Carl C. Icahn
Icahn Enterprises LP
767 Fifth Avenue
Suite 4700
New York, New York 10153

March 22, 2013

Special Committee of the Board of Directors of Dell Inc.
Dell Inc.
One Dell Way
Round Rock, Texas 78682

James B. Lee, Vice Chairman
JPMorgan Chase
270 Park Avenue
New York, New York 10017

William O. Hiltz
Naveen Nataraj
Evercore Partners
55 East 52nd Street
New York, New York 10055

Jeffrey J. Rosen
Michael A. Diz
Debevoise & Plimpton
919 Third Avenue
New York, NY 10022

Re: Acquisition Proposal for Dell Inc. (“Dell”)

Dear Members of the Special Committee of the Board of Directors of Dell and Advisors:

On February 5, 2013, Dell entered into a merger agreement (the “February 5 Merger Agreement”) with certain entities affiliated with Silver Lake Partners and Michael S. Dell. Capitalized terms not otherwise defined in this letter shall have the meanings ascribed to such terms in the February 5 Merger Agreement. Section 5.3 of the February 5 Merger Agreement provides, among other things, that Dell, its Subsidiaries and its Representatives have the right to initiate, solicit, encourage and receive Acquisition Proposals with respect to Dell up to the No-Shop Period Start Date. This Acquisition Proposal, which is detailed below, is being delivered, as contemplated by the February 5 Merger Agreement, by Icahn Enterprises LP, and Carl C. Icahn, prior to the No-Shop Period Start Date.

Icahn Enterprises LP

We believe that you will agree that Icahn Enterprises is well able to provide the $1 billion cash equity capital (in addition to its existing $1 billion stock position in Dell), and that Mr. Icahn and his affiliates other than Icahn Enterprises are well able to provide the additional $3 billion cash equity capital, contemplated in this Acquisition Proposal, which constitutes an aggregate $5 billion equity commitment. In this regard we invite you to examine the public filings of Icahn Enterprises and to meet with us regarding any additional questions you may have. Further, we have excellent relationship with numerous large banking institutions and we are confident that we would be able to obtain the debt financing contemplated in our proposal. Although we are well known for the performance of our investment activities, over time we have found that our greatest returns have come from the control and ownership of portfolio companies. For example, in May 2012, Icahn Enterprises purchased a controlling interest in CVR Energy, Inc. (‘‘CVR’’) for an aggregate purchase price approximately $2 billion. As of March 11, 2013, based on the closing sale price of CVR stock and distributions since Icahn Enterprises acquired control, we had a gain of over $2 billion on our purchase of CVR.

Currently, the portfolio companies owned or controlled by Icahn Enterprises and Mr. Icahn include among others, the following:

NameHoldingsDate of Initial Investment
CVR Energy, Inc.82%2011
Tropicana Entertainment Inc.67%2008
West Point Home100%2004
Federal Mogul Corporation78%2001
Viskase Companies Inc.70%2001
XO Holdings100%2001
PSC Metals100%1998
American Railcar Industries Inc.55%1994
ACF Industries100%1984

The Acquisition Proposal For Dell

As you know, on March 10, 2013 Icahn Enterprises entered into a confidentiality agreement with Dell and commenced due diligence in support of an Acquisition Proposal. On March 13, 2013, Jefferies LLC (“Jefferies”), as a representative of Icahn Enterprises, entered into a confidentiality agreement with Dell and commenced due diligence in support of an Acquisition Proposal. Further, on and after February 8, 2013, Southeastern Asset Management Inc. (“Southeastern”) has publicly disclosed its desire to remain a shareholder of Dell, rather than participate in the merger contemplated by the February 5 Merger Agreement and has suggested that the merger be recast as a transaction under which Dell shareholders are provided with the opportunity to elect to continue to hold Dell shares or receive cash, at their option. T. Rowe Price has similarly opposed the February 5 Merger Agreement. For purposes of this proposal, Icahn Enterprises assumes that Southeastern and T. Rowe Price and other larger holders would, if provided the opportunity, support the proposal set forth below and agree to the matters set forth in the fourth bullet item of the proposal set forth below.

We hereby propose that we and Dell engage in the following merger transaction (the “Proposed Merger”, and the surviving company of the Proposed Merger, the “Surviving Company”): 
  • Dell will obtain transaction funding composed of the following:
    • $2.0 billion investment ($1 billion by Icahn Enterprises and $1 billion by Carl C. Icahn and his affiliates other than Icahn Enterprises) for the purchase of common shares of the Surviving Company (in addition to the shares currently owned by Icahn Enterprises and its affiliates) at a price of $15 per share, resulting in an additional 133 million shares being issued by the Surviving Company. As contemplated in the fifth bullet item below, Mr. Icahn and his affiliates other than Icahn Enterprises, are willing to commit an additional $2 billion of cash equity financing, for an aggregate $5 billion total equity commitment to this Acquisition Proposal.
    • $7.4 billion of cash currently available at Dell.
    • $1.712 billion in new factoring receivable facility (total factoring receivable facility of $3.0 billion).
    • $5.218 billion in new debt.
    • We understand that this Proposed Merger contemplates less total leverage on the Surviving Company than under the February 5 Merger Agreement.
  • In connection with the Proposed Merger, Dell shareholders will be entitled to elect to receive either: (x) shares of the Surviving Company on a one-to-one basis with their current holdings; or (y) an aggregate of up to $15.65 billion in cash (the “Payment Funding”) payable at a rate of $15 per share. If the Payment Funding is fully utilized this would result in 1.043 billion shares (58.1% of the current outstanding) being subject to the Proposed Merger. If shareholders electing to receive cash exceed the maximum number of shares that may be acquired with the Payment Funding, then such elections will be accepted on a pro rated basis. If electing shareholders are insufficient to utilize all of the Payment Funding, then the balance will be distributed to all of the remaining shareholders of the Surviving Company as a special dividend (the “Special Dividend”).
  • In addition to the Payment Funding, Icahn Enterprises anticipates that Dell would be required to pay the breakup fee under the February 5 Merger Agreement of $180 million, and that Dell would incur other deal fees and expenses in the Proposed Merger of approximately $500 million, for a maximum aggregate use of funds of approximately $16.33 billion.
  • Neither Icahn Enterprises (which together with its affiliates, currently owns approximately 80 million shares of Dell), Southeastern (which publicly reports ownership of approximately 146.5 million shares of Dell), T. Rowe Price (which publicly reports ownership of approximately 82 million shares of Dell), nor other large holders that so agree (collectively with Icahn Enterprise, Southeastern, and T. Rowe Price, the “Rollover Holders”), would be eligible to elect to receive cash or shares in the Proposed Merger, but rather their existing common stock position in Dell would rollover into the Surviving Company. Rollover Holders would receive the Special Dividend, if any.
  • Pursuant to the Proposed Merger, if all eligible existing Dell shareholders elect to receive cash, then approximately 58.1% of the currently outstanding Dell shares would be subject to the Proposed Merger and following the completion of the Proposed Merger, Icahn Enterprises and its affiliates would own 24.1% of the outstanding shares of the Surviving Company; Southeastern and its affiliates would own 16.6% of the outstanding shares of the Surviving Company; T. Rowe Price and its affiliates would own 9.3% of the Surviving Company and the remaining public shareholders would own 50% of the shares of the Surviving Company. The opportunity exists to increase the number of shares cashed out by non-Rollover Holders in the Proposed Merger, if the large holders agree with Icahn Enterprises to become Rollover Holders. Further, Mr. Icahn and his affiliates other than Icahn Enterprises would be willing to commit (in addition to the equity investment provided for in the first bullet item above) an additional $2 billion of equity capital in cash, in the event that Southeastern, T. Rowe Price or other existing large Dell shareholders do not agree to become Rollover Holders.
  • Closing is anticipated to occur in July 2013.

This proposal contemplates the negotiation, execution and delivery of a definitive agreement (the “Definitive Agreement”) containing the terms and conditions set forth herein, together with covenants, representations, warranties and indemnification provisions which are satisfactory to both parties (including, if so requested, limits on the election of merger consideration) and which are typical and standard in a transaction of this nature.

This letter is a non-binding proposal. Neither Icahn Enterprises, Mr. Icahn, their respective affiliates, officers or directors or representatives, have, nor will this proposal letter or any discussions or communications among the parties, create or constitute, any offer, obligation, contract, commitment or duty of any kind or character, to engage in, negotiate or enter into or complete a transaction. Only a Definitive Agreement executed and delivered by the parties thereto, shall be binding upon the parties.

We look forward to proceeding with negotiations as promptly as possible and are prepared, together with Jefferies, to commit the resources to develop a Definitive Agreement with you. In addition, we look forward to receiving your confirmation that the Special Committee has concluded that our proposal is or could reasonably be expected to result in, a Superior Proposal.

Very truly yours,
Carl C. Icahn

Icahn Enterprises LP

By: Icahn Enterprises GP Inc., its general partner

By: Carl C. Icahn, Chairman of the Board