please.

12 (Record read by reporter as follows:

13 "Question: The mistake that you said that

14 Mr. Ellis made, did that lead you to

15 conclude that you were not going to be in

16 danger of violating your liquidity

17 covenants?")

18 THE WITNESS: When Mr. Ellis wrote this, he

19 says that, based on the current trajectory, we're

20

21 Then we dig into the numbers, and we figure out what

22 we need to change to fix that.

23 So, absolutely, if there's a forecast that

24 says , I'm concerned

25 about that, and then we have to make adjustments to

17 (Pages 62 - 65)


CONFIDENTIAL

Page 66

1 fix that.

2 BY MR. BERGER:

3 Q. Got it.

4 So Mr. Ellis wasn't wrong with his

5 numbers; you were just going to try to make it so

6 you didn't violate the covenants?

7 A. Once we verified that there is no tax

8 effect -- and I can't remember exactly what portion

9 of this was a tax effect. Once we've verified there

10 is no tax effect, then he gave a new forecast.

11 Q. When did he do that?

12 A. Don't know.

13 Q. Did you inform the board?

14 A. If it varied significantly, I suspect I

15 would; if it didn't, then I wouldn't.

16 Q. Okay. Just one second.

17 (Discussion off the record.)

18 MR. BERGER: Just give me one second. Sorry.

19 MR. SORRELS: Is now a good time for a break

20 maybe?

21 MR. BERGER: Okay. I'll break whenever you

22 want. I actually found what I want.

23 THE VIDEOGRAPHER: We're going off the record.

24 The time is 10:49 a.m. and this is the end of Media

25 Unit No. 1.

Page 67

1 (Recess taken.)


3 THE VIDEOGRAPHER: We're back on the record at

4 11:01 a.m. and this is the beginning of Media

5 Unit 2.

6 BY MR. BERGER:

7 Q. Mr. Rive, I have to go back, actually. I

8 forgot to ask you something about the Silver Lake

9 transaction.

10 I'm going to show you a document that we

11 marked as Exhibit 10, which is a series of e-mails

12 on November 12th, TESLA 22175 and 176.


14 Q. Okay. So you were copied on those

15 e-mails, correct, on November 12th?

16 A. Yes.

17 Q. So if you look at the very first one in

18 time, that's an e-mail from Mr. Musk to

19 Mr. Raffaelli, who I believe works at Silver Lake;

20 correct?

21 A. Correct.

22 Q. And that's where Mr. Musk tells him,

23 I understand part of his negotiating, but

24 ; right?

25 A.

Page 68

1 Q.

2 And then what Mr. Musk does is -- and then

3 the next thing that happens is the board is told, we

4 ; right?

5 A. Correct.

6 Q. And then what happens is Mr. Musk looks

7 into buying SolarCity stock in the public market?

8 A. Correct.

9 Q. So at this point no $100 million for the

10 company, but he takes his money and uses it to buy,

11 personally, stock?

12 A. Correct.

13 Q. That wouldn't get 100 million for the

14 company; right?

15 A. No. He's investing into the company.

16 Q. Right.

17 So the board chair decides , we're

18 not going to get 100 million for the company, and

19 I'm going to go personally and buy some stock.

20 A. And he believes in the company. That's

21 why --

22 Q. I understand that, but it's not getting

23 100 million for the company. He's not taking his

24 30 million and giving it to the company; he's taking

25 his 30 million and buying stock.

Page 69

1 A. He's buying $25 million in stock.

2 Q. 25 million in stock.

3 What would SolarCity have done if there

4 was no deal with Silver Lake to raise $100 million?

5 Did you have a contingency plan?

6 A. We would have to go to the equity markets.

7 Q. Let's go back to February, please. So if

8 you look at that -- it's the board letter. And then

9 I showed you -- I showed you the e-mail from

10 Mr. Ellis which had the schedule which showed the

11 projections That

12 was Exhibit No. 8; right?

13 Exhibit 9 was the board package on the

14 2nd. Exhibit 8 was Mr. Ellis' e-mail on February 9,

15 correct, which showed ; correct?

16 A. Correct.

17 Q. And right after that e-mail from

18 Mr. Ellis, you called a meeting with Mr. Musk to

19 discuss how you were going to deal with the

20 company's cash situation; correct?


22 BY MR. BERGER:


24 A. I assume I did. I always update the

25 chairman of the board.

18 (Pages 66 - 69)


CONFIDENTIAL

Page 70

1 Q. Okay. He certainly would have gotten the

2 board package on February 2nd because he was part of

3 the board.

4 A. Yes.

5 Q. And you certainly would have updated him

6 as to what Mr. Ellis was saying; correct?

7 A. Well, just that we needed to verify very

8 quickly about the tax effect, and it turned out we

9 did not have that tax effect.

10 Q. What was the amount? What kind of a

11 difference did it make dollar-wise?

12 A. I think that's the difference between

13 these two numbers (indicating).

14 Q. So there was still -- no matter which way

15 you looked at it, they were still projecting

16 .

17 A. .

18 Q. In February.

19 A. In February.

20 Q. Okay. So the next thing that happened,

21 knowing that you were

22 was that you had a meeting at your home

23 with Mr. Musk and a couple of other people to

24 discuss how you were going to deal with it; right?

25 A. Correct.

Page 71

1 Q. Let me show you a document that I'll ask

2 the reporter to mark as Exhibit 11.


4 BY MR. BERGER:

5 Q. This is TESLA 56953. It's from you to

6 yourself and Mr. Serra and Mr. Ellis and your

7 brother, calling a meeting for the next day;

8 correct?

9 A. Yes.

10 Q. And did you have that meeting?

11 A. I'm pretty sure we did.

12 Q. And what was discussed at that meeting?

13 A. Our cash flow cost.

14 Q. And what decisions did you make to try to

15 deal with your cash flow situation at the time?

16 A. There were quite a few.

17 Q. Can you remember any of them?

18 A. Things like inventory management, reducing

19 capex spend on manufacturing.

20 Q. Putting off payments to vendors?

21 A. Pushing out account receivables [sic].

22 Q. Did you consider raising money in the

23 public markets?

24 A. Yes, we did consider it.

25 Q. But you rejected that as a possibility in

Page 72

1 February of 2016?

2 A. The -- what were we doing in 2016? I

3 would have to look at the presentation to remind

4 myself again what we did regarding the equity

5 markets.

6 Q. So you discussed and then you put in

7 place, after this meeting at your house, a number of

8 steps to raise cash?


10 THE WITNESS: To reduce -- to increase the

11 cash.

12 BY MR. BERGER:

13 Q. Increase the cash. Fair enough.

14 Was one of the things that came out of

15 this meeting a discussion between you and Mr. Musk

16 about Tesla buying SolarCity?

17 A. It did not come out of that meeting.

18 Q. It came shortly after that meeting?

19 A. It came shortly -- I don't know exactly

20 when the call was made. I forget the date. But he

21 called me sometime in February and said, I think we

22 should acquire the company.

23

24

25

Page 73

1 Q. And that occurred in a telephone call

2 between Mr. Musk and you?

3 A. Yes.

4 Q. What did you say?

5 A. I said, well, that's very interesting.

6 You know, let me think about that, discuss that with

7 my brother. And you follow up with whoever you need

8 to follow up with and see where it goes from there.

9 Q. That call occurred sometime after this

10 meeting at your house to discuss cash, but before

11 the end of February?

12 A. I don't know. It could have been before

13 that. I can't remember the exact days.

14 Q. What else did Mr. Musk say in the

15 telephone call?

16 A. He has to run and get board approval in

17 order to do this.

18 Q. Did he say anything about why he thought

19 he or Tesla wanted to acquire SolarCity at this

20 time?

21 A. Yes. So the energy business of Tesla was

22 scaling. They just came out with the new Powerwall.

23 Before when we discussed a potential acquisition,

24 the energy group within Tesla just wasn't of real

25 significance. A year and a half later, the whole

19 (Pages 70 - 73)


CONFIDENTIAL

Page 74

1 battery unit group has grown dramatically and they

2 came out with a new Powerwall.

3 And then if you look at what's going to

4 happen to the solar industry, every single solar

5 system that's going to get deployed is going to have

6 a battery. That's just the way it will work. And

7 so now is the time to look at joining forces and to

8 accelerate that.

9 Q. That's what he said to you in that phone

10 call?

11 A. That was one of the things he said to me.

12 Q. What else?

13 A. I'm sure there's other stuff. I can't

14 remember everything. I remember that one clearly.

15 Q. Who did you tell about this phone call?

16 A. Probably at that time, until I knew it was

17 real, only my brother, if I remember.

18 Q. Did you tell anyone else on the board?

19 A. I don't know. I can't remember.

20 Q. I mean, you're a chief executive. You get

21 a call from the board chair that says, I and my

22 other company want to buy your company, and you

23 didn't tell anybody else on the board?

24 A. Well, at first I had to find out if it's

25 going to be real. So he purchased -- to set

Page 75

1 expectations of something that may or may not

2 happen, I want to avoid that. So I first wanted to

3 hear back whether they have board clearance.

4 Q. Did you hear back?

5 A. Yes, we did.

6 Q. And what did you hear?

7 A. So the board decided to delay or not make

8 an offer to acquire SolarCity.

9 Q. The Tesla board.

10 A. The Tesla board.

11 Based on the fact that they were having

12 Model X production challenges and that the company

13 needs to focus on those production challenges before

14 adding the solar group.

15 Q. And how did you hear about that?

16 A. I can't recall. Maybe a phone call. I

17 can't recall.

18 Q. So after -- and I'm sorry. I think I

19 asked you if you knew when that happened, but you

20 don't remember?

21 A. I don't remember exactly if it was a call

22 or an e-mail.

23 Q. Okay. After that point in time going

24 ahead into March and early April, am I correct that

25 SolarCity continued to have cash and liquidity

Page 76

1 problems?

2 A. .

3 Q. Show you a document we'll mark as

4 Exhibit 12. It's No. 16.


6 THE WITNESS: Just to clarify, it was the

7 liquidity tightness of the cash flow in and cash

8 flow out. I just want to clarify that.

9 BY MR. BERGER:

10 Q. And by "tightness" meaning how close you

11 were to the threshold of violating your debt

12 covenant?

13 A. And the fact that you run at a

14 $200 million in and $200 million out, so any delays

15 cause significant tightness.

16 Q. Cause significant risk of violating the

17 debt covenant; correct?

18 A. Well, close to that, yes.

19 Q. And this is 12.


21 A. Okay.

22 Q. You got these e-mails on April 19th;

23 correct?

24 A. Sorry. I didn't see this. Hang on a

25 second.

Page 77


2 A. Okay.

3 Q. So by mid April, what you were telling

4 your team was that there was no room for error with

5 respect to your cash; correct?

6 A. Yes. That's the whole point of running

7 tight on cash, is you force the company to run

8 efficiently.

9 MR. SORRELS: Real quick, insert an objection

10 there.

11 THE REPORTER: What was it?

12 MR. SORRELS: To form.

13 BY MR. BERGER:

14 Q. Prior to this time, in the first quarter

15 of 2016, did SolarCity request that the revolver

16 bank or banks increase the amount of the revolver,

17 the limit of the revolver?

18 It's not in this document.

19 A. It may have. I don't recall.

20 Q. Do you recall requesting that the -- the

21 revolver we're talking about had a limit of

22 $350 million; is that right?

23 A. I thought it was higher than that. I

24 thought it was 500, but maybe I was wrong.

25 Q. Okay. But you were maxed on out on that

20 (Pages 74 - 77)


CONFIDENTIAL

Page 78

1 revolver, or close to it; right?

2 A. With this revolver, absolutely. You pay

3 for the assets, you refinance them, and then you

4 pull again on the revolver.

5 Q. Isn't it the case you went to the revolver

6 banks and asked for an increase and they denied it

7 at this time?

8 A. I don't know.

9 Q. According to this document, Exhibit 12,

10 you were

11 ;

12 correct?

13 A. What are you referencing here?

14 Q. Well, just that the upshot of this is that

15 if you didn't manage your cash, you were going to be

16 in danger of violating your liquidity covenants.

17 A. Absolutely, we've got to manage the cash.

18 Q. Okay. Let me show you a document we'll

19 mark as Exhibit 13.


21 BY MR. BERGER:

22 Q. So, Mr. Rive, is Exhibit 13 the materials

23 that you sent to the board in connection with the

24 April 26th board of directors meeting, April 26th,

25 2016?

Page 79


2 A. Yes, this is familiar.

3 Q. So this is what you sent to the board in

4 connection with the meeting on April 29th, 2016;

5 correct?

6 A. Yeah. I assume, yes, April 29th.

7 Q. And if you look at page 16 of the board

8 book for that meeting, this is a liquidity schedule

9 similar to the one we looked at for February;

10 correct?

11 A. Correct.

12 Q. And, again, this schedule shows, and you

13 told the board, that

14

15

16

17 A. With an inner month of the cash flows, as

18 I described before, when you have 200 million coming

19 in and 200 million going out, and you have the

20 swings, it's an inner month, there is a concern that

21 we're getting close to it.

22 Q. And you still have the same concern now

23 that you had back in February?

24 A. Well, it's a little better than what we

25 had in February, so we made improvements. So if you

Page 80

1 look at the ones that we had in February . . .

2 MR. SORRELS: Exhibit 9.

3 THE WITNESS: So we had all those different

4 strategy meetings and what to do to improve the

5 business' cash flows.

6 BY MR. BERGER:

7 Q. Correct.

8 A. So that implementation improved the

9 end-of-month cash balance.

10 Q. Okay.

11 A. So if you look here, the liquidity shows

12 , as where this one shows -- I'll call

13 it roughly . So quite a bit of a

14 significant improvement.

15 Q. Those are end-of-months?

16 A. Those are end-of-months.

17 Q. But for interim, you were still in danger

18 of violating the debt covenants?

19 A. For interim, correct. This was just

20 end-of-month numbers, so I'm just pointing out for

21 you, for the record, that cash flow improved.

22 Q. The way the covenants were calculated were

23 daily average for a month; correct?

24 A. Daily average for the month.

25 Q. Correct.

Page 81

1 So if one day -- one day itself didn't

2 matter. Like at the end of the month passed the

3 covenant, that wouldn't necessarily mean that you

4 would pass it for the whole month; it was an

5 average?

6 A. Yes. But you're comparing apples to

7 apples.

8 Q. Yes.

9 A. You look at the blue line for this chart

10 (indicating) and the green line for this chart

11 (indicating).

12 Q. But still -- your interim was still way

13 below.

14 A. Absolutely. When you have a $200 million

15 run rate per month, you have big swings within the

16 month.

17 Q. So despite the fact that you did all those

18 things as a result of your February meeting, you

19 still were in danger of violating the liquidity

20 covenants for May through August?

21 A. No. My point that I'm making --

22 Q. Isn't that true, though?

23 A. Not with the business changes that we were

24 making. We were monitoring it carefully to make

25 sure we don't violate it.

21 (Pages 78 - 81)


CONFIDENTIAL

Page 82

1 Q. Correct.

2 You're monitoring carefully, but you're

3 still telling the board that you're

4

5 A. Yes. Anything can happen. If there's a

6 delay in financing, that will cause us to have a big

7 swing in the cash flow.

8 But I do think it's important, for the

9 record, the things that we did improved cash flow.

10 You've got to --


12 But even with the improved cash flow, you

13 were still concerned about violating your debt

14 covenants. It was still a risk. You were still

15 telling the board that you were

16

17 A. Yeah, presentation to the board is things

18 have improved, but there's still a risk.

19 MR. BERGER: So let's mark this as the next

20 exhibit, No. 19.

21 This is No. 13 -- 14.



24 BY MR. BERGER:

25 Q. So do you see this is an e-mail from

Page 83

1 Mr. Serra to you, May 20, 2016?

2 A. I do.

3 Q. And he informs you that you're

4

5


7 MR. BERGER: I'll withdraw the question because

8 maybe there was something unclear.

9 BY MR. BERGER:

10 Q. Do you see that he writes to you, in the

11 middle,

12

13

14

15 Do you see that?

16 A. I do.

17 Q. So you were

18

19 A. So --

20 Q. Yes or no?

21 A. No.

22 Q. You weren't in danger?

23 A. No. Again -- and this is what you'll see

24 is standard process through the business, is what we

25 need to do is manage the business so we don't breach

Page 84

1 those things. So he lays out step by step what we

2 need to do to make sure we manage our cash so we

3 don't breach it.

4 Q. At this point, you were very close to

5 breaching your liquidity covenants?


7 BY MR. BERGER:

8 Q. He's telling you that if

9

10

11 A. As I've described many times, the timing

12 of when we get the cash is very important.

13 Q. Understood.

14 But depending on when you get the cash,

15 you could have failed the liquidity covenant

16

17 A. And a few other steps we had to take as

18 well. So to modify -- there's a bunch of steps we

19 had to take.

20 Early on I mentioned that having tight

21 cash management practices forces the business to run

22 more efficiently and better. This is a great

23 example of that, where it forces you to be creative

24 and figure out how to run the business more

25 efficiently.

Page 85

1 Q. So running the business more efficiently

2 means not paying your vendors on time, but pushing

3 them off down the road? Is that part of running the

4 business more efficiently?

5 A. It means reducing costs --

6 Q. Can you answer the question?

7 A. -- managing cash allocation better,

8 getting more efficient at sales acquisition. Yes.

9 And then for your accounts payable, see how far you

10 can push it.

11 Q. Okay. So running the business more

12 efficiently to you meant putting off paying your

13 vendors, ;

14 right? That was making -- being more efficient?

15 A. You are not hearing me. You are only

16 taking a portion of my sentence. It's all of the

17 above.

18 Q. All of the above.

19

20 and significantly delaying

21 accounts payable payments for the month of June,

22 that's managing more efficiently?

23 A. Yeah.

24 Q. I wish I could do that. I wish I didn't

25 have to pay my electric bill on time, pay it next

22 (Pages 82 - 85)


CONFIDENTIAL

Page 86

1 month. It might help me.

2 A. Well, there's a big difference. You could

3 pay it at the first of the month or the end of the

4 month.

5 Q. Or I could not pay it when it's due.

6 These are bills that were due, these

7 account payable payments; right? You were putting

8 them off until after they were due; right?

9 A. Some of them.

10 Q. Yeah.

11 MR. SORRELS: I had an objection to form in

12 there.

13 MR. BERGER: I'll have the reporter mark as

14 Exhibit 16 a June 2nd e-mail from Mr. Ellis to

15 various people.

16 THE REPORTER: Exhibit 15.

17 MR. BERGER: 15? I'm sorry, yes.



20 BY MR. BERGER:

21 Q. Okay. So do you recall that at the end of

22 May, beginning of June there were still significant

23 issues about the company breaching its liquidity

24 covenants with its revolver bank?

25 A. We always have to manage tight cash with

Page 87

1 the high cash in and cash out of the business.

2 Q. So there were serious issues end of May,

3 beginning of June about whether you were going to

4 violate the covenants; correct?

5 A. We track them all the time.

6 Q. Yes, there were issues; yes?

7 A. Yes, we were close to the covenants.

8 Q. Very close.

9 You were like skin-of-your-teeth close

10 here; right?

11 A. Depending on what courses of actions we

12 take if we don't modify things, yes.

13 Q. And do you recall that Mr. Ellis and

14 Mr. Serra had come up with a Plan A and Plan B at

15 the beginning of June as to how you were going to

16 manage to not violate your covenants?

17 A. I'm not part of this e-mail string.


19 But do you recall that that was the case?

20 A. I do recall that Bryan and myself and

21 Tanguy and the team, we would always talk about how

22 to optimize the business and to make sure we don't

23 breach the covenants.

24 Q. And do you recall that at the end of May,

25 beginning of June, there was a Plan A and a Plan B?

Page 88

1 A. I don't recall that, but based on this,

2 sounds like there was a Plan A and Plan B.

3 Q. If you look at the schedule -- I think

4 it's the third or fourth page from the back. "Daily

5 Liquidity in SolarCity Controlled accounts - For

6 Covenant Reporting" is the title of it, June 2016.

7 Do you see that? It's page 10240 in the

8 bottom right. 10240.

9 A. Okay.

10 Q. And that's the projection for June;

11 correct?

12 Am I right that if you did nothing to

13 address the situation, you would violate the

14 covenant because you would end the June average

15 of -- looks like

16 A. Correct.

17 Q. So absent doing something, that was going

18 to breach the covenants pretty substantially;

19 correct?

20 A. The

21 covenant I think was 115. Was that right?

22 Q. 116, I think.

23 A. And it's saying that it would be .

24 Q. And if you look just -- if you look at the

25 first day of the month, June 1st, 2016 --

Page 89

1 A. It also says that Plan A --

2 Q. I'm not up to Plan A yet. I'll get there.

3 A. -- --

4 Q. I know. I'll get there. But without

5 ; right?

6 A. Yeah.

7 Q. And you started the month at

8 A. Okay.

9 Q. That's the first line.

10 Do you agree with that?

11 A. Yes.

12 Q. And the only reason you started at and

13 ended the month at a higher number is because you

14 put off -- if you look at that first line, the

15 beginning balance at the end of May was , which

16 just was over the covenant threshold, but you put

17 off

18 ; right?


20 BY MR. BERGER:

21 Q. It's the first line of this page, at the

22 top.

23 A. Are you still on 240? Is that right?

24 Q. Yes.

25 A. I don't understand the payroll one. Maybe

23 (Pages 86 - 89)


CONFIDENTIAL

Page 90

1 it's just payroll variance. I don't understand the

2 payroll one.

3 Q. Okay. But it looks like you did something

4 to

5 . You moved some ,

6

7

8 A. Okay.

9 Q. -- in order to meet the covenants; right?

10 A. Sure. We did many things to meet the

11 covenants.

12 Q. Is that your example of things that are

13 making the business more efficient?

14 A. It's some of the things.

15 Q. Moving payroll from one month to another

16 makes a business more efficient?

17 A. No, but it actually forces a business how

18 to figure out how to reduce cost.

19 Q. Now, in Plan A and Plan B, which you

20 alluded to, Plan A was going to get you to -- looks

21 like -- I have trouble reading this -- looks like

22 , the June average, and Plan B would get

23 you to ; correct?

24 A. Okay.

25 Q. So both of those plans would allow you not

Page 91

1 to breach the debt covenants; correct?

2 A. Correct.

3 Q. And the way you were going to do that,

4 among other things, was, again, if you look in the

5 notes, lots of account payment holds,

6 . I think all the account payment holds are

7 highlighted in yellow; right?


9 THE WITNESS: No.

10 BY MR. BERGER:

11 Q. There's some other things in there. Small

12 payroll goes out, hold until July 1st is one of

13 them. I mean, again, the way you were going to

14 manage Plan A and Plan B was going to be putting off

15 vendors due their money and hold off paying your own

16 employees; right?


18 THE WITNESS: I don't know about -- the

19 employee one is -- I'd have to look into that one.

20 For A/P, for accounts payable, we did push out some

21 of the accounts payable.

22 BY MR. BERGER:

23 Q. In Plan B, for example, the accounts

24 payable you were going to push out would be

25 ; right?

Page 92

1 A. That's the accumulated amount. We paid

2 the week afterwards because we got 200 in, 200 out.

3 Q. By the way, you've been talking about 200

4 in and 200 out. I kind of understand that. But I'm

5 looking at these schedules and maybe there's

6 something I'm not understanding here.

7 Where is the 200 million in in June? I

8 see there's cash in here. You start with

9 cash and you end up with -- in the first page, you

10 end up with Or in any of them, start , end up

11 with .

12 Where is the 200 million in?

13 A. Just do the math, roughly. So I got 11,

14 3, 42, 3, 53, that's about 200 million. Just figure

15 it right now.

16 Q. Is that what it is?

17 A. Yeah, let's do it right now.

18 Q. Forty, fifty --

19 A. So 11 plus 3 plus 42 plus 38 plus 55 plus

20 49 --

21 Q. Where is the 49?

22 A. -- plus 7?

23 Q. Oh, I see.

24 A. -- plus 7.


Page 93

1 A. So 212, roughly speaking.

2 Q. So that 200 million in is the tax equity

3 in and the debt in?

4 A. Yes. Remember this is nonrecourse debt.

5 This is debt associated with the assets.

6 Q. Got it.

7 So the way -- withdrawn.

8 So it would be fair to say that from

9 February, when Mr. Musk first discussed with you or

10 raised the issue of Tesla buying SolarCity, through

11 June, your cash situation had gotten tighter and

12 tighter each month; correct?

13 A. The inner month was tight. The end of --

14 balance improved since February.

15 Q. Well, this doesn't look like it's improved

16 here --

17 A. No --

18 Q. -- end of month.

19 A. Let's go back. So we go 123 -- we had a

20 dip there, so let's just look at . . .

21 Q. But I mean --

22 A. So the -- this was maybe our low, so we

23 forecasted our low to be in May, the low was

24 actually in June. We forecasted it to be . It

25 came in at -- based on this plan, it would be .

24 (Pages 90 - 93)


CONFIDENTIAL

Page 94

1 So that's pretty good.

2 Q. But in terms of the average monthly

3 balance with respect to whether you were going to

4 violate your debt covenants, it had gotten tighter

5 and tighter each month from February through June;

6 correct?

7 A. It's always been tight.

8 Q. It had always been tight, but it got

9 tighter and tighter February through June.

10 A. I think June was our low point. Maybe

11 July was actually our low point.

12 Q. So it got even worse after this June, into

13 July?

14 A. Yeah, and there's specific reason for

15 that.

16 Q. What was the reason?

17 A. The Tesla announcement of the acquisition.

18 Q. June was tight without the Tesla

19 announcement of the acquisition. Because the

20 announcement didn't happen until June 20 or June 21.

21 A. Yes.

22 Q. So June was tight, teetering on the edge

23 even without the Tesla announcement.

24 A. No, no, no.


Page 95

1 THE WITNESS: Tettering on the edge is -- yes,

2 it was tight. We had a plan, and we were exceeding

3 the plan. So it was manageable, but it was tight,

4 no debate.

5 BY MR. BERGER:

6 Q. Okay. So during this time when cash is

7 tight and you have to manage this and put off paying

8 your accounts payable and maybe doing some payroll

9 stuff, during that period of time, in May 2016, you

10 again spoke to Mr. Musk about Tesla acquiring

11 SolarCity; correct?

12 A. Correct.

13 Q. When in May?

14 A. I don't remember the date.

15 Q. How did that come about?

16 A. Well, the -- I needed closure on it.

17 Either that's going to happen or we need to go out

18 and raise equity financing.


20 A. The acquisition being in limbo prevents us

21 from raising equity. And as -- you can't raise

22 equity if there's a potential acquisition out there.

23 Q. Nobody in the public knew about it in May.

24 A. That's what I'm saying. You can't raise

25 equity if there's a potential acquisition.

Page 96

1 Q. But no one knew there was a potential2 acquisition.3 A. I knew.4 Q. Oh, you knew?5 A. Yes.6 Q. But the market didn't know; right? The7 board didn't know?8 A. No, the board knew.9 Q. The board knew?

10 A. Yes. At this point, absolutely the board11 knew.12 Q. In May?13 A. Yes.14 So the -- you can't go out and raise15 capital if there's a potential acquisition out16 there.17 Q. But what I'm asking you is about this18 potential acquisition and the acquisition being in19 limbo.20 Just so we're clear, in May, when you and21 Mr. Musk spoke again about Tesla acquiring22 SolarCity, no one in the public knew about a23 potential acquisition; right?24 A. Yes. Absolutely.25 Q. Okay. So there was something in your

Page 97

1 mind.

2 A. But do you understand how it works?

3 So in order to raise public equities, if

4 there's any material information that the management

5 team knows about, we have to disclose that. And you

6 can't disclose a maybe acquisition.

7 Q. What was maybe about it? They said no in

8 February; right?

9 A. No, they said delayed. They didn't say

10 no, they said delayed.

11 Q. They said delayed to you?

12 A. They said, at this stage, we're not ready.

13 We first want to fix the Model X production and then

14 we'll come back.

15 Q. That's what they said to you?

16 A. Roughly speaking, yes.

17 Q. Was there a formal communication that said

18 that?

19 A. This was probably a phone call.

20 Q. A phone call.

21 Did you inform your board?

22 A. At this point, the board --

23 Q. At what point?

24 A. I think it's probably late February or

25 early March, somewhere around there.

25 (Pages 94 - 97)


CONFIDENTIAL

Page 98

1 Q. Late February, early March, you tell your

2 board that Mr. Musk came to us about a potential

3 acquisition and he took it to his board and they

4 said maybe, maybe later?


6 THE WITNESS: The exact words I can't remember,

7 but the high-level content is they're interested,

8 they have to solve the X production challenges and

9 they will come back.

10 BY MR. BERGER:

11 Q. And you told that to your board in March?

12 A. Somewhere around there. I'm forgetting

13 the dates.

14 Q. And how did you tell your board that?

15 A. This is probably phone calls, calling

16 them.

17 Q. Any written communication of this subject

18 to your board in late February or March?

19 A. There may have been. I don't know.

20 Q. Do you remember any specifically?

21 A. No.

22 Q. The phone calls, did you personally call

23 up all the board members and tell them that?

24 A. I always do. I'm a high call guy.

25 Q. So that would have been like six or seven

Page 99

1 calls. I can't remember. I wrote down how many

2 board members. I know Mr. Pfund, Mr. Kendall,

3 Mr. Gracias. There are a bunch of others; right?

4 So there was a bunch of phone calls?

5 A. Probably -- well, actually, it kind of --

6 it's not that many.

7 Q. Gracias, Pfund, Kendall.

8 A. Kendall. And John.

9 Q. John?

10 A. So it's four.

11 Q. Your brother probably knew about it.

12 A. Yes, my brother, of course I would have

13 discussed -- so four calls.

14 Q. Four calls. And they were separate calls,

15 not -- it wasn't one group call; it was several

16 calls.

17 A. I can't remember.

18 Q. Okay. And what you said to them, again,

19 as I understand it, is, they've come to us with a

20 potential acquisition, they're not ready to do it

21 now, but they're going to come back to us when

22 they're ready?

23 A. Yes. And the expectation was this was

24 going to be a few months.

25 Q. And that's what the limbo was that

Page 100

1 prevented you from going to the equity markets.

2 A. Correct.

3 Q. A few months.

4 And that was based upon your

5 conversations -- your personal conversations with

6 Elon Musk?

7 A. When the limbo was going to be?

8 Q. No, the fact that they didn't want to do

9 it now, but they were going to come back later when

10 they were ready after they fixed their Model 3 [sic]

11 problems? That was based on a conversation with you

12 and Elon?

13 A. Yes, I think so.

14 Q. So going forward to May, what happened?

15 Did you call Mr. Musk or did he call you? Did you

16 call him and say, you've got to like put up or shut

17 up on this, I've got to know?

18 A. I forgot exactly who called who. I

19 suspect, if I remember correctly, I reached out to

20 him to say I need closure on this.

21 Q. When? Do you remember?

22 A. Don't remember.

23 Q. It was in May, though; right?

24 A. These dates are -- between May and June --

25 it's three years ago.

Page 101

1 Q. We'll come back to it.

2 And you needed closure again because if

3 Tesla wasn't going to buy SolarCity, you needed to

4 do an equity offering?

5 A. Correct.

6 Q. Because you needed -- I guess you needed

7 more cash.

8 A. It was running too tight.

9 Q. It was running too tight. Got it. Okay.

10 And what did he say to you? Was that one

11 conversation or more than one conversation?


13 Q. What did he say to you?

14 A. Let me get back to the board.

15 Q. And then what happened?

16 A. I think he asked, can we push it out

17 another month?

18 And I said, okay, let's push it out

19 another month.

20 Q. Push -- you wanted to do it in May, and he

21 said, can we push it to June; right?

22 A. Yes.

23 Q. And did he tell you why he wanted to push

24 it to June?

25 A. Don't know.

26 (Pages 98 - 101)


CONFIDENTIAL

Page 102

1 Q. Did he tell you that he wanted to push it

2 out to June because Tesla was doing an equity

3 offering in May?

4 A. I don't recall.

5 Q. Did you know -- you were -- withdrawn.

6 Tesla did do an equity offering in May

7 2016; correct?


9 Q. They sold, I want to say, 2.7 million -- I

10 probably got it wrong.

11 Is that why he wanted to push it out?

12 A. Don't know. The first communication was

13 relating to the Model X. So maybe the Model X was

14 improving.

15 Q. "The first communication," you mean back

16 in February about why --

17 A. February or March.

18 Q. Right.

19 But then when you went to him and said, in

20 substance, Elon, you got to put up or shut up,

21 because if you don't want to buy the company, I've

22 got to raise equity, and I want to do it in May, he

23 said, okay, but then he came back to you and said, I

24 want to do it in June; right?

25 That's what happened?

Page 103

1 A. He said, can it wait a month?

2 Q. Can it wait a month?

3 And you said, okay.

4 A. Yes, roughly.

5 Q. And did the waiting a month have anything

6 to do with the fact that Tesla was doing a

7 $2.7 billion stock offering in May?

8 MR. SORRELS: Objection; asked and answered.

9 THE WITNESS: I don't know.

10 BY MR. BERGER:

11 Q. Did he tell you that -- when you spoke to

12 him and he said he wanted to wait a month, did you

13 tell him that you weren't sure you could, that you

14 were concerned about whether you could wait a month

15 to raise the equity?


17 THE WITNESS: I told him the liquidity inner

18 month is tight, but if you need me to wait a month,

19 I can come up with a plan to make it wait a month.

20 BY MR. BERGER:

21 Q. Did he tell you, in words or substance,

22 I've got you covered?


24 THE WITNESS: No, I don't understand what you

25 mean by that.

Page 104

1 MR. BERGER: Okay.


3 THE WITNESS: Do you mind if we take a quick

4 break?

5 MR. BERGER: Of course.

6 THE VIDEOGRAPHER: We're going off the record

7 at 11:59 a.m. and this is the end of Media Unit 2.

8 (Recess taken.)


10 12:08 p.m. and this is the beginning of Media

11 Unit 3.

12 THE WITNESS: I want to add something that I'm

13 recollecting.

14 In the conversation I had with Elon, hey,

15 are you -- hey, is Tesla going to make an offer or

16 not? And I also said, if you do make an offer,

17

18

19 BY MR. BERGER:

20 Q. Okay. Thank you.

21 Look at Exhibit 16, please.


23 Q. Mr. Rive, is this a document you prepared

24 on July 9th, 2016 at 11:30 at night?

25 A. Yeah, this is my document that I --

Page 105

1 essentially are call notes.

2 Q. And it's notes of a call that you had?

3 A. No, notes in preparation for a call.

4 Q. Notes in preparation for a call.

5 Was it in preparation for a call that you

6 were going to have -- with whom?

7 A. With Elon.

8 Q. With Elon. Okay.

9 So would it be fair to say you were

10 writing notes to remind yourself about what you had

11 discussed back in May?

12 A. Reminding myself what to discuss with him

13 at the next call.

14 Q. Got it.

15 Did you have the call with Mr. Musk that

16 you wrote these notes for?

17 A. I don't know if I had a call or if I sent

18 him an e-mail. I don't know.

19 Q. So first of all, let me go through this.

20 I take it from the first sentence that, in

21 some conversation that you had with him before you

22 wrote this, he told you

23

24 A. You probably mean SolarCity.

25 Q. I'm sorry. SolarCity. Yes.

27 (Pages 102 - 105)


CONFIDENTIAL

Page 106

1 The first sentence indicates that -- do I

2 read that right that Mr. Musk told you that he was

3

4


6 THE WITNESS: No, this is -- in the call, I

7 remember one call I had with him, he was

8 So in

9 anticipation of this, I had prepared some notes to

10 say, okay,

11

12

13 BY MR. BERGER:

14 Q. Because as far as you were concerned, he

15 knew about SolarCity's cash position pretty much all

16 the time; right?

17 A. That we're running tight.

18 Q. Yes.

19 He knew that; right?

20 A. Yes.

21 Q. So he

22 A. The wording is probably not

23 the right wording.

24 Q.

25 And if you look at the bullet points, you

Page 107

1 updated Mr. Musk all the time about SolarCity's cash

2 balances; correct?

3 A. Yeah. We kept the board and everybody

4 updated with regard to our cash balances.

5 Q. And in the second

6 bullet point, that's what we've been talking about

7 this morning about running close to violating the

8 debt covenants with the schedules and graphs that

9 I've shown you where

10 ; right?

11 A. Yes.

12 Q. And the next bullet point, you had told

13 Elon earlier that you needed to raise capital, but

14 he told you,

15 -- withdrawn. Let me just read it to you.

16 That looks like a terrible question. Sorry.

17 You wrote,

18

19

20 So when did Elon tell you that, no,

21

22

23 A. This is the call that I referenced

24 earlier --

25 Q. Yes.

Page 108

1 A. -- and said that, if you're going to make

2 an offer,

3

4

5

6 Q. But in that conversation, he also told you

7 ; right?

8 A. Well, you can't raise capital when you are

9 expecting an acquisition. So those are tied. If it

10 was -- if the board -- it was clear that the board

11 is saying no, then I could raise capital, because

12 then there's no event. But you can't raise capital

13 if you're expecting an acquisition.

14 And so we didn't raise capital because we

15 were expecting an acquisition. The acquisition did

16 come in, but .

17 Q. And he had said to you -- what he had said

18 to you about having you covered was

19 .

20 A.

21 And then the purpose of this call was to

22 say,

23 Q. Got it.

24 A.

25 Q. And we'll get to that in a minute.

Page 109

1 But your notes here reflect things, again,

2 that you and he discussed in that call we talked

3 about a moment ago -- or earlier, which you had in

4 May; correct? Or maybe even before May, maybe in

5 April?

6 A. Yeah, the -- going back three years, like

7 with May or April, I can't remember exactly that,

8 but it's that time frame.

9 Q. And the that's referred

10 to in the fourth bullet point, that's

11

12 A. That's

13 So these notes were in anticipation of a

14 discussion, debate or -- with Elon regarding the

15

16 Q. And the next section, you write, "Now what

17 has gone wrong over the last 45 days?"

18 So that would take us back to sometime

19 around the end of May from July 9th; correct?

20 A. Um-hum.

21 Q. You have to answer verbally.

22 A. Yes.

23 Q. And these are the things that you believe

24 had gone wrong with your cash position; right?

25 A. Yes.

28 (Pages 106 - 109)


CONFIDENTIAL

Page 110

1 Q. What was Mr. Musk's response to the

2 conversation that you had with him?

3 A. I forget if I had a conversation or if I

4 sent an e-mail that I --

5 Q. Let me show you. I have a document here.

6 So in fairness, I'll show it to you because I

7 should.

8 MR. BERGER: So it's Exhibit 17.


10 BY MR. BERGER:

11 Q. Is this the e-mail that you wrote to him

12 that you were just telling us about?


14 A. Okay.

15 Q. You told us that you took those notes in

16 preparation for a call with Mr. Musk, and you said

17 you weren't sure whether you had the call or

18 communicated by e-mail. And I'm showing you this

19 e-mail, Exhibit 17.

20 Is this the e-mail that you wrote to him

21 or --

22 A. I did write this e-mail to him.

23 Q. Is this the e-mail you were talking about

24 in which you communicated to him the things that you

25 were preparing for?

Page 111

1 A. Yes, I think this is the e-mail.

2 Q. Okay. And how did he react to this?

3 A. I think the final reaction was Tesla board

4 said and that we have to go

5 solve that issue ourselves.

6 Q. I'm just curious.

7 In the first sentence, you say you've

8 "added Seth to the e-mail so the e-mail change [sic]

9 can stay privileged." Maybe you meant "chain," I

10 don't know.

11 "It is best to discuss most of this over

12 the phone."

13 Why? Why didn't you want to have a record

14 in writing?


16 BY MR. BERGER:

17 Q. Well, that's how I interpret it. When

18 somebody says it's best to discuss it over the

19 phone, you don't want to have it in writing.

20 A. No, I'm a big believer in phone. Writing

21 e-mails can often not explain it well enough. So

22 something as sensitive as this, you want to try and

23 have a phone call.

24 MR. BERGER: Let's mark this as Exhibit 18,

25 please.

Page 112


2 BY MR. BERGER:

3 Q. Before we get to 18 -- well, let's do 18.

4 Mr. Rive, just explain to me what 18 is.

5 Looks like it's an e-mail that you wrote to

6 Mr. Serra, Mr. Small, Mr. Weissman, July 11th.

7 Production Nos. TESLA 22388.


9 A. I wonder where the rest is?

10 Q. Is there a rest? There is no rest, as far

11 as I know.

12 A. Oh, this may be a press announcement that

13 we were going to do about the raising of capital.

14 Q. Okay. So is that the announcement that

15 you were referring to -- I mean, can you explain

16 what this is? I'm a little confused by it.

17 What's the announcement you're talking

18 about?

19 A. So we would periodically do capital

20 announcements. So when we raised that 200 million

21 in, 200 million out, we would make announcements of

22 which banks are investing to the company. So we

23 would do that through the year. I'm not 100 percent

24 what this is in connection with. I think it's for

25 one of those announcements.

Page 113

1 Q. And what was your concern about making

2 that announcement?

3 A. One, if it was just a -- a -- one of those

4 banks, I don't like making it just individually. I

5 like to make a big announcement. So you add a few

6 of the banks together, and you make a big

7 announcement announcing all the banks versus just

8 200 million, 200 million, 200 million. So that was

9 one concern.

10 The other concern, of course, is when you

11 say you raised 200 million -- I don't know what

12 the -- this e-mail doesn't tell me what the amount

13 of cash that we raised is. So I assume it's around

14 200 million. I can't remember.

15 Q. You were concerned with making that

16 announcement about raising the 200 million that you

17 did in the usual course of your business and then

18 having people understand at the end of the month

19 that you were only going to have a cash balance of

20 and need in a bridge loan;

21 right?

22 A. So end of Quarter No. -- I forget what our

23 end of quarter number was. So I didn't want to do a

24 cash announcement if I am going to need to get debt.

25 I first want to do the debt, and then I'll do the

29 (Pages 110 - 113)


CONFIDENTIAL

Page 114

1 cash announcements, which -- I think that's what we

2 ended up doing.

3 Q. What was it that led you to have that

4 communication with Mr. Musk July 9th, July 10th, the

5 one that you took the notes for? What was it in the

6 company's business circumstances that led you to

7 have that communication with him?

8 A. So we -- the Tesla announcement caused all

9 our banks to go back to their committees to say,

10 hey, things have changed at SolarCity, do we want to

11 deploy that $200 million? It's no issue. In fact,

12 the Tesla announcement is positive, but they still

13 have to go back.

14 And that aggravated the cash situation.

15 As I said, if things are delayed by two weeks,

16 that's a $100 million swing. And so that was a

17 significant trigger towards it. And so we were in

18 need to get a bridge loan of some sort, whether it

19 just be a straightforward loan or a bridge loan,

20 fairly quickly.

21 Q. And you were looking for a bridge loan of

22 at least ; right?

23 A. would give us an additional

24 buffer, but, yes, was the number that we

25 wanted.

Page 115

1 MR. BERGER: All right. I think this is a good

2 place to break for lunch, if you don't mind.

3 MR. SORRELS: Okay.


5 The time is 12:26 p.m. And this is the end of Media

6 Unit No. 3.

7 (Lunch recess was taken at 12:26 p.m.)

8 (Nothing omitted or deleted. See next

9 page.)

10 AFTERNOON SESSION 1:12 P.M.

11 - - -


13 THE VIDEOGRAPHER: Okay. We're back on the

14 record at 1:12 p.m. and this is the beginning of

15 Media Unit 4.

16 EXAMINATION RESUMED

17 BY MR. BERGER:

18 Q. Mr. Rive, good afternoon. I've put in

19 front of you a copy of SolarCity's 10-Q for the

20 first quarter of 2016. This is a document that you

21 signed on May 9th, 2016, if you look at the end of

22 it, page 68.

23 A. Yeah.

24 Q. Okay. If you would turn to page 39,

25 please -- actually, 38.

Page 116

1 You'll see there's a section in here

2 entitled "Liquidity and Capital Resources."

3 Do you see that?

4 A. Yeah.

5 Q. And I'd like to draw your attention to the

6 paragraph on the top of page 39 in this section, so

7 if you would just flip the page, please. And could

8 you read that first paragraph to yourself.


10 A. Yes.

11 Q. So as of May 9th, you had concluded that

12 you either needed to do an equity offering or do a

13 deal where Tesla bought SolarCity.

14 You told us that before; correct?


16 THE WITNESS: Yes, we need to -- we running too

17 close to comfort.

18 BY MR. BERGER:

19 Q. So because you were running too close, you

20 either had to raise equity or have a deal where

21 Tesla bought SolarCity.

22 A. One of the two.

23 Q. One of the two.

24 So at this point in time, May 9th, you

25 knew that your existing credit facilities and cash

Page 117

1 was not sufficient to meet your cash needs for the

2 next 12 months.

3 A. It was too tight. Not necessarily not

4 sufficient, it's just uncomfortably tight.

5 Q. Uncomfortably tight.

6 Now, in terms of -- okay, thank you.

7 We're done with that for now.

8 So before lunch, we went over the e-mail

9 that you wrote -- not e-mail -- the notes you wrote

10 to yourself on July 9th and the conversation you had

11 with Mr. Musk on the 10th.

12 And so picking up at that point in time,

13 wasn't it the case that by July 18th, which was a

14 week after that, SolarCity was on the brink of a

15 liquidity event, meaning on the brink of violating

16 its debt covenants?

17 A. I don't know.

18 Q. Let me show you a document which is a

19 series of e-mails. The last one is one from

20 Mr. Ellis to you.

21 Would it be fair to say that Mr. Ellis was

22 the principal person at SolarCity who was tracking

23 the company's cash versus its debt covenants?

24 A. Yes. He was our -- him and his team.

25 Q. Him and his team.

30 (Pages 114 - 117)


CONFIDENTIAL

Page 118

1 But he was the seniormost person who was

2 responsible for that; right?

3 A. Correct.

4 MR. BERGER: Okay. I'm going to ask the

5 reporter to mark this as Exhibit 20.


7 MR. BERGER: Thank you.

8 BY MR. BERGER:

9 Q. And I think you'll see that this is a

10 series of e-mails in which Mr. Ellis and his team

11 are communicating about their updated cash forecast

12 for SolarCity, which was sent to you on July 18th,

13 2016; correct?

14 A. Yes.

15 Q. And if you look -- and attached to the

16 e-mail was a forecast they had prepared, and it's

17 the last page of the document. Would you turn to

18 that, please.

19 A. Just give me a second while I . . .

20 Q. Sure, of course. Take your time.


22 A. Okay.

23 Q. And this was a forecast -- the current

24 cash forecast for SolarCity as of July 13th, 2016;

25 correct?

Page 119

1 A. Correct.

2 Q. And the team sent this to you for you to

3 look at; right?

4 A. Yes.

5 Q. And what this shows, doesn't it, that

6 SolarCity, the -- Mr. Ellis and his team are

7 projecting the average liquidity for the months

8

9

10 Do you see that?

11 A. So where are you looking? "Cash Balance,"

12 that one?

13 Q. "Weekly Average Liquidity Per Month," the

14 last line on the --

15 A. Oh, okay, okay, okay. Yeah, yeah.

16 Q. for the next three months;

17 right?

18 A. Okay.

19 Q. Right on the line of the debt covenants;

20 correct?

21 A. Correct.

22 Q. So, actually, it had gotten even tighter

23 from where it was in June.

24 A. No. It's roughly the same.

25 Q. Roughly the same. Right on the edge.

Page 120

1 Did you have a plan A and plan B for July

2 or August or September?


4 Q. Now, isn't it the case at this point in

5 time -- withdrawn.

6 Isn't it the case at this point in time,

7 in the middle of July, SolarCity management prepared

8 a downside case; that is, options that it would have

9 to take if it couldn't raise cash immediately?

10 A. We may have.

11 Q. And by the way, at this point in time,

12 Tesla had announced publicly the proposed

13 acquisition of SolarCity; correct?

14 A. Correct.

15 Q. But it wasn't final yet.

16 A. No.

17 Q. The deal hadn't been signed, hadn't been

18 approved by Tesla's board.

19 A. The offer has been approved, not -- the

20 actual deal has not been approved.

21 Q. The offer was approved, but the deal

22 hadn't been signed and the shareholders hadn't

23 approved it.

24 A. That's correct.

25 Q. So it wasn't a done deal by any means at

Page 121

1 this point?

2 A. No.

3 Q. Let me show you a document that are

4 minutes from SolarCity's -- from a meeting of the

5 special committee of SolarCity's board of directors

6 July 18th, 2016.

7 MR. BERGER: We'll mark it as Exhibit 21,

8 please.


10 BY MR. BERGER:

11 Q. You attended this meeting of the special

12 committee of the board; is that right?

13 A. I actually did not attend most of them, so

14 I may have.

15 Q. Well, let's just clear up any confusion.

16 Second paragraph says, "Attending the

17 meeting from the company were Lyndon Rive, chief

18 executive officer; Tanguy Serra, president and chief

19 financial officer," et cetera.

20 A. Okay.

21 Q. So you did attend.

22 A. Yeah, if I was there. If it says that, I

23 was there.

24 Q. And, in fact, you made a presentation

25 about the company's liquidity to the special

31 (Pages 118 - 121)


CONFIDENTIAL

Page 122

1 committee.

2 A. Okay.

3 Q. Is that right?

4 A. I mean, I can't remember. If it says it,

5 then I did.

6 Q. Okay.

7 A. I can review that presentation to refresh

8 my memory.

9 Q. I will show you the presentation, but if

10 you look at the minutes, bottom of the first page,

11 "Management Discussion of Liquidity Position," "The

12 company's management team began the meeting by

13 providing an overview of management's analysis of

14 the company's liquidity position."

15 Do you see that?

16 A. I do.

17 Q. Yes.

18 And "management" means you and Mr. Serra;

19 right?

20 A. And probably -- was Bryan there? No?

21 Yeah, it's definitely me and Mr. Serra for sure.

22 Q. And you and Mr. Serra were the ones who

23 spoke to the special committee about the company's

24 liquidity position.

25 A. Yes.

Page 123

1 Q. And the minutes say that you presented a

2 base case and downside scenarios.

3 Did you, in fact, do that?

4 A. We must have if the minutes say that.

5 MR. BERGER: Let me mark as Exhibit 22 a copy

6 of the presentation.


8 BY MR. BERGER:

9 Q. Mr. Rive, just take a look at Exhibit 22.

10 A. What page?

11 Q. Is this presentation what you presented to

12 the special committee on July 18th, 2016?

13 A. No.

14 Q. It's not?

15 A. No.

16 Q. Did you ever see this document before?

17 A. I saw it -- I think I saw it for the first

18 time yesterday.

19 Q. You didn't see it at the board meeting on

20 the 18th?

21 A. I don't remember this.

22 Q. But you remember giving a presentation,

23 don't you?



Page 124

1 MR. BERGER: Would you mark this as 23, please.


3 THE WITNESS: So I recognize some of them. I

4 don't recognize others. So . . .

5 BY MR. BERGER:

6 Q. Well, just take a look at the document

7 we've marked as Exhibit 23, which is the cover

8 e-mail from Mr. Jonathan Mir of Lazard to a number

9 of folks, to Mr. Serra, Mr. Small. It doesn't seem

10 to have gone to you, but it did go to the two

11 members of the special committee. Went to

12 Mr. Weissman. It's SolarCity Production 42366.

13 So this document went to the special

14 committee, Exhibit 22; correct?

15 A. I assume so, based on this. I was not on

16 the e-mail.

17 Q. The meeting on the 16th was by

18 videoconference, right, or teleconference.


20 MR. SORRELS: I think it's the 18th, too, so --

21 MR. BERGER: Did I misspeak?

22 BY MR. BERGER:

23 Q. Yeah, the meeting was on the 18th of July

24 and it was by telephone conference; correct?

25 A. It would be telephone conference.

Page 125

1 Q. And isn't it the case that you and

2 Mr. Serra used the slides that are in Exhibit 22 to

3 discuss with the special committee the company's

4 liquidity position?


6 THE WITNESS: I don't think so. I think Lazard

7 presented this, and we came in at different times

8 over the presentation.

9 BY MR. BERGER:

10 Q. Well, where the minutes say the

11 "management team," is Lazard included in the

12 management team?

13 A. No. It would be us.

14 Q. The "us."

15 So what did you and Mr. Serra say to the

16 special committee about a base case and downside

17 scenarios?

18 A. Maybe we only presented certain parts of

19 this presentation. I can't remember.

20 Q. Wouldn't it be -- withdrawn.

21 Wasn't it the case that the downside

22 scenarios that are referred to in the minutes and

23 that you talked about are what's called in this

24 document the liquidity management case?

25 A. I have to get my memory -- remember

32 (Pages 122 - 125)


CONFIDENTIAL

Page 126

1 liquidity case versus unrestricted liquidity case.

2 Q. The unrestricted case was the base case;

3 correct?

4 A. Based on this presentation, I would say

5 that the base case is the unrestricted liquidity

6 case.

7 Q. And the downside scenarios are what's

8 called the liquidity management case; correct?

9 A. Actually, I'm struggling with that. I

10 don't -- I can't see the connection between the two,

11 actually.

12 I'm not trying to avoid the question; I

13 really do not remember giving this presentation.

14 Some of the slides I recognize; a lot of these

15 slides, I don't.

16 It was current practice that Lazard would

17 meet with the special committee and we would come in

18 within the meeting, and it was just very common to

19 keep me out of the equation. It was intentional.

20 Q. Oh, I understand that, but this was a

21 meeting where they didn't keep you out at all; you

22 were there the whole time.

23 In fact, this was a meeting where you and

24 Mr. Serra did most of the talking.


Page 127

1 BY MR. BERGER:

2 Q. Isn't that what the -- I mean, you don't

3 have any reason to doubt the minutes, do you?

4 A. Okay. So where do you say us that did all

5 the talking?

6 Q. First page. Company's management team

7 began the meeting. The management team presented

8 base case. Management informed the committee that

9 in management's judgment, they believed. Management

10 discussed the amount of payables. Management

11 expressed concern.

12 Sounds like a lot of talking by you to me.


14 BY MR. BERGER:

15 Q. Is there something wrong with what I said?

16 You're the management, right, that's referred to in

17 the minutes.

18 A. Yeah, I get the minutes, but your question

19 is different than what the minutes are asking. And

20 your question --

21 Q. No, I asked you -- I'm going to stop you

22 for a second.

23 I asked that question because you said to

24 me for some reason, oh, we had a lot of special

25 committee minutes where they kept us out because of

Page 128

1 potential conflict; right?

2 This was not a meeting where they kept you

3 out, did they?

4 A. Okay. I was in the meeting.

5 Q. And not only were you in the meeting, you

6 did a presentation; correct?

7 A. I don't know what I presented. I can't

8 remember. It's three years ago.

9 Q. Got it.

10 But you don't have any reason to believe

11 that the minutes are not accurate, do you?

12 A. I have no reason to believe they're not

13 accurate.

14 Q. Okay. So then let's make sure we've got

15 everything in your recollection.

16 What do you remember saying about downside

17 scenarios?

18 A. Probably one of the downside scenarios

19 would be stopping the --

20 . That would probably

21 be the biggest one.

22 Q. And that was something you told the

23 special committee?

24 A. Yes.

25 Q. And another downside scenario was to

Page 129

1 preserve near-term liquidity, you could

.

3 Does that mean firing people?

4 A. Yes.

5 Q. And you also told the committee that

6 management believed that SolarCity required

7 of additional liquidity

8 to maintain its operational flexibility; correct?

9 A. Yes, that's what the minutes say.

10 Q. And that would be above what would

11 normally come in in terms of cash generated by your

12 various financing activities, you told the committee

13 you needed an additional

14 A. As -- that would have a little buffer in

15 there.


17 A. The would have buffer

18 in it.

19 Q. So maybe your point was you told them you

20 didn't maybe need all of it, but you needed most of

21 it or a lot of it.

22 A. Yeah, my common feedback was would be

23 preferred, and if we can get more, great.

24 Q. And you also discussed with the committee

25 the fact that even to get to this point, you had

33 (Pages 126 - 129)


CONFIDENTIAL

Page 130

1 been pushing off paying your bills, paying your

2 vendors, and that was getting to be a problem,

3 wasn't it?


5 BY MR. BERGER:


7 A. Yes, we have to pay our vendors.

8 Q. And you told the committee that because

9 you had

10 , it was getting to be a problem at

11 this point.


13 THE WITNESS: That it's one -- it's

14 absolutely -- the cash was getting tight. We needed

15 to raise -- call it , with a little

16 buffer in there, and that was my main communication

17 to the board -- or to the special committee.

18 BY MR. BERGER:

19 Q. And if you look at the top of the second

20 page of the minutes -- actually, I have to read the

21 carryover sentence, so I apologize.

22 At the bottom of the first page, the

23 minutes say,

24

25

Page 131

1

2

3 What specifically did you tell the

4 committee the consequences would be of a revolver

5 breach?

6 A. So the -- not necessarily all relating to

7 a revolver breach, but when you're running low on

8 cash, all the banks get concerned about debt.

9 And then what that can create is a Domino

10 effect where that -- if the one bank is, oh, I'm a

11 little concerned about your cash position, so I'm

12 going to wait until that improves, and the other

13 bank does the same, the other bank does the same.

14 The covenant breach was not the biggest

15 concern, because that, I think the banks would work

16 with us to solve. The biggest concern is the notice

17 of a covenant breach and how that could create

18 concern around other investors that want to put

19 money in the bank -- or put money in the company.

20 Q. Do you see the next sentence states,

21

22

23

24

25

Page 132

1 A. I see that.

2 Q. Yes.

3 And that's something you told the special

4 committee?

5 A. Yes, it's in the minutes, yeah.

6 Q. And the June 30 cash balance that you were

7 concerned about telling the public about was, what,

8 , something like that?

9 A. Yeah, this is what I mentioned earlier.

10 This was aggravated by the fact that the Tesla

11 announcement came in and our tax equity financing

12 from JPMorgan was delayed.

13 So the market sees your cash balance of Q1

14 to Q2, it has a big dip, and then they see Q2 as

15 150, they assume that Q3 will be zero. And so that

16 was the concern.

17 But in reality, all that was happening is

18 that the Tesla announcement pushed out that

19 financing, that financing came in Q3, and our cash

20 balance improved in Q3.

21 Q. By the way, the announcement of the Tesla

22 transaction was, I think, June 21st; is that right?

23 A. Yes, somewhere around there.

24 Q. Yeah. I mean, that had nothing to do with

25 your megawatt guidance, did it?

Page 133

1 A. No.

2 Q. Okay. So the fact that you were going to

3 have to revise down your guidance was completely

4 independent of Tesla offering to buy you?

5 A. Yeah, that's two different things.

6 Q. Right.

7 But you were also concerned that that

8 would have a negative effect on your stock price and

9 your liquidity?

10 A. Yes, absolutely. If you revise guidance,

11 there's always concern about that.


13 THE WITNESS: Just one other point that I'd

14 like to mention.

15 BY MR. BERGER:

16 Q. Yes.

17 A. I see all -- most of your questions are

18 going towards Q1 and Q2.

19 Q. So far, yes.

20 A. So far.

21 I think it's key to also mention that Q1

22 and Q2 was our tightest cash constraint positions.

23 Q3, we raised over a billion dollars in financing,

24 and from Q3 to end of Q4, we increased the cash

25 position over $100 million. And that was despite --

34 (Pages 130 - 133)


CONFIDENTIAL

Page 134

1 like without anything to do with Tesla. It's

2 100 percent based on SolarCity's credit and

3 SolarCity's performance.

4 The banks saw all the headline news about

5 SolarCity's financial struggles, so, of course,

6 they're going to send their team and spend a lot of

7 time with us on due diligence before they give us a

8 billion dollars. So even with that headline, the

9 banks were comfortable with our credit and our

10 financial situation.

11 Q. Well, we'll get to that in a minute when

12 we get to the third quarter and the fourth quarter.

13 We'll come back to that.

14 Now we're talking about the second quarter

15 and July, which is the beginning of the third

16 quarter; correct? That's where we are.

17 So am I correct that the list of things on

18 page 6 -- actually, I'm not sure it's page 6. It's

19 got a "6 Lazard" at the bottom. It's page 42375,

20 "SolarCity" -- it's entitled "SolarCity 'Liquidity

21 Management' Case versus 'Unrestricted Liquidity'

22 Case Bridge."

23 That -- these were all alternatives for

24 what you would have to do if you couldn't raise the

25 million that you were looking for.

Page 135


2 A. No, this is so different. This is related

3 to 2017, '18, '19, and '20. So I just don't . . .

4 Q. Okay. All right. If you don't know, you

5 don't know. All right. Well, I'll move on to

6 something else.

7 A. You know what this may -- actually, now --

8 it may be the forecast that we gave in terms of

9 solving for growth versus solving for cash over --

10 let's call it the next five years.

11 And so if you do lower growth, you can

12 increase your cash, but then your future recurring

13 revenue will be less. And so if the company is not

14 at a stage where it can invest in growth, then

15 maximize for cash. So this -- that may be the two

16 differences in the case.

17 Q. Okay. Well, we'll find out. If you don't

18 know, you don't know.

19 All right. So after the -- after the

20 special committee meeting, you, in fact, went out

21 and tried to raise million; correct?

22 A. , sure.

23 Q. million.

24 Was one of the alternatives that you

25 looked ?

Page 136

1 A. That was one alternative.2 Q. And what happened with that?3 A. In looking at it, it wouldn't have4 actually solved the short-term issue.5 Q. The short-term cash issue?6 A. The short-term cash tightness, yes.7 Q. So that didn't work.8 Did you go to try to raise cash from some9 of the banks?

10 A. We looked at different alternatives. I11 forgot all the different ones we looked at.12 Q. Ultimately, none of those alternatives13 worked; correct? Well, I shouldn't say that.14 Ultimately, what you did was sell solar15 bonds to Mr. Musk, your brother, and yourself.16 A. Correct.17 Q. So all the other alternatives didn't pan18 out?19 A. Yeah. That was our last option.20 And just to be clear, all the alternatives21 did not pan out in the time frame that we needed.22 So we needed to solve for August.23 Q. You needed to solve for August and24 September.25 A. Well, no --

Page 137

1 Q. August. Fine, you needed to solve for

2 August.

3 A. Just August. Because within August, all

4 the investors are coming in. All the deals are

5 closing then. And so from August to September,

6 that's where we raised a billion dollars of

7 financing.

8 Q. So all the other alternatives didn't work

9 out; correct?

10 A. They couldn't do it under the time frame

11 we needed.

12 Q. Wasn't it true that they couldn't do it

13 because they didn't think you were a very good

14 credit risk?

15 A. No. Some of them had challenges with the

16 acquisition being a stockholder vote, so --


18 A. Vote.

19 -- and so their company said that they

20 could not do that short-term bridge loan if it's up

21 to the stockholder vote.

22 Q. Did you also -- did you also try to see if

23 you could have someone else

24

25 A.

35 (Pages 134 - 137)


CONFIDENTIAL

Page 138

1

2

3 Q. And that didn't work either; right?

4 A. That could not close in the time frame we

5 needed.

6 Q. Well, also wasn't it the case that you

7 were worried that the person who was going to

8 finance it was going to ask for cash flows and you

9 didn't have the capital to fund it?

10 A. I don't understand that question.

11 Q. Well, let me show you a document.

12 MR. BERGER: Mark this as Exhibit 24.


14 MR. BERGER: Thank you.

15 BY MR. BERGER:

16 Q. This is July 14th, 2016. It's a series of

17 e-mails between you and Mr. Serra and Mr. Phillips

18 and Mr. Small. Production number is 85049, 50, and

19 51.

20 Do you see at the top you were discussing

21 with Mr. Small the idea of in some

22 way?

23 A. Give me a second.

24 Q. Sure.


Page 139

1 A. Okay, I've read the e-mail.

2 Q. So you see you're discussing with your

3 team the idea of either

4 ; correct?

5 A. Yes. So the discussion was -- because we

6 knew that the SolarCity acquisition was going to

7 take time, discussion was how do we come up with an

8 alternative to give us the short-term financing that

9 we need.

10 And one of the options was

11

12 , and then we were thinking, okay, well, that

13 will still take time to close that deal; can you get

14 financing of the offer letter for that.

15 And what I wrote here is that it would be

16 better off to get

17 , because the debt provider

18 is going to want to see us deploy the rest of the

19 equipment. And, as I mentioned already, that's one

20 of our -- we put that on hold temporarily.

21 Q. Right. So you weren't actually deploying

22 the equipment, so it was going to . . .

23 A. No. So there's regular equipment

24 deployed, so that would be financed --

25 Q. But the additional equipment --

Page 140

1 A. -- but the additional equipment would

2 have -- was put on hold.

3 Q. Because of the cash issues.

4 A. Because of the short-term cash constraint.

5 Q. Take a look at Exhibit --

6 MR. BERGER: Oh, I'll have to mark this as

7 Exhibit 25.


9 BY MR. BERGER:

10 Q. This is a long document. I'm not going to

11 ask you about all of it, but -- there are a number

12 of things here. But what I want you to look at is

13 page -- this is a document, it's -- the cover memo

14 is an August 13th e-mail from Jonathan Chang to a

15 number of individuals about the board book for the

16 solar bonds. And Production number is TESLA 585366

17 through 400. I would like you to look at page 368,

18 which is the third page into the document, please.

19 Now, this is a schedule that has four

20 columns across the top. The first is

21

22

23 Now, it's the case, isn't it, that those

24 were four of the options that you pursued to raise

25 the that you said you needed?

Page 141

1 A. Yeah, we went to those companies, yes.

2 Q. You want to

3 ; correct?

4 A. Yes.

5 Q. Solar bonds is what you ended up doing;

6 right?

7 A. Yes.

8 Q. rejected you; right?

9 A. They did it because of shareholder vote.

10 Q. I thought they did it -- if you look at

11 the bottom -- because SolarCity

12

13

14

15

16 Did you ever hear of anything like that?

17 A. No, that's not what I remember. Remember,

18 I wasn't on this document.

19 Q. Okay. So you don't remember that.

20 A. I actually remember quite clearly that it

21 was a -- maybe it was who was the other

22 one -- that it was because of shareholder vote.

23 Q. Okay. So you don't remember it was

24 because you

25 A. I don't remember that.

36 (Pages 138 - 141)


CONFIDENTIAL

Page 142

1 Q. And for , you'll see that this

2 document has the same -- it does have the same

3 entry -- makes the same reference,

4 ," Morgan Stanley.

5 You don't remember

6

7

8 A. I don't remember what was. One

9 of the two had the stock voting issue.

10 Q. One of the two what?

11 A. Had the stock voting issue.

12 Q. One of the two had a stock voting issue.

13 A. Yes.

14 Q. Did one of the two have an issue that

15 SolarCity ?

16 A. I can't remember what the reasons why we

17 could not get the deal done.

18 Q. Okay. Thank you. I'm done with that

19 document.

20 So I think that you told us that, unable

21 to get in financing anywhere else,

22 you turned as a last resort to solar bonds; is that

23 right?

24 A. Correct.


Page 143

1 BY MR. BERGER:

2 Q. Originally, was the idea that would

3 buy the solar bonds?

4 A. Originally, that was the idea.

5 Q. I mean, when I say "originally," at this

6 time, which was sometime in -- we're in August of

7 2016 now, right, when this is going on?

8 A. This is -- I think it closed and funded in

9 August, first or second week of August. I'm pretty

10 sure that's the case. So these conversations is

11 probably happening either early August or late July.

12 Q. Sometime between mid July, when it was

13 clear that

14 and mid or late August, when the solar bond

15 deal closed, you were having conversations with

16 these other potential sources, including

17 , et cetera.

18 That's the time frame; correct?

19 A. Yes, that's the time frame.

20 Q. And when those didn't work out, at some

21 point during that time frame, you turned to the

22 possibility of buying solar bonds; right?

23 A. Correct.

24 Q. And that didn't work out either?


Page 144

1 THE WITNESS: No.

2 BY MR. BERGER:

3 Q. Why not?

4 Did board refuse to do it?

5 A. I don't know what the -- who refused to do

6 it. And I was told no. So maybe it was

7 board that said no.

8 Q. How much were you trying to raise from the

9 solar bonds?

10 A. 100 million, but we would like to raise

11 more. But a minimum of 100 million.

12 Q. You ended up raising 100 million.

13 Originally, you wanted to raise more than

14 100 million in the solar bonds. Originally, the

15 idea was to raise something like 150 million from

16 , but wouldn't do it; isn't that right?

17 A. I can't remember exactly the process and

18 how it went through. Originally, we wanted to raise

19 from SpaceX and they said no. I forget exactly the

20 amount.

21 Q. So what you ended up doing was raising

22 $100 million where, if I have this correct, Mr. Musk

23 bought 65 million and you and your brother each

24 bought $17 1/2 million of solar bonds; correct?

25 A. Correct.

Page 145

1 Q. Because there was no other option at the

2 time?

3 A. Given the short-term cash crunch we needed

4 and needed people to move, no one could move in that

5 speed.

6 Q. Did you consider alternatives -- what

7 would have happened if you hadn't bought these solar

8 bonds and the company couldn't raise any more money?

9 What would have happened?

10 A. So the final final would have to be -- is

11 I guess we would have to call the deal off and

12 actually go raise equity.

13 Q. "The deal" meaning the Tesla acquisition?

14 A. Yeah. That's all work with the banks to

15 extend covenants. But we needed that 100 million in

16 August.

17 MR. BERGER: Okay. Could we take a short

18 break?

19 MR. SORRELS: Sure.


21 The time is 2:05 p.m. and this is the end of Media

22 Unit Number 4.

23 (Recess taken.)


25 2:15 p.m. This is the beginning of Media Unit 5.

37 (Pages 142 - 145)


CONFIDENTIAL

Page 146

1 BY MR. BERGER:

2 Q. Mr. Rive, just to follow up on something

3 that you said before, you said what you remembered

4 was that one of the two banks,

5 , refused to fund you -- your request

6 for funding at this time in August because of the

7 shareholder vote.

8 That was the shareholder vote by Tesla

9 shareholders to approve the acquisition with

10 SolarCity; right?

11 A. No. So the choice of doing an acquisition

12 doesn't always have to be a shareholder vote; it can

13 be a management board decision. You don't have to

14 get shareholder approval to do an acquisition.

15 So when or -- I

16 forget, whichever one it is -- when they started the

17 process, they thought that our board and their board

18 has to -- if it's an agreed, then it's all fine.

19 Only later on in the process did they

20 realize, oh, we're not going board-level sign-off

21 for the acquisition; we are actually going to ask

22 for shareholder approval. So the deal is not done,

23 you still have to get shareholder approval. So,

24 therefore, we -- and so it's -- both sides were

25 concerned.

Page 147

1 Q. So in other words, whichever bank it was

2 was concerned about lending money to SolarCity as a

3 standalone entity, they only wanted to lend it if it

4 was going to be combined with Tesla?

5 A. I don't know if it's a concern.

6 Q. Wasn't that the takeaway from why

7 they're -- what you're saying about they're being

8 concerned about a shareholder vote?

9 A. Well, they just didn't know what the

10 outcome was going to be.

11 Q. Well, their concern wasn't if the outcome

12 was going to be positive, right, their concern was

13 if the outcome was going to be negative.

14 A. I don't know --

15 Q. That's what you just told me.

16 A. I don't know what their -- I don't know

17 what their concern is. I'm telling you why they

18 didn't do it.

19 Q. Isn't that the logical takeaway from not

20 doing it because they're waiting for a shareholder

21 vote, they're worried that the vote would be no?

22 A. You would have to ask them.

23 Q. A little bit earlier when you told me that

24 in the third quarter or fourth quarter you got a

25 billion dollars of funding from banks -- I've seen

Page 148

1 that referred to.

2 A. Yes.

3 Q. Okay. Was that the fourth quarter?

4 A. Some in Q3 -- I think it was a little bit

5 in October, yeah. So September/October was the

6 primary months for that -- for that capital.

7 Q. So October would have been the fourth

8 quarter.

9 You think some was in September?

10 A. I think about half and half, if I were to

11 guess.

12 Q. And all of that was after July 31st, when

13 Tesla and SolarCity signed the agreement for Tesla

14 to buy SolarCity; correct?

15 A. No. It was actually despite that.

16 Q. I didn't ask despite; I asked you if it

17 was after.

18 A. Yes, it happened --

19 Q. It happened after.

20 A. It happened after.

21 It's also important to know that when they

22 went to credit committee, they underwrite it as

23 SolarCity only.

24 Q. And you know that?

25 A. Yes.

Page 149

1 MR. BERGER: We didn't mark these yet, did we?

2 Okay. What's the next exhibit, please?

3 THE REPORTER: 26.

4 MR. BERGER: Let's do this as 26. I think I

5 did mark one of these, but I can't remember which

6 one. Maybe I did mark this one. I did.

7 MS. MACKINTOSH: Was it this one?

8 MR. BERGER: Yes. Was it 9?

9 MR. UPADHYA: Yep -- it was 7.

10 BY MR. BERGER:

11 Q. Okay. So let me put back in front of you

12 Exhibit 7, please, or if you could grab it out of

13 the pile, that would be great. Thank you. It's the

14 third quarter shareholder letter.

15 Could you look at page 15, please.

16 Actually, take a look back at page 14, which is the

17 first page.

18 This is your statement of cash flows,

19 meaning SolarCity's statement of cash flows;

20 correct?

21 A. Correct.

22 Q. So if you look at the next page, page

23 15 -- are you on page 15?

24 A. Yes, I'm on page 15.

25 Q. So you'll see there's a line here three up

38 (Pages 146 - 149)


CONFIDENTIAL

Page 150

1 from the bottom, "Net Decrease in Cash and Cash

2 Equivalents."

3 Do you see that?

4 A. I do.

5 Q. And what that means is -- am I right -- is

6 net, what's the difference between the amount of

7 money SolarCity took in from its business operations

8 and financings and spent from the cost of its

9 business operations and the cost of its financings;

10 correct?

11 A. Correct.

12 Q. And for the third quarter, you were

13 negative cash flow, even after financings, of almost

14 $49 million for the third quarter; right?

15 A. Correct.

16 Q. Okay. So let's take a look at how you did

17 in the fourth quarter.

18 MR. BERGER: We'll ask the reporter to mark as

19 Exhibit 26 the fourth quarter shareholder letter.


21 BY MR. BERGER:

22 Q. Mr. Rive, take a look at the fourth

23 quarter shareholder letter, please, which is

24 Exhibit 26, and take a look at that one on page 13,

25 please.

Page 151

1 And in terms of cash from operations and

2 financings and its business, how did SolarCity do in

3 the fourth quarter?

4 A. What page do you see fourth quarter?

5 Q. 13. I mean, I'm sorry, this is for the

6 year.

7 A. Year.

8 Q. For the year.

9 A. Yeah.

10 Q. Right, for the year. Because this is the

11 fourth quarter, so it's for the whole year.

12 For the whole year, it was negative cash

13 flow by 121 million.

14 A. Correct.

15 Q. And that's even after all of the

16 financings it gets; right?

17 A. Yeah. But as I've mentioned before, we're

18 investing these assets and we get a long-term

19 recurring revenue stream.

20 Q. I do understand that, but third quarter

21 you were negative by 49 and for the year you were

22 negative 521.

23 Let's see how you did in the first quarter

24 of 2016.

25 MR. BERGER: We'll mark that as Exhibit 27.

Page 152


2 BY MR. BERGER:

3 Q. Do you have Exhibit 27 in front of you,

4 Mr. Rive?

5 A. I do.

6 Q. And this is part of the letter that you

7 wrote to shareholders in the first quarter of 2016;

8 correct?

9 A. Correct.

10 Q. And for this quarter, you were negative

11 cash flow by almost $21 million; right?

12 MR. SORRELS: Object to --

13 MR. BERGER: Correct.

14 MR. SORRELS: -- form.

15 THE WITNESS: Correct.

16 BY MR. BERGER:

17 Q. And let's look at the second quarter.

18 We'll mark as Exhibit 28 your shareholder letter.


20 BY MR. BERGER:

21 Q. And for the second quarter in your

22 shareholder letter, second quarter of 2016, take a

23 look at page 12, please.

24 In the second quarter, you were -- how

25 much negative cash flow did you have in the second

Page 153

1 quarter?


3 THE WITNESS: So a net decrease of 215.

4 BY MR. BERGER:

5 Q. Meaning that you spent almost $216 million

6 more cash than you took in.

7 A. Remember, this is the one I said where

8 there was a big timing delay with the --

9 Q. Well, whether the moon was in, like, you

10 know, a particular phase --

11 A. It's very significant.

12 Q. But that's not what I asked you.

13 A. No --

14 Q. Your lawyer can ask you anything he wants

15 to about whether it's significant or not. I just

16 asked you how much were you negative cash flow for

17 that quarter. How much?

18 MR. SORRELS: Object to the form.

19 BY MR. BERGER:

20 Q. I assume you were accurate when you wrote

21 to your shareholders. You tried to be accurate.

22 A. Yes, but your --

23 Q. Okay.

24 A. -- question was different. Your question

25 was of the business operations, were you negative

39 (Pages 150 - 153)


CONFIDENTIAL

Page 154

1 215.

2 The reason why we were negative 215 --

3 Q. I didn't ask you the reason; I asked you

4 the number. That's what I asked you. If I wanted

5 to ask you the reason, I know how to do that, okay?

6 So I just want to know what the number was.

7 A. Well, you can see what the number is, 215.

8 Q. Yeah, it's $215 million.

9 And what was the cash at the end of the

10 period? 146 million?

11 A. Yes, roughly.

12 Q. That was the amount that you were

13 concerned -- that you said that you were

14 concerned -- you said to the special committee you

15 were concerned about investors knowing because it

16 might impact the stock price; right?


18 MR. BERGER: What's wrong with that question?

19 MR. SORRELS: I don't think that's what he

20 testified to.

21 BY MR. BERGER:

22 Q. Take a look at the minutes of the board

23 special committee meeting July 18th, Exhibit 21.

24 MR. SORRELS: You got 21?

25 BY MR. BERGER:

Page 155

1 Q. Do you have 21 in front of you?

2 A. Hold on a second.

3 Q. Sure.

4 A. Where is 21? Oh, it's down here.

5 Q. Yeah.

6 A. Oh, I'm going the wrong way. I'm missing

7 it somewhere, then.

8 MR. SORRELS: I can give you my copy if you

9 want.

10 THE WITNESS: Thank you.

11 BY MR. BERGER:

12 Q. Do you have Exhibit 21 in front of you?

13 A. Yes.

14 Q. Okay. Would you look at the sentence on

15 the bottom of the first page, top of the second

16 page.


18 Q. Would you turn to the top of the second

19 page, please.

20 A. Hang on a second.


22 Q. Are you ready?

23 A. Okay.

24 Q. Do you see that the first full sentence

25 says,

Page 156

1

2

3

4

5 Do you see that?

6 A. I see that.

7 Q. And I think you told me earlier that the

8 management there that expressed that concern was

9 you; right?

10 A. So my concern --

11 Q. Not what I asked you.

12 Didn't you tell us that the management was

13 you? Or was there another management that maybe

14 we're talking about here?

15 A. I was definitely management.

16 Q. Good.

17 And the concern was something to do with

18 its June 30 cash balance; right? That's what the

19 minutes say.

20 A. Yes.

21 Q. And the June 30 cash balance is what's

22 reflected in the statement of cash flows for the

23 second quarter?

24 A. Yes. So we were concerned about that, and

25 we discussed it and presented it to our shareholders

Page 157

1 and explained to them why that was the case.

2 Q. Okay, fine. And the number was the

3 145.7 million; correct?

4 A. Yeah, call it 150.

5 Q. 145, 150, doesn't really matter; right?

6 Now, for the third quarter, we'll take a

7 look at Exhibit 29, please, third quarter

8 shareholders letter.

9 A. Where are we going?

10 Q. Yeah, I'm going to ask the reporter to

11 mark as Exhibit 29 your third quarter letter to

12 shareholders.


14 BY MR. BERGER:

15 Q. Would you look at page 12, please.

16 And as of the end of the third quarter,

17 were you cash flow negative or cash flow positive?

18 A. Cash flow positive.

19 Q. How much?

20 A. 113 million.

21 Q. And of that 113 million, $100 million was

22 provided by you personally, Mr. Musk, and your

23 brother; right?

24 A. Yes, 100 million came from us.

25 Q. So without the 100 million, you would have

40 (Pages 154 - 157)


CONFIDENTIAL

Page 158

1 been, essentially, at breakeven?

2 A. Correct.

3 Q. And the cash and cash equivalents at the

4 end of the period were 259 million?

5 A. Correct.

6 Q. So without the 100 million, you would have

7 been, essentially, at the same cash position as the

8 prior period; right?

9 A. Correct.

10 Q. There's no billion in here that you talked

11 about. I mean, is there a billion in here of

12 financing from banks?

13 A. Oh, you're not looking -- you've got to

14 get October. Are you in October?

15 Q. I will, but you had said September.

16 September is in the third quarter; right?

17 A. Yes, September and October.

18 Q. Okay. So I'm just -- but I think you said

19 half of the billion came in September, and I was

20 looking for it and I didn't see it.

21 A. The deal is closed.

22 Q. Ah, the deal is closed.

23 A. Yes.

24 Q. That's what you meant.

25 A. So you still have to get the assets

Page 159

1 installed.

2 Q. So it doesn't all come in at once?

3 A. Doesn't all come in at once.

4 Q. None of it came in the third quarter?

5 A. No, some of it must have come in the third

6 quarter, yeah, absolutely. You can't deploy the

7 assets that we did -- well, let's look at it and see

8 what came in in the first quarter.

9 So 370 million. That's pretty close.

10 380 million came in the first quarter.

11 Q. And that's from -- you think that's from

12 the new financings?

13 A. That's part of the financing, yes.

14 Q. That's part of it. Okay.

15 Now --

16 MR. SORRELS: Just to be clear, you said "first

17 quarter," but I think you meant "third quarter."

18 THE WITNESS: Yes. So the third quarter, back

19 to your statement earlier where you said nothing

20 came in, I think you're wrong. I think 380 --

21 BY MR. BERGER:

22 Q. Some of it came in.

23 A. 380 million came in.

24 Q. You think that all 380 million was from

25 those financings?

Page 160

1 A. No, but -- we have open funds, so it would

2 be some from there, some from other funds.

3 Q. Now, as long as we have these here in

4 front of us, these letters to shareholders, one of

5 the things that you reported on to your

6 shareholders, as well as to your investors, was

7 guidance with respect to how your business was doing

8 in terms of installations of megawatts; right?

9 A. Correct.

10 Q. And that was the metric you used for your

11 guidance, was megawatts installed, if I remember

12 that correctly; is that fair?

13 A. That's fair.

14 Q. If we go back to the third quarter of

15 2015, Exhibit 7 -- let's try to put these in order.

16 So third quarter is Exhibit 7, and there's 26, 27,

17 et cetera.

18 So go back to the third quarter. You told

19 investors that you were projecting that you were

20 going to install 1.25 jigawatts [sic] for 2016; is

21 that right?

22 A. Gigawatts, yes.

23 Q. Gigawatts.

24 I think I said "jiga," but that's "giga."

25 1,250 megawatts.

Page 161

1 A. Correct.

2 Q. For the fourth quarter in Exhibit 26,

3 which is the next shareholder letter, you had the

4 same guidance, correct, 1.25 gigawatts that you were

5 projecting for 2016 for the year; is that right?

6 A. So which quarter -- which one are we

7 looking at?

8 Q. Yeah, it's really . . . yes.

9 In the third quarter, you projected 1.25

10 gigawatts for 2016, and you kept the same guidance

11 in the fourth quarter letter --

12 A. Yes.

13 Q. -- is that fair?

14 A. That's fair.

15 Q. If you look at the 2014 shareholder letter

16 that you wrote on February 9th, Exhibit 26, page 5.

17 Could you take a look at that.

18 A. Exhibit 26, page 5. So this is --

19 Q. Exhibit 27 -- 26, please, rather, 26.

20 A. Not Exhibit 7?

21 Q. No, Exhibit 26.

22 A. Exhibit 26. 25, 27 -- 26.

23 Q. Okay. Exhibit 7 was the third quarter,

24 Exhibit 26 is the fourth quarter; correct?

25 A. Fourth quarter, okay.

41 (Pages 158 - 161)


CONFIDENTIAL

Page 162

1 Q. And in the fourth quarter, in your letter,

2 page 5, you discuss "Outlook and Q1 2016 Guidance";

3 is that right? Do you see that paragraph?

4 A. Yep.

5 Q. Now, I think that for 2015, you, in fact,

6 had not met the guidance that you had told investors

7 and shareholders that you anticipated.


9 A. I do. I don't remember how big the miss

10 was.

11 Q. But it was a miss.

12 A. In terms of megawatts installed? Let's

13 have a look here and see where it was. Where is the

14 accumulated number?

15 So we had 73 percent growth year over

16 year, but I forget the miss -- what did we miss it

17 by? So 870 -- it was my company presentation.

18 Q. 870 megawatts was what you actually did

19 for 2015; correct?

20 A. Yes, that's what we did for 2015, correct.

21 Q. And your guidance was somewhat higher than

22 that; is that fair?

23 A. I'm trying to find out what it was.

24 Ah, here we go. So the miss, we came in

25 at 270 megawatts and the guidance was 280 to 300.

Page 163

1 Q. For the fourth quarter?

2 A. For the fourth quarter.

3 Q. Okay. So you missed it by --

4 A. Eight megawatts.

5 Q. You came in 270 and the guidance was 280

6 to 300?

7 A. Yeah, so --

8 Q. You missed by 10.

9 A. 272 --

10 Q. Okay. 272. Okay.

11 A. 272.

12 Q. Okay. But you missed it?

13 A. Yeah, we missed it.

14 Q. Okay. But, generally, you believed

15 that -- withdrawn.

16 Why did you believe that megawatts

17 installed was a useful metric to give investors

18 guidance about?

19 A. Because when we deploy the assets, the

20 assets are directly proportional to our future

21 income stream.

22 Q. Now, you'll see that in Exhibit 26 that I

23 was discussing with you on page 5, you say that

24 you're going to -- you're not happy with your

25 results and you need to revamp your guidance

Page 164

1 methodology to avoid potential shortfalls going

2 forward.

3 You told that to investors; right?

4 A. So where did you say that page is?

5 Q. Page 5, Exhibit 26, your fourth quarter

6 letter.

7 A. Page 5, Exhibit 26.

8 Q. Do you see where I read?

9 A. Yeah.

10 Q. Okay. So that's what you told investors?

11 A. Correct, that we had to redo our guidance.

12 Q. Your methodology for providing guidance or

13 for forecasting your installations; correct?

14 A. Correct.

15 Q. That by -- by "revamping the guidance

16 methodology," what you meant was revamping the

17 methodology you were using to forecast what your

18 installations were going to be.

19 A. Well, essentially, being more conservative

20 in it.

21 Q. Being more conservative.

22 And did you do that at that time? Did you

23 revamp that methodology?

24 A. I know we redid the guidance, and I'm

25 forgetting exactly when we did it. So maybe we did

Page 165

1 it in this one, or not? Let's see.

2 Q. You kept the guidance the same as you had

3 the prior quarter; that is, the guidance for 2016 as

4 a whole.

5 A. Okay. So we haven't changed it just yet.

6 We changed it the following quarter, I think.

7 Q. Okay. You changed your methodology and,

8 therefore, changed your guidance; right?

9 A. No. A sequence of events happened that

10 caused us to change the guidance, primarily Nevada.

11 Q. So you'll see that then for the -- in your

12 first quarter letter to shareholders, Exhibit 27

13 dated May 9th, 2016 -- do you have that in front of

14 you?

15 A. Exhibit 27?

16 Q. Yes.

17 A. I have it in front of me.

18 Q. That's your shareholder letter for the

19 very next quarter; correct?

20 A. Yeah.

21 Q. Is that right?

22 A. For the first quarter.

23 Q. Yes, which was the next --

24 A. Yeah.

25 Q. -- one after Exhibit 26; right?

42 (Pages 162 - 165)


CONFIDENTIAL

Page 166

1 A. Yes.

2 Q. Okay. And what did you tell investors

3 about your guidance for 2016 in this letter? Maybe

4 take a look at page 6.


6 A. Yes, we changed guidance from 1,250 to 1

7 to 1.1 gigawatts.


9 A. 1,000 to 1,100. So 1,250 megawatts, we

10 changed that to 1,000 to 1,100 megawatts.

11 Q. Isn't the case, Mr. Rive, that at this

12 time -- that is, May 9th, 2016 -- that internally,

13 your guidance methodology had you projecting not

14 1,000 to 1,100 megawatts, but

15 A. Maybe if you exclude Mexico, if you don't

16 include Mexico.

17 Q. Well, let me show you a document that's

18 been marked as Exhibit 13, which is the board of

19 directors minutes -- I'm sorry, the package from the

20 board of directors meeting on April 26, 2016. Would

21 you take a look at page 21, please. Turn to page

22 21.

23 Are you at page 21?

24 A. Yes.

25 Q. It's a schedule that says -- it's a slide,

Page 167

1 rather, that says at the top "2016 Guidance

2 Revision."

3 Do you see that?

4 A. I do.

5 Q. And that's the same guidance we've been

6 talking about in these shareholder letters, isn't

7 it?

8 A. No, this is the -- this is what we told

9 the board that we think we can achieve. The board

10 was not -- did not agree to this.

11 Q. Got it. You told the board, but you

12 didn't tell your public shareholders?

13 A. No. The board said, go figure out a plan

14 to make up the gap, and then we deployed Mexico.

15 Q. So internally, you went to the board and

16 told the board that you thought you could do

17 and the board said, that's no good?

18 A. The board said, no, you need to come up

19 with a plan that deploys .

20 Q. And where is that plan?

21 A. We deployed megawatts in Mexico.

22 Q. How many megawatts did you deploy in

23 Mexico?

24 A. I don't have the final --

25 Q. 100?

Page 168

1 A. Actually, very close. I think it was -- I

2 know we did 40 in the third quarter, and I forget

3 what we did in the fourth quarter.

4 Q. Isn't it the case that what this slide

5 indicates is that management recommended to the

6 board that you stop giving guidance at all?


8 BY MR. BERGER:

9 Q. Isn't that what it means,

10

11 A. Quarterly guidance, but not stop doing --

12 Q. Not --

13 A. -- total guidance.

14 Q. You still wanted to give yearly guidance.

15 A. Still wanted to give yearly guidance.

16 Q. So you gave yearly guidance in May, and

17 you used 1,000 to 1,100.

18 A. That's correct.

19 Q. But not

20 A. Yes, because we had an expansion plan to

21 Mexico.

22 Q. And when did you come up with that

23 expansion plan to Mexico?

24 A. That was in progress.

25 Q. In progress.

Page 169

1 A. Yeah. So we knew we could achieve it.

2 Q. So you knew --

3 A. We had high confidence we could achieve

4 it.

5 Q. You had high confidence you could achieve

6 it.

7 Let me show you this document.

8 Let me ask you to look back at Exhibit 22,

9 which is the -- you can still hold on to that stuff.

10 This is Exhibit 22, Project Daedalus. That's the

11 materials prepared by Lazard.

12 I assume, by the way, before we talk about

13 that, that you and your team were speaking to Lazard

14 in connection with them doing the work they needed

15 to do to advise the special committee; correct?

16 A. My team, primarily.

17 Q. Yeah. And they gave them all the

18 information that Lazard wanted and they thought

19 would be important for Lazard to have; correct?

20 A. I assume they gave them all that

21 information.

22 Q. Okay. Would you look, please, at page --

23 it's the third -- it's one, two, three -- fourth

24 page in the document. It's -- 42370 is the page

25 number in the bottom right.

43 (Pages 166 - 169)


CONFIDENTIAL

Page 170

1 Do you have that?

2 A. Yes.

3 Q. "Unrestricted Liquidity Case Updated 2016

4 Cash Flows"?

5 A. Yeah.

6 Q. Do you see that there's virtually nothing

7 in Mexico that's being estimated for 2016?

8 A. Yeah. I'm sure they were being -- I don't

9 know why. I mean, I know we did 40 in Q3.


11 A. 40, yeah. So I don't know why they didn't

12 have it in there. We actually did 40. You can see

13 the press announcement and everything. And I think

14 it excludes this 8. That was one big deal.

15 Q. How many megawatts did the company

16 actually install in 2016?

17 A. I can't remember. I . . .

18 Q. Wasn't it slightly over 800? It was about

19 803; does that sound right?


21 Q. Does that sound right, though?

22 A. Actually, I thought it was over 900. I

23 thought it was closer to 940, but I can't remember

24 exactly.

25 Q. Would it surprise you that it was that

Page 171

1 low, 803?

2 A. Then something must have got installed the

3 following week in January.

4 Q. Got kicked over like lots of other stuff

5 gets kicked over into the future?

6 A. Have you ever done construction before?

7 Q. Just asking.

8 A. It's a construction project in the winter.

9 Things move.

10 Q. Take a look, then, at Exhibit -- I think

11 it's 28, which is -- I'm sorry, the fourth

12 quarter -- the second quarter shareholder letter,

13 2016, the one August 9th. That's Exhibit 28.

14 A. Okay.

15 Q. Page 4 under "Guidance," do you see in the

16 middle of this paragraph, you wrote the following to

17 investors: "In turn, we expect total 2016 megawatts

18 installed of 900 to 1,000 megawatts, with the mid to

19 high end of the range assuming an improvement in

20 residential sales productivity."

21 Do you see that?

22 A. I do.

23 Q. Did you go back to the board before you

24 wrote this letter and said, hey, is it okay now that

25 we can go out with a guidance of ? Can we lower

Page 172

1 our guidance now? Is that okay? Did you ask the

2 board?

3 A. The board reviews everything beforehand,

4 so I forget exactly how I asked the board.

5 Q. Just to go back for a second, just to go

6 back to the board of directors meeting on

7 April 26th, 2016, the one which had your guidance

8 recommendation of which you said the board

9 didn't accept.

10 Was the board usually -- by the way, was

11 the board usually in the habit of disagreeing with

12 your recommendations on what to do on guidance?

13 A. The board and what all boards should do is

14 push management to do the best they possibly can.

15 And so if they feel that is not the

16 right number, it is the board's responsibility to

17 ask management to come back with a plan to do better

18 than .

19 Q. And what you went out to the public with

20 on May 9th was 1,000 to 1100; correct?


22 BY MR. BERGER:

23 Q. That's what you went out with guidance on

24 May 9th; right?

25 A. Yeah.

Page 173

1 Q. Where did that number come from? Just

2 come out of thin air?

3 A. No, I'm sure we had a plan in place to

4 talk about that.

5 Q. Do you remember any particular person on

6 the board who said something about the

7 guidance being too low?

8 A. No. There was an overall board concern.

9 Q. See, what I don't understand is that --

10 well, I don't understand a lot of things, but I

11 guess what I want to ask you is I thought that we

12 talked earlier about the pivot at the third quarter

13 or fourth quarter of 2015, where you said the

14 company's business model now was going to be lower

15 growth, more cash; right? We talked about that;

16 right?

17 A. Correct.

18 Q. And now -- and the board knew about that;

19 right? I assume the board approved that.

20 A. Yes.

21 Q. And now the board is telling you, no, you

22 gotta grow more. Go back to growing.

23 A. No, they did not say no growth. Very big

24 difference.

25 Q. Well, is not no growth.

44 (Pages 170 - 173)


CONFIDENTIAL

Page 174

1 A. It's very close to no growth. We did 870

2 the previous year, so -- 872, so really small

3 growth.

4 And the year before that, we grew at

5 78 percent or something like that --

6 Q. Right.

7 A. -- so almost 80 percent. So the board

8 wanted some growth, but not hypergrowth.

9 Q. Do you remember anything that any

10 particular board member said at this meeting about

11 this subject?

12 A. Yeah. Most of the board members said,

13 you've got to have more growth. Lower growth is

14 fine, but you can't have no growth.

15 Q. Wasn't it going to require more cash to

16 generate that additional growth?

17 A. So we had to look at --

18 Q. Yes or no?

19 A. It depends on how the growth comes. So if

20 it's a cash sale, then no; if it's a financed, then

21 yes.

22 Q. So the board told you you should go out

23 and do more cash sales?

24 A. Yes.

25 Q. But if it's financed, it was going to cost

Page 175

1 you more cash to do it.

2 A. Short-term. But, remember, every asset we

3 deploy is cash accretive to the company.

4 Q. Take a look back at Exhibit 21, which are

5 the board minutes from the special committee,

6 July 8th.

7 A. Exhibit 21. Is it over there? Do I have

8 it?

9 Q. I don't know.


11 MR. BERGER: Maybe in this pile down here

12 underneath. It's the minutes.

13 MR. SORRELS: Here, just take mine again.

14 THE WITNESS: Okay. That's 1 through 6.

15 MR. BERGER: Sorry for all the confusion.

16 BY MR. BERGER:

17 Q. Again, I want you to look back at page 2

18 of the minutes, the sentence that we were discussing

19 a bit earlier, the first full sentence where you

20 said,

21

22

23

24

25 So here in July, it was clear to you that

Page 176

1 you were going to have to revise downward your

2 megawatt guidance; right?

3 A. Which we did.

4 Q. Which you -- which you did.

5 Did the board -- did these two board

6 members say, you can't do that?

7 (Telephonic interruption.)

8 MR. BERGER: Sorry. Sorry.

9 BY MR. BERGER:

10 Q. Did either of these two board members

11 raise an objection to your revising down your

12 guidance?

13 A. So this is now halfway through the end of

14 the year -- halfway through the year, and you have a

15 lot more information.

16 So the board is not going to ask you to

17 present things that you can't knowingly not do. So

18 they absolutely want to make sure what you present

19 is right. At this point, our confidence level of

20 hitting the higher guidance was not there.

21 MR. BERGER: Okay. Let's take a short break,

22 please. Thank you.

23 THE VIDEOGRAPHER: We're going off the record

24 at 3:02 p.m. This is the end of Media Unit 5.

25 (Recess taken.)

Page 177

1 THE VIDEOGRAPHER: Okay. We're back on the

2 record at 3:18 p.m. This is the beginning of Media

3 Unit 6.

4 BY MR. BERGER:

5 Q. Going back to -- excuse me. Going back to

6 Exhibit -- I think it's 13, page 21. If you would

7 turn there, please, again. That's the page on

8 guidance.

9 A. Okay.

10 Q. This represented the best estimate that

11 you and your team had at this time, April 26th,

12 2016, of what the total megawatts you were going to

13 install for the year would be; correct?

14 A. At that time, this is what we were

15 recommending to the board.

16 Q. Based on the work that you and your team

17 did determining guidance and projecting what your

18 installations were going to be for the year;

19 correct?

20 A. Without any further expansion, this is

21 what we think we could do.

22 Q. Okay. And what you told me before is that

23 the board told you that this wasn't okay, you had to

24 do better, and you said what you came up with was

25 more sales and sales in Mexico; correct?

45 (Pages 174 - 177)


CONFIDENTIAL

Page 178

1 A. Correct.

2 Q. And the guidance that you came out with on

3 May 9th was 1,000 to 1,100 megawatts; correct?

4 A. Yes.

5 Q. And so what you and your team concluded

6 was that you were going to be able to sell

7 worth of -- megawatts worth of systems in Mexico

8 between May and the end of the year.

9 A. A combination of Mexico and then, of

10 course, sales efficiency improvements.

11 Q. Did you really believe you were going to

12 be able to sell between megawatts worth

13 of systems in Mexico in seven months?

14 A. You didn't hear what I said.


16 THE WITNESS: As I said, it was partially

17 Mexico --

18 BY MR. BERGER:

19 Q. Yes.

20 A. -- and partially sales efficiency.

21 Q. "Sales efficiency" meaning being more

22 efficient selling systems?

23 A. Yes.

24 Q. You hadn't -- when you came up with the

25 , you hadn't, like, tried to ring all the

Page 179

1 efficiencies out of it?

2 A. Well, when we present a number to the

3 board, we want to make sure we exceed that number.

4 So now we go back and we go, okay, how do we make a

5 better number than the conservative number.

6 Q. You knew, didn't you, that if you went to

7 the public with a revision from 1,250 megawatts to

8 , that that would have a material negative impact

9 on the company's stock price; correct?

10 A. No, that was not -- no.

11 Q. Couldn't be sure, but you thought that

12 that would be a very likely outcome; right?

13 A. No. That was not at all the focus.

14 Q. Whether it's the focus or not, you

15 understood that revising your guidance downward

16 could have a very negative impact on the stock

17 price; right?

18 A. Revising the guidance to a close to zero

19 growth was not acceptable.

20 Q. Would have had a bad effect on the stock

21 price; correct?

22 A. The -- it might. I don't know what would

23 happen with the stock price.

24 But the focus is -- what the board wanted

25 us to do is come up with a plan to go beyond .

Page 180

1 Q. And this was -- withdrawn.

2 If you had come out with guidance of ,

3 it also would have made obtaining financing more

4 difficult; correct?

5 A. Not necessarily.

6 Q. But it could have had a very -- withdrawn.

7 It could have had a negative impact on

8 your ability to get financing; true?

9 A. No, not necessarily.

10 Q. But it could have; right?

11 If potential investors saw that the

12 company was forecasting little or no growth, that

13 could have impacted your ability to get financing;

14 right?

15 A. No. Actually, the financing itself was

16 tied to the assets that we deploy. Very little to

17 do with the stock itself.

18 Q. I went and looked at a news article in the

19 interim -- you don't have to take my word for it --

20 where you reported -- or Tesla reported that you

21 actually installed 30 megawatts of systems in Mexico

22 in 2016.

23 Does that surprise you?

24 A. Is it 30?

25 Q. Yeah, 30.

Page 181

1 A. Okay. So I said 40.

2 Q. You said 40 in the third quarter and, in

3 fact, it was 30 for the whole year.


5 BY MR. BERGER:

6 Q. And some had already been installed --


8 A. I don't remember.

9 Q. How much did you install in Mexico up

10 through end of April 2016? Do you know?

11 A. Up to April '16?

12 Q. Yeah. Yeah.

13 A. I mean, we started Mexico initiative in

14 '16, so I don't think we --


16 A. We started the Mexico initiative in '16,

17 so I don't think we did very much by April.

18 Q. So you thought you were going to go from,

19 essentially, zero to 100 in seven months?

20 A. Very close to that, yes. And we had clear

21 pipeline and projections on that.

22 Q. Why did you miss your guidance so badly in

23 2016?


25 THE WITNESS: So what do you call "so badly"?

46 (Pages 178 - 181)


CONFIDENTIAL

Page 182

1 BY MR. BERGER:

2 Q. 803 versus --

3 A. So the final number was 803?

4 Q. Correct, 803 versus either 1250 or --

5 A. Can you show me the 803?

6 Q. Yeah. I'll have to get the article.

7 There was a news article about it.

8 A. Doesn't sound right.

9 Q. Doesn't sound right?

10 A. Hmm-mm.

11 Q. Okay. Well, I don't want to represent it

12 to you, because that's not appropriate. So I will

13 try to find it, and if I can, I'll come back and ask

14 you at the very end of the deposition. Maybe my

15 friend will find it for me.

16 Okay. So let's come back to that. We can

17 put aside Exhibit 13, if you don't mind.

18 In addition to your cash issues with

19 respect to your revolver and your liquidity, you

20 also had to find cash to pay off debts as they were

21 coming due; correct?

22 A. Either the debt will convert into equity

23 or you have to pay it back.

24 Q. Some of your debt was not convertible.

25 Some of it was just straight debt, for example, bank

Page 183

1 loans or other types of debt; correct?

2 A. Yeah. Most of that debt would get

3 refinanced.

4 Q. Would get refinanced.

5 A. Yes.

6 Q. Although no guarantee.

7 A. Very high probability.

8 Q. Do you know how much debt the company had

9 coming due in the short term as of the first and

10 second quarter of 2016?


12 MR. BERGER: What's wrong with the form? I

13 mean, I'm sorry, I have to ask.

14 MR. SORRELS: Well, I don't know what "short

15 term" is.

16 MR. BERGER: Oh.

17 THE WITNESS: So '16?

18 BY MR. BERGER:

19 Q. Yeah. Well, do you understand what I'm --

20 let's just --

21 A. What was the debt in '16?

22 Q. 2016.


24 Q. Okay. So maybe that is a bad question.

25 You understand that with respect to the

Page 184

1 company's debt, some is classified as current and

2 some is classified as long-term?

3 A. Yes.

4 Q. So you understand, then.

5 What's current debt? Debt due within a

6 year?

7 A. Within a year.

8 Q. Okay. There you go. That wasn't so hard,

9 was it?

10 Now, how much current debt did the company

11 have coming due as of the first quarter or second

12 quarter of 2016?

13 A. I don't know.

14 Q. You don't know.

15 But, certainly, it would be reflected in

16 the company's financial statements. Could you take

17 a look -- let's just take a look at the second

18 quarter 2016 10-Q. Did we mark that? It's not

19 going to be in there.

20 A. This is the second quarter, isn't it?

21 Q. Yeah, but that's the report. I'm -- we've

22 got to -- we have to look at the 10-Q.

23 MR. SORRELS: Oh, 10-Q. 19. I think that was

24 the first quarter, though.

25 THE WITNESS: That was just the first quarter.

Page 185

1 MR. BERGER: Okay. We can use -- we can

2 probably use the first quarter.

3 So that was No. 19. Could you pull out 19

4 from this stack, which we very fortunately have put

5 in order.

6 MR. UPADHYA: It's the really thick one.

7 MR. BERGER: Do you have a copy for me?

8 BY MR. BERGER:

9 Q. Just take a look in 19 at the balance

10 sheet.

11 A. What page?

12 Q. Page 3.

13 Actually, there's a better way -- better

14 one.

15 Take a look at page 16, which is Note 5 of

16 the financial statement, "Indebtedness."

17 Are you with me?

18 A. Page 16? I'm sorry.

19 Q. Yes. Thank you.

20 And this is as of March 31st, 2016.

21 Do you see that?

22 A. I do.

23 Q. And just to clear up a couple of things

24 that maybe we weren't sure about this morning.

25 The very first item of debt, which is the

47 (Pages 182 - 185)


CONFIDENTIAL

Page 186

1 secured revolving credit facility, that was the

2 revolver that had the liquidity covenant; right?

3 A. I think that's the one, yes.

4 Q. And it was called Cronor? Is that what --

5 that's what you guys called that; right?

6 A. Okay.

7 Q. Is that a "yes"?

8 A. I think that's the case, yes.

9 Q. And I asked you --

10 MR. BERGER: Okay. I'm going to need the

11 second quarter one.

12 BY MR. BERGER:

13 Q. How much debt did the company have that

14 was coming due within a year?


16 A. It's actually -- is this the revolver? So

17 it's -- 375 was the revolver amount.

18 Q. I'm sorry, maybe I'm looking at the wrong

19 page.

20 Isn't it the case that there was

21 211 million of recourse debt that was coming due

22 within a year and then 241 million of nonrecourse

23 debt that was coming due, for a total of

24 452 million?

25 A. I see the 375 and then the --

Page 187

1 Q. That's the unpaid principal, yes.

2 A. Okay.

3 Q. And I was just curious --

4 A. And then the -- which other one are you

5 looking at? So you're looking at the term loan,

6 December '16, of 112, that one?

7 Q. Yeah. Here's a better way to ask that --

8 ask the question.

9 So there's amounts here for what the

10 unpaid principal balance is for all this debt.

11 That's the first column; right?

12 A. Correct.

13 Q. And then the second two columns are how

14 much is current and how much is long-term.

15 Do you see that?

16 A. Okay.

17 Q. And by that, do you understand the current

18 amount is the amount of the debt that is due within

19 a year?

20 A. Okay.

21 Q. You agree with that; right?

22 A. I do.

23 Q. Okay. And the amount of debt that the

24 company had that was coming due within a year of

25 March 31, 2016, in total was about $453 million.

Page 188

1 A. Correct.

2 Q. Now, by the way, when I asked you a little

3 bit earlier about the Cronor facility, that was,

4 essentially, at -- you were at capacity in that

5 facility.

6 A. Correct.

7 Q. Okay. What plans, if any, did you have in

8 March, April, May, June, when you were having these

9 liquidity issues, with respect to dealing with the

10 fact that you had a very substantial portion of debt

11 that was coming due within a year?

12 A. So let me explain the business, because I

13 think this is really key.

14 The revolver covers short-term

15 construction needs. Then we go out and then we get

16 tax equity and debt. Once we've done that and all

17 the assets have matured, then we get long-term debt

18 to take out the short-term debt. Okay? So that's

19 how the business has been operating for eight years.

20 And all these had takeouts, which was in

21 that number that I mentioned to you before, and that

22 was the 200 million in/200 million out.

23 Q. Got it.

24 But you were also, for example, going to

25 have to pay off $180 million of solar bonds within a

Page 189

1 year?

2 A. Yes.

3 Q. Wasn't it the case -- maybe you remember

4 this, maybe you don't -- wasn't it the case that at

5 some point in March or April of 2016, a substantial

6 portion of those solar bonds came due? I think it

7 was 90 million or 100 million came due and had to

8 either be paid off or rolled over?

9 A. Maybe. I can't remember it. Yes.

10 Q. And at this point, the 179 million in

11 solar bonds, this was before you and Mr. Musk and

12 your brother put in additional money for solar

13 bonds.

14 The 179 million was principally owed to

15 SpaceX; correct?

16 A. I don't -- I can't remember exactly the

17 amount to SpaceX versus others.

18 Q. SpaceX agreed to roll over its -- I don't

19 know if "roll over" is the right --

20 A. It's renew.

21 Q. Renew. That's --

22 A. Renew is the --

23 Q. Yes, renew.

24 They agreed to renew the solar bonds in

25 March or April of 2016; right?

48 (Pages 186 - 189)


CONFIDENTIAL

Page 190

1 A. Correct.

2 Q. And that was at a time when Mr. Musk had

3 already spoken to you about acquiring SolarCity?

4 A. Yes, there -- that's about right.

5 Q. Okay. I think I'm done with that.

6 So I'm going to show you an article on an

7 iPhone. You can do what you want with it.

8 MR. BERGER: Okay. I'm --

9 MR. SORRELS: No, I'm just sighing.

10 MR. BERGER: That's okay. Let's take a break

11 and get it printed.

12 MR. SORRELS: Yeah, that's --

13 MR. BERGER: Can you do that for us?

14 MR. SORRELS: I do not know.

15 MR. BERGER: It's your firm; right? Would you

16 mind?

17 MR. SORRELS: Yeah, I do work in this building.

18 MR. BERGER: Right.

19 MR. SORRELS: I can ask them at the front desk

20 if they have the ability to do it. That's --

21 MR. BERGER: Great.

22 MR. SORRELS: If you want to mark it as an

23 exhibit. Is that your --

24 MR. BERGER: No, I actually wasn't going to. I

25 was going to show it to him and ask him.

Page 191

1 But I'm happy to mark it. Let's mark it

2 as an exhibit. So let's go off the record, okay?

3 Thank you very much.


5 The time is 3:36 p.m.

6 (Off the record.)


8 3:37 p.m.

9 BY MR. BERGER:

10 Q. I'm going to read to you from an article

11 that's entitled "Tesla reports major miss on solar

12 installations in Q4 2016." It's by a Mark Osborne.

13 It's dated February 22, 2017. PV-Tech is the

14 website. It's the third paragraph.

15 It says the following: "Previous

16 full-year guided installations from SolarCity had

17 been in the range of 900 megawatts to 1,000

18 megawatts. Actual 2016 installations failed to meet

19 the lower revised figure set in the third quarter of

20 900 megawatts. Instead, total 2016 solar installs

21 were around 803 megawatts."

22 And there's the article, and you should

23 certainly feel free to read whatever you want.


25 Q. So, Mr. -- my question to you, Mr. Rive,

Page 192

1 is: First of all, do you have any reason to doubt

2 that that's what Tesla reported for SolarCity for

3 the full year 2016 in terms of megawatts installed?

4 A. I would like to see the Tesla full number

5 on this, because maybe they left something out. I

6 don't know. This is an article.

7 Q. Okay. So what I'll try to do before we

8 finish the deposition is get the Tesla press

9 release.

10 A. Yeah, that would be --

11 Q. That would be great. I think you're

12 right, that's a better way to do it. So let's try

13 to get that.

14 A. Okay.

15 Q. Thank you.

16 While we're waiting, let me turn to what

17 is the final or next-to-final topic here.

18 Let me have all three of those, please.

19 Thank you very much.

20 So am I correct that once the transaction

21 where Tesla acquired SolarCity was closed -- and I

22 think that was November 2016; is that right?

23 A. I forget the exact date, but around there.

24 Q. Okay.

25 -- you continued to work at Tesla for some

Page 193

1 period of time.

2 A. Correct.

3 Q. And am I right that one of your

4 responsibilities was integration, for lack of a

5 better word, of SolarCity into Tesla?

6 A. Working with Tesla. I was not in --

7 responsible for the full integration. Other

8 departments took the head of that.

9 Q. What role or responsibility did you have

10 with respect to integration?

11 A. Sales and -- sales of PV systems and sales

12 of battery systems, and then installation of those

13 two.

14 MR. BERGER: Could you please mark as

15 Exhibit 30 a series of e-mails from Mr. Rive

16 dated -- or an e-mail from Mr. Rive and then

17 response to one from Mr. Phillips dated

18 September 27, 2016. Document number is 1972829.


20 BY MR. BERGER:

21 Q. Mr. Rive, I'd like to ask you about the

22 e-mail you wrote at the top dated September 27th.

23 A. Yes.

24 Q. If you look at the second line of what you

25 wrote, you wrote to your team, "Until we have laid

49 (Pages 190 - 193)


CONFIDENTIAL

Page 194

1 out the integration strategy with Tesla, I don't

2 want any meeting with anything related to Tesla."

3 You wrote that; right?

4 A. Yes.

5 Q. So I take it that at least at this point,

6 September 27th, there was no integration strategy

7 that had been laid out yet.

8 A. Correct.

9 MR. BERGER: Let's mark this as Exhibit 31,

10 please.


12 BY MR. BERGER:


14 Exhibit 31, please. This is an e-mail from

15 Mr. Corey to you responding to an e-mail you wrote

16 to Mr. Corey. This is TESLA 18410 through 12.

17 You see on November 17th, you wrote to

18 Mr. Corey that "here's my first cut at a high-level

19 transition to Tesla's brand. I would like to get

20 your feedback and we can modify it as you see fit."

21 So am I correct that this was the first

22 time that you sat down to think about and plan out a

23 transition from SolarCity into Tesla?

24 A. Correct, this is the first, yes.

25 Q. And just a -- just a quick question on the

Page 195

1 next sentence about assuming Solar Roof gets

2 deployed in October. Go back to the first page,

3 please.

4 By this, you meant October 2017,

5 obviously.

6 A. Where do you see -- on the first page?

7 Q. Yeah, first page, right under the sentence

8 I wrote to you -- read to you, you wrote --

9 A. Oh, yeah.

10 Q. October 2017; right?

11 A. Yes.

12 Q. As of November 2016, Solar Roof was not

13 yet deployed; right?

14 A. Correct.

15 Q. It was not yet a functioning product.

16 A. It was still in R&D.


18 A. It was still in R&D.

19 MR. BERGER: Okay. Let me ask the reporter to

20 mark as Exhibit 32 this document, which is an e-mail

21 from you dated October 18th to a number of

22 individuals.


24 BY MR. BERGER:

25 Q. So you wrote on October 18th -- this is in

Page 196

1 response to an e-mail from Mr. Merkley of the same

2 day where he said, among other things, "Need to get

3 going on an integration plan. Even if the plan is

4 only to show people what stuff is planned to start

5 changing 12 months from now, need a plan, any plan."

6 Do you see that? He wrote that at the

7 bottom; right?

8 A. Yes.

9 Q. So, obviously, there was no plan yet.

10 And you wrote back that now that you had

11 received guidance from Mr. Musk, you could start

12 integration planning; is that fair?

13 A. Fair.

14 Q. Okay. After this, were -- did you -- were

15 you involved in integration planning?

16 A. There's a certain point, probably shortly

17 after this, that the Tesla team wanted to change,

18 different organizational structure, and then have

19 HR, IT, finance all under one department, versus

20 having SolarCity its own finance group, its own

21 engineering group. And I think that came in after

22 these e-mails.

23 Q. When did that happen?

24 A. I suspect right around December,

25 January-ish.

Page 197

1 Q. You gave me that answer in response to the

2 question I asked you about whether, after this

3 e-mail -- series of e-mails, you were involved in

4 the integration plans.

5 A. Oh. We --

6 Q. So is the answer, no, I wasn't, and that's

7 why?

8 A. No. Absolutely I had some involvement in

9 the integration plans, and -- but at that point,

10 they assigned a lead integrator, someone from Tesla.

11 I think his name was -- I can't remember his name.

12 I think it's Brian. And he -- his job is to work

13 with all the departments to get them integrated.

14 And so -- but, absolutely, he would come

15 to me and say, hey, this is what I'm doing. I would

16 get involved with people's titles; I would get

17 involved with people's comp. So, absolutely, I was

18 still involved.

19 Q. I think -- when did you leave Tesla?

20 A. July 2017.

21 Q. I believe, though, that the fact that you

22 were going to leave was announced publicly sometime

23 before that; right?

24 A. Correct.

25 Q. I think it was March?

50 (Pages 194 - 197)


CONFIDENTIAL

Page 198

1 A. No, I don't think it was that -- I forget

2 when it was.

3 Q. A few months before that, it was publicly

4 announced that you were going to be leaving.

5 A. Definitely before. I can't remember how

6 many months.

7 Q. Why did you leave?

8 A. Well, quite frankly, the -- I took on a

9 very big role. I took on all of solar, as well as

10 energy and international. It was too big a role for

11 me and I wasn't performing to the level that I

12 should have performed to, that I had held myself

13 accountable to it.

14 And I know that Elon was not happy with

15 the performance, specifically with the -- with the

16 energy group, and so at that point, I think we

17 mutually decided that this is not a -- not a great

18 fit.

19 Q. The energy group, would -- did that

20 include SolarCity or what had been the SolarCity

21 business?

22 A. Yeah. But the -- actually, the biggest

23 issue was getting batteries installed.

24 Q. And I only ask you this -- well, I saw

25 something -- did Mr. Musk ask you to leave?

Page 199

1 A. It was -- it was a mutual discussion.

2 Q. Mutual decision.

3 MR. BERGER: Okay. So let us take a break.

4 How did I do in my half hour to hour?

5 Pretty good; right?

6 MR. SORRELS: Well, if you're saying you're

7 done, then you're doing great.

8 MR. BERGER: Well, I'm going to see if we can

9 find the press release --

10 THE WITNESS: Okay.

11 MR. BERGER: -- and then come back and ask you

12 about that, if we can --

13 THE WITNESS: Okay. Yeah.

14 MR. BERGER: -- and then we'll be done --

15 THE WITNESS: Okay.

16 MR. BERGER: -- all right?


18 The time is 3:50 p.m.

19 (Recess taken.)

20 THE VIDEOGRAPHER: We're back on the record.

21 The time is 3:55.

22 BY MR. BERGER:

23 Q. Okay. I'm going to show you a press

24 release dated February 22nd, 2017, issued by Tesla,

25 entitled "Tesla Fourth Quarter and Full Year 2016

Page 200

1 Update."

2 And I'm going to refer you -- you can --

3 A. Mac vs. PC.

4 Q. Yeah. I'm an Apple person. I love Apple.

5 We'll talk about that later.

6 I'm going to refer you to --

7 MR. BERGER: What page is it?

8 MR. UPADHYA: Page 2.

9 BY MR. BERGER:

10 Q. Section on "Sustainable Energy," the one

11 with the nice picture of Solar Roof on it.

12 MR. BERGER: Where is it?

13 MR. UPADHYA: Right there.

14 BY MR. BERGER:

15 Q. Okay. And certainly feel free to scroll

16 up.

17 But this indicates that SolarCity

18 installed 201 megawatts in the fourth quarter of

19 2016.

20 Do you see that, Mr. Rive?

21 A. I do.

22 Q. Okay. So that's 201 for the fourth

23 quarter.

24 If you then go back -- let's do this in

25 reverse order. If you take Exhibit 29, which -- I

Page 201

1 have to do this quarter by quarter -- 29 has the

2 third quarter shareholder letter.

3 A. Where is Exhibit 29? Give me one second.

4 Q. So if you take 29, that has -- for the

5 third quarter, it had 187 installed.

6 Do you see that on the bottom of the first

7 page?

8 A. I do.

9 Q. And then if you go back to Exhibit 28,

10 which is the second quarter --

11 A. Well, I think there's probably an easier

12 way to do this.

13 Q. I don't know.

14 -- has 201.

15 Do you see that on Exhibit 28?

16 A. Give me a second. I'm pretty sure there's

17 an easier way to do this. One second.

18 Q. Sure.

19 A. I'm pretty sure we gave guidance for Q4.

20 Q. Actually, it would be quicker just to do

21 the first page of all these.


23 A. Okay.

24 Q. Let's just do it my way.

25 So the fourth quarter we know from Tesla's

51 (Pages 198 - 201)


CONFIDENTIAL

Page 202

1 press release is 201, the third quarter we know from

2 Exhibit 29 is 187 megawatts, the second quarter we

3 know from Exhibit 28 is 201 megawatts, and the first

4 quarter we know from Exhibit 27 is 214 megawatts.

5 Are you with me?

6 A. Okay.

7 Q. So if you add 201, 187, 201, and 214, you

8 get 803 megawatts --

9 A. Okay.

10 Q. -- actually installed in 2016.

11 You were still there responsible for the

12 solar business through the end of the fourth quarter

13 of 2016; correct?

14 A. I was.

15 Q. What accounted for such a severe miss in

16 terms of megawatts installed for SolarCity versus

17 its guidance and its plans for '16?

18 A. So the big part -- I've got to look into

19 this -- is where is the 30 megawatts of Mexico? I'm

20 not sure if it was in these.

21 Q. But let's assume the 30 watts in Mexico

22 wasn't in this and came in right in January.

23 You still would have had a big miss from

24 the guidance; right?

25 A. Well, call it 830 versus 900, okay? So,

Page 203

1 yes, it's a miss.

2 Q. And in your view, in terms of

3 understanding the business, what accounted for the

4 miss or the change from the original guidance of

5 1,250 megawatts down to 803?

6 A. There are many factors. You've got policy

7 factors, you got construction delays, you got

8 sales- -- salespeople not trained well enough, you

9 have to do sales efficiency improvements. We

10 constantly worked on that. You have to upgrade the

11 bottom group of your sales team all the time.

12 You have utility local fights that can

13 prevent volume from being deployed, as we saw in

14 Arizona. So many things can cause a swing of

15 10 percent.

16 Q. Well, 1,250 to 803 is way more than

17 10 percent.

18 A. Well, but that's -- I've updated the

19 guidance over time.

20 Q. Oh, I understand that.

21 A. Yes.


23 But I'm saying when you went into 2016,

24 indeed through May, you were still -- you still had

25 guidance out there of 1,250 megawatts.

Page 204

1 A. And then we updated in May.


3 But what accounted for the change from

4 1,250, where you thought you were in -- up through

5 end of April, and 803, where you ended up?

6 A. All the things I just mentioned.

7 Q. You were still there through the first

8 quarter of 2017; right?

9 A. Yes.

10 Q. How did -- how did the company do in terms

11 of its installation of megawatts in the first

12 quarter?

13 A. I don't know about the megawatts

14 installed, but in terms of cash generation, the

15 company did really well.

16 Q. No, I'm sure you did, but I didn't ask you

17 that.

18 How did you do in terms of megawatts

19 installed?


21 Q. You can't remember?

22 A. Hmm-mm.

23 MR. BERGER: I don't have any more questions.

24 Thank you very much. I appreciate your time.

25 THE WITNESS: Do you mind if I say one other

Page 205

1 thing? Because I know it's --

2 BY MR. BERGER:

3 Q. You have to be asked a question.

4 A. It doesn't matter what I say, huh?

5 Q. It matters. Of course -- of course it

6 matters, but the way this works is that --

7 A. You ask the question.

8 Q. -- I have to ask a question or your lawyer

9 has to ask you a question. So we'll let him ask

10 you --

11 MR. SORRELS: If it's --

12 MR. BERGER: -- a question.

13 MR. SORRELS: If it's responsive to the

14 question he -- the last question he asked, I mean,

15 answer it. But if it's not, then it's not.

16 THE WITNESS: Well, it's in general, all the

17 questions that have been asked.

18 MR. SORRELS: Yeah, then --

19 MR. BERGER: Then I'm not going to ask you any

20 more questions, and if your lawyer wants to ask you

21 something, he's certainly free to.

22 THE WITNESS: Yeah, ask him to ask me a

23 question.

24 MR. SORRELS: It doesn't quite work that way

25 either, but let -- so I am going to ask some

52 (Pages 202 - 205)


CONFIDENTIAL

Page 206

1 questions now, and I'm just going to sit here

2 because it's going to be short. And if you could

3 try to still look in that direction at the camera as

4 much as you can.

5 EXAMINATION

6 BY MR. SORRELS:

7 Q. So, Mr. Rive, my name is Brad Sorrels.

8 I'm your counsel and I'm going to ask you a few

9 questions on the record just to clean up some things

10 that were asked today.

11 And I'm going to start where Mr. Berger

12 left off, about the performance of the SolarCity

13 division within Tesla in the first quarter of 2017.

14 So what do you understand the performance

15 to have been?

16 A. Yeah, so this is real key. If you look at

17 Q3 of '16, Q4 of '16, Q1 and Q2 of '17, the cash

18 improvements of the company was dramatic.

19 From Q1 to end of Q4 -- sorry, Q3 to Q4,

20 the cash increased by roughly 130 million, and then

21 the cash generation of the company, by the time I

22 left, was over $10 million a month, plus $10 million

23 of future revenue. So net $20 million a month of

24 cash generation when I left.

25 Q. And so how does that translate into sort

Page 207

1 of on a quarterly basis in 2017? So I'm looking at

2 Q2 of 2017 versus, say, Q3 of 2017.

3 A. So quarterly basis in terms of cash

4 generation, call it 30 to 40 million, plus the

5 recurring revenue, which is another 30 to

6 40 million.

7 Q. So you were asked a lot today about

8 various projections of megawatt hours, and there are

9 various terms you used, booked megawatts versus

10 installed megawatts versus inspected megawatts.

11 Can you explain if there's a distinction

12 between those terms?

13 A. Yeah. So bookings is what the salespeople

14 bring in. Then you've got your installation.

15 The -- from installation to inspected, there's a

16 delay that can range from 30 days up to 6 months,

17 depending on the projects.

18 Q. So is it possible, sir, that if there was

19 a reference to inspected megawatts hours, that may

20 not reflect installed megawatt hours that just

21 haven't been inspected at that point?

22 A. Absolutely.

23 Q. And is it possible that, for example, when

24 you were referring to the megawatt hours that were

25 installed in Mexico, that it -- they weren't deemed

Page 208

1 inspected hours at whatever reporting time those

2 hours were being listed?

3 A. Very possible.

4 Q. You also -- and I want to actually direct

5 you to Exhibit 16. And if you could just -- yeah.

6 A. Okay.

7 Q. So halfway down, it's -- there's a -- you

8 were asked about this portion of the e-mail earlier

9 today. There -- Bullets 1 and 2 refer to, "Tax

10 equity investors are funding later and debt investor

11 fund later."

12 Can you explain what that's referring to?

13 A. So these are the investors that finance

14 the solar assets; that is, capital that is

15 nonrecourse to the business. It's underwritten

16 100 percent on the asset creditworthiness.

17 And that's what the tax equity and debt

18 investors pay to -- essentially, they pay upfront

19 cash for that and they receive a long-term revenue

20 stream from those assets, and then we share in that

21 long-term revenue stream.

22 Q. But specifically when it refers to the

23 "debt investor fund later," what are you referring

24 to there with respect to it being "later"?

25 A. So with the announcement, the tax equity

Page 209

1 investors and the debt investors are funding later

2 than initially expected.

3 Q. And why was that?

4 A. They have to go back to credit committee.

5 They have to go back and explain the update and

6 what's happening. And so it's just a process that

7 the banks have to do, but no impact in actual

8 financing.

9 But they still have to go through that

10 process, and that takes time, because committees

11 only meet once every two weeks or whenever they

12 meet.

13 And then when you're running at

14 200 million in per month, if you have a two-week

15 delay, that's roughly $100 million of cash.

16 Q. And at one point, you referred to certain

17 of these debt investors "underwriting as SolarCity

18 only." I believe that was a quote.

19 What were you referring to there?

20 A. Yeah, this is really important. When

21 the -- all of the future tax equity and debt

22 providers, they were looking at financing these

23 solar assets and SolarCity's performance on these

24 solar assets.

25 They did not underwrite whether Tesla

53 (Pages 206 - 209)


CONFIDENTIAL

Page 210

1 actually acquires the company. They would not be

2 able to either get that approved through the credit

3 committee, because otherwise the committee would

4 say, well, let's wait for the acquisition to go

5 through. They were underwriting the health of the

6 company and the performance of these assets.

7 I know this for a fact because I spoke to

8 them about it, but they had to go back to committees

9 to explain how they're underwriting it.

10 Q. And with respect to these debt sources in

11 Q3 and Q4 2016, did you ultimately obtain that

12 financing?

13 A. Yes. In Q3 and Q4, we closed roughly

14 about a billion dollars in new financing.

15 MR. SORRELS: I have no further questions.

16 MR. BERGER: Thank you. I have one or two

17 follow-ups.

18 FURTHER EXAMINATION

19 BY MR. BERGER:

20 Q. Just so we're clear, you said in response

21 to a question from your counsel that the incremental

22 cash between the Q3 and Q4 -- in Q3 was 130 million,

23 but I think I showed you before that it was

24 113 million, 100 million of which was the solar

25 bonds; right?

Page 211

1 A. I think that was just Q3.

2 Q. That was for Q3?

3 A. Yes.

4 Q. Exactly.

5 A. And so mine was Q3 and Q4.

6 Q. Q4. Got it.

7 In terms of the difference between

8 megawatts sold, installed, and inspected -- or

9 deployed, installed, and expected?

10 MR. SORRELS: I believe it was "booked," was

11 the term.

12 BY MR. BERGER:

13 Q. Booked --

14 A. Yes.

15 Q. -- installed, and inspected?

16 A. Yes.

17 Q. Installed was the metric that you used to

18 discuss your business with your investors and with

19 analysts; correct?

20 A. We used both.

21 Q. The guidance was given as megawatts

22 installed; correct?

23 A. And as inspected.

24 Q. But the guidance we've been talking

25 about -- I could go through all of those documents

Page 212

1 before -- the guidance of 1,250 for 2016, that was

2 megawatts what?

3 A. That's megawatts installed.

4 Q. And the million [sic] that you went to

5 the board on April 29th, that was megawatts what?

6 A. The megawatts.

7 Q. Megawatts what? Installed; right?

8 A. You said " million."

9 Q. I'm sorry, megawatts.

10 A. Yes.

11 Q. Installed; right?

12 A. megawatts installed.

13 Q. And the revision to the guidance down to

14 1,000 to 1,100, that's megawatts installed; correct?

15 A. Correct.

16 Q. And the 803 megawatts for the year, that

17 was megawatts installed?

18 A. Correct.

19 MR. BERGER: Thank you. No further questions.

20 MR. SORRELS: Yeah, I'll just -- why don't I

21 just be precise. One more question.

22 FURTHER EXAMINATION

23 BY MR. SORRELS:

24 Q. So if you could turn to Exhibit 22.

25 A. Exhibit 22?

Page 213

1 Q. Yes.

2 And if you turn to page 2 internally, so

3 it will say "2 Lazard" and it should end in 370.

4 Next page.

5 MR. BERGER: I got it. Sorry.

6 BY MR. SORRELS:

7 Q. Do you recall being asked about this page

8 in your deposition?

9 A. Yes.

10 Q. And if you see at the top, you were

11 specifically asked about the projections of megawatt

12 hours, and it says "Total Megawatt Hours Inspected."

13 Do you see that?

14 A. I do see that, yes.

15 Q. And that's different than megawatt

16 installed; correct?

17 A. Correct.

18 MR. SORRELS: That's it.

19 MR. BERGER: Okay. I think we'll leave it at

20 that, yeah.

21 THE WITNESS: Thank you.

22 MR. BERGER: Thank you very much.

23 THE VIDEOGRAPHER: We're off the record at

24 4:11 p.m. This ends today's testimony given by

25 Lyndon Rive. The total number of media used was six

54 (Pages 210 - 213)


CONFIDENTIAL

&

& 2:15 3:3,10,184:2 11:13,20,22,2412:2,4

0

0002148 5:210002149 5:230002156 5:240013363 5:110042367 9:50043466 9:100198295 10:5051 9:13069 6:5077 6:8

1

1 5:9 11:7 13:2313:25 14:3 41:1350:11 62:17 66:25166:6 175:14208:9

1,000 166:9,10,14168:17 171:18172:20 178:3191:17 212:14

1,100 166:9,10,14168:17 178:3212:14

1,250 160:25 166:6166:9 179:7 203:5203:16,25 204:4212:1

1.1 166:71.25 160:20 161:4

161:91/2 13:11 50:11

144:2410 6:24 8:11 15:23

20:7,8,9 32:14,1450:21,22 54:7

67:2,11 115:19129:2 163:8184:18,22,23203:15,17 206:22206:22

10/21/15 6:310/31/15 6:10100 16:3 27:20

31:18 37:8,1038:8,9,10 42:644:15 45:4 47:2250:19 51:18,21,2168:9,13,18,23 69:480:12 112:23114:16 133:25134:2 144:10,11144:12,14,22145:15 157:21,24157:25 158:6167:25 178:6,12181:19 189:7208:16 209:15210:24

10017 3:610019-7475 3:2110240 88:7,8103 38:9 93:24104 7:2310:33 48:1110:49 66:2410th 84:9 114:4

117:1111 7:3 71:2,3

92:13,19110 8:31100 172:20112 8:7 187:6113 157:20,21

210:24115 5:3 8:11 40:5

43:17,21 44:10

88:21116 43:21 44:10

88:22 107:9118 8:14 89:15

119:9,16119 119:9,1611:01 67:411:30 104:2411:59 104:711th 48:11 112:612 5:3 7:7 63:12

76:4,5,19 78:9117:2 152:23157:15 194:16196:5

120 90:23 92:11119:8,16

121 8:18 151:13122 89:3123 3:13 9:3 90:22

93:19124 9:81250 182:412711 1:4 2:4

11:11128 93:2512:08 104:1012:26 115:5,712th 48:2 67:12,1513 5:9 7:10 78:19

78:20,22 82:21150:24 151:5166:18 177:6182:17

130 206:20 210:22132 6:1313363 13:24137197 60:16138 9:1213th 118:24

140:14

14 7:14 82:21,22149:16

140 9:15145 157:5145.7 157:3146 154:1014th 138:1615 1:15 2:18 7:18

11:1 24:25 25:2086:16,17,18 129:2149:15,23,23,24

150 9:19 113:20132:8,15 144:15157:4,5

152 9:23 10:3157 10:715th 11:6 39:11,19

40:1016 7:23 24:25

25:20,21 76:479:7 86:14 104:2104:21 181:11,14181:16 183:17,21185:15,18 187:6202:17 206:17,17208:5

16617 215:2416th 124:17

215:2217 8:3 110:8,9,19

144:24 206:17176 6:25 67:12179 189:10,1417th 85:20 194:1718 8:7 15:25 84:10

89:18 90:6 111:24112:1,3,3,4 135:3

180 188:2518410 194:16187 201:5 202:2,7

[& - 187] Page 1


CONFIDENTIAL

18th 14:4 15:11,13117:13 118:12121:6 123:12,20124:20,23 154:23195:21,25

19 8:11 82:20115:12 135:3184:23 185:3,3,9

193 10:11194 10:141940 62:23195 10:171972829 193:1819801 3:1419801-1600 4:5199 6:17 60:1619th 76:221:12 115:10,141st 88:25 91:12

2

2 5:14 26:6,7,1040:2 42:20 50:1267:5 104:7 175:17200:8 208:9 213:2213:3

2.7 102:9 103:72/1/16 6:192/10/16 7:320 8:14 16:13,14

43:23 51:23 52:1455:15 83:1 85:1994:20 118:5,6135:3 206:23216:23

200 31:13,16,1732:16,18 40:21,2441:1 42:4,5,1251:24 60:8 76:1476:14 79:18,1980:13 81:14 92:292:2,3,4,7,12,14

93:2 109:9 112:20112:21 113:8,8,8113:11,14,16,20114:11,22,23,24129:22 130:15135:22,23 140:25142:21 178:7,12188:22,22 209:14

2005 19:162006 12:16201 200:18,22

201:14 202:1,3,7,72010 62:232012 16:222014 161:152015 5:17,20 6:7

6:24 9:19 12:1413:6,13 18:4,2019:3 21:21,2524:11 25:21 28:429:12,13,20,2030:11,22 31:1033:21 38:20 39:1941:14 48:2 51:1453:8 58:14,25160:15 162:5,19162:20 173:13

2016 5:14 6:15 7:77:10 8:14 9:12,159:23 10:3,7,11,1410:17 12:14 13:613:14 14:4 15:915:10,11 21:21,2524:11 26:13 39:653:16 58:16 59:2360:16,25 61:1562:13,15,17 63:1463:18 72:1,277:15 78:25 79:483:1 88:6,25 95:9102:7 104:24

115:20,21 118:13118:24 121:6123:12 138:16143:7 151:24152:7,22 160:20161:5,10 162:2165:3,13 166:3,12166:20 167:1170:3,7,16 171:13171:17 172:7177:12 180:22181:10,23 183:10183:22 184:12,18185:20 187:25189:5,25 191:12191:18,20 192:3192:22 193:18195:12 199:25200:19 202:10,13203:23 210:11212:1

2017 135:3 191:13195:4,10 197:20199:24 204:8206:13 207:1,2,2

2018 15:72019 1:15 2:18

11:1,6 215:22206 5:421 8:18 94:20

121:7,9 152:11154:23,24 155:1,4155:12 166:21,22166:23 175:4,7177:6

210 5:3211 186:21212 3:22 5:4 93:1214 202:4,72148 33:21

2149 34:22215 153:3 154:1,2

154:7,82155 34:22216 153:521st 15:13 38:20

41:5 132:2222 9:3 16:14 123:5

123:7,9 124:14125:2 169:8,10191:13 212:24,25

220 80:1322175 67:12222 4:422388 112:722nd 199:2423 9:8 124:1,2,724 9:12 40:4

138:12,13240 89:23241 186:22243 7:2125 9:15 69:1,2

89:17 90:5 140:7140:8 161:22

250 80:13 129:7,13129:17 134:25135:21

259 158:426 5:14 9:19 149:3

149:4 150:19,20150:24 160:16161:2,16,18,19,19161:21,22,22,24163:22 164:5,7165:25 166:20

26th 78:24,24172:7 177:11

27 9:23 151:25152:1,3 160:16161:19,22 165:12

[18th - 27] Page 2


CONFIDENTIAL

165:15 193:18202:4

270 162:25 163:5272 163:9,10,11274-9977 4:1227th 193:22 194:628 10:3 152:18,19

171:11,13 201:9201:15 202:3

280 162:25 163:529 10:7 157:7,11

157:13 200:25201:1,3,4 202:2

29th 3:5 79:4,6212:5

2:05 145:212:15 145:252nd 69:14 70:2

86:14

3

3 5:12,17 13:1114:22 15:6 30:930:12 40:13 52:889:18 90:6 92:1492:14,19 100:10104:11 115:6185:12

3.8 55:3,24 57:1957:21

3/31/16 8:1230 5:17 10:11 31:4

50:18 55:14 68:2468:25 131:22132:6 156:1,18,21175:21 180:21,24180:25 181:3193:15,19 202:19202:21 207:4,5,16

300 129:7,13,17134:25 135:21,22135:23 140:25

142:21 162:25163:6

302 3:15 4:6304-7617 4:630th 30:1031 10:14 26:11,13

187:25 194:9,11194:14

311 10:531st 148:12 185:2032 10:17 195:20,233276314 1:2533 5:203404 30:93405 30:9350 77:22355 6:22366 7:8368 140:17370 159:9 213:3375 186:17,2538 6:3 92:19

115:25380 159:10,20,23

159:2439 115:24 116:63:02 176:243:18 177:23:36 191:53:37 191:83:50 199:183:55 199:21

4

4 5:20 33:18,20,2233:25 34:23 35:339:17 115:15145:22 171:15

40 168:2 170:9,11170:12 181:1,2207:4,6

400 36:22 37:9,24140:17

405 5:18412 10:15415 4:1242 92:14,1942366 124:1242370 169:2442375 134:1945 109:17452 186:24453 187:25463 8:5474-1180 3:2248 6:7485 3:549 92:20,21 150:14

151:214th 131:23 156:2

175:23

5

5 6:3 38:12,13145:25 161:16,18162:2 163:23164:5,7 176:24185:15

5/15/19 216:45/20/16 7:1450 138:18500 77:2451 138:19521 151:22523068 38:1553 6:10 92:1455 92:1956953 71:5585366 140:16592 8:16

6

6 6:7 48:1,3134:18,18,19166:4 175:14177:3 207:16

6/2/16 7:1860 6:15,196014 9:25622-7081 3:15646 3:765 144:23650 2:16 11:1367 6:2468 115:2269 38:15

7

7 6:10 53:2,3,4,1592:22,24 149:9,12160:15,16 161:20161:23

7/10/16 8:37/11/16 8:77/17/16 9:87/18/16 8:207/9/16 7:2370 8:12 54:771 7:3722-8500 3:7729 10:1273 162:1575 91:2576 7:7 48:577 48:57778 1:24 2:19

215:278 7:10 174:57th 3:13 85:20

[27 - 7th] Page 3


CONFIDENTIAL

8

8 6:15 60:11,1262:17 69:12,1484:9 170:14

80 18:9,11 51:2254:7 80:12 174:7

800 4:4 170:18803 10:9 170:19

171:1 182:2,3,4,5191:21 202:8203:5,16 204:5212:16

82 7:148211 215:4825 3:20830 202:2583075 48:585049 138:18855 7:1686 7:18864 9:21870 162:17,18

174:1872 174:2874 8:21 9:687931 26:1288 89:7,12 92:8,108th 175:6

9

9 6:19 52:24 60:1860:20 62:9 69:1369:14 80:2 149:8

90 41:9,15,16 42:242:13 80:12 189:7

900 9:17 166:14167:17,19 168:19170:22 171:18,25172:8,15,18 173:6173:25 178:25179:8,25 180:2

191:17,20 202:25212:4,6,8,9,12

91 40:4 41:692 88:15,23 89:5

92:10931 5:15940 170:2394304 2:17984 7:129:30 2:17 11:2,59th 60:15,24

104:24 109:19114:4 115:21116:11,24 117:10161:16 165:13166:12 171:13172:20,24 178:3

a

a.m. 2:17 11:2,566:24 67:4 104:7

ability 21:20 180:8180:13 190:20

able 33:3 178:6,12210:2

absent 88:17absolutely 41:23

46:16 48:23 50:957:21 64:10 65:2378:2,17 81:1496:10,24 130:14133:10 159:6176:18 197:8,14197:17 207:22

accelerate 74:8accept 45:22 172:9acceptable 179:19access 17:6,8,14

17:16accessible 17:19

17:22

account 41:1556:25 57:22 71:2186:7 91:5,6

accountable198:13

accounted 202:15203:3 204:3

accounts 16:7 85:985:21 88:5 89:1790:5 91:20,21,2395:8

accretive 19:10175:3

accumulated 92:1162:14

accurate 14:515:14 128:11,13153:20,21 216:5

achieve 167:9169:1,3,5

achievement50:14

acknowledgment216:1

acquire 72:2273:19 75:8

acquired 12:20192:21

acquires 210:1acquiring 95:10

96:21 190:3acquisition 15:12

73:23 85:8 94:1794:19 95:20,22,2596:2,15,18,18,2397:6 98:3 99:20108:9,13,15,15120:13 137:16139:6 145:13146:9,11,14,21210:4

acronym 59:17action 42:15,16actions 87:11activities 129:12activity 128:19actual 120:20

191:18 209:7add 104:12 113:5

202:7added 111:8adding 75:14addition 21:8

182:18additional 114:23

129:7,13 139:25140:1 174:16189:12

address 34:1488:13

adjustments 65:25administer 215:3advise 169:15afternoon 115:10

115:18aggravated 114:14

132:10aggregation 131:2ago 100:25 109:3

128:8agree 34:12 89:10

167:10 187:21agreed 21:7

146:18 189:18,24agreement 21:25

22:13 148:13agreements 21:15

22:15 23:19ah 158:22 162:24ahead 75:24aided 215:12

[8 - aided] Page 4


CONFIDENTIAL

air 173:2allocation 85:7allow 90:25alluded 90:20alternative 136:1

139:8alternatives

134:23 135:24136:10,12,17,20137:8 145:6

alto 2:16 11:1,14amount 12:15

13:14 16:5 44:257:18 70:10 77:1690:4 92:1 113:12127:10 130:23144:20 150:6154:12 186:17187:18,18,23189:17

amounts 187:9analysis 122:13analysts 211:19announced 120:12

131:22 156:1175:21 197:22198:4

announcement94:17,19,20,23112:12,14,17113:2,5,7,16,24114:8,12 132:11132:18,21 170:13208:25

announcements112:20,21,25114:1

announcing 113:7anrae 1:23 2:18

11:17 215:2,25

answer 10:2119:13 20:5 21:224:17 25:7,1826:2 55:7 56:1256:13 57:4,1669:23 85:6 109:21130:6 197:1,6205:15

answered 25:2526:3 103:8

answering 19:2556:18

answers 20:19anticipated 162:7anticipation 106:9

109:13anybody 74:23apologies 14:25apologize 130:21appear 55:21appearances 3:1appeared 58:1appears 14:3apple 200:4,4apples 81:6,7appointment 7:3appreciate 204:24approach 51:5appropriate

182:12approval 34:17

47:22 73:16141:12,24 142:4,7142:15 146:14,22146:23

approve 37:4,747:13 146:9

approved 44:13120:18,19,20,21120:23 173:19210:2

approximately43:17

april 7:7,10 75:2476:22 77:3 78:1178:24,24 79:4,6109:5,7 166:20172:7 177:11181:10,11,17188:8 189:5,25204:5 212:5

arizona 203:14article 180:18

182:6,7 190:6191:10,22 192:6

aside 182:17asked 17:9,10,14

18:15,17 19:1520:4 24:24 25:425:19,25 42:24,2547:10,21 48:1449:8,10 57:2564:3 75:19 78:6101:16 103:8127:21,23 148:16153:12,16 154:3,4156:11 172:4186:9 188:2 197:2205:3,14,17206:10 207:7208:8 213:7,11

asking 25:6 49:2349:24 57:3 96:17127:19 171:7

asset 19:9 51:1951:20 54:20 55:14175:2 208:16

assets 14:8 15:1516:7 19:7,9 55:1755:23,25 57:19,2061:20 62:2 78:393:5 151:18

158:25 159:7163:19,20 180:16188:17 208:14,20209:23,24 210:6

assigned 197:10associated 22:20

93:5 128:19assume 29:3 69:24

79:6 113:13124:15 132:15153:20 169:12,20173:19 202:21

assumed 62:1assuming 35:4,24

171:19 195:1attached 54:16

118:15attachment 5:22

6:16 7:11,20 8:159:16 35:1,9,15,1936:5

attachments 6:126:21 7:15

attend 39:8 121:13121:21

attended 121:11attending 121:16attention 116:5attorney 215:18august 5:14 9:15

26:11,13 61:963:17,24 79:1481:20 82:4,16119:8,9 120:2131:23 136:22,23137:1,2,3,3,5140:14 143:6,9,9143:11,14 145:16146:6 156:2171:13 175:23

[air - august] Page 5


CONFIDENTIAL

authorized 215:3avenue 3:5,20 4:4average 40:3

41:11 80:23,2481:5 88:14 90:2294:2 119:7,13

avoid 75:2 126:12164:1

b

b 5:6 6:1 7:1 8:19:1 10:1 87:14,2588:2 90:19,2291:14,23 120:1

back 23:16 28:4,529:12 31:24 34:2540:13 45:22 47:355:16 57:5 58:865:10 67:3,7 69:772:23 75:3,479:23 88:4 93:1997:14 98:9 99:21100:9 101:1,14102:15,23 104:9105:11 109:6,18114:9,13 115:13134:13 145:24149:11,16 159:18160:14,18 169:8171:23 172:5,6,17173:22 175:4,17177:1,5,5 179:4182:13,16,23191:7 195:2196:10 199:11,20200:24 201:9209:4,5 210:8

background 12:1535:10

bad 22:3 37:13179:20 183:24

badly 181:22,25balance 40:4

41:15 52:5 54:1854:19 55:1,1 57:657:8,9,18 58:1,5,780:9 89:15 93:1494:3 113:19119:11 131:22132:6,13,20 156:1156:18,21 175:21185:9 187:10

balances 107:2,4bank 31:15 37:13

77:16 79:16 86:24131:10,13,13,19147:1 182:25

banks 23:16 24:424:9,19,22 25:1225:16 31:17 77:1678:6 112:22 113:4113:6,7 114:9131:8,15 134:4,9136:9 141:12145:14 146:4147:25 158:12209:7

barnard 30:2531:4

base 83:14 123:2125:16 126:2,5127:8

based 42:21 65:765:19 75:11 88:193:25 100:4,11124:15 126:4134:2 177:16

basis 55:17,19,25207:1,3

bates 5:10,15,185:21,22 6:4,5,8,126:16,21,25 7:5,8

7:11,15,20,25 8:48:9,15,20 9:4,9,139:16,20,24 10:4,810:12,15,18

batteries 198:23battery 74:1,6

193:12began 122:12

127:7beginning 2:17

20:8,12 67:486:22 87:3,15,2589:15 104:10115:14 134:15145:25 177:2

behalf 11:21 12:212:4

behavior 37:13believe 12:16

25:22 44:12 57:1467:19 109:23128:10,12 163:16178:11 197:21209:18 211:10

believed 127:9129:6 163:14

believer 111:20believes 68:20bell 51:8,15benefit 32:24 33:2berger 3:4 5:3

11:20,20 12:1013:22 14:1,23,2515:2,8 19:2120:22 21:6 22:224:16 25:5,1726:1,6,8 28:16,1928:21 29:2,1830:1,6,8,13 32:333:13,19,23 34:736:6,9 38:12,14

39:15 41:8 42:844:18 46:18,2347:25 48:4,7,2549:6 50:17 51:752:24 53:3,5 55:456:13,15 57:2,2458:23 60:13,18,2161:22 62:18,21,2563:6,7 65:10 66:266:18,21 67:669:22 71:4 72:1276:9 77:13 78:2180:6 82:19,2483:7,9 84:7 86:1386:17,20 89:2091:10,22 95:598:10 103:10,20104:1,5,19 106:13110:8,10 111:16111:24 112:2115:1,17 116:18118:4,7,8 121:7,10123:5,8 124:1,5,21124:22 125:9127:1,14 130:5,18133:15 138:12,14138:15 140:6,9143:1 144:2145:17 146:1149:1,4,8,10150:18,21 151:25152:2,13,16,20153:4,19 154:18154:21,25 155:11157:14 159:21168:8 172:22175:11,15,16176:8,9,21 177:4178:18 181:5182:1 183:12,16183:18 185:1,7,8

[authorized - berger] Page 6


CONFIDENTIAL

186:10,12 190:8190:10,13,15,18190:21,24 191:9193:14,20 194:9194:12 195:19,24199:3,8,11,14,16199:22 200:7,9,12200:14 204:23205:2,12,19206:11 210:16,19211:12 212:19213:5,19,22

best 26:4 44:9 47:147:2 49:4 54:9111:11,18 172:14177:10

better 45:22 49:2179:24 84:22 85:7139:16 172:17177:24 179:5185:13,13 187:7192:12 193:5

beyond 179:25big 31:21 54:5

81:15 82:6 86:2111:20 113:5,6132:14 153:8162:9 170:14173:23 198:9,10202:18,23

biggest 128:21131:14,16 198:22

bill 29:3,6,7 85:25billing 27:4,5,6

28:7,10billion 52:8 55:3

55:24 57:19,21103:7 133:23134:8 137:6147:25 158:10,11158:19 210:14

bills 27:9 86:6130:1

bit 28:5 80:13147:23 148:4175:19 188:3

blend 52:12,22blue 81:9board 8:19 13:1

34:15,17 35:1,9,2036:13,15,21 37:2,437:11,23,25,2539:11,18,24 40:1044:13 47:15,16,2148:10,22 49:950:1 61:14 62:1162:12,14 63:10,1463:17 64:1,8,11,1764:20 66:13 68:368:17 69:8,13,2570:2,3 73:1674:18,21,23 75:3,775:9,10 78:23,2479:3,7,13 82:3,1582:17 96:7,8,9,1097:21,22 98:2,3,1198:14,18,23 99:2101:14 107:3108:10,10 111:3120:18 121:5,12123:19 130:17140:15 144:4,7146:13,17,17,20154:22 166:18,20167:9,9,11,13,15167:16,17,18168:6 171:23172:2,3,4,6,8,10172:11,13 173:6,8173:18,19,21174:7,10,12,22175:5 176:5,5,10

176:16 177:15,23179:3,24 212:5

board's 49:16172:16

boards 172:13bond 143:14bonds 44:2 136:15

140:16,22 141:5142:22 143:3,22144:9,14,24 145:8188:25 189:6,11189:13,24 210:25

book 79:8 140:15booked 207:9

211:10,13bookings 59:4

207:13borrowing 83:14bottom 53:16 88:8

122:10 130:22134:19 141:11150:1 155:15169:25 196:7201:6 203:11

bought 116:13,21144:23,24 145:7

brad 12:1 31:2532:2,4 206:7

bradley 4:3brand 194:19breach 25:14

27:13,17,19 28:161:8 65:20,2483:25 84:3 87:2388:18,20 91:1130:25 131:1,5,7131:14,17

breached 23:14,1723:25

breaches 23:19

breaching 24:1224:18,25 25:11,2327:1,1,17 61:784:5 86:23

break 58:9 66:1966:21 104:4 115:2145:18 176:21190:10 199:3

breakeven 158:1breather 59:7brian 197:12bridge 104:17

108:2,4,16,18,20108:22,23,24109:10,12,15111:4 113:20114:18,19,21134:22 137:20143:13

bring 50:8 207:14brink 117:14,15brother 12:23

71:7 73:7 74:1799:11,12 136:15144:23 157:23189:12

bryan 61:19 87:20122:20

bsorrels 4:7buffer 114:24

129:14,17 130:16building 21:1

190:17built 20:25bullet 61:17

106:25 107:6,12109:10

bullets 208:9bunch 84:18 99:3

99:4

[berger - bunch] Page 7


CONFIDENTIAL

business 17:2418:1,6 19:7,2424:2,3,9 25:11,1631:13,13 32:14,1534:10 37:19,2242:4,7 43:3,4 51:551:5,13,16,1856:23 58:19,2565:5 73:21 80:581:23 83:24,2584:21,24 85:1,4,1187:1,22 90:13,1690:17 113:17114:6 139:11150:7,9 151:2153:25 160:7173:14 188:12,19198:21 202:12203:3 208:15211:18

buss 32:4,7 48:10buy 68:10,19

72:25 74:22 101:3102:21 133:4137:23 143:3148:14

buying 68:7,2569:1 72:16 93:10139:11 143:22

c

c 22:6c.a. 1:4 2:4calculated 44:6

80:22california 2:16

11:1 215:4call 13:10 16:13

35:7,21 39:11,1839:24 45:2,372:20 73:1,9,1574:10,15,21 75:16

75:21 80:12 97:1997:20 98:22,2499:15 100:15,15100:16 105:1,2,3,4105:5,13,15,17106:6,7 107:23108:21 109:2110:16,17 111:23130:15 131:24135:10 145:11156:3 157:4175:23 181:25202:25 207:4

called 22:5,2451:10 52:5,7,2053:7 65:9 69:1872:21 100:18125:23 126:8186:4,5

calling 71:7 98:15calls 52:6 98:15,22

99:1,4,13,14,14,16camera 206:3capacity 188:4capex 71:19capital 43:11

44:21 85:13 96:15107:13,18,21,22108:7,8,11,12,14112:13,19 116:2138:9 148:6208:14

caption 215:19,21captures 55:15cards 46:3,11carefully 21:17

23:10 81:24 82:2carryover 130:21case 11:10 13:24

31:25 38:25 39:278:5 87:19 117:13

120:4,6,8 123:2125:1,16,21,24126:1,1,2,2,5,6,8127:8 134:21,22135:16 138:6140:23 143:10157:1 166:11168:4 170:3 186:8186:20 189:3,4

cases 24:19cash 17:1,25 18:5

18:8,12,20 19:2,419:4,11,12,12,1719:17,18 20:3,4,820:9,14,16 21:1423:7,8,14 24:428:13 29:5,7,831:14,18 32:1833:8,10 34:10,1134:12 36:16 37:1237:14 39:1,4,12,2241:1,11,12 43:1943:25 44:1 51:451:23 52:4,9,12,1652:22 54:1,3,10,1254:12 60:2 65:4,569:20 71:13,1572:8,11,13 73:1075:25 76:7,7 77:577:7 78:15,1779:17 80:5,9,2182:7,9,12 84:2,1284:14,21 85:786:25 87:1,1 92:892:9 93:11 95:6101:7 104:17105:23 106:4,8,12106:15 107:1,4109:24 113:13,19113:24 114:1,14116:25 117:1,23

118:11,24 119:11120:9 129:11130:14 131:8,11131:22 132:6,13132:19 133:22,24135:9,12,15 136:5136:6,8 138:8140:3,4 145:3149:18,19 150:1,1150:13 151:1,12152:11,25 153:6153:16 154:9156:1,18,21,22157:17,17,18158:3,3,7 170:4173:15 174:15,20174:23 175:1,3,21182:18,20 204:14206:17,20,21,24207:3 208:19209:15 210:22

cast3 83:11cause 76:15,16

82:6 203:14 215:8215:20

caused 58:19,2158:25 114:8165:10

center 141:12certain 15:20

21:14 23:5 24:344:1 56:24 58:18125:18 196:16209:16

certainly 64:1770:1,5 184:15191:23 200:15205:21

certificate 215:1certified 2:19 12:7

[business - certified] Page 8


CONFIDENTIAL

certify 215:5,17216:2,4

cetera 121:19143:17 160:17

chain 5:14,17,206:7,15,24 7:7,108:14 9:12,1510:11,14,17 111:9

chair 13:1 68:1774:21

chairman 46:6,1549:21 50:7,869:25

chairman's 46:1746:19,25

challenge 24:8challenges 75:12

75:13 98:8 137:15chance 63:2chancery 1:1 2:1

11:10chang 140:14change 51:4,13,16

53:18,23 65:22111:8 165:10196:17 203:4204:3

changed 114:10165:5,6,7,8 166:6166:10

changes 81:23changing 196:5chart 81:9,10chew 6:19chief 12:19,25

30:23 31:2 46:2074:20 121:17,18

children 16:8choice 146:11christine 3:11

11:24

circumstances114:6

civil 215:4clarification 18:16

28:15 30:3 44:757:12 92:25 95:19129:16 137:17166:8 170:10181:7,15 195:17

clarify 14:21 76:676:8

classified 184:1,2clean 36:7 206:9clear 19:2 28:25

35:19 43:15 96:20108:10 121:15136:20 143:13159:16 175:25181:20 185:23210:20

clearance 75:3clearly 74:14

141:20close 76:10,18

78:1 79:21 84:487:7,8,9 107:5,7116:17,19 138:4139:13 159:9168:1 174:1179:18 181:20

closed 15:12,12143:8,15 158:21158:22 192:21210:13

closer 170:23closing 137:5closure 95:16

100:20 101:2code 22:9,10 215:4collect 27:10

collections 27:4column 14:10,14

187:11columns 140:20

187:13combination

178:9combined 52:22

147:4come 41:21 45:22

72:17 87:14 95:1597:14 98:9 99:1999:21 100:9 101:1103:19 108:16126:17 129:11134:13 139:7159:2,3,5 167:18168:22 172:17173:1,2 179:25180:2 182:13,16197:14 199:11

comes 31:23 43:1246:10 50:3 54:10174:19

comfort 116:17comfortable 134:9coming 44:2 52:9

79:18 137:4182:21 183:9184:11 186:14,21186:23 187:24188:11

comment 62:2563:1

commission216:25

committee 8:19121:5,12 122:1,23123:12 124:11,14125:3,16 126:17127:8,25 128:23

129:5,12,24 130:8130:17,25 131:4132:4 135:20148:22 154:14,23169:15 175:5209:4 210:3,3

committees 114:9209:10 210:8

common 126:18129:22

communicated110:18,24

communicating106:11 118:11

communication97:17 98:17102:12,15 114:4,7130:16

comp 197:17companies 37:17

56:22 141:1company 13:16,17

16:20 17:2,1619:10 20:4 24:1024:10 31:21 32:2533:1 46:5,12,1647:2 49:5 50:8,1452:8 54:6 61:3,1863:18,23 65:968:10,14,15,18,2068:23,24 72:2274:22,22 75:1277:7 79:14 86:23102:21 112:22121:17 131:19,21135:13 137:19145:8 162:17170:15 175:3,21180:12 183:8184:10 186:13187:24 204:10,15

[certify - company] Page 9


CONFIDENTIAL

206:18,21 210:1,6company's 39:4

39:12,22 61:1369:20 114:6117:23 121:25122:12,14,23125:3 127:6 131:1156:1 173:14179:9 184:1,16

comparing 81:6complacent 37:14complete 215:13completely 133:3components 54:2computer 215:12concern 16:25

17:15 42:23 60:361:19 79:20,22113:1,9,10 127:11131:15,16,18,21132:16 133:11147:5,11,12,17155:25 156:8,10156:17 173:8175:20

concerned 31:2342:10 65:24 82:13103:14 106:14113:15 131:8,11132:7 133:7146:25 147:2,8154:13,14,15156:24

concerns 63:19conclude 64:22

65:15concluded 34:4

116:11 178:5214:2

conference 35:735:21 39:11,18,24

124:24,25confidence 169:3

169:5 176:19confidential 1:11

2:11confirm 35:23conflict 128:1confused 112:16confusion 121:15

175:15connection 35:20

62:12 78:23 79:4112:24 126:10169:14

consent 47:1248:15 49:11,16

consents 50:1 68:4consequences

130:24 131:4conservative

164:19,21 179:5consider 71:22,24

145:6consolidated 1:3

2:3constantly 203:10constraint 133:22

140:4construction

171:6,8 188:15203:7

consumed 60:2cont'd 6:1 7:1 8:1

9:1 10:1contains 36:12contemplated

44:19,22content 98:7contingency 69:5continue 39:6 54:4

continued 58:1575:25 192:25

contracted 56:8,9contributing 60:1controlled 88:5conversation

100:11 101:11,11104:14 105:21108:6 110:2,3117:10

conversations100:5,5 143:10,15

convert 33:16 37:8182:22

convertible 33:1544:15 182:24

convinced 25:22copied 67:14copy 15:1 34:23

36:7 52:25 62:11115:19 123:5155:8 185:7

corey 194:15,16194:18

corner 63:13corporate 41:14correct 12:18,22

12:23,24 14:1215:15,17 16:418:1 19:5,1921:11,12,15,16,2122:23 23:11,2524:14 25:2 26:2426:25 27:2 29:934:16 38:9 39:2042:16,19 43:19,2047:5 48:12,13,1648:17 51:2 53:1454:13,14 59:2060:4 61:5,9,1064:17 67:15,20,21

68:5,8,12 69:15,1569:16,20 70:6,2571:8 75:24 76:1776:23 77:5 78:1279:5,10,11 80:7,1980:23,25 82:187:4 88:11,16,1990:23 91:1,293:12 94:6 95:1195:12 100:2 101:5102:7 107:2 109:4109:19 116:14118:3,13,25 119:1119:20,21 120:13120:14,24 124:14124:24 126:3,8128:6 129:8134:16,17 135:21136:13,16 137:9139:4 141:3142:24 143:18,23144:22,24,25148:14 149:20,21150:10,11,15151:14 152:8,9,13152:15 157:3158:2,5,9 160:9161:1,4,24 162:19162:20 164:11,13164:14 165:19168:18 169:15,19172:20 173:17177:13,19,25178:1,3 179:9,21180:4 182:4,21183:1 187:12188:1,6 189:15190:1 192:20193:2 194:8,21,24195:14 197:24202:13 211:19,22

[company - correct] Page 10


CONFIDENTIAL

212:14,15,18213:16,17 215:15

correction 216:8corrections 216:6correctly 28:18

55:15 100:19160:12

correlation 39:25cost 33:1 43:3,4

54:3,5 55:17,19,2559:24 70:17 71:1390:18 150:8,9174:25

costs 42:22 51:2051:21 54:5 85:5

counsel 11:1820:23 36:6 206:8210:21 215:17

count 13:10country 33:2couple 70:23

185:23coupon 50:11,13course 17:9 27:23

54:4 99:12 104:5113:10,17 118:20134:5 178:10205:5,5

courses 87:11court 1:1 2:1 11:9

11:17cousin 13:4covenant 24:7,19

24:23 25:1,14,2328:8 40:5 42:1943:16,18 76:12,1781:3 84:15 88:688:14,21 89:16130:25 131:14,17186:2

covenants 21:1121:14,20,24 22:1622:18,20 23:1,3,323:4,14,16,17,1824:1,5,12 25:1127:2,18 28:7,8,928:10 29:9,2243:1 60:4,6,7,961:7 63:23 64:2465:17,20,24 66:669:11 70:16,2278:11,16 79:1580:18,22 81:2082:4,14,16 83:4,1483:18 84:5 86:2487:4,7,16,23 88:1888:20 90:9,1191:1 94:4 104:18107:8 117:16,23119:19 145:15

cover 52:25108:20 124:7140:13

covered 103:22107:15,19,22108:18

covers 188:14cravath 3:18 12:3cravath.com 3:23crazy 107:5create 131:9,17creates 37:13creative 37:21

84:23credit 21:25 22:12

26:23 59:2,5116:25 134:2,9137:14 141:11,13141:13,24 142:3,7142:15 148:22186:1 209:4 210:2

creditworthiness208:16

crisis 29:21 31:932:7,10,12 34:3,1141:4,25 42:1159:22 61:4

cronor 22:6,7,8,2322:24 23:2 26:2227:14,19 28:1,1029:14 186:4 188:3

crunch 145:3csr 1:24 215:2curious 111:6

187:3current 28:7 42:22

43:3,4 63:25 65:765:19 70:17118:23 126:16184:1,5,10 187:14187:17

currently 51:18customers 27:4,10

59:4cut 194:18

d

d 4:3 5:1daedalus 9:4

169:10daily 80:23,24

88:4danger 42:18 43:1

64:23 65:16 70:2178:10,16 80:1781:19 83:3,17,22

daniel 3:4 11:20date 15:5 72:20

95:14 192:23dated 6:3,10,19

7:3,14,18,23 8:3,79:8 26:11 62:17165:13 191:13

193:16,17,22195:21 199:24

dates 98:13 100:24david 4:11 11:15day 48:16 49:11

50:2 71:7 81:1,188:25 196:2215:22 216:23

days 73:13 109:17207:16

dberger 3:8dead 27:14 28:2

32:21deal 45:21 47:1,3

47:8,20,22 48:1549:21 67:23,24,2568:1,4,17 69:4,1970:24 71:15116:13,20 120:17120:20,21,25139:13 142:17143:15 145:11,13146:22 158:21,22170:14

dealing 188:9deals 137:4debate 95:4

109:14debt 14:10,13,15

14:17 15:23 21:1121:20,23 22:16,1723:14,17,25 29:2244:15 50:9,1554:10 60:4,5,7,963:23 69:11 70:1670:21 76:11,1780:18 82:13,1691:1 93:3,4,5 94:4107:8 113:24,25117:16,23 119:19131:8 139:17

[correct - debt] Page 11


CONFIDENTIAL

182:22,24,25183:1,2,8,21 184:1184:5,5,10 185:25186:13,21,23187:10,18,23188:10,16,17,18208:10,17,23209:1,17,21210:10

debts 15:20182:20

december 30:2233:17 40:3 42:243:2 58:19 62:23187:6 196:24

decide 33:14decided 44:23

51:3 75:7 198:17decides 68:17decision 146:13

199:2decisions 71:14decrease 150:1

153:3deemed 207:25defendants 3:17

12:5definitely 122:21

156:15 198:5delaware 1:1 2:1

3:14 4:4,5 11:10delay 75:7 82:6

153:8 207:16209:15

delayed 32:17,1841:22 42:5 97:997:10,11 114:15132:12

delaying 85:19,20delays 31:17 76:14

203:7

deleted 115:8denied 78:6department

196:19departments

193:8 197:13depending 84:14

87:11 207:17depends 41:20

64:19 174:19deploy 19:7 51:19

114:11 139:18159:6 163:19167:22 175:3180:16

deployed 19:955:18 57:19 74:5139:24 167:14,21195:2,13 203:13211:9

deploying 138:1139:21

deploys 167:19deponent 4:1

216:1deposition 1:14

2:14 11:8,12 21:4182:14 192:8213:8 215:1,6,8,15215:19

describe 51:12described 34:10

41:22 79:18 84:11description 5:8

6:2 7:2 8:2 9:210:2

desk 190:19despite 81:17

133:25 148:15,16destroy 24:10

details 47:6determining

177:17difference 70:11

70:12 86:2 150:6173:24 211:7

differences 135:16different 19:13

22:10 27:3 28:841:10 54:25 61:1863:21 80:3 125:7127:19 133:5135:2 136:10,11153:24 196:18213:15

differently 14:2418:18

difficult 180:4dig 65:21diligence 134:7dip 32:9,11,19

33:11 93:20132:14

dips 32:16direct 208:4directing 42:22direction 206:3

215:11directly 163:20director 3:17 12:4directors 8:20

47:13 48:19 49:962:14 78:24 121:5166:19,20 172:6

disagreed 37:2338:5,6

disagreeing172:11

disclose 97:5,6discuss 35:21 37:1

69:19 70:24 73:6

73:10 105:12111:11,18 125:3162:2 211:18

discussed 39:1971:12 72:6 73:2393:9 99:13 105:11109:2 127:10129:24 130:23156:25

discussing 53:19138:20 139:2163:23 175:18

discussion 66:1772:15 109:14122:11 133:12139:5,7 175:10199:1

distinction 207:11division 206:13document 9:3

13:12,23 14:6,1626:5,17 30:2,931:6 34:1 35:1738:11,21 48:6,953:7,20 60:10,1460:17 63:5 67:1067:13 71:1 76:376:20 77:1,1878:9,18 79:182:23 86:19104:22,23,25110:5,13 112:8115:20 116:9117:18 118:17,21121:3 123:16,25124:6,13 125:24135:1 138:11,25140:10,13,18141:18 142:2,19155:17,21 166:5166:17 169:7,24

[debt - document] Page 12


CONFIDENTIAL

186:15 191:24193:18 195:20201:22

documents 211:25doing 33:16 37:8

44:13 46:20 72:288:17 95:8 102:2103:6 114:2 141:5144:21 146:11147:20 160:7168:11 169:14197:15 199:7

dollar 70:11dollars 133:23

134:8 137:6147:25 210:14

domino 131:9double 36:10doubt 49:7 127:3

192:1downside 120:8

123:2 125:16,21126:7 128:16,18128:25

downward 131:23156:2 175:22176:1 179:15

dramatic 206:18dramatically 74:1draw 116:5due 44:2 86:5,6,8

91:15 134:7141:12 182:21183:9 184:5,11186:14,21,23187:18,24 188:11189:6,7

duly 215:2

e

e 5:1,6,14,17,206:1,3,7,10,15,196:24 7:1,7,10,147:18,23 8:1,3,4,78:14 9:1,8,12,1510:1,11,14,1726:11,18,19 28:330:10 31:3,433:20 34:4 35:2,638:15,20,22 40:1440:17,24 47:7,9,1948:1 50:2,1152:25 58:14 67:1167:15,18 69:9,1469:17 75:22 76:2282:25 86:14 87:17105:18 110:4,11110:18,19,20,22110:23 111:1,8,8111:21 112:5113:12 117:8,9,19118:10,16 124:8124:16 138:17139:1 140:14193:15,16,22194:14,15 195:20196:1,22 197:3,3208:8

earlier 55:7 57:465:3 107:13,24109:3 132:9147:23 156:7159:19 173:12175:19 188:3208:8

early 20:4 58:1659:23 75:24 83:1284:20 97:25 98:1143:11

earnings 52:656:19,20 131:24156:3 175:23

easier 201:11,17easy 17:7edge 94:22 95:1

119:25edification 54:15effect 61:20,21

62:1,5 65:1 66:8,966:10 70:8,9131:10,24 133:8156:3 175:24179:20

effectively 37:16efficiencies 179:1efficiency 178:10

178:20,21 203:9efficient 85:8,14

90:13,16 178:22efficiently 37:22

77:8 84:22,2585:1,4,12,22

eight 163:4 188:19eighth 3:20eisenhofer 3:3,10

11:20,23,25either 30:23 46:3

95:17 116:12,20138:3 139:3143:11,24 176:10182:4,22 189:8205:25 210:2215:18

elaborate 29:17electric 85:25ellis 6:3 7:18 38:16

38:20,23 40:1841:5 42:12,20,2143:16 60:14,2463:22 64:4,22,25

65:14,18 66:469:10,14,18 70:671:6 86:14 87:13117:20,21 118:10119:6

elon 13:1,4 16:1137:2 49:2,4 100:6100:12 102:20104:14 105:7,8107:13,20 109:14198:14

employee 91:19employees 91:16ended 8:11 33:16

37:8 38:8 89:13114:2 141:5144:12,21 204:5

ends 213:24energies 55:2energy 59:12

73:21,24 198:10198:16,19 200:10

engineering196:21

ensure 83:13entire 31:20 48:22

65:8entitled 116:2

134:20 191:11199:25 215:8

entity 147:3entry 54:19 142:3equation 126:19equipment 52:13

52:15 137:25138:2 139:17,19139:22,23,25140:1

equities 97:3equity 32:22,23

33:12,12 34:5,14

[document - equity] Page 13


CONFIDENTIAL

35:8,11,22 39:2042:23 44:24 69:672:4 93:2 95:1895:21,22,25 100:1101:4 102:2,6,22103:15 116:12,20132:11 145:12182:22 188:16208:10,17,25209:21

equivalents 150:2158:3

erp 27:6,7error 77:4esq 3:4,11,12,19

4:3essentially 105:1

158:1,7 164:19181:19 188:4208:18

established 22:1139:17

estate 20:25 57:22estimate 5:10

177:10estimated 170:7et 121:19 143:17

160:17event 23:24 58:20

108:12 117:15events 58:18,24

59:9,10 165:9everybody 107:3evr 10:5exact 16:12 24:6

47:6 73:13 98:6192:23

exactly 64:6 66:872:19 75:21100:18 109:7144:17,19 164:25

170:24 172:4189:16 211:4

examination 5:212:9 115:16 206:5210:18 212:22

example 84:2390:12 91:23182:25 188:24207:23

exceed 19:12179:3

exceeding 95:2exception 216:6exclude 166:15excludes 170:14excuse 177:5executive 12:19

13:1 46:20 74:20121:18

exhibit 5:8,9,14,175:20 6:2,3,7,10,156:19,24 7:2,3,7,107:14,18,23 8:2,3,78:11,14,18 9:2,3,89:12,15,19,23 10:210:3,7,11,14,1713:23,25 14:326:6,7,10 30:9,1233:18,20,22,2534:21,21,23 35:338:13 39:17 40:1348:1,3 52:24 53:253:3,4 60:11,12,1860:20 62:9,1767:2,11 69:12,1369:14 71:2,3 76:476:5 78:9,19,20,2280:2 82:20,2286:14,16,18 104:2104:21 110:8,9,19111:24 112:1

115:12 118:5,6121:7,9 123:5,7,9124:2,7,14 125:2138:12,13 140:5,7140:8 149:2,12150:19,20,24151:25 152:1,3,18152:19 154:23155:12 157:7,11157:13 160:15,16161:2,16,18,19,20161:21,22,23,24163:22 164:5,7165:12,15,25166:18 169:8,10171:10,13 175:4,7177:6 182:17190:23 191:2193:15,19 194:9194:11,14 195:20195:23 200:25201:3,9,15 202:2,3202:4 208:5212:24,25

existing 116:25expansion 168:20

168:23 177:20expect 171:17expectation 99:23expectations 75:1expected 209:2

211:9expecting 108:9

108:13,15expenses 85:13expire 59:5expires 59:6

216:25explain 20:1

111:21 112:4,15188:12 207:11

208:12 209:5210:9

explained 157:1explains 15:4expressed 127:11

131:21 155:25156:8 175:20

extend 141:13145:15

extended 59:7extension 59:2

f

face 63:4facilities 116:25facility 26:23

131:2 186:1 188:3188:5

fact 45:20 75:1176:13 81:17 100:8103:6 114:11121:24 123:3126:23 129:25132:10 133:2135:20 162:5181:3 188:10197:21 210:7

factors 203:6,7fail 37:18 84:10failed 84:15

141:11,24 142:3,7142:15 191:18

fair 13:13 16:1516:18,24 22:1930:7 35:12 72:1393:8 105:9 117:21160:12,13 161:13161:14 162:22196:12,13

fairly 17:7 114:20fairness 110:6

[equity - fairness] Page 14


CONFIDENTIAL

fall 29:12,19 31:951:13

falling 78:10familiar 79:2far 19:12 85:9

106:14 112:10133:19,20

fast 28:24fault 53:3feb 62:15february 6:15

60:15,24 61:1562:13,17,22 69:769:14 70:2,18,1972:1,21 73:1179:9,23,25 80:181:18 93:9,1494:5,9 97:8,2498:1,18 102:16,17161:16 191:13199:24

feedback 129:22194:20

feel 37:14 72:24172:15 191:23200:15

fifty 92:18fights 203:12figure 65:21 84:24

90:18 92:14167:13 191:19

filed 11:9final 50:20 62:7

111:3 120:15145:10,10 167:24182:3 192:17,17

finance 26:2138:24 137:25138:8 139:4196:19,20 208:13

financed 139:24174:20,25

financial 52:254:16 55:21 56:656:10,16 121:19134:5,10 184:16185:16

financing 19:5,1944:13 82:6 95:18129:12 132:11,19132:19 133:23137:7,24 138:2,21139:8,14,16142:21 158:12159:13 180:3,8,13180:15 209:8,22210:12,14

financings 150:8,9150:13 151:2,16159:12,25

find 57:7 74:24135:17 162:23182:13,15,20199:9

finding 139:3fine 58:10 137:1

146:18 157:2174:14

finish 20:19 56:12192:8

finished 31:5,7firing 129:3firm 190:15first 9:23 19:25

67:17 74:24 75:277:14 86:3 88:2589:9,14,21 92:993:9 97:13 102:12102:15 105:19,20106:1 111:7113:25 115:20

116:8 122:10123:17 127:6130:22 140:20143:9 149:17151:23 152:7155:15,24 159:8159:10,16 165:12165:22 175:19183:9 184:11,24184:25 185:2,25187:11 192:1194:18,21,24195:2,6,7 201:6,21202:3 204:7,11206:13

fit 194:20 198:18five 135:10fix 65:22 66:1

97:13fixed 100:10flexibility 129:8flip 116:7floor 3:5,13flow 17:1 18:5,8

18:12,20 19:220:4 24:4 31:1933:10 41:11,1251:23 54:4,1265:5 71:13,1576:7,8 80:21 82:782:9,12 150:13151:13 152:11,25153:16 157:17,17157:18

flows 19:12 20:952:4,10 79:1780:5 138:8 149:18149:19 156:22170:4

focus 27:11 53:1653:25 54:3 75:13

179:13,14,24folks 124:9follow 36:2 73:7,8

146:2 210:17following 63:22

165:6 171:3,16191:15

follows 12:8 65:12force 77:7forced 38:3forces 37:20 74:7

84:21,23 90:17forecast 40:3,8

41:13 54:8 61:2465:7,23 66:10118:11,16,23,24135:8 164:17

forecasted 93:2393:24

forecasting 164:13180:12

foregoing 215:5215:13,19 216:3

forget 72:20 110:3113:22 144:19146:16 162:16168:2 172:4192:23 198:1

forgetting 98:12164:25

forgot 67:8 100:18136:11

form 8:11 19:2022:1 24:15 25:329:16,23 31:1133:9 34:6 39:1341:7 42:3 44:1746:21 48:21 50:551:6 54:24 57:1057:14 58:17 61:1669:21 72:9 77:12

[fall - form] Page 15


CONFIDENTIAL

83:6 86:11 89:1991:8,17 94:2598:5 103:16,23106:5 111:15123:24 125:5127:13 130:4,12142:25 143:25152:14 153:2,18168:7 172:21178:15 181:4,24183:11,12

formal 97:17formula 43:22

44:5,8fortunately 185:4forty 92:18forward 100:14

164:2 168:10found 66:22founded 12:16,23four 99:10,13,14

140:19,24fourth 9:19 88:4

109:10 134:12147:24 148:3,7150:17,19,22151:3,4,11 161:2161:11,24,25162:1 163:1,2164:5 168:3169:23 171:11173:13 199:25200:18,22 201:25202:12

frame 109:8136:21 137:10138:4 143:18,19143:21

frankly 198:8free 62:24 191:23

200:15 205:21

friend 182:15front 51:23 52:17

115:19 149:11152:3 155:1,12160:4 165:13,17190:19

frustrated 106:7106:10,23,24

full 19:23 155:24175:19 191:16192:3,4 193:7199:25 215:13

functioning195:15

fund 138:9 146:5208:11,23

funded 84:8 143:8funding 41:21,21

83:11 146:6147:25 208:10209:1

funds 160:1,2funny 46:10further 177:20

210:15,18 212:19212:22 215:17216:4

future 19:11 52:452:9 54:19 55:2156:6,25 135:12163:20 171:5206:23 209:21

g

gaap 52:4 56:2356:24,24

gap 167:14gebremariam 3:19

12:3,3gelaw.com 3:8general 37:11

205:16

generally 163:14generate 54:12

56:3 57:20 174:16generated 19:4,17

129:11generating 53:25generation 204:14

206:21,24 207:4getting 38:19

52:13 68:22 79:2185:8 130:2,10,14198:23

giga 160:24gigawatts 160:22

160:23 161:4,10166:7

give 24:6,7,22 25:726:15 29:24 31:1656:20,20,21,2266:18 114:23118:19 134:7138:23 139:8143:13 155:8163:17 168:14,15201:3,16

given 24:8 35:983:11 145:3211:21 213:24215:14

gives 52:16 65:6giving 31:17 68:24

123:22 126:13168:6

go 14:15 16:2021:5 23:16 25:1428:4,5 29:1232:14 36:11 40:940:13 45:11 47:349:1,9,10 50:157:5 67:7 68:1969:6,7 93:19,19

95:17 96:14105:19 111:4114:9,13 124:10136:8 145:12160:14,18 162:24167:13 171:23,25172:5,5 173:22174:22 179:4,4,25181:18 184:8188:15 191:2195:2 200:24201:9 209:4,5,9210:4,8 211:25

goal 54:11goals 54:11goes 20:13 24:4

50:2 73:8 91:12going 12:13 13:12

17:6 28:24 31:1634:20,22 35:741:6 42:1,2,11,1343:14 44:20 50:353:24 58:8 59:560:4 64:23 65:3,565:15,20,20,2466:5,23 67:1068:18,19 69:1970:24 72:23 74:374:5,5,25 75:2378:15 79:19 87:387:15 88:17 90:2091:3,13,14,24 94:395:17 99:21,24100:1,7,9,14 101:3104:6,15 105:6108:1 109:6112:13 113:19,24115:4 118:4127:21 131:12133:2,18 134:6138:7,8 139:6,18

[form - going] Page 16


CONFIDENTIAL

139:22 140:10143:7,13 145:20146:20,21 147:4147:10,12,13155:6 157:9,10160:20 163:24164:1,18 168:10173:14 174:15,25176:1,16,23 177:5177:5,12,18 178:6178:11 181:18184:19 186:10188:24 190:6,24190:25 191:4,10196:3 197:22198:4 199:8,17,23200:2,6 205:19,25206:1,2,8,11

goldman 140:21141:2,21 142:1,5143:16 146:4,15

goldman's 142:8good 11:4 12:11

25:15 46:4 52:1052:10,18 57:1758:2,4,5,6,11,1258:12 59:3 66:1994:1 115:1,18137:13 156:16167:17 199:5

goodrich 2:15 4:211:13 12:2

gotta 173:22gotten 41:18 70:1

93:11 94:4 119:22grab 149:12gracias 99:3,7grant 3:3,10 11:20

11:22,24graphs 107:8

great 36:3 84:22129:23 149:13190:21 192:11198:17 199:7

green 81:10grew 54:7 174:4group 73:24 74:1

75:14 99:15196:20,21 198:16198:19 203:11

grow 173:22growing 17:2 18:8

18:11 173:22grown 74:1growth 53:22,25

54:6,9,10 135:9,11135:14 162:15173:15,23,25174:1,3,8,13,13,14174:16,19 179:19180:12

guarantee 33:4,5,6183:6

guess 35:4 57:8101:6 145:11148:11 173:11

guidance 53:16131:23 132:25133:3,10 156:2160:7,11 161:4,10162:2,6,21,25163:5,18,25164:11,12,15,24165:2,3,8,10 166:3166:6,13 167:1,5168:6,10,11,13,14168:15,16 171:15171:25 172:1,7,12172:23 173:7175:22 176:2,12176:20 177:8,17

178:2 179:15,18180:2 181:22196:11 201:19202:17,24 203:4203:19,25 211:21211:24 212:1,13

guided 191:16guy 98:24guys 28:23 45:15

46:12 186:5

h

h 5:6 6:1 7:1 8:19:1 10:1

habit 172:11half 15:21,21,25

16:1 72:23 73:25148:10,10 158:19199:4

halfway 176:13,14208:7

halvorson 4:1111:15

hand 63:13 215:22hang 76:24 155:20happen 25:19 50:3

74:4 75:2 82:594:20 95:17179:23 196:23

happened 49:1258:18 70:20 75:19100:14 101:15102:25 136:2145:7,9 148:18,19148:20 165:9

happening 132:17143:11 209:6

happens 24:225:11 32:23 42:656:22 68:3,6

happy 50:15 57:4163:24 191:1

198:14hard 184:8hayes 30:25head 193:8headline 134:4,8health 210:5hear 75:3,4,6,15

106:3 141:16178:14

hearing 85:15helam 3:19 12:3held 8:20 11:12

16:7 198:12help 47:1 86:1helped 45:9hereunto 215:22hey 104:14,15

114:10 171:24197:15

hgebremariam3:23

high 32:25 34:1034:11 87:1 98:798:24 169:3,5171:19 183:7194:18

higher 38:4,755:18 77:23 89:13162:21 176:20

highlighted 91:7highlighting 36:7

61:6highly 17:7 56:8historically 54:6history 31:21hitting 176:20hmm 182:10

204:22hold 38:17 49:13

91:12,15 139:20140:2 155:2 169:9

[going - hold] Page 17


CONFIDENTIAL

holds 91:5,6home 70:22honestly 64:9hour 199:4,4hours 207:8,19,20

207:24 208:1,2213:12,12

house 72:7 73:10hr 196:19huh 205:4hum 109:20hypergrowth

174:8

i

idea 138:21 139:3143:2,4 144:15

ideas 37:21identify 11:18immediately 120:9impact 19:11,12

131:1 154:16179:8,16 180:7209:7

impacted 180:13implementation

80:8implication 23:13important 17:13

21:9,21 63:2 82:884:12 148:21169:19 209:20

improve 80:4improved 80:8,21

82:9,12,18 93:1493:15 132:20

improvement52:17 80:14171:19

improvements79:25 178:10203:9 206:18

improves 131:12improving 102:14inability 141:13include 14:7,8

20:21 166:16198:20

included 125:11including 40:19

60:15 130:25143:16

income 52:3,1455:18,20 56:3,557:1,21 163:21

incorrect 61:19increase 72:10,13

77:16 78:6 135:12increased 59:24

133:24 206:20incredible 50:13

52:1incredibly 45:19incremental

210:21indebtedness

185:16independent 47:13

47:15 48:19,23133:4

indicates 106:1168:5 200:17

indicating 35:2570:13 81:10,11

indication 57:1858:2,3

individually 113:4individuals 6:4,11

6:20 7:5,19 8:89:9 140:15 195:22

industry 33:1 59:374:4

inform 61:1366:13 97:21

information 29:2556:21 97:4 169:18169:21 176:15

informed 127:8informing 61:3informs 83:3initially 209:2initiative 181:13

181:16inner 79:17,20

93:13 103:17insert 77:9inspected 207:10

207:15,19,21208:1 211:8,15,23213:12

install 60:1 160:20170:16 177:13181:9

installation 193:12204:11 207:14,15

installations 160:8164:13,18 177:18191:12,16,18

installed 59:25159:1 160:11162:12 163:17171:2,18 180:21181:6 192:3198:23 200:18201:5 202:10,16204:14,19 207:10207:20,25 211:8,9211:15,17,22212:3,7,11,12,14212:17 213:16

installs 191:20instructed 10:21

integrated 197:13integration 193:4

193:7,10 194:1,6196:3,12,15 197:4197:9

integrator 197:10intend 56:1intentional 126:19interested 49:25

98:7 215:20interesting 45:10

73:5interim 80:17,19

81:12 180:19internally 166:12

167:15 213:2international

198:10interpret 111:17interruption 176:7inventory 71:18invest 44:23 50:18

135:14invested 16:3investing 54:5

68:15 112:22151:18

investment 50:2351:25 53:22

investments 52:10investor 208:10,23investors 18:25

131:18 137:4154:15 160:6,19162:6 163:17164:3,10 166:2171:17 180:11208:10,13,18209:1,1,17 211:18

invite 7:3

[holds - invite] Page 18


CONFIDENTIAL

involved 47:1148:20 50:10,12,16196:15 197:3,16197:17,18

involvement 197:8iphone 190:7ish 80:13 196:25issue 24:23 25:13

27:3 29:13 33:1535:8 93:10 111:5114:11 136:4,5142:6,9,11,12,14198:23

issued 199:24issues 51:4 61:4,14

86:23 87:2,6140:3 182:18188:9

item 185:25

j

january 62:22171:3 196:25202:22

jiga 160:24jigawatts 160:20job 1:25 38:23

42:21 46:17,19,2547:2 50:7 65:2,4197:12

john 99:8,9joining 74:7jonathan 124:8

140:14jpmorgan 132:12judgment 127:9july 8:14 9:12

91:12 94:11,13104:24 109:19112:6 114:4,4117:10,13 118:12118:24 119:8,8

120:1,7 121:6123:12 124:23134:15 138:16143:11,12 148:12154:23 175:6,25197:20

june 83:5,12,14,1884:9,9,16 85:20,2085:21 86:14,2287:3,15,25 88:6,1088:14,25 90:4,7,2292:7 93:11,2494:5,9,10,12,18,2094:20,22 100:24101:21,24 102:2102:24 119:23131:22 132:6,22156:1,18,21175:21 188:8

justison 3:13

k

keep 43:19 126:19126:21

keeping 37:20kendall 99:2,7,8kept 107:3 127:25

128:2 161:10165:2

key 133:21 188:13206:16

kicked 171:4,5kind 49:24 56:24

70:10 92:4 99:5knew 74:16 75:19

95:23 96:1,3,4,8,996:11,22 99:11106:15,19 116:25139:6 169:1,2173:18 179:6

know 13:10 16:1220:9,24 23:21,22

23:23 28:11,12,1228:13,22,23 31:533:7 35:23,2437:19 42:9 47:751:1,11 59:4,562:7 64:12,13,2066:12 72:19 73:673:12 74:19 78:889:4 91:18 96:6,798:19 99:2 100:17101:25 102:5,12103:9 105:17,18111:10 112:11113:11 117:17128:7 135:4,5,7,18135:18 144:5147:5,9,14,16,16148:21,24 153:10154:5,6 164:24168:2 170:9,9,11175:9 179:22181:10 183:8,14184:13,14 189:19190:14 192:6198:14 201:13,25202:1,3,4 204:13205:1 210:7

knowing 70:21154:15

knowingly 176:17knows 97:5ks 20:8

l

l 3:4 7:4,15,23 8:38:7

lack 193:4laid 35:10 193:25

194:7lake 36:17,20 43:6

44:14 45:2,4,12,1445:20 46:1 47:3,4

47:7,10,14,2048:12 58:15 67:867:19 69:4 140:21141:3 143:17

late 97:24 98:1,18143:11,14

lawyer 153:14205:8,20

lays 84:1laz 10:9lazard 124:8 125:6

125:11 126:16134:19 169:11,13169:18,19 213:3

lead 64:22 65:14197:10

lean 37:20lease 56:1leased 52:19,23

55:2,2 56:1leasing 52:13leave 197:19,22

198:7,25 213:19leaving 198:4led 40:9 58:14

60:3 114:3,6left 192:5 206:12

206:22,24legal 4:10 214:1lend 142:5 147:3lender 21:24lenders 21:11,13

21:23lending 21:14

23:19 147:2letter 9:20,24 10:4

10:8 53:1,8 69:8139:14,16 149:14150:19,23 152:6152:18,22 157:8157:11 161:3,11

[involved - letter] Page 19


CONFIDENTIAL

161:15 162:1164:6 165:12,18166:3 171:12,24201:2

letters 53:12 160:4167:6

level 23:5 38:4,798:7 146:20176:19 194:18198:11

lexington 3:5liabilities 14:7,9

14:11 15:15limbo 95:20 96:19

99:25 100:7limit 77:17,21line 40:19 81:9,10

89:9,14,21 119:14119:19 149:25193:24 216:8

line's 107:9liquid 17:3liquidity 16:24

17:4,7,8,16 18:2521:8 23:6,1824:12 25:1,2327:2,17 29:8,14,2131:9 32:7 33:334:3,11 44:6 58:858:13 59:22,2261:4,4,14 63:14,1964:24 65:2,1675:25 76:7 78:1178:16 79:8,1580:11 81:19 83:483:13,18 84:5,1586:23 88:5 103:17116:2 117:15119:7,13 121:25122:11,14,24125:4,24 126:1,1,5

126:8 129:1,7131:25 133:9134:20,21 156:4170:3 175:24182:19 186:2188:9

list 134:17listed 208:2 216:7litigation 1:4 2:4

11:9little 28:5 34:14

35:5 38:10 59:760:2 79:24 112:16129:14 130:15131:11 147:23148:4 180:12,16188:2

llp 3:18loan 104:17 108:2

108:4,5,16,18,20108:22,23,24109:9,11,12,15111:4 113:20114:18,19,19,21137:20 143:14187:5

loans 183:1local 203:12located 11:13logical 147:19long 19:8 48:8

52:18 140:10151:18 160:3184:2 187:14188:17 208:19,21

look 14:2,5 26:926:11 31:3 33:1833:24 34:24 35:1435:15 36:4 40:240:17 41:13 45:2050:9,10 52:2 53:6

53:15 54:17 55:157:5 62:9 63:1267:17 69:8 72:374:3,7 79:7 80:180:11 81:9 88:388:24,24 89:1491:4,19 93:15,20104:21 106:25115:21 118:15119:3 122:10123:9 124:6130:19 140:5,12140:17 141:10149:15,16,22150:16,22,24152:17,23 154:22155:14 157:7,15159:7 161:15,17162:13 166:4,21169:8,22 171:10174:17 175:4,17184:17,17,22185:9,15 193:24194:13 202:18206:3,16

looked 18:7 23:1,123:3 64:14 70:1579:9 135:25136:10,11 180:18

looking 15:1 92:5114:21 119:11134:25 136:3158:13,20 161:7186:18 187:5,5207:1 209:22

looks 14:14 15:1435:6 38:25 39:1068:6 88:15 90:390:20,21 107:16112:5

lot 43:14 126:14127:12,24 129:21134:6 173:10176:15 207:7

lots 13:19 91:5171:4

love 200:4low 31:22 93:22

93:23,23 94:10,11105:23 106:4,8,12131:7 171:1 173:7

lower 63:12135:11 171:25173:14 174:13191:19

lowest 32:25lunch 115:2,7

117:8lyndon 1:14 2:15

5:9 11:8 12:6121:17 213:25214:8 216:2,21

m

mac 200:3mackintosh 3:11

11:24,24 149:7mail 5:14,17,20

6:3,7,10,15,19,247:7,10,14,18,238:3,7,14 9:8,12,1510:11,14,17 26:1826:19 28:3 31:3,434:4 35:2 38:1538:20,22 40:14,1740:24 47:7,9,1950:2,11 52:2558:14 67:18 69:969:14,17 75:2282:25 86:14 87:17105:18 110:4,11110:18,19,20,22

[letter - mail] Page 20


CONFIDENTIAL

110:23 111:1,8,8112:5 113:12117:8,9 118:16124:8,16 139:1140:14 193:16,22194:14,15 195:20196:1 197:3 208:8

mails 26:11 30:1033:20 35:6 48:167:11,15 76:22111:21 117:19118:10 138:17193:15 196:22197:3

main 130:16maintain 23:5

129:8major 191:11making 28:23

52:12 81:21,2485:13,14 90:13113:1,4,15

manage 54:9 65:578:15,17 83:2584:2 86:25 87:1691:14 95:7

manageable 95:3management

23:10 37:21 38:346:8 47:1 61:171:18 84:21 97:4120:7 122:11,12122:18 125:11,12125:24 126:8127:6,7,8,9,10,16129:6 130:23131:21 134:21146:13 155:25156:8,12,13,15168:5 172:14,17175:20

management's122:13 127:9

managing 17:132:13 85:7,22

manufacturing71:19 128:20139:11

march 75:2497:25 98:1,11,18102:17 185:20187:25 188:8189:5,25 197:25

margin 60:1mark 13:22 26:6

30:8 33:20 34:2048:1 52:24 60:1060:18 71:2 76:378:19 82:19 86:13111:24 118:5121:7 123:5 124:1138:12 140:6149:1,5,6 150:18151:25 152:18157:11 184:18190:22 191:1,1,12193:14 194:9195:20

marked 13:2526:7 30:12 33:2238:13 48:3 53:460:12,20 67:2,1171:3 76:5 78:2082:22 86:18 104:2110:9 112:1115:12 118:6121:9 123:7 124:2124:7 138:13140:8 150:20152:1,19 157:13166:18 193:19194:11 195:23

market 68:7 96:6132:13

markets 32:2258:21 69:6 71:2372:5 100:1

massive 54:6material 97:4

179:8materials 78:22

169:11math 51:20 92:13matter 24:13 25:2

25:24 70:14 81:2157:5 205:4

matters 205:5,6matured 188:17maxed 77:25maximize 135:15mean 13:18 20:7

63:1 64:16 74:2081:3 91:13 93:21102:15 103:25105:24 112:15122:4 127:2 129:3132:24 143:5151:5 158:11170:9 181:13183:13 205:14

meaning 76:10117:15 145:13149:19 153:5178:21

means 41:1 85:2,5120:25 122:18150:5 168:9215:12

meant 27:1,1785:12 111:9158:24 159:17164:16 195:4

media 11:7 66:2467:4 104:7,10115:5,15 145:21145:25 176:24177:2 213:25

meet 21:13,2024:5 83:13 90:990:10 117:1126:17 191:18209:11,12

meeting 8:18 39:162:13 69:18 70:2271:7,10,12 72:7,1572:17,18 73:1078:24 79:4,881:18 121:4,11,17122:12 123:19124:17,23 126:18126:21,23 127:7128:2,4,5 135:20154:23 166:20172:6 174:10194:2

meetings 39:3,880:4

megawatt 131:23132:25 156:2175:22 176:2207:8,20,24213:11,12,15

megawatts 160:8160:11,25 162:12162:18,25 163:4163:16 166:9,10166:14,14 167:19167:21,22 170:15171:17,18 177:12178:3,7,12 179:7180:21 191:17,18191:20,21 192:3200:18 202:2,3,4,8

[mail - megawatts] Page 21


CONFIDENTIAL

202:16,19 203:5203:25 204:11,13204:18 207:9,10207:10,19 211:8211:21 212:2,3,5,6212:7,9,12,14,16212:17

member 174:10members 35:9

98:23 99:2 124:11174:12 176:6,10

memo 140:13memory 22:8 31:8

122:8 125:25mention 133:14,21

141:15mentioned 65:3

84:20 107:17132:9 139:19151:17 188:21204:6

merkley 196:1message 54:3met 162:6metering 59:12,13

59:14methodology

164:1,12,16,17,23165:7 166:13

metric 54:25160:10 163:17211:17

metrics 56:23mexico 166:15,16

167:14,21,23168:21,23 170:7177:25 178:7,9,13178:17 180:21181:9,13,16202:19,21 207:25

mid 77:3 83:12143:12,14 171:18

middle 83:11120:7 171:16

midnight 50:2migration 27:7,8mill 2:16 11:13million 15:23 16:3

31:13,16,17,1832:16,18 36:2237:8,9,10 38:840:4,4,5 41:1,6,941:15 42:4,5,6,1242:13 43:17 44:1044:15 45:4 47:2250:18 60:8 68:968:13,18,23,24,2569:1,2,4 76:14,1477:22 79:18,1981:14 84:9,1085:19 88:15 89:1789:18,18 90:5,6,690:22 91:25 92:792:8,12,14 93:2102:9 109:9112:20,21 113:8,8113:8,11,14,16,20113:20 114:11,16114:22,23,24119:8,9,9 129:7,7129:13,17 130:15132:8 133:25134:25 135:21,23140:25 142:21144:10,11,12,14144:15,22,23,24145:15 150:14151:13 152:11153:5 154:8,10157:3,20,21,21,24157:25 158:4,6

159:9,10,23,24167:17 173:6186:21,22,24187:25 188:22,22188:25 189:7,7,10189:14 206:20,22206:22,23 207:4,6209:14,15 210:22210:24,24 212:4,8

mind 36:8 38:1897:1 104:3 115:2182:17 190:16204:25

mine 175:13 211:5minimum 144:11minus 40:21,23minute 108:25

134:11minutes 8:18

121:4 122:10123:1,4 125:10,22127:3,17,18,19,25128:11 129:9130:20,23 132:5154:22 156:19166:19 175:5,12175:18

mir 9:8 124:8misinterpreting

19:6misleading 46:22missed 163:3,8,12

163:13missing 14:18,19

14:20 39:25 40:12155:6

misspeak 124:21mistake 64:18,21

65:13mm 182:10 204:22

model 17:24 19:719:24 51:18 75:1297:13 100:10102:13,13 173:14

modify 42:22 43:765:8 84:18 87:12194:20

modifying 70:17moment 109:3money 17:20

32:20 33:15 37:1843:5 44:14 52:1758:15 68:10 71:2291:15 131:19,19141:12 145:8147:2 150:7189:12

monitor 60:9monitoring 60:5,7

81:24 82:2month 31:14

32:18 63:14 79:1779:20 80:9,20,2380:24 81:2,4,15,1685:21 86:1,3,488:25 89:7,1390:15 93:12,13,1894:5 101:17,19103:1,2,5,12,14,18103:18,19 113:18119:13 206:22,23209:14

monthly 40:341:11 94:2

months 19:1 79:1380:15,16 99:24100:3 117:2 119:7119:16 130:10148:6 178:13181:19 196:5198:3,6 207:16

[megawatts - months] Page 22


CONFIDENTIAL

moon 153:9moore 3:18 12:4morgan 140:20

141:2,8 142:4143:17 146:5,15

morning 11:412:11,12 107:7185:24

motors 1:3 2:33:17 11:8

move 27:6 37:959:6 64:2 90:4135:5 145:4,4171:9

moved 27:5 90:5,6moves 31:13moving 52:11

90:15multiple 31:16musk 8:4 13:1,4

16:11,11 37:244:20,23 45:747:11,19 48:2049:2,4,11 50:3,650:14,18 67:18,2268:2,6 69:1870:23 72:15 73:273:14 93:9 95:1096:21 98:2 100:6100:15 105:15106:2 107:1110:16 114:4117:11 136:15144:22 157:22189:11 190:2196:11 198:25

musk's 110:1mutual 199:1,2mutually 198:17

n

n 5:1 22:6name 11:15 22:9

22:10 30:16197:11,11 206:7

named 215:19,20names 22:10nature 17:24navigating 65:9near 129:1nearly 52:18necessarily 81:3

117:3 131:6 180:5180:9

necessary 47:1248:18

need 20:20,2427:21 28:25 34:1342:22 61:11 62:2563:1 65:22 68:473:7 83:12,2584:2 95:17 100:20103:18 104:17107:17 113:20,24114:18 116:16129:20 139:9163:25 167:18186:10 196:2,5

needed 43:5,7 70:795:16 101:2,3,6,6107:13,22 116:12129:13,20 130:14136:21,22,23137:1,11 138:5140:25 145:3,4,15169:14

needs 75:13 108:2117:1 188:15

negative 19:351:23 131:24133:8 147:13

150:13 151:12,21151:22 152:10,25153:16,25 154:2157:17 175:23179:8,16 180:7

negotiated 49:20negotiates 45:18

46:3negotiating 45:25

67:23negotiations 45:9negotiator 45:19nem 59:12,15net 5:9 13:14,18

13:20 14:3 15:1519:9,11 20:351:24 59:12,13,14150:1,6 153:3206:23

nevada 58:20,2159:1,11,19 165:10

never 18:5 22:2523:1 24:18

new 3:6,6,21,2127:5,5,7 66:1073:22 74:2 159:12210:14

news 134:4 180:18182:7

nice 200:11night 48:11 104:24nilly 25:14non 56:23 141:13nonrecourse 93:4

186:22 208:15normally 44:23

129:11nos 33:21 112:7notary 216:25note 62:16 185:15

notes 91:5 105:1,2105:3,4,10,16106:9 109:1,13110:15 114:5117:9

notice 131:16notify 65:3noting 62:18 63:4november 6:7,24

10:14,17 15:13,1348:2,11 67:12,15192:22 194:17195:12

number 11:1016:12 33:1 38:1640:18 43:18 50:2060:25 72:7 89:13113:23 114:24124:8 130:10138:18 140:11,15140:16 145:22154:4,6,7 157:2162:14 169:25172:16 173:1179:2,3,5,5 182:3188:21 192:4193:18 195:21213:25

numbers 36:261:23 62:2,6,863:21,21 64:5,7,964:12 65:21 66:570:13 80:20

ny 1:25

o

o 22:6,6oaths 215:3object 19:20 22:1

24:15 25:3,929:16,23 31:1133:9 34:6 39:13

[moon - object] Page 23


CONFIDENTIAL

41:7 42:3 44:1746:21 48:21 50:551:6 54:24 57:1057:14 58:17 61:1669:21 72:9 83:689:19 91:8,1794:25 98:5 103:16103:23 106:5111:15 116:15123:24 125:5126:25 127:13130:4,12 142:25143:25 152:12153:2,18 154:17168:7 172:21178:15 181:4,24183:11

objected 45:8objection 25:25

46:14 49:3 77:984:6 86:11 103:8176:11

obtain 210:11obtaining 180:3obviously 63:1

195:5 196:9occur 61:8 65:2occurred 73:1,9october 5:20 14:4

15:11 33:21 35:2238:20 39:11,1940:10 41:5 42:1148:5,5,7 158:14158:14,17 195:2,4195:10,21,25

offer 75:8 104:15104:16 108:2120:19,21 139:14139:16

offering 101:4102:3,6 103:7

116:12 133:4officer 12:19 13:1

30:24 31:2 121:18121:19 215:1

oh 14:15,23,2525:14 92:23 96:4112:12 119:15126:20 127:24131:10 140:6146:20 155:4,6158:13 183:16184:23 195:9197:5 203:20

okay 15:3 16:1718:15 21:4 26:426:22 27:21 28:428:14,16,17,1929:19 34:2 35:1836:3 45:24 46:2447:18 49:1 50:2452:24 58:12 61:1263:6,9 64:1166:16,21 67:1470:1,20 75:2376:21 77:2,2578:18 80:10 85:1186:21 88:9 89:890:3,8,24 95:696:25 99:18 101:9101:18 102:23103:3 104:1,20105:8 106:10110:14 111:2112:14 115:3,13115:24 117:6118:4,22 119:15119:15,15,18121:20 122:2,6127:4 128:4,14133:2 135:4,17139:1,12 141:19

141:23 142:18145:17 148:3149:2,11 150:16153:23 154:5155:14,23 157:2158:18 159:14161:23,25 163:3163:10,10,12,14164:10 165:5,7166:2 169:22171:14,24 172:1175:14 176:21177:1,9,22,23179:4 181:1182:11,16 183:24184:8 185:1 186:6186:10 187:2,16187:20,23 188:7188:18 190:5,8,10191:2 192:7,14,24195:19 196:14199:3,10,13,15,23200:15,22 201:23202:6,9,25 208:6213:19

omitted 115:8once 17:6 66:7,9

159:2,3 188:16192:20 209:11

ones 80:1 122:22136:11

ooo 4:14 5:5 10:1910:24 214:4

open 160:1operate 37:16 38:3

38:7operating 24:3

30:24 188:19operational 129:8operations 18:6

19:5,18 47:2

150:7,9 151:1153:25

opportunity215:15

optimize 87:22option 136:19

145:1options 120:8

139:10 140:24order 62:22 73:17

90:9 97:3 160:15185:5 200:25

organizational196:18

original 203:4originally 143:2,4

143:5 144:13,14144:18

osborne 191:12outcome 23:15

49:20 147:10,11147:13 179:12215:20

outlook 162:2overall 23:3 51:16

173:8overdue 130:24overhead 60:2

129:2overlapping 28:24overview 122:13owed 189:14owned 57:21

p

p 91:20p.a. 3:3,10p.c. 4:2p.m. 2:18 104:10

115:5,7,10,14145:21,25 176:24177:2 191:5,8

[object - p.m.] Page 24


CONFIDENTIAL

199:18 213:24214:3

package 62:1169:13 70:2 166:19

page 2:16 5:2,86:2 7:2 8:2 9:210:2 11:13 14:214:22 15:6 26:1235:15 36:4,1053:7,15 63:1279:7 88:4,7 89:2192:9 115:9,22,24116:6,7 118:17122:10 123:10127:6 130:20,22134:18,18,19140:13,17,18149:15,16,17,22149:22,23,24150:24 151:4152:23 155:15,16155:19 157:15161:16,18 162:2163:23 164:4,5,7166:4,21,21,23169:22,24,24171:15 175:17177:6,7 185:11,12185:15,18 186:19195:2,6,7 200:7,8201:7,21 213:2,4,7216:8

pages 5:12 8:1234:22

paid 29:4,4 50:1592:1 189:8

painful 27:8palo 2:16 11:1,14pan 136:17,21paragraph 116:6

116:8 121:16

162:3 171:16191:14

part 20:20 34:2134:22 44:4,19,2053:21,21 54:555:23 67:23 70:285:3 87:17 139:11152:6 159:13,14202:18

partially 178:16178:20

particular 12:1417:3 23:4 153:10173:5 174:10

parties 5:11,21,235:24 9:5,10215:18

parts 125:18pass 81:4 84:9

141:13passed 81:2pause 57:13pay 78:2 85:25,25

86:3,5 130:7182:20,23 188:25208:18,18

payable 85:9,2186:7 89:17 90:591:20,21,24 95:8

payables 127:10130:24

paying 85:2,1291:15 95:7 130:1130:1,9

payment 85:1991:5,6

payments 27:1071:20 85:21 86:7

payroll 89:17,2590:1,2,4,15 91:1295:8

pc 200:3people 29:3,6,7

31:22 37:13,1440:18 60:15 70:2386:15 113:18129:3 145:4 196:4

people's 197:16,17percent 13:11

16:13,14 18:9,1127:20 43:23 50:1250:13,19 51:1854:7 112:23 129:2134:2 162:15174:5,7 203:15,17208:16

percentage 13:8,944:1 58:4,6,6

performance134:3 198:15206:12,14 209:23210:6

performed 198:12performing

198:11period 8:11 18:23

21:10 24:22 55:1495:9 154:10 158:4158:8 193:1

periodically112:19

person 117:22118:1 138:7 173:5200:4

personal 100:5personally 68:11

68:19 98:22157:22

persons 38:16pfund 99:2,7phase 27:8 153:10

phillips 6:11138:17 193:17

phone 74:9,1575:16 97:19,2098:15,22 99:4111:12,19,20,23

phrasing 30:4picking 117:12picture 18:7 35:5

200:11pile 149:13 175:11pipeline 181:21pivot 51:11 52:20

52:21 53:18173:12

place 72:7 115:2173:3 215:9

plaintiffs 3:211:21 13:25 26:730:12 33:22 38:1348:3 53:4 60:1260:20 67:2 71:376:5 78:20 82:2286:18 104:2 110:9112:1 115:12118:6 121:9 123:7124:2 138:13140:8 150:20152:1,19 157:13193:19 194:11195:23

plan 24:18 69:587:14,14,25,2588:2,2 89:1,2,590:19,19,20,2291:14,14,23 93:2595:2,3 103:19120:1,1 167:13,19167:20 168:20,23172:17 173:3179:25 194:22

[p.m. - plan] Page 25


CONFIDENTIAL

196:3,3,5,5,9planned 196:4planning 196:12

196:15plans 90:25 188:7

197:4,9 202:17platform 27:5,6please 11:18 26:10

28:22 33:18,2538:12 53:15 54:1560:19 62:9 65:1169:7 104:21111:25 115:25116:7 118:18121:8 124:1140:18 149:2,12149:15 150:23,25152:23 155:19157:7,15 161:19166:21 169:22176:22 177:7192:18 193:14194:10,14 195:3

pledged 15:19plus 40:20,23 44:1

92:19,19,19,19,1992:22,24 206:22207:4

point 16:23 47:854:18 60:6 62:1868:9 75:23 77:681:21 84:4 94:1094:11 96:10 97:2297:23 107:6,12109:10 116:24117:12 120:4,6,11121:1 129:19,25130:11 133:13143:21 176:19189:5,10 194:5196:16 197:9

198:16 207:21209:16

pointing 80:20points 106:25policy 58:21 203:6portion 66:8 85:16

188:10 189:6208:8

position 30:21,2539:4,12,23 106:15109:24 122:11,14122:24 125:4131:11 133:25158:7

positions 133:22positive 18:5,8,13

18:21 20:5 54:1257:20 114:12147:12 157:17,18

possibility 71:25143:22

possible 207:18,23208:3

possibly 172:14post 5:9potential 59:22

73:23 95:22,2596:1,15,18,23 98:299:20 128:1143:16 164:1180:11

power 49:14,15powerwall 73:22

74:2practice 39:2

126:16practices 84:21precise 212:21predates 62:17preferred 129:23

prefers 37:11preparation 105:3

105:4,5 110:16prepared 104:23

106:9 118:16120:7 169:11

preparing 110:25present 4:9 19:11

51:24 176:17,18179:2

presentation 9:372:3 82:17 121:24122:7,9 123:6,11123:22 125:8,19126:4,13 128:6162:17

presentations56:20

presented 123:1123:11 125:7,18127:7 128:7156:25

preserve 129:1president 121:18press 112:12

170:13 192:8199:9,23 202:1

pressure 37:15pretty 21:17 71:11

88:18 94:1 106:15143:9 159:9 199:5201:16,19

prevent 203:13prevented 100:1preventing 33:11prevents 95:20previous 20:16

174:2 191:15previously 57:15price 131:25 133:8

154:16 156:4

175:24 179:9,17179:21,23

primarily 165:10169:16

primary 59:10148:6

principal 117:22187:1,10

principally 189:14printed 14:24 36:2

190:11prior 77:14 158:8

165:3priority 17:1private 17:19,22privileged 111:9probability 183:7probably 13:8

26:21 74:16 97:1997:24 98:15 99:599:11 102:10105:24 106:22122:20 128:18,20143:11 185:2196:16 201:11

problem 24:2333:8 130:2,10

problems 58:1376:1 100:11

procedure 215:4proceed 29:1proceedings 214:2process 49:25

83:24 144:17146:17,19 209:6209:10

product 195:15production 13:24

33:21 48:4 75:1275:13 97:13 98:8112:7 124:12

[plan - production] Page 26


CONFIDENTIAL

138:18 140:16productivity

171:20profile 141:14progress 168:24

168:25project 9:4 59:8

169:10 171:8projected 41:14

61:8 161:9projecting 41:5

70:15 119:7160:19 161:5166:13 177:17

projection 61:688:10

projections 69:11181:21 207:8213:11

projects 40:3207:17

proportional163:20

proposed 35:11120:12

provided 157:22provider 139:17providers 209:22providing 122:13

164:12public 16:19,21

17:6 18:4,2019:16 68:7 71:2395:23 96:22 97:3132:7 167:12172:19 179:7216:25

publicly 17:1518:24 32:25120:12 197:22198:3

pull 78:4 185:3purchase 108:4purchased 74:25purpose 108:21pursuant 215:3pursued 140:24push 85:10 91:20

91:24 101:16,18101:20,21,23102:1,11 172:14

pushed 132:18pushing 71:21

85:2 130:1put 34:25 49:13

57:11 72:6 89:1489:16 95:7 100:16102:20 115:18131:18,19 139:20140:2 149:11160:15 182:17185:4 189:12

putting 45:1071:20 85:12 86:791:5,14

pv 191:13 193:11

q

q1 58:22 62:14,15132:13 133:18,21162:2 206:17,19

q2 132:14,14133:18,22 206:17207:2

q3 132:15,19,20133:23,24 148:4170:9 206:17,19207:2 210:11,13210:22,22 211:1,2211:5

q4 133:24 191:12201:19 206:17,19206:19 210:11,13

210:22 211:5,6qs 20:7quarter 9:19,23

10:3,7 20:1552:25 53:8,1377:14 113:22,23115:20 134:12,12134:14,16 147:24147:24 148:3,8149:14 150:12,14150:17,19,23151:3,4,11,20,23152:7,10,17,21,22152:24 153:1,17156:23 157:6,7,11157:16 158:16159:4,6,8,10,17,17159:18 160:14,16160:18 161:2,6,9161:11,23,24,25162:1 163:1,2164:5 165:3,6,12165:19,22 168:2,3171:12,12 173:12173:13 181:2183:10 184:11,12184:18,20,24,25185:2 186:11191:19 199:25200:18,23 201:1,1201:2,5,10,25202:1,2,4,12 204:8204:12 206:13

quarterly 168:10168:11 207:1,3

question 19:14,1520:3 22:3 24:2425:4,19,21 30:539:14 49:8 56:1156:14,16 61:1263:3 65:10,13

83:7 85:6 107:16126:12 127:18,20127:23 138:10153:24,24 154:18183:24 187:8191:25 194:25197:2 205:3,7,8,9205:12,14,14,23210:21 212:21

questions 10:2112:13 20:23 21:221:3 62:22 133:17204:23 205:17,20206:1,9 210:15212:19

quick 12:15 77:9104:3 194:25

quicker 201:20quickly 70:8

114:20quite 71:16 80:13

141:20 198:8205:24

quote 209:18

r

r 22:6,6r&d 195:16,18raffaelli 67:19raise 17:20,25

32:16,20,22,2333:3,12,15 34:5,1335:11 36:16,1637:17 43:5 44:2169:4 72:8 95:1895:21,24 96:1497:3 102:22103:15 107:13,18107:21 108:8,11108:12,14 116:20120:9 130:15134:24 135:21

[production - raise] Page 27


CONFIDENTIAL

136:8 140:24144:8,10,13,15,18145:8,12 176:11

raised 19:18 43:1193:10 112:20113:11,13 133:23137:6

raises 44:24raising 33:12 35:8

35:22 38:8 39:1944:14 58:15 71:2295:21 108:7112:13 113:16144:12,21

ran 64:25range 171:19

191:17 207:16rate 50:11 81:15rated 141:14reached 100:19react 111:2reaction 111:3read 26:15 48:8

53:17 65:10,12106:2 107:15116:8 130:20139:1 164:8191:10,23 195:8215:15 216:3

reading 31:5,790:21

ready 49:1,9,1060:22 97:12 99:2099:22 100:10155:22

real 20:25 57:2273:24 74:17,2577:9 206:16

reality 132:17realize 146:20

really 32:1,2134:21 57:9 126:13157:5 161:8 174:2178:11 185:6188:13 204:15209:20

reason 31:1589:12 94:14,16127:3,24 128:10128:12 154:2,3,5192:1

reasons 35:11142:4,16

recall 29:19 37:375:16,17 77:19,2086:21 87:13,19,2087:24 88:1 102:4213:7

receivables 71:21receive 208:19received 196:11recess 67:1 104:8

115:7 145:23176:25 199:19

recipient 7:24recognize 52:3

124:3,4 126:14recollecting

104:13recollection

128:15recommend 36:15

168:9recommendation

36:12,21 172:8recommendations

36:23 37:1,5172:12

recommended168:5

recommending177:15

record 11:5 28:1728:23,25 29:130:15 48:18 62:2062:21 65:12 66:1766:23 67:3 80:2182:9 104:6,9111:13 115:4,14133:12 145:20,24175:10 176:23177:2 191:2,4,6,7199:17,20 206:9213:23 215:13216:5

recorded 1:142:14 11:7 54:22

recourse 186:21recurring 19:8

135:12 151:19207:5

redid 164:24redo 164:11reduce 54:9 72:10

90:18 129:1reduced 50:23reducing 53:25

54:4 71:18 85:5reduction 54:3refer 200:2,6

208:9reference 22:5

142:3 207:19referenced 52:21

107:23referencing 53:18

78:13referred 51:10

59:14 109:9125:22 127:16148:1 209:16

referring 26:2328:7 39:1 51:1755:6 112:15207:24 208:12,23209:19

refers 43:16208:22

refinance 78:3refinanced 183:3

183:4reflect 109:1

207:20reflected 156:22

184:15refresh 31:8 122:7refuse 144:4refused 142:5

144:5 146:5regard 107:4regarding 61:20

72:4 109:14regular 139:23regulated 141:12rejected 71:25

141:8relate 59:11,12related 135:2

194:2relating 27:4

102:13 131:6release 192:9

199:9,24 202:1relief 24:7remember 29:15

38:19,22 44:4,947:6,24 55:1466:8 71:17 73:1374:14,14,17,1975:20,21 93:495:14 98:6,2099:1,17 100:19,21

[raise - remember] Page 28


CONFIDENTIAL

100:22 101:12102:8 106:7 109:7113:14 120:3122:4 123:21,22124:19 125:19,25126:13 128:8,16141:17,17,19,20141:23,25 142:5,8142:16 144:17149:5 153:7160:11 162:8,9170:17,20,23173:5 174:9 175:2181:8 183:23189:3,9,16 197:11198:5 204:20,21

remembered146:3

remind 72:3105:10

reminding 105:12remove 168:10renegotiate 23:16renew 189:20,21

189:22,23,24rental 52:14replace 32:2report 54:17 56:19

56:21 64:25184:21

reported 1:2218:24 160:5180:20,20 192:2215:10

reporter 2:1911:17 12:8 13:2218:16 28:15,17,2028:22 30:3,8 44:748:1 57:12 65:1271:2 77:11 86:1386:16 92:25 95:19

118:5 129:16137:17 149:3150:18 157:10166:8 170:10181:7,15 195:17195:19

reporting 88:6208:1

reports 191:11represent 182:11represented 52:6

177:10request 77:15

146:5requesting 77:20require 174:15required 17:25

21:13 23:5 43:18129:6

residential 171:20resort 142:22resources 116:2respect 29:21 77:5

94:3 160:7 182:19183:25 188:9193:10 208:24210:10

responding 194:15response 110:1

193:17 196:1197:1 210:20

responsibilities193:4

responsibility172:16 193:9

responsible 118:2193:7 202:11

responsive 205:13rest 55:12,13

112:9,10,10139:18

result 33:14 34:359:21,24 81:18

results 163:25resumed 115:16retained 52:7,9

54:21 55:9 214:1return 52:1returns 52:10revamp 163:25

164:23revamping 164:15

164:16revenue 19:8 31:2

52:18 135:13151:19 206:23207:5 208:19,21

reverse 200:25review 50:7 122:7reviews 14:6,16

26:17 31:6 34:135:17 38:21 48:653:20 60:17 67:1376:20 77:1 79:182:23 86:19104:22 110:13112:8 116:9118:21 123:25135:1 138:25155:17,21 166:5172:3 186:15191:24 201:22

revise 133:3,10176:1

revised 131:22156:1 175:22191:19

revising 176:11179:15,18

revision 167:2179:7 212:13

revolver 22:11,1222:17,21,23 24:1325:1,24 26:2340:5 42:19 43:143:16 77:15,16,1777:21 78:1,2,4,579:15 86:24130:24 131:4,7182:19 186:2,16186:17 188:14

revolving 21:2422:12 186:1

rid 50:12right 12:17 13:2

15:10,11 16:218:3,23 19:320:11 21:25 22:928:2 29:5 30:2,1634:8 35:2 36:1336:24 40:25 41:141:16 42:14 43:2343:24 44:3,1546:13 47:25 59:1959:23 60:25 62:362:13 63:10,13,2463:25 64:12,1867:24 68:4,14,1669:12,17 70:2472:24 77:22 78:184:10 85:14 86:786:8 87:10 88:888:12,21 89:5,1889:23 90:9 91:791:16,25 92:15,1796:6,23 97:8 99:3100:23 101:21102:18,24 106:2106:16,19,23107:10 108:7109:24 113:21114:22 115:1

[remember - right] Page 29


CONFIDENTIAL

118:2 119:3,17,19119:25 121:12122:3,19 124:18127:16 128:1132:22 133:6135:4,5,19 138:3139:21 141:6,8142:23 143:7,22144:16 146:10147:12 150:5,14151:10,16 152:11154:16 156:9,18157:5,23 158:8,16160:8,21 161:5162:3 164:3 165:8165:21,25 169:25170:19,21 172:16172:24 173:15,16173:19 174:6176:2,19 179:12179:17 180:10,14182:8,9 186:2,5187:11,21 189:19189:25 190:4,15190:18 192:12,22193:3 194:3 195:7195:10,13 196:7196:24 197:23199:5,16 200:13202:22,24 204:8210:25 212:7,11

ring 51:8,15178:25

risk 76:16 79:1482:3,14,15,18137:14

rive 1:14 2:15 5:97:4,15,24 8:4,811:8 12:6,11 26:926:18 30:14 33:2438:19 53:6 60:22

67:7 78:22 104:23112:4 115:18121:17 123:9146:2 150:22152:4 166:11191:25 193:15,16193:21 194:13200:20 206:7213:25 214:8216:2,21

road 2:16 11:1485:3

role 193:9 198:9198:10

roll 189:18,19rolled 189:8roof 12:14 195:1

195:12 200:11room 77:4rosati 2:16 4:2

11:13 12:2roughly 13:11

16:2,5,12 51:2280:13 92:13 93:197:16 103:4119:24,25 154:11206:20 209:15210:13

rules 56:25run 18:1 37:19,22

65:4,20 73:1676:13 77:7 81:1584:21,24

running 22:8 46:546:7,9,12 62:477:6 85:1,3,11101:8,9 105:23106:3,8,11,17107:5,7 116:16,19131:7 209:13

s

s 5:6 6:1 7:1 8:19:1 10:1

sachs 140:21143:17 146:4

sale 174:20sales 52:12 85:8

171:20 174:23177:25,25 178:10178:20,21 193:11193:11,11 203:8,9203:11

salespeople 203:8207:13

sat 194:22satisfy 22:16 29:8saw 123:17,17

134:4 180:11198:24 203:13

saying 17:21 32:847:8,19 70:688:23 95:24108:11 128:16147:7 199:6203:23

sayingn 39:25says 14:10 28:3

40:20 45:11 46:1150:3,6 53:1665:19,24 74:2189:1 111:18121:16,22 122:4155:25 166:25167:1 191:15213:12

sc 5:11,21,23,249:5,10 33:21

scaling 73:22scenario 128:25scenarios 123:2

125:17,22 126:7

128:17,18schedule 14:3

63:13 69:10 79:879:12 88:3 140:19166:25

schedules 92:5107:8

scroll 200:15scty 41:14second 10:3 14:2

26:12,15 40:17,1953:6 66:16,1876:25 107:5118:19 121:16127:22 130:19134:14 138:23143:9 152:17,21152:22,24,25155:2,15,18,20156:23 171:12172:5 183:10184:11,17,20186:11 187:13193:24 201:3,10201:16,17 202:2

section 109:16116:1,6 200:10215:3

secured 186:1see 14:13 26:5,14

27:13,15 36:137:17 40:6,7,11,1940:22,24,25 50:1153:9 55:23,2457:17 73:8 76:2482:25 83:10,15,2385:9 88:7 92:8,23115:8 116:1,3118:9 119:10122:15 123:16,19126:10 131:20

[right - see] Page 30


CONFIDENTIAL

132:1,14 133:17137:22 138:1,20139:2,18 142:1149:25 150:3151:4,23 154:7155:24 156:5,6158:20 159:7162:3,13 163:22164:8 165:1,11167:3 170:6,12171:15,21 173:9185:21 186:25187:15 192:4194:17,20 195:6196:6 199:8200:20 201:6,15213:10,13,14

seeking 36:19seeks 18:16 28:15

30:3 44:7 57:1292:25 95:19129:16 137:17166:8 170:10181:7,15 195:17

seen 22:5 43:2151:10 59:14 64:14147:25

sees 132:13sell 52:15 136:14

178:6,12selling 61:20 62:1

135:25 139:3178:22

send 49:10 134:6sending 27:9senior 61:1seniormost 118:1sensitive 111:22sent 35:1,8,20 47:7

47:9,19 53:1262:12 63:10,14,22

64:25 78:23 79:3105:17 110:4118:12 119:2

sentence 34:985:16 105:20106:1 111:7130:21 131:20155:14,24 175:18175:19 195:1,7

separate 16:899:14

september 5:1710:11 29:20 30:1031:4 33:8 41:4,2542:10 58:14 61:963:18,24 119:8,9120:2 136:24137:5 148:5,9158:15,16,17,19193:18,22 194:6

sequence 47:24165:9

sequentially 36:2series 26:10 30:10

33:20 48:1 67:11117:19 118:10138:16 193:15197:3

serious 23:2424:13,20 25:2,8,1325:24 29:13,2187:2

seriously 25:15serra 7:14 30:15

34:4 40:14,2041:19 42:10 71:683:1 87:14 112:6121:18 122:18,21122:22 124:9125:2,15 126:24138:17

serra's 58:14session 115:10set 50:1 74:25

191:19seth 111:8seven 98:25

178:13 181:19severe 202:15sfdepo 4:13share 13:10

208:20shareholder 9:20

9:24 10:4,8 53:1,854:17 141:9,22146:7,8,12,14,22146:23 147:8,20149:14 150:19,23152:18,22 161:3161:15 165:18167:6 171:12201:2

shareholders18:24 53:12,24120:22 146:9152:7 153:21156:25 157:8,12160:4,6 162:7165:12 167:12

shares 13:9sheet 52:5 54:18

54:19 55:1,1 57:657:8,9,19 58:1,5,7185:10

shit 27:24short 19:10,12

52:16 59:3 136:4136:5,6 137:20139:8 140:4 145:3145:17 175:2176:21 183:9,14188:14,18 206:2

shortfalls 164:1shorthand 2:19

12:8shortly 72:18,19

196:16show 13:12 20:7

20:15 30:2 34:1934:20 38:11 46:246:11 60:10 63:2367:10 71:1 76:378:18 110:5,6117:18 121:3122:9 138:11166:17 169:7182:5 190:6,25196:4 199:23

showed 69:9,9,1069:15 210:23

showing 110:18shown 46:2 107:9shows 41:14 79:12

80:11,12 119:5shut 100:16

102:20shutting 58:21sic 19:16 71:21

100:10 111:8160:20 212:4

sided 36:10sides 146:24sighing 190:9sign 48:19,22,24

146:20signature 215:24signed 48:15

115:21 120:17,22148:13

significance 73:25significant 17:25

63:18 76:15,1680:14 86:22

[see - significant] Page 31


CONFIDENTIAL

114:17 153:11,15156:3

significantly 66:1485:20

silevo 85:13,1989:18 90:6 91:6128:20 135:25137:23,24 138:21139:4,12,17

silver 36:17,2043:6 44:14 45:2,445:12,14,19,2547:3,4,7,9,14,2048:12 58:15 67:867:19 69:4 140:21141:3 143:17

similar 79:9simple 51:20single 31:14 74:4sir 28:20 207:18sit 206:1situation 40:9

69:20 71:15 88:1393:11 114:14134:10

six 98:25 213:25sixth 14:14skin 87:9slide 166:25 168:4slides 125:2

126:14,15slightly 170:18slow 58:19,25slowdown 58:22

59:4small 91:11 112:6

124:9 138:18,21174:2

solar 12:14 33:155:2 74:4,4 75:14136:14 140:16,22

141:5 142:22143:3,14,22 144:9144:14,24 145:7188:25 189:6,11189:12,24 191:11191:20 195:1,12198:9 200:11202:12 208:14209:23,24 210:24

solarcity 9:19,2310:3,7 12:16 13:613:15,20 15:1216:3,6,7,10,19,2017:25 18:5,2019:4,17 21:2322:13 23:5,1024:11 29:13,2130:21 31:1,9 34:538:23 39:3 43:1944:2 47:13 51:351:12,13 53:8,1168:7 69:3 72:1672:25 73:19 75:875:25 77:15 88:593:10 95:11 96:22101:3 105:24,25106:3 107:21108:19 114:10116:13,21 117:14117:22 118:12,24119:6 120:7,13124:12 129:6134:20,20 139:6141:11,14 142:15146:10 147:2148:13,14,23150:7 151:2 190:3191:16 192:2,21193:5 194:23196:20 198:20,20200:17 202:16

206:12 209:17solarcity's 16:24

52:25 106:15107:1 115:19121:4,5 134:2,3,5149:19 209:23

sold 102:9 211:8solutions 4:10

214:1solve 24:23 25:12

25:16 98:8 111:5131:16 136:22,23137:1

solved 136:4solving 135:9,9somebody 45:11

46:10 111:18somewhat 162:21sonsini 2:15 4:2

11:13 12:1sorrels 4:3 5:4

12:1,1 15:5 19:2020:19 21:5 22:124:15 25:3,9,2529:16,23 31:1133:9 34:6 39:1341:7 42:3 44:1746:14,21 48:2149:3 50:5 51:654:24 56:12,1857:10,13 58:1761:16 62:16,20,2463:4 66:19 69:2172:9 77:9,12 80:283:6 84:6 86:1189:19 91:8,1794:25 98:5 103:8103:16,23 106:5111:15 115:3116:15 123:24124:20 125:5

126:25 127:13130:4,12 142:25143:25 145:19152:12,14 153:2153:18 154:17,19154:24 155:8159:16 168:7172:21 175:13178:15 181:4,24183:11,14 184:23190:9,12,14,17,19190:22 199:6205:11,13,18,24206:6,7 210:15211:10 212:20,23213:6,18

sorry 14:19,2322:4 48:8 66:1875:18 76:24 86:17105:25 107:16151:5 166:19171:11 175:15176:8,8 183:13185:18 186:18206:19 212:9213:5

sort 114:18 206:25sound 170:19,21

182:8,9sounds 30:5 88:2

127:12sources 143:16

210:10spacex 143:2,22

144:16,16,19189:15,17,18

spacex's 144:4,6span 55:15speaking 93:1

97:16 169:13

[significant - speaking] Page 32


CONFIDENTIAL

special 8:19 121:5121:11,25 122:23123:12 124:11,13125:3,16 126:17127:24 128:23130:17 132:3135:20 141:14154:14,23 169:15175:5

specific 25:1931:25 61:18 94:14

specifically 44:1498:20 131:3198:15 208:22213:11

speed 145:5spend 20:13 42:22

71:19 134:6spending 43:8spent 19:4,17

150:8 153:5spoke 34:15 95:10

96:21 103:11122:23 210:7

spoken 190:3stack 185:4stage 97:12 135:14stages 61:18standalone 147:3standard 83:24stanley 140:21

141:2,8 142:4143:17 146:5,15

start 20:12 33:1992:8,10 196:4,11206:11

started 13:16 89:789:12 146:16181:13,16

state 1:1 2:1 11:10

stated 215:9statement 20:9

52:3 149:18,19156:22 159:19185:16

statements 52:254:16 55:22 56:656:10,17 184:16

states 131:20static 18:7stay 111:9step 84:1,1steps 72:8 83:13

84:17,18stock 13:6 15:17

15:19,24 16:6,1016:14 17:8 68:768:11,19,25 69:1,2103:7 131:25133:8 142:9,11,12154:16 156:4175:24 179:9,16179:20,23 180:17

stockholder 1:42:4 11:9 137:16137:21

stop 21:2 58:9127:21 168:6,11

stopped 59:19stopping 128:19stops 50:4straight 182:25straightforward

114:19strategy 51:5,13

53:18 80:4 194:1194:6

stream 19:8 52:1857:1 151:19163:21 208:20,21

street 3:13string 87:17strong 45:19structure 196:18struggle 34:9struggles 134:5struggling 126:9stuff 74:13 95:9

169:9 171:4 196:4subject 98:17

174:11subscribe 215:16subscribed 215:22

216:22substance 45:17

102:20 103:21substandard

141:15substantial 13:14

188:10 189:5substantially

88:18substitute 36:6succeed 24:10sufficient 117:1,4suggest 34:13suite 4:4sum 45:16super 106:3supplement 55:8supplemental

56:21support 104:17supposed 37:25sure 13:9 16:16

22:25 26:16 27:2032:13 42:23 43:1143:15 45:3,646:25 50:19 51:1860:6 65:1 71:1174:13 81:25 84:2

87:22 90:10103:13 108:3110:17 118:20122:21 128:14134:18 135:22138:24 143:10145:19 155:3170:8 173:3176:18 179:3,11185:24 201:16,18201:19 202:20204:16

surprise 170:25180:23

surprised 105:22106:3,10,21,22

suspect 66:14100:19 196:24

sustainable 200:10swaine 3:18 12:4swing 31:19 32:19

42:6 60:8 82:7114:16 203:14

swings 31:2279:20 81:15

sworn 11:19 12:7215:6 216:22

system 27:6,7 74:5systems 52:19,23

178:7,13,22180:21 193:11,12

t

t 5:6 6:1 7:1 8:19:1 10:1

take 14:2 20:1325:15 26:9 33:2435:14 42:15,1653:6,15 54:1755:16 58:9 59:762:9 63:12 83:1284:17,19 87:12

[special - take] Page 33


CONFIDENTIAL

104:3 105:20109:18 118:20120:9 123:9 124:6139:7,13 140:5145:17 149:16150:16,22,24152:22 154:22157:6 161:17166:4,21 171:10175:4,13 176:21180:19 184:16,17185:9,15 188:18190:10 194:5,13199:3 200:25201:4

takeaway 147:6147:19

taken 2:15 67:1104:8 115:7145:23 176:25199:19 215:9216:4

takeouts 188:20takes 68:10 209:10talk 87:21 169:12

173:4 200:5talked 43:13 44:25

72:22 109:2125:23 158:10173:12,15

talking 43:1454:20 55:20 77:2192:3 107:6 110:23112:17 126:24127:5,12 134:14156:14 167:6211:24

tanguy 30:15,1830:19,20 31:2532:1 87:21 121:18

targeting 36:22tax 5:9 59:2,5

61:20,21 62:1,565:1 66:7,9,1070:8,9 93:2132:11 188:16208:9,17,25209:21

teaches 37:16team 23:10 26:13

26:20,21 27:2337:21 38:3 46:847:1 54:9 77:487:21 97:5 117:24117:25 118:10119:2,6 122:12125:11,12 127:6,7134:6 139:3169:13,16 177:11177:16 178:5193:25 196:17203:11

tech 191:13teetering 94:22teeth 87:9teleconference

124:18telephone 73:1,15

124:24,25telephonic 176:7tell 30:15 45:19

46:19 58:8 64:1174:15,18,23 98:198:14,23 101:23102:1 103:11,13103:21 107:20113:12 131:3156:12 166:2167:12

telling 27:23 42:1253:23 77:3 82:3

82:15 84:8 110:12132:7 147:17173:21

tells 67:22temporarily

139:20term 19:8,10,12

51:11 52:16,1859:3 129:1 136:4136:5,6 137:20139:8 140:4 145:3151:18 175:2183:9,15 184:2187:5,14 188:14188:17,18 208:19208:21 211:11

terms 13:8,1815:14,22 23:7,845:22 47:23 94:2117:6 129:11135:8 151:1 160:8162:12 192:3202:16 203:2204:10,14,18207:3,9,12 211:7

terrible 107:16tes00041787 10:9tesla 1:3 2:3 3:17

10:5 11:8 12:2115:11,17,24 30:9,948:4 60:16 67:1271:5 72:16,2573:19,21,24 75:975:10 93:10 94:1794:18,23 95:1096:21 101:3 102:2102:6 103:6104:15 105:22108:19,20 111:3112:7 114:8,12116:13,21 120:12

132:10,18,21133:4 134:1135:25 139:10140:16 143:13145:13 146:8147:4 148:13,13180:20 191:11192:2,4,8,21,25193:5,6 194:1,2,16194:23 196:17197:10,19 199:24199:25 206:13209:25

tesla's 120:18194:19 201:25

tesla000018728:21

tesla000023216:22

tesla000034045:18

tesla0001841010:15

tesla0001972810:12

tesla000221756:25

tesla00022388 8:9tesla00022462 8:5tesla00056953 7:5tesla00077529

10:18tesla00083075 6:8tesla00083765

7:25tesla00084363 7:8tesla00085049

9:13tesla00087930

5:15

[take - tesla00087930] Page 34


CONFIDENTIAL

tesla001371976:17

tesla001385888:16

tesla003088489:21

tesla00523068 6:5tesla00527848

7:16tesla00527954

7:12tesla00585366

9:17tesla00605997

9:25tesla00710234

7:21tesladir0074111

6:13testified 12:8

57:15 154:20testify 215:6testimony 44:12

213:24 215:10,14216:4,6

tettering 95:1thank 16:17 20:18

26:10 27:22 29:129:11 60:19 62:9104:20 117:6118:7 138:14142:18 149:13155:10 176:22185:19 191:3192:15,19 204:24210:16 212:19213:21,22

theoretical 25:18thick 185:6thin 173:2

thing 27:18 33:735:16 46:16 49:550:4 68:3 70:20205:1

things 13:19 34:1841:10 43:10 51:264:2 70:17 71:1872:14 74:11 81:1882:9,17 84:187:12 90:10,12,1491:4,11 109:1,23110:24 114:10,15131:2 133:5134:17 140:12160:5 171:9173:10 176:17185:23 196:2203:14 204:6206:9

think 14:21 15:1215:13 19:6 22:925:8,22 30:2333:16 37:21 39:1750:19,21 51:1770:12 72:21 73:675:18 82:8 88:388:21,22 91:694:10 97:24100:13 101:16111:1,3 112:24114:1 115:1 118:9123:17 124:20125:6,6 131:15132:22 133:21137:13 142:20143:8 148:4,9,10149:4 154:19156:7 158:18159:11,17,20,20159:24 160:24162:5 165:6 167:9

168:1 170:13171:10 177:6,21181:14,17 184:23186:3,8 188:13189:6 190:5192:11,22 194:22196:21 197:11,12197:19,25 198:1198:16 201:11210:23 211:1213:19

thinking 25:20139:12

third 5:11,21,235:24 9:5,10 10:752:25 53:8 88:4134:12,15 140:18147:24 149:14150:12,14 151:20157:6,7,11,16158:16 159:4,5,17159:18 160:14,16160:18 161:9,23168:2 169:23173:12 181:2191:14,19 201:2,5202:1

thought 24:12,2541:4,24 42:1054:23 64:7,9,1673:18 77:23,24141:10 146:17167:16 169:18170:22,23 173:11179:11 181:18204:4

three 19:1 100:25109:6 119:16128:8 149:25169:23 192:18

threshold 40:543:17 44:9 76:1189:16

tied 13:15,20 23:223:2 108:9 180:16

tight 33:10 34:1337:15 77:7 84:2086:25 93:13 94:794:8,18,22 95:2,395:7 101:8,9103:18 104:18106:17 117:3,4,5130:14

tighter 93:11,1294:4,5,9,9 119:22

tightest 133:22tightness 76:7,10

76:15 136:6time 12:20,20,25

15:24 16:10,1917:17,18 18:4,1918:19,24 19:1621:10 24:3,6,9,2125:12 28:5 29:1432:9,16 39:3,2341:18 43:12 47:951:3,19,25 56:2259:8 61:5 64:2,665:8 66:19,2467:18 71:15 72:2472:25 73:20 74:774:16 75:23 77:1478:7 85:2,25 87:595:6,9 106:12,16107:1 109:8 115:5116:24 117:12118:20 120:5,6,11123:18 126:22134:7 136:21137:10 138:4139:7,13 143:6,18

[tesla00137197 - time] Page 35


CONFIDENTIAL

143:19,21 145:2145:21 146:6164:22 166:12177:11,14 190:2191:5 193:1194:22 199:18,21203:11,19 204:24206:21 208:1209:10 215:9

timely 130:9times 24:4 84:11

125:7timing 84:11

153:8title 63:13,15 88:6titles 197:16today 206:10

207:7 208:9today's 51:24

213:24told 28:2 42:20,25

45:24 47:4 48:1449:10 63:17 64:164:8,16,18 68:379:13 98:11103:17 105:22106:2 107:12,14107:18 108:6110:15 116:14128:22 129:5,12129:19 130:8132:3 142:20144:6 147:15,23156:7 160:18162:6 164:3,10167:8,11,16174:22 177:22,23

top 15:6 17:1 31:331:7 89:22 116:6130:19 138:20140:20 155:15,18

167:1 193:22213:10

topic 192:17total 5:12 14:18,20

14:22 15:3 168:13171:17 177:12186:23 187:25191:20 213:12,25

track 17:11 87:5tracked 17:5,10,12

21:17 23:10tracking 117:22traded 17:7,16

32:25trained 203:8trajectory 63:25

65:7,8,19transaction 36:16

45:3,5 47:1448:12 67:9 132:22192:20

transcribed215:11

transcript 2:14216:3

transcription215:12

transition 194:19194:23

translate 206:25tried 135:21

137:25 153:21178:25

trigger 114:17triggered 23:19trip 65:4trouble 90:21true 19:22 20:2

23:6 28:20 45:781:22 137:12180:8 215:13

216:5truth 215:6,7,7try 19:25 66:5

71:14 111:22136:8 137:22160:15 182:13192:7,12 206:3

trying 126:12144:8 162:23

turn 36:11 115:24118:17 155:18166:21 171:17177:7 192:16212:24 213:2

turned 70:8142:22 143:21

two 31:18,2333:20 41:10,2242:5 54:2 59:1070:13 114:15116:22,23 124:10126:10 133:5135:15 142:9,10142:12,14 146:4169:23 176:5,10187:13 193:13209:11,14 210:16

type 51:25types 183:1

u

ultimately 136:12136:14 210:11

um 109:20unable 142:20unclear 83:8uncomfortably

117:4,5uncontracted

55:13underestimate

24:21

underneath175:12

understand 19:2324:5 31:12 38:244:12 49:22 51:956:4 57:3,8 61:1167:23 68:22 82:1187:18 89:25 90:192:4 97:2 99:19103:24 113:18126:20 138:10151:20 173:9,10183:19,25 184:4187:17 203:20,22204:2 206:14

understanding28:6 92:6 203:3

understood 84:13179:15

underwrite148:22 209:25

underwriting209:17 210:5,9

underwritten208:15

undisclosed 7:24unencumbered

43:25 44:1unforeseen 58:20unfortunately

34:23unit 11:7 66:25

67:5 74:1 104:7104:11 115:6,15145:22,25 176:24177:3

unpaid 187:1,10unrestricted 126:1

126:2,5 134:21170:3

[time - unrestricted] Page 36


CONFIDENTIAL

upadhya 3:1211:22,22 14:21,2453:2 149:9 185:6200:8,13

update 48:1269:24 200:1 209:5

updated 40:241:13 61:17 64:2070:5 107:1,4118:11 170:3203:18 204:1

upfront 52:12,22208:18

upgrade 203:10ups 210:17upset 42:10upshot 78:14use 51:20 185:1,2useful 163:17uses 68:10usual 113:17usually 172:10,11utility 203:12

v

value 15:22,23,2519:11 51:24,2452:7,9 54:21 55:958:4

variance 64:1990:1

varied 66:14various 6:4,11,20

7:4,19 8:8 9:960:15 86:15129:12 207:8,9

vcs 1:4 2:4 11:11vendors 71:20

85:2,13 91:15130:2,7,9

verbally 109:21

verified 66:7,9verify 70:7veritext 4:10

11:16,17 214:1veritext.com 4:13versus 113:7

117:23 126:1134:21 135:9182:2,4 189:17196:19 202:16,25207:2,9,10

veto 49:14,15video 1:14 2:14

11:7videoconference

124:18videographer 4:11

11:4,16 66:2367:3 104:6,9115:4,13 145:20145:24 176:23177:1 191:4,7199:17,20 213:23

view 203:2violate 60:4 66:6

81:25 87:4,1688:13 94:4

violating 42:1843:1 63:23 64:2365:16 69:11 70:2176:11,16 78:10,1679:14 80:18 81:1982:4,13,15 83:4,17107:7 117:15

violations 69:1570:16

virtually 170:6vivek 3:12 11:22volatility 31:15

34:14

volume 32:2559:25 60:1 203:13

vote 137:16,18,21141:9,22 146:7,8146:12 147:8,21147:21

voting 142:9,11,12vp 38:24vs 200:3

w

w 6:12,16,21 7:117:15,20 8:15 9:16

wait 49:17 103:1,2103:12,14,18,19131:12 210:4

waiting 103:5147:20 192:16

want 17:18,2020:1 21:3 24:1025:13,15 26:1528:5 37:12,14,1543:15 45:11,14,2047:4,20 49:2150:9 58:9 62:2266:22,22 74:2275:2 76:8 97:13100:8 102:9,21,22102:24 104:12111:13,19,22113:23,25 114:10131:18 139:18140:12 141:2154:6 155:9173:11 175:17176:18 179:3182:11 190:7,22191:23 194:2208:4

wanted 33:1237:24 57:7,2573:19 75:2 101:20

101:23 102:1,11103:12 114:25144:13,18 147:3154:4 168:14,15169:18 174:8179:24 196:17

wanting 32:1wants 49:4 50:6

153:14 205:20watts 202:21way 30:4 32:15

43:7 45:10,1846:3 52:4 70:1474:6 80:22 81:1291:3,13 92:3 93:7120:11 132:21138:22 139:3155:6 169:12172:10 185:13187:7 188:2192:12 201:12,17201:24 203:16205:6,24 215:20

we've 53:19 66:978:17 107:6 124:7128:14 167:5184:21 188:16211:24

website 191:14wednesday 1:15

2:18 11:1week 31:18 32:17

39:10,22 63:2292:2 117:14 143:9171:3 209:14

weekly 39:1,3119:13

weeks 31:18,2341:22 42:5 114:15209:11

[upadhya - weeks] Page 37


CONFIDENTIAL

weissman 112:6124:12

went 18:4,19 37:278:5 102:19 117:8124:11,13 135:20141:1 144:18148:22 167:15172:19,23 179:6180:18 203:23212:4

whereof 215:22whichever 146:16

147:1willy 25:14wilmington 3:14

4:5wilson 2:15 4:2

11:12 12:1wimberley 1:23

2:19 11:17 215:2215:25

winter 171:8wise 70:11wish 85:24,24withdraw 22:3

83:7withdrawn 21:9

47:10,18 93:7102:5 107:15120:5 125:20163:15 180:1,6

witness 10:2111:19 12:2,7 14:614:16 15:7 20:2025:4,10 26:1729:17,24 30:431:6,12 33:1034:1 35:17 38:2139:14 42:4 46:1546:22 48:6,2249:4 50:6 53:20

54:25 56:19 57:1157:17 58:18 60:1761:17 65:18 67:1372:10 76:6,2077:1 79:1 80:382:23 86:19 91:991:18 95:1 98:6103:9,17,24 104:3104:12,22 106:6110:13 112:8116:9,16 118:21123:25 124:3125:6 130:13133:13 135:1138:25 144:1152:15 153:3155:10,17,21159:18 166:5175:14 178:16181:25 183:17184:25 186:15191:24 199:10,13199:15 201:22204:25 205:16,22213:21 215:5,10215:14,22

wonder 112:9word 32:12 34:11

180:19 193:5wording 106:22

106:23words 58:5 98:6

103:21 147:1work 24:7,20,22

25:12,16 74:6131:15 136:7137:8 138:3143:20,24 145:14169:14 177:16190:17 192:25197:12 205:24

worked 136:13203:10

working 193:6works 32:15 52:4

67:19 97:2 205:6worried 41:19

138:7 147:21worse 20:16 39:12

40:9 41:3,1894:12

worsened 39:2340:1

worth 5:10 13:1513:18,20 14:415:15 57:22 178:7178:7,12

write 26:18,1927:15,16 109:16110:22

writes 40:18 83:10writing 105:10

111:14,19,20written 43:24

98:17wrong 61:21,23

62:6 64:1,5 66:477:24 102:10109:17,24 127:15154:18 155:6159:20 183:12186:18

wrote 27:13 48:1060:24 65:18 99:1105:16,22 107:17110:11,20 112:5117:9,9 139:15152:7 153:20161:16 171:16,24193:22,25,25194:3,15,17 195:8195:8,25 196:6,10

wsgr.com 4:7

x

x 5:1,6 6:1 7:1 8:19:1 10:1 75:1297:13 98:8 102:13102:13

y

yeah 15:7,21 16:516:16 17:15 22:2530:5,5,17 35:636:25 42:21 47:1750:23 59:13,1679:6 82:17 85:2386:10 89:6 92:1794:14 104:25107:3 109:6115:23 116:4119:15,15 121:22122:21 124:23127:18 129:22132:5,9,24 133:5136:19 141:1145:14 148:5151:9,17 154:8155:5 157:4,10159:6 161:8 163:7163:13 164:9165:20,24 169:1169:17 170:5,8,11172:25 174:12180:25 181:12,12182:6 183:2,19184:21 187:7190:12,17 192:10195:7,9 198:22199:13 200:4205:18,22 206:16207:13 208:5209:20 212:20213:20

[weissman - yeah] Page 38


CONFIDENTIAL

year 18:9,11 40:2040:23 41:12,1442:12,13 44:354:7 55:14,1572:23,23 73:25112:23 151:6,7,8151:10,11,12,21161:5 162:15,16174:2,4 176:14,14177:13,18 178:8181:3 184:6,7186:14,22 187:19187:24 188:11189:1 191:16192:3 199:25212:16

yearly 168:14,15168:16

years 12:14 32:1432:15 52:14 54:7100:25 109:6128:8 135:10188:19

yellow 91:7yep 55:5 149:9

162:4yesterday 123:18yielded 52:10york 3:6,6,21,21

z

zero 50:13 132:15179:18 181:19

[year - zero] Page 39


(

)

*

+

,

-

.

/

0

('

((

()

(*

(+

(,

(-

(.

(/

(0

)'

)(

))

)*

)+

),

67<3F3A7 AD<7B ?8 5;E;< @A?576DA7

@HY[ E& 6LWVZP[PVUZ HUK 6PZJV]LY`

CP[SL E$ A\SL *'

"L# B\ITPZZPVU [V ^P[ULZZ2 JOHUNLZ2 ZPNUPUN& FOLU

[OL [LZ[PTVU` PZ M\SS` [YHUZJYPILK$ [OL KLWVZP[PVU

ZOHSS IL Z\ITP[[LK [V [OL ^P[ULZZ MVY L_HTPUH[PVU

HUK ZOHSS IL YLHK [V [OL ^P[ULZZ$ \USLZZ Z\JO

L_HTPUH[PVU HUK YLHKPUN HYL ^HP]LK I` [OL ^P[ULZZ

HUK I` [OL WHY[PLZ& 3U` JOHUNLZ PU MVYT VY

Z\IZ[HUJL ÔPJO [OL ^P[ULZZ KLZPYLZ [V THRL ZOHSS

IL LU[LYLK \WVU [OL KLWVZP[PVU I` [OL VMMPJLY ^P[O

H Z[H[LTLU[ VM [OL YLHZVUZ NP]LU I` [OL ^P[ULZZ MVY

THRPUN [OLT& COL KLWVZP[PVU ZOHSS [OLU IL ZPNULK I`

[OL ^P[ULZZ$ \USLZZ [OL WHY[PLZ I` Z[PW\SH[PVU

^HP]L [OL ZPNUPUN VY [OL ^P[ULZZ PZ PSS VY JHUUV[

IL MV\UK VY YLM\ZLZ [V ZPNU& ;M [OL KLWVZP[PVU PZ

UV[ ZPNULK I` [OL ^P[ULZZ ^P[OPU *' KH`Z HM[LY [OL

KH[L ÔLU [OL YLWVY[LY UV[PMPLZ [OL ^P[ULZZ HUK

JV\UZLS I` THPS VM [OL H]HPSHIPSP[` MVY L_HTPUH[PVU

I` [OL ^P[ULZZ$ [OL VMMPJLY ZOHSS ZPNU P[ HUK Z[H[L

VU [OL YLJVYK [OL MHJ[ VM [OL ^HP]LY VY VM [OL

PSSULZZ VY HIZLUJL VM [OL ^P[ULZZ VY [OL MHJ[ VM

[OL YLM\ZHS [V ZPNU [VNL[OLY ^P[O [OL YLHZVU$ PM

HU`$ NP]LU [OLYLMVY2 HUK [OL KLWVZP[PVU TH` [OLU IL

(

)

*

+

,

-

.

/

0

('

((

()

(*

(+

(,

(-

(.

(/

(0

)'

)(

))

)*

)+

),

\ZLK HZ M\SS` HZ [OV\NO ZPNULK$ \USLZZ VU H TV[PVU

[V Z\WWYLZZ \UKLY A\SL *)"K# [OL 5V\Y[ OVSKZ [OH[

[OL YLHZVUZ NP]LU MVY [OL YLM\ZHS [V ZPNU YLX\PYL

YLQLJ[PVU VM [OL KLWVZP[PVU PU ÔVSL VY PU WHY[&

6;B5<3;=7A1 C:7 8?A79?;>9 5;E;< @A?576DA7 AD<7B

3A7 @A?E;676 8?A ;>8?A=3C;?>3< @DA@?B7B ?><G&

C:7 34?E7 AD<7B 3A7 5DAA7>C 3B ?8 #&'$% ($

)'("& @<73B7 A787A C? C:7 3@@<;534<7 BC3C7 AD<7B

?8 5;E;< @A?576DA7 8?A D@%C?%63C7 ;>8?A=3C;?>&

VERITEXT LEGAL SOLUTIONS

COMPANY CERTIFICATE AND DISCLOSURE STATEMENT

Veritext Legal Solutions represents that the

foregoing transcript is a true, correct and complete

transcript of the colloquies, questions and answers

as submitted by the court reporter. Veritext Legal

Solutions further represents that the attached

exhibits, if any, are true, correct and complete

documents as submitted by the court reporter and/or

attorneys in relation to this deposition and that

the documents were processed in accordance with

our litigation support and production standards.

Veritext Legal Solutions is committed to maintaining

the confidentiality of client and witness information,

in accordance with the regulations promulgated under

the Health Insurance Portability and Accountability

Act (HIPAA), as amended with respect to protected

health information and the Gramm-Leach-Bliley Act, as

amended, with respect to Personally Identifiable

Information (PII). Physical transcripts and exhibits

are managed under strict facility and personnel access

controls. Electronic files of documents are stored

in encrypted form and are transmitted in an encrypted

fashion to authenticated parties who are permitted to

access the material. Our data is hosted in a Tier 4

SSAE 16 certified facility.

Veritext Legal Solutions complies with all federal and

State regulations with respect to the provision of

court reporting services, and maintains its neutrality

and independence regardless of relationship or the

financial outcome of any litigation. Veritext requires

adherence to the foregoing professional and ethical

standards from all of its subcontractors in their

independent contractor agreements.

Inquiries about Veritext Legal Solutions'

confidentiality and security policies and practices

should be directed to Veritext's Client Services

Associates indicated on the cover of this document or

at www.veritext.com.

Documents

PlainSite · 2019-11-01 · 17 For Tesla Motors Director Defendants: 18 CRAVATH, SWAINE & MOORE LLP 19 BY: HELAM GEBREMARIAM, ESQ. 20 825 Eighth Avenue 21 New York, New York 10019-7475