<PAGE>
 
                                                                   EXHIBIT 10.46

                      FIRST AMENDMENT TO LEASE AGREEMENT
                                        
                                        
     This First Amendment To Lease Agreement ("Amendment") is entered into as of
the _________ day of January, 1999 ("Amendment Date") by and between WASHCOP
ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership ("Landlord"), and
EXODUS COMMUNICATIONS, INC., a Delaware corporation ("Tenant"), with reference
to the following:


                                   RECITALS
                                   --------

     A.   Landlord and Tenant entered into that certain lease agreement dated
April 18, 1996 ("Lease") wherein Landlord leased to Tenant and Tenant leased
from Landlord premises consisting of approximately fourteen thousand two hundred
eighty (14,280) square feet in that certain building commonly known as 1605 and
1615 Wyatt Drive, Santa Clara, California ("Building"), which premises are
commonly known as 1605 Wyatt Drive, Santa Clara, California, and which premises
are more particularly described in the Lease ("Existing Premises").

     B.   Upon the Expansion Premises Existing Tenant (hereafter defined in
Paragraph 2.b.) vacating the Expansion Premises (hereafter defined in Paragraph
2.b.), Tenant wishes to lease the Expansion Premises from Landlord and Landlord
wishes to lease the Expansion Premises to Tenant on the terms set forth
hereinbelow.  In connection with Tenant's leasing of the Expansion Premises,
Landlord and Tenant further wish to extend the term of the Lease as to the
Existing Premises to the same date on which Tenant's lease of the Expansion
Premises expires.

     C.   Landlord and Tenant therefore wish to amend the Lease as more
particularly set forth hereinbelow to provide for the leasing by Tenant of the
Expansion Premises, to provide for the extension of the term as to the Existing
Premises, and to provide for the other matters set forth hereinbelow.

     NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:

                           AMENDMENTS AND AGREEMENTS
                           -------------------------

     1.   RECITALS.  Landlord and Tenant hereby agree that the hereinabove
          --------                                                        
recitals are true and correct.

     2.   DEFINITIONS.
          ----------- 
<PAGE>
 
     A.   Unless defined otherwise in this Amendment, all defined terms used in
this Amendment shall have the same meaning and definition given them in the
Lease.

     B.   The following defined terms shall have the following meanings:

     "Expansion Premises" shall mean the approximately nine thousand one hundred
      ------------------                                                        
twenty (9,120) square feet of space located in the Building more particularly
depicted in Exhibit A, attached hereto and incorporated herein by this
            ---------                                                 
reference, immediately adjacent to the Existing Premises.  The Expansion
Premises are commonly known as 1615 Wyatt Drive, Santa Clara, California.

     "Expansion Premises Delivery Date" shall mean November 1, 1999, the day
      --------------------------------                                      
immediately following the expiration date of the term of the Expansion Premises
Existing Lease. The Expansion Premises Delivery Date shall be subject to
adjustment as set forth in Paragraph 4 below.

     "Expansion Premises Existing Lease" shall mean that certain lease agreement
      ---------------------------------                                         
dated June 12, 1996 by and between Landlord and U.S. 3, Inc., a California
corporation, predecessor in interest to the Expansion Premises Existing Tenant,
for the Expansion Premises.

     "Expansion Premises Existing Tenant" shall mean Amazing! Controls, Inc., a
      ----------------------------------                                       
California corporation.

     "Expansion Premises Term" shall mean a period of one hundred twenty (120)
      -----------------------                                                 
months commencing on November 1, 1999 and expiring on October 31, 2009, unless
sooner terminated. The Expansion Premises Term shall be subject to adjustment as
set forth in Paragraph 4 below.

     3.   EXPANSION OF PREMISES.  Landlord hereby leases to Tenant and Tenant
          ---------------------                                              
hereby leases from Landlord the Expansion Premises for the Expansion Premises
Term. From and after the Expansion Premises Delivery Date, the Expansion
Premises shall be added to and constitute part of the premises leased pursuant
to the Lease and the Lease shall be amended as follows:

          (a)  The defined term "Premises" shall mean the entire Building, which
Building is comprised of the Existing Premises and the Expansion Premises, and
which Building contains a total of approximately twenty-three thousand four
hundred (23,400) square feet.

          (b)  Exhibit A of the Lease shall be amended to be Exhibit B attached
                                                             ---------
hereto and incorporated herein by this reference.

     4.   EARLY OR LATE DELIVERY OF THE EXPANSION PREMISES.  If prior to
          ------------------------------------------------
November 1, 1999 the term of the Expansion Premises Existing Lease expires and
the Expansion Premises Existing Tenant vacates the Expansion Premises, then
Tenant shall be obligated to take delivery
<PAGE>
 
of the Expansion Premises on the day immediately following such expiration and
vacation, and the Expansion Premises Delivery Date shall be the day immediately
following such expiration and vacation. If for any reason whatsoever Landlord
cannot deliver possession of the Expansion Premises to Tenant on November 1,
1999, this Amendment shall not be void or voidable, nor shall Landlord or
Landlord's agents be liable to Tenant for any loss or damage resulting
therefrom, and the Expansion Premises Delivery Date shall be the date on which
Landlord actually delivers possession of the Expansion Premises to Tenant. In
the event of any adjustment to the Expansion Premises Delivery Date as provided
for in this Paragraph 4, appropriate adjustments shall be made to the dates of
the Expansion Premises Term as set forth in this Amendment, and the dates
contained in the Monthly Rent Schedule attached hereto as Exhibit C.
                                                          --------- 

     Notwithstanding the foregoing to the contrary, in the event that Landlord
has not delivered possession of the Expansion Premises to Tenant by March 1,
2000, then Tenant may terminate this Amendment by giving written notice thereof
("Termination Notice") to Landlord on or before March 10, 2000.  If the
Termination Notice is not given in the manner and by the date required in the
immediately preceding sentence, then it shall be deemed that Tenant has elected
not to terminate this Amendment and the Amendment shall remain in full force and
effect.

     5.   EXTENSION OF TERM.  Landlord and Tenant hereby acknowledge and agree
          -----------------                                                   
that the term of the Lease (prior to the Lease being amended by this Amendment)
as to the Existing Premises expires on April 30, 2001. Landlord and Tenant
hereby agree to extend the term of the Lease as to the Existing Premises to the
same date on which the Expansion Premises Term expires ("Existing Premises
Extended Term").  Effective on the Expansion Premises Delivery Date, the defined
word "Term" as used in the Lease shall mean the Existing Premises Extended Term
and the Expansion Premises Term, which terms are identical in time and which
shall run concurrently.

     6.   MONTHLY RENT.  Effective on the Expansion Premises Delivery Date, the
          ------------                                                         
Monthly Rent due by Tenant under the Lease shall be as set forth in the Monthly
Rent Schedule attached hereto as Exhibit C and incorporated herein by this
                                 ---------                                
reference.

     7.   SECURITY DEPOSIT.
          ---------------- 

          A.   INCREASE IN SECURITY DEPOSIT.  The existing Cash Security Deposit
               ----------------------------
in the amount of Fifteen Thousand Seven Hundred Eight and 00/100ths Dollars
($15,708.00) on deposit with Landlord shall be increased by Tenant by an
additional Thirty-Eight Thousand One Hundred Twelve and 00/100ths Dollars
($38,112.00) ("Additional Cash Security Deposit"). The existing Letter of Credit
Security Deposit in the amount of One Hundred Thirty-Eight Thousand and
00/100ths Dollars ($138,000.00) on deposit with Landlord shall be replaced by
Tenant with a Letter of Credit Security Deposit in the amount of Two Hundred
Seventy-Six Thousand and 00/100ths Dollars ($276,000.00) ("Increased Letter of
Credit Security Deposit"). The Increased Letter of Credit Security Deposit shall
be on the terms and conditions set forth in clauses (i) through (vi) of
Paragraph 7 of the Lease. The Additional Cash Security Deposit shall be
deposited by Tenant with Landlord concurrently with Tenant's execution and
delivery of this
<PAGE>
 
Amendment. The Increased Letter of Credit Security Deposit shall be deposited by
Tenant with Landlord on or before the date which is thirty (30) days prior to
the Expansion Premises Delivery Date. From and after the date that the
Additional Cash Security Deposit is deposited with Landlord, the term "Cash
Security Deposit" as used in the Lease (as amended by this Amendment) shall mean
the existing Cash Security Deposit plus the Additional Cash Security Deposit,
which shall be in a total amount of Fifty-Three Thousand Eight Hundred Twenty
and 00/100ths Dollars ($53,820.00). From and after the date that the Increased
Letter of Credit Security Deposit is deposited with Landlord, the term "Letter
of Credit Security Deposit" as used in the Lease (as amended by this Amendment)
shall mean the Increased Letter of Credit Security Deposit.

          B.   AMENDMENT TO PARAGRAPH 7.  The third and fourth sentences of
               ------------------------
Paragraph 7 of the Lease are deleted in their entirety and replaced with the
following: "If Tenant defaults with respect to any provision of this Lease,
Landlord may apply all or any part of the Cash Security Deposit and/or draw on
all or any part of the Letter of Credit Security Deposit for the payment of any
Rent or other sum in default, the repair of such damage to the Premises or the
payment of any other amount which Landlord may spend or become obligated to
spend by reason of Tenant's default or to compensate Landlord for any other loss
or damage which Landlord may suffer by reason of Tenant's default to the full
extent permitted by law. Without limiting the generality of the foregoing,
Tenant hereby acknowledges that the following shall constitute loss or damage
incurred by Landlord by reason of a default by Tenant hereunder and Landlord
shall be entitled to draw on the Cash Security Deposit and/or the Letter of
Credit Security Deposit to reimburse Landlord for the following costs incurred
by Landlord: leasing fees and/or commissions paid in connection with entering
into this Lease, reasonable attorneys' fees and costs incurred in connection
with entering into this Lease, and all other costs incurred in connection with
entering into this Lease and delivering the Premises to Tenant."

     8.   CONDITION OF EXPANSION PREMISES.  Tenant agrees to take the Expansion
          -------------------------------                                      
Premises in its "AS IS" condition on the Expansion Premises Delivery Date
subject to all applicable laws, codes, and ordinances; provided, however, on the
Expansion Premises Delivery Date the electrical, plumbing, and HVAC systems of
the Expansion Premises shall be in good working condition given the age and
prior uses thereof. By taking possession of the Expansion Premises Tenant shall
be deemed to have accepted the Expansion Premises in the condition required
hereunder.  Landlord shall have no obligation to make any alterations,
additions, or improvements to the Expansion Premises. Tenant acknowledges that
neither Landlord nor Landlord's employees, agents, managers, or other
representatives have made any representations or warranties, express or implied,
with respect to the Expansion Premises, including, without limitation, any
representations or warranties as to the condition of the Expansion Premises or
suitability or fitness of the Expansion Premises for the conduct of Tenant's
business

     9.   TENANT'S PERCENTAGE.  Effective as of the Expansion Premises Delivery
          -------------------                                                  
Date, Tenant's Percentage shall be one hundred percent (100%).
<PAGE>
 
     10.  PARKING.  Effective as of the Expansion Premises Delivery Date, Tenant
          -------                                                               
shall have the right to use all of the parking spaces in the Project's parking
facilities upon such terms and conditions as may from time to time be
established by Landlord.

     11.  BROKERS.  Landlord and Tenant warrant and represent each to the other
          -------                                                              
that it has had no dealings with any real estate broker or agent in connection
with the negotiation of this Amendment. Landlord and Tenant agree to indemnify,
defend and hold each other and their respective agents harmless from and against
any and all liabilities or expenses, including attorneys' fees and costs,
arising out of or in connection with claims made by any broker or individual
against the indemnified party for commissions or fees in connection with the
execution of this Amendment and resulting from the actions of the indemnifying
party.

     12.  INCONSISTENCY.  In the event of any inconsistency or conflict between
          -------------                                                        
the terms of this Amendment and the terms of the Lease with respect to the
matters which are the subject of this Amendment, the terms of this Amendment
shall control.

     13.  RATIFICATION.  Except as amended by this Amendment, the terms and
          ------------                                                     
provisions of the Lease are hereby ratified, confirmed, and shall remain in full
force and effect.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of
the Amendment Date.

TENANT                              LANDLORD
------                              --------

EXODUS COMMUNICATIONS, INC.,        WASHCOP ASSOCIATES LIMITED
a California corporation            PARTNERSHIP,.
                                    a Delaware limited partnership

                                    By:   CB Richard Ellis, Inc.,        
By: /s/ Richard Stolz                     a Delaware corporation
    ----------------------------                                    
                                    Its:  Managing Agent      
Its:    COO/CFO
    ----------------------------
                                          By:______________________________

By:   Adam Wegner                         Its:_____________________________
   -----------------------------                

Its:   VP, GC and Secretary
    ----------------------------
<PAGE>
 
                                   EXHIBIT A
                                   ---------

                       DIAGRAM OF THE EXPANSION PREMISES



                      [DIAGRAM OF THE EXPANSION PREMISES]
<PAGE>
 
                                   EXHIBIT B
                                   ---------

                       DIAGRAM OF THE EXISTING PREMISES
                          AND THE EXPANSION PREMISES


             [DIAGRAM OF EXISTING PREMISES AND EXPANSION PREMISES]
<PAGE>
 
                                   EXHIBIT C
                                   ---------

                             MONTHLY RENT SCHEDULE

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
 
-----------------------------------------------------------------------------------------------------------                        
                        Monthly Rent                                           
       Period            Per Square               Square Footage                     Monthly Rent
       ------            ----------               --------------                     ------------
                            Foot
                            ----
----------------------------------------------------------------------------------------------------------- 
<S>                     <C>            <C>                                     <C>
11/1/99-10/31/00            $1.10      x  14,280 (Existing Premises)   =       $15,708 per month/NNN
-----------------------------------------------------------------------------------------------------------
                            $1.85      x   9,120 (Expansion Premises)  =       $16,872 per month/NNN
                                          ------
                                          23,400 (Total Square Footage         ---------------------
                                                 Combined Premises)            $32,580 per month/NNN
                                                                                       total Monthly Rent
-----------------------------------------------------------------------------------------------------------
                                  
11/1/00-4/30/01             $1.10      x  14,280 (Existing Premises)   =       $15,708 per month/NNN
                            $1.90      x   9,120 (Expansion Premises)  =       $17,328 per month/NNN
                                          ------                               ---------------------
                                          23,400 (Total Square Footage         $33,036 per month/NNN
                                                 Combined Premises)                    total Monthly Rent   
-----------------------------------------------------------------------------------------------------------
5/1/01-10/31/01             $1.65      x  14,280 (Existing Premises)   =       $23,562 per month/NNN
                            $1.90      x   9,120 (Expansion Premises)  =       $17,328 per month/NNN
                                          ------                               ---------------------  
                                          23,400 (Total Square Footage         $40,890 per month/NNN     
                                                 Combined Premises )                   total Monthly Rent    
-----------------------------------------------------------------------------------------------------------
11/1/01-10/31/02            $1.95      x  23,400 (Total Square Footage =       $45,630 per month/NNN
                                                 Combined Premises)              
-----------------------------------------------------------------------------------------------------------
11/1/02-10/31/03            $2.00      x  23,400 (Total Square Footage =       $46,800 per month/NNN
                                                 Combined Premises)              
-----------------------------------------------------------------------------------------------------------
11/1/03-10/31/04            $2.05      x  23,400 (Total Square Footage =       $47,970 per month/NNN
                                                 Combined Premises)              
-----------------------------------------------------------------------------------------------------------
11/1/04-10/31/05            $2.10      x  23,400 (Total Square Footage =       $49,140 per month/NNN
                                                 Combined Premises)              
-----------------------------------------------------------------------------------------------------------
11/1/05-10/31/06            $2.15      x  23,400 (Total Square Footage =       $50,310 per month/NNN
                                                 Combined Premises)              
-----------------------------------------------------------------------------------------------------------
11/1/06-10/31/07            $2.20      x  23,400 (Total Square Footage =       $51,480 per month/NNN
                                                 Combined Premises)
-----------------------------------------------------------------------------------------------------------
11/1/07-10/31/08            $2.25      x  23,400 (Total Square Footage =       $52,650 per month/NNN
                                                 Combined Premises)
-----------------------------------------------------------------------------------------------------------
11/1/08-10/31/09            $2.30      x  23,400 (Total Square Footage =       $53,820 per month/NNN
                                                 Combined Premises)
-----------------------------------------------------------------------------------------------------------
</TABLE>