<PAGE>
 
                        FIRST AMENDMENT TO OFFICE LEASE
                        -------------------------------

        This FIRST AMENDMENT TO OFFICE LEASE ("First Amendment") is made and
entered into as of May 1, 1997, by and between WHLW REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership ("Landlord"), and FARALLON
COMMUNICATIONS, INC., a California corporation, formerly known as Farallon
Computing, Inc. ("Tenant").


                               R E C I T A L S:
                               - - - - - - - -

        A. Paragon Alameda Gateway Associates, Ltd., a California limited
partnership ("Paragon") and Tenant entered into that certain Office Lease dated
as of June 26, 1992 (the "Lease"), pursuant to which Paragon leased to Tenant
and Tenant leased from Paragon, certain space (the "Demised Premises")
containing approximately 49,047 rentable square feet consisting of the entire
first (1st) and second (2nd) floors of that certain building located at 2470
Mariner Square Loop, Alameda, California 94501 (the "Building").

        B. Landlord has succeeded to the interest of Paragon as landlord under
the Lease.

        C. Landlord and Tenant now desire to amend the Lease in certain
respects, including to (i) extend the term of the Lease, and (ii) modify various
terms and provisions of the Lease, all as hereinafter provided.

        NOW, THEREFORE, in consideration of the foregoing Recitals and the
mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

        1. Capitalized Terms.  Except as otherwise expressly provided
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herein to the contrary, all capitalized terms used in this First Amendment shall
have the same meanings given such terms in the Lease.

        2. Extension of Term of Lease.
           -------------------------- 

                (a) Extension of Term. The Term of the Lease, which is currently
                    -----------------                                           
scheduled to expire on December 31, 1997, is hereby extended for an additional
five (5) year period (the "Extension Period") commencing January 1, 1998 and
ending December 31, 2002, unless sooner terminated or extended in accordance
with the Lease, upon all of the applicable terms and conditions set forth in the
Lease, except as amended hereby.

                (b) Option to Extend. Tenant shall have one (1) option to extend
                    ----------------                                     
the Term of the Lease for the Demised Premises for a five (5) year period
pursuant to and in accordance with Paragraph 20 of the Addendum attached to the
Lease, except that: (i) all references in Paragraph 20 of the Addendum attached
to the Lease to two (2) Option Terms shall be deemed to mean the one (1) five
(5) year period set forth hereinabove; and (ii) such five (5) year extension
shall, if exercised, extend the Extension Period set forth in Paragraph 2(a)
above, and must be exercised, if at all, by written notice from Tenant to
Landlord on or before the date which is ten (10) months prior to the end of the
Extension Period.

        3. Base Annual Rent. The Base Annual Rent payable for the Demised
           ----------------                                       
Premises during the Extension Period shall be $1,065,300.84 (i.e., $21.72 per
                                                             ----            
rentable square foot of the Demised Premises per year), payable in equal monthly
installments of $88,775,07 per month. If Tenant exercises its extension option
pursuant to Paragraph 2(b) above, the Base Annual Rent for the Option Term shall
be determined in accordance with the provisions of Paragraph 20 of the Addendum
attached to the Lease. Notwithstanding anything to the contrary herein, provided
that Tenant is not in default under the Lease or this First Amendment, Tenant
shall not be obligated to pay the monthly installments of Base Annual Rent
otherwise payable during months 1, 2, 3, 4 and 30 of the Extension Period .
Additionally, Tenant shall only be obligated to pay $79,456.16 of the monthly
installment of Base Annual Rent otherwise payable for month thirty-one (31) of
the Extension Period.
<PAGE>
 
        4. Base Year; Operating Costs.
           -------------------------- 

                (a) Base Year. Section 1.K. of the Lease is hereby amended to
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provide that during the Extension Period, the Base Taxes and Operating Costs
Amount shall be revised to mean the amount of Taxes and Operating Costs paid or
incurred for calendar year 1998 (the "Base Year"). The references to "1993" and
the "Base Year" in Sections 10.2 and 10.3 of the Addendum attached to the Lease
shall be modified to "1998" and the "1998 Base Year", respectively, during the
Extension Period.

                (b) Cap on Controllable Operating Costs. Notwithstanding
                    -----------------------------------
anything to the contrary contained in the Lease, during the Extension Period,
the aggregate "Controllable Expenses" (as hereinafter defined) included in
Operating Costs in any calendar year of the Extension Period after the 1998 Base
Year, shall not increase by more than the lesser of the actual increase in any
calendar year or five percent (5%) per year over the actual aggregate
Controllable Expenses included in the Base Year but with no such limit on the
amount of Controllable Expenses which may be included in the Operating Costs
incurred during the Base Year. For purposes of this Paragraph 4(b),
"Controllable Expenses" shall mean all Operating Costs except: (i) Taxes and any
and all assessments, including assessment districts and government-mandated
charges with respect to the Building and/or Site, or any part thereof, (ii)
costs of utilities, including, without limitation, electricity, water, HVAC and
sewer charges, utility surcharges and assessments, and refuse removal as
actually billed from the utility companies; (iii) the costs of capital
alterations, capital additions, capital improvements, capital repairs and
capital replacements described in Section 28.2(4) of the Lease; and (iv) wages,
salaries and other compensation and benefits paid to Landlord's employees,
agents or contractors engaged in the operation, management, maintenance or
security of the Building and/or Site, to the extent such wages, salaries and
other compensation are for union personnel or paid or incurred; provided
however, if any employee of Landlord provides services with respect to the Site
and other property which is not part of the Site, then a prorated portion of
such employees' wages, salaries and other compensation and benefits shall be
included in Operating Costs based on the portion of their working time devoted
to the Site.

                (c) Building Maintenance Costs. Tenant's Share of increases in
                    --------------------------                                 
Operating Costs and Taxes payable by Tenant with respect to the Demised Premises
(as set forth in Section I.M. of the Lease) has been calculated based upon the
ratio of the total Rentable Area of the Demised Premises over the aggregate
total Rentable Area of (i) the Building and (ii) the immediately adjacent
building on the Site located at 2490 Mariner Square Loop (the "2490 Building").
Notwithstanding the definition of Operating Costs set forth in the Lease or the
calculation of Tenant's Share for the Demised Premises as set forth above, (A)
Operating Costs, for purposes of determining Tenant's Share of Any Increase in
Base Taxes and Operating Costs Amount, shall exclude any cost of maintenance and
repair of the 2490 Building, it being agreed that Tenant shall not be
responsible for paying any such maintenance and repair cost for the 2490
Building, and (B) for purposes of determining Tenant's Share of the cost of
maintenance and repair of the Building which are included in Operating Costs,
Tenant's Share for such limited purposes shall mean one hundred percent (100%)
such that Tenant shall be responsible for paying one hundred percent (100%) of
the cost of the repair and maintenance of the Building for any calendar year
after the 1998 Base Year which is in excess of the cost of the repair and
maintenance of the Building paid or incurred in the 1998 Base Year.

                (d) Other Building Maintenance Costs. The costs of operation,
                    --------------------------------                          
maintenance, repairs and taxes incurred by Landlord with respect to the other
buildings located on the Site (i.e. the buildings located at 2430 Mariner Square
                               ---
Loop and 2450 Mariner Square Loop) shall not be included in the Operating Costs
and Taxes payable by Tenant for the Demised Premises, which costs shall be
allocated separately to such other buildings, and the Rentable Area of such
other buildings shall not be included in determining Tenant's Share.

                (e) Earthquake Insurance. If Landlord does not carry earthquake
                    --------------------                                        
insurance during any portion of the 1998 Base Year, and if Landlord adds
earthquake insurance during any subsequent calendar year, then from and after
the date upon which earthquake insurance is so added and continuing throughout
the period during which earthquake insurance is carried, Operating Costs for the
Base Year shall be deemed to be calculated under the assumption that earthquake
insurance was carried for the same portion of the calendar year 1998 that
earthquake insurance was carried for such subsequent calendar year.
<PAGE>
 
        5. Proposition 13. During the Extension Period, as may be extended
           --------------                                                   
pursuant to Paragraph 2(b) above, there shall be excluded from Taxes payable by
Tenant pursuant to Section 28 of the Lease, the following percentages of any
increases in real property taxes assessed against the Site, resulting from any
sale, transfer or change in ownership of the Building or Site, or Landlord's
interest in the Building or Site (collectively, "Transfer"): (A) 100% of any
increase resulting from any Transfer which occurs during the first (lst) year of
the Extension Period; (B) 60% of any increase resulting from any Transfer which
occurs during the second (2nd) year of the Extension Period; and (C) 40% of any
increase resulting from any Transfer which occurs during the third (3rd) year of
the Extension Period. Notwithstanding anything to the contrary contained herein,
in the event any Transfer occurs after December 31, 2000, 100% of any increase
in real property taxes resulting from such Transfer shall be included in Taxes
for purposes of determining Tenant's obligation to pay Tenant's Share of
increases in Taxes pursuant to the Lease.

        6. Landlord's Books and Records. In addition to Tenant's audit rights
           ----------------------------                        
set forth in Paragraph 13 of the Addendum attached to the Lease, Tenant shall
have the right, not more often then once in any calendar year, at Tenant's cost,
after reasonable notice to Landlord, and at reasonable times during Landlord's
business hours, to have an authorized employee of Tenant inspect, and copy if
necessary, Landlord's books and records concerning the Taxes and Operating Costs
for the then current and immediately preceding calendar years,(but in no event
shall Tenant have access to any books and records preceding the 1997 calendar
year); provided, however, Tenant agrees to keep such books and records and
information obtained in connection therewith strictly confidential and shall not
disclose such books, records and information to anyone except to Tenant's
accounting, financial and legal consultants (provided such consultants agree to
keep such books, records and information strictly confidential) and/or as may be
required by law. Notwithstanding anything to the contrary in Paragraph 13 of the
Addendum Landlord shall keep at Landlord's principal place of business,
Landlord's books and records concerning the Taxes and Operating Costs for each
calendar year commencing with the 1997 calendar year, and shall maintain such
records for a period of at least twenty-four (24) months after the expiration of
such calendar year.

        7. Improvements for Demised Premises. Tenant shall continue to occupy
           ---------------------------------
the Demised Premises in its "AS IS" condition without any obligation on
Landlord's part to construct or pay for any tenant improvements or refurbishment
work in the Demised Premises, and Tenant shall be solely responsible, at its
sole cost and expense, for constructing any and all alterations and
refurbishment work for the Demised Premises pursuant to and in accordance with
the provisions of Section 4.1 of the Lease, it being agreed to by the parties
that the Construction Rider attached to the Lease, Sections 12 and 19 of the
Addendum attached to the Lease, and all other provisions of the Lease (other
than Landlord's repair obligations in Paragraph 2 of the Addendum attached to
the Lease) which require Landlord to construct, pay for or provide an allowance
for any tenant improvements or refurbishment work shall no longer apply to the
Demised Premises.

        8. Right to Make Repairs. Tenant shall continue to have its right to
           ---------------------                                        
make repairs' pursuant to and in accordance with Paragraph 2 of the Addendum,
except that the following shall be added to the end of the second (2nd)
paragraph of such Paragraph 2:

        "Such reimbursement shall be made within thirty (30) days after
Landlord's receipt of invoice of such costs and expenses, and if Landlord fails
to so reimburse Tenant within such 30-day period, then Tenant shall be entitled
to deduct from the Base Annual Rent payable by Tenant under the Lease the amount
of such invoice; provided, however, that notwithstanding the foregoing to the
contrary, if (i) Landlord delivers to Tenant within such thirty (30) day period
described above, a written objection to Tenant's right to receive any such
reimbursement based upon Landlord's claim that such action did not have to be
made by Landlord pursuant to the terms of this Lease, or (ii) Landlord delivers
to Tenant, within thirty (30) days after receipt of Tenant's invoice, a written
objection to the payment of such invoice based upon Landlord's claim that such
charges are excessive (in which case, Landlord shall reimburse Tenant, within
such 30-day period, the amount Landlord contends would not be excessive), then
Tenant shall not be entitled to such reimbursement or deduction from Base Annual
Rent, but Tenant, as its sole remedy, may proceed to submit its claim for
reimbursement to arbitration pursuant to the following provisions of this
Paragraph 2. In the event Tenant undertakes such repairs and/or maintenance, as
permitted in this Paragraph 2, and such work will affect the systems and
equipment of the Building, the structural components and/or structural integrity
of the Building, and/or exterior appearance of the Building, Tenant shall use
only those unrelated third party contractors used by Landlord in the Building
for
<PAGE>
 
such work unless such contractors are unwilling or unable to perform such work
in which Tenant may utilize the services of any other qualified contractor which
normally and regularly performs similar work in comparable buildings in the
vicinity of the Building. Tenant shall comply with the terms and conditions of
this Lease if Tenant takes the required action.

                2.1 If Tenant submits its claim for reimbursement to arbitration
as set forth above, such claim shall be determined by binding arbitration before
a retired judge of the Superior Court of the State of California (the
"Arbitrator") under the auspices of Judicial Arbitration & Mediation Services,
Inc. ("JAMS"). Such arbitration shall be initiated by Tenant, within ten (10)
days after Tenant sends written notice (the "Arbitration Notice") of a demand to
arbitrate by registered or certified mail to Landlord and to JAMS. The
Arbitration Notice shall contain a description of the subject matter of the
arbitration, the dispute with respect thereto, and the amount involved, if any,
for which Tenant requests reimbursement. The parties may agree on a retired
judge from the JAMS panel. If they are unable to promptly agree, JAMS will
provide a list of three (3) available judges and each party may strike one. The
remaining judge (or if there are two (2), the one selected by JAMS) will serve
as the Arbitrator. In the event that JAMS shall no longer exist or if JAMS fails
or refuses to accept submission of such dispute, then the dispute shall be
resolved by binding arbitration before the American Arbitration Association
("AAA") under the AAA's commercial arbitration rules then in effect.

                2.2 The arbitration shall be conducted in Alameda County,
California. Any party may be represented by counsel or other authorized
representative. In rendering a decision(s), the Arbitrator shall determine the
rights and obligations of the parties according to the substantive and
procedural laws of California and the terms and provisions of this Lease. The
Arbitrator's decision shall be based on the evidence introduced at the hearing,
including all logical and reasonable inferences therefrom. The decision must be
based on, and accompanied by, a written statement of decision explaining the
factual and legal basis for the decision as to each of the principal
controverted issues. The decision shall be conclusive and binding, and it may
thereafter be confirmed as a judgment by the Superior Court of the State of
California, subject only to challenge on the grounds set forth in California
Code of Civil Procedure Section 1286.2. The validity and enforceability of the
Arbitrator's decision is to be determined exclusively by the California courts
pursuant to the provisions of this Lease. The Arbitrator may award costs,
including without limitation attorneys' fees, and expert and witness costs, to
the prevailing party, if any, as determined by the Arbitrator in its discretion.
The Arbitrators fees and costs shall be paid by the non-prevailing party as
determined by the Arbitrator in its discretion. A party shall be determined by
the Arbitrator to be the prevailing party if its proposal for the resolution of
dispute is the closer to that adopted by the Arbitrator. In the event Tenant
prevails in such arbitration action and receives a monetary award against
Landlord, then Landlord shall pay the amount of such monetary award to Tenant
within thirty (30) days of such award being entered. If the amount of such award
is not so paid, then Tenant shall be entitled to deduct such amount from Base
Annual Rent payable under this Lease."

        9. Right of First Offer. Section 14 of the Addendum attached to the
           --------------------                                             
Lease (Right of First Offer) is hereby deleted in its entirety. Landlord hereby
grants to Tenant a new fight of first offer pursuant to and in accordance with
the provisions of this Paragraph 9.

                9.1 Right of First Offer. Subject to the following provisions of
                    --------------------                                
this Paragraph 9, Landlord agrees that prior to submitting a lease proposal to,
or entering into any negotiations with, a third party (whether identified or
unknown) to lease all or any portion of that certain building ("Building C")
located at 2450 Mariners Square Loop, and containing approximately 31,200
rentable square feet, Landlord shall deliver written notice to Tenant
("Landlord's First Offer Notice") offering to lease to Tenant the entire
Building C (the "First Offer Space") for a term coterminous with the Extension
Period, as may be extended pursuant to Paragraph 2(b) above, and at a rental
equal to the Fair Market Rental Rate (as defined below). Landlord may provide
Landlord's First Offer Notice to Tenant at any time after the date of execution
of this First Amendment by Tenant, whether or not Landlord is currently in
negotiations with or has identified any particular third party offeree.

                9.2 Term of First Offer. Any such Landlord's First Offer Notice
                    -------------------                                         
delivered by Landlord in accordance with the provisions of this Paragraph 9
shall set forth the terms upon which Landlord would lease the First Offer Space
to Tenant, including, without
<PAGE>
 
limitation (i) the commencement date therefor, and (ii) Landlord's determination
of the Fair Market Rental Rate.

                9.3 Exercise of Right of First Offer. On or before the date
                    --------------------------------                       
which is ten (10) business days after Tenant's receipt of Landlord's First Offer
Notice (the "Election Date"), Tenant shall deliver written notice to Landlord
("Tenant's Election Notice") pursuant to which Tenant shall elect either to: (i)
lease the First Offer Space upon the terms set forth in the First Offer Notice
provided, however that Tenant may object to Landlord's determination of the Fair
Market Rental Rate in Tenant's Election Notice, in which case, the Fair Market
Rental Rate shall be determined pursuant to Paragraph 9.5 below; or (ii) refuse
to lease the First Offer Space. If Tenant does not so respond in writing to
Landlord's First Offer Notice by the Election Date, Tenant shall be deemed to
have elected the option described in clause (ii) hereinabove, and Landlord may
thereafter lease all or any portion of the First Offer Space to any person or
entity on any terms and conditions Landlord desires, and Tenant's right of first
offer set forth in this Paragraph 9 shall thereupon automatically forever
terminate and be of no further force or effect.

                9.4 Fair Market Rental Rate. The term "Fair Market Rental Rate"
                    -----------------------                                  
for the First Offer Space shall mean the annual amount per rentable square foot
that a willing, non-equity, non-sublease tenant would pay and a willing landlord
would accept on a non-sublease, non-renewal basis, at arm's length, for
unencumbered space comparable to the First Offer Space in Comparable Buildings
(as that term is defined below), giving appropriate consideration to all
economic terms, such as annual rental rates per rentable square foot, escalation
clauses (including type, such as net, base year or expense stop), length of
lease term, size and location of premises being leased and other generally
acceptable terms and conditions for the tenancy of the space in question,
including all appropriate concessions, if any, being provided in connection with
such comparable space ("Rent Concessions"), but only to the extent such Rent
Concessions are being granted to tenants having financial strength and personal
liability comparable to Tenant. Such Rent Concessions shall include, to the
extent applicable with respect to the First Offer Space and the comparable
space, abatement provisions reflecting free rent, tenant improvements or tenant
improvement allowances provided or to be provided for such First Offer Space;
provided, however, that the amount of such improvements or allowances shall be
reduced, when calculating the First Offer Rent, by deducting the value of the
existing improvements in the First Offer Space, as of the first day of the
commencement date of the term of lease of the First Offer Space, with such value
to be based upon the age, quality and layout of the improvements and the extent
to which the same can be utilized by a general office user. The term "Comparable
Buildings" shall mean comparable first-class office buildings in the northern
Alameda area.

                9.5 Determination of Fair Market Rental Rate. In the event
                    ----------------------------------------                    
Tenant timely and appropriately objects in writing to the Fair Market Rental
Rate initially determined by Landlord, Landlord and Tenant shall attempt to
agree upon the Fair Market Rental Rate, using their best good-faith efforts. If
Landlord and Tenant fail to reach agreement within twenty (20) days following
Tenant's objection to the Fair Market Rental Rate (the "Outside Agreement
Date"), then each party shall submit to the other party a separate written
determination of the Fair Market Rental Rate within ten (10) business days after
the Outside Agreement Date, and such determinations shall be submitted to
arbitration in accordance with Paragraphs 9.5.1 through 9.5.7 below. Failure of
Tenant or Landlord to submit a written determination of the Fair Market Rental
Rate within such ten (10) business day period shall conclusively be deemed to be
the non-determining party's approval of the Fair Market Rental Rate submitted
within such ten (10) business day period by the other party.

                9.5.1 Landlord and Tenant shall each appoint one arbitrator who
shall by profession be an independent real estate broker who shall have been
active over the five (5) year period ending on the date of such appointment in
the leasing of commercial properties in Alameda, California. The determination
of the arbitrators shall be limited solely to the issue of whether Landlord's or
Tenant's submitted Fair Market Rental Rate is the closest to the actual Fair
Market Rental Rate as determined by the arbitrators, taking into account the
requirements of Paragraph 9.4 of this First Amendment. Each such arbitrator
shall be appointed within thirty (30) days after the Outside Agreement Date .

                9.5.2 The two (2) arbitrators so appointed shall within ten (10)
days of the date of the appointment of the last appointed arbitrator agree upon
and appoint a third arbitrator
<PAGE>
 
who shall be qualified under the same criteria set forth hereinabove for
qualification of the initial two (2) arbitrators.

                9.5.3 The three (3) arbitrators shall Within thirty (30) days
after the appointment of the third arbitrator reach a decision as to whether the
parties shall use Landlord's or Tenant's submitted Fair Market Rental Rate and
shall notify Landlord and Tenant thereof.

                9.5.4 The decision of the majority of the three (3) arbitrators
shall be binding upon Landlord and Tenant.

                9.5.5 If either Landlord or Tenant fails to appoint an
arbitrator within thirty (30) days after the applicable Outside Agreement Date,
the arbitrator appointed by one of them shall reach a decision, notify Landlord
and Tenant thereof, and such arbitrator's decision shall be binding upon
Landlord and Tenant.

                9.5.6 If the two (2) arbitrators fail to agree upon and appoint
a third arbitrator within the time period provided in Paragraph 9.5.2 above,
then the parties shall mutually select the third arbitrator. If Landlord and
Tenant are unable to agree upon the third arbitrator within ten (10) days, then
either party may, upon at least five (5) days prior written notice to the other
party, request the Presiding Judge of the Alameda County Superior Court, acting
in his private and nonjudicial capacity, to appoint the third arbitrator.
Following the appointment of the third arbitrator, the panel of arbitrators
shall within thirty (30) days thereafter reach a decision as to whether
Landlord's or Tenant's submitted Fair Market Rental Rate shall be used and shall
notify Landlord and Tenant thereof.

                9.5.7 The cost of the arbitrators and the arbitration proceeding
shall be paid by Landlord and Tenant equally, except that each party shall pay
for the cost of its own witnesses and attorneys.

                9.6 Amendment to Lease. If Tenant leases any First Offer Space
                    ------------------                                         
pursuant to this Paragraph 9, Landlord and Tenant shall promptly execute an
amendment to the Lease on Landlord's then standard form covering the First Offer
Space and the lease terms thereof. Notwithstanding anything to the contrary
contained herein, Tenant must elect to exercise its right of first offer
provided herein, if at all, with respect to all of the space offered by Landlord
to Tenant at any particular time, and Tenant may not elect to lease only a
portion thereof.

                9.7 Suspension of Right of First Offer. Notwithstanding anything
                    ----------------------------------                   
in the foregoing to the contrary, at Landlord's option, and in addition to all
of Landlord's remedies under the Lease, at law or in equity, the right of first
offer herein above granted to Tenant shall not be deemed to be properly
exercised if, as of the date Tenant exercises its right of first offer or on the
scheduled commencement date for the lease of First Offer Space, Tenant is in
default under the Lease, amended by this First Amendment. In addition, Tenant's
right of first offer to lease the First Offer Space is personal to the original
Tenant executing this First Amendment, and may not be assigned or exercised,
voluntarily or involuntarily, by or to, any person or entity other than the
original Tenant, and shall only be available to and exercisable by the Tenant
when the original Tenant is in actual and physical possession of the entire
Demised Premises."

        10. Holdover. Section 21.1 of the Lease is hereby modified so that if
            --------                                                       
Tenant holds over after the expiration or sooner termination of the Lease, the
monthly installments of Base Annual Rent payable by Tenant during such holdover
period shall be equal to the following percentages of the Base Annual Rent
payable during the last month prior to such holdover period: (a) 125% for the
first (1st) month of such holdover period; (b) 150% for the second (2nd) month
of such holdover period; and (c) 175% for the third (3rd) and each succeeding
month of such holdover period.

        11. Security Deposit. Landlord shall refund to Tenant the Security
            ----------------                                               
Deposit or any remaining portion thereof, set forth in Section 1.N. of the
Lease, within fifteen (15) days following execution of this First Amendment by
Landlord and Tenant.

        12. Parking. Tenant shall continue to have the right to use the number
            -------                
of Parking Spaces as set forth in Section 1.L. of the Lease (i.e., 3.3 per
Parking Spaces per 1000 rentable square feet of the Demised Premised) on those
portions of the Common Areas as designated for parking by Landlord from time to
time. The current location of such Common
<PAGE>
 
Areas for parking for both Phase I and Phase II of the Site is attached hereto
as Exhibit "A," but such Common Areas and parking spaces thereon are subject to
modification by Landlord from time to time. Notwithstanding anything to the
contrary contained herein, in the event Landlord changes the size,
configuration, design, layout or other aspects of the portions of the Common
Areas designated for parking or the number of parking spaces available in such
Common Areas, Landlord shall continue to provide to Tenant the number of parking
spaces specified in Section l.L of the Lease (i.e., 3.3 Parking Spaces per 1000
rentable square feet of the Demised Premises) in a substantially equivalent
convenient proximity to the Demised Premises as the Parking Spaces currently
provided to Tenant. During and after Landlord's construction of new buildings on
the Site, Landlord shall, subject to governmental approval, endeavor to provide
to Tenant commercially reasonable accessing corridors and parking alternatives
which will minimize interference experienced by Tenant with Tenant's use of
Tenant's Parking Spaces as a result of such construction and any increased use
of the parking areas by occupants of such new buildings (including, without
limitation providing Tenant with an increased number of reserved or assigned
Parking Spaces for Tenant's use and/or relocating other tenants' parking spaces,
if reasonably practicable). Landlord may delegate its responsibilities hereunder
to a parking operator in which case such parking operator shall have all the
rights of control attributed hereby to the Landlord.

        13. Subordination, Non-Disturbance and Attornment Agreement. Tenant
            -------------------------------------------------------            
hereby acknowledges that as of the date on which Landlord and Tenant execute
this First Amendment, there is a deed of trust encumbering, and in force
against, the Demised Premises, the Building and the Site in favor of General
Electric Capital Corporation, a New York corporation (the "Current Lender").
Simultaneously with Tenant's execution of this First Amendment, Tenant shall
sign, notarize and deliver a subordination, non-disturbance and attornment
agreement substantially in the form of Exhibit "B" attached hereto, entitled
"Subordination, Non-Disturbance and Attornment Agreement." If Landlord at any
time during the Term of the Lease, as amended by this First Amendment, causes
the Demised Premises, the Building and the Site to be encumbered by a new deed
of trust or mortgage pursuant to which the beneficiary of such deed of trust or
mortgage is a party or entity other than the Current Lender, the parties
acknowledge and agree that the form of any non-disturbance and attornment
agreement that may be requested to be executed and delivered by Tenant in
connection therewith will not be the "Non-Disturbance and Attornment Agreement"
                          ---                                                  
attached to the Lease as Exhibit "B". If the foregoing occurs and/or if any
                         -----------                                        
party which acquires, or otherwise succeeds to, Landlord's interest in the
Demised Premises, the Building or the Site (including, without limitation, any
ground lessee) encumbers or places a lien against the Demised Premises, the
Building or the Site with a mortgage, deed of trust or similar security
instrument and the beneficiary thereof requires the Lease, as amended hereby, to
be subordinated to such encumbrance or lien, Landlord or the successor of
Landlord will use commercially reasonable efforts to provide to Tenant a
subordination, non-disturbance and attornment agreement in a form reasonably
acceptable to Landlord or such successor of Landlord, the subject beneficiary
and Tenant. If said subordination, non-disturbance and attornment agreement is
required and agreed upon by the aforesaid parties, Landlord or the successor of
Landlord, the subject beneficiary and Tenant shall cause any such subordination,
non-disturbance and attornment agreement to be executed, acknowledged and
recorded concurrently with, or as soon as practicable after, the execution and
recordation of any such lien, deed of trust or mortgage. In addition to the
foregoing, if Landlord enters into a ground lease with regard to the Building
and/or the Site and such ground lessee requires this Lease to be subordinated to
such ground lease, the ground lessee and ground lessor will use commercially
reasonable efforts to provide to Tenant a subordination, non-disturbance and
attornment agreement in form reasonably acceptable to such ground lessee, ground
lessor, any beneficiary of ground lessee, and to Tenant.

        14. Hazardous Materials. In addition to Landlord's obligations set forth
            -------------------                                            
in Paragraph 7 of the Addendum attached to the Lease, if at any time during the
term of the Lease, as may be extended, any Hazardous Materials are found to be
present in, on, under or outside of the Building and in, on or under the Site in
violation of applicable Hazardous Materials laws, and such Hazardous Materials
have not been caused or contributed to by, or Handled by, Tenant or any of
Tenant's employees, agents, contractors, vendors, licensees, invitees, visitors,
subtenants or assigns or any other Tenant's Parties, Landlord shall take all
steps required by governmental regulations to cure any such violations in
compliance with such applicable Hazardous Materials laws, at Landlord's cost,
which shall not be included in Operating Costs except as otherwise expressly
permitted in the Lease; provided, however, that if any such Hazardous Materials
violations result from any changes in applicable Hazardous Materials laws
enacted after the date of execution of this First Amendment, then (a) Tenant
shall be solely responsible for taking all
<PAGE>
 
steps required by governmental regulations to cure any such violations to the
extent such violations pertain to non-structural, non-mechanical systems
portions of the Demised Premises, and were not caused by Landlord or any of
Landlord's agents or employees, and (b) to the extent such violations pertain to
the structural and mechanical systems portions of the Building and/or Demised
Premises, Landlord shall be solely responsible for taking all steps required by
governmental regulations to cure any such violations, which costs may be
included in Operating Costs pursuant to the provisions of this Lease.

        15. Services. All references to "normal business days" in Section 12.1
            --------                                                      
of the Lease shall mean Monday through Friday, except for the date of
observation of New Years' Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas. The actual costs of any excess services and/or
services provided after-hours as set forth in Section 12.1 of the Lease shall be
paid to Landlord within thirty (30) days after receipt of written invoice from
Landlord setting forth such actual costs. As used herein, "actual costs" shall
mean the actual costs paid or incurred by Landlord, unless such actual costs
paid or incurred cannot be readily ascertained, in which event "actual costs"
shall be the amount reasonably estimated by Landlord.

        16. Notices. All Base Annual Rent and additional rent and any notices
            -------                                                   
desired or required to be delivered to Landlord pursuant to the provisions of
the Lease shall be addressed as follows, or to such other address or addresses
as Landlord may specify by notice to Tenant (and otherwise forwarded pursuant to
the remaining terms and provisions of the Lease):

                c/o Lincoln Property Company Management Services, Inc.
                101 Lincoln Center Drive
                5th Floor.
                Foster City, California 94404

        17. Brokers. Each party represents and warrants to the other party that
            -------                                                        
it has not dealt with any real estate broker or agent in connection with this
First Amendment or its negotiation, except Cushman Realty Corporation and BT
Commercial Real Estate (collectively, the "Brokers"). Landlord shall pay the
brokerage commissions payable to the Brokers in connection with this First
Amendment pursuant to a separate agreement between or among Landlord and the
Brokers. Subject to Landlord's obligation to pay the brokerage commissions to
the Brokers as provided above, each party shall indemnify, defend and hold
harmless the other party from any cost, expense or liability (including costs of
suit and reasonable attorneys' fees) for any compensation, commission or fees
claimed by any other real estate broker, agent or finder in connection with this
First Amendment or its negotiation by reason of any act of the indemnifying
party; provided however, that notwithstanding such mutual indemnity, Tenant
shall indemnify, defend and hold harmless Landlord from any cost, expense or
liability (including costs of suit and reasonable attorneys' fees) for any
compensation, commissions or fees claimed by ComCore Commercial Real Estate and
CB Commercial Real Estate Group, Inc. (the "Identified Brokers") in connection
with this First Amendment and the extension of the Term of the Lease provided
herein (but only to the extent the Identified Brokers represent or claim to
represent Tenant, and not Landlord, in connection with this First Amendment).
<PAGE>
 
        18. No Further Modification. Except as set forth in this First
            -----------------------                                    
Amendment, all of the term and provisions of the Lease shall remain unmodified
and in full force and effect.

        IN WITNESS WHEREOF, this First Amendment has been entered into as of the
day and year first above written.

<TABLE>
<CAPTION>
"Landlord"                                                  "Tenant"
<S>                                            <C>                
WHLW REAL ESTATE LIMITED                       FARALLON COMMUNICAITONS, INC.,
PARTNERSHIP,                                   a California corporation
a Delaware limited partnership                 
                                                                   
By:  Lincoln Property Company Management       By:  /s/ Alan Lefkof
     Services, Inc., as Manager and                 ---------------
     Agent for Landlord                             Name: Alan Lefkof 
                                                          -----------
By:  /s/ Alan Palmer                                Its: President & CEO 
     ---------------                                     ---------------
     Name: Alan Palmer                    
           -----------                         By:  /s/ James A. Clark
     Its: Vice President                            ------------------
          --------------                            Name: James A. Clark 
                                                          --------------
                                                    Its: Vice President & CFO
                                                         --------------------

</TABLE>