Reference no: EM131737426

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Text Book: (RTTNews) - Tesla Motors, Inc. (TSLA), SolarCity Corp. (SCTY) and D Subsidiary, Inc., a wholly owned subsidiary of Tesla or "Merger Sub", entered into an Agreement and Plan of Merger. The Merger Agreement provides for the merger of Merger Sub with and into SolarCity, with SolarCity surviving the Merger as a wholly owned subsidiary of Tesla.

The Board of Directors of Tesla determined that the transactions contemplated by the Merger Agreement, including the Merger and the issuance of shares of Tesla common stock in connection with the Merger), are fair to, and in the best interests of, Tesla and its stockholders, approved the Merger Agreement and the transactions contemplated by the Merger Agreement, and recommended that the stockholders of Tesla approve the Merger and the Share Issuance.

As per the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger, each share of SolarCity common stock, par value $0.0001 per share issued and outstanding immediately prior to the Effective Time will be converted into the right to receive 0.110 shares of Tesla common stock, par value $0.001 per share.

SolarCity and Tesla have made representations and warranties to each other in the Merger Agreement customary for transactions of this type.

Stockholders of SolarCity will be asked to vote on the adoption and approval of the Merger Agreement and the Merger, and stockholders of Tesla will be asked to vote on the approval of the Merger and the Share Issuance, at special meetings of the stockholders of SolarCity and Tesla, respectively, that will be held on dates to be announced.

Pursuant to the terms of a "go-shop" provision in the Merger Agreement, for 45 calendar days following the signing of the Merger Agreement, SolarCity and its representatives may solicit, discuss or negotiate alternative proposals from third parties for the acquisition of SolarCity.

The Merger Agreement contains certain termination rights for both Tesla and SolarCity, including, among other things, in the event that the Merger is not consummated on or before April 31, 2017.

In addition, if the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement, including by SolarCity in order to enter into an agreement with respect to an alternative acquisition proposal in accordance with the terms of the Merger Agreement, SolarCity will be required to pay Tesla a termination fee in the amount of $78.2 million, unless SolarCity terminates the Merger Agreement in order to enter into a binding agreement with respect to an alternative acquisition proposal with a third party who first made an alternative acquisition proposal prior to the expiration of the Go-Shop Period, in which case SolarCity will be required to pay Tesla a termination fee in the amount of $26.1 million.

If the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement, including by SolarCity if the Tesla board of directors changes its recommendation with respect to the Merger, Tesla will be required to pay SolarCity a termination fee in the amount of $78.2 million.