Item 1.01
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Entry into a Material Definitive Agreement.
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The information set forth in the Introductory Note and
Items 1.02, 2.01 and 3.02 of this report is incorporated herein by reference.
Debt Financing for the Merger
Senior Secured Credit Facilities
Overview.
On September 7, 2016, Denali Intermediate Inc. (Denali Intermediate), Dell, Dell International L.L.C. (Dell International), Merger Sub, EMC and certain other direct and indirect wholly-owned subsidiaries of Denali
Intermediate entered into a credit agreement (the Senior Secured Credit Agreement) with Credit Suisse AG, Cayman Islands Branch, as term loan B administrative agent and as collateral agent, JPMorgan Chase Bank, N.A., as term loan A /
revolver administrative agent and swingline lender, and certain other financial institutions as agents, issuing banks and/or lenders.
The Senior Secured
Credit Agreement provides for senior secured credit facilities (the Senior Secured Credit Facilities) in the aggregate principal amount of $17,575 million comprising (a) term loan facilities consisting of a $5,000 million term loan
B facility, a $3,700 million term loan A-1 facility, a $3,925 million term loan A-2 facility and a $1,800 million term loan A-3 facility and (b) a $3,150 million senior secured revolving credit facility, which includes capacity for up to $500
million of letters of credit and for borrowings of up to $400 million under swing-line loans. Dell International and EMC are the borrowers under the Senior Secured Credit Facilities.
The Senior Secured Credit Facilities provide that the borrowers have the right at any time subject to customary conditions to request incremental term loans
or incremental revolving commitments in an aggregate principal amount of up to (a) the greater of (i) $10,000 million and (ii) 100% of Consolidated EBITDA (as defined in the Senior Secured Credit Agreement) plus (b) an amount
equal to voluntary prepayments of the term loan facilities and the revolving credit facility, subject to certain requirements, plus (c) an additional unlimited amount subject to a pro forma net first lien leverage ratio of 3.25:1.0.
Interest Rate and Fees.
Borrowings under the Senior Secured Credit Facilities bear interest at a rate per annum equal to an applicable margin, plus, at
the borrowers option, either (a) a base rate, which, under the term loan B facility, is subject to an interest rate floor of 1.75% per annum, and under all other borrowings is subject to an interest rate floor of 0% per annum, or
(b) a LIBOR rate, which, under the term loan B facility, is subject to an interest rate floor of 0.75% per annum, and under all other borrowings is subject to an interest rate floor of 0% per annum. The applicable margin under the term
loan B facility is subject to reduction based on a first lien leverage ratio test. The applicable margins under the term loan A-1 facility, the term loan A-2 facility, the term loan A-3 facility and the revolving credit facility vary based upon a
corporate ratings-based pricing schedule.
The borrowers are required to pay a commitment fee on any unutilized commitments under the revolving credit
facility. The borrowers are also required to pay customary letter of credit fees.
Prepayments.
The term loan facilities require the borrowers to
prepay outstanding term loans, subject to certain exceptions, with a portion of certain excess cash flow, net cash proceeds of certain non-ordinary course asset sales or other dispositions of property, and net cash proceeds of certain debt not
permitted to be incurred under the term loan facilities. In addition, the borrowers may voluntarily repay outstanding loans under the Senior Secured Credit Facilities at any time without premium or penalty, other than customary breakage
costs with respect to LIBOR loans, except that voluntary prepayments of the term loan B facility are subject to a 1% prepayment premium in the event of certain voluntary prepayments or refinancings thereof that reduce the effective yield of the term
loan B facility during the six-month period commencing on the date of the consummation of the Merger.
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Amortization and Maturity.
The term loan A-1 facility will mature on December 31, 2018 and has no
amortization. The term loan A-2 facility will mature on September 7, 2021 and amortizes in equal quarterly installments in aggregate annual amounts equal to 5% of the original principal amount in each of the first two years after the date of
the consummation of the Merger, 10% of the original principal amount in each of the third and fourth years after the date of the consummation of the Merger and 70% of the original principal amount in the fifth year after the date of the consummation
of the Merger. The term loan A-3 facility will mature on December 31, 2018 and has no amortization. The term loan B facility will mature on September 7, 2023 and amortizes in equal quarterly installments in aggregate annual amounts equal
to 1% of the original principal amount. The revolving credit facility will mature on September 7, 2021 and has no amortization.
Guarantee and
Security.
All obligations of the borrowers under the Senior Secured Credit Facilities and certain swap agreements, cash management arrangements and certain letters of credit provided by any lender or agent party to the Senior Secured Credit
Facilities or any of their affiliates and certain other persons are unconditionally guaranteed by Denali Intermediate, Dell, certain subsidiaries of Denali Intermediate and each existing and subsequently acquired or organized direct or indirect
material wholly-owned domestic restricted subsidiary of Dell, with customary exceptions.
All such obligations under the Senior Secured Credit Facilities
(and the guarantees thereof) and certain swap agreements, cash management arrangements and certain letters of credit provided by any lender or agent party to the Senior Secured Credit Facilities or any of its affiliates and certain other persons are
secured, subject to permitted liens and other exceptions, by:
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a first-priority security interest in certain tangible and intangible assets of the borrowers and the guarantors; and
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a first-priority pledge of 100% of the capital stock of the borrowers, Dell and each wholly-owned material restricted subsidiary of the borrowers and the guarantors (which pledge, in the case of any non-U.S. subsidiary
of a U.S. subsidiary, will not include more than 65% of the voting stock of such non-U.S. subsidiary), in each case subject to certain thresholds, exceptions and permitted liens.
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The collateral does not include, among other assets, (a) a pledge of the assets or equity interests of certain subsidiaries, including SecureWorks Corp.,
Boomi Inc., Virtustream, Inc., Pivotal Software, Inc. and VMware, Inc. (VMware) and their respective subsidiaries, or (b) any principal property as defined in the indentures governing (i) the 5.65% Senior Notes due
2018, 5.875% Senior Notes due 2019, 4.625% Senior Notes due 2021, 6.50% Senior Notes due 2038, 5.40% Senior Notes due 2040 and 7.10% Senior Debentures due 2028, in each case issued by Dell (collectively, the Dell Existing Notes), and
(ii) the EMC Notes (as defined below), or any capital stock of any subsidiary holding principal property as defined in the indentures governing the Dell Existing Notes.
Certain Covenants and Events of Default.
The Senior Secured Credit Facilities contain customary affirmative covenants including, among others: delivery
of annual audited and quarterly unaudited financial statements; delivery of notices of defaults, material litigation and material ERISA events; submission to certain inspections; maintenance of property and customary insurance; payment of taxes; and
compliance with laws and regulations. The Senior Secured Credit Facilities also contain customary negative covenants that, subject to certain exceptions, qualifications and baskets, generally limit the ability of Denali Intermediate,
Dell and Dells and Denali Intermediates other restricted subsidiaries to incur debt, create liens, make fundamental changes, enter into asset sales, make certain investments, pay dividends or distribute or redeem certain equity
interests, prepay or redeem certain debt and enter into certain transactions with affiliates. The term loan A-1 facility, the term loan A-2 facility, the term loan A-3 facility and the revolving credit facility are subject to a first lien leverage
ratio test that will be tested at the end of each fiscal quarter of Dell with respect to the preceding four consecutive fiscal quarters of Dell.
The
Senior Secured Credit Facilities also contain certain customary events of default (including an event of default upon a change of control).
The foregoing
summary of the Senior Secured Credit Facilities does not purport to be complete and is qualified in its entirety by reference to the text of the Senior Secured Credit Agreement, a copy of which is filed as Exhibit 10.1 to this report and
incorporated herein by reference.
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Asset Sale Bridge Facility
Overview.
On September 7, 2016, Denali Intermediate, Dell, Dell International, Merger Sub, EMC and certain other direct and indirect wholly-owned
subsidiaries of Denali Intermediate entered into a credit agreement (the Asset Sale Bridge Credit Agreement) with JPMorgan Chase Bank, N.A., as administrative agent, and certain other financial institutions as lenders party thereto
providing for a senior unsecured asset sale bridge facility in an aggregate principal amount of $2,200 million (the Asset Sale Bridge Facility). Dell International and EMC are the borrowers under the Asset Sale Bridge Facility.
Interest Rate and Fees.
Borrowings under the Asset Sale Bridge Facility bear interest (a) at a fixed rate of 4.875% per annum until the date
that is the three-month anniversary of the closing date of the facility, (b) at a LIBOR-based rate plus a marginal rate of 7.50% per annum from the date that is the three-month anniversary of the closing date of the facility until the date
that is the six-month anniversary of the closing date of the facility and (c) thereafter, at a LIBOR-based rate, subject to increases of 50 basis points on the applicable margin rate every three months thereafter. Interest is payable, at the
end of each interest period (but at least every three months), in arrears.
Prepayment.
The Asset Sale Bridge Facility requires the borrowers to
prepay outstanding borrowings under the facility with 100% of the net cash proceeds of certain non-ordinary course asset sales or dispositions. The borrowers may voluntarily repay outstanding loans under the Asset Sale Bridge Facility at any time
without premium or penalty, other than customary breakage costs.
Amortization and Maturity.
The Asset Sale Bridge Facility will mature
on September 6, 2017 and has no amortization.
Guarantee.
All obligations of the borrowers under the Asset Sale Bridge Facility are
unconditionally guaranteed by Denali Intermediate, certain subsidiaries of Denali Intermediate, Dell and each existing and subsequently acquired or organized direct or indirect material wholly-owned domestic restricted subsidiary of Dell that
guarantees the Senior Secured Credit Facilities.
Certain Covenants and Events of Default.
The Asset Sale Bridge Facility contains customary
affirmative covenants including, among others: delivery of annual audited and quarterly unaudited financial statements; delivery of notices of defaults, material litigation and material ERISA events; submission to certain inspections; maintenance of
property and customary insurance; payment of taxes; and compliance with laws and regulations. The Asset Sale Bridge Facility also contains customary negative covenants that, subject to certain exceptions, qualifications and baskets,
generally limit the ability of Denali Intermediate, Dell and Dells and Denali Intermediates other restricted subsidiaries to incur debt, create liens, make fundamental changes, enter into asset sales, make certain investments, pay
dividends or distribute or redeem certain equity interests, prepay or redeem certain debt and enter into certain transactions with affiliates.
The Asset
Sale Bridge Facility also contains certain customary events of default (including an event of default upon a change of control).
The foregoing summary of
the Asset Sale Bridge Facility does not purport to be complete and is qualified in its entirety by reference to the text of the Asset Sale Bridge Credit Agreement, a copy of which is filed as Exhibit 10.2 to this report and incorporated herein by
reference.
Margin Bridge Facility
Overview.
On September 7, 2016, Merger Sub and EMC entered into a credit agreement (the Margin Bridge Credit Agreement) with JPMorgan
Chase Bank, N.A., as administrative agent and collateral agent, and certain other financial institutions as lenders party thereto providing for a senior secured margin bridge facility in an aggregate principal amount of $2,500 million (the
Margin Bridge Facility). As a result of the Merger, EMC is the borrower under the Margin Bridge Facility.
Interest Rate and Fees.
Interest under the Margin Bridge Facility is payable, at the borrowers option, either at (a) a base rate plus 0.75% per annum or (b) a LIBOR-based rate plus 1.75% per annum. Interest is payable, in the case of loans
bearing interest based on LIBOR, at the end of each interest period (but at least every three months), in arrears and, in the case of loans bearing interest based on the base rate, quarterly in arrears.
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Prepayments.
The Margin Bridge Facility requires the borrower to prepay outstanding borrowings under the
Margin Bridge Facility with 100% of the net cash proceeds of any asset sale or other disposition of the pledged VMware shares, as described below. The borrower may voluntarily repay outstanding loans under the Margin Bridge Facility at any time
without premium or penalty, other than customary breakage costs, subject to certain minimum threshold amounts for prepayment.
Amortization
and Maturity.
The Margin Bridge Facility will mature on September 6, 2017 and has no amortization.
Guarantee and Security.
The Margin
Bridge Facility is not guaranteed by any of the subsidiaries of the borrower or the Company. The Margin Bridge Facility is secured solely by 77,033,442 shares of Class B common stock of VMware and any proceeds thereof.
Certain Covenants and Events of Default.
The Margin Bridge Facility does not include any affirmative or negative covenants, other than (a) an
asset sale covenant solely with respect to the pledged VMware shares, which requires that 100% of the consideration for the sale of such shares consist of cash or cash equivalents and requires that all such proceeds be used to repay the Margin
Bridge Facility, and (b) a negative covenant generally to not create liens on the pledged VMware shares, subject to certain exceptions. The Margin Bridge Facility also contains events of default substantially consistent with the events of
default under the Senior Secured Credit Facilities, as modified to reflect the nature of the Margin Bridge Facility.
The foregoing summary of the Margin
Bridge Facility does not purport to be complete and is qualified in its entirety by reference to the text of the Margin Bridge Credit Agreement, a copy of which is filed as Exhibit 10.3 to this report and incorporated herein by reference.
VMware Note Bridge Facility
Overview.
On
September 7, 2016, Merger Sub and EMC entered into a credit agreement (the VMware Credit Agreement) with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and certain other financial institutions as lenders
party thereto providing for a senior secured note bridge facility in an aggregate principal amount of $1,500 million (the VMware Note Bridge Facility). As a result of the Merger, EMC is the borrower under the VMware Note Bridge Facility.
Interest Rate and Fees.
Interest under the VMware Note Bridge Facility is payable, at the borrowers option, either at (a) a base rate
plus 0.75% per annum or (b) a LIBOR-based rate plus 1.75% per annum. Interest is payable, in the case of loans bearing interest based on LIBOR, at the end of each interest period (but at least every three months), in arrears and, in
the case of loans bearing interest based on the base rate, quarterly in arrears.
Prepayments.
The VMware Note Bridge Facility requires the
borrower to prepay outstanding borrowings under the VMware Note Bridge Facility with 100% of the net cash proceeds of any asset sale or other disposition of the pledged VMware promissory notes, as described below. The borrower may voluntarily repay
outstanding loans under the VMware Note Bridge Facility at any time without premium or penalty, other than customary breakage costs, subject to certain minimum threshold amounts for prepayment.
Amortization and Maturity.
The VMware Note Bridge Facility will mature on September 6, 2017 and has no amortization.
Guarantee and Security.
The VMware Note Bridge Facility is not guaranteed by any of the subsidiaries of the borrower or the Company. The VMware Note
Bridge Facility is secured solely by certain intercompany notes in an aggregate principal amount of $1,500 million issued by VMware that are payable to EMC, and the proceeds thereof.
Certain Covenants and Events of Default.
The VMware Note Bridge Facility does not include any affirmative or negative covenants, other than (a) an
asset sale covenant solely with respect to the pledged VMware promissory notes, which requires that 100% of the consideration for the sale of such promissory notes consist of cash or cash equivalents and requires that all such proceeds be used to
repay the VMware Note Bridge Facility, and (b) a negative covenant generally to not create liens on the pledged VMware promissory notes, subject to certain exceptions. The VMware Note Bridge Facility also contains events of default
substantially consistent with the events of default under the Senior Secured Credit Facilities, as modified to reflect the nature of the VMware Note Bridge Facility.
The foregoing summary of the VMware Note Bridge Facility does not purport to be complete and is qualified in its entirety by reference to the text of the
VMware Bridge Credit Agreement, a copy of which is filed as Exhibit 10.4 to this report and incorporated herein by reference.
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Certain of the lenders and agents who are parties to, or participated in arrangements regarding, the Senior
Secured Credit Facilities, the Asset Sale Bridge Facility, the Margin Bridge Facility and the VMware Note Bridge Facility and their respective affiliates have provided and may in the future provide certain financial advisory, investment banking and
commercial banking services in the ordinary course of business for the Company, its subsidiaries and certain of their respective affiliates, for which they have received or will receive customary fees and expenses in connection with the performance
of such services.
First Lien Notes
On
September 7, 2016, Dell International, EMC, the Company, Denali Intermediate, Dell and Denali Intermediates wholly-owned domestic subsidiaries (including each of EMCs wholly-owned domestic subsidiaries) that guarantee obligations
under the Senior Secured Credit Facilities (the Guarantors) executed Supplemental Indenture No. 2 and Supplemental Indenture No. 3 (collectively, the First Lien Notes Supplemental Indentures) to the indenture, dated
as of June 1, 2016 (the First Lien Notes Base Indenture), among Diamond 1 Finance Corporation (Finco 1), Diamond 2 Finance Corporation (Finco 2 and, together with Finco 1, the Fincos) and The Bank
of New York Mellon Trust Company, N.A., as trustee and collateral agent, as supplemented by Supplemental Indenture No. 1, dated as of June 1, 2016, relating to each series of First Lien Notes (as defined below) (each, a First Lien
Notes Supplemental Indenture No. 1), and the First Supplemental Indenture, dated as of September 6, 2016 (the First Lien Notes First Supplemental Indenture and, together with the First Lien Notes Base Indenture, the
applicable First Lien Notes Supplemental Indenture No. 1 and the First Lien Notes Supplemental Indentures, the First Lien Notes Indenture), relating to the following series of senior secured notes (collectively, the First Lien
Notes) issued by the Fincos on June 1, 2016:
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$3,750,000,000 aggregate principal amount of 3.480% First Lien Notes due 2019;
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$4,500,000,000 aggregate principal amount of 4.420% First Lien Notes due 2021;
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$3,750,000,000 aggregate principal amount of 5.450% First Lien Notes due 2023;
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$4,500,000,000 aggregate principal amount of 6.020% First Lien Notes due 2026;
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$1,500,000,000 aggregate principal amount of 8.100% First Lien Notes due 2036; and
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$2,000,000,000 aggregate principal amount of 8.350% First Lien Notes due 2046.
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Pursuant to the First Lien
Notes Supplemental Indentures, Dell International and EMC assumed the obligations of Finco 1 and Finco 2, respectively, as issuers under the First Lien Notes Indenture and the First Lien Notes, the Company provided a senior unsecured guarantee of
the First Lien Notes and each Guarantor (other than the Company) provided a senior secured guarantee of the First Lien Notes. The First Lien Notes First Supplemental Indenture amends the First Lien Notes Base Indenture to clarify certain of
Dells reporting obligations under the First Lien Notes.
A description of the First Lien Notes is contained in the proxy statement/prospectus dated
June 6, 2016, as amended (the Form S-4 Proxy Statement/Prospectus), forming part of the Companys Registration Statement on Form S-4 (Registration No. 333-208524) (the Form S-4 Registration Statement) in the
section captioned Proposal 1: Approval of the Merger AgreementFinancing of the Merger.
In addition, on September 7, 2016, Dell
International, EMC and the Guarantors executed a joinder (the Joinder) to the registration rights agreement, dated as of June 1, 2016 (the First Lien Registration Rights Agreement), pursuant to which Dell International,
EMC and the Guarantors have agreed to use commercially reasonable efforts to register notes having substantially identical terms as the First Lien Notes with the Securities and Exchange Commission (the SEC) as part of an offer to
exchange such registered notes for the First Lien Notes. Dell International and EMC will be obligated to pay additional interest on the First Lien Notes if they fail to consummate such an exchange offer within five years after the closing date of
the Merger.
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The foregoing summary of the First Lien Notes Indenture, the First Lien Notes, the First Lien Registration Rights
Agreement and the Joinder does not purport to be complete and is qualified in its entirety by reference to the text of the First Lien Notes Base Indenture, a copy of which has been filed as Exhibit 4.14 to the Form S-4 Registration Statement, the
text of each Supplemental Indenture No. 1, copies of which have been filed as Exhibits 4.15, 4.17, 4.19, 4.21, 4.23 and 4.25 to the Form S-4 Registration Statement, the text of the forms of the First Lien Notes, copies of which have been filed
as Exhibits 4.16, 4.18, 4.20, 4.22, 4.24 and 4.26 to the Form S-4 Registration Statement, the text of the First Lien Notes First Supplemental Indenture, a copy of which is filed as Exhibit 4.1 to this report, the text of each First Lien Notes
Supplemental Indenture, copies of which are filed as Exhibits 4.2 and 4.3 to this report, the text of the First Lien Registration Rights Agreement, a copy of which is filed as Exhibit 4.4 to this report, and the text of the Joinder, a copy of which
is filed as Exhibit 4.5 to this report, each of which documents is incorporated herein by reference.
Senior Notes
On September 7, 2016, Dell International, EMC, the Company, Denali Intermediate, Dell and the other Guarantors executed Supplemental Indenture No. 2
and Supplemental Indenture No. 3 (collectively, the Senior Notes Supplemental Indentures) to the indenture, dated as of June 22, 2016 (the Senior Notes Base Indenture), among the Fincos and The Bank of New York
Mellon Trust Company, N.A., as trustee, as supplemented by Supplemental Indenture No. 1 relating to each series of Senior Notes (as defined below) (each, a Senior Notes Supplemental Indenture No. 1), dated as of June 22,
2016, and the First Supplemental Indenture, dated as of September 6, 2016 (the Senior Notes First Supplemental Indenture and, together with the Senior Notes Base Indenture, the applicable Senior Notes Supplemental Indenture
No. 1 and the applicable Senior Notes Supplemental Indentures, the Senior Notes Indenture), relating to (a) the $1,625,000,000 aggregate principal amount of 5.875% Senior Notes due 2021 and (b) the $1,625,000,000 aggregate
principal amount of 7.125% Senior Notes due 2024 (collectively, the Senior Notes) issued by the Fincos on June 22, 2016. Pursuant to the Senior Notes Supplemental Indentures, Dell International and EMC assumed the obligations of
Finco 1 and Finco 2, respectively, as issuers under the Senior Notes Indenture and the Senior Notes and each Guarantor (including the Company) provided a senior unsecured guarantee of the Senior Notes. The Senior Notes First Supplemental Indenture
amends the Senior Notes Base Indenture to clarify certain of Dells reporting obligations under the Senior Notes.
A description of the Senior Notes
is contained in the Companys Current Report on Form 8-K filed with the SEC on June 22, 2016 (the June 22 Form 8-K).
The foregoing
summary of the Senior Notes Indenture and the Senior Notes does not purport to be complete and is qualified in its entirety by reference to the text of the Senior Notes Base Indenture, a copy of which has been filed as Exhibit 4.1 to the
June 22 Form 8-K, the text of each Supplemental Indenture No. 1, copies of which have been filed as Exhibits 4.2 and 4.3 to the June 22 Form 8-K, the text of the forms of the Senior Notes, copies of which have been filed as Exhibits
4.4 and 4.5 to the June 22 Form 8-K, the text of the Senior Notes First Supplemental Indenture, a copy of which is filed as Exhibit 4.6 to this report, and the text of each Senior Notes Supplemental Indenture, copies of which are filed as
Exhibits 4.7, 4.8, 4.9 and 4.10 to this report, each of which documents is incorporated herein by reference.
Sponsor Stockholders Agreement,
Management Stockholders Agreement and Registration Rights Agreement
Sponsor Stockholders Agreement
On September 7, 2016, the Company entered into an Amended and Restated Sponsor Stockholders Agreement (the Sponsor Stockholders Agreement), by
and among the Company, Denali Intermediate, Dell, EMC, Denali Finance, Dell International, Michael S. Dell (MD), Susan Lieberman Dell Separate Property Trust (together with MD, the MD Stockholders), MSDC Denali Investors,
L.P. (the MSDC Denali Investors), MSDC Denali EIV, LLC (together with the MSDC Denali Investors, the MSD Partners Stockholders), Silver Lake Partners III, L.P. (SLP III), Silver Lake Technology Investors III, L.P.
(SLTI III), Silver Lake Partners IV, L.P. (SLP IV), Silver Lake Technology Investors IV, L.P. (SLTI IV) and SLP Denali Co-Invest, L.P. (SLP Denali Co-Investor and, together with SLP III, SLTI III, SLP
IV and SLTI IV, the SLP Stockholders) and the other stockholders named therein.
The Sponsor Stockholders Agreement contains specific rights,
obligations and agreements of the stockholders party thereto as owners of the Companys common stock and contains provisions related to the composition of the Companys board of directors and its committees. A description of the terms of
the Sponsor Stockholders Agreement is contained in the Form S-4 Proxy Statement/Prospectus in the section captioned Certain Relationships and Related TransactionsDenali Stockholders Agreement.
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The foregoing summary of the Sponsor Stockholders Agreement does not purport to be complete and is qualified in
its entirety by reference to the text of the Sponsor Stockholders Agreement, a copy of which is filed as Exhibit 10.5 to this report and incorporated herein by reference.
Management Stockholders Agreement
On
September 7, 2016, the Company entered into an Amended and Restated Management Stockholders Agreement (the Management Stockholders Agreement) by and among the Company, the MD Stockholders, the MSD Partners Stockholders, the SLP
Stockholders and the management stockholders party thereto (the Management Stockholders).
The Management Stockholders Agreement contains
specific rights, obligations and agreements of the Management Stockholders as owners of the Companys common stock. Under the terms of the Management Stockholders Agreement, equity-based awards granted to the Management Stockholders under the
amended and restated Dell Technologies Inc. 2013 Stock Incentive Plan described in Item 5.02 of this report and certain other securities held by the Management Stockholders are subject to transfer restrictions, with certain specified
exceptions. The Management Stockholders Agreement also provides that the Management Stockholders have tag-along rights with respect to certain transfers of common stock (other than the Class V Common Stock) by other stockholders of the Company and
that shares of common stock (other than the Class V Common Stock) held by the Management Stockholders are also subject to drag-along rights of the MD Stockholders and SLP Stockholders, in each case until an initial public offering of the Class C
Common Stock. In addition, in the event a Management Stockholder engages in certain specified types of conduct while employed by the Company or its subsidiaries, or for a specified period thereafter, the Management Stockholders Agreement grants the
Company clawback rights with respect to such Management Stockholders vested awards, shares held pursuant to the exercise or settlement of vested awards and the proceeds of the sale of any such shares.
The Company and certain of its stockholders, subject to certain limitations and time restrictions, also have a call right over certain securities (other than
the Class V Common Stock) held by the Management Stockholders whose employment with the Company or its subsidiaries is terminated or ends for any reason. If a Management Stockholders employment is terminated other than for cause, such
Management Stockholder also has a put right for his or her shares of Class A Common Stock or Class C Common Stock to the Company, subject to certain limitations and other requirements. In addition, each fiscal year, on a recurring semi-annual
basis until the first to occur of a change in control or an initial public offering, the Management Stockholders Agreement requires the Company to make offers to purchase Class C Common Stock.
The foregoing summary of the Management Stockholders Agreement does not purport to be complete and is qualified in its entirety by reference to the text of
the Management Stockholders Agreement, a copy of which is filed as Exhibit 10.6 to this report and incorporated herein by reference.
Registration
Rights Agreement
On September 7, 2016, the Company entered into an Amended and Restated Registration Rights Agreement (the Registration
Rights Agreement) by and among the Company, the MD Stockholders, the MSD Partners Stockholders, the SLP Stockholders, Venezio Investments Pte. Ltd., an affiliate of Temasek Holdings (Private) Limited (Temasek), and the management
stockholders party thereto.
The Registration Rights Agreement provides, among other terms, that certain of the Companys security holders, their
affiliates and certain of their transferees have the right, under specified circumstances and subject to certain restrictions, to require the Company to register for resale the shares of the Companys Class C Common Stock (including shares of
Class C Common Stock issuable upon conversion of shares of the Companys Class A Common Stock, Class B Common Stock and Class D Common Stock) to be offered for resale by such holders. A description of the terms of the Registration Rights
Agreement is contained in the Form S-4 Proxy Statement/Prospectus in the section captioned Certain Relationships and Related TransactionsDenali Registration Rights Agreement.
The foregoing summary of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the text of the
Registration Rights Agreement, a copy of which is filed as Exhibit 10.7 to this report and incorporated herein by reference.
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Mr. Dell is the Chief Executive Officer and Chairman of the Board of the Company. Immediately before the
consummation of the Merger, the MD Stockholders, the MSD Partners Stockholders and the SLP Stockholders beneficially owned common stock of the Company representing approximately 70%, 4% and 24%, respectively, of the combined voting power of all
classes of the Companys outstanding common stock. As described in Item 3.02 of this report, on September 7, 2016, in connection with the Merger, Temasek purchased 18,181,818 shares of Class Common Stock.