<PAGE>   1
                                                                  EXHIBIT 10.4

================================================================================








                                      LEASE



                        THE PRUDENTIAL INSURANCE COMPANY
                      OF AMERICA, A NEW JERSEY CORPORATION



                                       AND



                             WEBTRENDS CORPORATION,
                              AN OREGON CORPORATION



                             DATED NOVEMBER 20, 1998








================================================================================



<PAGE>   2


                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                                              Page
                                                                              ----
<S>                                                                            <C>
1.   Term.....................................................................  1

2.   Letter of Credit.........................................................  3

3.   Rent.....................................................................  4

4.   Use......................................................................  8

5.   Assignment and Subletting................................................  8

6.   Alterations.............................................................. 10

7.   Repairs, Surrender of Premises........................................... 10

8.   Indemnification.......................................................... 11

9.   Insurance................................................................ 11

10.  Waiver of Subrogation.................................................... 12

11.  Liability for Injury or Damage........................................... 12

12.  Damage to Premises....................................................... 12

13.  Eminent Domain........................................................... 13

14.  Admittance by Pass-Key................................................... 13

15.  Exhibition and Inspection of Premises.................................... 13

16.  Abandonment.............................................................. 13

17.  Signs.................................................................... 13

18.  Electrical and Mechanical Devices and Installations...................... 14

19.  Windows.................................................................. 14

20.  Floor Coverings.......................................................... 14

21.  Services................................................................. 14

22.  Attorneys' Fees.......................................................... 16

23.  Default.................................................................. 17

24.  Lessor's Remedies........................................................ 17

25.  Lessor's Right to Perform................................................ 19

26.  Lessor's Default......................................................... 19

27.  Cumulation of Remedies - No Waiver....................................... 19

28.  Light and Air............................................................ 19
</TABLE>





                                       i

<PAGE>   3

<TABLE>
<S>                                                                            <C>
29.  Repair................................................................... 19

30.  Holding Over............................................................. 20

31.  Liens.................................................................... 20

32.  Furniture and Bulky Items................................................ 20

33.  Regulations.............................................................. 21

34.  Preparation for Occupancy................................................ 21

35.  Acceptance of Premises................................................... 21

36.  Possession............................................................... 21

37.  Parking.................................................................. 21

38.  Subordination and Attornment; Notice to Lenders.......................... 22

39.  Estoppel Certificate..................................................... 22

40.  Article Headings......................................................... 22

41.  Notice................................................................... 22

42.  Parties Affected......................................................... 23

43.  Authority................................................................ 23

44.  Building Planning........................................................ 23

45.  Lessor's Exculpation..................................................... 23

46.  Consents................................................................. 23

47.  Brokers.................................................................. 23

48.  Discontinuance of Services............................................... 23

49.  No Interference.......................................................... 24

50.  Building Name............................................................ 24

51.  Recording................................................................ 24

52.  Time..................................................................... 24

53.  First Right of Opportunity............................................... 24

54.  Entire Agreement......................................................... 25
</TABLE>





                                       ii

<PAGE>   4

                             BASIC LEASE INFORMATION



DATE:                        November 20, 1998

LESSOR:                      THE PRUDENTIAL INSURANCE COMPANY
                             OF AMERICA, a New Jersey corporation

MANAGING AGENT:              VOIT MANAGEMENT COMPANY, L.P.

LESSEE:                      WEBTRENDS Corporation,
                             an Oregon corporation

BUILDING:                    PACIFIC FIRST CENTER
                             851 S.W. 6th Avenue
                             Portland, Oregon  97204


<TABLE>
<CAPTION>
===============================================================================================
                                                                       Lease References
-----------------------------------------------------------------------------------------------
<S>                      <C>                                           <C>
PREMISES:                Suite(s) 650, 700 and 1200, on floors 6, 7    Preamble
                         and 12 as shown on Exhibit A hereto

                         Net Rentable Square Footage:
                         Approximately 36,956 rsf
-----------------------------------------------------------------------------------------------

TERM:                    Five (5) years                                Paragraph 1
-----------------------------------------------------------------------------------------------

ESTIMATED                                                              Paragraph 1
COMMENCEMENT             Suites 650, 1200 - January 15, 1999
DATE:                    Suite 700 - July 1, 1999
-----------------------------------------------------------------------------------------------

EXPIRATION
DATE:                    January 31, 2004                              Paragraph 1
-----------------------------------------------------------------------------------------------

PARTIAL
CONSIDERATION:           $225,000 (Letter of Credit)                   Paragraph 2
-----------------------------------------------------------------------------------------------
</TABLE>





                                       1
<PAGE>   5

<TABLE>
-----------------------------------------------------------------------------------------------
<S>                      <C>                                           <C>
BASE RENT:               $57,466.58/mo. for months 1 through 30*       Paragraph 3
                         $61,316.16/mo. for months 30 through
                         expiration

                         *For the period from commencement (month 1)
                         until Seventh Floor Commencement Date, the
                         Base Rent rate shall be at a rate of
                         $34,208.45/month.
-----------------------------------------------------------------------------------------------

BASE YEAR:               1999                                          Paragraph 3
-----------------------------------------------------------------------------------------------

LESSEE'S                 9,66% until seventh floor commencement        Paragraph 3
PERCENTAGE               16.22% thereafter
SHARE:
-----------------------------------------------------------------------------------------------

PARKING                  One per 3,500 full rentable square feet of    Paragraph 37
FACILITIES/              the Premises, calculated based on the area
NUMBER OF                of the Premises for which this Lease has
AUTOMOBILES:             commenced (and as otherwise provided in
                         Paragraph 37)
-----------------------------------------------------------------------------------------------

BROKERS:                 Lessor:  CB Richard Ellis
                                  Casey Davidson and Charles Fettig
                                  1300 SW 5th Avenue, #2600
                                  Portland, OR 97201-5609

                         Lessee:  Hume Myers Tenant Counsel
                                  Gregory R. Hume
                                  15455 Hallmark Drive
                                  Lake Oswego,  OR 97035
-----------------------------------------------------------------------------------------------
</TABLE>






                                       2
<PAGE>   6

<TABLE>
-----------------------------------------------------------------------------------------------
<S>                      <C>                                           <C>
ADDRESS FOR NOTICES:     Lessor:   c/o Voit Management Company, LP
                                   851 SW 6th Avenue, Suite 450
                                   Portland, OR 97204
                                   Attn: Ron Brenner

                         Lessee:   Until Commencement Date:
                                   621 SW Morrison, Suite 1300
                                   Portland OR  97205
                                   Attn:  James T. Richardson
                                   Vice President & CFO

                                   After Commencement Date:
                                   851 SW Sixth Avenue
                                   Portland, Oregon  97204
                                   Attn: Chief Financial Officer
-----------------------------------------------------------------------------------------------

INITIALS:                _________________       _________________
                         Lessor                  Lessee
===============================================================================================
</TABLE>





<PAGE>   7


                                      LEASE


        THIS LEASE, made and entered into in the City of Portland, State of
Oregon, this 20th day of November, 1998, by and between THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA, a New Jersey corporation, through its managing agent, VOIT
MANAGEMENT COMPANY, L.P. (hereinafter referred to as "Lessor") and WEBTRENDS
CORPORATION, an Oregon corporation (hereinafter referred to as "Lessee"):


                                   WITNESSETH:

        In consideration of the mutual covenants herein contained, Lessor hereby
leases to Lessee and Lessee hereby leases from Lessor, for the term hereinafter
specified, that certain space described in the Basic Lease Information
hereinafter referred to as the "Demised Premises" and as attached as Exhibit "A"
hereto, located on the real property described in the legal description attached
as Exhibit "B" hereto, together with a nonexclusive right of ingress and egress
over the Common Areas of the building in which the Demised Premises is located,
the Pacific First Center ("Building"). The Common Areas shall mean the areas and
facilities within the Building designated by Lessor for the general use,
convenience or benefit of Lessee and other occupants of the Building. Lessor
reserves the right to modify the Common Areas from time to time. There are no
Common Areas on the 7th and 12th floors.

        1. Term.

           (A) The term of this Lease shall commence for Suites 650 and 1200 on
the Estimated Commencement Date for Suites 650 and 1200 as set forth in the
Basic Lease Information or, if earlier, the date Lessee takes occupancy of
Suites 650 and 1200 ("Commencement Date"). The term of this Lease shall commence
for Suite 700 on the Estimated Commencement Date for Suite 700 as set forth in
the Basic Lease Information or, if earlier, the date Lessee takes occupancy of
Suite 700 ("Seventh Floor Commencement Date"). If Lessor, for any reason
whatsoever, cannot deliver the applicable area of the Demised Premises to Lessee
by the applicable Estimated Commencement Date, this Lease shall not be void or
voidable, nor shall Lessor be liable to Lessee for any loss or damage resulting
therefrom, but in that event rent shall be waived for the applicable area for
the period between the applicable Estimated Commencement Date and the time
Lessor delivers the applicable area of the Demised Premises to Lessee, provided
that to the extent Lessor's delay in delivering the applicable area of the
Demised Premises results from any action described in paragraph 4 of the work
letter attached as Exhibit C hereto, the Commencement Date for that floor will
be accelerated by the number of days of such delay. At Lessee's request, Lessor
shall keep Lessee informed of the projected date of delivery of each floor as
the work progresses. If the sixth or twelfth floor work is falling behind
schedule, so that their delivery date will otherwise be after January 31, 1999,
Lessee may request that Lessor have Lessor's contractors work overtime in order
to get the work completed by January 31, 1999. In such case Lessor shall use all
reasonable efforts to have such overtime work performed.





                                       1

<PAGE>   8

The extra cost of such overtime work shall be paid by Lessee as additional rent
upon billing by Lessor. No delay in delivery of the Demised Premises shall
operate to extend the term hereof. The term of this Lease shall end on the
Expiration Date, unless sooner terminated pursuant to any of the provisions of
this Lease.

           (B) Option to Extend.

               (i) Lessee shall have the option to extend the term of this Lease
for a period of five (5) years (the "Extension Term"), on the terms and
conditions contained herein, except for Base Rent, which shall be determined as
hereinafter provided. Other than as set forth herein, Lessee shall have no
further option to extend this Lease. The extension option under this Clause (B)
may be exercised only by the named Lessee or its Corporate Successor and is not
assignable to any other assignee or sublessee of the named Lessee.

               (ii) Exercise of such extension option shall be by written notice
given to Lessor at least one hundred eighty (180) and not more than three
hundred sixty (360) days prior to the last day of the original Term. During the
Extension Term, Base Rent shall be adjusted to equal the prevailing fair market
rental value of the Premises (the "Fair Market Rental Value"), determined as
hereinafter provided, provided that in no event shall Base Rent for the
Extension Term be less than that in effect at the end of the initial Term. Fair
Market Rental Value may include step increases in rental.

               (iii) After the exercise of the option to extend by Lessee and at
least 120 days prior to the commencement of the extension term, Lessor shall
notify Lessee of Lessor's determination of the Fair Market Rental Value. Within
fifteen (15) days after the date of such notice, Lessee shall either: (i) notify
Lessor of Lessee's acceptance of Lessor's determination of the Fair Market
Rental Value, in which event Base Rent for the extension term shall be as so
determined by Lessor; or (ii) notify Lessor of Lessee's rejection of Lessor's
determination of the Fair Market Rental Value, which notice shall include
Lessee's determination of Fair Market Rental Value. If Lessee rejects Lessor's
determination, and if the parties cannot agree upon the Fair Market Rental Value
within fifteen (15) days after Lessee's notice, the Fair Market Rental Value
shall be determined as provided below. In such event, within thirty (30) days
after Lessee's timely rejection of Lessor's determination of the Fair Market
Rental Value, each party shall designate a representative who is either a
licensed MAI appraiser skilled in determining rental rates for office space in
the Portland, Oregon metropolitan area, or a real estate broker experienced in
leasing office space in the Portland, Oregon metropolitan area. The two (2)
representatives so chosen shall select an arbitrator having the above
qualifications or, if they cannot agree, the presiding judge of the Circuit
Court of Multnomah County, Oregon shall, upon application by either party,
select an arbitrator having the above qualifications. At least thirty (30) days
prior to the commencement of the extension term, each party's representative
shall submit to the arbitrator a written report stating such representative's
opinion of the Fair Market Rental Value, based on a consideration of rental
rates then being charged (under the most recently executed leases) for
equivalent office space in the Portland, Oregon metropolitan area





                                       2
<PAGE>   9

comparable to the Premises. Comparability shall be based on such factors as
location, parking, building quality, age, performance of mechanical systems,
maintenance, history, efficiency, prestige, provision or nonprovision of tenant
improvements, and the level of services provided to tenants. Within thirty (30)
days after receipt of such reports, the arbitrator shall accept one or the other
of the reports. The arbitrator shall have no right to propose a middle ground or
any modification of either of the two reports. The determination of the Fair
Market Rental Value in the report so accepted shall be final and binding on the
parties, provided that in no event shall Base Rent for the Extension Term be
less than that in effect at the end of the previous term. The cost of the
arbitration of the Fair Market Rental Value pursuant to this paragraph shall be
paid by the other party whose report was not accepted by the arbitrator. The
parties agree to maintain all information produced in the arbitration, and the
judgment reached in the arbitration, strictly confidential.

               (iv) If the arbitrator does not decide the amount of the Fair
Market Rental Value prior to commencement of the extension term, Base Rent shall
be payable based on Lessor's determination of Fair Market Rental Value, and
retroactive adjustment shall be made when the arbitrator reaches a decision. In
the event of a final determination in Lessee's favor, Lessor shall refund
Lessee, with twelve percent (12%) interest, the amount of any such overpayment.

               (v) Lessee's rights under this clause (B) shall terminate (i) if
this Lease or Lessee's right to possession of the Demised Premises is
terminated, (ii) if Lessee is in default of this Lease on the date of exercise
of the option, or (iii) if Lessee fails to timely exercise its option under this
Article, time being of the essence with respect to Lessee's exercise thereof.

        2. Letter of Credit. As partial consideration for the execution of this
Lease, the Lessee shall, at the time of delivery of this Lease, deliver to
Lessor an original Irrevocable Standby Letter of Credit in the amount of
$225,000 (the "Letter of Credit"), issued by a national bank with offices in
Portland, Oregon, and in form acceptable to Lessor. The Letter of Credit shall
have a term of at least four years from January 15, 1999, or, if issued for a
shorter term, shall be renewed by Lessee continuously so that the term, with
renewals, is at least four years. If issued on a renewal basis, the Letter of
Credit and each renewal thereof shall provide for not less than 30 days advance
written notice of nonrenewal by the issuer to Lessor. The Letter of Credit shall
provide in substance that, upon presentation of a site draft signed by Lessor
stating that an Event of Default of Lessee has occurred under this Lease, the
issuer shall pay to Lessor the full amount of the Letter of Credit. If the
Letter of Credit is issued on a renewal basis, the Letter of Credit also shall
permit Lessor to draw the full amount thereof if Lessor has not received a
renewal Letter of Credit within 15 days prior to its expiry. Lessor may apply
the amount so paid toward any damages arising from Lessee's default, and may
retain any remaining payment from the issuer, which remaining payment shall be
credited toward the payment of base rent for the last month(s) of this Lease
until the credit is exhausted. In no event shall Lessor be required to keep
these sums separate from its general accounts, nor shall Lessor be required to
pay or accrue interest thereon. Lessor's





                                       3
<PAGE>   10

drawing upon the Letter of Credit shall not act to cure any Lessee default and
shall be without prejudice to Lessor's other rights and remedies regarding such
default. So long as no Event of Default has occurred, Lessor shall return the
Letter of Credit to Lessee upon the earlier of (i) the fourth anniversary of the
Commencement Date or (ii) upon Lessee's presentation to Lessor of a certified
financial statement, prepared by a certified public accountant from one of the
five largest US accountancy firms, as being true and correct and prepared in
accordance with generally accepted accounting principals, and establishing
Lessee's net worth as at least $10,000,000.

        3. Rent. Lessee covenants and agrees to pay to Lessor's Managing Agent,
at its office, or such other place or party as may be designated in writing by
Lessor, as rent for the Demised Premises, the following sums:

           (A) Base Rent. Lessee shall pay the Base Rent shown in the Basic
Lease Information, in advance on the first day of each calendar month during the
term hereof. Rent for a part of the month shall be prorated in proportion to the
number of days of the month included in the term of this Lease.

           (B) Additional Rent. The rental payable during each calendar year
subsequent to the Base Year shall be increased by an amount equal to Lessee's
Percentage Share of the total dollar increase, if any, of Operating Expenses
paid or incurred by Lessor in such year over the Operating Expenses paid or
incurred by Lessor in the Base Year, and also increased by an amount equal to
Lessee's Percentage Share of the total dollar increase, if any, in Property
Taxes paid by Lessor in such year over the Property Taxes paid or incurred by
Lessor in the Base Year. "Operating Expenses" shall mean those costs incurred
during any calendar year as operating costs of the Building (as located on
Exhibit B), including, but not limited to, all costs of management, operation
and maintenance and repair of the Building, insurance (including deductibles),
cost of capital improvements made to the Building after the date of the
execution hereof that reduce other Operating Expenses, improve security and life
safety systems, or that are required under any government law or regulation that
was not applicable at the time the Building was constructed or that are
reasonably required for the health and safety of tenants in the Building, such
cost to be amortized over such reasonable period as determined at Lessor's sole
discretion, together with interest on the unamortized balance at the rate of 10
percent per annum. If Lessor elects to self insure or includes the Building
under blanket insurance policies covering multiple properties, then Operating
Expenses shall include the portion of the cost of such self insurance for
blanket insurance allocated by Lessor to the Building, but not in excess of
commercially reasonable rates for such coverage. If less than 90 percent of the
rentable area of the Building is occupied, Operating Expenses shall be adjusted
to equal Lessor's reasonable estimate of Operating Expenses as if 90 percent of
the total rentable area of the Building were occupied. The term "Property Taxes"
shall mean any ordinary or extraordinary form of assessment of special
assessment, license fee, rent tax, levy, penalty (if a result of Lessee's
delinquency), or tax, other than net income, premium, estate, succession,
inheritance, transfer or franchise taxes, imposed by any authority having the
direct or indirect power to tax, or by any city, county,





                                       4
<PAGE>   11

state or federal government for any maintenance or improvement or other district
or division thereof, as well as any costs incurred in obtaining a reduction of
any Property Taxes. The term shall include all transit charges, housing fund
assessments, real estate taxes and all other taxes relating to the Demised
Premises, Building (including parking areas) and underlying land, all other
taxes which may be levied in lieu of real estate taxes, all assessments,
assessment bonds, levies, fees, and other governmental charges (including, but
not limited to, charges for traffic facilities, improvements, child care, water
services studies and improvements, and fire services studies and improvements)
for amounts necessary to be expended because of governmental orders, whether
general or special, ordinary or extraordinary, unforeseen as well as foreseen,
of any kind and nature for public improvements, services, benefits or any other
purposes which are assessed, levied, confirmed, imposed or become a lien upon
the Premises, Building or land or become payable during the term of this Lease.

           (C) The term "Operating Expenses", as used herein, shall not include
the following:

               (i) Any ground lease rental and any costs associated with the
parking garage;

               (ii) Costs of capital improvements and capital equipment except
as expressly provided in Section (B) above;

               (iii) Rentals for items (except when needed in connection with
normal repairs and maintenance of permanent systems) which if purchased, rather
than rented, would constitute a capital improvement which is specifically
excluded in Subsection (ii) above (excluding, however, equipment not affixed to
the Premises which is used in providing janitorial, security, or similar
services);

               (iv) Depreciation, amortization and interest payments, except as
provided herein and except on materials, tools, supplies and vendor-type
equipment purchased by Lessor to enable Lessor to supply services Lessor might
otherwise contract for with a third party where such depreciation, amortization
and interest payments would otherwise have been included in the charge for such
third party's services, all as determined in accordance with GAAP, and when
depreciation or amortization is permitted or required, the item shall be
amortized over its reasonably anticipated useful life;

               (v) Marketing costs including leasing commissions, attorneys'
fees in connection with the negotiation and preparation of letters, deal memos,
letters of intent, leases, subleases and/or assignments, space planning costs,
and other costs and expenses incurred in connection with lease, sublease and/or
assignment negotiations and transactions with present or prospective tenants or
other occupants of the Premises;

               (vi) Overhead and profit increment paid to Lessor or to
subsidiaries or affiliates of Lessor for goods and/or services provided to or
for the Premises to the extent





                                       5
<PAGE>   12

the same exceeds the costs of such goods and/or services rendered by
unaffiliated third parties on a market basis;

               (vii) Interest, principal, points and fees on debts or
amortization on any mortgage or mortgages or any other debt instrument
encumbering the Premises;

               (viii) Advertising and promotional expenditures excluding
directory boards, the signage for the Premises and directional signs and
graphics which include the Premises name;

               (ix) Tax penalties incurred as a result of Lessor's negligence,
inability or unwillingness to make payments and/or to file any income tax or
information returns when due;

               (x) Costs arising from Lessor's charitable or political
contributions;

               (xi) Costs for sculpture, paintings or other subjects of art; and

               (xii) Costs (including in connection therewith all attorneys'
fees and costs of settlement, judgments and payments in lieu thereof) arising
from litigation or arbitration pertaining to the Lessor and/or the Premises,
excluding costs incurred by Lessor in any action related to (i) the use,
management, or operation of the Building or (ii) attempts to reduce or recoup
Operating Expenses or Property Taxes, or (iii) challenges to governmentally
mandated improvements to the Building.

           (D) Adjustment of Rent. The adjustment of additional rent shall be
made as follows: During each December, or as soon thereafter as practicable,
Lessor shall give Lessee written notice of its estimates of amounts payable
under Paragraph (B) above for the following calendar year. On or before the
first day of each month during the ensuing calendar year, Lessee shall pay to
Lessor 1/12 of such estimated amounts, provided that if such notice is not given
in December, Lessee shall continue to pay on the basis of the prior year's
estimate, until the month after such notice is given. If at any time or times it
appears to Lessor that the amounts payable as additional rent for the current
calendar year will vary from its estimate by more than 10 percent, Lessor may,
by written notice to Lessee, revise its estimate for such year, and subsequent
payments by Lessee for such year shall be based upon such revised estimate.
Within 90 days after the close of each calendar year or as soon after such 90
day period as practicable Lessor shall deliver to Lessee a statement of amounts
payable as additional rent for such calendar year certified by accountants
designated by Lessor, and such certified statement shall be final and binding
upon Lessor and Lessee. If such statement shows an amount owing by Lessee that
is less than the estimated payments for such calendar year previously made by
Lessee, it shall be accompanied by a refund of the excess from Lessor to Lessee.
If such statement shows an amount owing by Lessee that is more than the
estimated payments for such calendar year previously made by Lessee, Lessee
shall pay the deficiency to Lessor within 30 days after delivery of the
statement. If, for any reason other than the default of Lessee, this Lease shall
terminate on a day other than the last





                                       6
<PAGE>   13

day of a calendar year, the amount of increase, if any, in rental payable by
Lessee applicable to a calendar year in which such termination shall occur shall
be prorated on the basis with which the number of days from the commencement of
such calendar year to and including such termination date bears to 365.

           (E) Audit and Arbitration. Lessee may, not more than once each year,
audit Lessor's annual statement with a certified public accountant who is
working on an hourly basis. Lessor shall make available to Lessee at Lessor's
place of business in the Portland Metropolitan area Lessor's books and records
applicable to the annual statement at issue. Lessor's annual statement of
additional rent shall be final and binding unless Lessee, within 90 days after
receipt of the statement, notifies Lessor of its objection to the statement,
accompanied by a detailed audit with a statement of Lessee's objection and the
amount Lessee believes to be the correct adjustment of additional rent. If the
parties do not resolve the dispute among themselves within 30 days after
Lessee's notice, either party may initiate arbitration under the rules of the
Arbitration Services of Portland, or such other procedures as shall be mutually
agreed upon between Lessor and Lessee. Such arbitration shall be the exclusive
means of resolving such disputes. The arbitration shall take place with a single
arbitrator selected through the arbitration service. The arbitrator may award
attorney's fees and arbitration costs. The parties agree to maintain all
information regarding additional rent, all information produced in the
arbitration, and the judgment reached in the arbitration, strictly confidential.
Pending the final determination of any dispute, Lessee shall pay the amount(s)
claimed by Lessor. In the event of a final determination in Lessee's favor,
Lessor shall refund Lessee, with twelve percent (12%) interest, the amount of
any such overpayment. If Lessee's audit, as upheld through arbitration if
applicable, establishes that Lessor's annual statement of additional rent
exceeded actual additional rent payable by a factor of three percent (3%) or
more, Lessor shall pay the reasonable cost of Lessee's audit.

           (F) Late Charges. Rental shall be paid without deduction or offset.
In the event Lessee should fail to pay any installment of rent or any other sum
due Lessor hereunder within ten (10) days after notice that such amount is due
(if notice is required under Section 23), Lessee agrees to pay to Lessor as
additional rent a late charge equal to five percent (5%) of each such
installment, Lessee acknowledges that late payment by Lessee to Lessor of any
payments due hereunder will cause Lessor to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain,
including, without limitation, costs of processing and accounting charges and
other charges which may be imposed on Lessor under the terms of any mortgage.
The parties agree that the foregoing late charge represents a fair and
reasonable estimate of such costs incurred by Lessor by reason of late payment
by Lessee. Acceptance of any late charge by Lessor shall not constitute a waiver
of Lessee's default, nor prevent Lessor from exercising any of its other rights
or remedies hereunder.

           (G) Interest. In addition to any late charge, in the event Lessee
should fail to pay any rent or any other sum due Lessor hereunder within 10 days
after such payment is





                                       7
<PAGE>   14

due, the same shall bear interest from the date due until the date paid at a
rate equal to twelve percent (12%) per annum, or, if less, the maximum rate of
interest allowed by law.

        4. Use. Lessee will use and occupy the Demised Premises for office use
and for no other purpose. Lessee will not use or permit in the Demised Premises
anything that will increase the rate of fire insurance thereon or prevent
Lessor's taking advantage of any ruling of the Oregon Insurance Examining Bureau
or its successors which would allow Lessor to obtain reduced rates for long-term
insurance policies, or maintain anything that may be dangerous to life or limb,
or in any manner deface, injure or commit waste in, on or about said building or
any portion thereof, or overload the floors, or permit any objectionable noise
or odor to escape or to be emitted from said premises, or permit anything to be
done upon the Demised Premises in any way tending to create a nuisance or to
disturb any other tenants of the Building, or to injury the reputation of the
Building or to use or permit the use of the Demised Premises for lodging or
sleeping purposes, or for any immoral or illegal purposes. Lessee will comply,
at Lessee's own cost and expense, with all orders, notices, regulations or
requirements of any municipality, state or other governmental authority
respecting the use of the Demised Premises. Lessee shall not generate, release,
store or deposit on the Demised Premises any environmentally hazardous or toxic
substances, materials, wastes, pollutants, oils or contaminants, as defined by
any federal, state or local law or regulation (collectively, "Hazardous
Substances"). The foregoing sentence shall not apply to normal office cleaning
fluids and office supplies, so long as the same are maintained in sealed
receptacles in amounts reasonably necessary for the conduct of Lessee's
business, and are used in accordance with applicable law, Lessee shall
indemnify, defend, and hold Lessor and Lessor's agents, employees and
contractors harmless from any and all claims, losses (including, but not limited
to loss of rental income and loss due to business interruption), damages,
liabilities, costs, legal fees and expenses of any nature arising out of or
relating to any generation, release, storage or deposit of Hazardous Substances
by Lessee or any of Lessee's agents, contractors or invitees. The provisions of
this paragraph shall survive any expiration or termination of this Lease.

        5. Assignment and Subletting.

           (A) Lessee will not, except as set forth herein, assign, transfer, or
hypothecate this Lease or any interest hereunder and will not permit any
assignment hereof by operation of law and will not subrent or sublet the Demised
Premises or any portion thereof, and will not permit the use or occupancy of the
Demised Premises by other than Lessee and agents and employees of Lessee without
the prior written consent of Lessor, which consent shall not be unreasonably
withheld or delayed. A transfer of stock control in Lessee, if Lessee is a
corporation, or the transfer of any partnership or membership interest in
Lessee, if Lessee is a partnership or limited liability company, shall be deemed
an act of assignment hereunder. Any assignment requiring Lessor's consent and
made without the consent of Lessor is void and Lessor at its option may
terminate this Lease. Any consent by Lessor to an assignment, transfer or
subletting of this Lease, or any assignment, transfer or subletting made without
such consent, shall not release Lessee from its primary liability or





                                       8
<PAGE>   15

obligations hereunder, whether or not then accrued, and shall not be construed
as a consent to any future assignment, transfer or subletting.

           (B) Lessee shall have the right to sublease up to 50% of the area of
the Premises without Lessor's consent for office use, so long as the subtenant's
use and image is consistent with a first class office building. In addition, no
Lessor consent shall be required for an assignment to any subsidiary, affiliate
or related company controlled by, controlling, or under common control with
Lessee (a "Corporate Successor"). "Control" means the power to appoint a
majority of the board of directors or other governing body of the entity. In the
case of assignment, Lessee shall notify Lessor of how control is shared in a
manner qualifying the assignment under this clause (B).

           (C) If Lessee desires to sublet or assign all or any part of the
Demised Premises (including pursuant to Clause (B)), Lessee shall give Lessor
notice, at least 30 days prior to the proposed assignment or subletting, setting
forth the name and address of the proposed assignee or subtenant, the terms of
the proposed assignment or subletting the space proposed to be assigned or
sublet, and (for assignments or sublets requiring Lessor's consent) such
financial information, including without limitation audited financial
statements, as Lessor may request concerning the proposed assignee or subtenant.
When consent is required, Lessor may impose such conditions on its consent as
Lessor deems appropriate, including without limitation that 50% of any sums
received by Lessee which exceed the total sums which Lessee is obligated to pay
Lessor under this Lease shall be payable to Lessor as additional rental under
this Lease without affecting or reducing any other obligation of Lessee
hereunder. Whether or not Lessor's consent is required, the assignee or
sublessee shall have no right of possession until Lessor has been delivered an
executed copy of the assignment or sublease; the assignee or sublessee shall
have no further right to assign or sublet, except in accordance with this
Section 5; and Lessee shall further indemnify and hold Lessor harmless from any
costs, obligations or liabilities (including reasonable attorneys' fees) arising
from any act or negligence of such assignee or subtenant, or any employee, agent
or invitee thereof and from any claim, action or proceeding arising therefrom.

           (D) For assignments, sublets, or other transfers requiring Lessor's
consent, in lieu of consenting or not consenting Lessor may, at its option,

               (i) in the event of a proposed assignment or subletting of
Lessee's entire leasehold interest, terminate Lessee's lease in its entirety or

               (ii) terminate Lessee's lease as to that portion of the Demised
Premises which Lessee has proposed to assign or sublet.

In the event Lessor elects to terminate this Lease pursuant to clause (2) above,
Lessee's rent shall be reduced in the same proportion that the rentable area of
the portion of the Demised Premises taken by the proposed assignee or subtenant
bears to the total rentable area of the Demised Premises.





                                       9
<PAGE>   16

           (E) Lessee shall pay on demand reasonable attorneys' fees incurred by
Lessor, up to $1000 in connection with Lessor's review of any request for
assignment or subletting and preparation of documents in connection with such
request for consent, whether or not consent is granted.

        6. Alterations.

           (A) Lessee will make no alterations improvements, or additions, nor
any installments of fixtures, in, to, or at the Demised Premises ("Alterations")
without obtaining the prior written consent of Lessor. Lessor may impose
conditions on its consent, including, without limitation, compliance with the
conditions set forth in clauses (5)(a) through (h) of the attached work letter.
Such conditions shall be reasonable, except that, to the extent the Alteration
affects the Building systems or structures or the exterior appearance of the
Building, Lessor may condition or withhold its consent in its sole and absolute
discretion. Lessor may require that Lessee use a space planner, engineer and/or
contractor selected by Lessor for any Alterations. All Alterations, including
all improvements and fixtures installed in connection therewith (except the
movable furniture and trade fixtures of Lessee) made or added either by Lessee
or Lessor shall be and remain the property of Lessor immediately upon their
installation.

           (B) At the termination of this Lease, Lessee will not be required to
restore the Premises to its original condition, or to remove any building
standard improvements, except that Lessee may be required to restore damage to
the Premises caused by Lessee's use or moving in or out of the Premises or any
other wear and tear beyond normal wear and tear. If during the term of the Lease
Lessor conditions its approval of any Alterations upon a requirement that Lessee
remove the Alteration at termination of the Lease, with such condition stated in
writing at the time of approval, Lessor may require that Lessee, at Lessee's
expense, to remove such Alterations upon termination of the Lease and return
that portion of the Premises to its prior condition. Lessee shall repair any
damage caused by removal of Alterations.

        7. Repairs, Surrender of Premises. Lessee shall at all times take good
care of the Demised Premises. Subject to Lessee's repair and maintenance
obligations, Lessor shall maintain the areas of the Building (other than the
Premises), its systems and all of the Common Area in good condition and working
order. Lessee agrees to promptly repair at Lessee's expense:

           (A) all injury to the Demised Premises, or to the Building, caused by
moving the property of Lessee into, in, or out of the Building or the Demised
Premises; or

           (B) all breakage or damage to the Demised Premises or the Building
caused by Lessee or the agent, servants or employees of Lessee.

Lessee shall return the Demised Premises to Lessor at the expiration or earlier
termination of this Lease in good condition, subject to ordinary wear and tear.
Upon expiration or any





                                       10
<PAGE>   17

earlier termination of this Lease, at Lessor's request, Lessee shall remove at
Lessee's expense all telephone, data processing, audio and video, security and
electrical (other than building standard) cables, wires, lines, duct work,
sensors, switching equipment, control boxes and related improvements, to the
extent required under Section 6. If Lessee fails to remove any personal
property, trade fixtures or (to the extent required under Section 6) Alterations
by the end of the Lease Term, Lessor may remove such property and store it and
dispose it at Lessee's expense, which shall be payable on demand as additional
rent. If the Demised Premises are not so surrendered at the termination of this
Lease, Lessee shall indemnify Lessor against all loss or liability resulting
from delay by Lessee in so surrendering the Demised Premises, including, without
limitation, any claims made by any succeeding tenant, lost opportunities to
lease to succeeding tenants, and attorneys' fees and costs.

        8. Indemnification. Lessee hereby agrees to indemnify, defend, protect
and hold harmless Lessor, its subsidiaries, directors, officers, agents and
employees including, without limitation, the managing agent for the Building
from and against any and all damage, loss, liability or expense including but
not limited to, attorneys' fees and legal costs suffered by same directly or by
reason of any claim, suit or judgment brought by or in favor of any person or
persons for damage, loss or expense, including, without limitation, claims for
bodily injury, including death resulting anytime therefrom, and property damage
sustained by such person or persons which arises out of, is occasioned by or is
in any way attributable to the use or occupancy of the Demised Premises and
adjacent areas by the Lessee, the acts or omissions of the Lessee, its agents,
employees or any contractors brought onto the Demised Premises by the Lessee,
except to the extent caused by the gross negligence or willful misconduct of
Lessor or its employees, agents, customers and invitees. Such loss or damage
shall include, but not be limited to, any injury or damage to Lessor's personnel
(including death resulting anytime therefrom) or premises. Lessee's obligations
to indemnify shall include, without limitation, the duty to defend with counsel
acceptable to Lessor any claims for loss, damage or injury, and to pay any
judgments, settlements, costs, fees and expenses incurred in connection
therewith. Lessee agrees that the obligations assumed herein shall survive this
Lease.

        9. Insurance. Lessee hereby agrees to maintain in full force and effect
at all times during the term of this Lease, at its own expense, for the
protection of Lessee and Lessor, as their interest may appear, policies of
insurance issued by a responsible carrier or carriers acceptable to Lessor which
afford the following coverages:

           (A) Comprehensive General Liability Insurance including Blanket
Contractual Liability Broad Form Property Damage, Personal Injury, Completed
Operations Products Liability and Fire Damage Legal, such insurance to afford
protection in the minimum combined limit of not less than $2,000,000. Such
insurance shall name Lessor and its managing agent as additional insureds.





                                       11
<PAGE>   18

           (B) Fire insurance with extended coverage endorsement upon Lessee's
equipment, furniture, fixtures, merchandise and any other personal property
located in the Demised Premises in the amount of the full insurable value
thereof.

           (C) Workers' Compensation as required by statute and Employees'
liability of not less than $100,000.00.

           The Lessee shall deliver to Lessor upon execution of this Lease and
thereafter at least thirty (30) days prior to expiration of such policy,
certificates of insurance evidencing the above coverage which shall expressly
provide that at least thirty (30) days prior written notice shall be given
Lessor in the event of material alteration or cancellation of the coverage.

           Lessor makes no representation that the limits of liability specified
to be carried by Lessee under the terms hereof are adequate to protect Lessee;
if Lessee deems this insurance to be inadequate, Lessee shall, at its own
expense, provide such additional insurance as necessary. Lessee's obligations
under this Lease shall in no way be limited to the amount of insurance required
to be carried under this paragraph 9. Lessor agrees to maintain during the term
of this Lease such insurance on the Building as Lessor reasonably deems prudent
(or to self-insure such risks), provided that any such insurance may be provided
under blanket insurance policies covering multiple properties.

        10. Waiver of Subrogation. The parties shall obtain from their
respective insurance carriers waivers of subrogation against the other party,
agents, employees and, as to Lessee, invitees. Neither party shall be liable to
the other for any loss or damage caused by fire or any of the risks enumerated
in a standard fire insurance policy with an extended coverage endorsement if
such insurance was carried or required to be carried at the time of such loss or
damage.

        11. Liability for Injury or Damage. Lessor shall not be in default or
liable to Lessee for any damage resulting from (i) the carelessness, negligence
or improper conduct on the part of a co-tenant or any other third party, or (ii)
for any damage to person or property resulting from any condition of the Demised
Premises or other cause, including, but not limited to, damage by water. Lessor
shall have no liability under this Lease whatsoever for any consequential
damages of Lessee under any circumstances. Lessee shall give Lessor prompt
notice of any damage in or about the Demised Premises.

        12. Damage to Premises. If the Demised Premises are destroyed or
partially damaged then Lessor may, at Lessor's option, exercised in writing
within sixty (60) days of written notice of damage from Lessee, elect to
terminate this Lease or to repair the damage. If Lessor elects to repair the
damage, Lessor shall at its own expense, without unnecessary delay, repair the
damages. If Lessor elects to repair, Lessee shall pay the cost of repairing any
tenant improvements in the Demised Premises other than the Building itself and
Building standard improvements. If Lessor elects to repair, but does not
substantially complete such repair within 120 days after the date of the
casualty, then Lessee may, at any time after such 120th day, give Lessor notice
of Lessee's conditional termination of the Lease, and upon





                                       12
<PAGE>   19

delivery of such notice this Lease shall terminate sixty days after the date of
such notice unless Lessor substantially completes such repair within such 60 day
period. Lessee shall be entitled to an abatement of rent in fair proportion to
the amount and nature of the damage sustained, until the Demised Premises are
made fit for occupancy and use; provided, however, that Lessee shall not be
entitled to an abatement of rent if such damage was caused by the negligence or
willful misconduct of Lessee or Lessee's employees or invitees. Lessor shall not
be liable for loss of use of the Demised Premises or for damage to Lessee's
personal property or any inconvenience, occasioned by any damage, repair or
restoration, nor shall Lessee have any right to terminate this Lease as a result
of the same. Lessor shall be entitled to all insurance proceeds resulting from
the damage, except those proceeds which specifically insured Lessee's personal
property and trade fixtures.

        13. Eminent Domain. If all or any part of the Demised Premises shall be
taken as a result of the exercise of the power of eminent domain, this Lease
shall terminate as to the part so taken as of the date of taking. In the event
of a partial taking, either Lessor or Lessee shall have the right to terminate
this Lease as to the balance of the Demised Premises by written notice to the
other within thirty (30) days after such date, provided however, that a
condition to the exercise by Lessee of such right to terminate shall be that the
portion of the Demised Premises taken shall be of such extent and nature as
substantially to impair Lessee's use of the balance of the Demised Premises. In
the event of a total taking or a partial taking, Lessor shall be entitled to any
and all compensation, damages or awards which may be paid in connection
therewith. Lessee shall be entitled to any damages attributable to moving
expenses or damages to Lessee's non-removable fixtures, provided that such award
does not diminish the award to Lessor and further provided that no portion of
the award is for any excess value or leasehold value of this Lease. In the event
of a partial taking of the Demised Premises which does not result in termination
of this Lease, the monthly rental thereafter shall be equitably reduced.

        14. Admittance by Pass-Key. Lessor shall not be liable for the
consequences of admitting by pass-key or refusing to admit to the Demised
Premises Lessee or any of Lessee's agents, employees or other persons claiming
the right of admittance.

        15. Exhibition and Inspection of Premises. Lessor and Lessor's agents
shall have the right at reasonable hours on 24 hours prior notice to Lessee
(except that no advance notice shall be required in the case of emergencies, or
in the cases of clauses (c), (d), or requested repairs under (e)) to (a) exhibit
the Demised Premises to prospective purchasers and during the final six months
of the term hereof to prospective lessees; (b) to examine the Demised Premises
to determine whether Lessee is complying with its obligations hereunder and in
reference to any emergency or general maintenance; (c) supply janitorial service
and any other service supplied by Lessor to Lessee hereunder; (d) to post
notices of non-responsibility in connection with any construction work; and (e)
to make repairs or alterations to any portion of the Building. Lessee hereby
waives any claim for damages for any injury or inconvenience to or interference
with Lessee's business, occupancy or quiet





                                       13
<PAGE>   20

enjoyment of the Demised Premises resulting from any of the foregoing, except
for any intentional misconduct of Lessor.

        16. Abandonment. Any personal property left on the Demised Premises
after termination of this Lease shall be deemed to be abandoned at the option of
Lessor and Lessee waives any claims to or arising from said property.

        17. Signs. No sign, picture, advertisement or notice shall be displayed,
inscribed, painted or affixed to any of the glass or woodwork of the Demised
Premises, or on the exterior walls of the Building, except such as shall be
first approved in writing by Lessor.

        18. Electrical and Mechanical Devices and Installations. Lessee shall
not without Lessor's prior written consent, operate or install any electrical
equipment or operate or install any machinery or mechanical device on said
Demised Premises other than that normal to office use. No electric wiring or
other electrical apparatus shall be installed, maintained or operated on the
Demised Premises, except with the prior written approval of and in a manner
satisfactory to Lessor, and in no event shall Lessee overload the electrical
circuits from which Lessee obtains current. Lessee shall not, without Lessor's
prior written consent, use heat generating machines or equipment or lighting
other than Lessor's designated building standard lights which affect the
temperature otherwise maintained by the air conditioning system. Lessor may
condition its consent on installation of supplemental air conditioning units in
the Demised Premises, and the costs thereof (including without limitation
operating costs) shall be paid by Lessee to Lessor upon demand.

        19. Windows. Lessee shall not allow anything to be placed on the outside
window ledges of the Demised Premises. No awnings shall be attached to the
outside of any windows of the Demised Premises. Only such window draperies
furnished by Lessor, which shall be uniform to Building standards, shall be
exposed to exterior views.

        20. Floor Coverings. Lessee, or any other person, shall not lay linoleum
or any other floor covering or attach or affix any covering to the walls or
ceiling of the Demised Premises or any part thereof without the prior consent of
Lessor. Any such addition shall be deemed an alteration within the meaning of
paragraph 6, and shall be subject to the conditions set forth therein.

        21. Services

            (A) General. So long as Lessee is not in default under any of the
terms of this Lease, and subject to the provisions of this paragraph 21, Lessor
shall:

                (i) Elevator. Provide unattended automatic elevator facilities
Monday through Friday, except holidays, from 7:00 a.m. to 6:00 p.m., and have at
least one elevator available at all other times, subject to Lessor's security
procedures then in effect.





                                       14
<PAGE>   21

                (ii) Ventilation. Ventilate the Demised Premises and furnish air
conditioning or heating Monday through Friday, except holidays, from 7:00 a.m.
to 6:00 p.m. (and at other times for the additional charges described in
subparagraph (B)) to the extent required for the comfortable occupancy of the
Demised Premises, subject to governmental regulation. The air conditioning
system achieves maximum cooling when the window coverings and sliding glass
doors are closed. Lessee shall keep all exterior sliding glass doors and all
other exterior doors in the Demised Premises closed whenever the system is in
operation. Lessee shall cooperate to the best of its ability at all times with
Lessor and shall abide by all reasonable regulations and requirements which
Lessor may prescribe for the proper functioning and protection of the air
conditioning system. Lessee and Lessee's servants, employees, agents, visitors,
licensees or contractors shall not adjust, tamper with, touch or otherwise in
any manner affect the climate control equipment in the Demised Premises. Lessee
shall not connect any apparatus, device, conduit or pipe to the Building's
chilled and hot water air conditioning supply lines. Lessee and Lessee's
servants, employees, agents, visitors, licensees or contractors shall not enter
at any time the mechanical installations or facilities of the Building, or
adjust, tamper with, touch or otherwise in any manner affect the installations
or facilities. If any installation of partitions, equipment or fixtures, or any
Alterations, modifications or remodeling by Lessee necessitates the re-balancing
of the climate control equipment in the Demised Premises, the re-balancing shall
be performed by Lessor at Lessee's expense; provided that, so long as Lessee
indicates its equipment locations and heat load in the working drawings for the
buildout of the Premises, and Lessee's equipment installations and heat loads
are consistent with such drawings, Lessee shall not be responsible for the cost
of rebalancing the climate control equipment as a result of the initial tenant
improvements.

                (iii) Electricity. Subject to the provisions of subparagraph
(B), furnish to the Demised Premises electric current as required by the
Building standard office lighting and fractional horsepower office business
machines in the amount of approximately two and one-half (2.5) watts per square
foot. If Lessee's electrical installation or electrical consumption is in excess
of the quantity described above, or extends beyond normal business hours, Lessee
shall not connect any apparatus or device with wires, conduits or pipes, or
other means by which the services are supplied, for the purpose of using
additional or unusual amounts of the services without the prior written consent
of Lessor. At all times Lessee's use of electric current shall not exceed the
capacity of the feeders to the Building or the risers or wiring installation,
except as provided in working drawings approved by Lessor.

                (iv) Water. Make water available in public areas for drinking
and lavatory purposes only.

                (v) Janitorial Service. Provide building standard janitorial
service to the Demised Premises, provided the Premises are used exclusively as
offices, and are kept reasonably in order by Lessee. Lessee shall pay to Lessor
any cost incurred by Lessor for janitorial services in excess of those generally
provided for other tenants in the Building. Lessee shall pay to Lessor the cost
of removal of any of Lessee's refuse and rubbish.





                                       15
<PAGE>   22

                (vi) Director. Lessee shall be granted standard building
directory signage.

            (B) Additional Charges. Lessor may impose a reasonable charge for
any utilities and services, including heating or air conditioning, electric
current, water and janitorial service, required to be provided by Lessor by
reason of (i) any use of the Demised Premises at any time other than between the
hours of 7:00 a.m. and 6:00 p.m. Monday through Friday, except holidays; (ii)
any use beyond what Lessor agrees to furnish as described above; or (iii)
special electrical, cooling and ventilating needs created in certain areas by
hybrid telephone equipment, computers and other similar equipment or uses.
Overtime heating and air conditioning shall be provided at Lessor's hourly
overtime HVAC charge then in effect. Lessor's current charge for after-hours
HVAC is $50 per hour, which may be shared among other after-hour HVAC users. In
the event both Lessee and other tenants request concurrent use of after-hours
HVAC, Lessor shall bill each such tenant for its proportionate share of such
usage as reasonably established by Lessor.

            (C) Rules and Regulations. Lessee agrees to cooperate at all times
with Lessor and to abide by all reasonable regulations and requirements which
Lessor may prescribe for the use of the utilities and services. Any failure to
pay any excess costs as described above with the next installment of rent due
after receipt of a statement for such services shall constitute a breach of the
obligation to pay rent under this Lease and shall entitle Lessor to the rights
granted in this Lease for a breach.

            (D) Stopping of Service. Lessor reserves the right to stop services
of the elevator, plumbing, ventilation, air conditioning and electric systems
when necessary by reason of accident or emergency, or for repairs, alterations
or improvements, in the judgment of Lessor desirable or necessary to be made,
until the repairs, alterations or improvements have been completed; provided
that subject to causes beyond Lessor's reasonable control, Lessor shall keep at
least one elevator operating at all times as the Building remains open for
business. Lessor shall have no responsibility or liability for failure to supply
elevator facilities, plumbing, ventilating, air conditioning or electric service
when prevented by strike or accident or by any cause beyond Lessor's reasonable
control, or by laws, rules, orders, ordinances, directions, regulations or
requirements of any federal, state, county or municipal authority or failure of
gas, oil or other suitable fuel supply or inability by exercise of reasonable
diligence to obtain gas, oil or other suitable fuel. It is expressly understood
and agreed that any covenants on Lessor's part to furnish any service pursuant
to any of the terms, covenants, conditions, provisions or agreements of this
Lease, or to perform any act or thing for the benefit of Lessee, shall not be
deemed breached if Lessor is unable to furnish or perform the same by virtue of
a strike or labor trouble or any other cause whatsoever beyond Lessor's
reasonably control. To the extent practical, Lessor shall attempt to give Lessee
notice of proposed shutdowns of services.

            (E) Changes. The standards set forth above for utilities and
services are those currently in effect. Lessor reserves the right to adopt
nondiscriminatory modifications





                                       16
<PAGE>   23

and additions hereto, which do not materially affect Lessee's rights. Lessor
shall give notice to Lessee, in accordance with provisions of this Lease, of
material modification and additions.

        22. Attorneys' Fees. In the event a suit, action, arbitration, or other
proceeding of any nature whatsoever, including without limitation any proceeding
under the U.S. Bankruptcy Code, is instituted, or the services of an attorney
are retained, to interpret or enforce any provision of this Lease or with
respect to any dispute relating to this Lease, the non-defaulting party shall be
entitled to recover from the party its attorneys', paralegals', accountants',
and other experts' fees and all other fees, costs, and expenses actually
incurred and reasonably necessary in connection therewith. In the event of suit,
action, arbitration, or other proceeding, the amount thereof shall be determined
by the judge or arbitrator, shall include fees and expenses incurred on any
appeal or review, and shall be in addition to all other amounts provided by law.

        23. Default. The occurrence of any one or more of the following events
shall constitute a breach of the Lease and an Event of Default by Lessee:

            (A) if Lessee fails to make payment of any rent or other amounts due
Lessor within ten days after notice from Lessor that such amount is due;
provided that, after any two such delinquencies in any twelve-month period, any
third or subsequent nonpayment within such twelve-month period shall be an Event
of Default if not paid within ten days of the date due, without notice; or

            (B) if Lessee shall be in violation of any law, rule, order or
ordinance applicable to Lessee's use of the Demised Premises if Lessee does not
cure the same promptly after notice, and in any event within the time required
under the applicable law, rule, order or ordinance; or

            (C) if Lessee fails to provide an estoppel certificate required
under paragraph 37 when due; or

            (D) if Lessee fails to keep or perform any of the other covenants or
conditions of this Lease or rules or regulations in connection therewith, within
ten (10) days after written notice of default; provided, however, that if Lessor
has given two such notices of default regarding any failure of performance by
Lessee, then any third failure of performance by Lessee of the same or similar
nature shall constitute an Event of Default without notice from Lessor (except
if Lessee is in good faith and reasonably attempting to fix a recurring
problem); or

            (E) if a receiver shall be appointed for Lessee's property or any
part thereof, or if a petition is filed by Lessee for an arrangement with his
creditors under Chapter Eleven of The Bankruptcy Act, or if Lessee shall be
declared bankrupt or insolvent according to law, or if any assignment of
Lessee's property shall be made for the benefit of creditors.





                                       17
<PAGE>   24

        24. Lessor's Remedies. Upon the occurrence of any Event of Default,
Lessor may exercise any one or more of the following remedies or any other
remedy available under applicable law:

            (A) Lessor or Lessor's agents and employees may immediately or at
any time thereafter re-enter the Demised Premises or any part thereof, by any
suitable action or proceeding at law, or by force or otherwise, without being
liable for indictment, prosecution, trespass, or damages, and may repossess the
Demised Premises, and may remove any person or property therefrom and may lock
Demised Premises, to the end that Lessor may have, hold, and enjoy the Demised
Premises. Lessee hereby waives service of any notice of intention to terminate
this Lease or to retake the Demised Premises and waives any requirement of
service of demand for payment of rent or for possession and of any and every
other notice or demand prescribed by law and hereby waives any claim for damages
by reason of any repossession by Lessor.

            (B) Lessor, at his sole option, may relet the whole or any part of
the Demised Premises from time to time, either in the name of the Lessor or
otherwise, to such tenants, for such terms ending before, on, or after the
expiration of the Term, at such rentals, and upon such conditions (including
concessions and free rent periods) as Lessor, in its sole discretion, may
determine to be appropriate. Lessor shall have no obligation to relet the
Premises or any part thereof, and shall not be liable for refusal to relet the
Demised Premises, or, in the event of any such reletting, for refusal or failure
to collect any rent due upon such reletting; and no such refusal or failure
shall operate to relieve Lessee of any liability under this Lease or otherwise
affect any such liability. Lessor at its option may make such physical changes
to the Demised Premises as Lessor, in its sole discretion, considers advisable
or necessary in connection with any such reletting or proposed reletting,
without relieving Lessee of any liability under this Lease or otherwise
affecting Lessee's liability.

            (C) Whether or not Lessor retakes possession of or relets the
Demised Premises, Lessor shall have the right to recover unpaid rent and all
damages caused by the default, including attorneys' fees. Damages shall include,
without limitation, all rent lost; all legal expenses and other related costs
incurred by Lessor following Lessee's default; that portion of any leasing
commission and improvement costs paid by Lessor as a result of this Lease which
is attributable to the unexpired portion of this Lease; storage costs; all costs
incurred by Lessor in restoring the Demised Premises to good order and condition
or in remodeling, renovating, or otherwise preparing the Demised Premises for
reletting; and all costs incurred by Lessor in reletting the Demised Premises,
including, without limitation, any advertising costs, brokerage commissions and
the value of Lessor's time.

            (D) To the extent permitted under Oregon law, Lessor may sue
periodically for damages as they accrue without barring a later action for
further damages. Lessor may in one action recover accrued damages plus damages
attributable to the remaining term equal to the difference between the rent
reserved in this Lease for the balance of the term after the time of award, and
the fair rental value of the Demised Premises for the





                                       18
<PAGE>   25

same period, discounted to the time of award at the rate of seven percent per
annum. If Lessor has relet the Demised Premises for the period which otherwise
would have constituted all or any part of the unexpired portion of the term, the
amount of rent reserved upon such reletting shall be deemed, prima facie, to be
the fair rental value for the Demised Premises.

            (E) Lessor may terminate this Lease. Even though an Event of Default
has occurred, this Lease shall continue in effect for so long as Lessor does not
terminate Lessee's right to possession, and Lessor may enforce all its rights
and remedies under this Lease, including the right to recover the rent as it
becomes due under this Lease. Acts of maintenance or preservation or efforts to
relet the Demised Premises or the appointment of a receiver upon initiative of
Lessor to protect Lessor's interest under this Lease shall not constitute a
termination of Lessee's right to possession unless written notice of termination
is given by Lessor to Lessee. Lessor's termination of this Lease shall not
prejudice or affect Lessor's rights, including without limitation, its right to
damages for breach of this Lease.

        25. Lessor's Right to Perform. If Lessee shall fail to make any payment
or perform any act required to be made or performed under this Lease, Lessor
may, but shall not be obligated to, make such payment or perform such act to the
extent Lessor may deem desirable, and, in connection therewith, pay expenses and
employ counsel. Any such payment or performance by Lessor shall not waive or
release Lessee from any obligations of Lessee under this Lease. All sums so paid
by Lessor, and all penalties, interests and costs in connection therewith, shall
be due and payable by Lessee on the next day after any payment by Lessor,
together with interest thereon as set forth in paragraph 3(E) from that date to
the date of payment by Lessee, plus collection costs and attorneys' fees.

        26. Lessor's Default. Lessor shall not be deemed in default of
performance of any obligation under this Lease unless Lessor has failed to
perform such obligation within thirty days after receipt of written notice by
Lessee to Lessor specifying the nature of Lessor's failure of performance;
provided, (i) in the event of emergency Lessor nonetheless shall respond as soon
as reasonably possible after notice thereof, and (ii) if the nature of Lessor's
obligation is such that more than thirty days are required for its performance,
Lessor shall not be deemed in default if Lessor shall commence such performance
within thirty days after receipt of Lessee's notice and thereafter promptly and
diligently prosecute the same to completion.

        27. Cumulation of Remedies - No Waiver. Except as otherwise provided in
this Lease, No right to remedy herein expressly conferred upon or reserved to a
party is intended to be exclusive of any other right or remedy, and each and
every right and remedy shall be cumulative and in addition to any other right or
remedy given hereunder or now or hereafter existing at law or in equity or by
statute. The failure of a party to insist in any one or more instances upon the
strict performance by the other party of any of the covenants of this Lease or
to exercise any option herein contained shall not be construed as a waiver or a
relinquishment for the future of any such covenant or option. The receipt by
Lessor of rent with the knowledge of a breach of any covenant or agreement
hereof shall not be deemed a





                                       19
<PAGE>   26

waiver of such breach. No waiver by a party of any provision of this Lease shall
be deemed to have been made unless expressed in writing and signed by the party
or its duly authorized agent.

        28. Light and Air. This Lease does not grant any right of access to
light, air, or view, over the property, and Lessor shall not be liable for any
diminution of such light, air, or view by any adjacent structure.

        29. Repair. In the event Lessor, during the term of this Lease, deems it
necessary to repair, alter, remove, reconstruct or improve any part of the
Demised Premises or the Building of which the Demised Premises are a part, then
such repairing, alteration, or removal, reconstruction or improvement may be
made by and at the expense of Lessor without any interference or claim for
damages by Lessee, but there shall be such an abatement or adjustment of rent as
shall be just and in proportion to the interference with Lessee's occupation of
the Demised Premises, unless such repairs or alterations are necessitated by
reason of Lessee's act or negligence or the act or negligence of Lessee's
employees, agents or invitees.

        30. Holding Over.

            (A) If Lessee shall hold over after the expiration term of this
Lease and shall not have agreed in writing with Lessor upon the terms and
provisions of a new lease prior to such expiration, Lessee shall remain bound by
all terms, covenants and agreements hereof, except that the tenancy shall be one
from month to month at one and one-half (1 1/2) times the then scheduled rent
for comparable space within the building, as solely determined by Lessor.

            (B) Lessee shall have the unilateral right to hold over for a period
of up to six (6) months following the expiration of the Lease term, at the
rental rate then being quoted by Lessor for comparable space within the
Building, but in no event less than 100% of, and not more than 150% of, the rate
of rent in effect at the end of the Lease term. Lessee's right to holdover is
conditioned upon Lessee's delivery of written notice of exercise of such
holdover right to Lessor not less than one hundred eighty (180) days prior to
Lease expiration, which notice shall identify Lessee's holdover period. Lessee's
rights under this clause (B) shall terminate (i) if this Lease or Lessee's right
to possession of the Demised Premises is terminated, (ii) upon the occurrence of
an Event of Default under this Lease beyond any applicable cure period, or (iii)
if Lessee fails to timely exercise its option under this clause (B), time being
of the essence with respect to Lessee's exercise thereof.

        31. Liens. Lessee shall keep the Demised Premises and the Building free
from any liens arising out of any work performed, materials furnished or
obligations incurred by Lessee. Lessor shall have the right to post or keep
posted on the Demised Premises any notices that may be provided by law or which
Lessor may deem to be proper for the protection of the Lessor, the Demised
Premises any notices that may be provided by law or which Lessor may deem to be
proper for the protection of the Lessor, the Demised Premises





                                       20
<PAGE>   27

and the buildings from such liens. Nothing in this Lease contained shall be
deemed or construed in any way as constituting the consent or request of Lessor,
expressed or implied, by inference or otherwise, to any contractor, or
subcontractor, laborer or materialman for the performance of any labor or the
furnishing of any materials for any specific improvement, alteration or repair
to the Demised Premises or any part thereof, nor as giving Lessee any right,
power or authority to contact for or permit the rendering of any services or the
furnishing of any materials that would give rise to the filing of any lien
against the fee of the Demised Premises. If any such lien shall at any time to
be filed against the Demised Premises, Lessee shall cause the same to be
discharged of record within twenty days after the date of filing the same. Any
amount paid by Lessor for any of the expenses or fees incurred or arising from
such lien, including all reasonable legal or other expenses of Lessor, shall be
repaid by Lessee to Lessor on demand with interest at 12% per annum, and if
unpaid may be treated as additional rent.

        32. Furniture and Bulky Items. Safes, furniture or bulky items shall be
moved in or out of the Demised Premises only at such hours and in such manner as
shall least inconvenience other tenants, as Lessor shall reasonably decide. No
safe or other articles of over 1000 pounds shall be moved into the Demised
Premises without the reasonable consent of the Lessor. Lessor shall have the
right to fix the position of any article of such weight in the Demised Premises.

        33. Regulations. Lessor may make and enforce against Lessee regulations
appropriate in Lessor's reasonable determination for maintenance and management
of the Building including but not limited to regulations for order, cleanliness
and security. Lessor shall not be responsible to Lessee for the nonperformance
by any other tenant or occupant of any said rules or regulations. Lessor shall
not unreasonably discriminate among tenants in the enactment and enforcement of
such rules and regulations.

        34. Preparation for Occupancy. Lessor shall prepare the Demised Premises
for occupancy in accordance with the work letter attached hereto as Exhibit C.
All improvements made in connection with the preparation of the Demised Premises
for occupancy shall be and remain the property of Lessor. Lessee shall pay all
cost of furnishing, installing or connecting fixtures and any equipment required
by Lessee.

        35. Acceptance of Premises. Lessee agrees to accept delivery of the
Demised Premises upon such notice of the availability of the Demised Premises
given to Lessee by Lessor. By occupying such Demised Premises Lessee formally
accepts the same in the "AS IS" condition and acknowledges that the Demised
Premises are in the condition called for hereunder, except as otherwise set
forth and agreed to in writing at the time of taking possession. To the extent
of any inconsistency between the language of this Section 35 and Exhibit C, the
language of Exhibit C shall control.

        36. Possession. In the event of the inability of Lessor to deliver
possession of the Demised Premises, or any portion thereof, at the time of the
commencement of the term of this Lease, neither Lessor nor Lessor's agent shall
be liable for any damage caused thereby,





                                       21
<PAGE>   28

nor shall this Lease thereby become void or voidable nor shall the term herein
specified be extended in any way, but in such event, Lessee shall not be liable
for any rent until such time as Lessor can deliver possession. If the Lessee
shall take possession of the Demised Premises prior to the commencement date of
this Lease, Lessor and Lessee agree to be bound by all of the provisions and
obligations hereunder during such prior period, including payment of rent as set
forth herein.

        37. Parking. Lessor shall provide Lessee with unreserved parking
facilities in the Building for the number of automobiles shown in the Basic
Lease Information during the term of this Lease. The parking allotment
applicable to the seventh floor space will be provided by the Seventh Floor
Commencement Date, or earlier to the extent Lessor determines such additional
allotment is available, using Lessor's parking availability standards
consistently applied. Lessee shall pay for such parking facilities at the
prevailing rate for parking in the Building, which may vary from time to time.
Parking of vehicles by Lessee or Lessee's agents or employees in violation of
garage regulations, or failure to pay the parking fees within ten (10) days
after payment is due shall, at Lessor's discretion, result in Lessee or Lessee's
agents or employees parking privilege being revoked. Upon request of Lessee,
Lessor shall use reasonable efforts to assist Lessee in locating additional
parking spots within a three-block radius of the Building, to accommodate an
overall parking ratio of one spot per 1200 square feet of the Premises. Lessor
makes no representation regarding the availability of such space, and Lessee
shall be responsible for making its own direct arrangements with the owner or
operator of such parking facilities.

        38. Subordination and Attornment; Notice to Lenders.

            (A) Lessee agrees that, subject to the provisions of Section (B)
below, upon request of Lessor it will subordinate its rights hereunder to the
lien of any mortgage, ground lease or deed of trust (collectively, "Mortgages")
now or hereafter enforced against the land or Building and to all events made or
hereafter to be made upon the security thereof. At the request of any party
which may succeed to Lessor's rights hereunder, Lessee shall attorn to and
recognize such successor as Lessor under this Lease.

            (B) Lessor represents that, as of the date of this Lease, there are
no Mortgages encumbering the Building. Lessee's duty to subordinate its rights
under this Lease and attorn to a future Mortgage holder or its successor shall
be expressly conditioned upon Lessee's receipt of a subordination,
non-disturbance and attornment agreement from the holder of such Mortgage, which
Lessee agrees it shall execute and deliver to such holder.

            (C) Lessee agrees to execute such documents as Lessor or Lessor's
successors may request to effectuate the provisions of this article.

        39. Estoppel Certificate. At any time upon ten days prior written
request by Lessor, Lessee shall promptly execute acknowledge and deliver to
Lessor, a certificate certifying (a) that this Lease is unmodified and in full
force and effect, or if there has been modifications, that this Lease is in full
force and effect as modified, and state the date and





                                       22
<PAGE>   29

nature of each modification; (b) the date, if any, to which rental and other
sums payable hereunder have been paid; (c) that no notice has been received by
Lessee of any default which has not been cured, except as to default specified
in said certificate; and (d) such other factual matters as may be reasonably
requested by Lessor. If Lessee fails to provide such certificate within such
10-day period, Lessee shall conclusively be deemed to have certified the matters
set forth in the certificate.

        40. Article Headings. The article headings throughout this instrument
are for convenience in reference only, and the words contained therein shall in
no way be held to explain, modify, amplify or aid in the interpretation,
construction or meaning of the provisions of this Lease.

        41. Notice. Any notice or demand under this Lease shall be in writing
and shall be given by hand-delivery, telecopy, or United States Mail, postage
prepaid, registered or certified with return receipt requested. Notices given by
telecopy or hand-delivery shall be deemed given upon receipt. Notices which are
mailed shall be deemed given on the date shown on the receipt as having been
tendered or delivered. The addresses of Lessor and Lessee for notices are as
specified in the Basic Lease Information. Either party may change its address by
giving notice of the change in accordance with this paragraph.

        42. Parties Affected. The rights, liabilities and remedies provided for
herein shall extend to the heirs, legal representatives, successors and as far
as the terms of this Lease permit, assigns of the parties hereto. The words
"Lessor" and "Lessee" and their accompanying verbs or pronouns, whenever used in
this Lease shall apply equally to all persons, firms or corporations which may
be or become parties hereto.

        43. Authority. If Lessee is a corporation, each person executing this
Lease on behalf of Lessee covenants and warrants that (i) Lessee is duly
incorporated and validly existing under the laws of its state of incorporation;
(ii) Lessee is qualified to do business in Oregon; (iii) Lessee has full
corporate right and authority to enter into this Lease and perform its
obligations hereunder; and (iv) Each person signing this Lease on behalf of
Lessee is duly and validly authorized to do so.

        44. Building Planning. INTENTIONALLY OMITTED.

        45. Lessor's Exculpation. In the event of default, breach or violation
hereof by Lessor which, for the purpose of this paragraph, includes Lessor's
partners, officers, directors, employees, agents and representatives, of any
obligation under this Lease, Lessor's liability to Lessee shall be limited to
Lessor's ownership interest in the Building, and Lessor shall not be liable for
any deficiency beyond its ownership interest in the Building. Upon any transfer
of the Building and assignment of this Lease, Lessor shall have no further
liability under any and all covenants and obligations under this Lease accruing
after such transfer and assignment, including any liability respecting partial
consideration described in paragraph 2 above.





                                       23
<PAGE>   30

        46. Consents. INTENTIONALLY OMITTED.

        47. Brokers. Lessee represents and warrants that it has had no dealing
with any real estate broker or agent in connection with the negotiation of this
Lease, except for any brokers as specified in the Basic Lease Information, and
that Lessee knows of no other real estate broker or agent who is or might be
entitled to a commission in connection with this Lease. Lessee shall indemnify
and hold harmless Lessor from and against any liabilities or expenses arising
out of claims made by any other broker or individual for commissions or fees
resulting from this Lease, except claims by Lessor's Broker, if any, shown in
the Basic Lease Information.

        48. Discontinuance of Services. In addition to any other rights and
remedies which Lessor may have under this Lease, following occurrence of Event
of Default and continuing until the event giving rise to such Event of Default
has been remedied, Lessor shall not be obligated to continue furnishing Lessee
any heat, ventilation or air conditioning services or any cleaning services, and
the discontinuance of any such services shall be without liability by Lessor to
Lessee and shall not effect any of Lessee's covenants or obligations under this
Lease.

        49. No Interference. Lessee agrees that it shall not exercise any of its
rights under this Lease in a manner which would violate Lessor's union contracts
effecting the building, nor create any work stoppage, picketing, labor
disruption or dispute or any interference with the business of Lessor or any
other tenant or occupant of the Building.

        50. Building Name. Lessee shall not employ the name of the Building in
the name or title of its business or occupation without Lessor's prior written
consent, which Lessor may withhold in its sole discretion. Lessor reserves the
right to change the name of the Building without Lessee's consent and without
any liability to Lessee.

        51. Recording. Lessee shall not record this Lease without the prior
written consent of Lessor. At the request of Lessor, Lessee shall execute for
recording such instruments evidencing this Lease as Lessor may request, provided
that the cost of recording shall be at Lessor's expense. Upon termination of
this Lease, Lessee, at Lessor's request, shall execute and deliver to Lessor in
recordable form a quit claim deed of any interest of Lessee in the Demised
Premises or Building, in form requested by Lessor, provided that the cost of
recording shall be at Lessor's expense.

        52. Time. TIME IS OF THE ESSENCE OF THIS AGREEMENT.

        53. First Right of Opportunity.

            (A) Available Space. As used in this Section 53, "Available Space"
shall mean any office space in the Building which becomes vacant after the
Commencement Date and during the Term, other than space on the ground floor. If
any such vacant space is subject to an existing expansion right or first refusal
right of an existing tenant, or if Lessor





                                       24
<PAGE>   31

determines that Lessor must extend such an existing right of an existing tenant
in order to induce such tenant to renew its Lease, such vacant space shall
become "Available Space" only if and when such rights are waived by that tenant
or expire. In addition, space which is vacant on the Commencement Date but is
then under Lease prior to occupancy shall not be Available Space until such
leasehold terminates and the space is again vacant.

            (B) Notice of Availability. Before Lessor commences negotiations
with a third party regarding leasing of Available Space, Lessor shall notify
Lessee of the availability of such Available Space ("Lessor's Notice"), which
notice shall include a statement of the rent and other material terms upon which
such Available Space could be leased ("Lessor's Terms").

            (C) Lessee's Response. Within three (3) business days after receipt
of Lessor's Notice, Lessee shall notify Lessor either (i) that Lessee does not
desire to lease the Available Space, or (ii) that Lessee does desire to Lease
the Available Space, which notice must either accept Lessor's Terms, or state
the rent and terms upon which Lessee would lease the Available Space ("Lessee's
Terms"). If Lessee does not timely give either of such notices, Lessee shall be
deemed to have elected option (i).

            (D) Discussion Period. If Lessee timely notifies Lessor of its
interest in leasing the Available Space pursuant to Section (C), but does not
accept Lessor's Terms, Lessor will consult with Lessee regarding the terms
Lessor would consider for the leasing the Available Space, and Lessor shall
continue to engage in such discussions with Lessee for a period of at least
thirty (30) days, unless Lessee within such period notifies Lessor that it is no
longer interested in the Available Space. Lessor will be under no obligation to
continue such discussions beyond such period, or to lease the Available Space to
Lessee, except on terms acceptable to Lessor in its absolute discretion.

            (E) Prohibition on Releasing. If Lessee timely notified Lessor of
its interest in leasing the Available Space pursuant to Section (C) (but stated
Lessee's Terms), did not notify Lessor that Lessee was no longer interested in
the Available Space, and did not reach agreement with Lessor on the rent and
terms for leasing the Available Space under Section (D), then Lessor shall not
lease the Available Space to a third party on terms less favorable to Lessor
than Lessor's Terms or Lessee's Terms (whichever were less favorable to Lessor),
without first giving another Lessor's Notice to Lessee and again proceeding
through the steps stated in Sections (C) and (D).

            (F) Appraisal of Lessee's Needs. Upon request of Lessor, Lessee
shall inform Lessor from time to time of its projected needs for expansion space
in the Building, and the provisions of this Section 53 shall not apply to the
extent Lessee does not project a need for the Available Space at issue.

        54. Entire Agreement. This Lease and the Exhibits hereto constitute the
entire agreement between the parties hereto and no modification of this Lease
shall be binding unless evidenced by an agreement in writing signed by the
Lessor and Lessee. This Lease





                                       25
<PAGE>   32

shall become effective and binding only upon execution hereof by Lessor and
delivery of a signed copy to Lessee.





























                                       26

<PAGE>   33

        IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the date first herein written.



LESSEE:                                      LESSOR:  THE PRUDENTIAL
                                             INSURANCE COMPANY OF AMERICA


WEBTRENDS CORPORATION                        By: VOIT MANAGEMENT COMPANY, L.P.


By:  /s/                                     Its: Managing Agent
   -------------------------------
Its: CFO
    ------------------------------

By:  /s/                                     By:
   -------------------------------              -------------------------------
Its: CEO                                     Its:
    ------------------------------               ------------------------------























                                       27

<PAGE>   34





                                   EXHIBIT A-1

                              [FLOOR PLAN DIAGRAM]



<PAGE>   35





                                   EXHIBIT A-2

                              [FLOOR PLAN DIAGRAM]



<PAGE>   36





                                   EXHIBIT A-3

                              [FLOOR PLAN DIAGRAM]



<PAGE>   37





                                    EXHIBIT B



Lots 3, 4, 5, and 6, Block 180, CITY OF PORTLAND, in the City of Portland,
County of Multnomah and State of Oregon



<PAGE>   38



                                    EXHIBIT C

                                   WORK LETTER


RE:  PACIFIC FIRST CENTER / SUITES 650, 700, and 1200

Lessor and Lessee do mutually agree as follows:

1.      Lessor agrees to provide, by Lessor's designated Space Planner and
        Engineer, the following Building Standard construction and mechanical
        drawings and specifications drawn for the premises on Lessee's behalf,
        and on the following terms and conditions:

        (a)    Complete, finished and detailed construction drawings and
               specifications for Lessee's partition layout, reflected ceiling,
               telephone and electrical outlets, finish schedule, and for the
               work to be done by Lessor under Paragraph 2 hereof.

        (b)    Complete Building Standard mechanical plans and specifications
               where necessary for installation of air conditioning systems, and
               ductwork, heating and electrical facilities for the work to be
               done by Lessor under Paragraph 2 hereof.

        (c)    Any redrawing occasioned by Lessee after Lessee's prior approval
               and any changes requested thereafter in plans and specifications
               shall be at Lessee's sole cost and expense.

        (d)    All such plans are expressly subject to Lessor's prior written
               approval.

        (e)    Lessee has approved the above plans and specifications for Suites
               650 and 1200. Lessee covenants and agrees to furnish to Lessor
               all information necessary for the preparation of said plans and
               specifications described in Paragraph 1 (a) above for Suite 700,
               and otherwise approve same on or before March 15, 1999, or if
               later, within three business days after completion by space
               planner. Plans, working drawings and specifications shall be
               deemed approved if Lessee fails to disapprove them within the
               foregoing period. Lessor will cause said plans to be filed with
               the appropriate governmental agencies in such form (building
               notice, alteration or other form) as may be required.

        (f)    If Lessee shall desire any additional or nonstandard work, over
               and above that specified below in Paragraph 2, to be performed in
               the Premises by Lessor, Lessee shall cause similar plans and
               specifications for such work to be drawn at Lessee's sole cost
               and expense (either by arranging therefor with Lessor's Space
               Planner and/or Engineer, or by consultants of Lessor's own
               selection). All such plans and specifications for additional or
               non-standard work shall be





                                       1
<PAGE>   39

               expressly subject to review by Lessor, which reserves the right
               to employ the services of Lessor's Space Planner or Engineer for
               such purpose, at Lessor's expense to insure that such additional
               or non-standard work conforms to the standards of the building.

2.      Lessor agrees to supply, install and otherwise undertake to do the
        following Building Standard work in the Premises on behalf of Lessee.

        (a)    DEMOLITION: Demolition and removal of and/or to storage, of all
               existing improvements not required as part of this agreement.

        (b)    PARTITIONS: Building Standard gypsum wallboard with smooth veneer
               plaster finish, located as shown on plans described in Paragraph
               1 above. All corridor walls, demising walls and conference room
               walls to be provided with sound attenuation to Building Standard.

        (c)    DOOR FRAMES AND HARDWARE: Building Standard, full height, solid
               core wood doors with building standard finish, painted metal
               frames and hardware located as shown on said plans described in
               Paragraph 1 above. Hardware shall include door stops, latchsets
               and hinges for openings in all interior doors and locksets (keyed
               to building master), hinges for openings, door stops and closets
               for openings on all public corridor and entry doors, as required
               by Building Code. All such hardware to be Building Standard.

        (d)    PAINTING: All wall surfaces, except as otherwise specified in
               said plans described in Paragraph 1, above, shall be covered with
               one (1) primer coat and one (1) latex enamel finish coat, in
               colors as selected by Lessee from Building Standard Paint
               selection.

        (e)    CEILING: Building Standard 24" x 48" acoustical lay-in ceiling.

        (f)    LIGHTING: Building Standard 24" x 48" or 24" x 24" fluorescent
               lighting fixtures with deep cell parabolic lens, located in an
               established grid pattern, at a ratio of one (1) fixture per 80
               square feet of tenant improvement area.

        (g)    ELECTRICAL SERVICE: Building Standard electrical facilities
               sufficient for an overall connected load of no more than 2.5
               watts per square foot.

        (h)    ELECTRICAL OUTLETS: Building Standard (base mounted) duplex
               electrical outlets located as shown on said plans described in
               Paragraph 1 above, at a ratio of one (1) outlet per 200 square
               feet of tenant improvement area.



                                       2
<PAGE>   40

        (i)    TELEPHONE OUTLETS: Building Standard unwired telephone outlets
               located as shown on said plans described in Paragraph 1 above, at
               a ratio of one (1) outlet per 200 square feet of tenant
               improvement area.

        (j)    CARPET AND BASE: Building Standard carpet in the color as
               selected by Lessee from Lessor's selection, limited to one (1)
               color in each contiguous area, Building Standard toeless base in
               the color selected by Lessee from Lessor's building standard
               selection (but which shall be limited to one (1) color in each
               contiguous area), 4" at perimeter of all areas.

        (k)    WINDOW COVERING: Building Standard levelors provided by Lessor on
               all exterior windows.

        (l)    HEATING, VENTILATING AND AIR CONDITIONING: Building Standard
               overhead suspended air system, as determined by mechanical design
               for typical air system, as determined by mechanical design for
               typical office use, designed for an overall load not to exceed
               2.5 watts per square foot.

        (m)    LIFE SAFETY SYSTEM: Modifications to Building Standard fire
               sprinkler and life safety systems, to meet requirement of office
               configuration.

        (n)    SIGNAGE: Building Standard - Lessee signage to include door sign,
               elevator lobby directory and main building directories.

        (o)    ADDITIONAL IMPROVEMENTS: Lessor agrees to provide additional
               improvements as specified in the final plans and specifications,
               provided that in no event shall Lessor's total costs exceed the
               TI Allowance, inclusive of all items identified in the above
               Paragraph 1 (a) through 2 (p).

               Lessor further agrees to notify Lessee prior to the commencement
               of said work should Lessor anticipate costs exceeding the total
               allowance as set forth in Paragraph 2 (p) above, based on plans
               and specifications submitted. Lessee shall then have the option
               to modify said plans and specifications to conform to the
               allowance as set forth above, or authorizing Lessor to undertake
               completion of the work as set forth on Lessee's behalf and
               account, within one week from the date of submission by Lessor.

               Lessor need not commence or continue any work on Suite 700 during
               any period that Lessee is in default of the Lease.

3.      Lessor will provide a tenant improvement allowance of $461,979 for
        Suites 650 and 1200 and $285,379 for Suite 700 (the "TI Allowance"). The
        TI Allowance shall be applied first to the hard and soft costs incurred
        by Lessor under Sections 1 and 2, including space planning, construction
        drawings, permitting, and construction costs, then to Lessee's moving
        costs, and the balance may be applied towards wiring, a





                                       3
<PAGE>   41

        communication consultant and the expense of partitions within the
        Premises. Any unused portion of the TI Allowance for Suites 650 and 1200
        will be utilized towards such costs incurred in connection with Suite
        700. Lessee shall have no claim to any unused portion of the TI
        Allowance after application toward Suite 700 costs.

4.      If Lessor further agrees to perform, at Lessee's request, and upon
        submission by Lessee of necessary plans and specifications, any
        additional or non-standard work over and above that specified in
        Paragraph 2 hereof, such work shall be performed by Lessor at Lessee's
        sole expense, after application of the TI Allowance. Prior to commencing
        any such work requested by Lessee, Lessor will submit to Lessee, written
        estimates of the cost of any such work. If Lessee shall fail to approve
        any such estimates of the cost of any such work within one week from the
        date of submission thereof by Lessor, then same shall be deemed
        disapproved in all respects by Lessee and Lessor need not proceed
        thereon. Lessee agrees to pay Lessor the cost of all such work plus an
        administrative fee of 3% of hard and soft costs in excess of the TI
        Allowance for Lessor's overhead and supervision, within thirty (30) days
        after the date of billing. If Lessee does not approve the cost estimate
        but fails to approve modifications which will reduce the cost estimate
        within one week after submission to Lessee of such suggested
        modifications, Lessor may either terminate this Agreement and the Lease
        or proceed with construction on the basis of the last cost estimate
        (with modifications) submitted to Lessee. All past due monies shall bear
        interest at the rate of twelve percent (12%) per annum from the date due
        until paid. Lessee agrees that same shall be collectable on demand, as
        additional rent pursuant to the Lease, and, in the event of default of
        payment thereof, that Lessor shall, in addition to all other remedies,
        have the same rights as in the event if default of payment of rent under
        said Lease.

5.      It is agreed, notwithstanding the date provided in the Lease for
        commencement thereof, that Lessee's obligations for the payment of
        rental thereunder shall not commence until Lessor has substantially
        completed all work to be performed by Lessor as herein above set forth
        in Paragraph 2, provided however, that if Lessor shall be delayed in
        substantially completing said work as a result of:

        (a)    Lessee's failure to furnish plans and specifications in
               accordance with Paragraph 1 (a) above, or;

        (b)    Lessee's request for materials, finishes or installations other
               than Lessor's Building Standard, or;

        (c)    Lessee's changes in said plans, or

        (d)    Lessee's failure to approve cost estimates pursuant to Section 3;
               or

        (e)    The performance by a person, firm or corporation employed by
               Lessee and the completion of said work by said person, firm or
               corporation;





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<PAGE>   42

               Then commencement of the term of said Lease and the payment of
               rent thereunder shall be accelerated by the number of days of
               resulting delay.

6.      Lessor will permit Lessee and its agents to enter the Premises, at least
        30 days prior to the applicable dates for the commencement of Lessee's
        occupancy under the Lease, in order that Lessee may perform, through its
        own contractors, such other work and decorations in the Premises prior
        to the commencement of the Lease term, however, this is conditioned upon
        Lessee's workmen and mechanics working in harmony and not interfering
        with the labor employed by Lessor, Lessor's mechanics or contractors.
        Such license is further conditioned upon:

        (a)    approval by Lessor of Lessee's contractors and subcontractors;

        (b)    posting of a performance and payment bond in the amount equal to
               Lessee's contractor's contract sum, if requested by Lessor;

        (c)    such work being done in conformity with a valid building permit
               when required, a copy of which shall be furnished to Lessor
               before such work is commenced;

        (d)    all work by Lessee or Lessee's contractor being done with union
               labor in accordance with union labor agreements applicable to the
               trades being employed;

        (e)    all work by Lessee or Lessee's contractor being scheduled through
               Lessor;

        (f)    scheduling of necessary utility, hoisting and elevator service
               with Lessor or Lessor's contractor, and Lessee's payment of such
               reasonable charges for such services as may be charged by Lessor
               or Lessor's contractor;

        (g)    Lessee's reimbursement to Lessor upon demand for any extra
               expense incurred by Lessor by reason of faulty work, inadequate
               cleanup, or delays caused by Lessee's work; and

        (h)    Workmen's Compensation and Public Liability insurance and
               Property Damage insurance, all in amounts and with companies and
               on forms satisfactory to Lessor, being provided and at all times
               maintained by Lessee's contractors engaged in the performance of
               the work, and certificate of such insurance being furnished to
               Lessor prior to proceeding with the work.

               If at any time such entry shall cause disharmony or interference
               therewith, this license may be withdrawn by Lessor upon
               forty-eight (48) hours written notice to Lessee. Such entry will
               be deemed to be under all of the terms, covenants, provisions and
               conditions of said Lease, except as to the covenant to pay rent.
               Lessor shall not be liable in any way for any injury, loss or





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<PAGE>   43

               damage which may occur to any of Lessee's decorations or
               installations so made prior to commencement of the term of the
               Lease, the same being solely at Lessee's risk.

7.      Within seven days after Commencement Date, Lessee shall walk through the
        Demised Premises with Lessor and during such walk through shall complete
        a punch list of items requiring additional work by Lessor. Other than
        the items specified in the punch list, by taking possession of Demised
        Premises, Lessee shall be deemed to have accepted the Demised Premises
        in completed condition and repair, as required under this Lease. The
        punch list shall not include any damage to the Demised Premises or the
        Building caused by Lessee's construction work or move in, which damage
        Lessee properly shall repair at its sole expense. If Lessee fails to
        complete such walk through and punch list within the seven-day period
        specified above, all of Lessor's work shall be deemed completed in all
        respects with no items requiring additional work or repair. Lessor shall
        complete all reasonable punch list items within thirty days after the
        walk-through inspection, or as soon as practicable thereafter. Upon
        notification of completion of the punch list items,





























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