Document:

Exhibit 10.5

 

SERVICES AGREEMENT

 

by and between

 

IAC/INTERACTIVECORP

 

and

 

MATCH GROUP, INC.

 

Dated as of

 

November 24, 2015

 

 

SERVICES AGREEMENT

 

This Services Agreement, dated as of November 24, 2015 (this “Services Agreement”), is entered into by and between IAC/InterActiveCorp, a Delaware corporation (“IAC”), and Match Group, Inc., a Delaware corporation (“Match” and, together with IAC, the “Parties” and each a “Party”).

 

WHEREAS, IAC and Match entered into a Master Transaction Agreement, dated as of November 24, 2015 (the “Transaction Agreement”) and other Ancillary Agreements related to the initial public offering of Match’s common stock (the “Transaction”);

 

WHEREAS, in connection with such Transaction, (a) Match desires to procure certain services from IAC, and IAC is willing to provide such services, during the term hereof, on the terms and conditions set forth in this Services Agreement; and (b) IAC desires to procure certain services from Match, and Match is willing to provide such services to IAC, during the term hereof, on the terms and conditions set forth in this Services Agreement.

 

NOW, THEREFORE, in consideration of the mutual agreements, covenants and other provisions set forth in this Services Agreement, the Parties hereby agree as follows:

 

ARTICLE I

 

Definitions

 

1.01.                     General.   All terms used herein and not defined herein shall have the meanings assigned to them in the Transaction Agreement.

 

ARTICLE II

 

Agreement To Provide and Accept Services

 

2.01.                     Provision of Services.

 

(a)                                 On the terms and subject to the conditions contained herein, IAC agrees with Match, that it shall provide, or shall cause its Subsidiaries and Affiliates (other than Match and its Subsidiaries) and its or their respective employees designated by IAC (such designated Subsidiaries, Affiliates and employees, together with IAC, being herein collectively referred to as the “IAC Service Providers”) to provide, to Match (or a member of the Match Group designated by Match) the services (“IAC Services”) listed on the Schedule of Services attached hereto (the “Services Schedule”) as being performed by IAC.  Subject to Section 3.01, any decisions as to which of the IAC Service Providers (including the decisions to use third parties) shall provide the IAC Services shall be made by IAC in its sole discretion, except to the extent specified in the Services Schedule.  Each IAC Service shall be provided in exchange for the consideration set forth with respect to such IAC Service on the Services Schedule or as IAC and Match may otherwise agree in writing.  Each IAC Service shall be provided and accepted in accordance with the terms, limitations and conditions set forth herein and on the Services Schedule.

 

 

(b)                                 On the terms and subject to the conditions contained herein, Match agrees with IAC that it shall provide, or shall cause its Subsidiaries and Affiliates (other than IAC and its non-Match Group Subsidiaries) and their respective employees designated by it (such designated Subsidiaries, Affiliates and employees, together with Match, being herein collectively referred to as the “Match Service Providers” and together with the IAC Service Providers, the “Service Providers”) to provide, to IAC (or a member of the IAC Group designated by IAC), as applicable, the services (“Match Services”) listed on the Services Schedule as being performed by Match.  Subject to Section 3.01, any decisions as to which of the Match Service Providers (including the decisions to use third parties) shall provide the Match Services shall be made by Match in its sole discretion, except to the extent specified in the Services Schedule.  Each Match Service shall be provided in exchange for the consideration set forth with respect to such Service on the Services Schedule or as Match and IAC may otherwise agree in writing.  Each Match Service shall be provided and accepted in accordance with the terms, limitations and conditions set forth herein and on the Services Schedule.

 

(c)                                  As used in this Services Agreement, the term “Receiving Party” shall mean the Party receiving (or the Party whose Subsidiary is receiving) the applicable Services from a Service Provider.

 

2.02.                     Books and Records; Availability of Information.  Each Party shall create and maintain accurate books and records in connection with the provision of the Services performed or caused to be performed by it and, upon reasonable notice from a Receiving Party, shall make available for inspection and copying by such Receiving Party’s agents such books and records to the extent relating to the Services provided to such Receiving Party hereunder during reasonable business hours with such inspection occurring no more than one (1) time during the term in which the Service Provider has provided the applicable Service to the Receiving Party. Moreover, such inspection shall be conducted by the Receiving Party or its agents in a manner that will not unreasonably interfere with the normal business operations of the Service Provider.  Each Receiving Party shall make available on a timely basis to the Service Providers all information and materials reasonably requested by such Service Providers to enable them to provide the applicable Services.  Each Receiving Party shall provide to the Service Providers reasonable access to such Receiving Party’s premises to the extent necessary for the purpose of providing the applicable Services.

 

ARTICLE III

 

Services; Payment; Independent Contractors

 

3.01.                     Services To Be Provided.

 

(a)                                 Unless otherwise agreed between the applicable Party providing Services hereunder and the Receiving Party (including to the extent specified in the applicable entry on the Services Schedule), (i) the Service Providers shall be required to perform the Services only in a manner, scope, nature and quality as provided by or within IAC that is similar in all material respects to the manner in which such Services were performed immediately prior to the Effective Date (as defined in Section 4.01), and (ii) the Services shall be used for substantially the same purposes and in substantially the same manner (including as to volume, amount, level or

 

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frequency, as applicable) as the Services have been used immediately prior to the Effective Date; provided, however, that the applicable entry on the Services Schedule shall control the scope of the Service to be performed (to the extent provided therein), unless otherwise agreed in writing.  Each Party and the Service Providers shall act under this Services Agreement solely as an independent contractor and not as an agent or employee of any other Party or any of such Party’s Affiliates. As an independent contractor, all overhead and personnel necessary to the Services required of the Service Providers hereunder shall be the Service Provider’s sole responsibility and shall be at the Service Provider’s sole cost and expense.  No Service Provider shall have the authority to bind the Receiving Party by contract or otherwise.

 

(b)                                 The provision of Services by the Service Providers shall be subject to Article V hereof.

 

3.02.                     Cooperation.  Each Receiving Party and Party providing Services to it hereunder will use good-faith efforts to reasonably cooperate with each other in all matters relating to the provision and receipt of Services.  Such cooperation shall include obtaining all consents, licenses or approvals necessary to permit each such Party to perform its obligations to such Receiving Party hereunder; provided, however, under no circumstances shall any Service Provider be required to make any payments to any third party in respect of any such consents, licenses or approvals nor shall any Service Provider be required to make any alternative arrangements in the event that any such consents, licenses or approvals are not obtained.

 

3.03.                     Additional Services.

 

(a)                                 From time to time during the term applicable to any Service being provided by a Service Provider, each Party may request any of the other Parties (i) to provide additional or different services which such other Party is not expressly obligated to provide under this Services Agreement if such services are of the type and scope provided by such providing Party within IAC or (ii) expand the scope of any Service (such additional or expanded services, the “Additional Services”). The Party receiving such request shall consider such request in good faith and shall use commercially reasonable efforts to provide such Additional Service; provided, no Party shall be obligated to provide any Additional Services if it does not, in its reasonable judgment, have adequate resources to provide such Additional Services or if the provision of such Additional Services would interfere with the operation of its business. The Party receiving the request for Additional Services shall notify the requesting Party within fifteen (15) days as to whether it will or will not provide the Additional Services.

 

(b)                                 If a Party agrees to provide Additional Services pursuant to Section 3.03(a), then a representative of each applicable Party shall in good faith negotiate the terms of a supplement to the Services Schedule which will describe in detail the service, project scope, term, price and payment terms to be charged for the Additional Services.  Once agreed to in writing, the supplement to the Services Schedule shall be deemed part of this Services Agreement as of such date and the Additional Services shall be deemed “Services” provided by such Service Provider to such Receiving Party hereunder, in each case subject to the terms and conditions of this Agreement.

 

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3.04.                     Payments.  Except as set forth on the Services Schedule, statements will be delivered to each applicable Receiving Party within ten (10) business days after the end of each month, and each such statement shall set forth a brief description of such Services, the allocation of personnel costs related to providing such Services and the amounts charged therefor, and, except as the applicable providing Party and Receiving Party may agree or as set forth on the Services Schedule, such amounts shall be due and payable by the Receiving Party within thirty (30) days after the date of such statement.  Receiving Party shall have the right to dispute any items set forth in an invoice and the parties agree to work in good faith to resolve any such disputes.  In the event that the parties are not able to resolve a dispute, IAC’s resolution of any such dispute shall be final and binding unless such resolution is unreasonable or clearly erroneous, it being understood and agreed that reasonableness shall be assessed without regard to whether such resolution happens to be in IAC’s self-interest. Statements not paid within such 30-day period shall be subject to late charges, calculated at an interest rate per annum equal to the Prime Rate plus 2% (or the maximum legal rate, whichever is lower), and calculated for the actual number of days elapsed, accrued from the date on which such payment was due up to the date of the actual receipt of payment.  Payments shall be made by wire transfer to an account designated in writing from time to time by the applicable Service Provider, or as otherwise agreed by the Service Provider and Receiving Party.

 

3.05.                     Increases in Costs.  The Parties understand and agree that the costs set forth on the Services Schedule are based on the actual cost to the Service Provider of the Services provided to the Receiving Party.  If the actual cost to the Service Provider of a Service increases, the Service Provider may, in good faith, increase the cost for such Service with 30 days’ prior written notice.

 

3.06.                     Disclaimer of Warranty.  EXCEPT AS EXPRESSLY SET FORTH IN THIS SERVICES AGREEMENT, THE SERVICES TO BE PURCHASED UNDER THIS SERVICES AGREEMENT ARE FURNISHED AS IS, WHERE IS, WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.  In the event that the provision of any Service for the account of a Receiving Party by a Service Provider conflicts with such Service Provider’s provision of such Service for its own account or the account of other Receiving Parties, priority for the provision of such Service shall be allocated in an equitable manner on an aggregate basis, and in a manner consistent with the Receiving Party’s level of use of such Service prior to the Effective Date (or as described in the applicable entry on the Services Schedule).

 

3.07.                     Taxes.

 

(a)                                 The amounts set forth on the Services Schedule with respect to each Service do not include any sales, use, value added, goods and services or similar taxes (collectively, and together with any interest, penalties or additions to tax imposed with respect thereto, “Sales Taxes”).  In addition to the amounts required to be paid as set forth on the Services Schedule or otherwise pursuant to this Services Agreement, the Receiving Party shall pay and be responsible for, and in the event paid to a taxing authority by the Service Provider shall promptly reimburse the Service Provider for, any Sales Taxes imposed with respect to the provision of Services to the Receiving Party hereunder or any payment of fees therefor; provided, that the Receiving Party shall not be liable for any interest, penalties or other charges attributable to the Service

 

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Provider’s improper filing relating to Sales Taxes or late payment or failure to remit Sales Taxes to the relevant taxing authority; provided, further that the Receiving Party shall not be obligated to pay such Sales Taxes if and to the extent that the Receiving Party has provided the Service Provider with any valid exemption certificates or other applicable valid documentation that would eliminate or reduce such Sales Taxes.

 

(b)                                 The Parties acknowledge that the Service Provider and the Receiving Party shall each pay and be responsible for their own personal property taxes and taxes based on their own income, receipts, capital, profits or assets.

 

(c)                                  Payments for Services or any other amounts payable under this Services Agreement shall be made without any deduction or withholding in respect of taxes except to the extent such deduction or withholding is required under applicable Law.  To the extent such deduction or withholding is so required with respect to the making of any payment hereunder, the person making such payment shall deduct or withhold amounts so required to be deducted or withheld, and shall promptly remit any such deducted or withheld amounts to the appropriate taxing authority and such deducted or withheld amounts shall be treated for all purposes of this Services Agreement as having been paid to or on behalf of the payee.

 

3.08.                     Use of Services.  Each party, in its capacity as a Receiving Party agrees with each applicable providing Party that it shall not, and shall cause its Affiliates not to, resell any Services to any person whatsoever or permit the use of the Services by any person other than in connection with the conduct of such Receiving Party’s operations as conducted immediately prior to the Effective Date.

 

ARTICLE IV

 

Term of Services

 

4.01.                     Term.  Subject to Section 4.03, the provision of Services hereunder shall commence as of the Effective Time (the time of commencement of the provision of such Services being referred to as the “Effective Date”) and continue for one year thereafter; provided, that this Agreement shall be automatically renewed for additional one year periods (each, an “Extension Term”) for so long as IAC holds a majority of the combined voting power of all Match Voting Stock unless all of the Services provide hereunder have been terminated in accordance with this Section 4.01.  Notwithstanding the foregoing, subject to the applicable entry on the Services Schedule, any Service may be cancelled or reduced in amount or any portion thereof by the Receiving Party or, in any Extension Term, by the Service Provider, in each case upon ninety (90) days written notice thereof or, if the Service Provider gives notice of an increase the cost for such Service pursuant to Section 3.05, thirty (30) days written notice (or, in either case, such other notice period if one is set forth for such Service in the applicable entry on the Services Schedule).  The foregoing notwithstanding and subject to Section 7.01, (i) a Service Provider may immediately terminate any individual Service provided to a Receiving Party in the event that the Receiving Party fails to make payments for such Service under Section 3.02 and has not cured such failure within thirty (30) days of written notice of such failure from the applicable Service Provider, and (ii) upon ninety (90) days written notice, the Service Provider

 

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may terminate any Service provided to a Receiving Party at such time as the Service Provider no longer provides the same Service to itself for its own account.

 

4.02.                     Extension of Services.  In the event a Receiving Party requests an extension of the term applicable to the provision of Services, such request shall be considered in good faith by the applicable Service Provider. Any terms, conditions or costs or fees to be paid by the Receiving Party for Services provided during an extended term will be on terms mutually acceptable to such Service Provider and Receiving Party.  For the avoidance of doubt, under no circumstances shall a Service Provider be required to extend the term of provision of any Service if (i) the Service Provider does not, in its reasonable judgment, have adequate resources to continue providing such Services, (ii) the extension of the term would interfere with the operation of the Service Provider’s business or (iii) the extension would require capital expenditure on the part of the Service Provider or otherwise require the Service Provider to renew or extend any Contract with any third party.

 

4.03.                     Distribution.  In the event that IAC distributes its interest in Match to IAC’s shareholders, whether by dividend, recapitalization or other extraordinary transaction (a “Distribution”), then, nothwithstanding anything to the contrary herein, the provision of Services hereunder shall continue from the effective date of the Distribution until the first anniversary thereof, unless such Service is earlier terminated in accordance with Section 4.01.   Each Party agrees with each other Party providing Services to it hereunder to use its reasonable efforts following a Distribution to reduce or eliminate its dependency on such Services as soon as is reasonably practicable; provided that a breach of this sentence shall not affect a Service Provider’s obligation to provide any Service through the term applicable to such Service.

 

ARTICLE V

 

Force Majeure

 

5.01.                     The Service Providers shall not be liable for any expense, loss or damage whatsoever arising out of any interruption of Service or delay or failure to perform under this Services Agreement that is due to acts of God, acts of a public enemy, acts of terrorism, acts of a nation or any state, territory, province or other political division thereof, changes in applicable law, fires, hurricanes, floods, epidemics, riots, theft, quarantine restrictions, freight embargoes or other similar causes beyond the reasonable control of the Service Providers.  In any such event, the applicable Service Provider’s obligations hereunder shall be postponed for such time as its performance is suspended or delayed on account thereof.  Each Service Provider will promptly notify the recipient of the Service, either orally or in writing, upon learning of the occurrence of such event of force majeure.  Upon the cessation of the force majeure event, such Service Provider will use commercially reasonable efforts to resume, or to cause any other relevant Service Provider to resume, its performance with the least practicable delay (provided that, at the election of the applicable Receiving Party, the applicable term for such suspended Service shall be extended by the length of the force majeure event).

 

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ARTICLE VI

 

Liabilities

 

6.01.                     Consequential and Other Damages.  None of the Service Providers shall be liable to any Receiving Party with respect to this Services Agreement, whether in contract, tort (including negligence and strict liability) or otherwise, for any special, indirect, incidental or consequential damages whatsoever (except, in each case, to the extent any amount is paid to third parties by such Receiving Party or its Affiliates) which in any way arise out of, relate to or are a consequence of, the performance or nonperformance by it hereunder or the provision of, or failure to provide, any Service hereunder, including with respect to loss of profits, business interruptions or claims of customers.

 

6.02.                     Limitation of Liability.  Subject to Section 6.03 hereof, the liability of any Service Provider with respect to this Services Agreement to any Receiving Party or in respect of any Services provided to such Receiving Party or any act or failure to act in connection herewith (including, but not limited to, the performance or breach hereof), or from the sale, delivery, provision or use of any Service provided under or covered by this Services Agreement, whether in contract, tort (including negligence and strict liability) or otherwise, shall be limited to actions or omissions resulting from intentional breach of this Services Agreement or gross negligence, and, in any event, such liability shall not exceed the fees previously paid to such Service Provider by such Receiving Party during the term of the applicable Service giving rise thereto.

 

6.03.                     Obligation to Re-perform.  In the event of any breach of this Services Agreement by any Service Provider resulting from any error or defect in the performance of any Service (which breach such Service Provider can reasonably be expected to cure by re-performance in a commercially reasonable manner), the Service Provider shall use its reasonable commercial efforts to correct in all material respects such error, defect or breach or re-perform in all material respects such Service upon receipt of the written request of the applicable Receiving Party.

 

6.04.                     Indemnity.  Except as otherwise provided in this Service Agreement (including the limitation of liability provisions in this Article VI), each Party shall indemnify, defend and hold harmless each other Party from and against any Liability arising out of the intentional breach hereunder or gross negligence of the Indemnifying Party or its Affiliates, employees, agents, or contractors (including with respect to the performance or nonperformance of any Service hereunder). The procedures set forth in Sections 6.04 and 6.05 of the Transaction Agreement shall apply to any claim for indemnification hereunder.

 

ARTICLE VII

 

Effectiveness; Certain Deemed References; Termination

 

7.01.                     Termination.  Notwithstanding anything herein to the contrary, with respect to the Parties, the rights and obligations of each such Party in respect of such other Party under this Services Agreement shall terminate, and the obligation of the applicable Service Provider to provide or cause to be provided any applicable Service shall cease, on the earliest to occur of (i) the last date indicated for the termination of any Service provided by one such Party to the other such Party on the Services Schedule, as the case may be, (ii) the date on which the provision of all Services by either such Party to the other such Party has been cancelled pursuant to Article IV hereof or (iii) the date on which this Services Agreement, to the extent of the rights and obligations of such pair of Parties to each other, is terminated by either such

 

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Party, as the case may be, in accordance with the terms of Section 7.02 hereof; provided that, in each case, no such termination shall relieve any Party of any liability for any breach of any provision of this Services Agreement prior to the date of such termination.

 

7.02.                     Breach of Services Agreement; Dispute Resolution.  Subject to Article VI hereof, and without limiting a Party’s obligations under Section 4.01, if a Party shall cause or suffer to exist any material breach of any of its obligations to any other Party (the “Nonbreaching Party”) under this Services Agreement, including any failure to make a payment within thirty (30) days after receipt of the statement describing the Services provided for pursuant to Section 3.04 with respect to more than one Service provided hereunder, and such breaching Party does not cure such default in all material respects within thirty (30) days after receiving written notice thereof from the Nonbreaching Party, the Nonbreaching Party shall have the right to terminate this Services Agreement to the extent of the rights and obligations of such Nonbreaching Party and breaching Party to each other hereunder immediately thereafter. In the event a dispute arises between two or more Parties regarding the terms of this Services Agreement, such dispute shall be governed by Article 8 of the Transaction Agreement.

 

7.03.                     Sums Due.  In addition to any other payments required pursuant to this Services Agreement, in the event of a termination of this Services Agreement with respect to the rights and obligations of a Service Provider and a Receiving Party to each other, such Service Provider shall be entitled to the immediate payment of, and such Receiving Party shall within three (3) business days, pay to such Service Provider, all accrued amounts for Services, Sales Taxes and other amounts due from such Receiving Party to such Service Provider under this Services Agreement as of the date of termination.

 

7.04.                     Effect of Termination.  Section 2.02 hereof and Articles V, VI, VII and VIII hereof shall survive any termination or partial termination of this Services Agreement.

 

ARTICLE VIII

 

Miscellaneous

 

8.01.                     Incorporation of Transaction Agreement Provisions.  The provisions of Articles 7 and 10 of the Transaction Agreement are hereby incorporated herein by reference, and unless otherwise expressly specified herein, such provisions shall apply as if fully set forth herein.

 

8.02.                     Ownership of Work Product.  Subject to the Transaction Agreement, (i) each Service Provider acknowledges and agrees that it will acquire no right, title or interest (including any license rights or rights of use) to any work product resulting from the provision of Services hereunder for the Receiving Party’s exclusive use and such work product shall remain the exclusive property of the Receiving Party and (ii) each Receiving Party acknowledges and agrees that it will acquire no right, title or interest (other than a non-exclusive, worldwide right of use) to any work product resulting from the provision of Services hereunder that is not for the Receiving Party’s exclusive use and such work product shall remain the exclusive property, subject to license, of the Service Provider.

 

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IN WITNESS WHEREOF, the Parties have caused this Services Agreement to be executed by their duly authorized representatives.

 

 

	
 
    	
IAC/INTERACTIVECORP
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
/s/   Gregg Winiarski
    
	
 
    	
 
    	
Name:
    	
Gregg   Winiarski
    
	
 
    	
 
    	
Title:
    	
Executive   Vice President, General Counsel
    

 

 

	
 
    	
MATCH   GROUP, INC.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
/s/   Joanne Hawkins
    
	
 
    	
 
    	
Name:
    	
Joanne   Hawkins
    
	
 
    	
 
    	
Title:
    	
Vice   President and Assistant Secretary
    

 

Services Schedule – 1Exhibit

Amendment No. 1 to Building B Bridge Space Lease

AMENDMENT NO. 1 TO LEASE
This AMENDMENT NO. 1 TO LEASE (“Amendment”) is dated as of this 9th day of November, 2015 (the “Amendment Date”), by and between SANTA CLARA PHASE I PROPERTY LLC, a Delaware limited liability company (“Landlord”) and PALO ALTO NETWORKS, INC., a Delaware corporation (“Tenant”),
RECITALS
A.Landlord’s predecessor in interest and Tenant entered into that certain Lease dated as of May 28, 2015 (the “Lease”) for premises comprised of approximately 121,953 rentable square feet of floor area (“Leased Premises”) on the second, third, and fourth floors of the building located in the City of Santa Clara, County of Santa Clara, State of California, with a street address of 3325 Scott Boulevard, all as more particularly described in the Lease; and  
B.Landlord and Tenant now desire to amend the Lease on the terms and conditions set forth herein.  
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
1.Definitions.  All capitalized terms used in this Amendment but not otherwise defined shall have the meanings assigned to them in the Lease.  
2.Intended Commencement Date.  The definition of “Intended Commencement Date” in Paragraph 1.1of the Lease is hereby deleted and replaced in its entirety with the following:
	
		
	“Intended Commencement Date:
	February 1, 2016, with respect to the fourth (4th) floor of the Leased Premises (the “4th Floor Intended Commencement Date”), and, May 1, 2016 with respect to the second (2nd) and third (3rd) floors of the Leased Premises (the “2nd and 3rd Floor Intended Commencement Date”), in each case subject to Paragraph 2.3 hereof.”

3.List of Exhibits.  The Exhibit C in the list of Exhibits set forth in Article 1 of the Lease is hereby amended to read as follows:
Exhibit C –Work Letter
4.Landlord’s Work.  
(a)Paragraph 2.4 of the Lease is hereby modified by deleting the second sentence thereof and replacing it with the following:  
On or before the 4th Floor Intended Commencement Date, Landlord shall deliver the fourth (4th) floor of the Leased Premises with the 4th Floor Tenant Improvements (as defined in the Work Letter attached hereto as Exhibit C) (the “Work Letter”) substantially complete (as described in Paragraph 7 of the Work Letter) and with the 

1.

Amendment No. 1 to Building B Bridge Space Lease

fourth (4th) floor of the Leased Premises and such portion of the Landlord’s Work being Title 24 and ADA compliant as configured upon delivery to Tenant.  On or before the 2nd and 3rd Floor Intended Commencement Date, Landlord shall deliver the second (2nd) and third (3rd) floors of the Leased Premises with the 2nd and 3rd Floor Tenant Improvements (as defined in the Work Letter) substantially complete and with the second (2nd) and third (3rd) floors of the Leased Premises and such portion of the Landlord’s Work being Title 24 and ADA compliant as configured upon delivery to Tenant (the foregoing work in the entirety of the Leased Premises is referred to herein as “Landlord’s Work”).  For the avoidance of confusion, there shall be no penalties and Tenant shall have no termination rights on account of Landlord’s failure to complete the foregoing portions of the Landlord’s Work by the dates set forth herein, it being the intent of the parties that the sole consequence of such delays would be similar delays in the dates by which Base Monthly Rent would commence under this Lease.
(b)Exhibit C attached to the Lease is hereby deleted and replaced with Exhibit C attached to this Amendment.  
5.Deletion of Termination Right.  Paragraph 2.3(b) of the Lease is hereby deleted, it being the intention of Landlord and Tenant that Tenant shall have no right to terminate the Lease as set forth in such Paragraph 2.3(b).
6.Lease Commencement Date And Lease Term.  
(a)Clause (b) of the first sentence of Paragraph 2.3(a) is hereby deleted and replaced with the following:  “(ii) the 2nd and 3rd Floor Intended Commencement Date”.
(b)A new Paragraph 2.3(b) is hereby added to the Lease to read as follows:
(b) Notwithstanding Paragraph 2.3(a) above, if Tenant elects to occupy a portion of the Leased Premises for the conduct of Tenant’s business prior to the Lease Commencement Date, then Tenant shall be required to pay Base Monthly Rent and utilities with respect to such portion of the Leased Premises and to comply with all other provisions of this Lease (including but not limited to Article 9 below) applicable to the portion of the Leased Premises so occupied, but the Lease Commencement Date shall not occur until the date set forth in Paragraph 2.3(a) above; provided, however, that Tenant shall not elect to occupy the Leased Premises pursuant to this Paragraph 2.3(b) prior to substantial completion of the Landlord’s Work in such portion of the Leased Premises.
(c)The following sentence is hereby deleted from Paragraph 2.3(a) of the Lease: “By no later than three (3) months before the Intended Commencement Date, Landlord shall complete so much of Landlord’s Work as is required to enable such early occupancy.”
(d)Notwithstanding any contrary or inconsistent provision of the Lease or this Amendment, Tenant shall be required to pay Base Monthly Rent and utilities with respect to the fourth floor of the Leased Premises upon substantial completion of the 4th Floor Tenant Improvements (as defined in the Work Letter) and delivery of the fourth floor of the Leased Premises in the condition described in Paragraph 2.4 of the Lease, as amended by Section 4(a) of this Amendment.
7.Condition Precedent To Lease Amendment. Landlord’s obligations hereunder are subject to the receipt by Landlord, no later than fifteen (15) business days after the date hereof, of the Lender’s Consent, as hereinafter defined.  Landlord hereby agrees to use diligent efforts to obtain the 

2.

Amendment No. 1 to Building B Bridge Space Lease

Lender’s Consent by such date; however, if Landlord does not receive the Lender’s Consent by such date, this Amendment shall, at Landlord’s option, thereupon be deemed terminated and of no further force or effect, and neither party shall have any further rights, obligations, or liabilities hereunder.  As used herein, the term “Lender’s Consent” means a written consent to this Amendment and the amendment to the Building F Lease entered into substantially concurrently with this Amendment, in form reasonably satisfactory to Landlord, executed by the holder of the promissory note secured by any deed of trust encumbering the fee interest in the real property of which the Leased Premises are a part.
8.Ratification.  The Lease, as amended by this Amendment, is hereby ratified by Landlord and Tenant and Landlord and Tenant hereby agree that the Lease, as so amended, shall continue in full force and effect.
9.Miscellaneous.
9.1    Voluntary Agreement.  The parties have read this Amendment and the mutual releases contained in it, and on the advice of counsel they have freely and voluntarily entered into this Amendment.
9.2    Attorney’s Fees.  If either party commences an action against the other party arising out of or in connection with this Amendment, the prevailing party shall be entitled to recover from the non-prevailing party, reasonable attorney’s fees and costs of suit.
9.3    Successors.  This Amendment shall be binding on and inure to the benefit of the parties and their successors.
9.4    Counterparts.  This Amendment may be signed in two or more counterparts.  When at least one such counterpart has been signed by each party, this Amendment shall be deemed to have been fully executed, each counterpart shall be deemed to be an original, and all counterparts shall be deemed to be one and the same agreement.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the date first written above.
	
		
	 
	TENANT:

PALO ALTO NETWORKS, INC. , a Delaware corporation

By:  _/s/ Mark D. McLaughlin_______________________________
Printed Name: __Mark D. McLaughlin_______________________
Title: President

By: _/s/ Steffan Tomlinson________________________________
Printed Name: __Steffan Tomlinson_________________________
Title:  Chief Financial Officer

	 
	 

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

3.

Amendment No. 1 to Building B Bridge Space Lease

[SIGNATURES CONTINUED FROM PRIOR PAGE]

	
		
	 
	LANDLORD:

SANTA CLARA PHASE I PROPERTY LLC, a Delaware limited liability company

	 
	By:   Santa Clara Campus Partners LLC,
         a Delaware limited liability company,
         its Sole Member

         By:   Menlo Equities Development Company IX LLC,
                  a California limited liability company,
                  its Manager

                  By:   Menlo Equities V LLC,
                           a California limited liability company,
                           its Manager
      
                           By:   Menlo Legacy Holdings L.P.,
                                    a California limited partnership,
                                    its Managing Member
      
                                    By:_/s/ Henry D. Bullock________              
                                                Henry D. Bullock, President

4.

EXHIBIT C
WORK LETTER
THIS WORK LETTER (“Work Letter”) sets forth the agreement of Landlord and Tenant with respect to the improvements to be constructed in the Leased Premises, as defined in the Lease to which this Work Letter is attached as an exhibit.  In the event of any inconsistency between the terms of this Work Letter and the terms of the Lease, the terms of the Lease shall control.  All defined terms used herein shall have the meanings set forth in the Lease, unless otherwise defined in this Work Letter.
1.Construction of Tenant Improvements.  As used in this Work Letter, the term “Tenant Improvements” means the 2nd and 3rd Floor Tenant Improvements and the 4th Floor Tenant Improvements.
(a)Construction of 4th Floor Tenant Improvements.  Tenant, through its architect, and Landlord, though its contractor, have prepared, and Landlord and Tenant have approved, the “4th Floor Working Drawings,” defined herein as the plans and specifications and working drawings for improvements to the portion of the Leased Premises located on the fourth floor of the Building (the “4th Floor Premises”), a list of which is attached hereto as Exhibit A.  Landlord shall, through Devcon Construction, Inc. (the “Contractor”), furnish and install within the portion of the 4th Floor Premises, substantially in accordance with the 4th Floor Working Drawings, those items of general construction set forth on the 4th Floor Working Drawings (the “4th Floor Tenant Improvements”). 
(b)Construction of 2nd and 3rd Floor Tenant Improvements.  After completion of the process described in Paragraph 3 below concerning revisions to the 4th Floor Working Drawings to adapt them for use in the portion of the Leased Premises located on the second and third floors of the Building (the “2nd and 3rd Floor Premises”), Landlord shall, through the Contractor, furnish and install within the 2nd and 3rd Floor Premises, substantially in accordance with the plans, specifications, working drawings, and finishes to be approved by Landlord and Tenant pursuant to Paragraph 3 below, those items of general construction (the “2nd and 3rd Floor Tenant Improvements”) set forth on the 2nd and 3rd Floor Working Drawings (as defined in Paragraph 3 below).  The parties intend the 2nd and 3rd Floor Working Drawings to be substantially the same as the 4th Floor Working Drawings (including but not limited to the finishes included therein).
(c)General.  The quantities, character and manner of installation of all of the Tenant Improvements shall be subject to the limitations imposed by any applicable governmental regulations relating to conservation of energy and by applicable building codes and regulations.  In addition, unless approved by Landlord in its sole discretion, Tenant agrees that the Tenant Improvements shall not require Landlord to perform work which would (i) require changes to structural components of the Building or the exterior design of the Building; (ii) require any material modification to the Building’s mechanical or electrical systems; (iii) be incompatible with the Building plans filed with the City of Santa Clara, California; or (iv) delay the completion of the Leased Premises beyond the Intended Commencement Date (this clause (iv) however, being subject to Tenant’s right to request Changes (as defined in Paragraph 5 below).
(d)Cost Estimates.  To the extent possible, Landlord shall reasonably consult with Tenant concerning likely pricing impacts of design decisions for the Tenant Improvements as design progresses.  Within ten (10) days after the date of this Amendment, with respect to the 4th Floor Tenant Improvements, and prior to the start of construction, with respect to the 2nd and 3rd Floor Tenant Improvements, Landlord shall submit to Tenant a written estimate of the cost of such improvements.  Tenant shall have the right to request modifications to the design of the Tenant Improvements in accordance with and subject to the terms of this Work Letter if the cost estimates are unsatisfactory to Tenant.  
2.[RESERVED]
3.Approval of Working Drawings for2nd and 3rd Floor Premises.
(a)Landlord and Tenant acknowledge that Tenant shall retain its architect to adapt the 4th Floor Working Drawings for use in the 2nd and 3rd Floor Premises, making such revisions thereto as are reasonably determined by Tenant to improve the functionality of the 2nd and 3rd Floor Premises.  In this regard, Tenant’s architect shall prepare all architectural plans and specifications and finishes required for the construction of the 2nd and 3rd Floor Tenant Improvements (the “2nd and 3rd Floor Working Drawings”), in substantial conformance with the 4th Floor Working Drawings, and shall prepare drawings and specifications for Changes (as defined below), if any, requested or required pursuant to paragraph 5 below.  Landlord’s engineer, or the engineer retained through Contractor, shall, as a cost of the Tenant Improvements, provides such engineering work as is required in connection with the Tenant Improvements. 

(b)Tenant shall submit the 2nd and 3rd Floor architectural CAD backgrounds needed for the 2nd and 3rd Floor Working Drawings to Landlord for Landlord’s design-build engineers no later than November 30, 2015, and the architectural 2nd and 3rd Floor Working Drawings by December 11, 2015, for Landlord’s approval, which approval shall not be unreasonably withheld or conditioned, subject to Section 1(c) of this Work Letter.   Landlord will provide written approval or disapproval of the architectural 2nd and 3rd Floor Working Drawings within two (2) business days after such submission.  If Landlord disapproves any part of the submission, the disapproval shall include written instructions adequate for Tenant’s architect to revise the 2nd and 3rd Floor Working Drawings.  Such revisions shall be subject to Tenant’s approval, which shall not be unreasonably withheld.  In the case of disapproval, Tenant shall cause the necessary revisions to be made and the revised 2nd and 3rd Floor Working Drawings to be submitted to Landlord within three (3) business days of Landlord’s disapproval.  Landlord will similarly approve or disapprove the revised 2nd and 3rd Floor Working Drawings within two (2) business days after submission thereof to Landlord, with disapprovals to be handled as with the original submission.  It shall be deemed reasonable for Landlord to withhold consent to any element of the 2nd and 3rd Floor Working Drawings or any Change thereto that will be reasonably likely to delay completion of the 2nd and 3rd Floor Tenant Improvements beyond the 2nd and 3rd Floor Intended Commencement Date unless Tenant agrees that such delay will constitute a Tenant Delay.
(c)Upon Landlord’s approval of the 2nd and 3rd Floor Working Drawings, Landlord shall be authorized to cause the Contractor to proceed with the construction of the Tenant Improvements in accordance with the 2nd and 3rd Floor Working Drawings.
4.Cost of Tenant Improvements.  
(a)The Tenant Improvements will be constructed by Landlord on an “open-book” basis and Tenant shall be entitled to receive and review copies of all invoices and contracts with respect to the Tenant Improvements.  Landlord shall pay the cost of the Tenant Improvements (as further defined below); provided, however, that, subject to the terms and conditions of this Work Letter, Landlord shall contribute a maximum of $85 per rentable square foot to the cost of the Tenant Improvements, for an aggregate maximum of $10,366,005 (the “Landlord Fund”) and Tenant shall contribute the Excess (defined below).  The Landlord Fund shall be utilized only for building improvements to the Building and any related “soft costs” as set forth in the below description of the “cost of the Tenant Improvements”, including, but not limited to, design fees, consulting fees for audio/visual equipment, costs related to cabling, telephone lines, security, mechanical/electrical engineers’ fees and construction management fees for construction managers retained by Landlord, and not for signage or furniture costs.  Therefore, except as otherwise provided herein, Landlord shall pay the aggregate cost of the Tenant Improvements up to an amount not to exceed the Landlord Fund and Tenant shall pay the excess of the aggregate cost of the Tenant Improvements over the Landlord Fund (the “Excess”) plus the cost of all Tenant’s Work (defined in Paragraph 6 below).  Tenant shall pay the Excess as provided in Paragraph 4(b), and Tenant shall pay the cost of the Tenant’s Work, if any, directly to the persons or entities performing same.  The “cost of the Tenant Improvements” as used in this Work Letter shall include all costs incurred by Landlord to plan, design and perform the Tenant Improvements as specified by the Working Drawings and any approved (or deemed approved) revisions thereof (including any Change), including without limitation, the fees and charges of the Contractor, architects, engineers, all permit and inspection fees and charges, permit expediting charges, Landlord’s fee for construction administration in an amount equal to one percent (1%) of the total hard costs of the Tenant Improvements, electricity costs from the date of this Work Letter until the Lease Commencement Date, and any costs incurred by or charged to Landlord for (i) substitution of materials or finishes due to the unavailability of materials or finishes specified in the applicable Working Drawings that would materially delay completion of the Tenant Improvements (provided that Landlord shall give Tenant written notice of such substitution), (ii) necessary modification of any portions of the Building or its systems to accommodate the Tenant Improvements, and (iv) to the extent required on account of the construction of the Tenant Improvements, any change or alteration to comply with applicable laws, regulations, codes or ordinances and/or the requirements of any building inspector with jurisdiction over Tenant Improvements.   Notwithstanding anything to the contrary herein, Landlord shall pay for at its sole cost and expense, and Tenant shall have no responsibility for and the Landlord Fund shall not be used for the following:   (a) attorneys' fees incurred in connection with negotiation of construction contracts; (b) interest and other costs of financing construction costs; or (c) penalties and late charges attributable to Landlord’s failure to pay construction costs (except where arising from Tenant’s failure to timely pay the Excess).  Notwithstanding the foregoing, Landlord shall have no obligation to pay any cost of the Tenant Improvements during any time that Tenant is in monetary or material non-monetary default for which Landlord has provided Tenant notice thereof, and in such event, Landlord may suspend completion of the Tenant Improvements for so long as such default continues, and any delay in completing the Tenant Improvements arising from such suspension in work shall constitute a Tenant Delay.  Upon completion of the Tenant Improvements and payment in full for the same, any remaining portion of the Landlord Fund shall be retained by Landlord and Tenant shall have no rights therein. 

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(b)If Landlord estimates at any time or from time to time that there will be an Excess, Landlord shall notify Tenant in writing of Landlord’s good faith estimate of the amount thereof, which estimate shall be itemized in reasonable detail.  Tenant shall pay Landlord’s good faith estimate of the Excess billed by Landlord within ten (10) business days after it receives Landlord’s bill therefor.  In the event Tenant fails to timely pay any such good faith estimate of the Excess, Landlord shall be entitled to suspend the performance of Landlord’s Work until such time as such payment is received by Landlord, and any delay in completion of the Tenant Improvements resulting from such suspension shall be deemed a Tenant Delay.  At such time as the total cost of the Tenant Improvements is finally determined, Landlord shall notify Tenant of such amount in writing.  If Tenant has not paid all of the Excess, such notice shall include Landlord’s bill to Tenant for the balance of the Excess not previously paid by Tenant, and if Tenant has paid more than the Excess, such notice shall include Landlord’s statement to Tenant showing the amount of the overpayment of the Excess.  Tenant shall pay any such balance of the Excess to Landlord within ten (10) business days after the date when Tenant receives such notice and bill from Landlord, and Landlord shall pay any such overpayment of the Excess to Tenant within ten (10) business days after the date when Landlord gives such notice and statement to Tenant.  All Landlord’s bills to Tenant for portions of the Excess and Landlord’s notice to Tenant of the finally determined cost of the Tenant Plans and the Landlord’s Work shall itemize the costs in question in reasonable detail.
5.Changes.
(a)Any request by Tenant for a change in the Tenant Improvements after approval of the applicable Working Drawings (a “Change”) shall be accompanied by all information necessary to clearly identify and explain the proposed Change (an “Estimate Request Form”).  All Changes shall be subject to Landlord’s approval, not to be unreasonably withheld or condition, subject to Section 1(c) of this Work Letter.  If Landlord is inclined to approve a Change, as soon as practicable after receipt of such an Estimate Request Form, Landlord shall notify Tenant of the estimated cost of such Change as well as the estimated increase in construction time caused by the Change (including the estimated amount of Tenant Delay), if any (a “Change Order”).  Tenant shall approve in writing such estimates within two business days after receipt of Landlord’s notice, or the same shall be deemed disapproved.  Upon receipt of such written request, Landlord shall be authorized to cause the Contractor to proceed with the implementation of the requested Change.
(b)The increased cost and time, as determined by Landlord, of all Changes, including the cost of architectural and engineering services required to revise the Working Drawings to reflect such Changes, the Contractor’s overhead and fee, and Landlord’s fee for construction administration services, shall be treated as costs of the Tenant Improvements, and shall be as determined by Landlord upon completion of the Tenant Improvements, subject only to Landlord’s furnishing to Tenant appropriate back up information from the Contractor concerning the increased costs and increased construction time.   
6.Tenant’s Work.  Landlord and Tenant acknowledge and agree that certain work that Tenant may perform for Tenant’s occupancy of the Leased Premises, including but not limited to the procurement and installation of furniture, fixtures, equipment, artwork and interior signage are beyond the scope of the Tenant Improvements and shall be performed by Tenant or its contractors at Tenant’s sole cost and expense.  All such work (“Tenant’s Work”) shall be subject to Landlord’s prior written approval in its reasonable discretion.  By prior arrangement with Landlord’s property manager, Tenant shall be permitted access to the Leased Premises per the schedule attached hereto as Exhibit B, in order to perform the Tenant’s Work, and Tenant shall adopt a construction/installation schedule for Tenant’s Work in conformance with the Contractor’s schedule, and shall perform Tenant’s Work in such a way as not to hinder or delay the operations of Landlord or the Contractor in the Building.  Any costs incurred by Landlord as a result of any interference with Landlord’s operations by Tenant or its contractors shall be deducted from the Landlord Fund (to the extent remaining), or if the Landlord Fund has been depleted, shall be paid for by Tenant as Excess.  Landlord shall give Tenant prompt notice of such excess costs together with reasonable supporting documentation.  Landlord shall make reasonable efforts to notify Tenant of any such interference of which Landlord has actual knowledge.  Tenant’s contractors shall be subject to Landlord’s prior written approval, and to the administrative supervision of the Contractor.  Tenant’s Work shall comply with all of the following requirements:
(a)Tenant’s Work shall not proceed until Landlord has approved in writing:  (i) Tenant’s contractors, (ii) proof of the amount and coverage of public liability and property damage insurance carried by Tenant’s contractors in the form of an endorsed insurance certificate naming Landlord, the Contractor, and the agents of Landlord and the Contractor as additional insureds, in an amount not less than two million dollars, and (iii) complete and detailed plans and specifications for Tenant’s Work.
(b)Tenant’s Work shall be performed in conformity with a valid permit when required, a copy of which shall be furnished to Landlord before such work is commenced.  In any event, all Tenant’s Work shall comply with all applicable laws, codes and ordinances of any governmental entity 

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having jurisdiction over the Building.  Landlord shall have no responsibility for Tenant’s failure to comply with such applicable laws.  Any and all delay in obtaining a certificate of occupancy or a sign-off on the building permit card due to Tenant’s vendors is the responsibility of Tenant and shall be a Tenant’s Delay.
7.Substantial Completion; Tenant’s Delay.    
(a)The applicable portion of the Tenant Improvements shall be deemed “substantially complete” upon the earlier of the following: (i) such portion of the Tenant Improvements has been substantially completed in accordance with the applicable Working Drawings and Landlord has delivered to Tenant of a temporary certificate of occupancy issued (or the building permit card “finaled”) by the City of Santa Clara for such portion of the Leased Premises,  (ii) Tenant’s architect furnishes a certificate of substantial completion confirming that the applicable Tenant Improvements have been substantially completed,  subject to details of construction, decoration or mechanical adjustment which do not unreasonably affect Tenant’s ability to do business in the Leased Premises, or (iii) the date upon which Tenant opens for business in the applicable portion of the Leased Premises.
(b)If Landlord shall be delayed in substantially completing the Tenant Improvements beyond the applicable Intended Commencement Date as a result of any of the following (“Tenant’s Delays”):
(i)Tenant’s failure to furnish the information, instructions, and plans, specifications, drawings, or finishes required in paragraph 3 or approve the Working Drawings, within the applicable time periods specified in paragraph 3 or the schedule attached hereto as Exhibit B; or
(ii)(A) If the scope of the 2nd and 3rd Floor Working Drawings is materially different from that set forth in the 4th Floor Working Drawings, or (B) any Changes to the 4th Floor Working Drawings, or (C) any Changes to the 2nd and 3rd Floor Working Drawings requested by Tenant after approval thereof pursuant to paragraph 5 (including without limitation Tenant Changes which are requested but not subsequently approved by Tenant pursuant to paragraph 5); or
(iii)Any interruption or interference in Landlord’s construction of the Tenant Improvements caused by Tenant, its contractors or its vendors; or
(iv)Tenant’s failure to timely pay any amounts which Tenant is obligated to pay under this Work Letter; or
(v)Any other circumstance defined as a Tenant Delay in this Work Letter; or
(vi)Any other act, neglect, failure or omission of Tenant, its agents, employees or contractors that persists for more than twelve (12) hours following Landlord’s notice to Tenant thereof;
then the date upon which the payment of rental under the Lease shall commence shall be advanced by the cumulative duration of such Tenant’s Delays.  
8.Designation of Agent.  Tenant hereby designates and appoints William Hammerson or Cambridge CM Inc. (“Agent”) as its agent to act on its behalf with respect to its duties and obligations under this Work Letter.  For the purposes of this appointment, Agent’s authority shall specifically include, but in no way be limited to, the following: (i) the approval of the Design Development Plans, (ii) the submission of any Changes, (iii) the delivery of any Estimate Requests, (iv) the approval of any Landlord responses to Estimate Requests, (v) the approval of all costs and time of architectural services, required to revise the Working Drawings to reflect any Changes, (v) the authorization of any overtime, and (vi) the authority to execute and deliver to Landlord any written authorizations requested by Landlord in connection with the construction of the Tenant Improvements.  Tenant expressly acknowledges that this Appointment is made with the knowledge that Landlord and its affiliates will rely on the authority granted to Agent herein.  Accordingly, Landlord shall be deemed a third party beneficiary of this Appointment.  Tenant further acknowledges that the authority hereby conferred will continue in full force and effect until Landlord shall receive notice in writing, signed by the Tenant, of the revocation of the authority herein granted.  Such revocation shall be effective only as to actions taken by the Agent subsequent to receipt by Landlord of such notice.  Tenant agrees to indemnify, defend and hold Landlord harmless from any and all claims, liabilities, losses, damages, costs and expenses, including without limitation, all reasonable attorneys’ fees, asserted against or suffered by Landlord resulting from Landlord’s reliance on this appointment. 

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EXHIBIT A
4TH FLOOR WORKING DRAWINGS: LIST OF PLANS, SPECIFICATIONS AND DRAWINGS

		
	1.
	PALO ALTO NETWORKS TENANT IMPROVEMENTS – B4 ISSUED FOR PERMIT, DATED 10/30/15

		
	2.
	PALO ALTO NETWORKS TENANT IMPROVMENTS – SPECIFICATIONS ISSUED FOR PERMIT, DATED 10/30/15 

ARCHITECT:  GENSLER

EXHIBIT B
SCHEDULE

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