Table of Contents


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________
FORM 10-Q
þ
 
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 
For the quarterly period ended January 31, 2016
OR
o
 
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 
For the transition period from ____________ to ____________ .

Commission File Number 0-21180
INTUIT INC.
(Exact name of registrant as specified in its charter)
Delaware
(State of incorporation)
 
77-0034661
(IRS employer identification no.)
 
2700 Coast Avenue, Mountain View, CA 94043
(Address of principal executive offices)
 
 
 
 
 
(650) 944-6000
(Registrant’s telephone number, including area code)
 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer þ
 
Accelerated filer o
 
Non-accelerated filer o
 
Smaller reporting company o
 
 
 
 
(Do not check if a smaller reporting company)
 
 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 256,821,224 shares of Common Stock, $0.01 par value, were outstanding at February 19, 2016 .
 


INTUIT INC.
FORM 10-Q
INDEX

 
Page
Number
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 EX-10.02
 EX-10.03
 EX-31.01
 EX-31.02
 EX-32.01
 EX-32.02
 EX-101.INS XBRL Instance Document
 EX-101.SCH XBRL Taxonomy Extension Schema
 EX-101.CAL XBRL Taxonomy Extension Calculation Linkbase
 EX-101.LAB XBRL Taxonomy Extension Label Linkbase
 EX-101.PRE XBRL Taxonomy Extension Presentation Linkbase
 EX-101.DEF XBRL Taxonomy Extension Definition Linkbase

Intuit, the Intuit logo, QuickBooks, TurboTax, Lacerte, ProSeries, and Mint, among others, are registered trademarks and/or registered service marks of Intuit Inc., or one of its subsidiaries, in the United States and other countries. Other parties’ marks are the property of their respective owners.

2
Table of Contents

PART I
ITEM 1
FINANCIAL STATEMENTS

INTUIT INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
Three Months Ended
 
Six Months Ended
(In millions, except per share amounts)
January 31,
2016
 
January 31,
2015
 
January 31,
2016
 
January 31,
2015
Net revenue:
 
 
 
 
 
 
 
Product
$
264

 
$
195

 
$
535

 
$
423

Service and other
659

 
554

 
1,101

 
938

Total net revenue
923

 
749

 
1,636

 
1,361

Costs and expenses:
 
 
 
 
 
 
 
Cost of revenue:
 
 
 
 
 
 
 
Cost of product revenue
40

 
42

 
69

 
75

Cost of service and other revenue
153

 
139

 
284

 
258

Amortization of acquired technology
6

 
7

 
12

 
14

Selling and marketing
356

 
344

 
600

 
595

Research and development
205

 
188

 
418

 
377

General and administrative
120

 
115

 
237

 
234

Amortization of other acquired intangible assets
1

 
3

 
3

 
6

Total costs and expenses
881

 
838

 
1,623

 
1,559

Operating income (loss) from continuing operations
42

 
(89
)
 
13

 
(198
)
Interest expense
(9
)
 
(7
)
 
(16
)
 
(14
)
Interest and other income (expense), net
(5
)
 
2

 
(9
)
 
2

Income (loss) before income taxes
28

 
(94
)
 
(12
)
 
(210
)
Income tax benefit
(1
)
 
(34
)
 
(10
)
 
(69
)
Net income (loss) from continuing operations
29

 
(60
)
 
(2
)
 
(141
)
Net loss from discontinued operations
(5
)
 
(6
)
 
(5
)
 
(9
)
Net income (loss)
$
24

 
$
(66
)
 
$
(7
)
 
$
(150
)
 
 
 
 
 
 
 
 
Basic net income (loss) per share from continuing operations
$
0.11

 
$
(0.21
)
 
$
(0.01
)
 
$
(0.50
)
Basic net loss per share from discontinued operations
(0.02
)
 
(0.02
)
 
(0.02
)
 
(0.03
)
Basic net income (loss) per share
$
0.09

 
$
(0.23
)
 
$
(0.03
)
 
$
(0.53
)
Shares used in basic per share calculations
263

 
285

 
267

 
285

 
 
 
 
 
 
 
 
Diluted net income (loss) per share from continuing operations
$
0.11

 
$
(0.21
)
 
$
(0.01
)
 
$
(0.50
)
Diluted net loss per share from discontinued operations
(0.02
)
 
(0.02
)
 
(0.02
)
 
(0.03
)
Diluted net income (loss) per share
$
0.09

 
$
(0.23
)
 
$
(0.03
)
 
$
(0.53
)
Shares used in diluted per share calculations
266

 
285

 
267

 
285

 
 
 
 
 
 
 
 
Cash dividends declared per common share
$
0.30

 
$
0.25

 
$
0.60

 
$
0.50

See accompanying notes.

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Table of Contents

INTUIT INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)

 
Three Months Ended
 
Six Months Ended
(In millions)
January 31,
2016
 
January 31,
2015
 
January 31,
2016
 
January 31,
2015
 
 
 
 
 
 
 
 
Net income (loss)
$
24

 
$
(66
)
 
$
(7
)
 
$
(150
)
Other comprehensive loss, net of income taxes:
 
 
 
 
 
 
 
Foreign currency translation losses
(10
)
 
(15
)
 
(12
)
 
(20
)
Total other comprehensive loss, net
(10
)
 
(15
)
 
(12
)
 
(20
)
Comprehensive income (loss)
$
14

 
$
(81
)
 
$
(19
)
 
$
(170
)


See accompanying notes.


4
Table of Contents

INTUIT INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
January 31,
2016
 
July 31,
2015
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
334

 
$
808

Investments
—

 
889

Accounts receivable, net
512

 
91

Income taxes receivable
108

 
84

Deferred income taxes
—

 
231

Prepaid expenses and other current assets
110

 
94

Current assets of discontinued operations
30

 
26

Current assets before funds held for customers
1,094

 
2,223

Funds held for customers
373

 
337

Total current assets
1,467

 
2,560

Long-term investments
28

 
27

Property and equipment, net
980

 
682

Goodwill
1,278

 
1,266

Acquired intangible assets, net
67

 
87

Long-term deferred income taxes
211

 
5

Other assets
103

 
106

Long-term assets of discontinued operations
215

 
235

Total assets
$
4,349

 
$
4,968

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Short-term debt
$
245

 
$
—

Accounts payable
286

 
190

Accrued compensation and related liabilities
179

 
283

Deferred revenue
961

 
691

Other current liabilities
208

 
150

Current liabilities of discontinued operations
97

 
93

Current liabilities before customer fund deposits
1,976

 
1,407

Customer fund deposits
373

 
337

Total current liabilities
2,349

 
1,744

Long-term debt
1,000

 
500

Long-term deferred revenue
153

 
152

Other long-term obligations
138

 
172

Long-term obligations of discontinued operations
68

 
68

Total liabilities
3,708

 
2,636

Commitments and contingencies

 

Stockholders’ equity:
 
 
 
Preferred stock
—

 
—

Common stock and additional paid-in capital
4,226

 
4,010

Treasury stock, at cost
(9,400
)
 
(7,675
)
Accumulated other comprehensive loss
(42
)
 
(30
)
Retained earnings
5,857

 
6,027

Total stockholders’ equity
641

 
2,332

Total liabilities and stockholders’ equity
$
4,349

 
$
4,968

See accompanying notes.

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Table of Contents

INTUIT INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)

(In millions, except shares in thousands)
Shares of
Common
Stock
 
Common
Stock and
Additional
Paid-In
Capital
 
Treasury
Stock
 
Accumulated
Other
Comprehensive
Loss
 
Retained
Earnings
 
Total
Stockholders'
Equity
Balance at July 31, 2015
277,706

 
$
4,010

 
$
(7,675
)
 
$
(30
)
 
$
6,027

 
$
2,332

Comprehensive loss
—

 
—

 
—

 
(12
)
 
(7
)
 
(19
)
Issuance of stock under employee stock plans
1,901

 
56

 
—

 
—

 
—

 
56

Stock repurchases under stock repurchase programs
(19,134
)
 
—

 
(1,725
)
 
—

 
—

 
(1,725
)
Dividends and dividend rights declared ($0.60 per share)
—

 
—

 
—

 
—

 
(163
)
 
(163
)
Tax benefit from share-based compensation plans
—

 
20

 
—

 
—

 
—

 
20

Share-based compensation expense
—

 
140

 
—

 
—

 
—

 
140

Balance at January 31, 2016
260,473

 
$
4,226

 
$
(9,400
)
 
$
(42
)
 
$
5,857

 
$
641


(In millions, except shares in thousands)
Shares of
Common
Stock
 
Common
Stock and
Additional
Paid-In
Capital
 
Treasury
Stock
 
Accumulated
Other
Comprehensive
Loss
 
Retained
Earnings
 
Total
Stockholders'
Equity
Balance at July 31, 2014
284,950

 
$
3,561

 
$
(6,430
)
 
$
(2
)
 
$
5,949

 
$
3,078

Comprehensive loss
—

 
—

 
—

 
(20
)
 
(150
)
 
(170
)
Issuance of stock under employee stock plans
3,463

 
101

 
—

 
—

 
—

 
101

Stock repurchases under stock repurchase programs
(7,473
)
 
—

 
(668
)
 
—

 
—

 
(668
)
Dividends and dividend rights declared ($0.50 per share)
—

 
—

 
—

 
—

 
(147
)
 
(147
)
Tax benefit from share-based compensation plans
—

 
38

 
—

 
—

 
—

 
38

Share-based compensation expense
—

 
122

 
—

 
—

 
—

 
122

Balance at January 31, 2015
280,940

 
$
3,822

 
$
(7,098
)
 
$
(22
)
 
$
5,652

 
$
2,354



See accompanying notes.

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Table of Contents

INTUIT INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Six Months Ended
(In millions)
January 31,
2016
 
January 31,
2015
Cash flows from operating activities:
 
 
 
Net loss
$
(7
)
 
$
(150
)
 Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
Depreciation
94

 
75

Amortization of acquired intangible assets
19

 
36

Share-based compensation expense
137

 
122

Deferred income taxes
(11
)
 
(16
)
Tax benefit from share-based compensation plans
20

 
38

Excess tax benefit from share-based compensation plans
(20
)
 
(38
)
Other
10

 
19

Total adjustments
249

 
236

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(431
)
 
(327
)
Income taxes receivable
(26
)
 
(110
)
Prepaid expenses and other assets
(18
)
 
12

Accounts payable
103

 
116

Accrued compensation and related liabilities
(100
)
 
(79
)
Deferred revenue
296

 
439

Other liabilities
43

 
110

Total changes in operating assets and liabilities
(133
)
 
161

Net cash provided by operating activities
109

 
247

Cash flows from investing activities:
 
 
 
Purchases of available-for-sale debt securities
(181
)
 
(619
)
Sales of available-for-sale debt securities
942

 
458

Maturities of available-for-sale debt securities
126

 
328

Net change in money market funds and other cash equivalents held
 to satisfy customer fund obligations
(35
)
 
(65
)
Net change in customer fund deposits
35

 
65

Purchases of property and equipment
(394
)
 
(116
)
Acquisitions of businesses, net of cash acquired
—

 
(76
)
Other
—

 
(10
)
Net cash provided by (used in) investing activities
493

 
(35
)
Cash flows from financing activities:
 
 
 
Proceeds from borrowings under credit facility
745

 
—

Net proceeds from issuance of stock under employee stock plans
56

 
101

Cash paid for purchases of treasury stock
(1,725
)
 
(554
)
Dividends and dividend rights paid
(161
)
 
(143
)
Excess tax benefit from share-based compensation plans
20

 
38

Net cash used in financing activities
(1,065
)
 
(558
)
Effect of exchange rates on cash and cash equivalents
(11
)
 
(21
)
Net decrease in cash and cash equivalents
(474
)
 
(367
)
Cash and cash equivalents at beginning of period
808

 
849

Cash and cash equivalents at end of period
$
334

 
$
482

_________________________
Because the cash flows of our discontinued operations were not material for any period presented, we have not segregated the cash flows of those businesses on these statements of cash flows. See Note 4, “ Discontinued Operations ,” for more information.
See accompanying notes.

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Table of Contents

INTUIT INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1.
Description of Business and Summary of Significant Accounting Policies
Description of Business
Intuit Inc. provides business and financial management solutions for small businesses, consumers, and accounting professionals. With flagship products and services that include QuickBooks and TurboTax, we help customers solve important business and financial management problems such as running a small business, paying bills, and filing income taxes. ProSeries and Lacerte are Intuit’s tax preparation offerings for professional accountants. Incorporated in 1984 and headquartered in Mountain View, California, we sell our products and services primarily in the United States.
Basis of Presentation
These condensed consolidated financial statements include the financial statements of Intuit and its wholly owned subsidiaries. We have eliminated all significant intercompany balances and transactions in consolidation. We have included all adjustments, consisting only of normal recurring items, which we considered necessary for a fair presentation of our financial results for the interim periods presented. We have reclassified certain amounts previously reported in our financial statements to conform to the current presentation, including amounts related to discontinued operations and reportable segments. See Note 4, “Discontinued Operations,” and Note 10, “ Segment Information ,” for more information.
As discussed in Note 4, we classified our Demandforce, QuickBase, and Quicken businesses as discontinued operations in the fourth quarter of fiscal 2015. We have reclassified our statements of operations and balance sheets for all periods presented to reflect these businesses as discontinued operations. Because the cash flows of these businesses were not material for any period presented, we have not segregated them on our statements of cash flows. Unless noted otherwise, discussions in these notes pertain to our continuing operations.
These unaudited condensed consolidated financial statements and accompanying notes should be read together with the audited consolidated financial statements in Item 8 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2015 . Results for the six months ended January 31, 2016 do not necessarily indicate the results we expect for the fiscal year ending July 31, 2016 or any other future period.
Seasonality
Our Consumer Tax offerings have significant seasonal patterns and revenue from those income tax preparation products and services is heavily concentrated in our third fiscal quarter ending April 30.
Significant Accounting Policies
We describe our significant accounting policies in Note 1 to the financial statements in Item 8 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2015 . There have been no changes to our significant accounting policies during the first six months of fiscal 2016 .
Use of Estimates

In preparing our consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP), we make certain estimates and assumptions that affect the amounts reported in our financial statements and the disclosures made in the accompanying notes. For example, we use estimates in determining the appropriate levels of reserves for product returns and rebates, the collectibility of accounts receivable, the appropriate levels of various accruals including accruals for litigation contingencies, the amount of our worldwide tax provision, and the realizability of deferred tax assets. We also use estimates in determining the remaining economic lives and fair values of acquired intangible assets, property and equipment, and other long-lived assets. In addition, we use assumptions to estimate the fair value of reporting units and share-based compensation. Despite our intention to establish accurate estimates and use reasonable assumptions, actual results may differ from our estimates.
Computation of Net Income (Loss) Per Share
We compute basic net income or loss per share using the weighted average number of common shares outstanding during the period. We compute diluted net income per share using the weighted average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of the shares issuable upon the exercise of stock options and upon the vesting of restricted stock units (RSUs) under the treasury stock method.

8

We include stock options with combined exercise prices, unrecognized compensation expense and tax benefits that are less than the average market price for our common stock, and RSUs with combined unrecognized compensation expense and tax benefits that are less than the average market price for our common stock, in the calculation of diluted net income per share. We exclude stock options with combined exercise prices, unrecognized compensation expense and tax benefits that are greater than the average market price for our common stock, and RSUs with combined unrecognized compensation expense and tax benefits that are greater than the average market price for our common stock, from the calculation of diluted net income per share because their effect is anti-dilutive. Under the treasury stock method, the amount that must be paid to exercise stock options, the amount of compensation expense for future service that we have not yet recognized for stock options and RSUs, and the amount of tax benefits that will be recorded in additional paid-in capital when the awards become deductible are assumed to be used to repurchase shares.
All of the RSUs we grant have dividend rights. Dividend rights are accumulated and paid when the underlying RSUs vest. Since the dividend rights are subject to the same vesting requirements as the underlying equity awards they are considered a contingent transfer of value. Consequently, the RSUs are not considered participating securities and we do not present them separately in earnings per share.
In loss periods, basic net loss per share and diluted net loss per share are the same since the effect of potential common shares is anti-dilutive and therefore excluded.

9

The following table presents the composition of shares used in the computation of basic and diluted net income (loss) per share for the periods indicated.
 
Three Months Ended
 
Six Months Ended
(In millions, except per share amounts)
January 31,
2016
 
January 31,
2015
 
January 31,
2016
 
January 31,
2015
Numerator:
 
 
 
 
 
 
 
Net income (loss) from continuing operations
$
29

 
$
(60
)
 
$
(2
)
 
$
(141
)
Net loss from discontinued operations
(5
)
 
(6
)
 
(5
)
 
(9
)
Net income (loss)
$
24

 
$
(66
)
 
$
(7
)
 
$
(150
)
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
Shares used in basic per share amounts:
 
 
 
 
 
 
 
Weighted average common shares outstanding
263

 
285

 
267

 
285

 
 
 
 
 
 
 
 
Shares used in diluted per share amounts:
 
 
 
 
 
 
 
Weighted average common shares outstanding
263

 
285

 
267

 
285

Dilutive common equivalent shares from stock options
 
 
 
 
 
 
 
and restricted stock awards
3

 
—

 
—

 
—

Dilutive weighted average common shares outstanding
266

 
285

 
267

 
285

 
 
 
 
 
 
 
 
Basic and diluted net loss per share:
 
 
 
 
 
 
 
Basic net income (loss) per share from continuing operations
$
0.11

 
$
(0.21
)
 
$
(0.01
)
 
$
(0.50
)
Basic net loss per share from discontinued operations
(0.02
)
 
(0.02
)
 
(0.02
)
 
(0.03
)
Basic net income (loss) per share
$
0.09

 
$
(0.23
)
 
$
(0.03
)
 
$
(0.53
)
 
 
 
 
 
 
 
 
Diluted net income (loss) per share from continuing operations
$
0.11

 
$
(0.21
)
 
$
(0.01
)
 
$
(0.50
)
Diluted net loss per share from discontinued operations
(0.02
)
 
(0.02
)
 
(0.02
)
 
(0.03
)
Diluted net income (loss) per share
$
0.09

 
$
(0.23
)
 
$
(0.03
)
 
$
(0.53
)
 
 
 
 
 
 
 
 
Shares excluded from computation of diluted net income (loss)
per share:
 
 
 
 
 
 
 
Weighted average stock options and restricted stock units that would have been included in the computation of dilutive common equivalent shares outstanding if net income had been reported in the period
—

 
14

 
13

 
15

 
 
 
 
 
 
 
 
Weighted average stock options and restricted stock units excluded from computation due to anti-dilutive effect
2

 
2

 
2

 
2

Concentration of Credit Risk and Significant Customers
No customer accounted for 10% or more of total net revenue in the three or six months ended January 31, 2016 or January 31, 2015 . Due to the seasonality of our consumer tax offerings, one retail customer accounted for 15% of gross accounts receivable at January 31, 2016 . No customer accounted for 10% or more of gross accounts receivable at July 31, 2015 .
Accounting Pronouncements Not Yet Adopted
ASU 2015-16 , “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments.”
In September 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-16, “ Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. ” ASU 2015-16 eliminates the requirement for an acquirer to retrospectively adjust provisional amounts recorded in a business combination to reflect new information about the facts and circumstances that existed as of the acquisition date and that, if known, would have affected measurement or recognition of amounts initially recognized. As an alternative, the amendment

10

requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments require that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. ASU 2015-16 is effective prospectively for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, which means that it will be effective for us in the first quarter of our fiscal year beginning August 1, 2016. Early adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2015-16 on our consolidated financial statements.
ASU 2014-09 , “Revenue from Contracts with Customers (Topic 606)”
In May 2014 the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers (Topic 606) ,” and in August 2015 the FASB issued ASU 2015-14, “ Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ,” which defers the effective date of ASU 2014-09 by one year. ASU 2014-09 supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible that more judgment and estimates may be required within the revenue recognition process than is required under present U.S. GAAP. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price, and allocating the transaction price to each separate performance obligation. The new standard also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU 2014-09 is effective for reporting periods beginning after December 15, 2017, which means that it will be effective for us in the first quarter of our fiscal year beginning August 1, 2018. Early adoption of one year prior to the required effective date is permitted. ASU 2014-09 allows adoption using either of two methods: (i) retrospective to each prior reporting period presented, with the option to elect certain practical expedients; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures. We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements.
Accounting Pronouncements Recently Adopted
ASU 2015-17 , “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”
In November 2015 the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes,” requiring all deferred tax assets and liabilities, and any related valuation allowance, to be classified as noncurrent on the balance sheet. We elected to early adopt this standard in the second quarter of fiscal 2016 on a prospective basis. ASU 2015-17 did not have a material impact on our consolidated balance sheets and had no impact on our consolidated statements of operations or cash flows. Prior periods were not adjusted.
We do not expect that any other recently issued accounting pronouncements will have a significant effect on our financial statements.


2.
Fair Value Measurements
The authoritative guidance defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, we consider the principal or most advantageous market for an asset or liability and assumptions that market participants would use when pricing the asset or liability. In addition, we consider and use all valuation methods that are appropriate in estimating the fair value of an asset or liability.
The authoritative guidance establishes a fair value hierarchy that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. In general, the authoritative guidance requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the measurement of its fair value. The three levels of input defined by the authoritative guidance are as follows:
•
Level 1 uses unadjusted quoted prices that are available in active markets for identical assets or liabilities.
•
Level 2 uses inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as

11

interest rates and volatility, can be corroborated by readily observable market data for substantially the full term of the assets or liabilities.
•
Level 3 uses one or more unobservable inputs that are supported by little or no market activity and that are significant to the determination of fair value. Level 3 assets and liabilities include those whose fair values are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table summarizes financial assets and financial liabilities that we measured at fair value on a recurring basis at the dates indicated, classified in accordance with the fair value hierarchy described above.
 
January 31, 2016
 
July 31, 2015
(In millions)
Level 1
 
Level 2
 
Level 3
 
Total
Fair Value
 
Level 1
 
Level 2
 
Level 3
 
Total
Fair Value
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents, primarily money market funds
$
280

 
$
—

 
$
—

 
$
280

 
$
695

 
$
—

 
$
—

 
$
695

Available-for-sale debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Municipal bonds
—

 
6

 
—

 
6

 
—

 
506

 
—

 
506

Corporate notes
—

 
169

 
—

 
169

 
—

 
546

 
—

 
546

U.S. agency securities
—

 
—

 
—

 
—

 
—

 
12

 
—

 
12

Municipal auction rate securities
—

 
—

 
15

 
15

 
—

 
—

 
15

 
15

Total available-for-sale securities
—

 
175

 
15

 
190

 
—

 
1,064

 
15

 
1,079

Total assets measured at fair value on a recurring basis
$
280

 
$
175

 
$
15

 
$
470

 
$
695

 
$
1,064

 
$
15

 
$
1,774

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior notes (1)
$
—

 
$
523

 
$
—

 
$
523

 
$
—

 
$
531

 
$
—

 
$
531

______________________________
(1)
Carrying value in long-term debt on our balance sheets at January 31, 2016 was $500 million and at July 31, 2015 was $500 million. See Note 6, “Long-Term Obligations and Commitments,” for more information.


12


The following table summarizes our cash equivalents and available-for-sale debt securities by balance sheet classification and level in the fair value hierarchy at the dates indicated.
 
January 31, 2016
 
July 31, 2015
(In millions)
Level 1
 
Level 2
 
Level 3
 
Total
Fair Value
 
Level 1
 
Level 2
 
Level 3
 
Total
Fair Value
Cash equivalents:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In cash and cash equivalents
$
82

 
$
—

 
$
—

 
$
82

 
$
533

 
$
—

 
$
—

 
$
533

In funds held for customers
198

 
—

 
—

 
198

 
162

 
—

 
—

 
162

Total cash equivalents
$
280

 
$
—

 
$
—

 
$
280

 
$
695

 
$
—

 
$
—

 
$
695

Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In investments
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
889

 
$
—

 
$
889

In funds held for customers
—

 
175

 
—

 
175

 
—

 
175

 
—

 
175

In long-term investments
—

 
—

 
15

 
15

 
—

 
—

 
15

 
15

Total available-for-sale securities
$
—

 
$
175

 
$
15

 
$
190

 
$
—

 
$
1,064

 
$
15

 
$
1,079

We value our Level 1 assets, consisting primarily of money market funds, using quoted prices in active markets for identical instruments. Financial assets whose fair values we measure on a recurring basis using Level 2 inputs consist of municipal bonds, corporate notes, and U.S. agency securities. We measure the fair values of these assets with the help of a pricing service that either provides quoted market prices in active markets for identical or similar securities or uses observable inputs for their pricing without applying significant adjustments. Our fair value processes include controls that are designed to ensure that we record appropriate fair values for our Level 2 investments. These controls include comparison to pricing provided by a secondary pricing service or investment manager, validation of pricing sources and models, review of key model inputs, analysis of period-over-period price fluctuations, and independent recalculation of prices where appropriate.
Financial liabilities whose fair values we measure using Level 2 inputs consist of senior unsecured notes. See Note 6, “ Long-Term Obligations and Commitments,” for more information. We measure the fair value of our senior notes based on their trading prices and the interest rates we could obtain for other borrowings with similar terms.
Financial assets whose fair values we measure using significant unobservable (Level 3) inputs consist of municipal auction rate securities that are no longer liquid. We estimate the fair values of the auction rate securities using a discounted cash flow model. We continue to classify them as long-term investments based on the maturities of the underlying securities at that date. We do not intend to sell our municipal auction rate securities. In addition, it is more likely than not that we will not be required to sell them before recovery at par, which may be at maturity.
There were no transfers between Level 1, Level 2, and Level 3 of the fair value hierarchy during the six months ended January 31, 2016 .


3.
Cash and Cash Equivalents, Investments and Funds Held for Customers
We consider highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents consist primarily of AAA-rated money market funds in all periods presented. Investments at July 31, 2015 consisted of available-for-sale investment-grade debt securities that we carried at fair value. Funds held for customers consist of cash and cash equivalents and investment grade available-for-sale debt securities in all periods presented. Except for direct obligations of the United States government, securities issued by agencies of the United States government, and money market funds, we diversify our investments in debt securities by limiting our holdings with any individual issuer.

13

The following table summarizes our cash and cash equivalents, investments, and funds held for customers by balance sheet classification at the dates indicated.
 
January 31, 2016
 
July 31, 2015
(In millions)
Amortized
Cost
 
Fair Value
 
Amortized
Cost
 
Fair Value
Classification on balance sheets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
334

 
$
334

 
$
808

 
$
808

Investments
—

 
—

 
890

 
889

Funds held for customers
373

 
373

 
337

 
337

Long-term investments
28

 
28

 
27

 
27

Total cash and cash equivalents, investments, and funds
held for customers
$
735

 
$
735

 
$
2,062

 
$
2,061

The following table summarizes our cash and cash equivalents, investments, and funds held for customers by investment category at the dates indicated.
 
January 31, 2016
 
July 31, 2015
(In millions)
Amortized
Cost
 
Fair Value
 
Amortized
Cost
 
Fair Value
Type of issue:
 
 
 
 
 
 
 
Total cash and cash equivalents
$
532

 
$
532

 
$
970

 
$
970

Available-for-sale debt securities:
 
 
 
 
 
 
 
Municipal bonds
6

 
6

 
507

 
506

Corporate notes
169

 
169

 
546

 
546

U.S. agency securities
—

 
—

 
12

 
12

Municipal auction rate securities
15

 
15

 
15

 
15

Total available-for-sale debt securities
190

 
190

 
1,080

 
1,079

Other long-term investments
13

 
13

 
12

 
12

Total cash and cash equivalents, investments, and funds
held for customers
$
735

 
$
735

 
$
2,062

 
$
2,061

We use the specific identification method to compute gains and losses on investments. We include realized gains and losses on our available-for-sale debt securities in interest and other income, net in our statements of operations. Gross realized gains and losses on our available-for-sale debt securities for the three and six months ended January 31, 2016 and January 31, 2015 were not significant.
We accumulate unrealized gains and losses on our available-for-sale debt securities, net of tax, in accumulated other comprehensive income or loss in the stockholders’ equity section of our balance sheets. Gross unrealized gains and losses on our available-for-sale debt securities at January 31, 2016 and July 31, 2015 were not significant.
We periodically review our investment portfolios to determine if any investment is other-than-temporarily impaired due to changes in credit risk or other potential valuation concerns. We believe that the investments we held at January 31, 2016 were not other-than-temporarily impaired. Unrealized losses on available-for-sale debt securities at January 31, 2016 were not significant and were due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities. We do not intend to sell these investments. In addition, it is more likely than not that we will not be required to sell them before recovery at par, which may be at maturity.

14

The following table summarizes our available-for-sale debt securities classified by the stated maturity date of the security at the dates indicated.
 
January 31, 2016
 
July 31, 2015
(In millions)
Amortized
Cost
 
Fair Value
 
Amortized
Cost
 
Fair Value
Due within one year
$
89

 
$
89

 
$
434

 
$
435

Due within two years
41

 
41

 
443

 
442

Due within three years
45

 
45

 
156

 
156

Due after three years
15

 
15

 
47

 
46

Total available-for-sale debt securities
$
190

 
$
190

 
$
1,080

 
$
1,079

Available-for-sale debt securities due after three years in the table above include our municipal auction rate securities. See Note 2, “Fair Value Measurements,” for more information. All of the remaining securities in that category had interest reset dates or mandatory call dates within three years of the dates indicated in the table.


4.
Discontinued Operations
In the fourth quarter of fiscal 2015 management having the authority to do so formally approved a plan to sell our Demandforce, QuickBase, and Quicken businesses. The decision was a result of management’s desire to focus resources on our core small business and tax strategies. We determined that these businesses became long-lived assets held for sale in the fourth quarter of fiscal 2015. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. Since the carrying values of these three businesses at January 31, 2016 and July 31, 2015 were less than the estimated fair values less cost to sell, no adjustments to the carrying values of these long-lived assets were necessary at those dates.
We also classified our Demandforce, QuickBase, and Quicken businesses as discontinued operations in the fourth quarter of fiscal 2015 and have therefore segregated their operating results from continuing operations in our statements of operations and on our balance sheets for all periods presented. Because the cash flows of these businesses were not material for any period presented, we have not segregated them on our statements of cash flows. Demandforce and QuickBase were part of our Small Business segment and Quicken was part of our former Consumer segment.

15

The carrying amounts of the major classes of assets and liabilities of Demandforce, QuickBase, and Quicken at January 31, 2016 and July 31, 2015 were as shown in the following table.
(In millions)
January 31,
2016
 
July 31,
2015
Accounts receivable
$
28

 
$
19

Deferred income taxes
—

 
5

Prepaid and other current assets
2

 
2

Property and equipment, net
19

 
25

Goodwill
151

 
165

Purchased intangible assets, net
43

 
43

Other assets
2

 
2

Total assets
245

 
261

 
 
 
 
Accounts payable
8

 
7

Accrued compensation
20

 
21

Deferred revenue
56

 
48

Other current liabilities
13

 
17

Long-term deferred revenue
52

 
39

Long-term obligations
16

 
29

Total liabilities
165

 
161

Net assets
$
80

 
$
100

Net revenue from discontinued operations, income (loss) from discontinued operations before income taxes, and the components of net income (loss) from discontinued operations were as follows for the periods indicated:
 
Three Months Ended
 
Six Months Ended
(In millions)
January 31,
2016
 
January 31,
2015
 
January 31,
2016
 
January 31,
2015
Net revenue from discontinued operations:
 
 
 
 
 
 
 
Demandforce
$
24

 
$
30

 
$
49

 
$
61

QuickBase
20

 
17

 
40

 
34

Quicken
12

 
12

 
26

 
25

Total net revenue from discontinued operations
$
56

 
$
59

 
$
115

 
$
120

 
 
 
 
 
 
 
 
Income (loss) from discontinued operations before income taxes:
 
 
 
 
 
 
 
Demandforce
$
(6
)
 
$
(14
)
 
$
(10
)
 
$
(28
)
QuickBase
2

 
4

 
6

 
7

Quicken
(5
)
 
1

 
(1
)
 
7

Total loss from discontinued operations before income taxes
$
(9
)
 
$
(9
)
 
$
(5
)
 
$
(14
)
 
 
 
 
 
 
 
 
Net income (loss) from discontinued operations:
 
 
 
 
 
 
 
Net loss from Demandforce operations
$
(3
)
 
$
(10
)
 
$
(6
)
 
$
(19
)
Net income from QuickBase operations
1

 
3

 
4

 
5

Net income (loss) from Quicken operations
(3
)
 
1

 
—

 
5

Tax expense from discontinued operations
—

 
—

 
(3
)
 
—

Total net loss from discontinued operations
$
(5
)
 
$
(6
)
 
$
(5
)
 
$
(9
)



16

5.
Current Liabilities
Unsecured Revolving Credit Facility
On February 17, 2012 we entered into an agreement with certain institutional lenders for a $500 million unsecured revolving credit facility that will expire on February 17, 2017. We may, subject to certain customary conditions, on one or more occasions increase commitments under the facility in an amount not to exceed $250 million in the aggregate. Advances under the unsecured revolving credit facility accrue interest at rates that are equal to, at our election, either JP Morgan's alternate base rate plus a margin that ranges from 0.0% to 0.5% or London Interbank Offered Rate (LIBOR) plus a margin that ranges from 0.9% to 1.5% . Actual margins under either election are based on our senior debt credit ratings. The agreement includes customary affirmative and negative covenants, including financial covenants that require us to maintain a ratio of total debt to annual earnings before interest, taxes, depreciation and amortization (EBITDA) of not greater than 3.25 to 1.00 as of any date and a ratio of annual EBITDA to interest payable of not less than 3.00 to 1.00 as of the last day of each fiscal quarter. We remained in compliance with these covenants at all times during the quarter ended January 31, 2016 . As of January 31, 2016 , there was $745 million in outstanding borrowings on this credit facility, of which $245 million was considered short term.
Other Current Liabilities
Other current liabilities were as follows at the dates indicated:
(In millions)
January 31,
2016
 
July 31,
2015
Reserve for product returns
$
50

 
$
12

Reserve for rebates
40

 
12

Current portion of license fee payable
10

 
10

Current portion of deferred rent
3

 
8

Interest payable
11

 
10

Executive deferred compensation plan liabilities
59

 
63

Other
35

 
35

Total other current liabilities
$
208

 
$
150

The balances of several of our other current liabilities, particularly our reserves for product returns and rebates, are affected by the seasonality of our business. See Note 1, “Description of Business and Summary of Significant Accounting Policies – Seasonality,” for more information.


6.
Long-Term Obligations and Commitments
Long-Term Debt
Unsecured Revolving Credit Facility
We have an unsecured revolving credit facility that will expire on February 17, 2017. As of January 31, 2016 , there was $745 million in outstanding borrowings on this credit facility, of which $500 million was considered long term. See Note 5, “Current Liabilities,” for more information.
Senior Unsecured Notes
On March 12, 2007 we issued $500  million of 5.75% senior unsecured notes due on March 15, 2017 (the Notes). We carried the Notes at face value less the unamortized discount in long-term debt on our balance sheets at January 31, 2016 and July 31, 2015 . The Notes are redeemable by Intuit at any time, subject to a make-whole premium, and include covenants that limit our ability to grant liens on our facilities and to enter into sale and leaseback transactions, subject to significant allowances. Interest on the Notes is payable semi-annually on March 15 and September 15. We paid $14  million in cash for interest on the Notes during the six months ended January 31, 2016 and $14 million in cash for interest on the Notes during the six months ended January 31, 2015 .


17

Other Long-Term Obligations
Other long-term obligations were as follows at the dates indicated:
(In millions)
January 31,
2016
 
July 31,
2015
Total deferred rent
$
54

 
$
49

Total license fee payable
35

 
34

Long-term income tax liabilities
47

 
45

Long-term deferred income tax liabilities
5

 
50

Other
11

 
13

Total long-term obligations
152

 
191

Less current portion (included in other current liabilities)
(14
)
 
(19
)
Long-term obligations due after one year
$
138

 
$
172

Operating Lease Commitments
We describe our operating lease commitments in Note 9 to the financial statements in Item 8 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2015 . In January 2016 we completed the purchase of certain leased facilities for $262 million in cash. The lease on these facilities was scheduled to expire in July 2017 and the remaining operating lease commitment was not significant. There were no other significant changes in our operating lease commitments during the first six months of fiscal 2016 .


7.
Income Taxes
Adoption of ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”
In the second quarter of fiscal 2016, we elected to early adopt ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes,” on a prospective basis . This new standard requires all deferred tax assets and liabilities, and any related valuation allowance, to be classified as noncurrent on the balance sheet. Prior periods were not adjusted.
Effective Tax Rate
We compute our provision for or benefit from income taxes by applying the estimated annual effective tax rate to income or loss from recurring operations and adding the effects of any discrete income tax items specific to the period.
In December 2015 the Consolidated Appropriations Act, 2016 was signed into law. The Act includes a permanent reinstatement of the federal research and experimentation credit that was retroactive to January 1, 2015. We recorded a discrete tax benefit of approximately $ 12 million for the retroactive effect during the second quarter of fiscal 2016.
We recorded a $1 million tax benefit on income of $28 million for the three months ended January 31, 2016 . Our effective tax rate for the six months ended January 31, 2016 was approximately 87% . Excluding discrete tax items primarily related to the permanent reinstatement of the federal research and experimentation credit, as well as including the effects of losses in certain jurisdictions where we do not recognize a tax benefit, our effective tax rate for those periods was approximately 35% and did not differ significantly from the federal statutory rate of 35% . Tax expense related to share-based compensation, state income taxes, and the effects of losses in certain jurisdictions where we do not recognize a tax benefit were partially offset by the benefit we received from the domestic production activities deduction and the federal research and experimentation credit.
Our effective tax rates for the three and six months ended January 31, 2015 were approximately 37% and 33% . Excluding discrete tax items primarily related to the reinstatement of the federal research and experimentation credit, as well as including the effects of losses in certain jurisdictions where we do not recognize a tax benefit, our effective tax rate for those periods was approximately 36% and did not differ significantly from the federal statutory rate of 35% . Tax expense related to share-based compensation, state income taxes, and the effects of losses in certain jurisdictions where we do not recognize a tax benefit were partially offset by the benefit we received from the domestic production activities deduction and the federal research and experimentation credit.
Unrecognized Tax Benefits and Other Considerations
The total amount of our unrecognized tax benefits at July 31, 2015 was $56  million. Net of related deferred tax assets, unrecognized tax benefits were $37  million at that date. If we were to recognize these net benefits, our income tax expense

18

would reflect a favorable net impact of $37 million. There were no material changes to these amounts during the six months ended January 31, 2016 . We do not believe that it is reasonably possible that there will be a significant increase or decrease in our unrecognized tax benefits over the next 12 months.

8.
Stockholders’ Equity
Stock Repurchase Programs and Treasury Shares
Intuit’s Board of Directors has authorized a series of common stock repurchase programs. Shares of common stock repurchased under these programs become treasury shares. We repurchased 19.1 million shares for $1.7 billion under these programs during the six months ended January 31, 2016 . We repurchased 7.5 million shares for $668 million under these programs during the six months ended January 31, 2015 . At January 31, 2016 , we had authorization from our Board of Directors to expend up to an additional $900  million for stock repurchases through May 19, 2019 . Future stock repurchases under the current program are at the discretion of management, and authorization of future stock repurchase programs is subject to the final determination of our Board of Directors.
Our treasury shares are repurchased at the market price on the trade date; accordingly, all amounts paid to reacquire these shares have been recorded as treasury stock on our balance sheets. Repurchased shares of our common stock are held as treasury shares until they are reissued or retired. When we reissue treasury stock, if the proceeds from the sale are more than the average price we paid to acquire the shares we record an increase in additional paid-in capital. Conversely, if the proceeds from the sale are less than the average price we paid to acquire the shares, we record a decrease in additional paid-in capital to the extent of increases previously recorded for similar transactions and a decrease in retained earnings for any remaining amount.
In the past we have satisfied option exercises and restricted stock unit vesting under our employee equity incentive plans by reissuing treasury shares, and we may do so again in the future. During the second quarter of fiscal 2014 we began issuing new shares of common stock to satisfy option exercises and RSU vesting under our 2005 Equity Incentive Plan. We have not yet determined the ultimate disposition of the shares that we have repurchased in the past, and consequently we continue to hold them as treasury shares.
Dividends on Common Stock
During the six months ended January 31, 2016 we declared and paid quarterly cash dividends that totaled $0.60 per share of outstanding common stock or $163 million. In February 2016 our Board of Directors declared a quarterly cash dividend of $0.30 per share of outstanding common stock payable on April 18, 2016 to stockholders of record at the close of business on April 11, 2016 . Future declarations of dividends and the establishment of future record dates and payment dates are subject to the final determination of our Board of Directors.
Share-Based Compensation Expense
The following table summarizes the total share-based compensation expense that we recorded in operating income (loss) from continuing operations for the periods shown.
 
Three Months Ended
 
Six Months Ended
(In millions, except per share amounts)
January 31,
2016
 
January 31,
2015
 
January 31,
2016
 
January 31,
2015
Cost of revenue
$
2

 
$
1

 
$
4

 
$
2

Selling and marketing
18

 
17

 
37

 
33

Research and development
21

 
18

 
42

 
37

General and administrative
24

 
20

 
49

 
41

Total share-based compensation expense
65

 
56

 
132

 
113

Income tax benefit
(20
)
 
(18
)
 
(40
)
 
(36
)
Decrease in net income or increase in net loss from
continuing operations
$
45

 
$
38

 
$
92

 
$
77

Decrease in net income or increase in net loss per share:
 
 
 
 

 

Basic
$
0.17

 
$
0.13

 
$
0.34

 
$
0.27

Diluted
$
0.17

 
$
0.13

 
$
0.34

 
$
0.27

We capitalized $3 million in share-based compensation related to internal use software projects during the six months ended January 31, 2016 . The table above also excludes share-based compensation expense for our discontinued operations, which totaled $5 million during the six months ended January 31, 2016 and $9 million during the six months ended January 31, 2015 .

19

Because we have not reclassified our statements of cash flows to segregate discontinued operations, these amounts are included in share-based compensation expense on our statements of cash flows for those periods.
Share-Based Awards Available for Grant
A summary of share-based awards available for grant under our 2005 Equity Incentive Plan for the six months ended January 31, 2016 was as follows:
(Shares in thousands)
Shares
Available
for Grant
Balance at July 31, 2015
17,183

Options granted
(9
)
Restricted stock units granted (1)
(681
)
Share-based awards canceled/forfeited/expired (1)(2)
2,740

Balance at January 31, 2016
19,233

________________________________
(1)
RSUs granted from the pool of shares available for grant under our 2005 Equity Incentive Plan reduce the pool by 2.3 shares for each share granted. RSUs forfeited and returned to the pool of shares available for grant increase the pool by 2.3 shares for each share forfeited.
(2)
Stock options and restricted stock units canceled, expired or forfeited under our 2005 Equity Incentive Plan are returned to the pool of shares available for grant. Stock options and restricted stock units canceled, expired or forfeited under older expired plans are not returned to the pool of shares available for grant.
Stock Option Activity and Related Share-Based Compensation Expense
A summary of stock option activity for the six months ended January 31, 2016 was as follows:
 
Options Outstanding
(Shares in thousands)
Number
of Shares
 
Weighted
Average
Exercise
Price
Per Share
Balance at July 31, 2015
8,713

 
$
69.13

Granted
9

 
94.88

Exercised
(999
)
 
46.65

Canceled or expired
(293
)
 
74.11

Balance at January 31, 2016
7,430

 
$
71.98

 
 
 
 
Exercisable at January 31, 2016
4,043

 
$
55.13

At January 31, 2016 , there was approximately $48  million of unrecognized compensation cost related to non-vested stock options that we expect to recognize as expense in the future. We will adjust unrecognized compensation cost for future changes in estimated forfeitures. We expect to recognize that cost over a weighted average vesting period of two  years.

20

Restricted Stock Unit Activity and Related Share-Based Compensation Expense
A summary of restricted stock unit activity for the six months ended January 31, 2016 was as follows:
 
Restricted Stock Units
(Shares in thousands)
Number
of Shares
 
Weighted
Average
Grant Date
Fair Value
Nonvested at July 31, 2015
8,916

 
$
76.64

Granted
296

 
96.50

Vested
(796
)
 
68.44

Forfeited
(1,032
)
 
69.71

Nonvested at January 31, 2016
7,384

 
$
79.29

At January 31, 2016 , there was approximately $339 million of unrecognized compensation cost related to non-vested RSUs that we expect to recognize as expense in the future. We will adjust unrecognized compensation cost for future changes in estimated forfeitures. We expect to recognize that cost over a weighted average vesting period of two  years.


9.
Litigation
In fiscal 2015 Intuit was contacted by regulatory authorities, including Congress, the Federal Trade Commission, the SEC, the Department of Justice and certain state Attorneys General, which are conducting inquiries in connection with the increase during the 2015 tax season in attempts by criminals using stolen identity information to file fraudulent tax returns and claim refunds at the state and federal levels. Intuit is cooperating with all such government inquiries, including formal requests for information. In addition, we are the subject of certain actions, including a consolidated putative class action lawsuit by individuals who claim to have suffered damages in connection with the foregoing events. We believe that the allegations contained within these lawsuits are without merit, and we intend to vigorously defend against them.
Intuit is subject to certain routine legal proceedings, including class action lawsuits like those described above, as well as demands, claims, government inquiries and threatened litigation, that arise in the normal course of our business, including assertions that we may be infringing patents or other intellectual property rights of others. We currently believe that, in addition to any amounts accrued, the amount of potential losses, if any, for any pending claims of any type (either alone or combined) will not have a material impact on our consolidated financial statements. The ultimate outcome of any litigation is uncertain and, regardless of outcome, litigation can have an adverse impact on Intuit because of defense costs, negative publicity, diversion of management resources and other factors. Our failure to obtain necessary license or other rights, or litigation arising out of intellectual property claims could adversely affect our business.


10.
Segment Information
We have defined three reportable segments, described below, based on factors such as how we manage our operations and how our chief operating decision maker views results. We define the chief operating decision maker as our Chief Executive Officer and our Chief Financial Officer. Our chief operating decision maker organizes and manages our business primarily on the basis of product and service offerings.
Small Business. Our Small Business segment includes the following offerings, which target small businesses and the accounting professionals who serve them.
•
QuickBooks financial and business management online services and desktop software; QuickBooks technical support; and financial supplies.
•
QuickBooks Accountant, QuickBooks Accountant Plus, and QuickBooks Online Accountant as well as the QuickBooks ProAdvisor Program, all of which are intended for the accounting professionals who serve small businesses.
•
Small business payroll products and services, including online payroll offerings such as Quickbooks Online Payroll and Intuit Online Payroll; desktop payroll offerings such as QuickBooks Basic Payroll and QuickBooks Enhanced Payroll; and full service payroll offerings such as Intuit Full Service Payroll and QuickBooks Assisted Payroll.

21

•
Payment processing services for small businesses, including merchant services such as credit and debit card processing; Web-based transaction processing services for online merchants; secure online payments for small businesses and their customers through the Intuit Commerce Network; GoPayment mobile payment processing services; and QuickBooks Point of Sale solutions.
Consumer Tax. Our Consumer Tax segment targets consumers and includes TurboTax income tax preparation products and services and electronic tax filing services.
Professional Tax. Our Professional Tax segment targets professional accountants in the U.S. and Canada and includes Lacerte, ProSeries, ProFile, and Intuit Tax Online professional tax preparation products and services, electronic tax filing services, bank product transmission services, and training services.
All of our segments operate primarily in the United States and sell primarily to customers in the United States. International total net revenue was less than 5% of consolidated total net revenue for all periods presented.
We include expenses such as corporate selling and marketing, product development, and general and administrative expenses and share-based compensation expenses, which are not allocated to specific segments, in unallocated corporate items. Unallocated corporate items also include amortization of acquired technology, amortization of other acquired intangible assets, and goodwill and intangible asset impairment charges.
The accounting policies of our reportable segments are the same as those described in the summary of significant accounting policies in Note 1 to the financial statements in Item 8 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2015 and in Note 1, "Description of Business and Summary of Significant Accounting Policies – Significant Accounting Policies" in this Quarterly Report on Form 10-Q. Except for goodwill and purchased intangible assets, we do not generally track assets by reportable segment and, consequently, we do not disclose total assets by reportable segment.
The following table shows our financial results by reportable segment for the periods indicated. Results for all periods presented have been adjusted to exclude results for our Demandforce, QuickBase, and Quicken businesses, which we classified as discontinued operations in the fourth quarter of fiscal 2015. See Note 4, “Discontinued Operations,” for more information.
 
Three Months Ended
 
Six Months Ended
(In millions)
January 31,
2016
 
January 31,
2015
 
January 31,
2016
 
January 31,
2015
Net revenue:
 
 
 
 
 
 
 
Small Business segment
$
564

 
$
525

 
$
1,110

 
$
1,044

Consumer Tax segment
275

 
213

 
332

 
270

Professional Tax segment
84

 
11

 
194

 
47

Total net revenue
$
923

 
$
749

 
$
1,636

 
$
1,361

 
 
 
 
 
 
 
 
Operating income (loss) from continuing operations:
 
 
 
 
 
 
 
Small Business segment
$
199

 
$
170

 
$
410

 
$
358

Consumer Tax segment
62

 
26

 
34

 
(10
)
Professional Tax segment
41

 
(37
)
 
113

 
(40
)
Total segment operating income
302

 
159

 
557

 
308

Unallocated corporate items:
 
 
 
 
 
 
 
Share-based compensation expense
(65
)
 
(56
)
 
(132
)
 
(113
)
Other common expenses
(188
)
 
(182
)
 
(397
)
 
(373
)
Amortization of acquired technology
(6
)
 
(7
)
 
(12
)
 
(14
)
Amortization of other acquired intangible assets
(1
)
 
(3
)
 
(3
)
 
(6
)
Total unallocated corporate items
(260
)
 
(248
)
 
(544
)
 
(506
)
Total operating income (loss) from continuing operations
$
42

 
$
(89
)
 
$
13

 
$
(198
)



22

11.
Subsequent Event
On February 1, 2016 we entered into a credit agreement with certain institutional lenders for a new five -year credit facility in an aggregate principal amount of $1.5 billion . The credit agreement replaces our February 2012 unsecured revolving credit facility which was due to expire on February 17, 2017 and was terminated on February 1, 2016. The new credit agreement provides for a $500 million unsecured term loan and a $1 billion unsecured revolving credit facility that will expire on February 1, 2021. We may, subject to certain customary conditions, on one or more occasions increase commitments under the credit facility in an amount not to exceed $750 million in the aggregate and may extend the maturity date of the unsecured revolving credit facility up to two times. Advances under the unsecured revolving credit facility accrue interest at rates that are equal to, at our election, either Bank of America's alternate base rate plus a margin that ranges from 0.0% to 0.5% or the London Interbank Offered Rate (LIBOR) plus a margin that ranges from 0.9% to 1.5% . The unsecured term loan accrues interest at rates that are equal to, at our election, either Bank of America's alternate base rate plus a margin that ranges from 0.125% to 0.875% or LIBOR plus a margin that ranges from 1.125% to 1.875% . Actual margins under all of these elections are based on our senior debt credit ratings. The credit agreement includes customary affirmative and negative covenants, including financial covenants that require us to maintain a ratio of total debt to annual earnings before interest, taxes, depreciation and amortization (EBITDA) of not greater than 3.25 to 1.00 as of any date and a ratio of annual EBITDA to annual interest expense of not less than 3.00 to 1.00 as of the last day of each fiscal quarter. The unsecured term loan is subject to quarterly principal payments of 2.5% of the loan amount beginning in July 2017, with the balance payable on the maturity date. On February 1, 2016 we borrowed $250 million on the unsecured revolving credit facility.



23

ITEM 2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) includes the following sections:
•
Executive Overview that discusses at a high level our operating results and some of the trends that affect our business.
•
Significant changes since our most recent Annual Report on Form 10-K in the Critical Accounting Policies and Estimates that we believe are important to understanding the assumptions and judgments underlying our financial statements.
•
Results of Operations that includes a more detailed discussion of our revenue and expenses.
•
Liquidity and Capital Resources which discusses key aspects of our statements of cash flows, changes in our balance sheets, and our financial commitments.
You should note that this MD&A discussion contains forward-looking statements that involve risks and uncertainties. Please see Item 1A in Part II of this Quarterly Report on Form 10-Q for important information to consider when evaluating such statements.
You should read this MD&A in conjunction with the financial statements and related notes in Part I, Item 1 of this Quarterly Report and our Annual Report on Form 10-K for the fiscal year ended July 31, 2015 . In the fourth quarter fiscal 2015 we determined that our Demandforce, QuickBase, and Quicken businesses became long-lived assets held for sale. We accounted for these businesses as discontinued operations and have therefore reclassified our statements of operations and balance sheets for all periods presented to reflect them as such. Because the cash flows of these discontinued operations were not material for any period presented, we have not segregated the cash flows of those businesses on our statements of cash flows. See “ Results of Operations – Discontinued Operations” later in this Item 2 for more information. Unless otherwise noted, the following discussion pertains only to our continuing operations.


Executive Overview
This overview provides a high-level discussion of our business and growth strategy as well as the trends, opportunities, challenges, and risks that affect our performance and operating results. Understanding our growth strategy and the trends that affect our business provides context for the discussion of financial results and future opportunities which follows this overview. This summary is not intended to be exhaustive, nor is it a substitute for the detailed discussion and analysis provided elsewhere in this Quarterly Report on Form 10-Q.
About Intuit
Intuit creates business and financial management solutions that help simplify the business of life for small businesses, consumers, and accounting professionals. We organize our businesses into three reportable segments – Small Business, Consumer Tax, and Professional Tax.

Small Business: This segment targets small businesses and the accounting professionals who serve them and includes QuickBooks financial and business management online services and desktop software, payroll solutions, and payment processing solutions.

Consumer Tax: This segment targets consumers and includes TurboTax income tax preparation products and services.

Professional Tax: This segment targets professional accountants in the U.S. and Canada and includes Lacerte, ProSeries, ProFile, and Intuit Tax Online professional tax products and services.
Our Growth Strategy
Based on our assessment of key technology and demographic trends – an increasingly borderless world, the prevalence of mobile devices, and the scalability of the cloud – we see significant opportunities to drive future growth by continuing to solve the unmet needs of small businesses, consumers, and accounting professionals. Our evolving growth strategy includes three key elements:

•
Focus on the product – we call it “Delivering awesome product experiences.” Computing devices are moving to the palm of our hands in the form of tablets and smart phones. Our TurboTax solutions, for example, let customers prepare

24
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and file their entire tax returns online, via tablet, mobile phone, or desktop computer. We also believe that a key factor in growing our customer base is delivering an amazing first-use experience so our customers can get the value they expect from our offerings as quickly and easily as possible.

•
Creating network effect platforms – we call it “Enabling the contributions of others.” We expect to solve problems faster and more efficiently for our growing base of customers by moving to more open platforms with application programming interfaces that enable the contributions of end users and third-party developers. One example of this is QuickBooks Online, which allows small business customers all over the world to localize, configure, and add value to the offering.

•
Leveraging our data for our customers' benefit – we call it “Using data to create delight.” Our customers generate valuable data that we seek to appropriately use to deliver better products and breakthrough benefits by eliminating the need to enter data, helping them make better decisions and improving transactions and interactions.
Industry Trends and Seasonality
Industry Trends
The industry in which we operate is dynamic and highly competitive, and we expect it to remain so in the future. The markets for software and related services, especially highly-available connected services, are characterized by rapid technological change, shifting customer needs, and frequent new product introductions and enhancements. Competitive interest and expertise in many of the markets we serve have grown markedly over the past few years and we expect this trend to continue. There are also large, cloud-based service companies who innovate quickly and serve small businesses and consumers. While today our competition with such companies may be limited, as we and those companies grow, our competition with them may increase. In recent years the widespread availability of the Internet, the emergence of mobile devices, and the explosion of social media have accelerated the pace of change and revolutionized the way that people throughout the world manage important financial tasks. The result is a global market that is shifting from traditional services that are paper-based, human-produced, and brick-and-mortar bound, to one where people understand, demand, and embrace the benefits of connected services. This trend toward connected services is the primary driver of the strategies in all of our businesses.
Seasonality
Our Consumer Tax offerings have significant seasonal patterns. As a result, during each of the last three fiscal years the total revenue for our third quarter ended April 30 has represented nearly half of our total revenue for those years. We expect the seasonality of our Consumer Tax business to continue to have a significant impact on our quarterly financial results in the future.
Key Challenges and Risks
Our growth strategy depends upon our ability to initiate and embrace disruptive technology trends, to enter new markets, and to drive broad adoption of the products and services we develop and market. Our future growth also increasingly depends on the strength of our third-party business relationships and our ability to continue to develop, maintain and strengthen new and existing relationships. To remain competitive and continue to grow, we are investing significant resources in our product development, marketing, and sales capabilities, and we expect to continue to do so in the future.
As we continue transitioning to offer more connected services, the ongoing operation and availability of our information technology and communication systems and those of our external service providers is becoming increasingly important. Because we help customers manage their financial lives, we face risks associated with the hosting, collection, use and retention of personal customer information and data. We are investing significant management attention and resources in our information technology infrastructure and in our privacy and security capabilities, and we expect to continue to do so in the future.
During the beginning of the 2015 calendar year, state taxing authorities, the IRS, and the tax preparation industry experienced an increase in attempts by criminals using stolen identity information to file fraudulent tax returns and claim refunds at the federal level and expanding into the state level. We implemented additional security measures in our products and began working with state governments to share information regarding suspicious filings while continuing to share such information with the federal government. During the current tax season, we expect continued efforts by criminals to attempt to access our customers’ accounts and to try to use stolen identities to obtain customer information and file fraudulent federal and state tax returns. We will continue to invest in security and to work with the broader industry and government to protect our customers against this type of fraud.
For a complete discussion of the most significant risks and uncertainties affecting our business, please see “Forward-Looking Statements and Risk Factors” in Item 1A of this Quarterly Report.

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Overview of Financial Results
The most important financial indicators that we use to assess our business are revenue growth for the company as a whole, for each reportable segment, and for product lines within each reportable segment; operating income growth and operating income margins for the company as a whole and for each reportable segment; earnings per share; and cash flow from operations. We also track certain non-financial drivers of revenue growth and, when material, identify them in the applicable discussions of segment results below. These non-financial drivers include, for example, customer growth and retention for all of our businesses and transaction volume for our payment processing business. Total credit and debit card transaction volume correlates strongly with the macroeconomic environment and is one of the key drivers of revenue growth in our payment processing business. Customers for our connected services offerings have generally grown faster than those for our traditional desktop software offerings, reflecting our strategic focus on connected services over the past few years. Connected services (total service and other revenue) generated $3.0 billion or 73% of our total revenue in fiscal 2015 , compared with about 50% of our total revenue seven years ago. We expect connected services revenue as a percentage of our total revenue to continue to grow in the future.
Total net revenue for the first six months of fiscal 2016 was $1.6 billion , an increase of 20% compared with the same period of fiscal 2015 . Revenue in our Consumer Tax segment grew 23% in the first six months of fiscal 2016 compared with the same period a year ago due to 23% growth in TurboTax Online federal units. The IRS began accepting federal income tax returns on January 19, 2016, which provided an extra weekend day in January for tax filers to process returns compared with the same period in fiscal 2015. Total net revenue growth was also affected by the changes that we made to our desktop software offerings in fiscal 2015. In fiscal 2015 we began delivering ongoing enhancements and certain connected services for our Professional Tax desktop software products and we plan to continue to provide them for all future versions of those products. Due to these changes, we recognize revenue for these offerings as services are provided through the end of each calendar year. Prior to these changes, we recognized a substantial portion of the revenue for these offerings during our third fiscal quarters ended April 30. As a result, revenue in our Professional Tax segment increased 309% to $194 million in the first six months of fiscal 2016 compared with the same period of fiscal 2015. Starting with the release of Quickbooks 2015 in the first quarter of fiscal 2015, and for all subsequent versions, we began delivering ongoing enhancements and certain connected services for our QuickBooks desktop software products. We plan to continue to provide ongoing enhancements and certain connected services for all future versions of these products. As a result of these changes, we recognize revenue for these QuickBooks desktop software products as services are provided over approximately three years. Revenue in our Small Business segment grew 6% in the first six months of fiscal 2016 compared with the same period of fiscal 2015 due to growth in QuickBooks Online and online payroll services and the impact of the changes to our QuickBooks desktop software products.
We recorded operating income from continuing operations of $13 million for the first six months of fiscal 2016 primarily due to the increase in revenue described above. Higher revenue was partially offset by higher costs and expenses, including higher spending for staffing, advertising and other marketing programs, and share-based compensation. We recorded an operating loss of $198 million for the first six months of fiscal 2015 primarily due to the impact of the changes to our desktop software offerings on fiscal 2015 revenue.
Net loss from continuing operations decreased 99% for the first six months of fiscal 2016 compared with the same period of fiscal 2015 due to the factors impacting operating income described above and a higher effective tax rate in the fiscal 2016 period. Basic and diluted net loss per share from continuing operations for the first six months of fiscal 2016 decreased 98% to $0.01 , in line with the decrease in the net loss for that period.
We ended the first six months of fiscal 2016 with cash, cash equivalents and investments totaling $334 million . During the first six months of fiscal 2016 we generated cash from operations, net sales of investments, borrowings under our unsecured revolving credit facility, and the issuance of common stock under employee stock plans. During the same period we used cash for the repurchase of shares of our common stock under our stock repurchase programs, the payment of cash dividends, and capital expenditures, including the purchase of certain previously leased facilities. At January 31, 2016 , we had authorization from our Board of Directors to expend up to an additional $900  million for stock repurchases through May 19, 2019 .


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Critical Accounting Policies and Estimates
In preparing our financial statements, we make estimates, assumptions and judgments that can have a significant impact on our net revenue, operating income or loss, and net income or loss, as well as on the value of certain assets and liabilities on our balance sheet. We believe that the estimates, assumptions and judgments involved in the accounting policies described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2015 have the greatest potential impact on our financial statements, so we consider them to be our critical accounting policies and estimates. We believe that there were no significant changes in those critical accounting policies and estimates during the first six months of fiscal 2016 . Senior management has reviewed the development and selection of our critical accounting policies and estimates and their disclosure in this Quarterly Report on Form 10-Q with the Audit and Risk Committee of our Board of Directors.


Results of Operations
Financial Overview
(Dollars in millions, except per share amounts)
Q2
FY16
 
Q2
FY15
 
$
Change
 
%
Change
 
YTD
Q2
FY16
 
YTD
Q2
FY15
 
$
Change
 
%
Change
Total net revenue
$
923

 
$
749

 
$
174

 
23
%
 
$
1,636

 
$
1,361

 
$
275

 
20
 %
Operating income (loss) from continuing operations
42

 
(89
)
 
131

 
NM

 
13

 
(198
)
 
211

 
NM

Net income (loss) from continuing operations
29

 
(60
)
 
89

 
NM

 
(2
)
 
(141
)
 
139

 
(99
)%
Basic and diluted net income (loss) per share from continuing operations
$
0.11

 
$
(0.21
)
 
$
0.32

 
NM

 
$
(0.01
)
 
$
(0.50
)
 
$
0.49

 
(98
)%
NM = Not meaningful.
Current Fiscal Quarter
Total net revenue for the second quarter of fiscal 2016 increased $174  million or 23% compared with the same quarter of fiscal 2015 . Revenue in our Consumer Tax segment increased 29% in the second quarter of fiscal 2016 due to 23% growth in TurboTax Online federal units. The IRS began accepting federal income tax returns on January 19, 2016, which provided an extra weekend day in January for tax filers to process returns compared with the same period in fiscal 2015. Total net revenue growth was also affected by the changes to our desktop software offerings described in “Executive Overview - Overview of Financial Results” above. In fiscal 2015 we began delivering ongoing enhancements and certain connected services for our Professional Tax desktop software products and we plan to continue to provide them for all future versions of those products. Due to these changes, we recognize revenue for these offerings as services are provided through the end of each calendar year. Prior to these changes, we recognized a substantial portion of the revenue for these offerings during our third fiscal quarters ended April 30. As a result, revenue in our Professional Tax segment increased 665% to $84 million in the second quarter of fiscal 2016. Revenue in our Small Business segment grew 7% in the second quarter of fiscal 2016 due growth in QuickBooks Online and online payroll services and the impact of the changes to our QuickBooks desktop software products. See “S egment Results” later in this Item 2 for more information about the results for all of our reportable segments.
We recorded operating income from continuing operations of $42 million for the second quarter of fiscal 2016 primarily due to the increase in revenue described above. Higher revenue was partially offset by higher costs and expenses, including higher spending for advertising and other marketing programs and share-based compensation. We recorded an operating loss from continuing operations of $89 million for the second quarter of fiscal 2015 primarily due to the impact of the changes to our desktop software offerings on fiscal 2015 revenue. See “ Operating Expenses” later in this Item 2 for more information.
We recorded net income from continuing operations of $29 million for the second quarter of fiscal 2016 due to the operating income described above. We recorded a n et loss from continuing operations of $60 million for the same quarter of fiscal 2015 due to the operating loss described above. Diluted net income per share from continuing operations for the second quarter of fiscal 2016 was $0.11 , compared with basic and diluted net loss per share from continuing operations of $0.21 for the same quarter of fiscal 2015.

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Fiscal Year to Date
Total net revenue for the first six months of fiscal 2016 increased $275 million or 20% compared with the same period of fiscal 2015. Revenue in our Consumer Tax segment grew 23% in the first six months of fiscal 2016 compared with the same period a year ago due to 23% growth in TurboTax Online federal units. The IRS began accepting federal income tax returns on January 19, 2016, which provided an extra weekend day in January for tax filers to process returns compared with the same period in fiscal 2015. Total net revenue growth was also affected by the changes to our desktop software offerings described in “Executive Overview - Overview of Financial Results” above. In fiscal 2015 we began delivering ongoing enhancements and certain connected services for our Professional Tax desktop software products and we plan to continue to provide them for all future versions of those products. Due to these changes, we recognize revenue for these offerings as services are provided through the end of each calendar year. Prior to these changes, we recognized a substantial portion of the revenue for these offerings during our third fiscal quarters ended April 30. As a result, revenue in our Professional Tax segment increased 309% to $194 million in the first six months of fiscal 2016. Revenue in our Small Business segment grew 6% in the first six months of fiscal 2016 due to growth in QuickBooks Online and online payroll services and the impact of the changes to our QuickBooks desktop software products. See “Segment Results” later in this Item 2 for more information about the results for all of our reportable segments.
We recorded operating income from continuing operations of $13 million for the first six months of fiscal 2016 primarily due to the increase in revenue described above. Higher revenue was partially offset by higher costs and expenses, including higher spending for staffing, advertising and other marketing programs, and share-based compensation. We recorded an operating loss from continuing operations of $198 million for the same period of fiscal 2015 primarily due to the impact of the changes to our desktop software offerings on fiscal 2015 revenue. See “Operating Expenses” later in this Item 2 for more information.
Net loss from continuing operations decreased 99% for the first six months of fiscal 2016 compared with the same period of fiscal 2015 due to the factors impacting operating income described above and a higher effective tax rate in the fiscal 2016 period. Basic and diluted net loss per share from continuing operations for the first six months of fiscal 2016 decreased 98% to $0.01 , in line with the decrease in the net loss for that period.
Segment Results
The information below is organized in accordance with our three reportable segments. See “Executive Overview – About Intuit” earlier in this Item 2 and Note 10 to the financial statements in Part I, Item 1 of this Quarterly Report for more information. All of our segments operate primarily in the United States and sell primarily to customers in the United States. International total net revenue was less than 5% of consolidated total net revenue for all periods presented.
Segment operating income or loss is segment net revenue less segment cost of revenue and operating expenses. See “Executive Overview – Industry Trends and Seasonality” earlier in this Item 2 for a description of the seasonality of our business. Segment expenses do not include certain costs, such as corporate selling and marketing, product development, and general and administrative expenses and share-based compensation expenses, which are not allocated to specific segments. These unallocated costs totaled $529 million in the first six months of fiscal 2016 and $486 million in the first six months of fiscal 2015 . Unallocated costs increased in the fiscal 2016 period due to increases in corporate product development and selling and marketing expenses in support of the growth of our businesses and to higher share-based compensation expenses. Segment expenses also do not include amortization of acquired technology, amortization of other acquired intangible assets, and goodwill and intangible asset impairment charges. See Note 10 to the financial statements in Part I, Item 1 of this Quarterly Report for reconciliations of total segment operating income or loss to consolidated operating income or loss for each fiscal period presented.
We calculate revenue growth rates and segment operating margin figures using dollars in thousands. Those results may vary slightly from figures calculated using the dollars in millions presented below.

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Small Business
(Dollars in millions)
Q2
FY16
 
Q2
FY15
 
%
Change
 
YTD
Q2
FY16
 
YTD
Q2
FY15
 
%
Change
Product revenue
$
178

 
$
180

 
(1
)%
 
$
344

 
$
367

 
(6
)%
Service and other revenue
386

 
345

 
12
 %
 
766

 
677

 
13
 %
Total segment revenue
$
564

 
$
525

 
7
 %
 
$
1,110

 
$
1,044

 
6
 %
% of total revenue
61
%
 
70
%
 
 
 
68
%
 
77
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment operating income
$
199

 
$
170

 
18
 %
 
$
410

 
$
358

 
15
 %
% of related revenue
35
%
 
32
%
 
 
 
37
%
 
34
%
 
 
Product revenue in our Small Business segment is derived primarily from QuickBooks desktop software products, including QuickBooks Pro, QuickBooks Premier, QuickBooks Accountant, and QuickBooks Enterprise Solutions; QuickBooks Basic Payroll and QuickBooks Enhanced Payroll; QuickBooks Point of Sale solutions; ProAdvisor Program subscriptions for the accounting professionals who serve small businesses; and financial supplies. Service and other revenue in our Small Business segment is derived primarily from QuickBooks Online, our hosted financial and business management offerings; QuickBooks Pro Plus, QuickBooks Premier Plus, and QuickBooks Accountant Plus, our subscription offerings; QuickBooks technical support plans; small business payroll services, including Quickbooks Online Payroll, Intuit Online Payroll, Intuit Full Service Payroll, and QuickBooks Assisted Payroll; and payment processing services for small businesses.
Small Business segment total net revenue increased $39  million or 7% in the second quarter of fiscal 2016 compared with the same quarter of fiscal 2015 . Small Business segment revenue growth was affected by the changes to our QuickBooks desktop offerings described in “Executive Overview - Overview of Financial Results” above. Small Business Online Ecosystem revenue grew 23%, driven by customer acquisition. QuickBooks Online subscribers grew 49% and online payroll customers grew 17%. Active online payments customers grew 5% and online payments charge volume grew 17%. In our Small Business Desktop Ecosystem revenue increased 3%. QuickBooks desktop revenue increased due to the impact of the changes to our QuickBooks desktop offerings. QuickBooks Enterprise Solutions revenue grew 24%. Desktop payments revenue decreased 14% during the second quarter of fiscal 2016 as we focused resources on core offerings for QuickBooks merchants and deemphasized certain non-QuickBooks payments offerings.
Small Business segment total net revenue increased $66 million or 6% in the first six months of fiscal 2016 compared with the same period of fiscal 2015 . Small Business segment revenue growth was affected by the changes to our QuickBooks desktop offerings described in “ Executive Overview - Overview of Financial Results” above. Small Business Online Ecosystem revenue grew 25%, driven by customer acquisition. QuickBooks Online subscribers grew 49% and online payroll customers grew 17%. Active online payments customers grew 5% and online payments charge volume grew 15%. In our Small Business Desktop Ecosystem revenue increased 1%. QuickBooks desktop revenue increased due to the impact of the changes to our QuickBooks desktop offerings. QuickBooks Enterprise Solutions revenue grew 27%. Desktop payments revenue decreased 12% during the first six months of fiscal 2016 as we focused resources on core offerings for QuickBooks merchants and deemphasized certain non-QuickBooks payments offerings.
Small Business segment operating income as a percentage of related revenue increased in the second quarter and first six months of fiscal 2016 compared with the same periods of fiscal 2015 . These increases were due to the higher revenue described above and relatively stable spending during the fiscal 2016 periods.

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Consumer Tax
(Dollars in millions)
Q2
FY16
 
Q2
FY15
 
%
Change
 
YTD
Q2
FY16
 
YTD
Q2
FY15
 
%
Change
Product revenue
$
13

 
$
6

 
133
%
 
$
23

 
$
17

 
39
%
Service and other revenue
262

 
207

 
27
%
 
309

 
253

 
22
%
Total segment revenue
$
275

 
$
213

 
29
%
 
$
332

 
$
270

 
23
%
% of total revenue
30
%
 
28
%
 
 
 
20
%
 
20
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment operating income (loss)
$
62

 
$
26

 
130
%
 
$
34

 
$
(10
)
 
NM

% of related revenue
22
%
 
13
%
 
 
 
10
%
 
(4
)%
 
 
NM = Not meaningful.
Consumer Tax segment product revenue is derived primarily from TurboTax desktop tax return preparation software. Consumer Tax segment service and other revenue is derived primarily from TurboTax Online tax return preparation services and electronic tax filing services. Due to the seasonal nature of our Consumer Tax business, we will not have substantially complete results for the 2015 tax season until the third quarter of fiscal 2016.
Consumer Tax segment total revenue increased $62 million or 23% in the first six months of fiscal 2016 compared with the same period of fiscal 2015 due to 23% growth in TurboTax Online federal units. The IRS began accepting federal income tax returns on January 19, 2016, which provided an extra weekend day in January for tax filers to process returns compared with the same period in fiscal 2015.
We recorded operating income of $34 million in our Consumer Tax segment for the first six months of fiscal 2016 due to the increase in revenue described above partially offset by higher expenses for staffing and advertising and other marketing programs. We recorded a seasonal operating loss of $10 million in our Consumer Tax segment for the same period of fiscal 2015.
Professional Tax
(Dollars in millions)
Q2
FY16
 
Q2
FY15
 
%
Change
 
YTD
Q2
FY16
 
YTD
Q2
FY15
 
%
Change
Product revenue
$
73

 
$
9

 
683
%
 
$
168

 
$
39

 
323
%
Service and other revenue
11

 
2

 
563
%
 
26

 
8

 
238
%
Total segment revenue
$
84

 
$
11

 
665
%
 
$
194

 
$
47

 
309
%
% of total revenue
9
%
 
2
 %
 
 
 
12
%
 
3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment operating income (loss)
$
41

 
$
(37
)
 
NM

 
$
113

 
$
(40
)
 
NM

% of related revenue
48
%
 
(346
)%
 
 
 
58
%
 
(86
)%
 
 
NM = Not meaningful.
Professional Tax segment product revenue is derived primarily from Lacerte, ProSeries, and ProFile desktop tax preparation software products. Professional Tax segment service and other revenue is derived primarily from Intuit Tax Online tax return preparation, bank products, and related services that complement the tax return preparation process. Due to the seasonal nature of our Professional Tax business, we will not have substantially complete results for the 2015 tax season until the third quarter of fiscal 2016.
Professional Tax total net revenue increased $147 million or 309% in the first six months of fiscal 2016 compared with the same period of fiscal 2015 because of the changes to our desktop software offerings described in “Executive Overview - Overview of Financial Results” above. In fiscal 2015 we began delivering ongoing enhancements and certain connected services for our Professional Tax desktop software products and we plan to continue to provide them for all future versions of those products. As a result of these changes, we recognize revenue for these offerings as services are provided through the end of each calendar year. Prior to these changes, we recognized a substantial portion of the revenue for these offerings during our third fiscal quarters ended April 30.

30

We recorded operating income of $113 million in our Professional Tax segment for the first six months of fiscal 2016 due to the increase in revenue described above and relatively stable spending during the fiscal 2016 period. We recorded a seasonal operating loss of $40 million in our Professional Tax segment for the same period of fiscal 2015.
Cost of Revenue
(Dollars in millions)
Q2
FY16
 
% of
Related
Revenue
 
Q2
FY15
 
% of
Related
Revenue
 
YTD
Q2
FY16
 
% of
Related
Revenue
 
YTD
Q2
FY15
 
% of
Related
Revenue
Cost of product revenue
$
40

 
15
%
 
$
42

 
22
%
 
$
69

 
13
%
 
$
75

 
18
%
Cost of service and other revenue
153

 
23
%
 
139

 
25
%
 
284

 
26
%
 
258

 
28
%
Amortization of acquired technology
6

 
n/a

 
7

 
n/a

 
12

 
n/a

 
14

 
n/a

Total cost of revenue
$
199

 
22
%
 
$
188

 
25
%
 
$
365

 
22
%
 
$
347

 
25
%
Cost of product revenue as a percentage of product revenue decreased in the second quarter and first six months of fiscal 2016 compared with the same periods of fiscal 2015 due to the changes to our Professional Tax and QuickBooks desktop software products described in “ Executive Overview - Overview of Financial Results” earlier in this Item 2. We expense costs of product revenue as they are incurred for delivered software and we do not defer any of these costs when product revenue is deferred. Cost of service and other revenue as a percentage of service and other revenue decreased in the second quarter and first six months of fiscal 2016 compared with the same periods of fiscal 2015 due to growth in connected service offerings such as Turbotax Online and QuickBooks Online. Online revenues have relatively lower costs of revenue compared with our other service offerings.
Operating Expenses
(Dollars in millions)
Q2
FY16
 
% of
Total
Net
Revenue
 
Q2
FY15
 
% of
Total
Net
Revenue
 
YTD
Q2
FY16
 
% of
Total
Net
Revenue
 
YTD
Q2
FY15
 
% of
Total
Net
Revenue
Selling and marketing
$
356

 
39
%
 
$
344

 
46
%
 
$
600

 
37
%
 
$
595

 
44
%
Research and development
205

 
22
%
 
188

 
25
%
 
418

 
26
%
 
377

 
28
%
General and administrative
120

 
13
%
 
115

 
16
%
 
237

 
14
%
 
234

 
17
%
Amortization of other acquired intangible assets
1

 
—
%
 
3

 
—
%
 
3

 
—
%
 
6

 
—
%
Total operating expenses
$
682

 
74
%
 
$
650

 
87
%
 
$
1,258

 
77
%
 
$
1,212

 
89
%
Current Fiscal Quarter
Total operating expenses as a percentage of total net revenue decreased to 74% in the second quarter of fiscal 2016 from 87% in the same quarter of fiscal 2015 . Total net revenue for the second quarter of fiscal 2016 increased $174  million or 23% and total operating expenses for that quarter increased $32  million. Total net revenue growth was affected by the changes to our desktop software offerings described in “Executive Overview - Overview of Financial Results” earlier in this Item 2. Operating expenses increased about $16 million for advertising and other marketing programs and about $8 million for share-based compensation expenses. Share-based compensation expenses were higher in the fiscal 2016 quarter due to our assumption of certain equity awards in connection with business combinations. Share-based compensation expenses have also been increasing over time because the market price of our common stock has generally been increasing.
Fiscal Year to Date
Total operating expenses as a percentage of total net revenue decreased to 77% in the first six months of fiscal 2016 from 89% in the same period of fiscal 2015. Total net revenue for the first six months of fiscal 2016 increased $275 million or 20% and total operating expenses for that period increased $46 million. Total net revenue growth was affected by the changes to our

31

desktop software offerings described in “Executive Overview - Overview of Financial Results” earlier in this Item 2. Staffing expenses increased about $13 million due to higher headcount. Operating expenses also increased about $8 million for advertising and other marketing programs and about $17 million for share-based compensation expenses. Share-based compensation expenses increased due to our assumption of certain equity awards in connection with business combinations. Share-based compensation expenses have also been increasing over time because the market price of our common stock has generally been increasing.
Non-Operating Income and Expenses
Interest Expense
Interest expense of $16 million for the first six months of fiscal 2016 consisted primarily of interest on our senior notes and the outstanding balance on our unsecured revolving credit facility. Interest expense of $14 million for the first six months of fiscal 2015 consisted primarily of interest on our senior notes. See Note 5 and Note 6 to the financial statements in Part I, Item 1 of this Quarterly Report for more information.
Interest and Other Income, Net
 
Three Months Ended
 
Six Months Ended
(In millions)
January 31,
2016
 
January 31,
2015
 
January 31,
2016
 
January 31,
2015
Interest income
$
—

 
$
2

 
$
—

 
$
4

Net gain (loss) on executive deferred compensation plan assets
(4
)
 
—

 
(6
)
 
1

Other
(1
)
 
—

 
(3
)
 
(3
)
Total interest and other income (expense), net
$
(5
)
 
$
2

 
$
(9
)
 
$
2

Interest income in the second quarter and first six months of fiscal 2016 was lower compared with the same periods of fiscal 2015 due to lower average invested balances and lower average interest rates. In accordance with authoritative guidance, we record gains and losses associated with executive deferred compensation plan assets in interest and other income and gains and losses associated with the related liabilities in operating expenses. The total amounts recorded in operating expenses for each period are approximately equal to the total amounts recorded in interest and other income in those periods.
Income Taxes
In the second quarter of fiscal 2016, we elected to early adopt ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes,” on a prospective basis . This new standard requires all deferred tax assets and liabilities, and any related valuation allowance, to be classified as noncurrent on the balance sheet. Prior periods were not adjusted.
We compute our provision for or benefit from income taxes by applying the estimated annual effective tax rate to income or loss from recurring operations and adding the effects of any discrete income tax items specific to the period.
In December 2015 the Consolidated Appropriations Act, 2016 was signed into law. The Act includes a permanent reinstatement of the federal research and experimentation that was retroactive to January 1, 2015. We recorded a discrete tax benefit of approximately $ 12 million for the retroactive effect during the second quarter of fiscal 2016.
We recorded a $1 million tax benefit on income of $28 million for the second quarter of fiscal 2016. Our effective tax rate for the first six months of fiscal 2016 was approximately 87% . Excluding discrete tax items primarily related to the permanent reinstatement of the federal research and experimentation credit, as well as including the effects of losses in certain jurisdictions where we do not recognize a tax benefit, our effective tax rate for those periods was approximately 35% and did not differ significantly from the federal statutory rate of 35% .
Our effective tax rates for the second quarter and first six months of fiscal 2015 were approximately 37% and 33% . Excluding discrete tax items primarily related to the reinstatement of the federal research and experimentation credit, as well as including the effects of losses in certain jurisdictions where we do not recognize a tax benefit, our effective tax rate for those periods was approximately 36% and did not differ significantly from the federal statutory rate of 35% . See Note 7 to the financial statements in Part I, Item 1 of this Quarterly Report for more information.

32

Discontinued Operations
In the fourth quarter of fiscal 2015 we determined that our Demandforce, QuickBase, and Quicken businesses became long-lived assets held for sale and we classified them as discontinued operations. See Note 4 to the financial statements in Part I, Item 1 of this Quarterly Report for more information.

Liquidity and Capital Resources
Overview
At January 31, 2016 , our cash, cash equivalents and investments totaled $334 million , a decrease of $1.4 billion from July 31, 2015 due to the factors discussed under “Statements of Cash Flows” below. Our primary sources of liquidity have been cash from operations, which entails the collection of accounts receivable for products and services, and borrowings under our unsecured revolving credit facility. Our primary uses of cash have been for research and development programs, selling and marketing activities, capital projects, acquisitions of businesses, debt service costs, repurchases of our common stock under our stock repurchase programs, and the payment of cash dividends. As discussed in “Executive Overview – Industry Trends and Seasonality” earlier in this Item 2, our business is subject to significant seasonality. The balance of our cash, cash equivalents, and investments generally fluctuates with that seasonal pattern. We believe the seasonality of our business is likely to continue in the future.
The following table summarizes selected measures of our liquidity and capital resources at the dates indicated:
(Dollars in millions)
January 31,
2016
 
July 31,
2015
 
$
Change
 
%
Change
Cash, cash equivalents, and investments
$
334

 
$
1,697

 
$
(1,363
)
 
(80
)%
Long-term investments
28

 
27

 
1

 
4
 %
Short-term debt
245

 
—

 
245

 
NM

Long-term debt
1,000

 
500

 
500

 
100
 %
Working capital (deficit)
(882
)
 
816

 
(1,698
)
 
NM

Ratio of current assets to current liabilities
0.6 : 1

 
1.5 : 1

 
 
 
 
NM = Not meaningful.
We have historically generated significant cash from operations and we expect to continue to do so during the balance of fiscal 2016 . Approximately 51% of our cash, cash equivalents and investments at January 31, 2016 were located in the U.S. and none of those funds were restricted. Our unsecured revolving credit facility is available to us for general corporate purposes, including future acquisitions and stock repurchases. As of January 31, 2016 , there was $745 million in outstanding borrowings on this credit facility, of which $245 million was considered short term and $500 million was considered long term. See Note 5, Note 6, and Note 11 to the financial statements in Part I, Item 1 of this Quarterly Report for more information.
We evaluate, on an ongoing basis, the merits of acquiring technology or businesses, or establishing strategic relationships with and investing in other companies. Our strong liquidity profile enables us to respond nimbly to these types of opportunities.
Based on past performance and current expectations, we believe that our cash and cash equivalents, investments, and cash generated from operations will be sufficient to meet anticipated seasonal working capital needs, capital expenditure requirements, contractual obligations, commitments, debt service requirements, and other liquidity requirements associated with our operations for at least the next 12 months. We expect to return excess cash generated by operations to our stockholders through repurchases of our common stock and payment of cash dividends, after taking into account our operating and strategic cash needs.

33

Statements of Cash Flows
The following table summarizes selected items from our statements of cash flows for the first six months of fiscal 2016 and fiscal 2015 . See the financial statements in Part I, Item 1 of this Quarterly Report for complete statements of cash flows for those periods.
 
Six Months Ended
(Dollars in millions)
January 31,
2016
 
January 31,
2015
 
$
Change
Net cash provided by (used in):
 
 
 
 
 
Operating activities
$
109

 
$
247

 
$
(138
)
Investing activities
493

 
(35
)
 
528

Financing activities
(1,065
)
 
(558
)
 
(507
)
Effect of exchange rate changes on cash
(11
)
 
(21
)
 
10

Total decrease in cash and cash equivalents
$
(474
)
 
$
(367
)
 
$
(107
)
During the first six months of fiscal 2016 we generated cash from operations, net sales of investments, borrowings under our unsecured revolving credit facility, and the issuance of common stock under employee stock plans. During the same period we used cash for the repurchase of shares of our common stock under our stock repurchase programs, the payment of cash dividends, and capital expenditures, including the purchase of certain previously leased facilities. See Note 6 to the financial statements in Part I, Item 1 of this Quarterly Report for more information on the purchase of these facilities.
During the first six months of fiscal 2015 we generated cash from operations, net sales of investments, and the issuance of common stock under employee stock plans. During the same period we used cash for the repurchase of shares of our common stock under our stock repurchase programs, the payment of cash dividends, and capital expenditures.
Stock Repurchase Programs, Treasury Shares, and Dividends on Common Stock
As described in Note 8 to the financial statements in Part I, Item 1 of this Quarterly Report, during the first six months of fiscal 2016 we continued to repurchase shares of our common stock under repurchase programs that our Board of Directors has authorized. At January 31, 2016 , we had authorization from our Board of Directors to expend up to an additional $900  million for stock repurchases through May 19, 2019 . We currently expect to continue repurchasing our common stock on a quarterly basis; however, future stock repurchases under the current program are at the discretion of management, and authorization of future stock repurchase programs is subject to the final determination of our Board of Directors.
In the past we have satisfied option exercises and restricted stock unit vesting under our employee equity incentive plans by reissuing treasury shares, and we may do so again in the future. During the second quarter of fiscal 2014 we began issuing new shares of common stock to satisfy option exercises and RSU vesting under our 2005 Equity Incentive Plan. We have not yet determined the ultimate disposition of the shares that we have repurchased in the past, and consequently we continue to hold them as treasury shares.
During the first six months of fiscal 2016 we also continued to pay quarterly cash dividends on shares of our outstanding common stock. In February 2016 our Board of Directors declared a quarterly cash dividend of $0.30 per share of outstanding common stock payable on April 18, 2016 to stockholders of record at the close of business on April 11, 2016 . We currently expect to continue paying comparable cash dividends on a quarterly basis; however, future declarations of dividends and the establishment of future record dates and payment dates are subject to the final determination of our Board of Directors.
Credit Facilities
On February 17, 2012 we entered into an agreement with certain institutional lenders for a $500 million unsecured revolving credit facility that was to expire on February 17, 2017. We had the option, subject to certain customary conditions, on one or more occasions increase commitments under the facility in an amount not to exceed $250 million in the aggregate. See Note 5 to the financial statements in Part I, Item 1 of this Quarterly Report for a description of the key terms of this agreement, including the covenants. We remained in compliance with those covenants at all times during the quarter ended January 31, 2016 . We may use amounts borrowed under this credit facility for general corporate purposes, including future acquisitions. We monitor counterparty risk associated with the institutional lenders that are providing the credit facility. As of January 31, 2016 , there was $745 million in outstanding borrowings on this credit facility.
On February 1, 2016 we entered into a credit agreement with certain institutional lenders for a new five-year credit facility in an aggregate principal amount of $1.5 billion . The credit agreement replaces our February 2012 unsecured revolving credit

34

facility which was due to expire on February 17, 2017 and was terminated on February 1, 2016. The new credit agreement provides for a $500 million unsecured term loan and a $1 billion unsecured revolving credit facility that will expire on February 1, 2021. We may, subject to certain customary conditions, on one or more occasions increase commitments under the credit facility in an amount not to exceed $750 million in the aggregate and may extend the maturity date of the unsecured revolving credit facility up to two times. Advances under the unsecured revolving credit facility accrue interest at rates that are equal to, at our election, either Bank of America's alternate base rate plus a margin that ranges from 0.0% to 0.5% or the London Interbank Offered Rate (LIBOR) plus a margin that ranges from 0.9% to 1.5%. The unsecured term loan accrues interest at rates that are equal to, at our election, either Bank of America's alternate base rate plus a margin that ranges from 0.125% to 0.875% or LIBOR plus a margin that ranges from 1.125% to 1.875%. Actual margins under all of these elections are based on our senior debt credit ratings. The credit agreement includes customary affirmative and negative covenants, including financial covenants that require us to maintain a ratio of total debt to annual earnings before interest, taxes, depreciation and amortization (EBITDA) of not greater than 3.25 to 1.00 as of any date and a ratio of annual EBITDA to annual interest expense of not less than 3.00 to 1.00 as of the last day of each fiscal quarter. The unsecured term loan is subject to quarterly principal payments of 2.5% of the loan amount beginning in July 2017, with the balance payable on the maturity date. On February 1, 2016 we borrowed $250 million on the unsecured revolving credit facility.
Cash Held by Foreign Subsidiaries
Our cash, cash equivalents, and investments totaled $334 million at January 31, 2016 . Of this amount, approximately 49% was held by our foreign subsidiaries and subject to repatriation tax considerations. These foreign funds were located primarily in Canada, India, and the United Kingdom. We intend to permanently reinvest a significant portion of our earnings from foreign operations, and we currently do not anticipate that we will need funds generated from foreign operations to fund our domestic operations. In the event that funds from foreign operations are needed to fund operations in the United States, if U.S. taxes have not been previously provided on the related earnings we would provide for and pay additional U.S. taxes at the time we change our intention with regard to the reinvestment of those earnings.


Off-Balance Sheet Arrangements
At January 31, 2016 , we did not have any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.


Contractual Obligations
We presented our contractual obligations at July 31, 2015 in our Annual Report on Form 10-K for the fiscal year then ended. In January 2016 we completed the purchase of certain leased facilities for $262 million in cash. The lease was scheduled to expire in July 2017 and the remaining operating lease commitment was not significant. During the first six months of fiscal 2016 we also borrowed $745 million on our unsecured revolving credit facility. As of January 31, 2016, $245 million of that balance was considered short term and $500 million was considered long term. See Note 5 and Note 6 to the financial statements in Part I, Item 1 of this Quarterly Report and “ Credit Facilities” above for more information. There were no other significant changes to our contractual obligations during the first six months of fiscal 2016.

 
Recent Accounting Pronouncements
For a description of recent accounting pronouncements, if any, and the potential impact of these pronouncements on our consolidated financial statements, see Note 1 to the financial statements in Part I, Item 1 of this Quarterly Report.


35

ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Investment Risk
We actively monitor market conditions and developments specific to the securities in which we invest. We believe that we take a conservative approach to investing our funds in that we invest only in highly-rated securities and diversify our portfolio of investments. While we believe we take prudent measures to mitigate investment related risks, such risks cannot be fully eliminated because of market circumstances that are outside our control.
Our investments consist of instruments that meet quality standards that are consistent with our investment policy. This policy specifies that, except for direct obligations of the United States government, securities issued by agencies of the United States government, and money market funds, we diversify our investments by limiting our holdings with any individual issuer. We do not hold derivative financial instruments or European sovereign debt in our portfolio of investments. See Note 3 to the financial statements in Part I, Item 1 of this Quarterly Report for a summary of the cost and fair value of our investments by type of issue.
Interest Rate Risk
Our cash equivalents and investments are subject to market risk due to changes in interest rates. Interest rate movements affect the interest income we earn on cash equivalents and investments and the fair value of those investments. If the Federal Reserve Target Rate had increased by 25 basis points from the level of January 31, 2016 , the value of our investments at that date would have decreased by less than $1  million. If the Federal Reserve Target Rate had increased by 100 basis points from the level of January 31, 2016 , the value of our investments at that date would have decreased by approximately $1.8 million.
We are also exposed to the impact of changes in interest rates as they affect our unsecured revolving credit facility. Advances under the credit facility accrue interest at rates that are equal to JP Morgan's alternate base rate plus a margin that ranges from 0.0% to 0.5% or the London InterBank Offered Rate (LIBOR) plus a margin that ranges from 0.9% to 1.5%, in both cases based on our senior debt credit ratings. Consequently, our interest expense fluctuates with changes in the general level of these interest rates. At January 31, 2016 , $745 million was outstanding under the credit facility.
On March 12, 2007 we issued $500 million of 5.75% senior unsecured notes due on March 15, 2017. We carry the senior notes at face value less unamortized discount on our balance sheets. Since these senior notes bear interest at fixed rates, we have no financial statement risk associated with changes in interest rates. However, the fair value of this debt fluctuates when interest rates change. See Note 6 to the financial statements in Part I, Item 1 of this Quarterly Report for more information.
Impact of Foreign Currency Rate Changes
The functional currencies of our international operating subsidiaries are generally the local currencies. We translate the assets and liabilities of our foreign subsidiaries at the exchange rates in effect on the balance sheet date. We translate their revenue, costs and expenses at the average rates of exchange in effect during the period. We include translation gains and losses in the stockholders’ equity section of our balance sheets. We include net gains and losses resulting from foreign exchange transactions in interest and other income in our statements of operations.
Since we translate foreign currencies (primarily Canadian dollars, Indian rupees, and British pounds) into U.S. dollars for financial reporting purposes, currency fluctuations can have an impact on our financial results. The historical impact of currency fluctuations on our financial results has generally been immaterial. We believe that our exposure to currency exchange fluctuation risk is not significant primarily because our global subsidiaries invoice customers and satisfy their financial obligations almost exclusively in their local currencies. Although the impact of currency fluctuations on our financial results has generally been immaterial in the past and we believe that for the reasons cited above currency fluctuations will not be significant in the future, the impact of currency fluctuations could be material in the future. As of January 31, 2016 , we did not engage in foreign currency hedging activities.


36
Table of Contents

ITEM 4
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Based upon an evaluation of the effectiveness of disclosure controls and procedures, Intuit’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO) have concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures as defined under Exchange Act Rules 13a-15(e) and 15d-15(e) were effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission and is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
During our most recent fiscal quarter, there has not occurred any change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and that they are effective at the reasonable assurance level. However, no matter how well conceived and executed, a control system can provide only reasonable and not absolute assurance that the objectives of the control system are met. The design of any control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. There are also limitations that are inherent in any control system. These limitations include the realities that breakdowns can occur because of errors in judgment or mistakes, and that controls can be circumvented by individual persons, by collusion of two or more people, or by management override of the controls. Because of these inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.


37
Table of Contents

PART II
ITEM 1
LEGAL PROCEEDINGS
None.


ITEM 1A
RISK FACTORS

Forward-Looking Statements and Risk Factors
This Quarterly Report on Form 10-Q contains forward-looking statements. All statements in this report, other than statements that are purely historical, are forward-looking statements. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “forecast,” “estimate,” “seek,” and similar expressions also identify forward-looking statements. In this report, forward-looking statements include, without limitation, the following:
•
our expectations and beliefs regarding future conduct and growth of the business;
•
our beliefs and expectations regarding seasonality, competition and other trends that affect our business;
•
our expectation that we will solve problems faster and more efficiently for our growing base of customers by moving to more open platforms with application programming interfaces that enable the contributions of end users and third-party developers;
•
our expectation that we will expand our third party technology relationships and strategic partnerships as we continue to pursue our connected services strategy and expand our mobile and global offerings;
•
our expectation that we will continue to invest significant resources in our product development, marketing and sales capabilities;
•
our expectation that we will continue to invest significant management attention and resources in our information technology infrastructure and in our privacy and security capabilities;
•
our expectation that we will work with the broader industry and government to protect our customers from fraud;
•
our expectation that we will be able to protect our customers’ data and prevent third parties from using stolen customer information to perpetrate fraud in our tax and other offerings;
•
our belief that our recent financial performance has not been materially adversely affected by fraudulent activity or the actions we have taken to combat it;
•
our expectation that we will generate significant cash from operations;
•
our expectation that connected services revenue as a percentage of our total revenue will continue to grow;
•
our expectations regarding the development of future products, services, business models and technology platforms and our research and development efforts;
•
the assumptions underlying our critical accounting policies and estimates, including our estimates regarding product rebate and return reserves; the collectability of accounts receivable; stock volatility and other assumptions used to estimate the fair value of share-based compensation; the fair value of goodwill; and expected future amortization of acquired intangible assets;
•
our belief that the investments we hold are not other-than-temporarily impaired;
•
our belief that we take prudent measures to mitigate investment related risks;
•
our belief that our exposure to currency exchange fluctuation risk will not be significant in the future;
•
our assessments and estimates that determine our effective tax rate;
•
our belief that our income tax valuation allowance is sufficient;
•
our belief that it is not reasonably possible that there will be a significant increase or decrease in our unrecognized tax benefits over the next 12 months;
•
our intent to permanently reinvest a significant portion of our earnings from foreign operations, and our belief that we will not need funds generated from foreign operations to fund our domestic operations;

38
Table of Contents

•
our belief that our cash and cash equivalents, investments and cash generated from operations will be sufficient to meet our seasonal working capital needs, capital expenditure requirements, contractual obligations, debt service requirements and other liquidity requirements associated with our operations for at least the next 12 months;
•
our belief that our facilities are suitable and adequate for our near-term needs and that we will be able to locate additional facilities as needed;
•
our expectation that we will return excess cash generated by operations to our stockholders through repurchases of our common stock and the payment of cash dividends;
•
our assessments and beliefs regarding the future outcome of pending legal proceedings and inquiries by regulatory authorities, the liability, if any, that Intuit may incur as a result of those proceedings and inquiries, and the impact of any potential losses associated with such proceedings or inquiries on our financial statements.

We caution investors that forward-looking statements are only predictions based on our current expectations about future events and are not guarantees of future performance. We encourage you to read carefully all information provided in this Quarterly Report and in our other filings with the Securities and Exchange Commission before deciding to invest in our stock or to maintain or change your investment. These forward-looking statements are based on information as of the filing date of this Quarterly Report, and we undertake no obligation to revise or update any forward-looking statement for any reason.
Because forward-looking statements involve risks and uncertainties, there are important factors that may cause actual results to differ materially from those contained in the forward-looking statements. These factors include the following:
We face intense competitive pressures that may harm our operating results.
We face intense competition in all of our businesses, and we expect competition to remain intense in the future. Our competitors and potential competitors range from large and established entities to emerging start-ups. Our competitors may introduce superior products and services, reduce prices, have greater technical, marketing and other resources, have greater name recognition, have larger installed bases of customers, have well-established relationships with our current and potential customers, advertise aggressively or beat us to market with new products and services. In addition, we may face competition from existing companies, with large established consumer user-bases and broad-based platforms, who may change or expand the focus of their business strategies and marketing to target our customers, including small businesses and tax customers. We also face intensified competition from providers of free accounting, tax, payments, and other financial services. In order to compete, we have also introduced free offerings in several categories, but we may not be able to attract customers or effectively monetize all of these offerings, and customers who have formerly paid for Intuit’s products and services may elect to use free offerings instead. These competitive factors may diminish our revenue and profitability and harm our ability to acquire and retain customers.
Our consumer tax business also faces significant competition from the public sector, where we face the risk of federal and state taxing authorities developing software or other systems to facilitate tax return preparation and electronic filing at no charge to taxpayers. These or similar programs may be introduced or expanded in the future, which may cause us to lose customers and revenue. Although the Free File Alliance has kept the federal government from being a direct competitor to Intuit’s tax offerings, it has fostered additional online competition and may cause us to lose significant revenue opportunities. The current agreement with the Free File Alliance is scheduled to expire in October 2020. We anticipate that governmental encroachment at both the federal and state levels may present a continued competitive threat to our business for the foreseeable future.
Future revenue growth depends upon our ability to adapt to technological change and successfully introduce new and enhanced products, services and business models.
The software as a service, desktop software and mobile technology industries are characterized by rapidly changing technology, evolving industry standards and frequent new product introductions. As we continue to grow our software as a service, mobile and other offerings, we must continue to innovate and develop new products and features to meet changing customer needs and attract and retain talented software developers. We need to continue to develop our skills, tools and capabilities to capitalize on existing and emerging technologies, which require us to devote significant resources.
A number of our businesses also derive a significant amount of their sales from one-time upfront license fees and rely on customer upgrades and service offerings to generate a significant portion of their revenues. In addition, our consumer and professional tax businesses depend significantly on revenue from customers who return each year to use our updated tax preparation and filing software and services. As our existing products mature, encouraging customers to purchase product upgrades becomes more challenging unless new product releases provide features and functionality that have meaningful incremental value. If we are not able to develop and clearly demonstrate the value of new or upgraded products or services to our customers, our revenues may be harmed. In addition, as we continue to introduce and expand our new business models,

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including offerings that are subscription-based or that are free to end users, we may be unsuccessful in monetizing or increasing customer adoption of these offerings.
The number of people who access products and services through devices other than personal computers, including mobile phones, smartphones, and handheld computers such as tablets, continues to increase. We have devoted significant resources to develop products and services for users of these alternative devices, but the versions of our products and services developed for these devices may not be compelling to users. Even if we are able to attract new users through these mobile offerings, the amount of revenue that we derive per user from mobile offerings may be less than the revenue that we have historically derived from users of personal computers. As new devices and new platforms are continually being released, it is difficult to predict the problems we may encounter in developing versions of our products and services for use on these alternative devices and we may need to devote significant resources to the creation, support, and maintenance of such offerings. If we are slow to develop products and technologies that are compatible with these alternative devices, or if our competitors are able to achieve those results more quickly than us, we will fail to capture a significant share of an increasingly important portion of the market for online services, which could adversely affect our business.
In some cases, we may expend a significant amount of resources and management attention on offerings that do not ultimately succeed in their markets. We have encountered difficulty in launching new products and services in the past. If we misjudge customer needs in the future, our new products and services may not succeed and our revenues and earnings may be harmed. We have also invested, and in the future expect to invest, in new business models, geographies, strategies and initiatives. Such endeavors may involve significant risks and uncertainties, including distraction of management from current operations, expenses associated with the initiatives and inadequate return on investments. Because these new initiatives are inherently risky, they may not be successful and may harm our financial condition and operating results.
Business interruption or failure of our information technology and communication systems may impair the availability of our products and services, which may damage our reputation and harm our future financial results.
As we continue to transition our business to more connected services, we become more dependent on the continuing operation and availability of our information technology and communication systems and those of our external service providers, including, for example, third party Internet-based or “cloud” computing services. We do not have redundancy for all of our systems, many of our critical applications reside in only one of our data centers, and our disaster recovery planning may not account for all eventualities. In the event of significant system disruption we may experience loss of data or processing capabilities, which may cause us to lose customers and may materially harm our reputation and our operating results. In addition, we are in the process of updating our customer facing applications and the supporting information technology infrastructure to meet our customers’ expectations for continuous service availability. Any difficulties in upgrading these applications or infrastructure or failure of our systems or those of our third-party service providers may result in interruptions in our service, which may reduce our revenues and profits, cause us to lose customers and damage our reputation. Any prolonged interruptions at any time may result in lost customers, additional refunds of customer charges, negative publicity and increased operating costs, any of which may significantly harm our business, financial condition and results of operations.
We are in the process of migrating our applications and infrastructure to new data centers and to third party hosted environments. If we do not execute the transition to these new environments in an effective manner, we may experience unplanned service disruptions or unforeseen increases in costs which may harm our operating results and our business.
Our business operations, data centers, information technology and communications systems are vulnerable to damage or interruption from natural disasters, human error, malicious attacks, fire, power loss, telecommunications failures, computer viruses, computer denial of service attacks, terrorist attacks and other events beyond our control. The majority of our activities, our corporate headquarters, our principal information technology systems, and other critical business operations are located near major seismic faults. We do not carry earthquake insurance for direct quake-related losses. Our future financial results may be materially harmed in the event of a major earthquake or other natural or man-made disaster.
We rely on internal systems and external systems maintained by manufacturers, distributors and other service providers to take and fulfill customer orders, handle customer service requests and host certain online activities. Any interruption or failure of our internal or external systems may prevent us or our service providers from accepting and fulfilling customer orders or cause company and customer data to be unintentionally disclosed. Our continuing efforts to upgrade and expand our network security and other information systems as well as our high-availability capabilities may be costly, and problems with the design or implementation of system enhancements may harm our business and our results of operations.

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We host, collect, use and retain sensitive and personal customer information and data. A security breach resulting in third party access to this information and data could materially disrupt our businesses, result in the disclosure of confidential information, significantly damage our reputation and cause material losses.

We host, collect, use and retain large amounts of sensitive and personal customer information and data, including credit card information, tax return information, bank account numbers and passwords, personal and business financial data and transactions, social security numbers, healthcare information and payroll information. In addition, we collect and maintain sensitive and personal information of our employees in the ordinary course of our business. The volume of sensitive and personal information that we collect has been increasing and will continue to increase as we further transition our businesses to connected services. We and our vendors use commercially available security technologies to protect this information and data, and we also use security and business controls to limit access to and use of such sensitive and personal customer information and data. However, such measures cannot provide absolute security, and we have experienced instances in the past where criminals, using stolen identity information obtained outside of our systems, have gained unauthorized and illegal access to our customers’ data. As the accessibility of stolen identity information increases, we may experience additional instances of unauthorized and illegal access to our systems using our customers’ stolen identity information in the future. In addition, third parties may fraudulently induce employees, customers, or users to disclose sensitive information in order to gain access to our data or customers' data. The security measures that we implement may not be able to prevent access to our systems from unauthorized users who have fraudulently obtained our customers' personal information. In addition, because the techniques used to obtain unauthorized access change frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or implement adequate preventive measures. A major breach of our security measures or those of third parties that provide hosting services or have access to our sensitive and personal customer information may have serious negative consequences for our businesses, including possible fines, penalties and damages, reduced customer demand for our services, material harm to our reputation and brands, further regulation and oversight by federal or state agencies, and loss of our ability to provide financial transaction services or accept and process customer credit card orders or tax returns.

From time to time, we detect, or receive notices from customers or public or private agencies that they have detected, vulnerabilities in our servers, our software or third-party software components that are distributed with our products or fraudulent activity by unauthorized persons utilizing our products with stolen customer identity information. The existence of such vulnerabilities or fraudulent activity, even if they do not result in a security breach, may undermine customer confidence as well as the confidence of government agencies that we rely on to ensure that we can implement our offerings and require substantial resources to address, and we may not be able to discover or remediate such security vulnerabilities before they are exploited. In addition, our technologies, systems, and networks and our customers' devices have been subject to, and are likely to continue to be the target of, cyber attacks, computer viruses, worms, phishing attacks, malicious software programs and other information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of our customers' sensitive and personal information and data, or otherwise disrupt our or our customers' or other third parties' business operations. Although this is an industry-wide problem that affects software across platforms, it is increasingly affecting our offerings because cybercriminals tend to focus their efforts on well-known offerings that are popular among customers, and we expect them to continue to do so. If these cybercriminals are able to circumvent our security measures, or if we are unable to detect an intrusion into our systems and contain such intrusion in a reasonable amount of time, our customers' sensitive and personal information and data may be compromised.

In addition, our employees, contractors, temporary and seasonal employees may have access to sensitive and personal information of our customers and employees. While we conduct background checks of our employees and these other individuals and limit access to systems and data, it is possible that one or more of these individuals may circumvent these controls, resulting in a security breach. In addition, we rely on third party vendors to host certain of our sensitive and personal information and data. While we conduct due diligence on these third party partners with respect to their security and business controls, we may not have the ability to effectively monitor or oversee the implementation of these controls measures, and, in any event, individuals or third parties may be able to circumvent these security and business controls and/or exploit vulnerabilities that may exist in these controls, resulting in a loss of sensitive and personal customer or employee information and data.
If we are unable to develop, manage and maintain critical third party business relationships, our business may be adversely affected.
Our growth is dependent on the strength of our business relationships and our ability to continue to develop, maintain and leverage new and existing relationships. We rely on various third party partners, including software and service providers, suppliers, vendors, manufacturers, distributors, contractors, financial institutions, core processors, licensing partners and development partners, among others, in many areas of our business in order to deliver our offerings and operate our business. We also rely on third parties to support the operation of our business by maintaining our physical facilities, equipment, power systems and infrastructure. In certain instances, these third party relationships are sole source or limited source relationships

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and can be difficult to replace or substitute depending on the level of integration of the third party’s products or services into, or with, our offerings and/or the general availability of such third party’s products and services. In addition, there may be few or no alternative third party providers or vendors in the market. Further, there can be no assurance that we will be able to adequately retain third party contractors engaged to help us operate our business. The failure of third parties to provide acceptable and high quality products, services and technologies or to update their products, services and technologies may result in a disruption to our business operations and our customers, which may reduce our revenues and profits, cause us to lose customers and damage our reputation. Alternative arrangements and services may not be available to us on commercially reasonable terms or we may experience business interruptions upon a transition to an alternative partner.
In particular, we have relationships with banks, credit unions and other financial institutions that support certain critical services we offer to our customers. If macroeconomic conditions or other factors cause any of these institutions to fail, consolidate, stop providing certain services or institute cost-cutting efforts, our business and financial results may suffer and we may be unable to offer those services to our customers.
We have also started to increasingly utilize the distribution platforms of third parties like Apple's App Store and Google's Play Store for the distribution of certain of our product offerings. Although we benefit from the strong brand recognition and large user base of these distribution platforms to attract new customers, the platform owners have wide discretion to change the pricing structure, terms of service and other policies with respect to us and other developers. Any adverse changes by these third parties could adversely affect our financial results.

Increased government regulation of our businesses may harm our operating results.

The Company is subject to federal, state and local laws and regulations that affect the Company’s activities, including, without limitation, areas of labor, advertising, tax, financial services, data privacy and security requirements, digital content, consumer protection, real estate, billing, e-commerce, promotions, quality of services, intellectual property ownership and infringement, import and export requirements, anti-corruption, foreign exchange controls and cash repatriation restrictions, anti-competition, environmental, health and safety. There have been significant new regulations and heightened focus by the government on many of these areas, as well as in areas such as insurance and healthcare (including, for example, the Affordable Care Act). A s we expand our products and services and revise our business models, both domestically and internationally, we may become subject to additional government regulation or increased regulatory scrutiny. Further, regulators may adopt new laws or regulations or their interpretation of existing laws or regulations may differ from ours as well as the laws of other jurisdictions in which we operate. These regulatory requirements could impose significant limitations, require changes to our business, require notification to customers or employees of a security breach, restrict our use of personal information, or cause changes in customer purchasing behavior which may make our business more costly, less efficient or impossible to conduct, and may require us to modify our current or future products or services, which may harm our future financial results. For example, as our business continues to expand to new industry segments that may be more highly regulated for privacy and data security, and to countries outside the United States that have more strict data protection laws, our compliance requirements and costs may increase. We have incurred – and may continue to incur – significant expenses to comply with mandatory privacy and security standards and protocols imposed by law, regulation, industry standards or contractual obligations.

The tax preparation industry continues to receive heightened attention from federal and state governments. New legislation, regulation, public policy considerations, changes in the cybersecurity environment, litigation by the government or private entities, or new interpretations of existing laws may result in greater oversight of the tax preparation industry, restrict the types of products and services that we can offer or the prices we can charge, or otherwise cause us to change the way we operate our tax businesses or offer our tax products and services. We may not be able to respond quickly to such regulatory, legislative and other developments, and these changes may in turn increase our cost of doing business and limit our revenue opportunities. In addition, if our practices are not consistent with new interpretations of existing laws, we may become subject to lawsuits, penalties, and other liabilities that did not previously apply. We are also required to comply with a variety of state revenue agency standards in order to successfully operate our tax preparation and electronic filing services. Changes in state-imposed requirements by one or more of the states, including the required use of specific technologies or technology standards, may significantly increase the costs of providing those services to our customers and may prevent us from delivering a quality product to our customers in a timely manner.
If we fail to process transactions effectively or fail to adequately protect against disputed or potential fraudulent activities, our revenue and earnings may be harmed.
Our operations process a significant volume and dollar value of transactions on a daily basis, especially in our payroll and payments businesses. Due to the size and volume of transactions that we handle, effective processing systems and controls are essential to ensure that transactions are handled appropriately. Despite our efforts, it is possible that we may make errors or that funds may be misappropriated due to fraud. The systems supporting our business are comprised of multiple technology

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platforms that are difficult to scale. If we are unable to effectively manage our systems and processes we may be unable to process customer data in an accurate, reliable and timely manner, which may harm our business. In our payments processing service business, if merchants for whom we process payment transactions are unable to pay refunds due to their customers in connection with disputed or fraudulent merchant transactions, we may be required to pay those amounts and our payments may exceed the amount of the customer reserves we have established to make such payments.
If we are unable to effectively combat the increasing amount and sophistication of fraudulent activities by third parties using our offerings, we may suffer losses, which may be substantial, and lose the confidence of our customers and government agencies and our revenues and earnings may be harmed.
The online tax preparation, payroll administration and online payments industries have been experiencing an increasing amount of fraudulent activities by third parties, and those fraudulent activities are becoming increasingly sophisticated. Although we do not believe that any of this activity is uniquely targeted at our products or business, this type of fraudulent activity may adversely impact our consumer tax, payroll, and payments businesses. In addition to any losses that may result from such fraud, which may be substantial, a loss of confidence by our customers or by governmental agencies in our ability to prevent fraudulent activity that is perpetrated through our offerings may seriously harm our business and damage our brand. If we cannot adequately combat such fraudulent activity that is perpetrated through our tax offerings, state or federal tax authorities may refuse to allow us to continue to process our customers’ tax returns electronically, resulting in a significant adverse impact on our earnings and revenue. As fraudulent activities become more pervasive and increasingly sophisticated, and fraud detection and prevention measures must become correspondingly more complex to combat them across the various industries in which we operate, we may implement risk control mechanisms that could make it more difficult for legitimate customers to obtain and use our products, which could result in lost revenue and negatively impact our earnings.
Third parties claiming that we infringe their proprietary rights may cause us to incur significant legal expenses and prevent us from selling our products.
We may become increasingly subject to infringement claims, including patent, copyright, trade secret, and trademark infringement claims. Litigation may be necessary to determine the validity and scope of the intellectual property rights of others. We have received a number of allegations of intellectual property infringement claims in the past and expect to receive more claims in the future based on allegations that our offerings infringe upon the intellectual property held by third parties. Some of these claims are the subject of pending litigation against us and against some of our customers. These claims may involve patent holding companies or other adverse intellectual property owners who have no relevant product revenues of their own, and against whom our own intellectual property may provide little or no deterrence. The ultimate outcome of any allegation is uncertain and, regardless of outcome, any such claim, with or without merit, may be time consuming to defend, result in costly litigation, divert management’s time and attention from our business, require us to stop selling, delay shipping or redesign our products, or require us to pay monetary damages for royalty or licensing fees, or to satisfy indemnification obligations that we have with some of our customers. Our failure to obtain necessary license or other rights, or litigation arising out of intellectual property claims may harm our business.
We rely on third party intellectual property in our products and services.
Many of our products and services include intellectual property of third parties, which we license under agreements that may need to be renewed or renegotiated from time to time. We may not be able to obtain licenses to these third party technologies or content on reasonable terms, or at all. If we are unable to obtain the rights necessary to use this intellectual property in our products and services, we may not be able to sell the affected offerings, and customers who are currently using the affected product may be disrupted, which may in turn harm our future financial results, damage our brand, and result in customer loss. Also, we and our customers have been and may continue to be subject to infringement claims as a result of the third party intellectual property incorporated in to our offerings. Although we try to mitigate this risk and we may not be ultimately liable for any potential infringement, pending claims require us to use significant resources, require management attention and could result in loss of customers.
Some of our offerings include third-party software that is licensed under so-called “open source” licenses, some of which may include a requirement that, under certain circumstances, we make available, or grant licenses to, any modifications or derivative works we create based upon the open source software. Although we have established internal review and approval processes to mitigate these risks, we may not be sure that all open source software is submitted for approval prior to use in our products. Many of the risks associated with usage of open source may not be eliminated, and may, if not properly addressed, harm our business.

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Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products, services, and brand.
Our patents, trademarks, trade secrets, copyrights and other intellectual property rights are important assets for us. We aggressively protect our intellectual property rights by relying on federal, state and common law rights in the U.S. and internationally, as well as a variety of administrative procedures. We also rely on contractual restrictions to protect our proprietary rights in products and services. The efforts that we take to protect our proprietary rights may not always be sufficient or effective. Protecting our intellectual property rights is costly and time consuming and may not be successful in every location. Any significant impairment of our intellectual property rights could harm our business, our brand and our ability to compete.
Policing unauthorized use and copying of our products is difficult, expensive, and time consuming. Current U.S. laws that prohibit copying give us only limited practical protection from software piracy and the laws of many other countries provide very little protection. We frequently encounter unauthorized copies of our software being sold through online marketplaces. Although we continue to evaluate and put in place technology solutions to attempt to lessen the impact of piracy and engage in efforts to educate consumers and public policy leaders on these issues and cooperate with industry groups in their efforts to combat piracy, we expect piracy to be a persistent problem that results in lost revenues and increased expenses.
Because competition for our key employees is intense, we may not be able to attract, retain and develop the highly skilled employees we need to support our planned growth.
Much of our future success depends on the continued service and availability of skilled personnel, including members of our executive team, and those in technical, marketing and staff positions. Experienced personnel in the software, mobile technologies, data science, data security, and software as a service industries are in high demand and competition for their talents is intense, especially in California and India, where the majority of our employees are located. Also, as we strive to continue to adapt to technological change and introduce new and enhanced products and business models, we must be able to secure, maintain and develop the right quality and quantity of engaged and committed talent. Although we strive to be an employer of choice, we may not be able to continue to successfully attract, retain and develop key personnel which may cause our business to suffer.
The nature of our products and services necessitates timely product launches, and if we experience significant product quality problems or delays, it may harm our revenue, earnings and reputation.
All of our tax products and many of our non-tax products have rigid development timetables that increase the risk of errors in our products and the risk of launch delays. Our tax preparation software product development cycle is particularly challenging due to the need to incorporate unpredictable tax law and tax form changes each year and because our customers expect high levels of accuracy and a timely launch of these products to prepare and file their taxes by the tax filing deadline. Due to the complexity of our products and the condensed development cycles under which we operate, our products sometimes contain glitches that may unexpectedly interfere with the operation of the software. The complexity of our products may also make it difficult for us to consistently deliver offerings that contain the features, functionality and level of accuracy that our customers expect. When we encounter problems we may be required to modify our code, distribute patches to customers who have already purchased the product and recall or repackage existing product inventory in our distribution channels. If we encounter development challenges or discover errors in our products late in our development cycle it may cause us to delay our product launch date. Any major defects or launch delays may lead to loss of customers and revenue, negative publicity, customer and employee dissatisfaction, reduced retailer shelf space and promotions, and increased operating expenses, such as inventory replacement costs, legal fees or payments resulting from our commitment to reimburse penalties and interest paid by customers due solely to calculation errors in our consumer tax preparation products.
Our Consumer Tax business is highly seasonal and our quarterly results could fluctuate significantly.
Our Consumer Tax offerings have significant seasonal patterns. Revenue from income tax preparation products and services is heavily concentrated during November through April. This seasonality has caused significant fluctuations in our quarterly financial results. Our financial results may also fluctuate from quarter to quarter and year to year due to a variety of factors, including factors that may affect the timing of revenue recognition. These include changes to our offerings that result in the inclusion or exclusion of ongoing services; changes in product pricing strategies or product sales mix; the timing of the availability of federal and state tax forms from taxing agencies and the ability of those agencies to receive electronic tax return submissions; changes in consumer behavior; and the timing of our discontinuation of support for older product offerings. Other factors that may affect our quarterly or annual financial results include the timing of acquisitions, divestitures, and goodwill and acquired intangible asset impairment charges. Any fluctuations in our operating results may adversely affect our stock price.

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We are frequently a party to litigation and regulatory inquiries which could result in an unfavorable outcome and have an adverse effect on our business, financial condition, results of operation and cash flows.
We are subject to various legal proceedings (including class action lawsuits), claims and regulatory inquiries that have arisen out of the ordinary conduct of our business and are not yet resolved and additional claims and inquiries may arise in the future. The number and significance of these claims and inquiries have increased as our businesses have evolved. Any proceedings, claims or inquiries initiated by or against us, whether successful or not, may be time consuming; result in costly litigation, damage awards, consent decrees, injunctive relief or increased costs of business; require us to change our business practices or products; require significant amounts of management time; result in diversion of significant operations resources; or otherwise harm our business and future financial results. For further information about specific litigation, see Part II, Item 1, “ Legal Proceedings.”
Adverse global economic conditions could harm our business and financial condition.
Adverse macroeconomic developments could negatively affect our business and financial condition. Adverse global economic events have caused, and could, in the future, cause disruptions and volatility in global financial markets and increased rates of default and bankruptcy, and could impact consumer and small business spending. In particular, because the majority of our revenue is derived from sales within the U.S., economic conditions in the U.S. have an even greater impact on us than companies with a more diverse international presence. Challenging economic times could cause potential new customers not to purchase or to delay purchasing of our products and services, and could cause our existing customers to discontinue purchasing or delay upgrades of our existing products and services, thereby negatively impacting our revenues and future financial results. Decreased consumer spending levels could also reduce credit and debit card transaction processing volumes causing reductions in our payments revenue. Poor economic conditions and high unemployment have caused, and could in the future cause, a significant decrease in the number of tax returns filed, which may have a significant effect on the number of tax returns we prepare and file. In addition, weakness in the end-user consumer and small business markets could negatively affect the cash flow of our distributors and resellers who could, in turn, delay paying their obligations to us, which could increase our credit risk exposure and cause delays in our recognition of revenue or future sales to these customers. Any of these events could harm our business and our future financial results.
We regularly invest resources to update and improve our internal information technology systems and software platforms. Should our investments not succeed, or if delays or other issues with new or existing internal technology systems and software platforms disrupt our operations, our business could be harmed.
We rely on our network and data center infrastructure and internal technology systems for many of our development, marketing, operational, support, sales, accounting and financial reporting activities. We are continually investing resources to update and improve these systems and environments in order to meet existing, as well as the growing and changing requirements of our business and customers. If we experience prolonged delays or unforeseen difficulties in updating and upgrading our systems and architecture, we may experience outages and may not be able to deliver certain offerings and develop new offerings and enhancements that we need to remain competitive. Such improvements and upgrades are often complex, costly and time consuming. In addition such improvements can be challenging to integrate with our existing technology systems, or may uncover problems with our existing technology systems. Unsuccessful implementation of hardware or software updates and improvements could result in outages, disruption in our business operations, loss of revenue or damage to our reputation.
Our international operations are subject to increased risks which may harm our business, operating results, and financial condition.
In addition to uncertainty about our ability to generate revenues from our foreign operations and expand into international markets, there are risks inherent in doing business internationally, including:
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different or more restrictive privacy, data protection and other laws that could require us to make changes to our products, services and operations;
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difficulties in developing, staffing, and simultaneously managing a large number of varying foreign operations as a result of distance, language, and cultural differences;
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stringent local labor laws and regulations;
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credit risk and higher levels of payment fraud;
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profit repatriation restrictions, and foreign currency exchange restrictions;
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geopolitical events, including natural disasters, acts of war and terrorism;

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•
import or export regulations;
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compliance with U.S. laws such as the Foreign Corrupt Practices Act, and local laws prohibiting corrupt payments to government officials;
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antitrust and competition regulations;
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potentially adverse tax developments;
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economic uncertainties relating to European sovereign and other debt;
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trade barriers and changes in trade regulations;
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political or social unrest, economic instability, repression, or human rights issues; and
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risks related to other government regulation or required compliance with local laws.
Violations of the complex foreign and U.S. laws and regulations that apply to our international operations may result in fines, criminal actions or sanctions against us, our officers or our employees, prohibitions on the conduct of our business and damage to our reputation. Although we have implemented policies and procedures designed to promote compliance with these laws, there can be no assurance that our employees, contractors or agents will not violate our policies. These risks inherent in our international operations and expansion increase our costs of doing business internationally and may result in harm to our business, operating results, and financial condition.
If actual product returns exceed returns reserves, our future financial results may be harmed.
We ship more desktop software products to our distributors and retailers than we expect them to sell, in order to reduce the risk that distributors or retailers may run out of products. This is particularly true for our Consumer Tax products, which have a short selling season and for which returns occur primarily in our fiscal third and fourth quarters. Like many software companies that sell their products through distributors and retailers, we have historically accepted significant product returns. We establish reserves against revenue for product returns in our financial statements based on estimated returns and we closely monitor product sales and inventory in the retail channel in an effort to maintain adequate reserves. In the past, returns have not differed significantly from these reserves. However, if we experience actual returns that significantly exceed reserves, it may result in lower net revenue.
Unanticipated changes in our income tax rates may affect our future financial results.
Our future effective income tax rates may be favorably or unfavorably affected by unanticipated changes in the valuation of our deferred tax assets and liabilities, or by changes in tax laws or their interpretation. In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. These continuous examinations may result in unforeseen tax-related liabilities, which may harm our future financial results.
Amortization of acquired intangible assets and impairment charges may cause significant fluctuation in our net income.
Our acquisitions have resulted in significant expenses, including amortization and impairment of acquired technology and other acquired intangible assets, and impairment of goodwill. Total costs and expenses in these categories were approximately $15 million in the first six months of fiscal 2016 , $339 million in fiscal 2015 , $25 million in fiscal 2014, and $76 million in fiscal 2013. Although under current accounting rules goodwill is not amortized, we may incur impairment charges related to the goodwill already recorded and to goodwill arising out of future acquisitions. We test the impairment of goodwill annually in our fourth fiscal quarter or more frequently if indicators of impairment arise. The timing of the formal annual test may result in charges to our statement of operations in our fourth fiscal quarter that may not have been reasonably foreseen in prior periods. The total costs and expenses for fiscal 2015 and fiscal 2013 included goodwill and intangible asset impairment charges of $297 million and $46 million. At January 31, 2016 , we had $1.3 billion in goodwill and $67  million in net acquired intangible assets on our balance sheet, both of which may be subject to impairment charges in the future. New acquisitions, and any impairment of the value of acquired intangible assets, may have a significant negative impact on our future financial results.
Our acquisition and divestiture activities may disrupt our ongoing business, may involve increased expenses and may present risks not contemplated at the time of the transactions.
We have acquired and may continue to acquire companies, products and technologies that complement our strategic direction. Acquisitions involve significant risks and uncertainties, including:
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inability to successfully integrate the acquired technology and operations into our business and maintain uniform standards, controls, policies, and procedures;

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inability to realize synergies expected to result from an acquisition;
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disruption of our ongoing business and distraction of management;
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challenges retaining the key employees, customers, resellers and other business partners of the acquired operation;
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the internal control environment of an acquired entity may not be consistent with our standards and may require significant time and resources to improve;
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unidentified issues not discovered in our due diligence process, including product or service quality issues, intellectual property issues and legal contingencies;
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failure to successfully further develop an acquired business or technology and any resulting impairment of amounts currently capitalized as intangible assets;
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in the case of foreign acquisitions and investments, the impact of particular economic, tax, currency, political, legal and regulatory risks associated with specific countries.

We have divested and may in the future divest certain assets or businesses that no longer fit with our strategic direction or growth targets. Divestitures involve significant risks and uncertainties, including:
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inability to find potential buyers on favorable terms;
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failure to effectively transfer liabilities, contracts, facilities and employees to buyers;
•
requirements that we retain or indemnify buyers against certain liabilities and obligations in connection with any such divestiture;
•
the possibility that we will become subject to third-party claims arising out of such divestiture;
•
challenges in identifying and separating the intellectual properties to be divested from the intellectual properties that we wish to retain;
•
inability to reduce fixed costs previously associated with the divested assets or business;
•
challenges in collecting the proceeds from any divestiture;
•
disruption of our ongoing business and distraction of management;
•
loss of key employees who leave the Company as a result of a divestiture ;
•
if customers or partners of the divested business do not receive the same level of service from the new owners, our other businesses may be adversely affected, to the extent that these customers or partners also purchase other products offered by us or otherwise conduct business with our retained business.
Because acquisitions and divestitures are inherently risky, our transactions may not be successful and may, in some cases, harm our operating results or financial condition. Although we typically fund our acquisitions through cash available from operations, if we were to use debt to fund acquisitions or for other purposes, our interest expense and leverage would increase significantly, and if we were to issue equity securities as consideration in an acquisition, current shareholders’ percentage ownership and earnings per share would be diluted.
We have $500 million in long-term debt outstanding and have drawn $745 million on our unsecured revolving credit facility and may incur other debt in the future, which may adversely affect our financial condition and future financial results.
In fiscal 2007 we issued $500 million in senior unsecured notes due in March 2017. As the debt matures, we will have to expend significant resources to either repay or refinance these notes. If we decide to refinance the notes, we may be required to do so on different or less favorable terms or we may be unable to refinance the notes at all, both of which may adversely affect our financial condition.
We also have a five-year unsecured revolving credit facility. As of January 31, 2016 , there was $745 million in outstanding borrowings on this credit facility. We may use the proceeds of any advances against the credit facility for general corporate purposes, including future acquisitions and share repurchases.
This debt may adversely affect our financial condition and future financial results by, among other things:
•
increasing our vulnerability to downturns in our business, to competitive pressures and to adverse economic and industry conditions;

47
Table of Contents

•
requiring the dedication of a portion of our expected cash from operations to service our indebtedness, thereby reducing the amount of expected cash flow available for other purposes, including capital expenditures and acquisitions; and
•
limiting our flexibility in planning for, or reacting to, changes in our businesses and our industries.
Our current unsecured revolving credit facility imposes restrictions on us, including restrictions on our ability to create liens on our assets and the ability of our subsidiaries to incur indebtedness, and require us to maintain compliance with specified financial ratios. Our ability to comply with these ratios may be affected by events beyond our control. In addition, our short- and long-term debt includes covenants that may adversely affect our ability to incur certain liens or engage in certain types of sale and leaseback transactions. If we breach any of the covenants under our short- and long-term debt or our unsecured revolving credit facility and do not obtain a waiver from the lenders, then, subject to applicable cure periods, any outstanding indebtedness may be declared immediately due and payable.
In addition, changes by any rating agency to our credit rating may negatively impact the value and liquidity of both our debt and equity securities. If our credit ratings are downgraded or other negative action is taken, the interest rate payable by us under our unsecured revolving credit facility may increase. In addition, any downgrades in our credit ratings may affect our ability to obtain additional financing in the future and may affect the terms of any such financing.
We are subject to risks associated with information disseminated through our services.
The laws relating to the liability of online services companies for information such as online content disseminated through their services are subject to frequent challenges. In spite of settled law in the U.S., claims are made against online services companies by parties who disagree with the content. Where our online content is accessed on the internet outside of the U.S., challenges may be brought under foreign laws which do not provide the same protections for online services companies as in the U.S. These challenges in either U.S. or foreign jurisdictions may rise to legal claims alleging defamation, libel, invasion of privacy, negligence, copyright or trademark infringement, or other theories based on the nature and content of the materials disseminated through the services. Certain of our services include content generated by users of our online services. Although this content is not generated by us, claims of defamation or other injury may be made against us for that content. Any costs incurred as a result of this potential liability may harm our business.
Our stock price may be volatile and your investment could lose value.
Our stock price is subject to changes in recommendations or earnings estimates by financial analysts, changes in investors' or analysts' valuation measures for our stock, our credit ratings and market trends unrelated to our performance. Furthermore, speculation in the press or investment community about our strategic position, financial condition, results of operations, business or security of our products, can cause changes in our stock price. These factors, as well as general economic and political conditions and the timing of announcements in the public market regarding new products, product enhancements or technological advances by our competitors or us, and any announcements by us of acquisitions, major transactions, or management changes may adversely affect our stock price. Further, any changes in the amounts or frequency of share repurchases or dividends may also adversely affect our stock price. A significant drop in our stock price could expose us to the risk of securities class actions lawsuits, which may result in substantial costs and divert management's attention and resources, which may adversely affect our business.
Our business depends on our strong reputation and the value of our brands.
Developing and maintaining awareness of our brands is critical to achieving widespread acceptance of our existing and future products and services and is an important element in attracting new customers. Adverse publicity (whether or not justified) relating to events or activities attributed to us, our employees or agents may tarnish our reputation and reduce the value of our brands. Damage to our reputation and loss of brand equity may reduce demand for our products and services and thus have an adverse effect on our future financial results, as well as require additional resources to rebuild our reputation and restore the value of the brands.

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Table of Contents

ITEM 2
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Stock repurchase activity during the three months ended January 31, 2016 was as follows:

Period
 
Total Number
of Shares
Purchased
 
Average
Price Paid
per Share
 
Total Number
of Shares
Purchased
as Part of
Publicly
Announced
Plans
 
Approximate
Dollar Value
of Shares
That May Yet
Be Purchased
Under
the Plans
November 1, 2015 through November 30, 2015
 
700,380

 
$
98.92

 
700,380

 
$
1,285,215,398

December 1, 2015 through December 31, 2015
 
1,204,021

 
$
97.75

 
1,204,021

 
$
1,167,521,002

January 1, 2016 through January 31, 2016
 
2,870,378

 
$
93.25

 
2,870,378

 
$
899,852,021

Total
 
4,774,779

 
$
95.22

 
4,774,779

 
 
Note: All of the shares purchased as part of publicly announced plans during the three months ended January 31, 2016 were purchased under a plan we announced on May 19, 2015 under which we are authorized to repurchase up to $2 billion of our common stock from time to time over a four-year period ending on May 19, 2019 . At January 31, 2016 , authorization from our Board of Directors to expend up to $900 million remained available under that plan.


ITEM 6
EXHIBITS
See the Exhibit Index immediately following the signature page of this Quarterly Report on Form 10-Q.



49
Table of Contents

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
 
INTUIT INC.
(Registrant)
 
 
Date:
February 25, 2016
By:  
/s/ R. NEIL WILLIAMS  
 
 
 
 
R. Neil Williams 
 
 
 
 
Executive Vice President and Chief Financial Officer (Authorized Officer and Principal Financial Officer) 
 


50
Table of Contents

EXHIBIT INDEX

Exhibit
Number
 
Exhibit Description
 
Filed
Herewith
 
Incorporated by
Reference
10.01
 
Agreement of Purchase and Sale and Joint Escrow Instructions by and between Intuit Inc. and Kilroy Realty, L.P.
 
 
 
8-K filed 11/16/15
 
 
 
 
 
 
 
10.02+
 
Intuit Inc. Non-employee Director Compensation Program, effective January 21, 2016
 
X
 
 
 
 
 
 
 
 
 
10.03
 
Credit Agreement by and among Intuit, the Lenders parties thereto (the “Lenders”), Bank of America, N.A. and JPMorgan Chase Bank, N.A., as co-administrative agents, U.S. Bank National Association and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as co-syndication agents for the Lenders, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities L.L.C., U.S. Bank National Association and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as joint lead arrangers and joint bookrunners dated February 1, 2016
 
X
 
 
 
 
 
 
 
 
 
31.01
 
Certification of Chief Executive Officer
 
X
 
 
 
 
 
 
 
 
 
31.02
 
Certification of Chief Financial Officer
 
X
 
 
 
 
 
 
 
 
 
32.01*
 
Section 1350 Certification (Chief Executive Officer)
 
X
 
 
 
 
 
 
 
 
 
32.02*
 
Section 1350 Certification (Chief Financial Officer)
 
X
 
 
 
 
 
 
 
 
 
101.INS
 
XBRL Instance Document
 
X
 
 
 
 
 
 
 
 
 
101.SCH
 
XBRL Taxonomy Extension Schema
 
X
 
 
 
 
 
 
 
 
 
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase
 
X
 
 
 
 
 
 
 
 
 
101.LAB
 
XBRL Taxonomy Extension Label Linkbase
 
X
 
 
 
 
 
 
 
 
 
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase
 
X
 
 
 
 
 
 
 
 
 
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase
 
X
 
 
________________________________
+
Indicates a management contract or compensatory plan or arrangement.
*
This exhibit is intended to be furnished and shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended.


51
        

Intuit Inc.
2016 Non-Management Director Compensation
as approved by the Board of Directors on October 28, 2015, with an effective date of January 21, 2016
Director Stock Grants
•
Each newly appointed or elected non-employee director will receive an initial restricted stock unit grant (an "Initial Grant") equal in number to $75,000 divided by the closing stock price on the date of grant. The grant date for these awards shall be the first business day following the date of the director’s election or appointment. Each Initial Grant will generally vest 50% on the one-year anniversary of the grant date and 50% on the two-year anniversary of the grant date. All of a director's Initial Grant will become fully vested in the event of death or disability of the director or upon a “Corporate Transaction” (as defined in the applicable award agreement, which requires a transaction that results in a change in control of the ownership of Intuit). Payment of the Initial Grants shall be automatically deferred until the earliest of: (a) five years from the grant date; (b) termination (for any reason); or (c) a Corporate Transaction. Additional voluntary deferrals may also be permitted.
•
Each year, following the annual meeting of Intuit’s stockholders, each appointed or elected non-employee director shall automatically receive a grant (a "Succeeding Grant") of restricted stock units equal in number to $260,000 divided by the closing stock price on the grant date. The grant date for these awards shall be the first business day following the annual meeting of the Company's stockholders. If a director joins the board mid-year, the director will receive a pro-rated Succeeding Grant. Each Succeeding Grant will generally vest in full on the first day of the 12 th month following the grant date. All of a director's Succeeding grant will become fully vested in the event of death or disability of the director or upon a Corporate Transaction. Payment of the Succeeding Grants shall be automatically deferred until the earliest of: (a) five years from the grant date; (b) termination (for any reason); or (c) a Corporate Transaction. Additional voluntary deferrals will also be permitted.
•
Within the later of five years after the director joins the Board or July 2016, each director is required to hold shares of Intuit common stock with an aggregate value of five times the amount of the annual Board member cash retainer. Owned shares, outstanding restricted stock units, and any deferred cash retainers ultimately paid as restricted stock units (see below) count towards the ownership requirement.

Cash Retainers .

•
Non-employee directors in good standing are paid their annual cash retainers in four equal installments.

•
Non-employee directors serving on Committees (as chair or member) are paid annual retainers in addition to the annual cash compensation for service as a member of the Board, as set forth below.

•
Non-employee directors may elect to defer cash retainers and instead receive restricted stock units. Such election must be made prior to the start of the calendar year, and is irrevocable once made. Payment of any cash fees converted into restricted stock units shall be automatically deferred until the earliest of: (a) five years from the grant date; (b) termination (for any reason); or (c) a Corporate Transaction. Additional voluntary deferrals may also be permitted.

•
Annual cash compensation for service as a non-employee director of the Board: $60,000.

•
Annual cash retainer for Lead Independent Director: $40,000

•
Annual cash compensation for non-employee director committee service:

Audit & Risk Committee: Chair – $47,500; Member – $15,000

Acquisitions Committee: Chair – $32,500; Member – $15,000

Compensation & Organizational Development: Chair – $40,000; Member – $15,000

Nominating & Governance Committee: Chair – $27,500; Member – $10,000



1

EXECUTION VERSION
Published CUSIP Numbers:
Deal: 46121VAE8
Revolver: 46121VAF5
Term: 46121VAG3

CREDIT AGREEMENT
dated as of February 1, 2016
among
INTUIT INC.,
The Lenders Party Hereto,
BANK OF AMERICA, N.A.
and
JPMORGAN CHASE BANK, N.A.,
as Co-Administrative Agents,
and
U.S. BANK NATIONAL ASSOCIATION
and
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
as Co-Syndication Agents
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
J.P. MORGAN SECURITIES L.L.C.,
U.S. BANK NATIONAL ASSOCIATION
and
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
as Joint Lead Arrangers and Joint Bookrunners



CHAR1\1449231v6


TABLE OF CONTENTS
 
 
Page
ARTICLE I DEFINITIONS
5
SECTION 1.01.
Defined Terms
5
SECTION 1.02.
Classification of Loans and Borrowings
22
SECTION 1.03.
Terms Generally
23
SECTION 1.04.
Accounting Terms; GAAP
23
SECTION 1.05.
Status of Obligations
23
SECTION 1.06.
Additional Agreed Currencies
24
SECTION 1.07.
Change of Currency
24
ARTICLE II CREDITS
25
SECTION 2.01.
Loans
25
SECTION 2.02.
Borrowings
25
SECTION 2.03.
Requests for Borrowings
26
SECTION 2.04.
Determination of Dollar Amounts
27
SECTION 2.05.
Intentionally Omitted
27
SECTION 2.06.
Intentionally Omitted
27
SECTION 2.07.
Funding of Borrowings
27
SECTION 2.08.
Interest Elections
27
SECTION 2.09.
Termination and Reduction of Commitments
29
SECTION 2.10.
Repayment of Loans; Evidence of Debt
29
SECTION 2.11.
Prepayment of Loans
31
SECTION 2.12.
Fees
32
SECTION 2.13.
Interest
32
SECTION 2.14.
Alternate Rate of Interest; Illegality
33
SECTION 2.15.
Increased Costs
34
SECTION 2.16.
Break Funding Payments
36
SECTION 2.17.
Taxes
36
SECTION 2.18.
Payments Generally; Pro Rata Treatment; Sharing of Set-offs
41
SECTION 2.19.
Mitigation Obligations; Replacement of Lenders
43
SECTION 2.20.
Expansion Option
43
SECTION 2.21.
Judgment Currency
45
SECTION 2.22.
Defaulting Lenders
45
SECTION 2.23.
Extension of Revolving Maturity Date
46
ARTICLE III REPRESENTATIONS AND WARRANTIES
49
SECTION 3.01.
Organization; Good Standing
49
SECTION 3.02.
Authorization; No Conflicts
49
SECTION 3.03.
Governmental Approvals
49
SECTION 3.04.
Enforceability
49
SECTION 3.05.
Financial Condition; No Material Adverse Change
49
SECTION 3.06.
Litigation and Environmental Matters
50
SECTION 3.07.
Federal Reserve Regulations
50

i
CHAR1\1449231v6


SECTION 3.08.
Investment Company Status
50
SECTION 3.09.
Disclosure
50
SECTION 3.10.
Solvency
50
SECTION 3.11.
OFAC
50
SECTION 3.12.
Anti-Corruption Laws
51
SECTION 3.13.
EEA Financial Institution
51
ARTICLE IV CONDITIONS
51
SECTION 4.01.
Effective Date
51
SECTION 4.02.
Each Borrowing
52
ARTICLE V AFFIRMATIVE COVENANTS
52
SECTION 5.01.
Compliance with Laws, etc
53
SECTION 5.02.
Payment of Taxes, etc
53
SECTION 5.03.
Maintenance of Insurance
53
SECTION 5.04.
Preservation of Corporate Existence, etc
53
SECTION 5.05.
Visitation Rights
53
SECTION 5.06.
Keeping of Books
53
SECTION 5.07.
Maintenance of Properties, etc
54
SECTION 5.08.
Transactions with Affiliates
54
SECTION 5.09.
Reporting Requirements
54
ARTICLE VI NEGATIVE COVENANTS
56
SECTION 6.01.
Liens, etc
56
SECTION 6.02.
Mergers, etc
57
SECTION 6.03.
Accounting Changes
57
SECTION 6.04.
Subsidiary Debt
57
SECTION 6.05.
Speculative Transactions
58
SECTION 6.06.
Change in Nature of Business
58
SECTION 6.07.
Financial Covenants
58
SECTION 6.08.
Sanctions
58
SECTION 6.09.
Anti-Corruption Laws
58
ARTICLE VII EVENTS OF DEFAULT
58
ARTICLE VIII THE LEAD ADMINISTRATIVE AGENT
61
ARTICLE IX MISCELLANEOUS
63
SECTION 9.01.
Notices
63
SECTION 9.02.
Waivers; Amendments
65
SECTION 9.03.
Expenses; Indemnity; Damage Waiver
68
SECTION 9.04.
Successors and Assigns
69
SECTION 9.05.
Survival
72
SECTION 9.06.
Counterparts; Integration; Effectiveness
73
SECTION 9.07.
Severability
73
SECTION 9.08.
Right of Setoff
73
SECTION 9.09.
Governing Law; Jurisdiction; Consent to Service of Process
73
SECTION 9.10.
WAIVER OF JURY TRIAL
74
SECTION 9.11.
Headings
74

ii
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SECTION 9.12.
Confidentiality
74
SECTION 9.13.
Patriot Act
75
SECTION 9.14.
Interest Rate Limitation
75
SECTION 9.15.
No Advisory or Fiduciary Responsibility
75
SECTION 9.16.
Electronic Execution of Assignments and Certain Other Documents
76
SECTION 9.17.
Acknowledgement and Consent to Bail-In of EEA Financial Institutions
76
SECTION 9.18.
ENTIRE AGREEMENT
76



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SCHEDULES:
Schedule 2.01 – Commitments
Schedule 6.01 – Existing Liens
Schedule 6.04 – Existing Subsidiary Debt
EXHIBITS:
Exhibit A – Form of Assignment and Assumption
Exhibit B – Form of Opinion of the Borrower’s Counsel
Exhibit C – Form of Increasing Lender Supplement
Exhibit D – Form of Augmenting Lender Supplement
Exhibit E – List of Closing Documents
Exhibit F – Form of Revolving Maturity Date Extension Request
Exhibit G-1 – Form of U.S. Tax Certificate (Foreign Lenders That Are Not Partnerships)
Exhibit G-2 – Form of U.S. Tax Certificate (Foreign Participants That Are Not Partnerships)
Exhibit G-3 – Form of U.S. Tax Certificate (Foreign Participants That Are Partnerships)
Exhibit G-4 – Form of U.S. Tax Certificate (Foreign Lenders That Are Partnerships)
Exhibit H – Form of Borrowing Request
Exhibit I – Form of Interest Election Request
Exhibit J – Form of Notice of Loan Prepayment




iv
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This CREDIT AGREEMENT (this “ Agreement ”) dated as of February 1, 2016 is entered into among INTUIT INC., a Delaware corporation, the Lenders from time to time party hereto, and BANK OF AMERICA, N.A. and JPMORGAN CHASE BANK, N.A., as Co-Administrative Agents.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01.      Defined Terms . As used in this Agreement, the following terms have the meanings specified below:
“ ABR ”, when used in reference to any Loan or Borrowing, refers to a Loan, or the Loans comprising such Borrowing, bearing interest at a rate determined by reference to the Alternate Base Rate.
“ Administrative Questionnaire ” means an Administrative Questionnaire in a form supplied by the Lead Administrative Agent.
“ Affiliate ” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“ Aggregate Revolving Commitments ” means the aggregate Revolving Commitments of all the Lenders. The principal amount of the Aggregate Revolving Commitments in effect on the Effective Date is ONE BILLION DOLLARS ($1,000,000,000).
“ Agreed Currencies ” means (a) Dollars, (b) Australian Dollars, (c) Canadian Dollars, (d) euro, (e) Pounds Sterling, (f) Japanese Yen, (g) Singapore Dollars and (h) any other currency that is approved in accordance with Section 1.06 .
“ Alternate Base Rate ” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (c) the LIBO Rate plus 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate, respectively.
“ Applicable Percentage ” means, with respect to any Lender, (a) with respect to the Aggregate Revolving Commitments, the percentage (carried out to the ninth decimal place) of the Aggregate Revolving Commitments represented by such Lender’s Revolving Commitment at such time, and (b) with respect to the Term Facility, the percentage (carried out to the ninth decimal place) of the Term Facility represented by the outstanding principal amount of such Lender’s Term Loans at such time. If the Aggregate Revolving Commitments have terminated or expired, the Applicable Percentage of any Lender with respect to the Aggregate Revolving Commitments shall be determined based upon the Aggregate Revolving Commitments most recently in effect, giving effect to any assignments and to any Lender’s status as a Defaulting Lender at the time of determination.
“ Applicable Rate ” means, for any day, (a) with respect to any Eurocurrency Revolving Loan or any ABR Revolving Loan or with respect to the facility fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “Eurocurrency Spread”, “ABR Spread” or “Facility Fee

5
CHAR1\1449231v6


Rate”, as the case may be, based upon the ratings by Moody’s and S&P, respectively, applicable on such date to the Index Debt:
Category
Index Debt Ratings:
Eurocurrency
Spread
ABR
Spread
Facility
Fee Rate
Category 1:
A3/A- or higher
0.90%
0%
0.10%
Category 2:
Baa1/BBB+
1.00%
0%
0.125%
Category 3:
Baa2/BBB
1.10%
0.10%
0.15%
Category 4:
Baa3/BBB-
1.30%
0.30%
0.20%
Category 5:
Ba1/BB+ or lower
1.50%
0.50%
0.25%
and, (b) with respect to any Eurocurrency Term Loan or any ABR Term Loan, as the case may be, the applicable rate per annum set forth below under the caption “Eurocurrency Spread” or “ABR Spread”, as the case may be, based upon the ratings by Moody’s and S&P, respectively, applicable on such date to the Index Debt:
Category
Index Debt Ratings:
Eurocurrency
Spread
ABR
Spread
Category 1:
A3/A- or higher
1.125%
0.125%
Category 2:
Baa1/BBB+
1.25%
0.250%
Category 3:
Baa2/BBB
1.375%
0.375%
Category 4:
Baa3/BBB-
1.625%
0.625%
Category 5:
Ba1/BB+ or lower
1.875%
0.875%
For purposes of the foregoing, (i) if either Moody’s or S&P shall not have in effect a rating for the Index Debt (other than by reason of the circumstances referred to in the last sentence of this definition), then such rating agency shall be deemed to have established a rating in Category 5; (ii) if the ratings established or deemed to have been established by Moody’s and S&P for the Index Debt shall fall within different Categories, the Applicable Rate shall be based on the higher of the two ratings unless one of the two ratings is two or more Categories lower than the other, in which case the Applicable Rate shall be determined by reference to the Category next below that of the higher of the two ratings; and (iii) if the ratings established or deemed to have been established by Moody’s and S&P for the Index Debt shall be changed (other than as a result of a change in the rating system of Moody’s or S&P), such change shall be effective as of the date on which it is first announced by the applicable rating agency, irrespective of when notice of such change shall have been furnished by the Borrower to the Lead Administrative Agent and the Lenders pursuant to Section 5.09 or otherwise. Each change in the Applicable Rate shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of Moody’s or S&P shall change, or if either such rating agency shall cease to be in the business of rating corporate debt obligations, the Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating system or the unavailability of ratings from such rating agency and, pending the effectiveness of any such amendment, the Applicable Rate shall be determined by reference to the rating most recently in effect prior to such change or cessation.
“ Approved Fund ” means any Person (other than a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural Person)) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions

6
CHAR1\1449231v6


of credit in the ordinary course of its activities and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“ Assignment and Assumption ” means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04 ), and accepted by the Lead Administrative Agent, in the form of Exhibit A or any other form (including electronic documentation generated by use of an electronic platform) approved by the Lead Administrative Agent.
“ Augmenting Lender ” has the meaning assigned to such term in Section 2.20 .
“ Australian Dollars ” means the lawful currency of Australia.
“ Availability Period ” means the period from and including the Effective Date to but excluding the earlier of the Revolving Maturity Date and the date of termination of the Aggregate Revolving Commitments.
“ Bail-In Action ” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
“ Bail-In Legislation ” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“ Bank of America ” means Bank of America, N.A. and its successors.
“ Bankruptcy Event ” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or becomes the subject of a Bail-In Action, or, in the good faith determination of the Lead Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment; provided , that , a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof; provided , further , that , such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.
“ Board ” means the Board of Governors of the Federal Reserve System of the United States.
“ Borrower ” means Intuit Inc., a Delaware corporation.
“ Borrower Materials ” has the meaning specified in Section 5.09 .
“ Borrowing ” means Loans of the same Type, made, converted or continued on the same date and, in the case of Eurocurrency Loans, as to which a single Interest Period is in effect.
“ Borrowing Request ” means a request by the Borrower for a Borrowing in accordance with Section 2.03 , which Borrowing Request shall be in the form of Exhibit H or such other form as may be approved by the Lead Administrative Agent (including any form on an electronic platform or electronic transmission

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system as shall be approved by the Lead Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.
“ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided , that , when used in connection with a Eurocurrency Loan, the term “ Business Day ” shall also exclude any day on which banks are not open for dealings in the relevant Agreed Currency in the London interbank market or the principal financial center of such Agreed Currency (and, if the Borrowings which are the subject of a borrowing, drawing, payment, reimbursement or rate selection are denominated in euro, the term “Business Day” shall also exclude any day on which the TARGET2 payment system is not open for the settlement of payments in euro).
“ Canadian Dollars ” means the lawful currency of Canada.
“ Change in Law ” means the occurrence, after the date of this Agreement (or with respect to any Lender, if later, the date on which such Lender becomes a Lender), of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority, or (c) the making or issuance of any request, rules, guideline, requirement or directive (whether or not having the force of law) by any Governmental Authority; provided , that , notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder, issued in connection therewith or in implementation thereof, and (ii) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law” regardless of the date enacted, adopted, issued or implemented.
“ Class ”, when used in reference to any Loan or Borrowing, refers to such Loan, or the Loans comprising such Borrowing, as Revolving Loans or Term Loans.
“ Co-Administrative Agent ” means each of the Lead Administrative Agent and JPMorgan Chase Bank, N.A. (or any of its designated branch offices or affiliates), in its capacity as co-administrative agent for the Lenders hereunder.
“ Code ” means the Internal Revenue Code of 1986.
“ Commitment ” means, as to each Lender, the Revolving Commitment of such Lender and/or the Term Loan Commitment of such Lender. The initial amount of each Lender’s Revolving Commitment and each Lender’s Term Loan Commitment is set forth on Schedule 2.01 , or in the Assignment and Assumption or other documentation contemplated hereby pursuant to which such Lender shall have assumed its Commitment, as applicable.
“ Computation Date ” is defined in Section 2.04 .
“ Connection Income Taxes ” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“ Consenting Lender ” has the meaning assigned to such term in Section 2.23 .
“ Consolidated ” refers to the consolidation of accounts in accordance with GAAP.

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“ Consolidated Interest Charges ” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to all interest, premium payments, debt discount, fees, charges and related expenses in connection with Debt for Borrowed Money (including capitalized interest), in each case to the extent treated as interest in accordance with GAAP.
“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. The terms “Controlling” and “Controlled” have meanings correlative thereto.
“ Co-Syndication Agents ” means U.S. Bank National Association and The Bank of Tokyo-Mitsubishi UFJ, Ltd., in their respective capacities as co-syndication agents for the credit facilities evidenced by this Agreement.
“ Credit Party ” means the Lead Administrative Agent or any other Lender.
“ Declining Lender ” has the meaning assigned to such term in Section 2.23 .
“ Debt ” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than (i) trade payables incurred in the ordinary course of business of such Person and (ii) earn-outs, hold-backs and similar deferred payment of consideration in acquisitions (but only to the extent that (A) no payment is then owed thereunder and (B) the same are not fixed in amount and non-contingent)), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all obligations of such Person as lessee under leases that have been or should be, in accordance with GAAP, recorded as capital leases, (f) all obligations, contingent or otherwise, of such Person in respect of acceptances, letters of credit or similar extensions of credit, (g) all net obligations of such Person in respect of Hedge Agreements entered into with a particular counterparty (determined as of any date as the amount such Person would be required to pay to its counterparty in accordance with the terms thereof as if terminated on such date of determination), (h) all Debt of others referred to in clauses (a) through (g) above or clause (i) below and other payment obligations (collectively, “ Guaranteed Debt ”) guaranteed directly or indirectly in any manner by such Person, or in effect guaranteed directly or indirectly by such Person through an agreement (i) to pay or purchase such Guaranteed Debt or to advance or supply funds for the payment or purchase of such Guaranteed Debt, (ii) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Guaranteed Debt or to assure the holder of such Guaranteed Debt against loss, (iii) to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether such property is received or such services are rendered) or (iv) otherwise to assure a creditor against loss, and (i) all Debt referred to in clauses (a) through (h) above (including Guaranteed Debt) secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Debt.
“ Debt for Borrowed Money ” means, as at any date of determination, all items that, in accordance with GAAP, would be classified as indebtedness on a Consolidated balance sheet of the Borrower and its Subsidiaries.

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“ Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“ Defaulting Lender ” means any Lender that (a) has failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans or (ii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Lead Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three (3) Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans ( provided , that , such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Lead Administrative Agent), or (d) has become the subject of a Bankruptcy Event.
“ Designated Jurisdiction ” means any country or territory to the extent that such country or territory itself is the subject of any Sanction.
“ Disclosed Litigation ” means the matters described in the Borrower’s filings made prior to the date hereof with the SEC under the Securities Exchange Act of 1934, as amended.
“ Dollar Amount ” of any currency at any date means (a) the amount of such currency if such currency is Dollars or (b) the equivalent in such currency of Dollars if such currency is a Foreign Currency, calculated on the basis of the Exchange Rate for such currency, on or as of the most recent Computation Date provided for in Section 2.04 .
“ Dollars ” or “ $ ” refers to lawful money of the United States.
“ EBITDA ” means, for any period, net income (or net loss) plus the sum of (a) interest expense, (b) income tax expense, (c) depreciation expense, (d) amortization expense, (e) non-cash extraordinary losses (including, without limitation, charges for impairment of goodwill) and (f) share based non-cash compensation expense, and minus the sum of (x) non-cash extraordinary gains and (y) interest income, in each case determined in accordance with GAAP for such period.
In the event that the Borrower or any Subsidiary shall have completed since the beginning of the relevant period an acquisition or disposition of any Person, division or business unit for which the Borrower is required to file pro forma financial statements with the SEC, EBITDA shall be determined for such period on a Pro Forma Basis as if such acquisition or disposition, and any related incurrence or repayment of Debt for Borrowed Money, had occurred at the beginning of such period.
“ EEA Financial Institution ” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of

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an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“ EEA Member Country ” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“ EEA Resolution Authority ” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“ Effective Date ” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02 ).
“ Eligible Currency ” means any lawful currency other than Dollars that is readily available, freely transferable and convertible into Dollars in the international interbank market available to the Lenders in such market and as to which an Exchange Rate may be readily calculated. If, after the designation by the Lenders of any currency as an Agreed Currency, any change in currency controls or exchange regulations or any change in the national or international financial, political or economic conditions are imposed in the country in which such currency is issued, result in, in the reasonable opinion of the Lead Administrative Agent, (a) such currency no longer being readily available, freely transferable and convertible into Dollars, (b) an Exchange Rate no longer being readily calculable with respect to such currency, or (c) the provision of such currency being impracticable for the Lenders (each, a “ Disqualifying Event ”), then the Lead Administrative Agent shall promptly notify the Lenders and the Borrower, and such country’s currency shall no longer be an Agreed Currency until such time as the Disqualifying Event(s) no longer exist. Within, five (5) Business Days after receipt of such notice from the Lead Administrative Agent, the Borrowers shall repay all Loans in such currency to which the Disqualifying Event applies or convert such Loans into Dollars, subject to the other terms contained herein.
“ Environmental Action ” means any action, suit, demand, demand letter, claim, notice of non-compliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement arising pursuant to or based upon any Environmental Law, Environmental Permit or Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment, including, without limitation, (a) by any governmental or regulatory authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any governmental or regulatory authority or any third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.
“ Environmental Law ” means any federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, judgment, decree or judicial or agency interpretation, policy or guidance relating to pollution or protection of the environment, health, safety or natural resources, including, without limitation, those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.
“ Environmental Permit ” means any permit, approval, identification number, license or other authorization required under any Environmental Law.
“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing.

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“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.
“ ERISA Affiliate ” means any Person that for purposes of Title IV of ERISA is a member of the Borrower’s controlled group, or under common control with the Borrower, within the meaning of Section 414 of the Code.
“ ERISA Event ” means (a) (i) the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day notice requirement with respect to such event has been waived by the PBGC, or (ii) the requirements of subsection (1) of Section 4043(b) of ERISA (without regard to subsection (2) of such Section) are met with respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such Plan within the following 30 days; (b) the application for a minimum funding waiver with respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent to terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a facility of the Borrower or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by the Borrower or any ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for the imposition of a lien under Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the adoption of an amendment to a Plan requiring the provision of security to such Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, a Plan.
“ EU Bail-In Legislation Schedule ” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“ euro ” and/or “ EUR ” means the single currency of the Participating Member States.
“ Eurocurrency ”, when used in reference to a currency means an Agreed Currency and when used in reference to any Loan or Borrowing, means that such Loan, or the Loans comprising such Borrowing, bears interest at a rate determined by reference to clause (a) of the definition of LIBO Rate.
“ Eurocurrency Payment Office ” of the Lead Administrative Agent means, for each Foreign Currency, the office, branch, affiliate or correspondent bank of the Lead Administrative Agent for such currency as specified from time to time by the Lead Administrative Agent to the Borrower and each Lender.
“ Event of Default ” has the meaning assigned to such term in Article VII .
“ Exchange Rate ” means, on any day, with respect to any Foreign Currency, the rate at which such Foreign Currency may be exchanged into Dollars, as set forth at approximately 11:00 a.m., Local Time, on such date on the Reuters World Currency Page for such Foreign Currency. In the event that such rate does not appear on any Reuters World Currency Page, the Exchange Rate with respect to such Foreign Currency shall be determined by reference to such other publicly available service for displaying exchange rates as may be reasonably selected by the Lead Administrative Agent or, in the event no such service is selected, such Exchange Rate shall instead be calculated on the basis of the arithmetical mean of the buy and sell spot rates of exchange of the Lead Administrative Agent for such Foreign Currency on the London market at 11:00 a.m., Local Time, on such date for the purchase of Dollars with such Foreign Currency, for delivery

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two Business Days later; provided , that , if at the time of any such determination, for any reason, no such spot rate is being quoted, the Lead Administrative Agent, after consultation with the Borrower, may use any reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error.
“ Excluded Taxes ” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. Federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.19(b) ) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17 , amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan or Commitment or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.17(f) and (d) any U.S. Federal withholding Taxes imposed under FATCA.
“ Existing Credit Agreement ” means that certain Credit Agreement, dated as of February 17, 2012, by and among the Borrower, the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, as amended, modified, supplemented or restated prior to the date hereof.
“ Existing Revolving Maturity Date ” has the meaning assigned to such term in Section 2.23 .
“ Extension Effective Date ” has the meaning assigned to such term in Section 2.23 .
“ FATCA ” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“ Federal Funds Effective Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided , that , (a) if such day is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Effective Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Lead Administrative Agent.
“ Fee Letter ” means that certain letter agreement dated January 6, 2016 by and among the Borrower, Bank of America and MLPFS.
“ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.
“ Foreign Currencies ” means Agreed Currencies other than Dollars.

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“ Foreign Currency Sublimit ” means $100,000,000.
“ Foreign Lender ” means (a) if the Borrower is a U.S. Person, a Lender, with respect to such Borrower, that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender, with respect to such Borrower, that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.
“ GAAP ” means generally accepted accounting principles in the United States.
“ Governmental Authority ” means the government of the United States, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including, without limitation, the Financial Conduct Authority, the Prudential Regulation Authority and any supra-national bodies such as the European Union or the European Central Bank).
“ Hazardous Materials ” means (a) petroleum and petroleum products, byproducts or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls and radon gas and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.
“ Hedge Agreements ” means interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other similar interest rate or exchange rate hedging agreements.
“ Increasing Lender ” has the meaning assigned to such term in Section 2.20 .
“ Incremental Term Loan ” has the meaning assigned to such term in Section 2.20 .
“ Incremental Term Loan Amendment ” has the meaning assigned to such term in Section 2.20 .
“ Indemnified Taxes ” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document and (b) to the extent not otherwise described in clause (a) , Other Taxes.
“ Indemnitee ” has the meaning specified in Section 9.03(b) .
“ Index Debt ” means senior, unsecured, long-term indebtedness for borrowed money of the Borrower that is not guaranteed by any other person or entity or subject to any other credit enhancement.
“ Information ” has the meaning specified in Section 9.12 .
“ Information Memorandum ” means the Confidential Information Memorandum dated January 2016 relating to the Borrower and the Transactions.
“ Interest Election Request ” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.08 , which Interest Election Request shall be in the form of Exhibit I or such other form as may be approved by the Lead Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Lead Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.

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“ Interest Payment Date ” means (a) with respect to any ABR Loan, the last Business Day of each January, April, July and October and the Revolving Maturity Date or the Term Maturity Date, as applicable and (b) with respect to any Eurocurrency Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period and the Revolving Maturity Date or the Term Maturity Date, as applicable.
“ Interest Period ” means with respect to any Eurocurrency Borrowing, the period commencing on the date such Borrowing is disbursed or converted to or continued as a Eurocurrency Loan and ending on the date that is one, two, three or six months thereafter (in each case, subject to availability for the interest rate applicable to the relevant currency), as the Borrower may elect, or such other period that is twelve months or less requested by the Borrower and consented to by all of the Lenders; provided , that , (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period, and (iii) no Interest Period shall extend beyond the Revolving Maturity Date or the Term Maturity Date, as applicable.
“ IRS ” means the United States Internal Revenue Service.
“ Japanese Yen ” or “ JPY ” means the lawful currency of Japan.
“ Latest Maturity Date ” means, at any date of determination, the latest of the Revolving Maturity Date and the Term Maturity Date.
“ Lead Administrative Agent ” means Bank of America (or any of its designated branch offices or affiliates).
“ Lead Arrangers ” means MLPFS, J.P. Morgan Securities L.L.C., U.S. Bank National Association and The Bank of Tokyo-Mitsubishi UFJ, Ltd., in their respective capacities as joint lead arrangers and joint bookrunners.
“ Lenders ” means the Persons listed on Schedule 2.01 and any other Person that shall have become a Lender hereunder pursuant to Section 2.20 or pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.
“ LIBO Rate ” means, (a) with respect to any Eurocurrency Loan for any Interest Period, (i) denominated in a LIBOR Quoted Currency, the rate per annum equal to the London Interbank Offered Rate or a comparable or successor rate which rate is approved by the Lead Administrative Agent, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Lead Administrative Agent from time to time) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, for deposits in the relevant currency (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, (ii) denominated in Canadian Dollars, the rate per annum equal to the Canadian Dealer Offered Rate, or a comparable or successor rate which rate is approved by the Lead Administrative Agent, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Lead Administrative Agent from time to time) at or

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about 10:00 a.m. (Toronto, Ontario time) on the Rate Determination Date with a term equivalent to such Interest Period, (iii) denominated in Australian Dollars, the rate per annum equal to the Bank Bill Swap Reference Bid Rate or a comparable or successor rate, which rate is approved by the Lead Administrative Agent, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Lead Administrative Agent from time to time) at or about 10:30 a.m. (Melbourne, Australia time) on the Rate Determination Date with a term equivalent to such Interest Period, (iv) denominated in Singapore Dollars, the rate per annum equal to the Singapore Interbank Offered Rate, or a comparable or successor rate which rate is approved by the Lead Administrative Agent, as published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be designated by the Lead Administrative Agent from time to time) at or about 11:00 a.m. (Singapore time) on the Rate Determination Date with a term equivalent to such Interest Period, and (v) denominated in any other Non-LIBOR Quoted Currency, the rate per annum as designated with respect to such currency at the time such currency is approved by the Lead Administrative Agent and the relevant Lenders pursuant to Section 1.06 , and (b) for any rate calculation with respect to an ABR Loan on any date, the rate per annum equal to the LIBO Rate, at or about 11:00 a.m., London time, determined two (2) Business Days prior to such date for U.S. Dollar deposits with a term of one month commencing that day; provided , that , (i) to the extent a comparable or successor rate is approved by the Lead Administrative Agent in connection with any rate set forth in this definition, the approved rate shall be applied in a manner consistent with market practice; provided , further , that , to the extent such market practice is not administratively feasible for the Lead Administrative Agent, such approved rate shall be applied in a manner as otherwise reasonably determined by the Lead Administrative Agent, and (ii) if the LIBO Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.
“ LIBOR Quoted Currency ” means Dollars, euro, Pounds Sterling, and Japanese Yen, in each case as long as there is a published LIBO Rate with respect thereto.
“ Lien ” means any lien, security interest or other charge or encumbrance of any kind, including, without limitation, the lien or retained security title of a conditional vendor.
“ Loan Documents ” means this Agreement, the Notes, any Incremental Term Loan Amendment, the Fee Letter, and all other agreements, instruments, documents and certificates identified in Section 4.01 executed and delivered to, or in favor of, the Lead Administrative Agent or any Lenders and including all other pledges, powers of attorney, consents, assignments, contracts, notices, and all other written matter whether heretofore, now or hereafter executed by or on behalf of the Borrower, or any employee of the Borrower, and delivered to the Lead Administrative Agent or any Lender in connection with this Agreement or the transactions contemplated hereby. Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.
“ Loan ” means an extension of credit by a Lender to the Borrower under Article II in the form of a Revolving Loan, Term Loan or an Incremental Term Loan.
“ Local Time ” means (a) New York City time in the case of a Loan or Borrowing denominated in Dollars and (b) local time in the case of a Loan or Borrowing denominated in a Foreign Currency (it being understood that such local time shall mean London, England time unless otherwise notified by the Lead Administrative Agent).

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“ Mandatory Cost ” means any amount incurred periodically by any Lender during the term of this Agreement which constitutes fees, costs or charges imposed on lenders generally in the jurisdiction in which such Lender is domiciled or has its office that is subject to regulation by any Governmental Authority.
“ Material Adverse Change ” means any material adverse change in the business, financial condition or operations of the Borrower and its Subsidiaries taken as a whole.
“ Material Adverse Effect ” means a material adverse effect on (a) the business, financial condition or operations of the Borrower and its Subsidiaries taken as a whole, (b) the rights and remedies of the Lead Administrative Agent or any Lender under this Agreement or any Note or (c) the ability of the Borrower to perform its obligations under this Agreement or any Note.
“ Maturity Date ” means the Revolving Maturity Date or the Term Maturity Date, as applicable.
“ MLPFS ” means Merrill Lynch, Pierce, Fenner & Smith Incorporated, in its capacity as a joint lead arranger and joint book runner.
“ Moody’s ” means Moody’s Investors Service, Inc.
“ Multiemployer Plan ” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions.
“ Multiple Employer Plan ” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the Borrower or any ERISA Affiliate and at least one Person other than the Borrower and the ERISA Affiliates or (b) was so maintained and in respect of which the Borrower or any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.
“ Non-Defaulting Lender ” means, at any time, each Lender that is not a Defaulting Lender at such time.
“ Non-LIBOR Quoted Currency ” means any currency other than a LIBOR Quoted Currency.
“ Note ” means a promissory note of the Borrower payable to the order of any Lender, delivered pursuant to a request made under Section 2.10(f) , evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the Loans made by such Lender.
“ Notice of Loan Prepayment ” means a notice of prepayment with respect to a Loan, which shall be in the form of Exhibit J or such other form as may be approved by the Lead Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Lead Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.
“ Obligations ” means all unpaid principal of and accrued and unpaid interest on the Loans, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any of the Borrower and its Subsidiaries to any of the Lenders, the Lead Administrative Agent, or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated,

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secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Agreement or any of the other Loan Documents.
“ OFAC ” means the Office of Foreign Assets Control of the United States Department of the Treasury.
“ Other Connection Taxes ” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“ Other Taxes ” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.19 ).
“ Overnight Foreign Currency Rate ” means, for any day, (a) with respect to any amount denominated in Dollars, the greater of (i) the Federal Funds Effective Rate and (ii) an overnight rate determined by the Lead Administrative Agent in accordance with banking industry rules on interbank compensation, and (b) with respect to any amount denominated in a Foreign Currency, the rate of interest per annum at which overnight deposits in the applicable Foreign Currency, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by a branch or Affiliate of Bank of America in the applicable offshore interbank market for such currency to major banks in such interbank market.
“ Parent ” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.
“ Participant ” has the meaning assigned to such term in Section 9.04 .
“ Participant Register ” has the meaning assigned to such term in Section 9.04(c) .
“ Participating Member State ” means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to economic and monetary union.
“ Patriot Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, signed into law October 26, 2001.
“ PBGC ” means the Pension Benefit Guaranty Corporation (or any successor).
“ Permitted Liens ” means such of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced: (a) Liens for taxes, assessments and governmental charges or levies to the extent not required to be paid under Section 5.02 hereof; (b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary course of business securing obligations that are not overdue for a period of more than thirty (30) days or that are being contested in good faith and for which any reserves required by GAAP have been established; (c) pledges or deposits to secure obligations under workers’ compensation

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laws or similar legislation or to secure public or statutory obligations; (d) easements, rights of way and other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially adversely affect the use of such property for its present purposes; (e) Liens to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature; (f) landlords’ Liens under leases to which such Person is a party; (g) Liens consisting of leases, subleases, licenses or sublicenses granted to others and not interfering in any material respect with the business of the Borrower and its Subsidiaries, taken as a whole, and any interest or title of a lessor or licensor under any lease or license, as applicable; (h) Liens arising solely by virtue of any statutory or common law provision relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; (i) Liens securing judgments for the payment of money not constituting an Event of Default under clause (f) of Article VII or securing appeal or other surety bonds related to such judgments; and (j) restrictions on funds held for payroll customers pursuant to obligations to such customers.
“ Person ” means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture, limited liability company or other entity, or a government or any political subdivision or agency thereof.
“ Plan ” means a Single Employer Plan or a Multiple Employer Plan.
“ Platform ” has the meaning specified in Section 5.09 .
“ Pounds Sterling ” means the lawful currency of the United Kingdom.
“ Prime Rate ” means a rate of interest per annum set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such prime rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.
“ Pro Forma Basis ”, when used in reference to any computations, means that such computations are to be made on a basis that gives effect to the applicable acquisition or disposition as if such acquisition or disposition had occurred on the date specified, in a manner consistent with the requirements of the SEC for pro forma financial information set forth in Article 11 of Regulation S-X under the Securities Exchange Act of 1934, as amended. If any indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Hedge Agreement applicable to such indebtedness).
“ Public Lender ” has the meaning specified in Section 5.09 .
“ Rate Determination Date ” means, with respect to an Interest Period, the date that is two (2) Business Days prior to the commencement of such Interest Period (or such other day as is generally treated as the rate fixing day by market practice in such interbank market, as determined by the Lead Administrative Agent; provided , that , to the extent such market practice is not administratively feasible for the Lead Administrative Agent, such other day as otherwise reasonably determined by the Lead Administrative Agent).
“ Recipient ” means (a) the Lead Administrative Agent, (b) any Lender or (c) any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder.

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“ Register ” has the meaning assigned to such term in Section 9.04 .
“ Related Parties ” means, with respect to any specified Person, such Person’s Affiliates and the respective partners, directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.
“ Required Lenders ” means, at any time, Lenders having Total Credit Exposures representing more than 50% of the Total Credit Exposures of all Lenders at such time. The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.
“ Response Date ” has the meaning assigned to such term in Section 2.23 .
“ Responsible Officer ” means the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or controller of the Borrower, and solely for purposes of the delivery of incumbency certificates pursuant to Section 4.01 , the secretary or any assistant secretary of the Borrower, and solely purposes of delivering Borrowing Requests, Interest Election Requests or Notices of Loan Prepayment pursuant to Article II , any other officer or employee of the Borrower so designated by any of the foregoing officers in a notice to the Lead Administrative Agent or any other officer or employee of the Borrower designated in or pursuant to an agreement between the Borrower and the Lead Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer of the Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of the Borrower and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower.
“ Revolving Commitment ” means, as to each Lender, its obligation to make Revolving Loans to the Borrower pursuant to Section 2.01(a) , in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 , or in the Assignment and Assumption or other documentation contemplated hereby pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.
“ Revolving Credit Exposure ” means, with respect to any Lender at any time, the outstanding principal amount of such Lender’s Revolving Loans at such time.
“ Revolving Loan ” means a Loan made pursuant to Section 2.01(a) .
“ Revolving Maturity Date ” means February 1, 2021, as extended pursuant to Section 2.23 ; provided , that , if such date is not a Business Day, the Revolving Maturity Date shall be the next preceding Business Day.
“ Revolving Maturity Date Extension Request ” means a request by the Borrower, in the form of Exhibit F hereto or such other form as shall be approved by the Lead Administrative Agent, for the extension of the Revolving Maturity Date pursuant to Section 2.23 .
“ S&P ” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.
“ Sanctions ” means any sanction administered or enforced by the United States Government (including without limitation, OFAC), the United Nations Security Council, the European Union, Her Majesty’s Treasury (“ HMT ”) or other relevant sanctions authority.

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“ SEC ” means the United States Securities and Exchange Commission.
“ Singapore Dollars ” means the lawful currency of Singapore.
“ Single Employer Plan ” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the Borrower or any ERISA Affiliate and no Person other than the Borrower and the ERISA Affiliates or (b) was so maintained and in respect of which the Borrower or any ERISA Affiliate could have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated.
“ Solvent ” means, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
“ Special Notice Currency ” means, at any time, an Agreed Currency other than the currency of a country that is a member of the Organization for Economic Cooperation and Development at such time located in North America or Europe.
“ Subordinated Debt ” means any Debt of the Borrower or any Subsidiary the payment of which is subordinated to payment of the obligations under the Loan Documents.
“ subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, Controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
“ Subsidiary ” means any subsidiary of the Borrower.
“ TARGET2 ” means the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET2) payment system (or, if such payment system ceases to be operative, such other payment system (if any) reasonably determined by the Lead Administrative Agent to be a suitable replacement) for the settlement of payments in euro.
“ Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

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“ Term Facility ” means, at any time, the aggregate principal amount of the Term Loans of all of the Lenders outstanding at such time.
“ Term Loan ” means a Loan made by any Lender under the Term Facility.
“ Term Loan Commitment ” means, as to each Lender, its obligation to make Term Loans to the Borrower pursuant to Section 2.01(b) , in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 . The aggregate principal amount of the Term Loan Commitments of all of the Lenders as in effect on the Effective Date is FIVE HUNDRED MILLION DOLLARS ($500,000,000).
“ Term Maturity Date ” means February 1, 2021; provided , that , if such date is not a Business Day, the Term Maturity Date shall be the next preceding Business Day.
“ Total Credit Exposure ” means, as to any Lender at any time, the aggregate amount of unused Revolving Commitments, Revolving Credit Exposure, and outstanding amount of all Term Loans, in each case, of such Lender at such time.
“ Transactions ” means the execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents, the borrowing of Loans and other credit extensions, and the use of the proceeds thereof.
“ Type ”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to (a) clause (a) of the definition of LIBO Rate or (b) the Alternate Base Rate.
“ United States ” and “ U.S. ” mean the United States of America.
“ U.S. Person ” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.
“ U.S. Tax Compliance Certificate ” has the meaning assigned to such term in Section 2.17(f)(ii)(B)(3) .
“ Voting Stock ” means capital stock issued by a corporation, or equivalent interest in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.
“ Write-Down and Conversion Powers ” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
SECTION 1.02.      Classification of Loans and Borrowings . For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by Class and Type (e.g., a “Eurocurrency Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving Loan Borrowing”) or by Type (e.g., a “Eurocurrency Borrowing”) or by Class and Type (e.g., a “Eurocurrency Revolving Loan Borrowing”).

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SECTION 1.03.      Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation” and the specific inclusion of such phrase in certain clauses shall not imply that such phrase is not included in others. The word “will” shall be construed to have the same meaning and effect as the word “shall”. The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply), and all judgments, orders and decrees, of all Governmental Authorities. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to any restrictions on assignment set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
SECTION 1.04.      Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided , that , if the Borrower notifies the Lead Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Lead Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Debt or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein and (ii) without giving effect to any treatment of Debt in respect of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Debt in a reduced or bifurcated manner as described therein, and such Debt shall at all times be valued at the full stated principal amount thereof.
SECTION 1.05.      Status of Obligations . In the event that the Borrower shall at any time issue or have outstanding any Subordinated Debt, the Borrower shall take all such actions as shall be necessary to cause the Obligations to constitute senior indebtedness (however denominated) in respect of such Subordinated Debt and to enable the Lead Administrative Agent and the Lenders to have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under

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the terms of such Subordinated Debt. Without limiting the foregoing, the Obligations are hereby designated as “senior indebtedness” and as “designated senior indebtedness” and words of similar import under and in respect of any indenture or other agreement or instrument under which such Subordinated Debt is outstanding and are further given all such other designations as shall be required under the terms of any such Subordinated Debt in order that the Lenders may have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Debt.
SECTION 1.06.      Additional Agreed Currencies .
(a)    The Borrower may from time to time request that Eurocurrency Loans be made in a currency other than those specifically listed in the definition of “Agreed Currency”; provided , that , such requested currency is an Eligible Currency. In the case of any such request with respect to the making of Eurocurrency Loans, such request shall be subject to the approval of the Lead Administrative Agent and the Lenders.
(b)    Any such request shall be made to the Lead Administrative Agent not later than 11:00 a.m., twenty (20) Business Days prior to the date of the desired Borrowing (or such other time or date as may be agreed by the Lead Administrative Agent). The Lead Administrative Agent shall promptly notify each Lender thereof. Each Lender shall notify the Lead Administrative Agent, not later than 11:00 a.m., ten (10) Business Days after receipt of such request whether it consents, in its sole discretion, to the making of Eurocurrency Loans in such requested currency.
(c)    Any failure by a Lender to respond to such request within the time period specified in clause (b) shall be deemed to be a refusal by such Lender to permit Eurocurrency Loans to be made in such requested currency. If the Lead Administrative Agent and all of the Lenders consent to making Eurocurrency Loans in such requested currency and the Lead Administrative Agent and the Lenders reasonably determine that an appropriate interest rate is available to be used for such requested currency, the Lead Administrative Agent shall so notify the Borrower and (i) the Lead Administrative Agent, the Borrower and the Lenders may amend the definition of LIBO Rate for any Non-LIBOR Quoted Currency to the extent necessary to add the applicable LIBO Rate for such currency and (ii) to the extent the definition of LIBO Rate reflects the appropriate interest rate for such currency or has been amended to reflect the appropriate rate for such currency, such currency shall thereupon be deemed for all purposes to be an Agreed Currency for purposes of any Borrowings of Eurocurrency Loans. If the Lead Administrative Agent shall fail to obtain consent to any request for an additional currency under this Section 1.06 , the Lead Administrative Agent shall promptly so notify the Borrower.
SECTION 1.07.      Change of Currency .
(a)    Each obligation of the Borrower to make a payment denominated in the national currency unit of any member state of the European Union that adopts the euro as its lawful currency after the date hereof shall be redenominated into euro at the time of such adoption. If, in relation to the currency of any such member state, the basis of accrual of interest expressed in this Agreement in respect of that currency shall be inconsistent with any convention or practice in the London interbank market for the basis of accrual of interest in respect of the euro, such expressed basis shall be replaced by such convention or practice with effect from the date on which such member state adopts the euro as its lawful currency; provided , that , if any Borrowing in the currency of such member state is outstanding immediately prior to such date, such replacement shall take effect, with respect to such Borrowing, at the end of the then current Interest Period.

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(b)    Each provision of this Agreement shall be subject to such reasonable changes of construction as the Lead Administrative Agent may from time to time specify to be appropriate to reflect the adoption of the euro by any member state of the European Union and any relevant market conventions or practices relating to the euro.
(c)    Each provision of this Agreement also shall be subject to such reasonable changes of construction as the Lead Administrative Agent may from time to time specify to be appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the change in currency.
ARTICLE II
The Credits
SECTION 2.01.      Loans .
(a)    Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving Loans to the Borrower in Agreed Currencies from time to time during the Availability Period in an aggregate principal amount that will not result in (a) subject to Sections 2.04 and 2.11(b) , the Dollar Amount of such Lender’s Revolving Credit Exposure exceeding such Lender’s Revolving Commitment, (b) subject to Sections 2.04 and 2.11(b) , the sum of the Dollar Amount of the total Revolving Credit Exposures exceeding the Aggregate Revolving Commitments or (c) subject to Sections 2.04 and 2.11(b) , the Dollar Amount of the total outstanding principal amount of the Revolving Loans denominated in Foreign Currencies exceeding the Foreign Currency Sublimit. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.
(b)    Subject to the terms and conditions set forth herein, each Lender agrees to make a Term Loan to the Borrower in Dollars on the Effective Date in an amount not to exceed such Lender’s Applicable Percentage of the Term Facility. Term Loans repaid or prepaid may not be reborrowed.
SECTION 2.02.      Borrowings .
(a)    Each Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided , that , the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.
(b)      Subject to Section 2.14 , each Borrowing shall be comprised entirely of ABR Loans or Eurocurrency Loans as the Borrower may request in accordance herewith; provided , that , each ABR Loan shall only be made in Dollars. Each Lender at its option may make any Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan (and in the case of an Affiliate, the provisions of Sections 2.14 , 2.15 , 2.16 and 2.17 shall apply to such Affiliate to the same extent as to such Lender); provided , that , any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.
(c)      At the commencement of each Interest Period for any Eurocurrency Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 (or, if such Borrowing is denominated in (i) Japanese Yen, JPY100,000,000 or (ii) in a Foreign Currency other than Japanese Yen, 1,000,000 units of such currency) and not less than $5,000,000 (or, if such

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Borrowing is denominated in (i) Japanese Yen, JPY500,000,000 or (ii) in a Foreign Currency other than Japanese Yen, 5,000,000 units of such currency). At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000; provided , that , an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the Aggregate Revolving Commitments. Borrowings of more than one Type and Class may be outstanding at the same time; provided , that , (x) there shall not at any time be more than a total of six (6) Interest Periods outstanding with respect to all Revolving Loan Borrowings and (y) there shall not at any time be more than a total of six (6) Interest Periods outstanding with respect to the Term Facility.
(d)      Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Revolving Maturity Date or the Term Maturity Date, as applicable.
SECTION 2.03.      Requests for Borrowings . To request a Borrowing, the Borrower shall notify the Lead Administrative Agent of such request by irrevocable notice which may be given by a Borrowing Request or by telephone ( provided , that , any telephonic notice must be confirmed immediately by delivery to the Lead Administrative Agent of a Borrowing Request) (a) in the case of a Eurocurrency Borrowing denominated in Dollars, not later than 12:00 noon, Local Time, three (3) Business Days before the date of such proposed Borrowing, (b) in the case of a Eurocurrency Borrowing denominated in a Foreign Currency, not later than 12:00 noon, Local Time, four (4) Business Days (or five (5) Business Days in the case of a Special Notice Currency) before the date of the proposed Borrowing or (c) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time, one (1) Business Day before the date of the proposed Borrowing; provided , that , if the Borrower wishes to request a Eurocurrency Borrowing having an Interest Period other than one, two, three or six months in duration as provided in the definition of “Interest Period”, the applicable notice must be received by the Lead Administrative Agent not later than 12:00 noon, Local Time, (i) in the case of a Eurocurrency Borrowing denominated in Dollars, four (4) Business Days before the date of such proposed Borrowing or (ii) in the case of a Eurocurrency Borrowing denominated in a Foreign Currency, five (5) Business Days (or six (6) Business Days in the case of a Special Notice Currency) before the date of the proposed Borrowing, whereupon the Lead Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. Not later than 12:00 noon, Local Time, (A) three (3) Business Days before the requested date of such Eurocurrency Borrowing denominated in Dollars, or (ii) four (4) Business Days (or five (5) Business Days in the case of a Special Notice Currency) prior to the requested date of such Eurocurrency Borrowing denominated a Foreign Currency, the Lead Administrative Agent shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders. Each Borrowing Request shall specify the following information in compliance with Section 2.02 : (1) the aggregate amount of the requested Borrowing; (2) the date of such Borrowing, which shall be a Business Day; (3) whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; (4) in the case of a Eurocurrency Borrowing, the Agreed Currency and initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and (5) the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.07 . If no election as to the Type of Borrowing is specified, then, in the case of a Borrowing denominated in Dollars, the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurocurrency Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Lead Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

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SECTION 2.04.      Determination of Dollar Amounts . The Lead Administrative Agent will determine the Dollar Amount of: (a) each Eurocurrency Borrowing as of the date two (2) Business Days prior to the date of such Borrowing or, if applicable, the date of conversion/continuation of any Borrowing as a Eurocurrency Borrowing, and (b) all outstanding Borrowings on and as of the last Business Day of each calendar quarter and, during the continuation of an Event of Default, on any other Business Day elected by the Lead Administrative Agent in its discretion or upon instruction by the Required Lenders. Each day upon or as of which the Lead Administrative Agent determines Dollar Amounts as described in the preceding clauses (a) and (b) is herein described as a “ Computation Date ” with respect to each Borrowing for which a Dollar Amount is determined on or as of such day.
SECTION 2.05.      Intentionally Omitted .
SECTION 2.06.      Intentionally Omitted .
SECTION 2.07.      Funding of Borrowings .
(a)    Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds (i) in the case of Loans denominated in Dollars, by 12:00 noon, New York City time, to the account of the Lead Administrative Agent most recently designated by it for such purpose by notice to the Lenders and (ii) in the case of each Loan denominated in a Foreign Currency, by 12:00 noon, Local Time, in the city of the Lead Administrative Agent’s Eurocurrency Payment Office for such currency and at such Eurocurrency Payment Office for such currency. The Lead Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to (x) an account of the Borrower maintained with the Lead Administrative Agent in the United States and designated by the Borrower in the applicable Borrowing Request, in the case of Loans denominated in Dollars and (y) an account of the Borrower in the relevant jurisdiction and designated by the Borrower in the applicable Borrowing Request, in the case of Loans denominated in a Foreign Currency.
(b)      Unless the Lead Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Lead Administrative Agent such Lender’s share of such Borrowing, the Lead Administrative Agent may assume that such Lender has made such share available on such date in accordance with clause (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Lead Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Lead Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Lead Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Lead Administrative Agent in accordance with banking industry rules on interbank compensation (including without limitation the Overnight Foreign Currency Rate in the case of Loans denominated in a Foreign Currency) or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Lead Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.
SECTION 2.08.      Interest Elections .

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(a)    Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurocurrency Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurocurrency Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.
(b)      To make an election pursuant to this Section, the Borrower shall notify the Lead Administrative Agent of such election by irrevocable notice which may be given by an Interest Election Request or by telephone ( provided , that , any telephonic notice must be confirmed immediately by delivery to the Lead Administrative Agent of an Interest Election Request) by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Notwithstanding any contrary provision herein, this Section shall not be construed to permit the Borrower to (i) change the currency of any Borrowing, (ii) elect an Interest Period for Eurocurrency Loans that does not comply with Section 2.02(d) or (iii) convert any Borrowing to a Borrowing of a Type not available under such Borrowing.
(c)      Each Interest Election Request shall specify the following information in compliance with Section 2.02 : (i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing); (ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day; (iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and (iv) if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period and Agreed Currency to be applicable thereto after giving effect to such election, which Interest Period shall be a period contemplated by the definition of the term “Interest Period”. If any such Interest Election Request requests a Eurocurrency Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.
(d)      Promptly following receipt of an Interest Election Request, the Lead Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.
(e)      If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurocurrency Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period (i) in the case of a Borrowing denominated in Dollars, such Borrowing shall be converted to an ABR Borrowing and (ii) in the case of a Borrowing denominated in a Foreign Currency in respect of which the Borrower shall have failed to deliver an Interest Election Request prior to the third (3 rd ) Business Day preceding the end of such Interest Period, such Borrowing shall automatically continue as a Eurocurrency Borrowing in the same Agreed Currency with an Interest Period of one month unless such Eurocurrency Borrowing is or was repaid in accordance with Section 2.11 . Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Lead Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (A) no outstanding Borrowing denominated in Dollars may be converted to or continued

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as a Eurocurrency Borrowing, (B) unless repaid, each Eurocurrency Borrowing denominated in Dollars shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto and (C) unless repaid, each Eurocurrency Borrowing denominated in a Foreign Currency shall automatically be continued as a Eurocurrency Borrowing with an Interest Period of one month.
SECTION 2.09.      Termination and Reduction of Commitments .
(a)    Unless previously terminated, the Aggregate Revolving Commitments shall terminate on the Revolving Maturity Date.
(b)      The aggregate Term Loan Commitments shall be automatically and permanently reduced to zero on the date of the Term Loan Borrowing.
(c)      The Borrower may at any time terminate, or from time to time reduce, the Aggregate Revolving Commitments; provided , that , (i) each reduction of the Aggregate Revolving Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the Aggregate Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.11 , the Dollar Amount of the sum of the Revolving Credit Exposures would exceed the Aggregate Revolving Commitments.
(d)      The Borrower shall notify the Lead Administrative Agent of any election to terminate or reduce the Aggregate Revolving Commitments under clause (c) of this Section at least three (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Lead Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided , that , a notice of termination of the Aggregate Revolving Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Lead Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Aggregate Revolving Commitments shall be permanent. Each reduction of the Aggregate Revolving Commitments shall be made ratably among the Lenders in accordance with their respective Revolving Commitments.
(e)    If after giving effect to any reduction or termination of the Aggregate Revolving Commitments under this Section 2.09 , the Foreign Currency Sublimit exceeds the Aggregate Revolving Commitments at such time, the Foreign Currency Sublimit shall be automatically reduced by the amount of such excess.
SECTION 2.10.      Repayment of Loans; Evidence of Debt .
(a)    The Borrower hereby unconditionally promises to pay to the Lead Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan on the Revolving Maturity Date in the currency of such Loan.
(b)      The Borrower hereby unconditionally promises to pay to the Lead Administrative Agent for the account of each Lender the aggregate principal amount of all Term Loans outstanding in installments on the last Business Day of each of January, April, July and October and on the Term Maturity Date, in each case, in the respective amounts set forth in the table below (as such installments

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may hereafter be adjusted as a result of prepayments made pursuant hereto), unless accelerated sooner pursuant to Article VII :
Payment Dates
Principal Amortization Payment
(% of Initial Principal Amount of all Term Loans)
July, 2017
2.50%
October, 2017
2.50%
January, 2018
2.50%
April, 2018
2.50%
July, 2018
2.50%
October, 2018
2.50%
January, 2019
2.50%
April, 2019
2.50%
July, 2019
2.50%
October, 2019
2.50%
January, 2020
2.50%
April, 2020
2.50%
July, 2020
2.50%
October, 2020
2.50%
Term Maturity Date
Outstanding Principal Balance
of all Term Loans

(c)      Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(d)      The Lead Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class, Agreed Currency and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Lead Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
(e)      The entries made in the accounts maintained pursuant to clauses (c) and (d) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided , that , the failure of any Lender or the Lead Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.
(f)      Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Lead Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant

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to Section 9.04 ) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.11.      Prepayment of Loans .
(a)      The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice and delivery of a Notice of Loan Prepayment in accordance with the provisions of this Section 2.11(a) . The Borrower shall notify the Lead Administrative Agent by delivery of a Notice of Loan Prepayment of any prepayment hereunder (i) in the case of prepayment of a Eurocurrency Borrowing, not later than 12:00 noon, Local Time, three (3) Business Days before the date of prepayment of any Eurocurrency Borrowing denominated in Dollars (or (x) four (4) Business Days in the case of prepayment of any Eurocurrency Borrowing denominated in a Foreign Currency, or (y) or five (5) Business Days in the case of prepayment of any Eurocurrency Borrowing denominated in a Special Notice Currency) or (ii) in the case of prepayment of an ABR Borrowing, not later than 12:00 noon, New York City time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided , that , if a notice of prepayment is given in connection with a conditional notice of termination of the Aggregate Revolving Commitments as contemplated by Section 2.09 , then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09 . Any prepayment of (A) a Eurocurrency Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 (or, if such Eurocurrency Borrowing is denominated in (i) Japanese Yen, JPY100,000,000 or (ii) in a Foreign Currency other than Japanese Yen, 1,000,000 units of such currency) and not less than $5,000,000 (or, if such Borrowing is denominated in (i) Japanese Yen, JPY500,000,000 or (ii) in a Foreign Currency other than Japanese Yen, 5,000,000 units of such currency), or (B) an ABR Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000, or, in each case, if less, the entire principal amount thereof then outstanding. Promptly following receipt of any such notice relating to a Borrowing, the Lead Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02 . Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by (i) accrued interest to the extent required by Section 2.13 and (ii) break funding payments pursuant to Section 2.16 .
(b)      If at any time, (i) other than as a result of fluctuations in currency exchange rates, (A) the sum of the aggregate principal Dollar Amount of all of the Revolving Credit Exposures (calculated, with respect to those Borrowings denominated in Foreign Currencies, as of the most recent Computation Date with respect to each such Borrowing) exceeds the Aggregate Revolving Commitments or (B) the sum of the aggregate principal Dollar Amount of all of the outstanding Revolving Credit Exposures denominated in Foreign Currencies (the “ Foreign Currency Exposure ”) (so calculated), as of the most recent Computation Date with respect to each such Borrowing, exceeds the Foreign Currency Sublimit or (ii) solely as a result of fluctuations in currency exchange rates, (A) the sum of the aggregate principal Dollar Amount of all of the Revolving Credit Exposures (so calculated) exceeds 105% of the Aggregate Revolving Commitments or (B) the Foreign Currency Exposure, as of the most recent Computation Date with respect to each such Borrowing, exceeds 105% of the Foreign Currency Sublimit, the Borrower shall in each case immediately repay Borrowings in an aggregate principal amount sufficient to cause (x) the aggregate Dollar Amount of all Revolving Credit Exposures (so calculated) to be less than or equal to the Aggregate Revolving

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Commitments and (y) the Foreign Currency Exposure to be less than or equal to the Foreign Currency Sublimit, as applicable.
SECTION 2.12.      Fees .
(a)    The Borrower agrees to pay to the Lead Administrative Agent for the account of each Lender a facility fee, which shall accrue at the Applicable Rate on the daily amount of the Revolving Commitment of such Lender (whether used or unused) during the period from and including the Effective Date to but excluding the date on which such Revolving Commitment terminates; provided , that , if such Lender continues to have any Revolving Credit Exposure after its Revolving Commitment terminates, then such facility fee shall continue to accrue on the daily amount of such Lender’s Revolving Credit Exposure from and including the date on which its Revolving Commitment terminates to but excluding the date on which such Lender ceases to have any Revolving Credit Exposure. Accrued facility fees shall be payable in arrears on the last Business Day of January, April, July and October of each year and on the date on which the Aggregate Revolving Commitments terminate, commencing on the first such date to occur after the date hereof; provided , that , any facility fees accruing after the date on which the Aggregate Revolving Commitments terminate shall be payable on demand. All facility fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(b)      The Borrower agrees to pay to the Lead Administrative Agent and MLPFS, for their own respective accounts, fees payable in the amounts and at the times specified in the Fee Letter.
(c)      All fees payable hereunder shall be paid on the dates due, in Dollars and immediately available funds, to the Lead Administrative Agent for distribution, in the case of facility fees, to the Lenders. Fees paid shall not be refundable under any circumstances.
SECTION 2.13.      Interest .
(a)    The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate.
(b)      The Loans comprising each Eurocurrency Borrowing shall bear interest at the LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.
(c)      Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided in clause (a) of this Section.
(d)      Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided , that , (i) interest accrued pursuant to clause (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment

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and (iii) in the event of any conversion of any Eurocurrency Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.
(e)      Computations of interest for ABR Loans (including ABR Loans determined by reference to the LIBO Rate) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year), or, in the case of interest in respect of Loans denominated in Agreed Currencies as to which market practice differs from the foregoing, in accordance with such market practice. The applicable Alternate Base Rate or LIBO Rate shall be determined by the Lead Administrative Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.14.      Alternate Rate of Interest; Illegality .
(a)    If in connection with any request for a Loan or a conversion to or continuation thereof:
(i)    the Lead Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the LIBO Rate for any requested Interest Period with respect to a proposed Eurocurrency Loan (whether denominated in Dollars or a Foreign Currency) or in connection with an existing or proposed ABR Loan;
(ii)    the Lead Administrative Agent determines that a fundamental change has occurred in the foreign exchange or interbank markets with respect to an Agreed Currency (including, without limitation, changes in national or international financial, political or economic conditions or currency exchange rates or exchange controls);
(iii)    the Lead Administrative Agent determines that deposits (whether in Dollars or a Foreign Currency) are not being offered to banks in the applicable offshore interbank market for such currency for the applicable amount and Interest Period of the applicable Loan; or
(iv)    the Lead Administrative Agent is advised by the Required Lenders that the LIBO Rate for the applicable Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in the applicable Borrowing for such Interest Period;
then the Lead Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable and thereafter, (A) the obligation of the Lenders to make or maintain Eurocurrency Loans in the affected currency or currencies shall be suspended (to the extent of the affected Eurocurrency Loans or Interest Periods), and (B) in the event of a determination described in the foregoing with respect to the LIBO Rate component of the Alternate Base Rate, the utilization of the LIBO Rate component in determining the Alternate Base Rate shall be suspended, in each case until the Lead Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurocurrency Loans in the affected currency or currencies (to the extent of the affected Eurocurrency Loans or Interest Periods) or,

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failing that, will be deemed to have converted such request into a request for a Borrowing of ABR Loans in Dollars in the amount specified therein.
Notwithstanding the foregoing, if the Lead Administrative Agent has made the determination described in clauses (a)(i) , (a)(ii) or (a)(iii) of this Section and the Borrower shall so request, the Lead Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend the definition of “LIBO Rate” and other applicable provisions to preserve the original intent thereof in light of such change; provided , that , until so amended, such Loans will be handled as otherwise provided pursuant to the terms of this Section.
(b)    If any Lender determines that any law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender to perform any of its obligations hereunder or make, maintain or fund or charge interest with respect to any Borrowing or to determine or charge interest rates based upon the LIBO Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars or any Agreed Currency in the applicable interbank market, then, on notice thereof by such Lender to the Borrower through the Lead Administrative Agent, (i) any obligation of such Lender to issue, make, maintain, fund or charge interest with respect to any such Borrowing or to make or continue Eurocurrency Loans in the affected currency or currencies or, to convert ABR Loans to Eurocurrency Loans, shall be suspended, and (ii) if such notice asserts the illegality of such Lender making or maintaining ABR Loans the interest rate on which is determined by reference to the LIBO Rate component of the Alternate Base Rate, the interest rate on which ABR Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Lead Administrative Agent without reference to the LIBO Rate component of the Alternate Base Rate, in each case until such Lender notifies the Lead Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (x) the Borrower shall, upon demand from such Lender (with a copy to the Lead Administrative Agent), prepay or, if applicable and such Loans are denominated in Dollars, convert all Eurocurrency Loans of such Lender to ABR Loans (the interest rate on which ABR Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Lead Administrative Agent without reference to the LIBO Rate component of the Alternate Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurocurrency Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurocurrency Loans and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the LIBO Rate, the Lead Administrative Agent shall during the period of such suspension compute the Alternate Base Rate applicable to such Lender without reference to the LIBO Rate component thereof until the Lead Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the LIBO Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.
SECTION 2.15.      Increased Costs .
(a)    If any Change in Law shall:
(i)      impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement contemplated by Section 2.15(e) );

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(ii)      impose on any Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender; or
(iii)      subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;
and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making or maintaining any Loan or of maintaining its obligation to make any such Loan (including, without limitation, pursuant to any conversion of any Borrowing denominated in an Agreed Currency into a Borrowing denominated in any other Agreed Currency) or to reduce the amount of any sum received or receivable by such Lender or such other Recipient hereunder, whether of principal, interest or otherwise (including, without limitation, pursuant to any conversion of any Borrowing denominated in an Agreed Currency into a Borrowing denominated in any other Agreed Currency), then the Borrower will pay to such Lender or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.
(b)      If any Lender determines in good faith that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy and liquidity), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.
(c)      A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in clause (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof; provided , that , a Lender shall not be entitled to any compensation pursuant to Section 2.15(a) or (b) to the extent such Lender is not generally imposing such changes or requesting such compensation from other similarly situated borrowers under similar circumstances.
(d)      Failure or delay on the part of any Lender to demand compensation pursuant to clause (a) or (b) of this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided , that , the Borrower shall not be required to compensate a Lender pursuant to clause (a) or (b) of this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided , further , that , if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

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(e)    The Borrower shall pay to each Lender, (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurocurrency Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Loans, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error), which in each case shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least ten (10) days’ prior notice (with a copy to the Lead Administrative Agent) of such additional interest or costs from such Lender in the form of a certificate of such Lender setting forth the amount of such additional interest or costs and the computation (in reasonable detail) thereof. If a Lender fails to give notice ten (10) days prior to the relevant Interest Payment Date, such additional interest shall be due and payable ten (10) days from receipt of such notice.
(f)    If any Lender incurs any Mandatory Costs attributable to the Obligations, then from time to time the Borrower will pay to such Lender such Mandatory Costs. Such amount shall be expressed as a percentage rate per annum and shall be payable on the full amount of the applicable Obligations. A certificate of a Lender setting forth such amount and the computation (in reasonable detail) thereof shall be delivered to the Borrower and shall be conclusive absent manifest error.
SECTION 2.16.      Break Funding Payments . In the event of (a) the payment of any principal of any Eurocurrency Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default or as a result of any prepayment pursuant to Section 2.11 ), (b) the conversion of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurocurrency Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.11(a) and is revoked in accordance therewith) or (d) the assignment of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19 , then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. Such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for deposits in the relevant currency of a comparable amount and period from other banks in the eurocurrency market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.
SECTION 2.17.      Taxes .

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(a)     Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.
(i)    Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of the Lead Administrative Agent) requires the deduction or withholding of any Tax from any such payment by the Lead Administrative Agent or the Borrower, then the Lead Administrative Agent or the Borrower shall be entitled to make such deduction or withholding, upon the basis of the information and documentation to be delivered pursuant to subsection (f) below.
(ii)    If the Borrower or the Lead Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including both United States Federal backup withholding and withholding taxes, from any payment, then (A) the Lead Administrative Agent shall withhold or make such deductions as are determined by the Lead Administrative Agent to be required based upon the information and documentation it has received pursuant to subsection (f) below, (B) the Lead Administrative Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the Borrower shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 2.17 ) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.
(iii)    If the Borrower or the Lead Administrative Agent shall be required by any applicable laws other than the Code to withhold or deduct any Taxes from any payment, then (A) the Borrower or the Lead Administrative Agent, as required by such laws, shall withhold or make such deductions as are determined by it to be required based upon the information and documentation it has received pursuant to subsection (f) below, (B) the Borrower or the Lead Administrative Agent, to the extent required by such laws, shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with such laws, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the Borrower shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 2.17 ) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.
(b)      Payment of Other Taxes by the Borrower. Without limiting the provisions of subsection (a) above, the Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Lead Administrative Agent timely reimburse it for, Other Taxes.
(c)      Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section 2.17 , the Borrower shall deliver to the Lead Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Lead Administrative Agent.

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(d)      Indemnification by the Borrower. The Borrower shall indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Lead Administrative Agent), or by the Lead Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. The Borrower shall indemnify the Lead Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, for any amount which a Lender for any reason fails to pay indefeasibly to the Lead Administrative Agent as required pursuant to Section 2.17(e) below. To the extent that the Borrower indemnifies the Lead Administrative Agent pursuant to the immediately preceding sentence for (A) an amount described in Section 2.17(e)(ii) or 2.17(e)(iii) or (B) an amount described in Section 2.17(e)(i) for which the Borrower has already indemnified an applicable Lender, the applicable Lender shall indemnify the Borrower to the extent of such payment.
(e)      Indemnification by the Lenders. Each Lender shall severally indemnify the Lead Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Lead Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Lead Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Lead Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Lead Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Lead Administrative Agent to the Lender from any other source against any amount due to the Lead Administrative Agent under this subsection (e) .
(f)      Status of Lenders; Tax Documentation.
(i)    Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Lead Administrative Agent, at the time or times reasonably requested by the Borrower or the Lead Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Lead Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Lead Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Lead Administrative Agent as will enable the Borrower or the Lead Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation either (A) set forth in Section 2.17(f)(ii)(A) , (ii)(B) and below or (B) required by applicable law other than the Code or required by the

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taxing authorities of the non-U.S. jurisdiction pursuant to such applicable law to comply with the requirements for exemption or reduction of withholding tax in that jurisdiction) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(ii)      Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person:
(A)    any Lender that is a U.S. Person shall deliver to the Borrower and the Lead Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Lead Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax;
(B)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Lead Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Lead Administrative Agent), whichever of the following is applicable;
(1)    in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BENE (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BENE (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(2)    executed copies of IRS Form W-8ECI;
(3)    in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit G-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “ U.S. Tax Compliance Certificate ”) and (y) executed copies of IRS Form W-8BENE (or W-8BEN, as applicable); or
(4)    to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BENE (or W-8BEN, as applicable), a U.S. Tax Compliance

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Certificate substantially in the form of Exhibit G-2 or Exhibit G-3 , IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided , that , if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-4 on behalf of each such direct and indirect partner;
(C)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Lead Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Lead Administrative Agent), executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. Federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Lead Administrative Agent to determine the withholding or deduction required to be made; and
(D)    if a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Lead Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Lead Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Lead Administrative Agent as may be necessary for the Borrower and the Lead Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D) , “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(iii)    Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Lead Administrative Agent in writing of its legal inability to do so.
(g)      Treatment of Certain Refunds. Unless required by applicable laws, at no time shall the Lead Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes withheld or deducted from funds paid for the account of such Lender, as the case may be. If any Recipient determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.17 , it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.17 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses

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(including Taxes) incurred by such Recipient, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Recipient, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Recipient in the event the Recipient is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this subsection, in no event will the applicable Recipient be required to pay any amount to the Borrower pursuant to this subsection the payment of which would place the Recipient in a less favorable net after-Tax position than such Recipient would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This subsection shall not be construed to require any Recipient to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.
(h)      Survival. Each party’s obligations under this Section 2.17 shall survive the resignation or replacement of the Lead Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Aggregate Revolving Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.
SECTION 2.18.      Payments Generally; Pro Rata Treatment; Sharing of Set-offs .
(a)      The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or of amounts payable under Section 2.15 , 2.16 or 2.17 , or otherwise) prior to (i) in the case of payments denominated in Dollars, 12:00 noon, New York City time and (ii) in the case of payments denominated in a Foreign Currency, 12:00 noon, Local Time, in the city of the Lead Administrative Agent’s Eurocurrency Payment Office for such currency, in each case on the date when due, in immediately available funds, free and clear of and without condition or deduction for any counterclaim, defense, recoupment or set-off. Any amounts received after such time on any date may, in the discretion of the Lead Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made (i) in the same currency in which the applicable Borrowing was made (or where such currency has been converted to euro, in euro) and (ii) to the Lead Administrative Agent at its offices at 901 Main Street, Mail Code: TX1-492-14-11, Dallas, Texas 75202-3714 or, in the case of a Borrowing denominated in a Foreign Currency, the Lead Administrative Agent’s Eurocurrency Payment Office for such currency, except that payments pursuant to Sections 2.15 , 2.16 , 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The Lead Administrative Agent shall distribute any such payments denominated in the same currency received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. Notwithstanding the foregoing provisions of this Section, if, after the making of any Borrowing in any Foreign Currency, currency control or exchange regulations are imposed in the country which issues such currency with the result that the type of currency in which the Borrowing was made (the “ Original Currency ”) no longer exists or the Borrower is not able to make payment to the Lead Administrative Agent for the account of the Lenders in such Original Currency, then all payments to be made by the Borrower hereunder in such currency shall instead be made when due in Dollars in an amount equal to the Dollar Amount (as of the date of repayment) of such payment due, it being the intention of the parties

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hereto that the Borrower takes all risks of the imposition of any such currency control or exchange regulations.
(b)      If at any time insufficient funds are received by and available to the Lead Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.
(c)      If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided , that , (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
(d)      Unless the Lead Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Lead Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Lead Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Lead Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Lead Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Lead Administrative Agent in accordance with banking industry rules on interbank compensation (including without limitation the Overnight Foreign Currency Rate in the case of Loans denominated in a Foreign Currency).
(e)      If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.07(b) , 2.18(d) or 9.03(c) , then the Lead Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), (i) apply any amounts thereafter received by the Lead Administrative Agent for the account of such Lender and for the benefit of the Lead Administrative Agent to satisfy such Lender’s obligations to it under such Section until all such unsatisfied obligations are fully paid and/or (ii) hold any such amounts in a segregated account as

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cash collateral for, and application to, any future funding obligations of such Lender under any such Section; in the case of each of clauses (i) and (ii) above, in any order as determined by the Lead Administrative Agent in its discretion.
SECTION 2.19.      Mitigation Obligations; Replacement of Lenders .
(a)    If any Lender requests compensation under Section 2.15 , or the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17 , then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17 , as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b)      If (i) any Lender requests compensation under Section 2.15 , (ii) the Borrower is required to pay Indemnified Taxes or any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17 , (iii) any Lender becomes a Defaulting Lender or (iv) any Lender is a Declining Lender under Section 2.23 , then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Lead Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04 ), all its interests, rights and obligations under the Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided , that , (i) the Borrower shall have received the prior written consent of the Lead Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17 , such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
SECTION 2.20.      Expansion Option . The Borrower may from time to time elect to increase the Aggregate Revolving Commitments and/or enter into one or more tranches of term loans (each, an “ Incremental Term Loan ”), in each case in minimum increments of $25,000,000, so long as, after giving effect thereto, (x) the aggregate amount of all such increases of the Aggregate Revolving Commitments does not exceed $250,000,000 and (y) the aggregate initial principal amount of all such Incremental Term Loans does not exceed $500,000,000. The Borrower may arrange for any such increase or tranche to be provided by one or more Lenders (each Lender so agreeing to an increase in its Revolving Commitment, or to participate in such Incremental Term Loans, an “ Increasing Lender ”), or by one or more new banks, financial institutions or other entities (each such new bank, financial institution or other entity, an “ Augmenting Lender ”; provided , that , none of the Borrower or any of its Subsidiaries or Affiliates or a natural person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural person) may be an Augmenting Lender), to increase their existing Revolving Commitments, or to participate in such

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Incremental Term Loans, or extend new Revolving Commitments, as the case may be; provided , that , (i) each Augmenting Lender shall be subject to the approval of the Borrower and the Lead Administrative Agent and (ii) (x) in the case of an Increasing Lender, the Borrower and such Increasing Lender execute an agreement substantially in the form of Exhibit C hereto, and (y) in the case of an Augmenting Lender, the Borrower and such Augmenting Lender execute an agreement substantially in the form of Exhibit D hereto. No consent of any Lender (other than the Augmenting Lenders and Increasing Lenders participating in the increase or any Incremental Term Loan) shall be required for any increase in the Aggregate Revolving Commitments or Incremental Term Loan pursuant to this Section 2.20 . Increases and new Revolving Commitments and Incremental Term Loans created pursuant to this Section 2.20 shall become effective on the date agreed by the Borrower, the Lead Administrative Agent and the relevant Increasing Lenders or Augmenting Lenders, and the Lead Administrative Agent shall notify each Lender thereof. Notwithstanding the foregoing, no increase in the Aggregate Revolving Commitments (or in the Revolving Commitment of any Lender) or tranche of Incremental Term Loans shall become effective under this paragraph unless, (i) on the proposed date of the effectiveness of such increase or Incremental Term Loans, (A) the conditions set forth in clauses (a) and (b) Section 4.02 shall be satisfied or waived by the Required Lenders and the Lead Administrative Agent shall have received a certificate to that effect dated such date and executed by a Financial Officer who is a Responsible Officer of the Borrower and (B) the Borrower shall be in compliance (on a pro forma basis) with the covenants contained in Section 6.07 (and assuming for such purposes that any increase in the Aggregate Revolving Commitments is fully drawn) and (ii) the Lead Administrative Agent shall have received documents consistent with those delivered on the Effective Date as to the corporate power and authority of the Borrower to borrow hereunder after giving effect to such increase. On the effective date of any increase in the Aggregate Revolving Commitments or any Incremental Term Loans being made, (i) each relevant Increasing Lender and Augmenting Lender shall make available to the Lead Administrative Agent such amounts in immediately available funds as the Lead Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase and the use of such amounts to make payments to such other Lenders, each Lender’s portion of the outstanding Revolving Loans of all the Lenders to equal its Applicable Percentage of such outstanding Revolving Loans, and (ii) except in the case of any Incremental Term Loans, the Borrower shall be deemed to have repaid and reborrowed all outstanding Revolving Loans as of the date of any increase in the Aggregate Revolving Commitments (with such reborrowing to consist of the Types of Revolving Loans, with related Interest Periods if applicable, specified in a notice delivered by the Borrower, in accordance with the requirements of Section 2.03 ). The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Eurocurrency Loan, shall be subject to indemnification by the Borrower pursuant to the provisions of Section 2.16 if the deemed payment occurs other than on the last day of the related Interest Periods. The Incremental Term Loans (a) shall rank pari passu in right of payment with the Revolving Loans and the Term Loans, (b) shall not mature earlier than the Latest Maturity Date (but may have amortization prior to such date) and (c) shall be treated substantially the same as (and in any event no more favorably than) the Revolving Loans and the Term Loans; provided , that , (i) the terms and conditions applicable to any tranche of Incremental Term Loans maturing after the Latest Maturity Date may provide for material additional or different financial or other covenants or prepayment requirements applicable only during periods after the Latest Maturity Date and (ii) the Incremental Term Loans may be priced differently than the Revolving Loans and the Term Loans. Incremental Term Loans shall be made hereunder pursuant to an amendment or restatement (an “ Incremental Term Loan Amendment ”) of this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, each Increasing Lender participating in such tranche, each Augmenting Lender participating in such tranche, if any, and the Lead Administrative Agent. The Incremental Term Loan Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Lead Administrative Agent, to effect the provisions of this Section 2.20 . Nothing contained in this Section 2.20 shall constitute, or

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otherwise be deemed to be, a commitment on the part of any Lender to increase its Revolving Commitment hereunder, or provide Incremental Term Loans, at any time.
SECTION 2.21.      Judgment Currency . If for the purposes of obtaining judgment in any court it is necessary to convert a sum due from the Borrower hereunder in the currency expressed to be payable herein (the “ specified currency ”) into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Lead Administrative Agent could purchase the specified currency with such other currency at the Lead Administrative Agent’s main New York City office on the Business Day preceding that on which final, non-appealable judgment is given. The obligations of the Borrower in respect of any sum due to any Lender or the Lead Administrative Agent hereunder shall, notwithstanding any judgment in a currency other than the specified currency, be discharged only to the extent that on the Business Day following receipt by such Lender or the Lead Administrative Agent (as the case may be) of any sum adjudged to be so due in such other currency such Lender or the Lead Administrative Agent (as the case may be) may in accordance with normal, reasonable banking procedures purchase the specified currency with such other currency. If the amount of the specified currency so purchased is less than the sum originally due to such Lender or the Lead Administrative Agent, as the case may be, in the specified currency, the Borrower agrees, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender or the Lead Administrative Agent, as the case may be, against such loss, and if the amount of the specified currency so purchased exceeds (a) the sum originally due to any Lender or the Lead Administrative Agent, as the case may be, in the specified currency and (b) any amounts shared with other Lenders as a result of allocations of such excess as a disproportionate payment to such Lender under Section 2.18 , such Lender or the Lead Administrative Agent, as the case may be, agrees to remit such excess to the Borrower.
SECTION 2.22.      Defaulting Lenders .
(a)    Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:
(i)    Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and Section 9.02 .
(ii)    Any payment of principal, interest, fees or other amounts received by the Lead Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or otherwise) or received by the Lead Administrative Agent from a Defaulting Lender pursuant to Section 9.08 shall be applied at such time or times as may be determined by the Lead Administrative Agent as follows: first , to the payment on any amounts owing by such Defaulting Lender to the Lead Administrative Agent hereunder; second , as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Borrowing in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Lead Administrative Agent; third , if so determined by the Lead Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; fourth , to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any

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Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth , so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and sixth , to such Defaulting Lender or as otherwise as may be required under the Loan Documents in connection with any Lien conferred thereunder or directed by a court of competent jurisdiction; provided , that , if (1) such payment is a payment of the principal amount of any Borrowings in respect of which such Defaulting Lender has not fully funded its appropriate share, and (2) such Borrowings were made at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of owed to such Defaulting Lender until such time as all Loans are held by the Lenders pro rata in accordance with the Commitments hereunder. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(iii)    (A) Each Defaulting Lender shall be entitled to receive fees payable under Section 2.12(a) for any period during which that Lender is a Defaulting Lender only to extent allocable to the sum of the outstanding principal amount of the Revolving Loans funded by it.
(B)    With respect to any fee payable under Section 2.12(a) not required to be paid to any Defaulting Lender pursuant to clause (A) above, the Borrower shall not be required to pay the remaining amount of any such fee.
(b)    If the Borrower and the Lead Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Lead Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Lead Administrative Agent may determine to be necessary to cause the Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages, whereupon such Lender will cease to be a Defaulting Lender; provided , that , no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; provided , further , that , except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.
SECTION 2.23.      Extension of Revolving Maturity Date .
(a)    The Borrower may, by delivery of a Revolving Maturity Date Extension Request to the Lead Administrative Agent (which shall promptly deliver a copy thereof to each of the Lenders) not less than forty-five (45) days, and not more than seventy-five (75) days, prior to the then existing Revolving Maturity Date (the “ Existing Revolving Maturity Date ”), request that the Lenders extend the Existing Revolving Maturity Date in accordance with this Section 2.23 ; provided , that , (i) the Borrower shall not be permitted to submit more than two (2) Revolving Maturity Date Extension Requests during the term of this Agreement and (ii) no such Revolving Maturity Date Extension

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Request shall be effective unless the total Revolving Commitments of the Consenting Lenders (as defined below) and the total Revolving Commitments of the Replacement Lenders (as defined below) shall be more than 50% of the Aggregate Revolving Commitments in effect immediately prior to the applicable Existing Revolving Maturity Date. Each Revolving Maturity Date Extension Request shall (i) specify the date to which the Revolving Maturity Date is sought to be extended (which shall in no event be later than the date that is one year after the Existing Revolving Maturity Date), (ii) specify the changes, if any, to the Applicable Rate to be applied in determining the interest payable on Revolving Loans of, and fees payable hereunder to, Consenting Lenders in respect of that portion of their Revolving Commitments (and related Revolving Loans) extended to such new Revolving Maturity Date and the time as of which such changes will become effective (which may be prior to the Existing Revolving Maturity Date), and (iii) specify any other amendments or modifications to this Agreement to be effected in connection with such Revolving Maturity Date Extension Request; provided , that , no such changes or modifications requiring approvals pursuant to Section 9.02(b) shall become effective prior to the then existing Revolving Maturity Date unless such other approvals have been obtained. In the event a Revolving Maturity Date Extension Request shall have been delivered by the Borrower, each Lender shall have the right (but not the obligation) to agree to the extension of the Existing Revolving Maturity Date and other matters contemplated thereby on the terms and subject to the conditions set forth therein (each Lender agreeing to the Revolving Maturity Date Extension Request being referred to herein as a “ Consenting Lender ” and each Lender not agreeing thereto being referred to herein as a “ Declining Lender ”), which right may be exercised by written notice thereof, specifying the maximum amount of the Revolving Commitment of such Lender with respect to which such Lender agrees to the extension of the Revolving Maturity Date, delivered to the Borrower (with a copy to the Lead Administrative Agent) not later than a date (a “ Response Date ”) to be agreed upon by the Borrower and the Lead Administrative Agent following the date on which the Revolving Maturity Date Extension Request shall have been delivered by the Borrower (it being understood that (x) any Lender that shall have failed to exercise such right as set forth above shall be deemed to be a Declining Lender and (y) any Response Date shall be no earlier than fourteen (14) days after the applicable Revolving Maturity Date Extension Request has been delivered to the Lenders). If a Lender elects to extend only a portion of its then existing Revolving Commitment, it will be deemed for purposes hereof to be a Consenting Lender in respect of such extended portion and a Declining Lender in respect of the remaining portion of its Revolving Commitment. If Consenting Lenders shall have agreed to such Revolving Maturity Date Extension Request in respect of Revolving Commitments held by them, then, subject to clause (d) of this Section, on the date specified in the Revolving Maturity Date Extension Request as the effective date thereof (the “ Extension Effective Date ”), (i) the Existing Revolving Maturity Date of the applicable Revolving Commitments shall, as to the Consenting Lenders, be extended to such date as shall be specified therein, (ii) the terms and conditions of the Revolving Commitments of the Consenting Lenders (including interest and fees in respect thereof), shall be modified as set forth in the Revolving Maturity Date Extension Request and (iii) such other modifications and amendments hereto specified in the Revolving Maturity Date Extension Request shall (subject to any required approvals (including those of the Required Lenders) having been obtained) become effective.
(b)      Notwithstanding the foregoing, the Borrower shall have the right, in accordance with the provisions of Sections 2.19 and 9.04 , at any time prior to the Existing Revolving Maturity Date, to replace a Declining Lender (for the avoidance of doubt, only in respect of that portion of such Lender’s Revolving Commitments subject to a Revolving Maturity Date Extension Request that it has not agreed to extend) with a Lender, or other financial institution approved by the Lead Administrative Agent (such approval not to be unreasonably withheld or delayed) (any such Lender or other financial institution, a “ Replacement Lender ”), that will agree to such Revolving Maturity

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Date Extension Request, and any such Replacement Lender shall for all purposes constitute a Consenting Lender in respect of the Revolving Commitment assigned to and assumed by it on and after the effective time of such replacement.
(c)      If a Revolving Maturity Date Extension Request has become effective hereunder:
(i)      not later than the fifth (5 th ) Business Day prior to the Existing Revolving Maturity Date, the Borrower shall make prepayments of Revolving Loans in the manner set forth in Section 2.11 such that, after giving effect to such prepayments, the aggregate Revolving Credit Exposures outstanding as of such date will not exceed the Revolving Commitments of the Consenting Lenders extended pursuant to this Section 2.23 (and the Borrower shall not be permitted thereafter to request any Revolving Loan if, after giving effect thereto, the aggregate Revolving Credit Exposures outstanding would exceed the aggregate amount of the Revolving Commitments so extended); and (ii) on the Existing Revolving Maturity Date, the Revolving Commitment of each Declining Lender shall, to the extent not assumed, assigned or transferred as provided in clause (b) of this Section, terminate, and the Borrower shall repay all of the Revolving Loans of each Declining Lender, to the extent such Revolving Loans shall not have been so purchased, assigned and transferred, in each case together with accrued and unpaid interest and all fees and other amounts owing to such Declining Lender hereunder (accordingly, the Revolving Commitment of any Consenting Lender shall, to the extent the amount of such Revolving Commitment exceeds the amount set forth in the notice delivered by such Lender pursuant to clause (a) of this Section, be permanently reduced by the amount of such excess, and the Borrower shall prepay the proportionate part of the outstanding Revolving Loans of such Consenting Lender, in each case together with accrued and unpaid interest thereon to but excluding the Existing Revolving Maturity Date and all fees and other amounts payable in respect thereof on or prior to the Existing Revolving Maturity Date), it being understood that such repayments may be funded with the proceeds of new Revolving Borrowings made simultaneously with such repayments by the Consenting Lenders, which such Revolving Borrowings shall be made ratably by the Consenting Lenders in accordance with their extended Revolving Commitments.
(d)      Notwithstanding the foregoing, no Revolving Maturity Date Extension Request shall become effective hereunder unless, on the Extension Effective Date, (i) the conditions set forth in Section 4.02 shall be satisfied (with all references in such Section to a Borrowing being deemed to be references to such Revolving Maturity Date Extension Request) and the Lead Administrative Agent shall have received a certificate to that effect dated such date and executed by a Financial Officer who is a Responsible Officer of the Borrower and (ii) the Lead Administrative Agent shall have received customary corporate authorization documents (including an opinion of counsel as to due authorization and enforceability) to the extent reasonably required by the Lead Administrative Agent.
(e)      Notwithstanding any provision of this Agreement to the contrary, it is hereby agreed that no extension of an Existing Revolving Maturity Date in accordance with the express terms of this Section 2.23 , or any amendment or modification of the terms and conditions of the Revolving Commitments and Revolving Loans of the Consenting Lenders effected pursuant thereto, shall be deemed to (i) violate the last sentence of Section 2.09(d) or Section 2.18(b) or (d) or any other provision of this Agreement requiring the ratable reduction of Aggregate Revolving Commitments

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or the ratable sharing or making of payments or (ii) require the consent of all Lenders or all affected Lenders under Section 9.02(b) .
(f)      The Borrower, the Lead Administrative Agent and the Consenting Lenders may enter into an amendment to this Agreement to effect such modifications as may be necessary to reflect the terms of any Revolving Maturity Date Extension Request that has become effective in accordance with the provisions of this Section 2.23 .
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.01.      Organization; Good Standing . The Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.
SECTION 3.02.      Authorization; No Conflicts . The execution, delivery and performance by the Borrower of this Agreement and the Notes to be delivered by it, and the consummation of the transactions contemplated hereby, are within the Borrower’s corporate powers, have been duly authorized by all necessary corporate action, and do not contravene (i) the Borrower’s charter or by-laws or (ii) law or any contractual restriction binding on or affecting the Borrower, other than violations of contractual restrictions that could not reasonably be expected to result in a Material Adverse Effect or result in the imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.
SECTION 3.03.      Governmental Approvals . No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory body or any other third party is required for the due execution, delivery and performance by the Borrower of this Agreement or the Notes to be delivered by it.
SECTION 3.04.      Enforceability . This Agreement has been, and each of the Notes to be delivered by it hereunder will have been, duly executed and delivered by the Borrower. This Agreement is, and each of the Notes when delivered hereunder will be, the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with their respective terms subject to (i) bankruptcy, insolvency, reorganization, moratorium and other similar laws of general application affecting the rights and remedies of creditors and (ii) general principles of equity, regardless of whether applied in proceedings in equity or at law.
SECTION 3.05.      Financial Condition; No Material Adverse Change .
(a)    The Consolidated balance sheet of the Borrower and its Subsidiaries as at July 31, 2015, and the related Consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the fiscal year then ended, accompanied by an opinion of Ernst & Young LLP, independent public accountants, and the Consolidated balance sheet of the Borrower and its Subsidiaries as at October 31, 2015, and the related Consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the three months then ended, duly certified by the chief financial officer of the Borrower as contemplated by Item 601(b)(3)(i) of Regulation S-K under the Securities Exchange Act of 1934, as amended, copies of which have been furnished to each Lender, fairly present, subject, in the case of said balance sheet as at October 31, 2015, and said statements of income and cash flows for the three months then ended, to year-end audit adjustments,

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the Consolidated financial condition of the Borrower and its Subsidiaries as at such dates and the Consolidated results of the operations of the Borrower and its Subsidiaries for the periods ended on such dates, all in accordance with GAAP consistently applied.
(b)      Since July 31, 2015, there has been no Material Adverse Change.
SECTION 3.06.      Litigation and Environmental Matters . There is no pending or threatened action, suit, investigation, litigation or proceeding, including, without limitation, any Environmental Action, affecting the Borrower or any of its Subsidiaries before any court, governmental agency or arbitrator that (i) would have a Material Adverse Effect (other than the Disclosed Litigation), and there has been no adverse change in the status, or financial effect on the Borrower or any of its Subsidiaries, of the Disclosed Litigation from that described in the Borrower’s filings made prior to the date hereof with the SEC under the Securities Exchange Act of 1934, as amended, that has resulted in or would have a Material Adverse Effect, or (ii) could reasonably be expected to affect the legality, validity or enforceability of this Agreement or any Note or the consummation of the transactions contemplated hereby.
SECTION 3.07.      Federal Reserve Regulations . The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board). Following application of the proceeds of each Loan, not more than twenty-five percent (25%) of the value of the assets (either of the Borrower only or of the Borrower and its Subsidiaries on a Consolidated basis) subject to the provisions of Section 6.01 or subject to any restriction contained in any agreement or instrument between the Borrower and any Lender or any Affiliate of any Lender relating to Debt and within the scope of clause (d) of Article VII will be margin stock (within the meaning of Regulation U issued by the Board).
SECTION 3.08.      Investment Company Status . The Borrower is not an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.
SECTION 3.09.      Disclosure . Neither the Information Memorandum nor any other information, exhibits or reports furnished by or on behalf of the Borrower to the Lead Administrative Agent or any Lender in connection with the negotiation and syndication of this Agreement or pursuant to the terms of this Agreement, when taken as a whole, as and when furnished, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements made therein not misleading in any material respect; provided , that , with respect to any projected financial information, the Borrower represents only that such information was prepared in good faith based on assumptions believed to be reasonable at the time made.
SECTION 3.10.      Solvency . The Borrower is, individually and together with its Subsidiaries, Solvent.
SECTION 3.11.      OFAC . Neither the Borrower, nor any of its Subsidiaries, nor, to the knowledge of the Borrower and its Subsidiaries, any director, officer, or employee thereof, is an individual or entity that is, or is owned or controlled by any individual or entity that is (a) currently the subject or target of any Sanctions, (b) included on OFAC’s List of Specially Designated nationals, HMT’s Consolidated List of Financial Sanctions Targets and the Investment Ban List, or any similar list enforced by any other relevant sanctions authority or (c) located, organized or resident in a Designated Jurisdiction in violation of any Sanctions.

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SECTION 3.12.      Anti-Corruption Laws . The Borrower and its Subsidiaries have conducted their businesses in compliance in all material respects with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions and have instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.
SECTION 3.13.      EEA Financial Institution . The Borrower is not an EEA Financial Institution.
ARTICLE IV
Conditions
SECTION 4.01.      Effective Date . The obligations of the Lenders to make Loans hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02 ):
(a)      The Lead Administrative Agent (or its counsel) shall have received (i) from each party hereto either (A) a counterpart of this Agreement signed on behalf of such party or (B) written evidence satisfactory to the Lead Administrative Agent (which may include telecopy or electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement and (ii) duly executed copies of the Loan Documents and such other legal opinions, certificates, documents, instruments and agreements as the Lead Administrative Agent shall reasonably request in connection with the Transactions, all in form and substance satisfactory to the Lead Administrative Agent and its counsel and as further described in the list of closing documents attached as Exhibit E .
(b)      The Lead Administrative Agent shall have received a favorable written opinion (addressed to the Lead Administrative Agent and the Lenders and dated the Effective Date) of Fenwick & West LLP, counsel for the Borrower, substantially in the form of Exhibit B , and covering such other matters relating to the Borrower, the Loan Documents or the Transactions as the Lead Administrative Agent shall reasonably request. The Borrower hereby requests such counsel to deliver such opinion.
(c)      The Lead Administrative Agent shall have received such documents and certificates as are customary for transactions of this type relating to the organization, existence and good standing of the Borrower, the authorization of the Transactions and any other legal matters relating to the Borrower, the Loan Documents or the Transactions, all in form and substance satisfactory to the Lead Administrative Agent and its counsel and as further described in the list of closing documents attached as Exhibit E .
(d)      The Lead Administrative Agent shall have received a certificate, dated the Effective Date and signed by a Responsible Officer of the Borrower, confirming compliance with the conditions set forth in clauses (a) and (b) of Section 4.02 .
(e)      The Lead Administrative Agent shall have received evidence satisfactory to it that the Existing Credit Agreement shall have been terminated and cancelled and all indebtedness thereunder shall have been fully repaid (except to the extent being so repaid with the initial Loans).

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(f)      The Lead Administrative Agent shall have received evidence reasonably satisfactory to it that all governmental and third party approvals necessary or, in the reasonable discretion of the Lead Administrative Agent, advisable in connection with the Transactions have been obtained and are in full force and effect.
(g)      The Lead Administrative Agent shall have received (i) audited Consolidated financial statements of the Borrower and its Subsidiaries for the fiscal years ended July 31, 2015 and July 31, 2014, and (ii) unaudited interim Consolidated financial statements of the Borrower and its Subsidiaries for the fiscal quarter ended October 31, 2015.
(h)      Each Lender shall have received all documentation and other information that it has reasonably requested in writing at least ten (10) days prior to the Effective Date and that it has reasonably determined is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the Patriot Act.
(i)      The Lead Administrative Agent, the Lead Arrangers and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder.
For purposes of determining compliance with the conditions specified in this Section 4.01 , each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Lead Administrative Agent shall have received notice from such Lender prior to the proposed Effective Date specifying its objection thereto. The Lead Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding.
SECTION 4.02.      Each Borrowing . The obligation of each Lender to make a Loan on the occasion of any Borrowing is subject to the satisfaction of the following conditions:
(a)      The representations and warranties of the Borrower set forth in this Agreement (other than, after the Effective Date, those set forth in Sections 3.05(b) and 3.06 ) shall be true and correct on and as of the date of such Borrowing.
(b)      At the time of and immediately after giving effect to such Borrowing, no Default or Event of Default shall have occurred and be continuing.
(c)    In the case of a Borrowing to be denominated in a Foreign Currency, (i) such currency remains an Eligible Currency, and (ii) there shall not have occurred any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which in the reasonable opinion of the Lead Administrative Agent or the Required Lenders would make it impracticable for such Borrowing to be denominated in the relevant Foreign Currency.
Each borrowing (other than a conversion of Loans to the other Type or a continuation of Eurocurrency Loans) shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in clauses (a) and (b) of this Section.
ARTICLE V

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Affirmative Covenants
Until the Aggregate Revolving Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, the Borrower covenants and agrees with the Lenders that:
SECTION 5.01.      Compliance with Laws, etc . The Borrower will comply, and cause each of its Subsidiaries to comply, with all applicable laws, rules, regulations and orders, such compliance to include, without limitation, compliance with ERISA, Environmental Laws and the Patriot Act, except in such instances in which the failure to comply therewith would not reasonably be expected to have a Material Adverse Effect.
SECTION 5.02.      Payment of Taxes, etc . The Borrower will pay and discharge, and cause each of its Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all material taxes, assessments and governmental charges or levies imposed upon it or upon its property and (ii) all lawful claims that, if unpaid, might by law become a Lien upon its property; provided , that , neither the Borrower nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves under generally applicable accounting principles are being maintained, unless and until any Lien resulting therefrom attaches to its property and becomes enforceable against its other creditors.
SECTION 5.03.      Maintenance of Insurance . Except where the failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, the Borrower will maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which the Borrower or such Subsidiary operates; provided , that , the Borrower and its Subsidiaries may self-insure to the same extent as other companies engaged in similar businesses and owning similar properties in the same general areas in which the Borrower or such Subsidiary operates and to the extent consistent with prudent business practice.
SECTION 5.04.      Preservation of Corporate Existence, etc . The Borrower will preserve and maintain, and cause each of its Subsidiaries to preserve and maintain, its corporate existence, rights (charter and statutory) and franchises; provided , that , the Borrower and its Subsidiaries may consummate any merger or consolidation permitted under Section 6.02 ; provided , further , that , neither the Borrower nor any of its Subsidiaries shall be required to preserve any right or franchise, or the corporate existence of any Subsidiary, if the Borrower or such Subsidiary shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Borrower or such Subsidiary, as the case may be, and that the loss thereof is not disadvantageous in any material respect to the Borrower, such Subsidiary or the Lenders.
SECTION 5.05.      Visitation Rights . The Borrower will, at any reasonable time and from time to time, permit the Lead Administrative Agent or any of the Lenders or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, the Borrower and any of its Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower and any of its Subsidiaries with any of their officers or directors and with their independent certified public accountants.
SECTION 5.06.      Keeping of Books . The Borrower will keep, and cause each of its Subsidiaries to keep, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Borrower and each such Subsidiary in accordance with, and to the extent required by, GAAP in effect from time to time (or local accounting requirements).

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SECTION 5.07.      Maintenance of Properties, etc . The Borrower will maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties in good working order and condition, ordinary wear and tear excepted, except where the failure to do so would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
SECTION 5.08.      Transactions with Affiliates . The Borrower will conduct, and cause each of its Subsidiaries to conduct, all material transactions otherwise permitted under this Agreement with any of their Affiliates on terms that are fair and reasonable and no less favorable to the Borrower or such Subsidiary than it would obtain in a comparable arm’s-length transaction with a Person not an Affiliate, other than (a) transactions between the Borrower and its Subsidiaries, or between two or more Subsidiaries, (b) compensation arrangements for directors or executive officers approved by the board of directors or the compensation committee of the board of directors and (c) transactions incurred in the ordinary course of business with Persons that have directors or executive officers who are also directors or executive officers of the Borrower; provided , that , nothing contained in this Section 5.08 shall prevent the Borrower from paying dividends or making other cash distributions to its stockholders.
SECTION 5.09.      Reporting Requirements . The Borrower will furnish to the Lead Administrative Agent:
(a)      as soon as available and in any event within forty-five (45) days after the end of each of the first three quarters of each fiscal year of the Borrower, the Consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such quarter and Consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, duly certified (subject to year-end audit adjustments) by a Financial Officer who is a Responsible Officer of the Borrower as having been prepared in accordance with GAAP (subject to normal year-end audit adjustments and the absence of footnotes) and certificates of the chief financial officer, chief accounting officer, controller or treasurer who is a Responsible Officer of the Borrower as to compliance with the terms of this Agreement and setting forth in reasonable detail the calculations necessary to demonstrate compliance with Section 6.07 ; provided , that , in the event of any change in GAAP used in the preparation of such financial statements, the Borrower shall also provide, if necessary for the determination of compliance with Section 6.07 , a statement of reconciliation conforming such financial statements to GAAP;
(b)      as soon as available and in any event within ninety (90) days after the end of each fiscal year of the Borrower, a copy of the annual audit report for such year for the Borrower and its Subsidiaries, containing the Consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such fiscal year and Consolidated statements of income and cash flows of the Borrower and its Subsidiaries for such fiscal year, in each case accompanied by an opinion by Ernst & Young LLP or other independent public accountants of recognized national standing that does not include any “going concern” or similar qualification, or any qualification as to the scope of their audit and certificates of the chief financial officer, chief accounting officer, controller or treasurer who is a Responsible Officer of the Borrower as to compliance with the terms of this Agreement and setting forth in reasonable detail the calculations necessary to demonstrate compliance with Section 6.07 ; provided , that , in the event of any change in GAAP used in the preparation of such financial statements, the Borrower shall also provide, if necessary for the determination of compliance with Section 6.07 , a statement of reconciliation conforming such financial statements to GAAP;

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(c)      as soon as possible and in any event within five (5) days after the occurrence of each Default continuing on the date of such statement, a statement of a Financial Officer who is a Responsible Officer of the Borrower setting forth details of such Default and the action that the Borrower has taken and proposes to take with respect thereto;
(d)      promptly after the sending or filing thereof, copies of all reports that the Borrower sends to its securityholders generally, and copies of all reports on Form 10-K, 10-Q or 8-K (other than pursuant to Rule 14a-12 of the Securities Exchange Act of 1934, as amended) and registration statements for the public offering (other than pursuant to employee Plans) of securities of the Borrower that the Borrower or any Subsidiary files with the SEC or any national securities exchange;
(e)      promptly after Moody’s or S&P shall have announced a change in the rating established or deemed to have been established for the Index Debt, written notice of such rating change;
(f)      promptly after the commencement thereof, notice of all actions and proceedings before any court, governmental agency or arbitrator affecting the Borrower or any of its Subsidiaries of the type described in Section 3.06 ; and
(g)      such other information respecting the Borrower or any of its Subsidiaries as any Lender through the Lead Administrative Agent may from time to time reasonably request.
Documents required to be delivered pursuant to clauses (a) , (b) and (d) of this Section 5.09 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which such documents are filed for public availability on the SEC’s Electronic Data Gathering and Retrieval System; provided , that , the Borrower shall notify (which may be by facsimile or electronic mail) the Lead Administrative Agent of the filing of any such documents and provide to the Lead Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of the statements required by clause (c) of this Section 5.09 to the Lead Administrative Agent.
The Borrower hereby acknowledges that (a) the Lead Administrative Agent and/or the Lead Arrangers may, but shall not be obligated to, make available to the Lenders materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “ Borrower Materials ”) by posting the Borrower Materials on IntraLinks, Syndtrak, ClearPar, or a substantially similar electronic transmission system (the “ Platform ”) and (b) certain of the Lenders (each, a “ Public Lender ”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower hereby agrees that it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (w) all such Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof, (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Lead Administrative Agent, the Lead Arrangers, and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States Federal and state securities laws ( provided , that , to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 9.12 ), (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information;” and (z) the Lead Administrative

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Agent and the Lead Arrangers shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information.” Notwithstanding the foregoing, the Borrower shall be under no obligation to mark any Borrower Materials as “PUBLIC”.
ARTICLE VI
Negative Covenants
Until the Aggregate Revolving Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, the Borrower covenants and agrees with the Lenders that:
SECTION 6.01.      Liens, etc . The Borrower will not create or suffer to exist, or permit any of its Subsidiaries to create or suffer to exist, any Lien on or with respect to any of its properties, whether now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any right to receive income, other than:
(a)      Permitted Liens;
(b)      purchase money Liens (including Liens securing capital leases) upon or in any real property or equipment acquired or held by the Borrower or any Subsidiary to secure the purchase price of such property or equipment or to secure Debt incurred solely for the purpose of financing the acquisition, construction or improvement of such property or equipment and related expenses, or Liens existing on any property or equipment at the time of its acquisition (other than any such Liens created in contemplation of such acquisition that were not incurred to finance the acquisition of such property) or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount; provided , that , no such Lien shall extend to or cover any properties of any character other than the real property or equipment being acquired (and accessions thereto), and no such extension, renewal or replacement shall extend to or cover any properties not theretofore subject to the Lien being extended, renewed or replaced;
(c)      the Liens existing on the Effective Date and described on Schedule 6.01 hereto;
(d)      Liens on property of a Person existing at the time such Person is merged into or consolidated with the Borrower or any Subsidiary of the Borrower or becomes a Subsidiary of the Borrower; provided , that , such Liens were not created in contemplation of such merger, consolidation or acquisition and do not extend to any assets other than those of the Person so merged into or consolidated with the Borrower or such Subsidiary or acquired by the Borrower or such Subsidiary;
(e)      Liens on cash collateral or government securities to secure obligations under Hedge Agreements and letters of credit; provided , that , the aggregate value of any collateral so pledged does not exceed $50,000,000 in the aggregate at any time;
(f)      assignments of the right to receive income effected as a part of the sale of a business unit or for collection purposes;
(g)      other Liens securing Debt in an aggregate principal amount not to exceed the amount specified in Section 6.04(f) at any time outstanding; and

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(h)      the replacement, extension or renewal of any Lien permitted by clause (c) or (d) above upon or in the same property theretofore subject thereto or the replacement, extension or renewal (without increase in the amount or change in any direct or contingent obligor) of the Debt secured thereby.
SECTION 6.02.      Mergers, etc . The Borrower will not merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to, any Person, or permit any of its Subsidiaries to do so, except that (a) any Subsidiary of the Borrower may merge or consolidate with or into, or dispose of assets to, any other Subsidiary of the Borrower, (b) any Subsidiary of the Borrower may merge into or dispose of assets to the Borrower, (c) any Subsidiary of the Borrower may merge into or dispose of assets to any other Person so long as the Borrower delivers to the Lead Administrative Agent a certificate from a Responsible Officer of the Borrower demonstrating pro forma compliance with Section 6.07 after giving effect to such transaction, (d) any Subsidiary of the Borrower may merge with any other Person so long as such Subsidiary (or another wholly-owned Subsidiary of the Borrower) is the surviving corporation and (e) the Borrower may merge with any other Person so long as the Borrower is the surviving corporation; provided , that , in each case, no Default or Event of Default shall have occurred and be continuing at the time of such proposed transaction or would result therefrom.
SECTION 6.03.      Accounting Changes . The Borrower will not make or permit, or permit any of its Subsidiaries to make or permit, any change in accounting policies or reporting practices, except as required or permitted by GAAP.
SECTION 6.04.      Subsidiary Debt . The Borrower will not permit any of its Subsidiaries to create or suffer to exist, any Debt other than:
(a)      Debt owed to the Borrower or to a wholly owned Subsidiary of the Borrower;
(b)      Debt existing on the Effective Date and described on Schedule 6.04 hereto (the “ Existing Debt ”), and any Debt extending the maturity of, or refunding or refinancing, in whole or in part, the Existing Debt; provided , that , the principal amount of such Existing Debt shall not be increased above the principal amount thereof outstanding immediately prior to such extension, refunding or refinancing, and the direct and contingent obligors therefor shall not be changed, as a result of or in connection with such extension, refunding or refinancing;
(c)      Debt of a Person existing at the time such Person is merged into or consolidated with any Subsidiary of the Borrower or becomes a Subsidiary of the Borrower (the “ Assumed Debt ”) and any Debt extending the maturity of, or refunding or refinancing, in whole or in part, the Assumed Debt; provided , that , (i) such Debt was not created in contemplation of such merger, consolidation or acquisition and (ii) that the principal amount of such Assumed Debt shall not be increased above the principal amount thereof outstanding immediately prior to such extension, refunding or refinancing, and the direct and contingent obligors therefor shall not be changed, as a result of or in connection with such extension, refunding or refinancing;
(d)      Debt of the type permitted to be secured by Liens pursuant to Section 6.01(b) ;
(e)      endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and

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(f)      other Debt aggregating for all of the Subsidiaries of the Borrower, together with Debt secured by Liens permitted under Section 6.01(g) , an amount not to exceed ten percent (10%) of Consolidated total assets at any time outstanding (determined as of the date such Debt or Lien was incurred).
SECTION 6.05.      Speculative Transactions . The Borrower will not engage, or permit any of its Subsidiaries to engage, in any transaction involving commodity options or futures contracts or Hedge Agreements except in the ordinary course of business and not for speculative purposes.
SECTION 6.06.      Change in Nature of Business . The Borrower will not, and will not permit any of its Subsidiaries to, engage to any extent material to the Borrower and its Subsidiaries on a consolidated basis in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date of this Agreement and businesses reasonably related or complementary thereto.
SECTION 6.07.      Financial Covenants .
(a)      Maximum Leverage Ratio. The Borrower will maintain, as of any date, a ratio of Consolidated Debt for Borrowed Money as at such date to Consolidated EBITDA of the Borrower and its Subsidiaries for the period of four (4) consecutive fiscal quarters most recently ended of not greater than 3.25 to 1.00.
(b)      Minimum Interest Coverage Ratio. The Borrower will maintain, as of the last day of each fiscal quarter, a ratio of Consolidated EBITDA of the Borrower and its Subsidiaries for the period of four (4) consecutive fiscal quarters then ended to Consolidated Interest Charges for the period of four (4) consecutive fiscal quarters then ended of not less than 3.00 to 1.00.
SECTION 6.08.      Sanctions . The Borrower will not, nor will it permit any of its Subsidiaries to, directly or indirectly, use the proceeds of any Loan, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other individual or entity, to fund any activities of or business with any individual or entity, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any individual or entity (including any individual or entity participating in the transaction, whether as Lender, Lead Arranger, Co-Administrative Agent, or otherwise) of Sanctions.
SECTION 6.09.      Anti-Corruption Laws . The Borrower will not, nor will it permit any of its Subsidiaries to, directly or indirectly, use the proceeds of any Loan for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions.
ARTICLE VII
Events of Default
If any of the following events (“ Events of Default ”) shall occur:
(a)      the Borrower shall fail to pay any principal of any Loan when the same becomes due and payable; or the Borrower shall fail to pay any interest on any Loan or make any other payment of fees or other amounts payable under this Agreement or any Note within three (3) Business Days after the same becomes due and payable;

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(b)      any representation or warranty made by the Borrower herein or by the Borrower (or any of its officers) in connection with this Agreement shall prove to have been incorrect in any material respect when made;
(c)      (i) the Borrower shall fail to perform or observe any term, covenant or agreement contained in Section 5.04 , 5.05 , 5.08 , 5.09 or Article VI , or (ii) the Borrower shall fail to perform or observe any other term, covenant or agreement contained in this Agreement on its part to be performed or observed if such failure shall remain unremedied for thirty (30) days after written notice thereof shall have been given to the Borrower by the Lead Administrative Agent or any Lender;
(d)      the Borrower or any of its Subsidiaries shall fail to pay any principal of or premium or interest on any Debt that is outstanding in a principal or notional amount of at least $100,000,000 in the aggregate (but excluding Debt outstanding hereunder) of the Borrower or such Subsidiary (as the case may be), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate the maturity of such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof;
(e)      the Borrower or any of its Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower or any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of thirty (30) days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or the Borrower or any of its Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this clause (e) ;
(f)      judgments or orders for the payment of money in excess of $100,000,000 in the aggregate shall be rendered against the Borrower or any of its Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of thirty (30) consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; provided , that , any such judgment or order shall not be an Event of Default under this clause (f) if and for so long as (i) the amount of such judgment or order is covered by a valid and binding policy of insurance between the defendant and the insurer covering payment thereof and (ii) such insurer, which shall be rated at least “A” by A.M. Best Company, has been notified of, and has not disputed the claim made for payment of, the amount of such judgment or order;

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(g)      (i) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of Voting Stock of the Borrower representing 35% or more of the aggregate voting power represented by the issued and outstanding Equity Interests of the Borrower on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or (ii) during any period of up to twenty-four (24) consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals (A) who were members of that board or equivalent governing body on the first day of such period, (B) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (ii)(A) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (C) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (ii)(A) and (ii)(B) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body; or (iii) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of the power to direct the management or policies of the Borrower;
(h)      the Borrower or any of its ERISA Affiliates shall incur, or shall be reasonably likely to incur liability in excess of $100,000,000 in the aggregate as a result of one or more of the following: (i) the occurrence of any ERISA Event; (ii) the partial or complete withdrawal of the Borrower or any of its ERISA Affiliates from a Multiemployer Plan; or (iii) the reorganization or termination of a Multiemployer Plan; or
(i)      the Borrower shall fail to comply with Section 2.23(c) ;
then, and in every such event (other than an event with respect to the Borrower described in clause (e) of this Article), and at any time thereafter during the continuance of such event, the Lead Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (1) terminate the Aggregate Revolving Commitments, and thereupon the Aggregate Revolving Commitments shall terminate immediately, and (2) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other Obligations of the Borrower accrued hereunder and under the other Loan Documents, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (e) of this Article, the Aggregate Revolving Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other Obligations accrued hereunder and under the other Loan Documents, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

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Upon the occurrence and during the continuance of an Event of Default, the Lead Administrative Agent may, and at the request of the Required Lenders shall, exercise any rights and remedies provided to the Lead Administrative Agent under the Loan Documents or at law or equity.
ARTICLE VIII
The Lead Administrative Agent
Each of the Lenders hereby irrevocably appoints the Lead Administrative Agent as its agent and authorizes the Lead Administrative Agent to take such actions on its behalf, including execution of the other Loan Documents, and to exercise such powers as are delegated to the Lead Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Lead Administrative Agent and the Lenders, and the Borrower shall not have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Lead Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.
The Person serving as the Lead Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Lead Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include each Person serving as the Lead Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Lead Administrative Agent hereunder and without any duty to account therefor to the Lenders.
The Lead Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents, and their duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, (a) the Lead Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing; (b) the Lead Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Lead Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02 ); provided , that , the Lead Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Lead Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any debtor relief law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any debtor relief law; and (c) except as expressly set forth in the Loan Documents, the Lead Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by any Person serving as the Lead Administrative Agent or any of its Affiliates in any capacity. The Lead Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02 ) or in the absence of its own gross negligence or willful misconduct. The Lead Administrative Agent shall not be

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deemed to have knowledge of any Default unless and until written notice thereof is given to the Lead Administrative Agent by the Borrower or a Lender, and the Lead Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Lead Administrative Agent.
The Lead Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Lead Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, that by its terms must be fulfilled to the satisfaction of a Lender, the Lead Administrative Agent may presume that such condition is satisfactory to such Lender unless the Lead Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. The Lead Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
The Lead Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Lead Administrative Agent. The Lead Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Lead Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as the Lead Administrative Agent. The Lead Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that the Lead Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.
The Lead Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such resignation notice, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Lead Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders, the “ Resignation Effective Date ”), then the retiring Lead Administrative Agent may (but shall not be obligated to), on behalf of the Lenders, appoint a successor Lead Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank ( provided , that in no event shall any such successor Lead Administrative Agent be a Defaulting Lender). Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date. With effect from the Resignation Effective Date, (a) the retiring Lead Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (b) except for any indemnity payments or other amounts then owed to the retiring Lead Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Lead Administrative Agent shall instead be made by or to each Lender directly, until such time, if any, as the Required Lenders appoint a successor Lead Administrative Agent as provided for above. Upon the acceptance

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of a successor’s appointment as the Lead Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Lead Administrative Agent (other than as provided hereunder and other than any rights to indemnity payments or other amounts owed to the retiring Lead Administrative Agent as of the Resignation Effective Date), and the retiring Lead Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Lead Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Lead Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Lead Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them (i) while the retiring Lead Administrative Agent was acting as the Lead Administrative Agent and (ii) after such resignation for as long as any of them continues to act in any capacity hereunder or under the other Loan Documents, including in respect of any actions taken in connection with transferring the agency to any successor Lead Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance upon the Lead Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Lead Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
None of the Lenders, if any, identified in this Agreement as a Lead Arranger, Co-Administrative Agent (other than the Lead Administrative Agent) or Co-Syndication Agent shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender. Each Lender hereby makes the same acknowledgments with respect to the relevant Lenders in their respective capacities as Lead Arranger, Co-Administrative Agent (other than the Lead Administrative Agent) or Co-Syndication Agents, as applicable, as it makes with respect to the Lead Administrative Agent in the preceding paragraph.
The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Lead Administrative Agent) authorized to act for, any other Lender. The Lead Administrative Agent shall have the exclusive right on behalf of the Lenders to enforce the payment of the principal of and interest on any Loan after the date such principal or interest has become due and payable pursuant to the terms of this Agreement.
ARTICLE IX
Miscellaneous
SECTION 9.01.      Notices .
(a)    Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to clause (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

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(i)      if to the Borrower, to it at Intuit Inc., 2700 Coast Avenue, Mountain View, California 94043, Attention of Bill Bascom (Email: Bill_Bascom@intuit.com ; Telecopy No. (650) 963-2913);
(ii)      if to the Lead Administrative Agent, (A) for operational notices (i.e. borrowings, payments, interest, fees, etc.), to Bank of America, N.A., 901 Main Street, Mail Code: TX1-492-14-11, Dallas, Texas 75202-3714, Attention of Jacqueline Jones (Email: jacqueline.r.jones@baml.com ; Telephone No. 972-338-3765; Telecopy No. 214-290-9439), and (B) for any other notice to the Lead Administrative Agent, to Bank of America, N.A., 900 W. Trade Street, 6th Floor, Mail Code: NC1-026-06-03, Charlotte, North Carolina 28255, Attention of Melissa Mullis (Email: melissa.mullis@baml.com ; Telephone No. 980-386-9372; Telecopy No. 704-409-0617); and
(iii)      if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.
Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in clause (b) below, shall be effective as provided in such clause (b) .
(b)      Notwithstanding anything to the contrary herein (but subject to the second to last paragraph of Section 5.09 ), notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications (including email, FpML messaging, and Internet or intranet websites) pursuant to procedures approved by the Lead Administrative Agent; provided , that , the foregoing shall not apply to notices pursuant to Article II to any Lender if such Lender has advised the Lead Administrative Agent that it is not capable of receiving such notices under such Article by electronic communication. The Lead Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by the recipient thereof prior thereto; provided , that , approval of such procedures may be limited to particular notices or communications.
Unless the Lead Administrative Agent otherwise prescribes, (i) notices and other communications sent to an email address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its email address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided , that , for both clauses (i) and (ii) , if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.
(c)      THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE

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PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Lead Administrative Agent or any of its Related Parties (collectively, the “ Agent Parties ”) have any liability to the Borrower, any Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Lead Administrative Agent’s transmission of Borrower Materials or notices through the platform, any other electronic platform or electronic messaging service, or through the Internet.
(d)      Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. In addition, each Lender agrees to notify the Lead Administrative Agent from time to time to ensure that the Lead Administrative Agent have on record (i) an effective address, contact name, telephone number, facsimile number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable law, including United States Federal and state securities laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to the Borrower or its securities for purposes of United States Federal or state securities laws.
(e)      The Lead Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic notices, Borrowing Requests, and Interest Election Requests) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify the Lead Administrative Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower. All telephonic notices to and other telephonic communications with the Lead Administrative Agent may be recorded by the Lead Administrative Agent, and each of the parties hereto hereby consents to such recording.
SECTION 9.02.      Waivers; Amendments .
(a)    No failure or delay by the Lead Administrative Agent or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Lead Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by clause (b) of this Section, and then such waiver or consent

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shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Lead Administrative Agent or any Lender may have had notice or knowledge of such Default at the time.
Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Borrower shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Lead Administrative Agent in accordance with Article VII for the benefit of all the Lenders; provided , that , the foregoing shall not prohibit (a) the Lead Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as the Lead Administrative Agent) hereunder and under the other Loan Documents, (b) any Lender from exercising setoff rights in accordance with the provisions hereof, or (c) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to the Borrower under any debtor relief law; provided , further , that , if at any time there is no Person acting as the Lead Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Lead Administrative Agent pursuant to Article VII and (ii) subject to the provisions hereof, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.
(b)      Except as provided in Section 2.20 with respect to an Incremental Term Loan Amendment or as provided in Section 2.23 with respect to the extension of the Revolving Maturity Date, neither this Agreement, any Loan Document nor any provision hereof or thereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Lead Administrative Agent with the consent of the Required Lenders; provided , that , no such agreement shall:
(i)    extend or increase the Commitment of any Lender without the written consent of such Lender;
(ii)      reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender directly affected thereby;
(iii)      postpone the scheduled date of payment of the principal amount of any Loan, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender directly affected thereby;
(iv)      change Section 2.18(b) , (c) or (d) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender;
(v)      change any of the provisions of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender (it being understood that, solely with the consent of the parties prescribed by Section 2.20 to be parties to an Incremental Term Loan Amendment, Incremental Term Loans may be included in the

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determination of Required Lenders on substantially the same basis as the Commitments and the Loans are included on the Effective Date); or
(vi)      amend Section 1.06 or the definition of “Agreed Currency” without the written consent of each Lender;
provided , further , that , (A) the Fee Letter may be amended, or the rights and privileges thereunder waived, in a writing executed only by the parties thereto, (B) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender disproportionately adversely relative to other affected Lenders shall require the consent of such Defaulting Lender, and (C) no such agreement shall amend, modify or otherwise affect the rights or duties of the Lead Administrative Agent hereunder without the prior written consent of the Lead Administrative Agent.
(c)      Notwithstanding the foregoing, this Agreement and any other Loan Document may be amended (or amended and restated) with the written consent of the Required Lenders, the Lead Administrative Agent and the Borrower (x) to add one or more credit facilities (in addition to the Incremental Term Loans pursuant to an Incremental Term Loan Amendment) to this Agreement and to permit extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Loans, Incremental Term Loans and the accrued interest and fees in respect thereof and (y) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders and Lenders.
(d)      If, in connection with any proposed amendment, waiver or consent requiring the consent of “each Lender” or “each Lender directly affected thereby,” the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but not obtained being referred to herein as a “ Non-Consenting Lender ”), then the Borrower may elect to replace a Non-Consenting Lender as a Lender party to this Agreement; provided , that , concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrower and the Lead Administrative Agent shall agree, as of such date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and Assumption and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of clause (b) of Section 9.04 , and (ii) the Borrower shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (A) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrower hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 2.15 and 2.17 , and (B) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender.

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(e)      Notwithstanding anything to the contrary herein, the Lead Administrative Agent may, with the consent of the Borrower only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency.
SECTION 9.03.      Expenses; Indemnity; Damage Waiver .
(a)    The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Lead Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Lead Administrative Agent, in connection with the syndication and distribution (including, without limitation, via the internet or through a service such as Intralinks) of the credit facilities provided for herein, the preparation and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), and (ii) all out-of-pocket expenses incurred by the Lead Administrative Agent, or any Lender, including the fees, charges and disbursements of any counsel for the Lead Administrative Agent or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement and any other Loan Document, including its rights under this Section, or in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.
(b)      The Borrower shall indemnify the Lead Administrative Agent and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities, penalties and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or the use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any of its Subsidiaries, and regardless of whether any Indemnitee is a party thereto, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE ; provided , that , such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities, penalties or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from (i) the gross negligence, willful misconduct or fraud of such Indemnitee or any of its Related Parties or (ii) the material breach by such Indemnitee of its express obligations under this Agreement or any other Loan Document pursuant to a claim initiated by the Borrower. This Section 9.03(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims or damages arising from any non-Tax claim.
(c)      To the extent that the Borrower fails to pay any amount required to be paid by it to the Lead Administrative Agent under clause (a) or (b) of this Section, each Lender severally agrees to pay to the Lead Administrative Agent such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid

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amount (it being understood that the Borrower’s failure to pay any such amount shall not relieve the Borrower of any default in the payment thereof); provided , that , the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Lead Administrative Agent in its capacity as such.
(d)      To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee (i) for any damages arising from the use by others of information or other materials obtained through telecommunications, electronic or other information transmission systems (including the Internet), or (ii) on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or the use of the proceeds thereof.
(e)      All amounts due under this Section shall be payable not later than fifteen (15) days after written demand therefor.
SECTION 9.04.      Successors and Assigns .
(a)    The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (to the extent provided in clause (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of the Lead Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b)      (i) Subject to the conditions set forth in clause (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:
(A)    the Borrower ( provided , that , the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Lead Administrative Agent within ten (10) Business Days after having received notice thereof); provided , further , that , no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee; and
(B)    the Lead Administrative Agent.
(ii)      Assignments shall be subject to the following additional conditions:
(A)    except in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of

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the assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Lead Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Lead Administrative Agent otherwise consent; provided , that , no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;
(B)    each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement; provided , that , this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender’s rights and obligations in respect of one Class of Commitments or Loans;
(C)    the parties to each assignment shall execute and deliver to the Lead Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500, such fee to be paid by either the assigning Lender or the assignee Lender or shared between such Lenders;
(D)    the assignee, if it shall not be a Lender, shall deliver to the Lead Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its affiliates and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and state securities laws; and
(E)    the assignee shall not be (x) the Borrower or any Subsidiary or Affiliate of the Borrower, (y) a Defaulting Lender or any of its subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing or (z) any natural person (or to a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural person).
(iii)      Subject to acceptance and recording thereof pursuant to clause (b)(vi) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15 , 2.16 , 2.17 and 9.03 ). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with clause (c) of this Section.

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(iv)      In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Lead Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Lead Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Lead Administrative Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
(v)      The Lead Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive, and the Borrower, the Lead Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.
(vi)      Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in clause (b) of this Section and any written consent to such assignment required by clause (b) of this Section, the Lead Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided , that , if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.07(b) , 2.18(d) or 9.03(c) , the Lead Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
(c)      Any Lender may, without the consent of the Borrower or the Lead Administrative Agent, sell participations to any Person (other than a natural Person, or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural Person, a Defaulting Lender or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (a “ Participant ”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided , that , (A) such Lender’s obligations under

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this Agreement shall remain unchanged; (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations; and (C) the Borrower, the Lead Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided , that , such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15 , 2.16 and 2.17 (subject to the requirements and limitations therein, including the requirements under Section 2.17(f) (it being understood that the documentation required under Section 2.17(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b) of this Section; provided , that , such Participant (A) agrees to be subject to the provisions of Sections 2.18 and 2.19 as if it were an assignee under clause (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 2.15 or 2.17 , with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “ Participant Register ”); provided , that , no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Lead Administrative Agent (in its capacity as Lead Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(d)      Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided , that , no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05.      Survival . All covenants, agreements, representations and warranties made by the Borrower in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Lead Administrative Agent or any Lender may have had notice or knowledge of any Default or

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incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid and so long as the Aggregate Revolving Commitments have not expired or terminated. The provisions of Sections 2.15 , 2.16 , 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Aggregate Revolving Commitments or the termination of this Agreement or any other Loan Document or any provision hereof or thereof.
SECTION 9.06.      Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Lead Administrative Agent or the Lead Arrangers constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Lead Administrative Agent and when the Lead Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging shall be effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07.      Severability. Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 9.08.      Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final and in whatever currency denominated) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all of the Obligations held by such Lender, irrespective of whether or not such Lender shall have made any demand under the Loan Documents and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.
SECTION 9.09.      Governing Law; Jurisdiction; Consent to Service of Process .
(a)    This Agreement shall be construed in accordance with and governed by the law of the State of New York.
(b)      The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto

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hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Lead Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.
(c)      The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in clause (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d)      Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01 . Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10.      WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11.      Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 9.12.      Confidentiality . The Lead Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies under this Agreement or any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations

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under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) on a confidential basis to the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities provided hereunder, (h) with the consent of the Borrower or (i) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Lead Administrative Agent or any Lender on a nonconfidential basis from a source other than the Borrower that is not known to the Lead Administrative Agent or such Lender to be subject to a duty of confidentiality to the Borrower. For the purposes of this Section, “Information” means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Lead Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
SECTION 9.13.      Patriot Act . Each Lender that is subject to the requirements of the Patriot Act hereby notifies the Borrower that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with the Patriot Act.
SECTION 9.14.      Interest Rate Limitation . Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “ Charges ”), shall exceed the maximum lawful rate (the “ Maximum Rate ”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.
SECTION 9.15.      No Advisory or Fiduciary Responsibility . In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Lead Administrative Agent, the Lead Arrangers, and the Lenders are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Lead Administrative Agent, the Lead Arrangers, and the Lenders and their respective Affiliates, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Lead Administrative Agent, each Lead Arranger and each Lender is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) neither the Lead Administrative Agent, any Lead Arranger, any Lender nor any of their respective Affiliates has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Lead Administrative

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Agent, the Lead Arrangers and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and neither the Lead Administrative Agent, any Lead Arranger, any Lender nor any of their respective Affiliates has any obligation to disclose any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against the Lead Administrative Agent, any Lead Arranger, any Lender or any of their respective Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
SECTION 9.16.      Electronic Execution of Assignments and Certain Other Documents . The words “execute,” “execution,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including without limitation Assignment and Assumptions, amendments or other modifications, Borrowing Requests, Interest Election Requests, Notices of Loan Prepayment, waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Lead Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided, that, notwithstanding anything contained herein to the contrary the Lead Administrative Agent is not under any obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Lead Administrative Agent pursuant to procedures approved by it.
SECTION 9.17.      Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by: (a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and (b) the effects of any Bail-in Action on any such liability, including, if applicable (i) a reduction in full or in part or cancellation of any such liability; (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or (iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.
SECTION 9.18.      ENTIRE AGREEMENT . THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
BORROWER :                    INTUIT INC.,
a Delaware corporation
By:     /s/ R. NEIL WILLIAMS    
Name:     R. Neil Williams
Title:     Executive Vice President,
Chief Financial Officer



CHAR1\1449231v6


CO-ADMINISTRATIVE AGENTS :        BANK OFAMERICA, N.A.,
as Lead Administrative Agent
By:     /s/ DARLEEN R. DIGRAZIA        
Name:    Darleen R DiGrazia
Title:    Vice President
JP MORGAN CHASE BANK, N.A.,
as a Co-Administrative Agent
By:     /s/TIMOTHY D. LEE            
Name:    Timothy D. Lee
Title:    Vice President



CHAR1\1449231v6


LENDERS :                    BANK OF AMERICA, N.A.
as Lender
By:     /s/ PATRICK MARTIN            
Name:    Patrick Martin
Title:    Managing Director
JP MORGAN CHASE BANK, N.A.,
as Lender
By:     /s/ TIMOTHY D. LEE            
Name:    Timothy D. Lee
Title:    Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Lender
By:     /s/ JOAN KIEKCHAEFER        
Name:    Joan Kiekchaefer
Title:    SVP
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
as Lender
By:     /s/ LILLIAN KIM            
Name:    Lillian Kim
Title:    Director
THE BANK OF NOVA SCOTIA,
as Lender
By:     /s/ WINSTON LUA            
Name:    Winston Lua
Title:    Director

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Lender

By:     /s/ SEBASTIAN SZENDZIELORZ         
Name:    Sebastian Szendzielorz
Title:    Vice President

BARCLAYS BANK PLC,
as Lender

By:     /s/ KRISHNA MANEK             
Name:    KRISHNA MANEK
Title:    VICE PRESIDENT
EXECUTED IN LONDON






HSBC BANK USA, NATIONAL ASSOCIATION,
as Lender

By:     /s/ STEPHANIE W LEE             
Name:    Stephanie W Lee
Title:    Relationship Manager

THE NORTHERN TRUST COMPANY,
as Lender

By:     /s/ JOHN LASCODY             
Name:    John Lascody
Title:    Vice President










    
EXHIBIT A

[FORM OF] ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “ Assignment and Assumption” ) is dated as of the Effective Date set forth below and is entered into by and between [ Insert name of Assignor ] (the “ Assignor ”) and [ Insert name of Assignee ] (the “ Assignee ”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex I attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Lead Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount[s] and percentage interest[s] identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any guarantees included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “ Assigned Interest ”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.


1.
Assignor:
 
 
 
 
 
[Assignor [is][is not] a Defaulting Lender.]
 
 
 
 
 
2.
Assignee:
 
 
 
 
 
an [Affiliate][Approved Fund] 1   of [identify Lender]





 
 
 
 
 
3.
Borrower:
Intuit Inc., a Delaware corporation
 
 
 
 
 
 
4.
Co-Administrative
Agents:
Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Co- Administrative Agents under the Credit Agreement
 
 
 
 
 
5.
Credit Agreement:
The Credit Agreement dated as of February 1, 2016 among Intuit
 
Inc., a
 
Delaware corporation, the Lenders from time to time party thereto, and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Co- Administrative Agents

 
1 Select as applicable.







6.
Assigned Interest:

Facility Assigned 2
Aggregate Amount of Commitment/Loans for all Lenders
Amount of Commitment/ Loans Assigned
Percentage Assigned of Commitment Loans 3
 
$
$
%
 
$
$
%
 
$
$
%


Effective Date:      , 20_      [TO BE INSERTED BY LEAD ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]






































 
2 Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment and Assumption (e.g. “Revolving Commitment”, “Term Loan Commitment”, etc.)
3 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.





The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR

[NAME OF ASSIGNOR]

By:      Name:
Title:


ASSIGNEE

[NAME OF ASSIGNEE]

By:      Name:
Title:





Consented to and Accepted:

BANK OF AMERICA, N.A..
as Lead Administrative Agent

By:      Name:
Title:


[Consented to:] 4 INTUIT INC.,
a Delaware corporation

By:      Name:
Title:









































 
4 To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.





ANNEX I

STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1      Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby, and (iv) it is [not] a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

1.2      Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.09 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Lead Administrative Agent or any other Lender, and
(v) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Lead Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Lead Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and




other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date. Notwithstanding the foregoing, the Lead Administrative Agent shall make all payments of interest, fees or other amounts paid or payable in kind from and after the Effective Date to the Assignee.

3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.





EXHIBIT B

FORM OF OPINION OF THE BORROWER’S COUNSEL

[Attached]





SECTION 9.19 February , 2016

To the Lead Administrative Agent and the Lenders party on the date hereof to the Credit Agreement referred to below
DRAFT January 26, 2016

Re:     Intuit Inc .


Ladies and Gentlemen:

This opinion is furnished to you pursuant to Section 4.01(b) of the Credit Agreement, dated as of the date hereof (the “ Credit Agreement ”), by and among Intuit Inc., a Delaware corporation (the “ Borrower ” or the “ Company ” ), the Lenders parties thereto and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as co-administrative agents (the “ Co- Administrative Agents ”) for said Lenders.    We have acted as counsel for the Borrower in connection with the Credit Agreement. Unless otherwise defined herein (including but not limited to the Exhibits hereto), terms defined in the Credit Agreement are used herein as therein defined.

In rendering this opinion, we have made such legal and factual examinations and inquiries as we have deemed necessary for the purpose of rendering this opinion. We have also assumed that, with respect to factual matters, all the representations and warranties made by the Company in, or pursuant to, the Credit Agreement (other than matters expressly covered in the opinions set forth in paragraphs 1 and 2 below) are true and complete in all material respects.

In our examination of documents for purposes of this opinion, we have assumed, and express no opinion as to, the genuineness of all signatures on original documents, the authenticity and completeness of all documents submitted to us as originals, the conformity to originals and completeness of all documents submitted to us as copies, the lack of any undisclosed termination, modification, waiver or amendment to the Credit Agreement, the legal competence and capacity of all persons or entities executing the same, the good standing of all entities (other than the Company) in the States of the United States in which they were formed and, if required to be qualified to do business in the State of California, in such State, and the due authorization, execution and delivery of the Credit Agreement by the Co-Administrative Agents and the Lenders.

For the purposes of this opinion, we have also assumed, without independent investigation, that: (a) the Credit Agreement, along with any related fee letter, reflects the complete understanding and agreement of the parties concerning the subject matter thereof; and (b) the Credit Agreement is a legal, valid and binding obligation of the Co-Administrative Agents and the Lenders, enforceable against such parties in accordance with its terms.


16319/00630/DOCS/3893598.2





Without limitation, this opinion is subject to, and we render no opinion with respect to, the following:

(a) the effect of bankruptcy, insolvency, reorganization, arrangement, moratorium, bulk sales, fraudulent conveyance, preferential transfers, equitable subordination and other similar laws relating to or affecting the rights and remedies of creditors generally;

(b) the effect of general principles of equity, including but not limited to judicial decisions holding that certain provisions are unenforceable when their enforcement would violate the implied covenant of good faith and fair dealing, or would be commercially unreasonable or involve undue delay, whether or not such principles or decisions have been codified by statute, concepts of materiality, reasonableness, good faith and fair dealing, unconscionability and the possible unavailability of specific performance, injunctive relief or other equitable remedies, regardless of whether considered in a proceeding in equity or at law;

(c) the effect of limitations imposed by reason of generally applicable public policy principles or considerations or limitations imposed by or resulting from the exercise by any court of its discretion;

(d) the existence or effect of any implied duty or covenant of good faith and fair dealing to which the Co-Administrative Agents or any Lender may have been or may be subject;

(e) the effect of any applicable law or court decisions that requires a lender to enforce its remedies in a commercially reasonable manner;

(f) except as set forth in our opinion in paragraph 5 below, any federal or state securities laws;

(g) the effect of state and federal laws and judicial decisions that provide, among other things, (i) that oral modifications to a contract or waivers of contractual provisions may be enforceable, if the modification was performed, notwithstanding any express provision in the agreement that the agreement may only be modified or an obligation thereunder waived in writing, or (ii) that an implied agreement may be created from trade practices or course of conduct;

(h) the enforceability of any provision purporting to waive rights to trial by jury, service of process or objections to the laying of venue or to forum on the basis of forum non conveniens in connection with any litigation arising out of or pertaining to the Credit Agreement;

(i) the effect of judicial decisions that may permit the introduction of extrinsic evidence to modify the terms or the interpretation of the Credit Agreement;

(j) any waivers or releases of rights by a debtor, to the extent any of such waivers or releases are not enforceable under applicable law or public policy principles,




including any provision that purports to waive broadly or vaguely stated rights, unknown future rights, the benefits of statutory, regulatory or constitutional rights, or rights to dam- ages or rights which may not be waived on statutory or public policy grounds;

(k) the effect of equitable principles on the enforceability of any provisions of the Credit Agreement providing that (i) rights or remedies are not exclusive, (ii) every right or remedy is cumulative and may be exercised in addition to or with any other right or remedy, or (iii) the failure to exercise, or any delay in exercising, rights or powers available under the Credit Agreement will not operate as a waiver of any such right or power, or any provision providing for liquidated damages;

(l) applicable statutes and judicial decisions which provide, among other things, that a court may limit the granting of attorneys’ fees to those attorneys’ fees which are determined by the court to be reasonable and that attorneys’ fees may be granted only to a prevailing party and that a contractual provision for attorneys’ fees is deemed to extend to both parties (notwithstanding that such provision by its express terms benefits only one party);

(m) any provision in the Credit Agreement that permits or authorizes the Lead Administrative Agent or the Lenders to exercise remedies or impose penalties or an increase in interest rate for late payment or other default if it is determined that the default is not material, the remedies or penalties bear no reasonable relation to the damage suffered by the Lead Administrative Agent or the Lenders as a result of the default or it cannot be demonstrated that the enforcement of the remedies or penalties is reasonably necessary for the protection of the Lead Administrative Agent or the Lenders;

(n) the enforceability of any provisions in the Credit Agreement releasing or exonerating a party from liability or providing for indemnification or contribution, to the extent enforcement of such provisions would be contrary to public policy or indemnify a party against liability for the party’s own fraud or wrongful or negligent acts or omissions;

(o) the enforceability of any waiver of the Company’s right to assert counterclaims or other claims or defenses or any waivers or releases of rights by a debtor, to the extent any of such waivers or releases are not enforceable under applicable law or public policy principles, including any provision that purports to waive broadly or vaguely stated rights, unknown future rights, the benefits of statutory, regulatory or constitutional rights, or rights to damages or rights which may not be waived on statutory or public policy grounds; and

(p) any pension, employee benefit, antitrust, environmental or land use law, rule or regulation.

We do not assume any responsibility for the accuracy, completeness or fairness of any information, including, but not limited to, financial information, furnished to you by Borrower (or any of its agents or representatives) concerning the business, assets, operations, financial condition or affairs of Borrower or any of its Subsidiaries or any other information furnished to you by Borrower or any of its agents or representatives.




With respect to our opinion expressed in paragraph 1 below that Borrower is in good standing under the laws of the State of Delaware, we have relied exclusively on the Delaware Certificate of Good Standing.

With respect to our opinion in paragraph 3 below, we note that the Credit Agreement may be required to be filed and/or disclosed in a current report on Form 8-K by Borrower with the Securities and Exchange Commission.

We are admitted to practice law in the State of California and in the State of New York. The opinions expressed herein are limited to the existing internal laws of the State of California, the existing internal laws of the State of New York, the Delaware General Corporation Law as in effect on the date hereof (the “ DGCL ”), and the existing federal laws of the United States of America, assuming that such laws apply to the matters expressed herein .

Our opinion is limited to such California and New York state and United States federal statutes, laws, rules or regulations, and provisions of the DGCL, as in our experience are of general application to transactions of the sort contemplated by the Credit Agreement.

This opinion is based on the customary practice of lawyers who regularly give, and lawyers who regularly advise opinion recipients regarding, opinions of the kind involved, including customary practice as described in bar association reports. In rendering the opinions below, we are opining only as to the specific legal issues expressly set forth therein, and no opinion shall be inferred as to any other matter or matters.

Based upon and subject to the foregoing, and subject to all of the assumptions, qualifications, exceptions and limitations contained herein, we are of the following opinion:

1. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware.

2. The execution, delivery and performance by the Borrower of the Credit Agreement and the Notes and the consummation of the transactions contemplated thereby, are within the Borrower’s corporate powers, have been duly authorized by all necessary corporate action on the part of Borrower and do not (i) violate the terms of the Charter or the By-laws, or (ii) violate the DGCL, any California State, New York State or United States federal law, rule or regulation applicable to the Borrower (including, without limitation, Regulations U and X of the Board of Governors of the Federal Reserve System).

3. No authorization, approval or other action by, and no notice to or filing with, any California State, New York State, or United States federal, governmental authority or regulatory body, or pursuant to the DGCL to any governmental authority or regulatory body, is required for the due execution, delivery and performance, as of the date hereof, by the Borrower of the Credit Agreement or the Notes.

4. Each of the Credit Agreement and each Note has been duly executed and delivered on behalf of the Borrower. Each of the Credit Agreement and each Note is a legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms.




5. The Borrower is not an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

This opinion is intended solely for the use of the Lead Administrative Agent and Lenders as of the date of this opinion letter for the purpose of the above transaction, and is not to be relied upon for any other purpose or by any other person or entity, without our prior written consent, except that (a) a copy of this opinion may be delivered by any Lender to any person or entity that is a permitted assignee of a Lender, and becomes a Lender in accordance with the provisions of the Credit Agreement (a “ Permitted Assignee ” ) and (b) this opinion letter may be relied upon by any Permitted Assignee on the condition and understanding that any such reliance by a Permitted Assignee must be actual and reasonable under the circumstances existing at the time of assignment, including any changes in law or facts, and any reliance on the opinions expressed herein by any such assignee after the date of this letter shall be as to such opinions as of the date of this letter and such assignment or reliance shall not constitute a reissuance of any of such opinions as of the date of any such subsequent assignment or as of any other subsequent date. This opinion speaks as of the date first written above, and we assume no obligation to advise you of any fact, circumstance, event or change in the law or the facts that may hereafter be brought to our attention, whether or not such occurrence would affect or modify any of the opinions expressed herein.

Very truly yours,

FENWICK & WEST LLP



By:
David K. Michaels, a Partner






EXHIBIT C

[FORM OF] INCREASING LENDER SUPPLEMENT

This INCREASING LENDER SUPPLEMENT, dated      , 20      (this “ Supplement ”), by and among each of the signatories hereto, to the Credit Agreement, dated as of February 1, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Intuit Inc., a Delaware corporation (the “ Borrower ”), the Lenders from time to time party thereto and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Co-Administrative Agents.

W I T N E S S E T H

WHEREAS, pursuant to Section 2.20 of the Credit Agreement, the Borrower has the right, subject to the terms and conditions thereof, to effectuate from time to time an increase in the Aggregate Revolving Commitments and/or enter into one or more tranches of Incremental Term Loans under the Credit Agreement by requesting one or more Lenders to increase the amount of its Revolving Commitment and/or to participate in such Incremental Term Loans;

WHEREAS, the Borrower has given notice to the Lead Administrative Agent of its intention to [increase the Aggregate Revolving Commitments] [and] [enter into a tranche of Incremental Term Loans] pursuant to such Section 2.20 of the Credit Agreement; and

WHEREAS, pursuant to Section 2.20 of the Credit Agreement, the undersigned Increasing Lender now desires to [increase the amount of its Revolving Commitment] [and] [participate in a tranche of Incremental Term Loans] under the Credit Agreement by executing and delivering to the Borrower and the Lead Administrative Agent this Supplement.

NOW, THEREFORE, each of the parties hereto hereby agrees as follows:

1. The undersigned Increasing Lender agrees, subject to the terms and conditions of the Credit Agreement, that on the date of this Supplement it shall [have its Revolving Commitment increased by $[ ] thereby making the aggregate amount of its total Revolving Commitment equal to $[ ]] [and] [participate in a tranche of Incremental Term Loans with a commitment amount equal to $[ ] with respect thereto].

2. The Borrower hereby represents and warrants that no Default or Event of Default has occurred and is continuing on and as of the date hereof.
3. Terms defined in the Credit Agreement shall have their defined meanings when used herein.





4. This Supplement shall be governed by, and construed in accordance with, the laws of the State of New York.

5. This Supplement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same document.






IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be executed and delivered by a duly authorized officer on the date first above written.

[INSERT NAME OF INCREASING LENDER]

By:      Name:
Title: Accepted and agreed to as of the date first written above:
INTUIT INC.,
a Delaware corporation

By:      Name:
Title:
Acknowledged as of the date first written above: BANK OF AMERICA, N.A.,
as Lead Administrative Agent

By:      Name:
Title:





EXHIBIT D

[FORM OF] AUGMENTING LENDER SUPPLEMENT

This AUGMENTING LENDER SUPPLEMENT, dated      , 20      (this “ Supplement ”), by and among each of the signatories hereto, to the Credit Agreement, dated as of February 1, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Intuit Inc., a Delaware corporation (the “ Borrower ”), the Lenders from time to time party thereto and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Co-Administrative Agents.

W I T N E S S E T H

WHEREAS, the Credit Agreement provides in Section 2.20 thereof that any bank, financial institution or other entity may [extend new Revolving Commitments] [and] [participate in tranches of Incremental Term Loans] under the Credit Agreement subject to the approval of the Borrower and the Lead Administrative Agent, by executing and delivering to the Borrower and the Lead Administrative Agent a supplement to the Credit Agreement in substantially the form of this Supplement; and

WHEREAS, the undersigned Augmenting Lender was not an original party to the Credit Agreement but now desires to become a party thereto.

NOW, THEREFORE, each of the parties hereto hereby agrees as follows:

1. The undersigned Augmenting Lender agrees to be bound by the provisions of the Credit Agreement and agrees that it shall, on the date of this Supplement, become a Lender for all purposes of the Credit Agreement to the same extent as if originally a party thereto, with a [Revolving Commitment of $[ ]] [and] [a commitment with respect to a tranche of Incremental Term Loans in an amount equal to $[ ]].

2. The undersigned Augmenting Lender (a) represents and warrants that it is legally authorized to enter into this Supplement; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.09 thereof, as applicable, and has reviewed such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Supplement; (c) agrees that it will, independently and without reliance upon the Lead Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Lead Administrative Agent to take such action as agent on its behalf and to




exercise such powers and discretion under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Lead Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.

3. The undersigned’s address for notices for the purposes of the Credit Agreement is as follows: [      ].

4. The Borrower hereby represents and warrants that no Default or Event of Default has occurred and is continuing on and as of the date hereof.





5.
Terms defined in the Credit Agreement shall have their defined meanings when used herein.

6. This Supplement shall be governed by, and construed in accordance with, the laws of the State of New York.

7. This Supplement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same document.

[remainder of this page intentionally left blank]





IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be executed and delivered by a duly authorized officer on the date first above written.

[INSERT NAME OF AUGMENTING LENDER]

By:      Name:
Title: Accepted and agreed to as of the date first written above:
INTUIT INC.,
a Delaware corporation

By:      Name:
Title:
Acknowledged as of the date first written above: BANK OF AMERICA, N.A.,
as Lead Administrative Agent

By:      Name:
Title:





EXHIBIT E

LIST OF CLOSING DOCUMENTS

(a)      INTUIT INC. CREDIT FACILITIES
February 1, 2016

LIST OF CLOSING DOCUMENTS

A.
LOAN DOCUMENTS 1  

1.
Credit Agreement (the “ Credit Agreement ”) among Intuit Inc., a Delaware corporation (the “ Borrower ”), the Lenders party thereto and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Co-Administrative Agents, evidencing credit facilities to the Borrower from the Lenders in an initial aggregate principal amount of $1,500,000,000.

SCHEDULES

Schedule 2.01 – Commitments Schedule 6.01 – Existing Liens Schedule 6.04 – Existing Debt

EXHIBITS

Exhibit A    – Form of Assignment and Assumption
Exhibit B    – Form of Opinion of Borrower’s Counsel
Exhibit C    – Form of Increasing Lender Supplement
Exhibit D    – Form of Augmenting Lender Supplement
Exhibit E    – List of Closing Documents
Exhibit F    – Form of Revolving Maturity Date Extension Request
Exhibit G-1    – Form of U.S. Tax Certificate (Foreign Lenders That Are Not Partnerships)




Exhibit G-2    – Form of U.S. Tax Certificate (Foreign Participants That Are Not Partnerships)
Exhibit G-3    – Form of U.S. Tax Certificate (Foreign Participants That Are Partnerships)
Exhibit G-4    – Form of U.S. Tax Certificate (Foreign Lenders That Are Partnerships)
Exhibit H    – Form of Borrowing Request
Exhibit I    – Form of Interest Election Request
Exhibit J    – Form of Notice of Loan Prepayment

2.
Notes executed by the Borrower in favor of each of the Lenders, if any, which has requested a note pursuant to Section 2.10(f) of the Credit Agreement.






 
1 Each capitalized term used herein and not defined herein shall have the meaning assigned to such term in the above-defined Credit Agreement. Items appearing in bold italics shall be prepared and/or provided by the Borrower and/or Borrower’s counsel.





B.
CORPORATE DOCUMENTS

3.
Certificate of the Secretary or an Assistant Secretary of the Borrower certifying as true, correct and complete (i) the Certificate of Incorporation or other charter document of the Borrower attached thereto, which has been certified as of a recent date by the Secretary of State of Delaware, (ii) the by-laws or other applicable organizational document, as attached thereto, of the Borrower as in effect on the date of such certification, (iii) resolutions of the Board of Directors or other governing body of the Borrower authorizing the execution, delivery and performance of each Loan Document, and (iv) the names and true signatures of the incumbent officers of the Borrower authorized to sign the Loan Documents, and authorized to request a Borrowing under the Credit Agreement.

4.
Good Standing Certificate for the Borrower from the Secretary of State of Delaware.

C.
OPINION

5.
Opinion of Fenwick & West LLP, counsel for the Borrower.

D.
CLOSING CERTIFICATES AND MISCELLANEOUS

6.
A Certificate signed by a Responsible Officer of the Borrower certifying the following as of the Effective Date: (i) all of the representations and warranties of the Borrower set forth in the Credit Agreement are true and correct, (ii) no Default or Event of Default has occurred and is then continuing, and (iii) all governmental and third party approvals necessary or, in the reasonable discretion of the Lead Administrative Agent, advisable in connection with the Transactions have been obtained and are in full force and effect.

7.
Payoff Letter in respect of the Existing Credit Agreement.

8.
(i) Audited Consolidated financial statements of the Borrower and its Subsidiaries for the fiscal years ended July 31, 2015 and July 31, 2014, and (ii) unaudited interim Consolidated financial statements of the Borrower and its Subsidiaries for the fiscal quarter ended October 31, 2015.

9.
All documentation and other information that it has reasonably requested by each Lender in writing at least ten (10) days prior to the Effective Date that such Lender has reasonably determined is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the Patriot Act.





EXHIBIT F

[FORM OF] REVOLVING MATURITY DATE EXTENSION REQUEST

[Date]

Bank of America, N.A.,
as Lead Administrative Agent Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of February 1, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Intuit Inc., a Delaware corporation (the “ Borrower ”), the Lenders from time to time party thereto and Bank of America,
N.A. and JPMorgan Chase Bank, N.A., as Co-Administrative Agents. Capitalized terms used but not defined herein shall have the meanings specified in the Credit Agreement. In accordance with Section 2.23 of the Credit Agreement, the undersigned hereby requests [(i)] an extension of the Revolving Maturity Date from [ ], 20[ ] to [ ], 20[ ], [(ii) the following changes to the Applicable Rate to be applied in determining the interest payable on Loans of, and fees payable hereunder to, Consenting Lenders in respect of that portion of their Revolving Commitments (and related Revolving Loans) extended to such new Revolving Maturity Date, which changes shall become effective on [__], 20[ ], [and] [(iii) the amendments to the terms of the Credit Agreement set forth below, which amendments shall become effective on [ ], 20[ ]:


INTUIT INC.,
a Delaware corporation

By:      Name:
Title:





Each of the undersigned consents to the requested amendments to the terms of the Credit Agreement and the requested extension of the Revolving Maturity Date. The maximum amount of the Revolving Commitment of each of the undersigned with respect to which each of the undersigned agrees to the amendments to the terms of the Credit Agreement and the extension of the Revolving Maturity Date is set forth [under its signature][on the attached Schedule [ ]].

Name of Institution:



By:      Name:
Title:

For any Institution requiring a second signature line:

By:      Name:
Title:





EXHIBIT G-1

[FORM OF] U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of February 1, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Intuit Inc., a Delaware corporation (the “ Borrower ”), the Lenders from time to time party thereto and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Co-Administrative Agents.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Lead Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BENE (or W-8BEN, as applicable). By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Lead Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Lead Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]

By:      Name:
Title:

Date:      , 20[__]





EXHIBIT G-2

[FORM OF] U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of February 1, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Intuit Inc., a Delaware corporation (the “ Borrower ”), the Lenders from time to time party thereto and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Co-Administrative Agents.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BENE (or W-8BEN, as applicable). By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]

By:      Name:
Title:

Date:      , 20[__]





EXHIBIT G-3

[FORM OF] U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of February 1, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Intuit Inc., a Delaware corporation (the “ Borrower ”), the Lenders from time to time party thereto and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Co-Administrative Agents.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and
(v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BENE (or W-8BEN, as applicable) or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BENE (or W-8BEN, as applicable) from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]

By:      Name:




Title:

Date:      , 20[__]





EXHIBIT G-4

[FORM OF] U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of February 1, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Intuit Inc., a Delaware corporation (the “ Borrower ”), the Lenders from time to time party thereto and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Co-Administrative Agents.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code,
(iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Lead Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BENE (or W-8BEN as applicable) or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BENE (or W-8BEN, as applicable) from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Lead Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Lead Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]





By:      Name:
Title:

Date:      , 20[__]





EXHIBIT H

[FORM OF] BORROWING REQUEST

TO:    Bank of America, N.A., as Lead Administrative Agent

RE: Credit Agreement, dated as of February 1, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”; capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement), among Intuit Inc., a Delaware corporation (the “ Borrower ”), the Lenders from time to time party thereto, and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Co-Administrative Agents

DATE:    [Date]

 
The undersigned hereby requests (select one):

¨
A Revolving Loan Borrowing
 
 
¨
A Term Loan Borrowing

---

1.
On      (a Business Day)

2.
In the amount of $      .

3.
Type:
¨
ABR Borrowing
 
 
¨
Eurocurrency Borrowing
4.
For Eurocurrency Borrowings: with an initial Interest Period of      months.

5.
For Eurocurrency Borrowings, in the following Agreed Currency:     

6.
The proceeds of such Borrowing shall be disbursed to the following account: [ insert location and number of account ]




With respect to such Borrowing, the Borrower hereby represents and warrants that [(i) such request complies with the requirements of Section 2.01 of the Credit Agreement and (ii)] each of the conditions set forth in Section 4.02 of the Credit Agreement have been satisfied on and as of the date of such Borrowing.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]





The undersigned Responsible Officer of the Borrower has caused this Borrowing Request to be executed as of the date first above written.

INTUIT INC.,
a Delaware corporation


By:      Name:
Title:





EXHIBIT I

[FORM OF] INTEREST ELECTION REQUEST

TO:    Bank of America, N.A., as Lead Administrative Agent

RE: Credit Agreement, dated as of February 1, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”; capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement), among Intuit Inc., a Delaware corporation (the “ Borrower ”), the Lenders from time to time party thereto, and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Co-Administrative Agents

DATE:    [Date]

 

The undersigned hereby requests (select one):
¨
A [conversion][continuation] of a Revolving Loan Borrowing
 
 
¨
A [conversion][continuation] of a Term Loan Borrowing

---

1.
On      (a Business Day)
2.
Type:
¨
$_______________________
as a ABR Borrowing
 
 
¨
$_______________________
as a Eurocurrency Borrowing
4.
For Eurocurrency Borrowings: with an initial Interest Period of      months.

5.
For Eurocurrency Borrowings, in the following Agreed Currency:     

With respect to such Interest Election Request, the Borrower hereby represents and warrants that each of the conditions set forth in Section 4.02 of the Credit Agreement have been satisfied on and as of the date of such conversion or continuation.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




The undersigned Responsible Officer of the Borrower has caused this Interest Election Request to be executed as of the date first above written.

INTUIT INC.,
a Delaware corporation


By:      Name:
Title:





EXHIBIT J

[FORM OF] NOTICE OF LOAN PREPAYMENT

TO:    Bank of America, N.A., as Lead Administrative Agent

RE: Credit Agreement, dated as of February 1, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”; capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement), among Intuit Inc., a Delaware corporation (the “ Borrower ”), the Lenders from time to time party thereto, and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Co-Administrative Agents

DATE:    [Date]

 

The Borrower hereby notifies the Lead Administrative Agent that on [Date], pursuant to the terms of Section 2.11 of the Credit Agreement, the Borrower intends to prepay the following Loans as more specifically set forth below:
¨
Voluntary prepayment of a [Revolving Loan Borrowing][Term Loan Borrowing] in the following amount(s):

¨
Eurocurrency Borrowing: $_________________
Applicable Interest Period(s):         
¨
ABR Borrowing: $ _____


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]





The undersigned Responsible Officer of the Borrower has caused this Notice of Loan Prepayment to be executed as of the date first above written.

INTUIT INC.,
a Delaware corporation


By:      Name:
Title:





Exhibit 31.01

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
EXCHANGE ACT RULE 13a-14(a)/15d-14(a)

I, Brad D. Smith, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Intuit Inc.;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a.
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 25, 2016
By:      /s/ Brad D. Smith
Brad D. Smith
President and Chief Executive Officer
(Principal Executive Officer)





Exhibit 31.02

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO
EXCHANGE ACT RULE 13a-14(a)/15d-14(a)

I, R. Neil Williams, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Intuit Inc.;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 25, 2016
By:      /s/ R. NEIL WILLIAMS
R. Neil Williams
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)





Exhibit 32.01

Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of The Sarbanes-Oxley Act of 2002


In connection with the Quarterly Report of Intuit Inc. (the “Company”) on Form 10-Q for the quarter ended January 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Brad D. Smith, President and Chief Executive Officer of the Company, certifies pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ BRAD D. SMITH
Brad D. Smith
President and Chief Executive Officer


Date: February 25, 2016


A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.






Exhibit 32.02

Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of The Sarbanes-Oxley Act of 2002


In connection with the Quarterly Report of Intuit Inc. (the “Company”) on Form 10-Q for the quarter ended January 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), R. Neil Williams, Executive Vice President and Chief Financial Officer of the Company, certifies pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ R. Neil Williams
R. Neil Williams
Executive Vice President and Chief Financial Officer


Date: February 25, 2016


A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.