<PAGE>

                                                                   EXHIBIT 10.10

 
                    * * * * * * * * * * * * * * * * * * * *

                                     Lease


                             RIATA CORPORATE PARK



                    * * * * * * * * * * * * * * * * * * * *

                                    Between



                            PERVASIVE SOFTWARE INC.
                                   (Tenant)



                                      and



                           CARRAMERICA REALTY, L.P.
                           T/A RIATA CORPORATE PARK
                                  (Landlord)
<PAGE>
 
                               TABLE OF CONTENTS
<TABLE> 
<CAPTION> 
                                                                                                           Page
                                                                                                           ----
<S>                                                                                                        <C> 
1.  LEASE AGREEMENT........................................................................................  3
    A.       Lease of Premises.............................................................................  3
    B.       Determination of Rentable Square Feet.........................................................  3
    C.       Definitions...................................................................................  3
             (1)      Usable Area..........................................................................  3
             (2)      General Common Areas.................................................................  3
             (3)      Floor Common Areas...................................................................  3
    
2.  RENT...................................................................................................  3
    A.       Types of Rent.................................................................................  3
             (1)      Base Rent............................................................................  4
             (2)      Operating Cost Share Rent............................................................  4
             (3)      Additional Rent......................................................................  4
             (4)      Rent.................................................................................  4
    B.       Payment of Operating Cost Share Rent..........................................................  4
             (1)      Payment of Estimated Operating Cost Share Rent.......................................  4
             (2)      Correction of Operating Cost Share Rent..............................................  4
    C.       Definitions...................................................................................  5
             (1)      Included Operating Costs.............................................................  5
             (2)      Excluded Operating Costs.............................................................  6
             (3)      Taxes................................................................................  7
             (4)      Lease Year...........................................................................  7
             (5)      Fiscal Year..........................................................................  7
             (6)      Tenant's Proportionate Share.........................................................  7
             (7)      Controllable Operating Costs.........................................................  8
             (8)      Controllable Operating Cost Share Rent...............................................  8
             (9)      Non-Controllable Operating Cost Share Rent...........................................  8
    D.       Computation of Base Rent and Rent Adjustments.................................................  8
             (1)      Prorations...........................................................................  8
             (2)      Default Interest.....................................................................  8
             (3)      Rent Adjustments.....................................................................  8
             (4)      Miscellaneous........................................................................  8
    
3.  PREPARATION AND CONDITION OF PREMISES; POSSESSION AND SURRENDER OF PREMISES............................  9
    A.       Condition of Premises.........................................................................  9
    B.       Tenant's Possession...........................................................................  9
    C.       Maintenance...................................................................................  9
    
4.  PROJECT SERVICES.......................................................................................  9
    A.       Heating and Air Conditioning..................................................................  9
    B.       Elevators.....................................................................................  9
    C.       Electricity...................................................................................  9
    D.       Water......................................................................................... 10
    E.       Janitorial Service............................................................................ 10
    F.       Parking....................................................................................... 10
    G.       Building Security and Safety.................................................................. 10
    H.       Interruption of Services...................................................................... 10
    
5.  ALTERATIONS AND REPAIRS................................................................................ 11
    A.       Landlord's Consent and Conditions............................................................. 11
    B.       Damage to Systems............................................................................. 12
</TABLE> 

                                       i
<PAGE>
 
<TABLE> 
<S>                                                                                                         <C> 
    C.       No Liens...................................................................................... 12
    D.       Ownership of Improvements..................................................................... 12
    E.       Removal at Termination........................................................................ 12
    
6.  USE OF PREMISES........................................................................................ 12
    
7.  GOVERNMENTAL REQUIREMENTS AND BUILDING RULES........................................................... 13
    
8.  WAIVER OF CLAIMS; INDEMNIFICATION; INSURANCE........................................................... 13
    A.       Waiver of Claims.............................................................................. 13
    B.       Indemnification............................................................................... 13
    C.       Tenant's Insurance............................................................................ 13
    D.       Insurance Certificates........................................................................ 14
    E.       Landlord's Insurance.......................................................................... 14
    
9.  FIRE AND OTHER CASUALTY................................................................................ 15
    A.       Termination................................................................................... 15
    B.       Restoration................................................................................... 15
    
10. EMINENT DOMAIN......................................................................................... 15
    
11. RIGHTS RESERVED TO LANDLORD............................................................................ 15
    A.       Name.......................................................................................... 15
    B.       Signs......................................................................................... 15
    C.       Window Treatments............................................................................. 15
    D.       Keys.......................................................................................... 16
    E.       Access........................................................................................ 16
    F.       Preparation for Reoccupancy................................................................... 16
    G.       Heavy Articles................................................................................ 16
    H.       Show Premises................................................................................. 16
    I.       Relocation of Tenant.......................................................................... 16
    J.       Use of Lockbox................................................................................ 16
    K.       Repairs and Alterations....................................................................... 16
    L.       Landlord's Agents............................................................................. 17
    M.       Building Services............................................................................. 17
    N.       Other Actions................................................................................. 17
    
12. TENANT'S DEFAULT....................................................................................... 17
    A.       Rent Default.................................................................................. 17
    B.       Assignment/Sublease or Hazardous Substances Default........................................... 17
    C.       Other Performance Default..................................................................... 17
    D.       Credit Default................................................................................ 17
    
13. LANDLORD REMEDIES...................................................................................... 17
    A.       Termination of Lease or Possession............................................................ 17
    B.       Lease Termination Damages..................................................................... 18
    C.       Possession Termination Damages................................................................ 18
    D.       Remedies Cumulative........................................................................... 18
             (1)      Landlord............................................................................. 18
             (2)      Tenant............................................................................... 18
    E.       Waiver of Trial by Jury....................................................................... 18
    F.       Litigation Costs.............................................................................. 18
    
14. SURRENDER.............................................................................................. 19
</TABLE> 

                                      ii
<PAGE>
 
<TABLE> 
<S>                                                                                                         <C> 
15. HOLDOVER............................................................................................... 19
    
16. SUBORDINATION TO GROUND LEASES AND MORTGAGES........................................................... 19
    A.       Subordination................................................................................. 19
    B.       Termination of Ground Lease or Foreclosure of Mortgage........................................ 19
    C.       Security Deposit.............................................................................. 19
    D.       Notice and Right to Cure...................................................................... 19
    E.       Definitions................................................................................... 19
    
17. ASSIGNMENT AND SUBLEASE................................................................................ 20
    A.       In General.................................................................................... 20
    B.       Landlord's Consent............................................................................ 20
    C.       Procedure..................................................................................... 20
    D.       Related Entities.............................................................................. 20
    E.       [Intentionally Deleted]....................................................................... 21
    
18. CONVEYANCE BY LANDLORD................................................................................. 21
    
19. ESTOPPEL CERTIFICATE................................................................................... 21
    
20. SECURITY DEPOSIT....................................................................................... 21
    
21. FORCE MAJEURE.......................................................................................... 22
    
22. NOTICES................................................................................................ 22
    A.       Landlord...................................................................................... 22
    B.       Tenant........................................................................................ 22
    
23. QUIET POSSESSION....................................................................................... 23
    
24. REAL ESTATE BROKER..................................................................................... 23
    
25. MISCELLANEOUS.......................................................................................... 23
    A.       Successors and Assigns........................................................................ 23
    B.       Date Payments Are Due......................................................................... 23
    C.       Meaning of "Landlord", "Re-Entry, "including" and "Affiliate"................................. 23
    D.       Time of the Essence........................................................................... 23
    E.       No Option..................................................................................... 23
    F.       Severability.................................................................................. 23
    G.       Governing Law................................................................................. 23
    H.       Lease Modification............................................................................ 23
    I.       No Oral Modification.......................................................................... 23
    J.       Landlord's Default; Landlord's Right to Cure Tenant's Default................................. 23
    K.       Captions...................................................................................... 24
    L.       Authority..................................................................................... 24
    M.       Landlord's Enforcement of Remedies............................................................ 24
    N.       Entire Agreement.............................................................................. 24
    O.       Landlord's Title.............................................................................. 24
    P.       Light and Air Rights.......................................................................... 24
    Q.       Singular and Plural........................................................................... 24
    R.       No Recording by Tenant........................................................................ 24
    S.       Exclusivity................................................................................... 24
    T.       No Construction Against Drafting Party........................................................ 24
    U.       Survival...................................................................................... 24
    V.       Rent Not Based on Income...................................................................... 24
</TABLE> 

                                      iii
<PAGE>
 
<TABLE> 
<S>                                                                                                         <C> 
    W.       Building Manager and Service Providers........................................................ 24
    X.       Late Charge and Interest on Late Payments..................................................... 25
    Y.       Tenant's Financial Statements................................................................. 25
    Z.       Usury Savings................................................................................. 25
    AA.      Waiver of Warranties.......................................................................... 25
    
26. UNRELATED BUSINESS INCOME.............................................................................. 25
    
27. HAZARDOUS SUBSTANCES................................................................................... 25
    
28. EXCULPATION............................................................................................ 26
    
29. LANDLORD'S LIEN........................................................................................ 26
    
30. SATELLITE DISH......................................................................................... 26
</TABLE> 

APPENDIX A - LEGAL DESCRIPTION OF LAND 
APPENDIX A-1 - INITIAL PROJECT SITE PLAN
APPENDIX B - RULES AND REGULATIONS 
APPENDIX C - TENANT IMPROVEMENT AGREEMENT
APPENDIX C-1 - SHELL CONDITION 
APPENDIX C-2 - BASE BUILDING PROFILE
APPENDIX D - MORTGAGES CURRENTLY AFFECTING THE PROJECT
APPENDIX E - COMMENCEMENT DATE CONFIRMATION
APPENDIX F - SPECIAL PROVISIONS
APPENDIX G - FORM OF LETTER OF CREDIT


                                      iv
<PAGE>
 
                                INDEX OF TERMS
                                --------------

                                                                        Page No.
                                                                        --------
Additional Rent................................................................4
Base Building Plans..........................................................C-1
Base Building Work...........................................................C-1
Base Rent...................................................................1, 4
Building.......................................................................1
Business Hours.................................................................9
Cap Amount.....................................................................8
Change Orders................................................................C-2
Commencement Date..............................................................1
Completion Date..............................................................C-2
Controllable Operating Cost Share Rent.........................................8
Controllable Operating Costs...................................................8
Dish..........................................................................26
Early Termination Date.......................................................F-3
Equitable Adjustment...........................................................5
First Expansion Space........................................................F-2
First Renewal Term...........................................................F-1
First Take Space.............................................................F-1
Fiscal Year....................................................................7
Floor Common Areas.............................................................3
Force Majeure.................................................................22
General Common Areas...........................................................3
Governmental Requirements.....................................................11
Hazardous Substances..........................................................25
Included Capital Items.........................................................5
Initial Improvement Plans....................................................C-1
Initial Improvements.........................................................C-1
Initial Space").  The........................................................F-1
Issuer.......................................................................G-3
Landlord.......................................................................1
Landlord's Architect...........................................................3
Landlord's Contribution......................................................C-2
Landlord's Real Estate Broker..................................................1
Landlord's RFR Notice........................................................F-3
Lease..........................................................................1
Lease Year.....................................................................7
Letter of Credit.........................................................21, G-3
Necessary Hazardous Substances................................................25
New Premises..................................................................16
Non-Controllable Operating Cost Share Rent.....................................8
Non-Controllable Operating Costs...............................................8
Old Premises..................................................................16
Operating Cost Report..........................................................4
Operating Cost Share Rent......................................................4
Operating Costs................................................................5
Premises.......................................................................1
Project........................................................................1
Renewal Term.................................................................F-1
Rent...........................................................................4
Rent Tax.......................................................................7
Rentable Square Feet...........................................................1

                                       v
<PAGE>
 
RFR Space....................................................................F-3
Schedule.......................................................................1
Second Expansion Space.......................................................F-2
Second Renewal Term..........................................................F-1
Second Take Space............................................................F-1
Security Deposit...........................................................1, 21
Stated Amount................................................................G-1
Stated Expiration Date.......................................................G-1
Taxe...........................................................................7
Tenant.........................................................................1
Tenant Delay.................................................................C-2
Tenant Improvements............................................................1
Tenant's Proportionate Share................................................1, 7
Tenant's Real Estate Broker....................................................1
Term...........................................................................1
Termination Date...............................................................1
Termination Fee..............................................................F-3
Termination Notice...........................................................F-3
Termination Option...........................................................F-3
Third Take Space.............................................................F-1
UCP..........................................................................G-2
Usable Area....................................................................3
Work..........................................................................11

                                      vi
<PAGE>
 
                                     LEASE


        THIS LEASE (the "Lease") is made as of April 2, 1998, between
CarrAmerica Realty, L.P., a Delaware limited partnership, t/a Riata Corporate
Park (the "Landlord"), and the Tenant as named in the Schedule below. The term
"Premises" means the "Building" (herein so called) known as "Riata Corporate
Park Building 8," with a local address of 12365 Riata Trace Parkway, Building
II, Austin, Texas. The Building is part of an office development (the "Project")
known as "Riata Corporate Park," the extent and configuration of which shall be
determined by Landlord from time to time. The Project is situated on the land
legally described in Appendix A. The initial configuration of the Project,
including the Premises, is outlined on the site plan attached hereto as Appendix
A-1. Landlord shall obtain Tenant's prior written approval (not to be
unreasonably withheld or delayed) to any reconfiguration of the Project which
involves relocation or reconfiguration of the Building or which will have a
materially negative effect on parking for or access to the Premises.

         The following schedule (the "Schedule") is an integral part of this
Lease. Terms defined in this Schedule shall have the same meaning throughout the
Lease.

                                   SCHEDULE

1.       Tenant:  Pervasive Software Inc., a Delaware corporation

2.       Premises:  All of the 1st, 2nd and 3rd floors of Riata Corporate Park
         Building 8

3.       Rentable Square Feet:  Approximately 91,332

4.       Tenant's Proportionate Share:  100% (Based upon a total of
         approximately 91,332 rentable square feet in the Building, subject to
         phasing of the Premises in the Building under paragraph 2 of Appendix F
         and subject to adjustment with respect to other Buildings in the
         Project into which Tenant expands pursuant to Appendix F.
         Notwithstanding the foregoing, at all times Tenant shall be responsible
         for 100% of the costs associated with Tenant's supplemental HVAC
         systems.)
         
5.       Security Deposit:  $175,000.00

6.       Tenant's Real Estate Broker for this Lease:  Michael A. Kennedy and 
         Oxford Commercial, Inc. (Diana Barbour)

7.       Landlord's Real Estate Broker for this Lease:  Oxford Commercial, Inc.
         (Mark Greiner and Spencer Hayes)

8.       Tenant Improvements:  See the Tenant Improvement Agreement attached 
         hereto as Appendix C

9.       Commencement Date:  October 1, 1998, or the Completion Date (as defined
         in Appendix C and as otherwise provided therein) if it is later.
         Landlord and Tenant shall execute a Commencement Date Confirmation
         substantially in the form of Appendix E promptly following the
         Commencement Date.

10.      Termination Date/Term:  Ten (10) years after the Commencement Date, or
         if the Commencement Date is not the first day of a month, then ten (10)
         years after the first day of the following month.

11.      Base Rent:
<TABLE> 
<CAPTION> 
                  Period                     Annual Base Rent                     Monthly Base Rent Payment*
                  ------                     ----------------                     --------------------------
                  <S>                       <C>                                            <C> 
                  Months 1-36               $14.10 per rentable sq.ft.                     $107,315.10
                  Months 37-72              $16.05 per rentable sq.ft.                     $122,156.55
                  Months 73-120             $18.03 per rentable sq.ft.                     $137,226.33
</TABLE> 
<PAGE>
 
         *  The monthly Base Rent payment amount is based on total rentable
         square footage within the Premises as set forth in this Schedule.
         However, pursuant to the provisions of Section 2B of the Lease and
         Appendix F to the Lease, rentable square footage within the Premises
         may be greater or less than this figure from time to time under the
         Lease, in which event the monthly Base Rent payment may vary. The
         "Annual Base Rent" per square foot set forth above will not vary.

12.      Initial estimated Operating Cost Share Rent:  $7.00 per rentable square
         foot per year (subject to Sections 4.C and 4.E below), based on
         operation of the Building during Business Hours (defined below).
         Subject to the fluctuation in the total rentable square footage of the
         Premises described above, this rent figure equals $639,324.00 per year
         and $53,277.00 per month.

                                       2
<PAGE>
 
         1.  LEASE AGREEMENT.

         A.  Lease of Premises.  On the terms stated in this Lease, Landlord
leases the Premises to Tenant, and Tenant leases the Premises from Landlord, for
the Term beginning on the Commencement Date and ending on the Termination Date
unless extended or sooner terminated pursuant to this Lease.

         B.  Determination of Rentable Square Feet.  Landlord and Tenant
acknowledge and agree that the Rentable Square Footage as stated in the Schedule
is an approximation and cannot be conclusively determined until after completion
of construction of the Premises and the Building. Within sixty (60) days of the
Completion Date, the Rentable Square Footage of the Premises shall be determined
and certified in writing by RTG Partners, Inc. ("Landlord's Architect") using
the modified "BOMA" standard, as described below. For purposes of this
determination, Rentable Square Footage for the Premises shall be calculated by
taking the sum of the following:

             (1)  (i) Square footage of all Usable Area (as defined below)
         within the first (1st) floor of the Building, including Floor Common
         Areas (as defined below), plus (ii) an "add-on factor" to account for
         Tenant's share of General Common Areas (as defined below). The current
         estimate for the add-on factor for the 1st floor of the Building, so
         long as only Tenant occupies such floor is 4.4% times all Usable Area
         within the 1st floor.
                  
             (2)  (i) Square footage of all Usable Area within the second (2nd)
         floor of the Building, including Floor Common Areas, plus (ii) an "add-
         on factor" to account for Tenant's share of General Common Areas. The
         current estimate for the add-on-factor for the 2nd floor of the
         Building, so long as such floor is occupied only by Tenant, is 4.4%
         times all Usable Area within the 2nd floor.

             (3)  (i) Square footage of all Usable Area within the third (3rd)
         floor of the Building, including Floor Common Areas, plus (ii) an "add-
         on factor" to account for Tenant's share of General Common Areas. The
         current estimate for the add-on factor for the 3rd floor of the
         Building, so long as such floor is occupied only by Tenant, is 4.4%
         times all Usable Area within the 3rd floor.

         C.  Definitions.

             (1)  Usable Area. "Usable Area" is computed (i) with respect to
         multi-tenant floors, by measuring to the finished surface of the office
         side of the corridor and other permanent walls, to the center of
         partitions that separate the office from adjoining Usable Areas, and to
         the inside finished surface of the dominant portion of the permanent
         outer building walls, and (ii) with respect to single tenant floors, by
         measuring to the inside finished surface of the dominant portion of the
         permanent outer building walls, excluding major vertical penetrations
         of the floor. Deductions are not made for columns and projections
         necessary to the building.

             (2)  General Common Areas.  "General Common Areas" are defined as
         all areas intended for use by all building tenants (including building
         lobby, mailroom, elevator equipment rooms, shower facilities, security
         office and fire sprinkler rooms).

             (3)  Floor Common Areas.  "Floor Common Areas" are defined as all
         areas for use by tenants of a single floor only, and include restrooms,
         janitor's closets, mechanical, electrical, telephone rooms and building
         corridors, calculated by subtracting all Usable Area on a multi-tenant
         floor from the Usable Area for such floor as determined for occupancy
         by a single tenant.

         2.  RENT.

         A.  Types of Rent.  Tenant shall pay the following Rent in the form 
of a check to Landlord at the following address:

                                       3
<PAGE>
 
         CarrAmerica Realty, L.P.
         t/a Riata Corporate Park
         P.O. Box ________
         Atlanta, GA 30384-0566

or by wire transfer as follows:

         NationsBank, N.A. (South)
         ABA Number 061-000-052
         Account Number 3261312955
         Account Name:  CarrAmerica Realty, L.P. t/a Riata Corporate Park

or in such other manner as Landlord may notify Tenant:

             (1)  Base Rent in monthly installments in advance, the first
         monthly installment payable on the Commencement Date (prorated if the
         Commencement Date is not the first day of a month) and thereafter on or
         before the first day of each month of the Term in the amount set forth
         on the Schedule.

             (2)  Operating Cost Share Rent in an amount equal to the sum of
         Controllable Operating Cost Share Rent and Non-Controllable Operating
         Cost Share Rent. Operating Cost Share Rent shall be paid monthly in
         advance in an estimated amount. The method for billing and payment of
         Operating Cost Share Rent, and definitions of certain of the
         capitalized terms used herein, are set forth in Sections 2B, 2C and 2D
         below.

             (3)  Additional Rent in the amount of all costs, expenses,
         liabilities, and amounts which Tenant is required to pay under this
         Lease, excluding Base Rent and Operating Cost Share Rent, but including
         any interest for late payment of any item of Rent.

             (4)  Rent as used in this Lease means Base Rent, Operating Cost
         Share Rent and Additional Rent. Tenant's agreement to pay Rent is an
         independent covenant, with no right of setoff, deduction or
         counterclaim of any kind except as expressly provided herein.

         B.  Payment of Operating Cost Share Rent.

             (1) Payment of Estimated Operating Cost Share Rent. Landlord
         shall estimate the Operating Costs of the Project (including Taxes, as
         defined below) by April 1 of each Fiscal Year, or as soon as reasonably
         possible thereafter but not later than May 31 of such Fiscal Year.
         Landlord may revise these estimates whenever it obtains more accurate
         information, such as the final real estate tax assessment or tax rate
         for the Project, but no more than once per Fiscal Year. If Landlord
         fails to deliver its original estimate by May 31 of the Fiscal Year,
         Tenant may notify Landlord thereof in writing and, if Landlord has
         still not provided such estimate within thirty (30) days of such
         notice, Tenant shall not be required to pay any increase in Estimated
         Operating Cost Share Rent for such Fiscal Year from the previous Fiscal
         Year, provided that the foregoing shall have no effect on the
         application of Section 2(B)(2) below for such Fiscal Year.

             Within ten (10) days after receiving the original or revised
         estimate (in writing) from Landlord, Tenant shall pay Landlord
         one-twelfth (1/12th) of Tenant's Proportionate Share of the estimated
         Operating Costs, multiplied by the number of months that have elapsed
         in the applicable Fiscal Year to the date of such payment including the
         current month, minus payments previously made by Tenant for the months
         elapsed. On the first day of each month thereafter, Tenant shall pay
         Landlord one-twelfth (1/12th) of Tenant's Proportionate Share of this
         estimate, until a new estimate becomes applicable.

             (2)  Correction of Operating Cost Share Rent. Landlord shall
         deliver to Tenant a written report for the previous Fiscal Year (the
         "Operating Cost Report") by April 1 of each year, or as soon as
         reasonably possible thereafter but not later than May 31 of each Fiscal
         Year, setting forth (a) the actual Operating Costs 

                                       4
<PAGE>
 
         incurred, (b) the amount of Operating Cost Share Rent due from Tenant,
         and (c) the amount of Operating Cost Share Rent paid by Tenant. Within
         twenty (20) days after such delivery, Tenant shall pay to Landlord the
         amount due minus the amount paid, if applicable. If the amount paid
         exceeds the amount due, Landlord shall apply the excess to Tenant's
         payments of Operating Cost Share Rent next coming due or, if the excess
         is greater than $5,000.00, Landlord shall promptly refund such amount
         to Tenant. If Landlord fails to deliver the Operating Cost Report by
         May 31 of the Fiscal Year following the Fiscal Year to which such
         Operating Cost Report applies, Tenant may notify Landlord thereof in
         writing and, if Landlord has still not provided such Operating Cost
         Report within thirty (30) days of such notice, Tenant shall not be
         liable for any increase in Tenant's Operating Cost Share Rent for the
         preceding Fiscal Year above Tenant's Estimated Operating Cost Share
         Rent paid for such preceding Fiscal Year, provided that the foregoing
         shall have no effect on Tenant's obligation for Operating Cost Share
         Rent for the then-current or any subsequent Fiscal Year.

             (3)  Tenant's Audit Rights. Landlord shall maintain books and
         records reflecting the Operating Costs in accordance with sound
         accounting and management practices. Tenant and its certified public
         accountant shall have the right to inspect Landlord's records at
         Landlord's office upon at least seventy-two (72) hours' prior notice
         during normal business hours during the ninety (90) days following the
         delivery of the Operating Cost Report. The results of any such
         inspection shall be kept strictly confidential by Tenant and its
         agents, and Tenant and its certified public accountant must agree, in
         their contract for such services, to such confidentiality restrictions
         and shall specifically agree that the results shall not be made
         available to any other tenant of the Project. Unless Tenant sends to
         Landlord any written exception to either such report within said ninety
         (90) day period, such report shall be deemed final and accepted by
         Tenant. Tenant shall pay the amount shown on the Report in the manner
         prescribed in this Lease, whether or not Tenant takes any such written
         exception, without any prejudice to such exception. If Tenant makes a
         timely exception, Landlord may select and cause another firm with at
         least five (5) years of experience in auditing the books and records of
         commercial office projects to issue, in consultation with Tenant's
         auditor, a final and conclusive resolution of Tenant's exception.
         Tenant shall pay the cost of such certification unless Landlord's
         original determination of annual Operating Costs overstated the amounts
         thereof by more than three percent (3%), in which event Landlord shall
         pay the cost of both such certification and Tenant's audit.

         C.  Definitions.

             (1) Included Operating Costs. "Operating Costs" means any expenses,
         costs and disbursements of any kind, paid or incurred by Landlord
         directly in connection with the management [including an annual
         management fee, which shall not exceed four and one-half percent (4
         1/2%) of Rent (net of the management fee) for such year], maintenance,
         operation, insurance, repair, replacement and other related activities
         in connection with any part of the Building or the Project and of the
         personal property, fixtures, machinery, equipment, systems and
         apparatus used in connection therewith, including the cost of providing
         those services required to be furnished by Landlord under this Lease.
         Operating Costs shall also include Taxes and the costs of any capital
         improvements which reduce Operating Costs or improve safety, and those
         made to keep the Project in compliance with governmental requirements
         applicable from time to time (collectively, "Included Capital Items");
         provided, that the costs of any Included Capital Item shall be
         amortized by Landlord, together with an amount equal to interest at
         eight percent (8%) per annum, over the estimated useful life of such
         item and such amortized costs are only included in Operating Costs for
         that portion of the useful life of the Included Capital Item which
         falls within the Term. With respect to Included Capital Items which
         reduce Operating Costs, the amortized costs thereof included in
         Operating Costs shall not exceed the total amount of actual savings.

             If the Building is not fully occupied during any portion of any
         Fiscal Year, Operating Costs shall be calculated to equal what would
         have been incurred by Landlord had the Building been fully occupied (an
         "Equitable Adjustment"). This Equitable Adjustment shall apply only to
         Operating Costs which are variable and therefore increase as occupancy
         of the Building increases. Landlord may incorporate the Equitable
         Adjustment in its estimates of Operating Costs.

                                       5
<PAGE>
 
             If Landlord does not furnish any particular service whose cost
         would have constituted an Operating Cost to a tenant other than Tenant
         which has undertaken to perform such service itself, Operating Costs
         shall be increased by the amount which Landlord is not incurring due to
         such tenant providing such service. If Tenant elects to perform any
         such service itself, at its cost, Operating Costs shall not include the
         cost of such service.

             (2)  Excluded Operating Costs.  Operating Costs shall not include:

                  (a)  Costs of decorating, redecorating, special cleaning, or
                       other services provided to specific tenants and not
                       provided on a regular basis to tenants of the Project;

                  (b)  Wages, salaries, fees and fringe benefits paid to
                       executive personnel, marketing personnel, or officers or
                       partners of Landlord above the title of a property
                       manager directly responsible for the Project;

                  (c)  Any charge for depreciation of the Building or equipment
                       and any interest or other financing charge except for
                       Included Capital Items, as described in Section 2C(1)
                       above;

                  (d)  Any charge for Landlord's income taxes, profit taxes,
                       franchise taxes, or similar taxes on Landlord's business
                       unless enacted in lieu of included taxes or an increase
                       thereof;

                  (e)  All costs relating to activities of the solicitation and
                       execution of leases of space in the Project;

                  (f)  All costs for which Tenant or any other tenant in the
                       Building is being charged other than pursuant to the
                       operating expense clause in such tenant's lease with
                       Landlord;

                  (g)  The cost of capital expenditures incurred in correcting
                       defects in the construction of the Building or in the
                       Building equipment, except that conditions (not
                       occasioned by construction defects) resulting from
                       ordinary wear and tear will not be deemed defects for the
                       purpose of this item;

                  (h)  The cost of any repair made by Landlord because of the
                       total or partial destruction of the Building or the
                       condemnation of a portion of the Building;

                  (i)  Any increase in insurance premiums to the extent that
                       such increase is caused or attributable to the use,
                       occupancy, or act of another tenant other than office or
                       related uses;

                  (j)  The cost of any items for which Landlord is reimbursed by
                       insurance or otherwise compensated by tenants of the
                       Building pursuant to lease clauses similar to this
                       paragraph;

                  (k)  The cost of any additions or capital improvements to the
                       Building subsequent to the date of original construction
                       other than amortization of Included Capital Items;

                  (l)  The cost of any repairs, alterations, additions, changes,
                       replacements, and other items which under generally
                       accepted accounting principles are properly classified as
                       capital expenditures, but only to the extent they upgrade
                       or improve the Building as opposed to replace existing
                       items which have worn out, and other than amortization of
                       Included Capital Items;

                                       6
<PAGE>
 
                  (m)  The cost of capital expenditures for any removal,
                       treatment or abatement of asbestos or any other Hazardous
                       Substance or gas in the Building;

                  (n)  Any operating expense representing an amount paid to a
                       related corporation, entity, or person which is not
                       competitive with the amount which would be paid in the
                       absence of such relationship;

                  (o)  The cost of alterations of space in the Project for lease
                       to other tenants; and

                  (p)  Ground rent or similar payments by Landlord to a ground
                       lessor of the Project.

             (3)  Taxes. "Taxes" means any and all taxes, assessments and
         charges of any kind, general or special, ordinary or extraordinary,
         levied against the Project, which Landlord shall pay or become
         obligated to pay in connection with the ownership, leasing, renting,
         management, use, occupancy, control or operation of the Project or of
         the personal property, fixtures, machinery, equipment, systems and
         apparatus used in connection therewith. Taxes shall include real estate
         taxes, personal property taxes, sewer rents, water rents, special or
         general assessments, ad valorem taxes, assessments by any property
         owners association or under any deed or other restrictive covenants and
         any tax levied directly on the rents hereunder or the interest of
         Landlord under this Lease (the "Rent Tax"). Taxes shall also include
         all reasonable third-party fees and other actual out-of-pocket costs
         and expenses paid by Landlord in reviewing and/or protesting any tax
         and in seeking a refund or reduction of any Taxes, whether or not the
         Landlord is ultimately successful.

             For any year, the amount to be included in Taxes (a) from taxes or
         assessments payable in installments, shall be the amount of the
         installments (with any interest charged by the taxing authority) due
         and payable during such year, and (b) from all other Taxes, shall at
         Landlord's election be the amount accrued, assessed, or otherwise
         imposed for such year or the amount due and payable in such year. Any
         refund or other adjustment to any Taxes by the taxing authority, shall
         apply during the year in which the adjustment is made.

             Taxes shall not include any net income (except Rent Tax), profit,
         excise, capital, stock, succession, transfer, franchise, gift, estate
         or inheritance tax, except to the extent that such tax shall be imposed
         in lieu of any portion of Taxes. Taxes shall also not include any late
         charges or penalties incurred due to Landlord's late payment of Taxes,
         unless incurred as a result of Tenant's late payment of Operating Cost
         Share Rent.

             If, in their respective commercially-reasonable business judgment,
         Landlord and Tenant believe any property tax assessment in which Taxes
         will be based is excessively high and desire to protest such assessment
         with the appropriate taxing authority, then Landlord shall use
         reasonable efforts to carry out such protest.

             (4)  Lease Year.  "Lease Year" means each consecutive twelve-month
         period beginning with the Commencement Date, except that if the
         Commencement Date is not the first day of a calendar month, then the
         first Lease Year shall be the period from the Commencement Date through
         the final day of the twelve months after the first day of the following
         month, and each subsequent Lease Year shall be the twelve months
         following the prior Lease Year.

             (5)  Fiscal Year.  "Fiscal Year" means the calendar year, except
         that the first Fiscal Year and the last Fiscal Year of the Term may be
         a partial calendar year.

             (6)  Tenant's Proportionate Share.  "Tenant's Proportionate Share"
         means a fraction, the numerator of which is the total Rentable Square
         Footage of the Premises, and the denominator of which is the total
         Rentable Square Footage of the Building and any other Project buildings
         into which Tenant has expanded.

                                       7
<PAGE>
 
             (7)  Controllable Operating Costs.  "Controllable Operating Costs"
         means all Operating Costs other than costs related to utilities, Taxes,
         insurance, weather, Tenant's operations in the Building after Business
         Hours and wear and tear on the Building due to such after-hours use
         (herein, collectively, "Non-Controllable Operating Costs").

             (8)  Controllable Operating Cost Share Rent. "Controllable
         Operating Cost Share Rent" applicable to the first Fiscal Year shall be
         an amount equal to Tenant's Proportionate Share of Controllable
         Operating Costs during the first Fiscal Year. Controllable Operating
         Cost Share Rent applicable to the second Fiscal Year shall be the
         lesser of (i) Tenant's Proportionate Share of Controllable Operating
         Costs during the second Fiscal Year, or (ii) the sum of Tenant's
         Proportionate Share of Controllable Operating Costs for the first
         Fiscal Year, plus six percent (6%) (such sum is the "Cap Amount"). The
         Controllable Operating Cost Share Rent applicable to each Fiscal Year
         thereafter shall be the lesser of (i) Tenant's Proportionate Share of
         Controllable Operating Costs during the applicable Fiscal Year, or (ii)
         the sum of the Cap Amount for the immediately preceding Fiscal Year,
         plus six percent (6%). Assume, for example, Controllable Operating Cost
         Share Rent for the first Fiscal Year of $100.00. In the second Fiscal
         Year, Controllable Operating Cost Share Rent would be the lesser of (i)
         Tenant's Proportionate Share of Controllable Operating Costs for the
         second Fiscal Year, or (ii) $106.00 ($100.00 plus 6%, which would be
         the Cap Amount). In the third Fiscal Year, Controllable Operating Cost
         Share Rent would be the lesser of (i) Tenant's Proportionate Share of
         Controllable Operating Costs for the third Fiscal Year, or (ii) $112.36
         ($106.00 plus 6%, which becomes the Cap Amount subject to a 6% increase
         for the following Fiscal Year).

             (9)  Non-Controllable Operating Cost Share Rent.  "Non-Controllable
         Operating Cost Share Rent" for each Fiscal Year of this Lease shall be
         an amount equal to Tenant's Proportionate Share of Non-Controllable
         Operating Costs.

         D.  Computation of Base Rent and Rent Adjustments.

             (1)  Prorations. If this Lease begins on a day other than the first
         day of a month, Base Rent and Operating Cost Share Rent shall be
         prorated for such partial month based on the actual number of days in
         such month. If this Lease begins on a day other than the first day, or
         ends on a day other than the last day, of the Fiscal Year, Operating
         Cost Share Rent shall be prorated for the applicable Fiscal Year.

             (2)  Default Interest.  Any sum due from Tenant to Landlord not
         paid when due shall bear interest from the date due until paid at the
         lesser of fourteen percent (14%) per annum or the highest rate allowed
         by law.

             (3)  Rent Adjustments. Subject to Section 2B(2) above, if any
         Operating Cost paid in one Fiscal Year relates to more than one Fiscal
         Year, Landlord may proportionately allocate such Operating Cost among
         the related Fiscal Years. Operating Costs allocable to the Project as a
         whole (as opposed to a single building within the Project), including
         all maintenance, repair, replacement, insurance, Taxes and other
         Operating Costs associated with the parking and driveway areas,
         landscaping, project and directional signage and other common areas
         within the Project, shall be allocated among the completed buildings in
         the Project based upon the relative Rentable Square Feet within such
         buildings, and Operating Cost Share Rent shall include Tenant's
         Proportionate Share of such Operating Costs allocated to the Building.

             (4)  Miscellaneous.  So long as Tenant is in default of any
         obligation under this Lease beyond any applicable cure period, Tenant
         shall not be entitled to any refund of any amount from Landlord,
         provided that Landlord shall promptly refund such amount to Tenant upon
         Tenant's cure of such default. If this Lease is terminated for any
         reason prior to the annual determination of Operating Cost Share Rent,
         either party shall pay the full amount due to the other within fifteen
         (15) days after Landlord's written notice to Tenant of the amount when
         it is determined. Landlord may commingle any payments made with respect
         to Operating Cost Share Rent, without payment of interest.

                                       8
<PAGE>
 
         3.  PREPARATION AND CONDITION OF PREMISES; POSSESSION AND SURRENDER OF
PREMISES.

         A.  Condition of Premises.  Except as expressly provided in this Lease
and Appendix C hereto, Landlord is leasing the Premises to Tenant without any
obligation to alter, remodel, improve, repair or decorate any part of the
Premises. Landlord shall cause the Premises to be completed in accordance with
the Tenant Improvement Agreement attached as Appendix C.

         B.  Tenant's Possession.  Tenant's taking possession of any portion of
the Premises and execution of the Commencement Date Confirmation shall be
conclusive evidence that such portion of the Premises was in good order, repair
and condition, subject only to "punch list" items. If Tenant takes possession of
any part of the Premises prior to the Commencement Date for purposes of
conducting business (and not merely preparing the Premises for Tenant's use and
occupancy), all terms of this Lease shall apply to such pre-Term possession,
including Base Rent at the rate set forth for the First Lease Year in the
Schedule, prorated for any partial month.

         C.  Maintenance. Throughout the Term, Tenant shall maintain the
Premises in their condition as of the Completion Date, loss or damage caused by
the elements, ordinary wear and tear, and fire and other casualty excepted, and
at the termination of this Lease or Tenant's right to possession, Tenant shall
return the Premises to Landlord in broom-clean condition. To the extent Tenant
fails to perform either obligation, Landlord may, but need not, restore the
Premises to such condition and Tenant shall pay the actual, reasonable cost
thereof.

         4.  PROJECT SERVICES. Landlord shall furnish services as follows, at no
additional cost to Tenant except as provided in this Lease:

         A.  Heating and Air Conditioning. Landlord shall provide heating and
air conditioning services during the normal business hours of 7:00 a.m. to 6:00
p.m., Monday through Friday, and 8:00 a.m. to 1:00 p.m. on Saturday, excluding
New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day ("Business Hours"). Landlord shall furnish heating and air
conditioning to provide a comfortable temperature for normal business operations
in keeping with other Class "A" office buildings in the Austin Northwest
suburban market, except to the extent Tenant installs equipment which adversely
affects the temperature maintained by the air conditioning system above that
contemplated in the Initial Improvement Plans (as defined in Appendix C). If
Tenant installs such equipment, Landlord may install supplementary air
conditioning units in the Premises, and Tenant shall pay to Landlord upon
written demand as Additional Rent the cost of installation, operation and
maintenance thereof.

         Upon Tenant's occupancy in a multi-tenant building in the Project,
Landlord shall furnish heating and air conditioning after Business Hours for
such building if Tenant provides Landlord reasonable prior notice, and pays
Landlord all then-current, reasonable charges for such additional heating or air
conditioning, consistent with charges therefor levied against other tenants in
the building in question. Where Tenant occupies 100% of a Building, Landlord
shall furnish heating and air conditioning after Business Hours if Tenant
provides Landlord reasonable prior notice, and pays to Landlord an amount equal
to $2.00 for each hour of such additional heating and air conditioning per
Building floor, as compensation to Landlord for additional wear and tear on the
heating and air conditioning equipment for such Building.

         B.  Elevators.  Except in case of an emergency, Landlord shall provide
24-hour passenger elevator service to Tenant, in common with Landlord and all
other tenants, if any.

         C.  Electricity. Landlord shall provide sufficient electricity to
operate normal office lighting and equipment, as specified in the Base Building
Plans (as defined in Appendix C). Tenant shall not install or operate in the
Premises any electrically operated equipment or other machinery, other than
business machines and equipment normally employed for general office use which
do not require high electricity consumption for operation, without obtaining the
prior written consent of Landlord, not to be unreasonably withheld, delayed or
conditioned. If, in connection with Tenant's occupancy of any multi-tenant
building, any or all of Tenant's equipment requires electricity consumption in
excess of that which is necessary to operate normal office equipment, such
consumption (including consumption for computer or telephone rooms and special
HVAC equipment) shall be submetered by 

                                       9
<PAGE>
 
Landlord at Tenant's expense, and Tenant shall reimburse Landlord as Additional
Rent for the cost of its submetered consumption based upon Landlord's average
cost of electricity. Such Additional Rent shall be in addition to Tenant's
obligations pursuant to Section 2A(2) to pay its Proportionate Share of
Operating Costs. Tenant shall have the right, at no expense to Landlord, to (i)
contract directly with an electric service provider for service to the Building,
provided Tenant occupies all of the Building and such service will not result in
the placement of any material additional electrical facilities in the Premises,
and (ii) sub-meter one or more portions of the Premises.

         D.  Water.  Landlord shall furnish hot and cold tap water for drinking
and toilet purposes. Tenant shall pay Landlord the actual cost of water
furnished for any other purpose, as Additional Rent. Neither Landlord nor Tenant
shall permit water to be wasted.

         E.  Janitorial Service. Landlord shall furnish janitorial service as
generally provided to other tenants in the Project; provided, however, upon
sixty (60) days prior written notice to Landlord, Tenant may, at its option,
contract directly for janitorial services for any portion of the Premises
comprising an entire building (subject to Landlord's reasonable approval of such
contract, including the reputable character of the service provider and its
satisfaction of Landlord's bonding and insurance requirements and provided that
such direct contract does not create any unrelated business taxable income to
Landlord), at Tenant's sole cost and expense, in which event the cost of
janitorial services shall not be included as part of Operating Costs hereunder.

         F.  Parking. Landlord shall provide, without charge, parking areas for
the Project, as designated by Landlord from time to time, for the nonexclusive
use by Tenant and its employees and other invitees in common with Landlord and
other tenants of Project and their respective employees and other invitees,
which parking areas shall contain no fewer than four (4) parking spaces
(including visitor parking spaces and any reserved parking spaces) for every one
thousand 1,000 Rentable Square Feet contained within the Project. Landlord shall
provide fifteen (15) parking spaces within such parking areas within close
proximity to the Building, which shall be identified as reserved for Tenant's
visitor parking. Landlord shall also provide a grade level parking area adjacent
to the Building which shall be designated for loading and deliveries. Subject to
the foregoing, Tenant shall have no right to exclusive parking with respect to
any parking spaces within the Project, and Tenant shall not tow cars or
otherwise enforce its parking rights against third parties. Tenant shall use its
best efforts to not allow its employees or other invitees to park within any
public streets adjacent to the Project. Landlord shall use reasonable efforts to
enforce Tenant's parking rights against third parties, provided that Landlord
shall have no liability to Tenant due to Tenant's inability to utilize parking
spaces within the Project. Landlord shall have the right, but not the
obligation, to impose reasonable rules and regulations as Landlord may deem
necessary to regulate parking within the Project, including registration of
license plate numbers for vehicles driven by Tenant's employees, issuance and
monitoring of parking tags or permits and/or designation of exclusive parking
spaces. Surface visitor parking shall be available at no charge to Tenant or
Tenant's visitors. Parking areas within close proximity to the Building shall be
constructed substantially as shown on the site plan attached as Appendix A-1.

         G.  Building Security and Safety.  Landlord shall install and maintain
a card-key access control system for entry into the Building and for elevator
operation during non-Business Hours for the use of Tenant. Landlord shall also
install and maintain a fire sprinkler system for the Building in accordance with
applicable governmental requirements. Further, Landlord shall provide 24-hour/7
days per week security patrol service for the Project common areas, with no
warranty or liability respecting the effectiveness of such service. Tenant shall
have the right to install its own security system in the Premises, and such
security system equipment shall remain Tenant's property, to be removed by
Tenant upon termination of the Lease in accordance with Section 5E below.

         H.  Interruption of Services. If any of the Building equipment or
machinery ceases to function properly for any cause Landlord shall use
reasonable diligence to repair the same promptly. Landlord's inability to
furnish, to any extent, the Project services set forth in this Section 4, or any
cessation thereof resulting from any causes, including any entry for repairs
pursuant to this Lease, and any renovation, redecoration or rehabilitation of
any area of the Project shall not render Landlord liable for damages to either
person or property or for interruption or loss to Tenant's business, nor be
construed as an eviction of Tenant, nor work an abatement of any portion of
Rent, nor relieve Tenant from fulfillment of any covenant or agreement hereof.
However, in the event that an interruption of the Project services set forth in
this Section 4 causes a material portion of the Premises to be untenantable for
a 

                                      10
<PAGE>
 
period of at least three (3) consecutive business days, monthly Rent shall be
abated proportionately from the date of such interruption until such services
are resumed.

         5.  ALTERATIONS AND REPAIRS.

         A.  Landlord's Consent and Conditions. Tenant shall not make any
structural or exterior improvements or alterations to the Premises or any
alterations affecting the Building systems, nor any non-structural interior
improvements or alterations not affecting the Building systems costing more than
$10,000.00 (in either case, the "Work") without in each instance submitting
plans and specifications for the Work to Landlord and obtaining Landlord's prior
written consent, which consent shall not be unreasonably withheld or unduly
delayed or conditioned. Landlord will be deemed to be acting reasonably in
withholding its consent for any Work to the exterior of the Premises or any Work
which (a) impacts the base structural components or systems of the Building or
(b) impacts any other tenant's premises.

         Tenant shall reimburse Landlord for actual costs incurred for review of
the plans and all other items submitted by Tenant, not to exceed $500.00. Unless
agreed otherwise, Tenant shall pay for the cost of all Work. All Work shall
become the property of Landlord upon its installation, except for (i) Tenant's
trade fixtures, including, without limitation, Tenant's reception area equipment
and desk, hanging file systems, secretarial and work stations or systems,
supplemental HVAC units, security system, and any other system or item the
removal of which will not materially impact the structural integrity of the
Building and which other system (i.e., not specifically identified above) was
not paid for by Landlord's Contribution (as defined in Appendix C), and (ii)
items which Landlord requires Tenant to remove at Tenant's cost at the
termination of the Lease pursuant to Sections 5D and 5E. Tenant shall designate
those items which it considers to be its trade fixtures in any request for
Landlord's approval of alterations. Any alterations not designated as such in
Tenant's request shall be deemed not to be trade fixtures. Except as expressly
provided above, all Initial Improvements constructed under Appendix C shall
become the property of Landlord upon installation, and shall be surrendered to
Landlord with the Premises at the termination of this Lease or of Tenant's right
to possession.

         The following requirements shall apply to all Work:

             (1)  Prior to commencement, Tenant shall furnish to Landlord
         building permits and certificates of insurance reasonably satisfactory
         to Landlord, unless such Work is to be performed by Landlord.

             (2)  Tenant shall perform all Work so as to maintain peace and
         harmony among other contractors serving the Project and shall avoid
         unreasonable interference with other work to be performed or services
         to be rendered in the Project.

             (3)  The Work shall be performed in a good and workmanlike manner,
         meeting the standard for construction and quality of materials in the
         Building, and shall comply with all insurance requirements and all
         applicable governmental laws, ordinances and regulations ("Governmental
         Requirements").

             (4)  Tenant shall perform all Work so as to minimize or prevent 
         disruption to other tenants, and Tenant shall comply with all
         reasonable requests of Landlord in response to complaints from other
         tenants.

             (5)  Tenant shall perform all Work in compliance with Landlord's
         "Policies, Rules and Procedures for Construction Projects" in effect at
         the time the Work is performed.

             (6)  Tenant shall permit Landlord to supervise all Work. Landlord
         may charge a supervisory fee not to exceed seven and one-half percent
         (7.5%) of labor, material, and all other actual out-of-pocket costs of
         the Work, if Landlord's employees or contractors directly perform the
         Work and the total cost of such Work exceeds $10,000.00.

             (7)  Upon completion, Tenant shall furnish Landlord with
         contractor's affidavits and full and final statutory waivers of liens
         from all contractors and subcontractors, as-built plans and
         specifications, and

                                      11
<PAGE>
 
         receipted bills covering all labor and materials, and all other close-
         out documentation required in Landlord's "Policies, Rules and
         Procedures for Construction Projects".

         B.  Damage to Systems. If any part of the mechanical, electrical or
other systems in the Premises shall be damaged, Tenant shall promptly notify
Landlord thereof in writing, and Landlord shall repair such damage promptly
after receipt of such notice. Landlord may also at any reasonable time make any
repairs or alterations which Landlord deems reasonably necessary for the safety
or protection of the Project, or which Landlord is required to make by any court
or pursuant to any Governmental Requirement. Tenant shall at its expense make
all other repairs necessary to keep the Premises, and Tenant's fixtures and
personal property, in good order, condition and repair; to the extent Tenant
fails to do so within ten (10) business days (or such longer period of time as
is reasonably necessary so long as Tenant is diligently pursuing the completion
of such repairs) after written demand by Landlord (or with no demand in the case
of an emergency), Landlord may make such repairs itself. The cost of any repairs
made by Landlord on account of Tenant's default (beyond any applicable cure
period), or on account of the mis-use or neglect by Tenant or its invitees,
contractors or agents anywhere in the Project, shall become Additional Rent
payable by Tenant on demand.

         C.  No Liens. Tenant has no authority to cause or permit any lien or
encumbrance of any kind to affect Landlord's interest in the Project; any such
lien or encumbrance shall attach to Tenant's interest only. If any mechanic's
lien shall be filed or claim of lien made for work or materials furnished to
Tenant, then Tenant shall at its expense within ten (10) business days
thereafter either discharge or contest the lien or claim. If Tenant contests the
lien or claim, then Tenant shall (i) within such ten (10) business day period,
provide Landlord adequate security for the lien or claim by bonding in
accordance with the Texas Property Code, (ii) contest the lien or claim in good
faith by appropriate proceedings that operate to stay its enforcement, and (iii)
pay promptly any final adverse judgment entered in any such proceeding. If
Tenant does not comply with these requirements, Landlord may discharge the lien
or claim, and the amount paid, as well as attorney's fees and other out-of-pocke
expenses incurred by Landlord, shall become Additional Rent payable by Tenant on
demand.

         D.  Ownership of Improvements. Except as otherwise provided in Section
5A above, all Work as defined in this Section 5, partitions, hardware,
equipment, machinery and all other improvements and all fixtures except trade
fixtures, constructed in the Premises by either Landlord or Tenant, (i) shall
become Landlord's property upon installation without compensation to Tenant,
unless Landlord consents otherwise in writing, and (ii) shall at Landlord's
option either (a) be surrendered to Landlord with the Premises at the
termination of the Lease or of Tenant's right to possession, or (b) be removed
in accordance with Subsection 5E below, such election to be made by Landlord at
the time it gives its consent to the performance of such construction. Any items
identified as "trade fixtures" on the Initial Improvement Plans as approved by
Landlord shall remain the sole property of Tenant.

         E.  Removal at Termination. Upon the termination of this Lease or
Tenant's right of possession, Tenant shall remove from the Building its trade
fixtures, furniture, moveable equipment and other personal property (including
Tenant's security system), any improvements which Landlord elects shall be
removed by Tenant pursuant to Section 5D, and any improvements made by Tenant to
any portion of the Building or the Project other than the Premises. Tenant shall
repair all damage caused by the installation or removal of any of the foregoing
items. If Tenant does not remove such property within ten (10) business days
after notice from Landlord to do so, then Tenant shall be conclusively presumed
to have, at Landlord's election (i) conveyed such property to Landlord without
compensation or (ii) abandoned such property, and Landlord may dispose of or
store any part thereof in any manner at Tenant's sole cost, without waiving
Landlord's right to claim from Tenant all expenses arising out of Tenant s
failure to remove the property, and without liability to Tenant or any other
person. Landlord shall have no duty to be a bailee of any such personal
property. If Landlord elects abandonment, Tenant shall pay to Landlord, upon
demand, any expenses incurred for removal, repair or disposition.

         6.  USE OF PREMISES. Subject to Section 7 below, Tenant shall use the
Premises only for general office and research and development purposes and, to
the extent related thereto, sales, on-site training, telemarketing and support
and general customer service. Tenant shall not allow any use of the Premises
which will negatively affect the cost of coverage of Landlord's insurance on the
Premises. Tenant shall not allow any inflammable or explosive liquids or
materials to be kept on the Premises other than as permitted under Section 27
below. Tenant shall not allow any use of the Premises which would cause the
value or utility of any part of the Premises to 

                                      12
<PAGE>
 
diminish or would interfere with any other tenant or with the operation of the
Project by Landlord or would violate any Governmental Requirement. Tenant shall
not permit any nuisance or waste upon the Premises, or allow any offensive noise
or odor in or around the Premises.

         If any governmental authority shall deem the Premises to be a "place of
public accommodation" under the Americans with Disabilities Act or any other
comparable law as a result of Tenant's use, Tenant shall either modify its use
to cause such authority to rescind its designation or be responsible for any
alterations, structural or otherwise, required to be made to the Building
(including common areas thereof) or the Premises under such laws.

         7.  GOVERNMENTAL REQUIREMENTS AND BUILDING RULES. Tenant shall comply
with all Governmental Requirements applying to its use of the Premises. Tenant
shall also comply with all reasonable rules established for the Project from
time to time by Landlord and furnished to Tenant. The present rules and
regulations are contained in Appendix B, and any changes thereto shall be
provided to Tenant in writing. Failure by another tenant to comply with the
rules or failure by Landlord to enforce them shall not relieve Tenant of its
obligation to comply with the rules or make Landlord responsible to Tenant in
any way, unless Landlord is arbitrary in its enforcement of the rules. Landlord
shall use reasonable efforts to apply the rules and regulations uniformly with
respect to Tenant and tenants in the Project. Landlord shall not enact any
future rules or amendments thereto which would have an unreasonably adverse
effect on any Project tenant, including Tenant. In the event of alterations and
repairs performed by Tenant, Tenant shall comply with the provisions of Section
5 of this Lease and also Landlord's "Policies, Rules and Regulations for
Construction Projects".

         8.  WAIVER OF CLAIMS; INDEMNIFICATION; INSURANCE.

         A.  Waiver of Claims. To the extent permitted by law, Tenant waives any
claims it may have against Landlord or its officers, directors, employees or
agents for business interruption or damage to property sustained by Tenant as
the result of any act or omission of Landlord, to the extent typically covered
under policies of "All Risks" Property Insurance.

         To the extent permitted by law, Landlord waives any claims it may have
against Tenant or its officers, directors, employees or agents for loss of rents
(without waiving Tenant's obligation to pay Rent) or damage to property
sustained by Landlord as the result of any act or omission of Tenant, to the
extent typically covered under policies of "All Risks" Property Insurance.

         B.  Indemnification. Tenant shall indemnify, defend and hold harmless
Landlord and its officers, directors, representatives, employees and agents
against any claim by any third party for injury to any person or damage to or
loss of any property occurring in the Project and arising from the use or
occupancy of the Premises or from any other act or omission or negligence of
Tenant or any of Tenant's employees or agents. Tenant's obligations under this
section shall survive the termination of this Lease.

         Landlord shall indemnify, defend and hold harmless Tenant and its
officers, directors, representatives, employees and agents against any claim by
any third party for injury to any person or damage to or loss of any property
occurring in the Project and arising from any act or omission or negligence of
Landlord or any of Landlord's employees or agents. Landlord's obligations under
this section shall survive the termination of this Lease.

         Both parties agree to immediately notify the other of any claim for
which indemnity is provided hereunder.

         C.  Tenant's Insurance. Tenant shall maintain insurance as follows,
with such other terms, coverages and insurers, as Landlord shall reasonably
require from time to time:

             (1)  Commercial General Liability Insurance, with (a) Contractual
         Liability including the indemnification provisions contained in this
         Lease, (b) a severability of interest endorsement, (c) limits of not
         less than Two Million Dollars ($2,000,000) combined single limit per
         occurrence and not less than Two Million Dollars ($2,000,000) in the
         aggregate for bodily injury, sickness or death, and property damage,
         and umbrella coverage of not less than Five Million Dollars
         ($5,000,000).

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<PAGE>
 
             (2)  Property Insurance against "All Risks" of physical loss
         covering the replacement cost of all improvements, fixtures and
         personal property. Tenant waives all rights of subrogation, and
         Tenant's property insurance shall include a waiver of subrogation in
         favor of Landlord and its employees and agents.

             (3)  Workers' compensation or similar insurance in form and amounts
         required by law, and Employer's Liability with not less than the
         following limits:

                        Each Accident                          $500,000
                        Disease--Policy Limit                  $500,000
                        Disease--Each Employee                 $500,000

             Such insurance shall contain a waiver of subrogation provision in
         favor of Landlord and its employees and agents.

         Tenant's insurance shall be primary and not contributory to that
carried by Landlord, its agents, or mortgagee. Landlord, and if any, Landlord's
building manager or agent, mortgagee and ground lessor shall be named as
additional insureds as respects to insurance required of the Tenant in Section
8C(1). The company or companies writing any insurance which Tenant is required
to maintain under this Lease, as well as the form of such insurance, shall at
all times be subject to Landlord's approval, and any such company shall be
licensed to do business in the state in which the Building is located. Such
insurance companies shall have an A.M. Best rating of A VI or better.

         Tenant shall cause any contractor of Tenant performing work on the
Premises to maintain insurance as follows, with such other terms, coverages and
insurers, as Landlord shall reasonably require from time to time:

             (1)  Commercial General Liability Insurance, including contractor's
         liability coverage, contractual liability coverage, completed
         operations coverage, broad form property damage endorsement, and
         contractor's protective liability coverage, to afford protection with
         limits, for each occurrence, of not less than One Million Dollars
         ($1,000,000) with respect to personal injury, death or property damage.

             (2)  Workers' compensation or similar insurance in form and amounts
         required by law, and Employer's Liability with not less than the
         following limits:

                        Each Accident                          $500,000
                        Disease--Policy Limit                  $500,000
                        Disease--Each Employee                 $500,000

             Such insurance shall contain a waiver of subrogation provision in
         favor of Landlord and its employees and agents.

         Tenant's contractor's insurance shall be primary and not contributory
to that carried by Tenant, Landlord, their agents or mortgagees. Tenant and
Landlord, and if any, Landlord's building manager or agent, mortgagee or ground
lessor shall be named as additional insured on Tenant's contractor's insurance
policies.

         D.  Insurance Certificates.  Tenant shall deliver to Landlord
certificates evidencing all required insurance no later than five (5) business
days prior to the Commencement Date and each renewal date. Each certificate will
provide for thirty (30) days prior written notice of cancellation to Landlord
and Tenant.

         E.  Landlord's Insurance. Landlord shall maintain (i) "All-Risk"
property insurance, including loss of rents, on the Building in an amount equal
to the then-current replacement cost thereof, exclusive of excavation and
foundation costs, and with Landlord's reasonable deductible, and (ii) Commercial
General Liability insurance policies covering the common areas of the Building
and the Project, each with such terms, coverages and conditions (except as
provided above) as are normally carried by reasonably prudent owners of
properties similar to the Project. With respect to property insurance, Landlord
and Tenant mutually waive all rights of subrogation, and the respective
"All-Risk" coverage property insurance policies carried by Landlord and Tenant
shall contain enforceable waiver of subrogation endorsements.

                                      14
<PAGE>
 
         9.  FIRE AND OTHER CASUALTY.

         A.  Termination. If a fire or other casualty causes substantial damage
to the Building or the Premises, Landlord shall engage a registered architect to
certify within one (1) month of the casualty to both Landlord and Tenant the
amount of time needed, using standard working methods, to restore the Building
and the Premises to tenantability acceptable in Tenant's reasonable discretion,
as measured by Tenant's ability to continue its operations and maintain parking
for and access to the Premises in the same manner as before the casualty. If the
time needed exceeds nine (9) months from the casualty, or two (2) months
therefrom if the restoration would begin during the last twelve (12) months of
the Lease, then in the case of the Premises, either Landlord or Tenant may
terminate this Lease, and in the case of the Building, Landlord may terminate
this Lease, by notice to the other party within ten (10) days after the
notifying party's receipt of the architect's certificate. The termination shall
be effective thirty (30) days from the date of the notice and Rent shall be paid
by Tenant to that date, with an abatement for any portion of the Premises which
has been untenantable after the casualty.

         B.  Restoration. If a casualty causes damage to the Building or the
Premises but this Lease is not terminated for any reason, then subject to the
rights of any mortgagees or ground lessors, Landlord shall obtain the applicable
insurance proceeds (without regard to any deductible, which shall be included in
Operating Costs) and diligently restore the Building and the Premises subject to
then-current Governmental Requirements within the time period certified to by
Landlord's Architect. Tenant shall replace its damaged improvements, personal
property and fixtures to the extent of its insurance coverage therefor, as
required hereunder. Rent shall be abated on a per diem basis during the
restoration for any portion of the Premises which is untenantable.

         10. EMINENT DOMAIN.  If a part of the Project is taken by eminent
domain or deed in lieu thereof which is so substantial that the Premises cannot
reasonably be used by Tenant for the operation of its business, Tenant is unable
to access the Premises or Tenant no longer has adequate parking for its
Premises, then either party may terminate this Lease effective as of the date of
the taking by written notice to the other. Rent shall abate from the date of the
taking in proportion to any part of the Premises taken. The entire award for a
taking of any kind shall be paid to Landlord. Tenant may pursue a separate award
for its personal property, trade fixtures and moving expenses in connection with
the taking, but only if such recovery does not reduce the award payable to
Landlord. All obligations accrued to the date of the taking shall be performed
by the party liable to perform said obligations, as set forth herein.

         11. RIGHTS RESERVED TO LANDLORD.  Except as set forth below, Landlord
may exercise at any time any of the following rights respecting the operation of
the Project without liability to the Tenant of any kind:

         A.  Name.  To change the name or street address of the Project, the
street address of the Building or the suite number(s) of the Premises upon not
less than thirty (30) days prior written notice to Tenant. In the event of any
such change, Landlord shall reimburse Tenant for the reasonable and anticipated
costs associated with reprinting business cards, letterhead or other printed
items containing information to be changed.

         B.  Signs. To install and maintain any signs within the Project and on
the exterior and in the interior of the Building, and to approve at its sole
discretion, prior to installation, any of Tenant's signs in the Premises visible
from the common areas or the exterior of the Building. Notwithstanding the
foregoing, Landlord agrees that Tenant shall have the right to install, at
Tenant's expense (but which may be reimbursed out of Landlord's Contribution
under Appendix C), its signage on the exterior of the Building and on a shared
monument sign located within the Project common areas at the entrance to the
Project off of U.S. Highway 183 (provided Landlord is able to obtain
governmental approval for such sign), subject to (i) Landlord's signage and
architectural guidelines applicable to the Project, as previously provided to
Tenant, and (ii) Landlord's reasonable approval as to the size, location and
design thereof pursuant to the Tenant Improvement Agreement. Tenant shall be
solely responsible for and shall obtain all sign permits and other governmental
approvals required for its signage.

         C.  Window Treatments.  To approve, at its reasonable discretion but
without unreasonable delay, prior to installation, any shades, blinds,
ventilators or window treatments of any kind, as well as any lighting within the
Premises that may be visible from the exterior of the Building or any interior
common area.

                                      15
<PAGE>
 
         D.  Keys.  To retain and use at any time passkeys to enter the Premises
or any door within the Premises, subject to Tenant's reasonable security needs.
Tenant shall not alter or add any lock or bolt without first informing Landlord
and providing Landlord with keys or other means of access.

         E.  Access.  Subject to Tenant's reasonable security needs, and upon
not less than 24 hours prior notice to Tenant (except in case of emergency), to
have access to inspect the Premises during normal business hours, and to perform
its obligations, or make repairs, alterations, additions or improvements, as
permitted by this Lease, without any unreasonable interference with Tenant's
operations.

         F.  Preparation for Reoccupancy.  To decorate, remodel, repair, alter
or otherwise prepare the Premises for reoccupancy at any time after Tenant
abandons the Premises, without relieving Tenant of any obligation to pay Rent.

         G.  Heavy Articles.  To approve the weight, size, placement and time
and manner of movement within the Building of any safe, central filing system or
other heavy article of Tenant's property. Tenant shall move its property
entirely at its own risk.

         H.  Show Premises.  To show the Premises to prospective purchasers,
tenants, brokers, lenders, investors, rating agencies or others at any
reasonable time, provided that Landlord gives prior notice to Tenant, does not
materially interfere with Tenant's use of the Premises, and, in the case of a
prospective tenant, any such visit occurs only during the last twelve (12)
months of the Term.

         I.  Relocation of Tenant.  To relocate the Tenant, upon thirty days'
prior written notice, from a separately demised portion of the Premises equal to
or less than 5,000 Rentable Square Feet in size (the "Old Premises") to another
area in the applicable building (the "New Premises"), provided that:

             (1)  the size of the New Premises is at least equal to the size of
         the Old Premises and (i) in the event of a partial relocation,
         contiguous space within the Old Premises on any single floor must
         remain intact; and (ii) if the Rentable Square Feet within the New
         Premises is greater than the Old Premises, Base Rent and Tenant's
         Proportionate Share shall be increased proportionately, not to exceed a
         five percent (5%) increase;

             (2)  Landlord pays all cost of moving the Tenant and improving the
         New Premises to the standard of the Old Premises. Tenant shall
         cooperate with Landlord in all reasonable ways to facilitate the move,
         including supervising the movement of files or fragile equipment,
         designating new locations for furniture, equipment and new telephone
         and electrical outlets, and determining the color of paint in the New
         Premises.

         J.  Use of Lockbox.  To designate a lockbox collection agent for
collections of amounts due Landlord. In that case, the date of payment of Rent
or other sums shall be the date of the agent's receipt of such payment or the
date of actual collection if payment is made in the form of a negotiable
instrument thereafter dishonored upon presentment. However, Landlord may reject
any payment for all purposes as of the date of receipt or actual collection by
mailing to Tenant within 21 days after such receipt or collection a check equal
to the amount sent by Tenant.

         K.  Repairs and Alterations. To make repairs or alterations to the
Project or the Building and in doing so transport any required material through
the Premises, to temporarily close entrances, doors, corridors, elevators and
other facilities in the Project or the Building, to open any ceiling in the
Premises, or to temporarily suspend services or use of common areas in the
Project or the Building. Landlord may perform any such repairs or alterations
during Business Hours, except that Tenant may require any work in the Premises
to be done after Business Hours if such work would unreasonably interfere with
Tenant's right to quiet enjoyment of the Premises. Landlord may do or permit any
work on any nearby building, land, street, alley or way. Notwithstanding the
foregoing, Landlord shall use all reasonable efforts to ensure that such repairs
and alterations (i) do not result in any diminution in the quality and character
of the services provided by Landlord under the Lease or the physical condition
of the Premises or Project, Tenant having relied upon such quality and character
as a material inducement to enter into the 

                                      16
<PAGE>
 
Lease, and (ii) are performed in such a manner so as to prevent any unreasonable
interference with Tenant's use of the Premises or Project and minimize any
unreasonable inconvenience to Tenant and its customers and invitees.

         L.  Landlord's Agents.  If Tenant is in default under this Lease beyond
any applicable cure period, possession of Tenant's funds or negotiation of
Tenant's negotiable instrument by any of Landlord's agents shall not waive any
breach by Tenant or any remedies of Landlord under this Lease.

         M.  Building Services.  To install, use and maintain through the
Premises, pipes, conduits, wires and ducts serving the Building, provided that
such installation, use and maintenance does not unreasonably interfere with
Tenant's use of the Premises.

         N.  Other Actions.  To take any other action which Landlord deems
reasonable in connection with the operation, maintenance or preservation of the
Project or the Building and which does not unreasonably disturb, interfere with
or inconvenience Tenant.

         12. TENANT'S DEFAULT. Any of the following shall constitute a default
by Tenant:

         A.  Rent Default.  Tenant fails to pay any Rent when due, and, in the
case of the first and second such failure in any twelve (12) month period during
the Term of the Lease, such failure continues for ten (10) days after written
notice from Landlord;

         B.  Assignment/Sublease or Hazardous Substances Default.  Tenant 
defaults in its obligations under Section 17 Assignment and Sublease or Section
28 Hazardous Substances;

         C.  Other Performance Default. Tenant fails to perform any other
obligation to Landlord under this Lease, and, in the case of only the first
three (3) such failures during any Fiscal Year of the Term of this Lease, this
failure continues for ten (10) business days after written notice from Landlord,
except that if Tenant begins to cure its failure within the ten (10) business
day period but cannot reasonably complete its cure within such period, then, so
long as Tenant continues to diligently attempt to cure its failure, the ten (10)
business day period shall be extended to such period as is reasonably necessary
to complete the cure;

         D.  Credit Default.  One of the following credit defaults occurs:

             (1)  Tenant commences any proceeding under any law relating to
         bankruptcy, insolvency, reorganization or relief of debts, or seeks
         appointment of a receiver, trustee, custodian or other similar official
         for the Tenant or for any substantial part of its property, or any such
         proceeding is commenced against Tenant and either remains undismissed
         for a period of thirty days or results in the entry of an order for
         relief against Tenant which is not fully stayed within seven (7)
         business days after entry;

             (2)  Tenant becomes insolvent or bankrupt, does not generally pay 
         its debts as they become due, or admits in writing its inability to pay
         its debts, or makes a general assignment for the benefit of creditors;

             (3)  Any third party obtains a levy or attachment under process of
         law against Tenant's leasehold interest, unless Tenant immediately
         bonds around such action.

         13. LANDLORD REMEDIES.

         A.  Termination of Lease or Possession.  If Tenant defaults, Landlord
may elect by notice to Tenant either to terminate this Lease or to terminate
Tenant's possession of the Premises without terminating this Lease. In either
case, Tenant shall immediately vacate the Premises and deliver possession to
Landlord, and Landlord may repossess the Premises and may, at Tenant's sole
cost, remove any of Tenant's signs and any of its other property, without
relinquishing its right to receive Rent or any other right against Tenant.

                                      17
<PAGE>
 
         B.  Lease Termination Damages. If Landlord terminates the Lease due to
an uncured Tenant default, Tenant shall pay to Landlord all Rent due on or
before the date of termination, plus the aggregate Rent that would have been
payable from the date of termination through the Termination Date, reduced by
the fair market rental value of the Premises calculated as of the date of
termination for the same period, taking into account anticipated vacancy prior
to reletting, reasonable and customary reletting expenses and market
concessions, both discounted to present value at the rate of eight percent (8%)
per annum. If Landlord shall relet any part of the Premises for any part of such
period before such present value amount shall have been paid by Tenant or
finally determined by a court (and Landlord shall use reasonable efforts to do
so), then the amount of Rent payable pursuant to such reletting (taking into
account vacancy prior to reletting and any reasonable reletting expenses or
concessions) shall be deemed to be the reasonable rental value for that portion
of the Premises relet during the period of the reletting, unless determined to
the contrary in a final court judgment.

         C.  Possession Termination Damages. If Landlord terminates Tenant's
right to possession without terminating the Lease due to an uncured Tenant
default, and Landlord takes possession of the Premises itself, Landlord shall
use all reasonable efforts to relet any part of the Premises for such Rent, for
such time, and upon such terms as Landlord in its sole discretion shall
determine, without any obligation to do so prior to renting other vacant areas
in the Project. Any proceeds from reletting the Premises shall first be applied
to the reasonable out-of-pocket expenses of reletting, including redecoration,
repair, alteration, advertising, brokerage, legal, and other reasonably
necessary expenses. If the reletting proceeds after payment of expenses are
insufficient to pay the full amount of Rent under this Lease, Tenant shall pay
such deficiency to Landlord monthly upon demand as it becomes due. Any excess
proceeds shall be retained by Landlord.

         D.  Remedies Cumulative.

             (1)  Landlord. All of Landlord's remedies under this Lease shall be
         in addition to all other remedies Landlord may have at law or in
         equity. Waiver by Landlord of any breach of any obligation by Tenant
         shall be effective only if it is in writing, and shall not be deemed a
         waiver of any other breach, or any subsequent breach of the same
         obligation. Landlord's acceptance of payment by Tenant shall not
         constitute a waiver of any breach by Tenant, and if the acceptance
         occurs after termination of the Lease or of Tenant's right to
         possession, the acceptance shall not affect such termination.
         Acceptance of payment by Landlord after commencement of a legal
         proceeding or final judgment shall not affect such proceeding or
         judgment. Landlord may advance such monies and take such other actions
         for Tenant's account as reasonably may be required to cure or mitigate
         any default uncured by Tenant. Tenant shall immediately reimburse
         Landlord for any such advance, and such sums shall bear interest at the
         default interest rate under Section 2D(2) above until paid.

             (2)  Tenant.  All of Tenant's remedies under this Lease shall be in
         addition to all other remedies Tenant may have at law or in equity.
         Waiver by Tenant of any breach of any obligation by Landlord shall be
         effective only if it is in writing, and shall not be deemed a waiver of
         any other breach, or any subsequent breach of the same obligation.
         Tenant's acceptance of payment by Landlord shall not constitute a
         waiver of any breach by Landlord. Acceptance of payment by Tenant after
         commencement of a legal proceeding or final judgment shall not affect
         such proceeding or judgment.

         E.  WAIVER OF TRIAL BY JURY.  EACH PARTY WAIVES TRIAL BY JURY IN THE
EVENT OF ANY LEGAL PROCEEDING BROUGHT BY THE OTHER IN CONNECTION WITH THIS
LEASE. EACH PARTY SHALL BRING ANY ACTION AGAINST THE OTHER IN CONNECTION WITH
THIS LEASE IN A FEDERAL OR STATE COURT LOCATED IN TRAVIS COUNTY, TEXAS, CONSENTS
TO THE JURISDICTION OF SUCH COURTS, AND WAIVES ANY RIGHT TO HAVE ANY PROCEEDING
TRANSFERRED FROM SUCH COURTS ON THE GROUND OF IMPROPER VENUE OR INCONVENIENT
FORUM.

         F.  Litigation Costs.  The non-prevailing party shall pay the
prevailing party's reasonable attorneys' fees and other costs in enforcing this
Lease, whether or not suit is filed.

                                      18
<PAGE>
 
         14. SURRENDER. Upon termination of this Lease or Tenant's right to
possession, Tenant shall return the Premises to Landlord in good order and
condition, ordinary wear and tear and casualty damage excepted. If Landlord
requires Tenant to remove any alterations as agreed specifically in advance by
the parties or as otherwise required under this Lease, then Tenant shall remove
the alterations in a good and workmanlike manner and restore the Premises to its
condition prior to their installation.

         15. HOLDOVER. Tenant shall have no right to holdover possession of the
Premises after the expiration or termination of this Lease without Landlord's
prior written consent, which consent may be withheld in Landlord's sole and
absolute discretion. If, however, Tenant retains possession of any part of the
Premises after the Term, Tenant shall become a month-to-month tenant for the
entire Premises upon all of the terms of this Lease as might be applicable to
such month-to-month tenancy, except that Tenant shall pay all of Base Rent and
Operating Cost Share Rent at one hundred fifty percent (150%) of the rate in
effect immediately prior to such holdover, computed on a monthly basis for each
full or partial month Tenant remains in possession. If Tenant fails to surrender
the Premises and Landlord has given Tenant at least thirty (30) days' prior
written notice of Landlord's anticipated damages, Tenant shall also pay Landlord
all of Landlord's actual direct and consequential damages (but not punitive
damages) resulting from Tenant's holdover. No acceptance of Rent or other
payments by Landlord under these holdover provisions shall operate as a waiver
of Landlord's right to regain possession upon demand, or any other of Landlord's
remedies.

         16. SUBORDINATION TO GROUND LEASES AND MORTGAGES.

         A.  Subordination. Provided the conditions set forth below are
satisfied, this Lease shall be subordinate to any present or future ground lease
or mortgage respecting the Building or any other portion of the Project, and any
amendments to such ground lease or mortgage, at the election of the ground
lessor or mortgagee as the case may be, effected by notice to Tenant in the
manner provided in this Lease. The subordination shall be effective upon such
notice, provided that such ground lessor or mortgagee agrees not to disturb
Tenant's quiet possession of the Premises so long as Tenant is not in default
under the Lease. At the request of Landlord, ground lessor or mortgagee, Tenant
shall execute and deliver to the requesting party any reasonable documents
provided to establish the subordination of this Lease as aforesaid, provided
such document includes Tenant's non-disturbance rights described in the
immediately preceding sentence. Any mortgagee has the right, at its option, to
subordinate its mortgage to the terms of this Lease, without notice to, nor the
consent of, Tenant.

         B.  Termination of Ground Lease or Foreclosure of Mortgage. If any
ground lease is terminated or mortgage foreclosed or deed in lieu of foreclosure
given and the ground lessor, mortgagee, or purchaser at a foreclosure sale shall
thereby become the owner of the Building, Tenant shall attorn to such ground
lessor or mortgagee or purchaser without any deduction or setoff by Tenant, and
this Lease shall continue in effect as a direct lease between Tenant and such
ground lessor, mortgagee or purchaser. The ground lessor or mortgagee or
purchaser shall be liable as Landlord only during the time such ground lessor or
mortgagee or purchaser is the owner of the Building. At the request of Landlord,
ground lessor or mortgagee, Tenant shall execute and deliver within ten (10)
days of the request any document furnished by the requesting party to evidence
Tenant's agreement to attorn, provided such document includes Tenant's
non-disturbance rights described above.

         C.  Security Deposit. Any ground lessor, mortgagee or purchaser of the
Premises shall be responsible for the return of any security deposit by Tenant
only to the extent the security deposit is received by such ground lessor,
mortgagee or purchaser.

         D.  Notice and Right to Cure. The Building is subject to any ground
lease and mortgage identified with name and address of ground lessor or
mortgagee in Appendix D to this Lease (as the same may be amended from time to
time by written notice to Tenant). Tenant agrees to send by registered or
certified mail to any ground lessor or mortgagee identified either in such
Appendix or in any later notice from Landlord to Tenant a copy of any notice of
default sent by Tenant to Landlord. Any such ground lessor or mortgagee shall
have the right to cure such default in the time periods provided to Landlord
under this Lease.

         E.  Definitions. As used in this Section 16, "mortgage" shall include
"deed of trust" and "mortgagee" shall include "beneficiary" under such deed of
trust, "mortgagee" shall include the mortgagee of any ground lessee, 

                                      19
<PAGE>
 
and "ground lessor", "mortgagee", and "purchaser at a foreclosure sale" shall
include, in each case, all of its successors and assigns, however remote.

         17. ASSIGNMENT AND SUBLEASE.

         A.  In General. Tenant shall not, without the prior consent of Landlord
in each case, which consent shall not be unreasonably withheld or unduly
conditioned or delayed, (i) make or allow any assignment or transfer, by
operation of law or otherwise, of any part of Tenant's interest in this Lease,
(ii) grant or allow any lien or encumbrance, by operation of law or otherwise,
upon any part of Tenant's interest in this Lease, (iii) sublet any part of the
Premises, or (iv) permit anyone other than Tenant and its employees to occupy
any part of the Premises. Unless otherwise consented to in writing by Landlord,
Tenant shall remain primarily liable for all of its obligations under this
Lease, notwithstanding any assignment or transfer. No consent granted by
Landlord shall be deemed to be a consent to any subsequent assignment or
transfer, lien or encumbrance, sublease or occupancy. Tenant shall pay all of
Landlord's reasonable attorneys' fees and other expenses incurred in connection
with any consent requested by Tenant or in reviewing any proposed assignment or
subletting. Any assignment or transfer, grant of lien or encumbrance, or
sublease or occupancy without Landlord's prior written consent (which, if
requested, has not been reasonably withheld, delayed or conditioned) shall be
void. Unless otherwise consented to in writing by Landlord, if Tenant shall
assign this Lease or sublet at least one-third (_) of the then-current total
Rentable Square Footage of the Premises (excluding any assignment or sublease
under Section 17D below), any rights of Tenant to renew this Lease, extend the
Term or to lease additional space in the Project shall be extinguished thereby
and will not be transferred to the assignee or subtenant, all such rights being
personal to the Tenant named herein.

         B.  Landlord's Consent. Landlord will not unreasonably withhold, delay
or condition its consent to any proposed assignment or subletting. It shall be
reasonable for Landlord to withhold its consent to any assignment or sublease if
(i) Tenant is in default under this Lease beyond any applicable cure period,
(ii) the proposed assignee or sublessee is (a) a tenant in the Project or (b) an
affiliate of such a tenant or (c) a party that Landlord has actually pursued and
is actively negotiating with as a prospective tenant in the Project, (iii) the
financial responsibility, nature of business (including, without limitation, a
proposed use of the Premises as a telemarketing center or other
parking-intensive use), and character of the proposed assignee or subtenant, as
compared to typical tenants of a comparable size in office projects in the
Austin suburban market, are not all reasonably satisfactory to Landlord, (iv) in
the reasonable judgment of Landlord, the purpose for which the assignee or
subtenant intends to use the Premises (or a portion thereof) is not in keeping
with Landlord's reasonable standards for the Project or the Building or are in
violation of the terms of this Lease or any other leases in the Project, (v) the
proposed assignee or subtenant is a government entity (other than a research
consortium funded by a government entity), or (vi) in the event of an assignment
(and not a sublease), the proposed assignment is for less than the entire
Premises or for less than the remaining Term of the Lease.

         C.  Procedure. Tenant shall notify Landlord of any proposed assignment
or sublease at least thirty (30) days prior to its proposed effective date. The
notice shall include the name and address of the proposed assignee or subtenant
and its partners in a case of a partnership, a copy of the terms of the proposed
assignment or sublease, and sufficient information to permit Landlord to
determine the financial responsibility and character of the proposed assignee or
subtenant. As a condition to any effective assignment of this Lease, the
assignee shall execute and deliver in form reasonably satisfactory to Landlord
at least fifteen (15) days prior to the effective date of the assignment, an
assumption of all of the obligations of Tenant under this Lease. As a condition
to any effective sublease, subtenant shall execute and deliver in form
satisfactory to Landlord at least fifteen (15) days prior to the effective date
of the sublease, an agreement to comply with all of Tenant's obligations under
this Lease, and at Landlord's option, an agreement (except for the economic
obligations which subtenant will undertake directly to Tenant) to attorn to
Landlord under the terms of the sublease in the event this Lease terminates
before the sublease expires.

         D.  Related Entities. Notwithstanding any provision of this Section 17,
if no default on the part of Tenant has occurred and is continuing, Tenant may
assign this Lease to an entity into which Tenant is merged or consolidated or to
an entity to which substantially all of Tenant's outstanding shares of capital
stock or substantially all of Tenant's assets are transferred, or Tenant may
sublet a portion of the Premises to an entity of which Tenant owns at least
twenty-five percent (25%) of the outstanding capital stock thereof or other
equity ownership interests 

                                      20
<PAGE>
 
therein, without first obtaining Landlord's written consent, if Tenant notifies
Landlord at least ten (10) business days prior to the proposed transaction,
providing information satisfactory to Landlord in order to determine the net
worth both of the successor entity and of Tenant immediately prior to such
assignment, and showing the net worth of the successor to be at least equal to
the net worth of Tenant as of the date of this Lease.

         E.  [Intentionally Deleted].

         F.  Recapture. Landlord may, by giving written notice to Tenant within
fifteen (15) days after receipt of Tenant's notice of assignment or subletting
of at least one-third (_) of the then-current total Rentable Square Footage of
the Premises, terminate this Lease with respect to the space described in
Tenant's notice, as of the effective date of the proposed assignment or sublease
and all obligations under this Lease as to such space shall expire except as to
any obligations that expressly survive any termination of this Lease.

         18. CONVEYANCE BY LANDLORD. If Landlord shall at any time transfer its
interest in the Building or this Lease and such transferee expressly assumes all
of Landlord's obligations hereunder arising after the date of such transfer,
Landlord shall be released of any obligations occurring after such transfer,
except the obligation to return to Tenant any security deposit not delivered to
its transferee, and Tenant shall look solely to Landlord's successors for
performance of such obligations. This Lease shall not be affected by any such
transfer.

         19. ESTOPPEL CERTIFICATE. Tenant shall, within ten (10) days of
receiving a request from Landlord (but no more than three (3) times in one
Fiscal Year), execute, acknowledge in recordable form, and deliver to Landlord
or its designee a certificate stating, subject to a specific statement of any
applicable exceptions, that the Lease as amended to date is in full force and
effect, that the Tenant is paying Rent and other charges on a current basis, and
that to the best of the knowledge of Tenant, Landlord has committed no uncured
defaults and Tenant has no offsets or claims. Tenant may also be required to
state the date of commencement of payment of Rent, the Commencement Date, the
Termination Date, the Base Rent, the current Operating Cost Share Rent estimate,
the status of any improvements required to be completed by Landlord, the amount
of any security deposit, and such other matters as may be reasonably requested.
Failure to deliver such certificate and statement within the time required shall
be conclusive evidence against Tenant that this Lease, with any amendments
identified by Landlord, is in full force and effect, that there are no uncured
defaults by Landlord, that not more than one month's Rent has been paid in
advance, that Tenant has not paid any security deposit, and that Tenant has no
claims or offsets against Landlord. Within ten (10) days of receiving a request
from Tenant, Landlord shall execute, acknowledge and deliver to Tenant an
estoppel certificate in substantially the form set forth above.

         20. SECURITY DEPOSIT. Tenant shall deposit with Landlord on the date of
this Lease, security (the "Security Deposit") for the performance of all of its
obligations in the amount set forth on the Schedule. At Tenant's option, the
form of such Security Deposit shall be either a cashier's check made payable to
Landlord, or an unconditional and irrevocable letter of credit (the "Letter of
Credit"). If in the form of a Letter of Credit, such Letter of Credit shall be
(i) in the form attached hereto as Appendix G, (ii) naming Landlord and its
successors and assigns as beneficiary, (iii) expressly allowing Landlord to draw
upon it at any time from time to time by delivering to the issuer notice that
Landlord is entitled to draw thereunder, (iv) drawable on an FDIC-insured
financial institution reasonably satisfactory to Landlord, and (v) redeemable in
the state of Texas. If Tenant does not provide Landlord with a substitute Letter
of Credit complying with all of the requirements hereof at least ten (10) days
before the stated expiration date of the current Letter of Credit, then Landlord
shall have the right to draw upon the current Letter of Credit and hold the
funds drawn as the Security Deposit. If Tenant defaults under this Lease,
Landlord may use any part of the Security Deposit to make any defaulted payment,
to pay for Landlord's cure of any defaulted obligation, or to compensate
Landlord for any loss or damage resulting from any default. To the extent any
portion of the Security Deposit is used, Tenant shall within five (5) business
days after demand from Landlord restore the Security Deposit to its full amount.
If in the form of a cash deposit, Landlord may keep the Security Deposit in its
general funds and shall not be required to pay interest to Tenant on the deposit
amount. If Tenant shall perform all of its obligations under this Lease and
return the Premises to Landlord at the end of the Term, Landlord shall return
all of the remaining Security Deposit to Tenant within thirty (30) days after
the end of the Term. The Security Deposit shall not serve as an advance payment
of Rent or a measure of Landlord's damages for any default under this Lease.

                                      21
<PAGE>
 
         If Landlord transfers its interest in the Project or this Lease,
Landlord may transfer the Security Deposit to its transferee. Upon such
transfer, Landlord shall have no further obligation to return the Security
Deposit to Tenant, and Tenant's right to the return of the Security Deposit
shall apply solely against Landlord's transferee, provided such transferee
expressly assumed the obligation to return such Security Deposit in accordance
with this Lease.

         21. FORCE MAJEURE. Landlord shall not be in default under this Lease to
the extent Landlord is unable to perform any of its obligations on account of
any strike or labor problem, energy shortage, governmental pre-emption or
prescription, national emergency, or any other cause of any kind beyond the
reasonable control of Landlord ("Force Majeure").

         22. NOTICES. All notices, consents, approvals and similar
communications to be given by one party to the other under this Lease, shall be
given in writing, mailed or personally delivered as follows:

         A.  Landlord.  To Landlord as follows:

             CarrAmerica Realty, L.P.
             t/a Riata Corporate Park
             8240 North MoPac, Suite 105
             Austin, Texas  78759
             Attn:  Market Officer

             with a copy to:

             CarrAmerica Realty Corporation
             1700 Pennsylvania Avenue, N.W.
             Washington, D.C. 20006
             Attn:  Lease Administration

or to such other person at such other address as Landlord may designate by
notice to Tenant.

         B.  Tenant.  To Tenant as follows:

             Pervasive Software, Inc.
             8834 Capital of Texas Highway North
             Suite 300
             Austin, Texas  78759
             Attn:  Vice President - Administration/CFO

             with a copy to:

             Jenkens & Gilchrist
             600 Congress Avenue
             Suite 2200
             Austin, Texas  78701
             Attn:  J. Bradley Greenblum, Esq.

or to such other person at such other address as Tenant may designate by notice
to Landlord.

         Mailed notices shall be sent by United States certified or registered
mail, or by a reputable national overnight courier service, postage prepaid.
Mailed notices shall be deemed to have been given on the earlier of actual
delivery or three (3) business days after posting in the United States mail in
the case of registered or certified mail, and one business day in the case of
overnight courier.

                                      22
<PAGE>
 
         23. QUIET POSSESSION. So long as Tenant shall perform all of its
obligations under this Lease, Tenant shall enjoy peaceful and quiet possession
of the Premises without hindrance of any manner from Landlord or any mortgagee
or any party claiming by or through the Landlord.

         24. REAL ESTATE BROKER. Tenant represents to Landlord that Tenant has
not dealt with any real estate broker with respect to this Lease except for
Landlord's Real Estate Broker and Tenant's Real Estate Broker, as listed in the
Schedule, and no other broker is in any way entitled to any broker's fee or
other payment in connection with this Lease. Tenant and Landlord shall each
indemnify and defend the other against any claims by any other broker or third
party for any payment of any kind in connection with this Lease arising out of
the activities of the indemnifying party.

         25. MISCELLANEOUS.

         A.  Successors and Assigns. Subject to the limits on Tenant's
assignment contained in Section 17, the provisions of this Lease shall be
binding upon and inure to the benefit of all successors and assigns of Landlord
and Tenant.

         B.  Date Payments Are Due. Except for payments to be made by Tenant
under this Lease which are due upon demand or are due in advance (such as Base
Rent), Tenant shall pay to Landlord any amount owed hereunder for which Landlord
renders a statement of account within ten business days of Tenant's receipt of
Landlord's written statement specifying in detail the amount owed.

         C.  Meaning of "Landlord", "Re-Entry, "including" and "Affiliate". The
term "Landlord" means only the owner of the Building and the lessor's interest
in this Lease from time to time. The words "re-entry" and "re-enter" are not
restricted to their technical legal meaning. The words "including" and similar
words shall mean "without limitation." The word "affiliate" shall mean a person
or entity controlling, controlled by or under common control with the applicable
entity. "Control" shall mean the power directly or indirectly, by contract or
otherwise, to direct the management and policies of the applicable entity.

         D.  Time of the Essence. Time is of the essence of each provision of
this Lease.

         E.  No Option. This document shall not be effective for any purpose
until it has been executed and delivered by both parties; execution and delivery
by one party shall not create any option or other right in the other party.

         F.  Severability. The unenforceability of any provision of this Lease
shall not affect any other provision.

         G.  Governing Law. This Lease shall be governed in all respects by the
laws of the state in which the Project is located, without regard to the
principles of conflicts of laws.

         H.  Lease Modification. Tenant agrees to modify this Lease in any way
requested by a mortgagee which does not cause increased expense to Tenant or
otherwise materially adversely affect Tenant's interests under this Lease.

         I.  No Oral Modification. No modification of this Lease shall be
effective unless it is a written modification signed by both parties.

         J.  Landlord's Default; Landlord's Right to Cure Tenant's Default. If
Landlord breaches any of its obligations under this Lease, Tenant shall notify
Landlord in writing and shall take no action respecting such breach so long as
Landlord promptly begins to cure the breach and diligently pursues such cure to
its completion. Notwithstanding the foregoing, if Landlord's breach has a
material adverse effect on Tenant's business operations within the Premises and
Landlord has not cured such breach within thirty (30) days of Tenant's written
notice to Landlord thereof, then Tenant shall have the right to notify Landlord
in writing a second time as to such breach. If Landlord has not cured such
breach within ten (10) days of such second notice, then Tenant shall have the
right 

                                      23
<PAGE>
 
to cure such breach on its own and may deduct the reasonable cost thereof (plus
interest at the rate specified in Section 2.D(2) above until repaid) from up to
thirty percent (30%) of Tenant's next (and, if necessary, subsequent) payments
of Base Rent, provided that the repair work performed in order to effect such
cure must occur within a portion of the Premises located in a Project building
in which Tenant does not share occupancy with any other tenant. Landlord may
cure any Tenant default not timely cured by Tenant; any expenses incurred shall
become Additional Rent due from Tenant on demand by Landlord.

         K.  Captions. The captions used in this Lease shall have no effect on
the construction of this Lease.

         L.  Authority. Landlord and Tenant each represents to the other that it
has full power and authority to execute and perform this Lease.

         M.  Landlord's Enforcement of Remedies. Landlord may enforce any of its
remedies under this Lease either in its own name or through an agent.

         N.  Entire Agreement. This Lease, together with all Appendices,
constitutes the entire agreement between the parties. No representations or
agreements of any kind have been made by either party which are not contained in
this Lease.

         O.  Landlord's Title. Landlord's title shall always be paramount to the
interest of the Tenant, and nothing in this Lease shall empower Tenant to do
anything which might in any way impair Landlord's title.

         P.  Light and Air Rights. Landlord does not grant in this Lease any
rights to light and air in connection with the Building or the Project. Landlord
reserves to itself, all land within the Project, the Building below the improved
floor of each floor of the Premises, the Building above the ceiling of each
floor of the Premises, the exterior of the Premises and the areas on the same
floor outside the Premises, along with the areas within the Premises required
for the installation and repair of utility lines and other items required to
serve other tenants of the Building.

         Q.  Singular and Plural. Wherever appropriate in this Lease, a singular
term shall be construed to mean the plural where necessary, and a plural term
the singular. For example, if at any time two parties shall constitute Landlord
or Tenant, then the relevant term shall refer to both parties together.

         R.  No Recording by Tenant. Tenant shall not record in any public real
estate records any memorandum or any portion of this Lease.

         S.  Exclusivity. Landlord does not grant to Tenant in this Lease any
exclusive right except the right to occupy its Premises.

         T.  No Construction Against Drafting Party. The rule of construction
that ambiguities are resolved against the drafting party shall not apply to this
Lease.

         U.  Survival. All obligations of Landlord and Tenant under this Lease
shall survive the termination of this Lease.

         V.  Rent Not Based on Income. No rent or other payment in respect of
the Premises shall be based in any way upon net income or profits from the
Premises. Tenant may not enter into or permit any sublease or license or other
agreement in connection with the Premises which provides for a rental or other
payment based on net income or profit.

         W.  Building Manager and Service Providers. Landlord may perform any of
its obligations under this Lease through its employees or third parties hired by
the Landlord.

         X.  Late Charge and Interest on Late Payments. Without limiting the
provisions of Section 12A, if Tenant fails to pay any installment of Rent or
other charge to be paid by Tenant pursuant to this Lease within ten 

                                      24
<PAGE>
 
(10) business days after the same becomes due and payable, then Tenant shall pay
a late charge equal to the greater of five percent (5%) of the amount of such
payment or $250. In addition, interest shall be paid by Tenant to Landlord on
any late payments of Rent from the date due until paid at the rate provided in
Section 2D(2). Such late charge and interest shall constitute Additional Rent
due and payable by Tenant to Landlord upon the date of payment of the delinquent
payment referenced above.

         Y.  Tenant's Financial Statements. Within ten (10) business days after
Landlord's specific written request therefor (but not more frequently than once
per calendar quarter), Tenant shall deliver to Landlord the current audited
annual and unaudited quarterly financial statements of Tenant, and annual
audited financial statements of the two (2) years prior to the current year's
financial statements, each annual statement with an opinion of a certified
public accountant and including a balance sheet and profit and loss statement,
all prepared in accordance with generally accepted accounting principles
consistently applied.

         Z.  Usury Savings. All agreements between Landlord and Tenant, whether
now existing or hereafter arising and whether written or oral, are hereby
expressly limited so that in no contingency or event whatsoever shall the amount
contracted for, charged or received by Landlord for the use, forbearance or
retention of money hereunder or otherwise exceed the maximum amount which
Landlord is legally entitled to contract for, charge or collect under the
applicable state or federal law. If, from any circumstance whatsoever,
fulfillment of any provision hereof at the time performance of such provision
shall be due shall involve transcending the limit of validity prescribed by law,
then the obligation to be fulfilled shall be automatically reduced to the limit
of such validity, and if from any such circumstance Landlord shall ever receive
as interest or otherwise an amount in excess of the maximum that can be legally
collected, then such amount which would be excessive interest shall be applied
to the reduction of rent hereunder, and if such amount which would be excessive
interest exceeds such rent, then such additional amount shall be refunded to
Tenant.

         AA. WAIVER OF WARRANTIES. TENANT HEREBY WAIVES THE BENEFIT OF ALL
IMPLIED WARRANTIES WITH RESPECT TO THE PREMISES INCLUDING, WITHOUT LIMITATION,
ANY IMPLIED WARRANTY THAT THE PREMISES ARE SUITABLE FOR ANY COMMERCIAL OR OTHER
PARTICULAR PURPOSE.

         26. UNRELATED BUSINESS INCOME. If Landlord is advised by its counsel at
any time that any part of the payments by Tenant to Landlord under this Lease
may be characterized as unrelated business income under the United States
Internal Revenue Code and its regulations, then Tenant shall enter into any
amendment proposed by Landlord to avoid such income, so long as the amendment
does not require Tenant to make more payments or accept fewer services from
Landlord, than this Lease provides.

         27. HAZARDOUS SUBSTANCES. Except as provided below, Tenant shall not
cause or permit any Hazardous Substances to be brought upon, produced, stored,
used, discharged or disposed of in or near the Project unless Landlord has
consented to such storage or use in its sole discretion. "Hazardous Substances"
include those hazardous substances described in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section
9601 et seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
Section 6901 et seq., any other applicable federal, state or local law, and the
regulations adopted under these laws. If any lender or governmental agency shall
require testing for Hazardous Substances in the Premises, Tenant shall pay all
reasonable costs for such testing. Tenant agrees to indemnify and hold Landlord
harmless from all claims, demands, actions, liabilities, costs, expenses,
damages and obligations of any nature arising from the contamination of the
Project with Hazardous Substances as a result of or arising out of the use or
occupancy of the Premises by Tenant. The foregoing indemnification shall survive
the termination or expiration of this Lease for a period of two (2) years
thereafter. Tenant may use and store in the Premises janitorial supplies and
other items as are necessary in the normal operation of Tenant's business in the
Premises ("Necessary Hazardous Substances"), provided Tenant (i) uses and stores
all Necessary Hazardous Substances in accordance with all applicable
Governmental Requirements; (ii) indemnifies and holds Landlord harmless from any
claims, costs or damages arising from the presence of any Necessary Hazardous
Substances in the Building; and (iii) pays any increased insurance premiums
arising from the presence of any Necessary Hazardous Substances in the Building.
Landlord shall use its reasonable best efforts to prohibit other tenants and
visitors in the Project from causing or permitting contamination 

                                      25
<PAGE>
 
of the Project with Hazardous Substances as aforesaid, provided Landlord shall
not be liable to Tenant or any other party in the event such contamination
occurs.

         28. EXCULPATION. Landlord shall have no personal liability under this
Lease; its liability shall be limited to its interest in the Building, and shall
not extend to any other property or assets of the Landlord. In no event shall
any officer, director, employee, agent, shareholder, partner, member or
beneficiary of Landlord be personally liable for any of Landlord's obligations
hereunder.

         29. LANDLORD'S LIEN. LANDLORD SHALL HAVE AND TENANT HEREBY GRANTS TO
LANDLORD A CONTINUING SECURITY INTEREST FOR ALL RENT AND OTHER SUMS OF MONEY
BECOMING DUE HEREUNDER FROM TENANT, UPON ALL EQUIPMENT, FIXTURES, FURNITURE, AND
OTHER PERSONAL PROPERTY OF TENANT SITUATED ON THE PREMISES (BUT NOT TENANT'S
INTANGIBLE PROPERTY, INTELLECTUAL PROPERTY OR BOOKS AND RECORDS), WHICH IS
LOCATED AT 12365 RIATA TRACE PARKWAY, BUILDING II, AUSTIN, TEXAS, AND SUCH
PROPERTY SHALL NOT BE REMOVED THEREFROM WITHOUT THE CONSENT OF LANDLORD UNTIL
ALL ARREARAGES IN RENT AS WELL AS ANY AND ALL OTHER SUMS OF MONEY THEN DUE TO
LANDLORD HEREUNDER SHALL FIRST HAVE BEEN PAID AND DISCHARGED. PRODUCTS OF
COLLATERAL ARE ALSO COVERED. IN THE EVENT OF A DEFAULT UNDER THIS LEASE,
LANDLORD SHALL HAVE, IN ADDITION TO ANY OTHER REMEDIES PROVIDED HEREIN OR BY
LAW, ALL RIGHTS AND REMEDIES UNDER THE UNIFORM COMMERCIAL CODE, INCLUDING
WITHOUT LIMITATION THE RIGHT TO SELL THE PROPERTY DESCRIBED IN THIS PARAGRAPH AT
PUBLIC OR PRIVATE SALE UPON FIVE (5) DAYS NOTICE TO TENANT. TENANT HEREBY AGREES
TO EXECUTE SUCH OTHER INSTRUMENTS NECESSARY OR DESIRABLE IN LANDLORD'S
DISCRETION TO PERFECT THE SECURITY INTEREST HEREBY CREATED. ANY STATUTORY LIEN
FOR RENT IS NOT HEREBY WAIVED, THE EXPRESS CONTRACTUAL LIEN HEREIN GRANTED BEING
IN ADDITION AND SUPPLEMENTARY THERETO. LANDLORD AND TENANT AGREE THAT THIS LEASE
AND SECURITY AGREEMENT SERVES AS A FINANCING STATEMENT AND THAT A COPY OR
PHOTOGRAPHIC OR OTHER REPRODUCTION OF THIS PORTION OF THIS LEASE MAY BE FILED OF
RECORD BY LANDLORD AND HAVE THE SAME FORCE AND EFFECT AS THE ORIGINAL. THIS
SECURITY AGREEMENT AND FINANCING STATEMENT ALSO COVERS FIXTURES LOCATED AT THE
PREMISES, AND MAY BE FILED FOR RECORD IN THE REAL ESTATE RECORDS. TENANT
WARRANTS THAT THE COLLATERAL SUBJECT TO THE SECURITY INTEREST GRANTED HEREIN IS
NOT PURCHASED OR USED BY TENANT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES.
LANDLORD'S LIENS AS AFORESAID SHALL BE SUBORDINATE TO A SINGLE INSTITUTIONAL
LENDER DESIGNATED BY TENANT AND ANY LENDER PROVIDING PURCHASE MONEY OR EQUIPMENT
LEASING FINANCING TO TENANT.

         30. SATELLITE DISH. Tenant may at its sole cost install, maintain, and
from time to time replace a satellite dish (a "Dish") on the roof of the
Building, provided that Tenant shall obtain Landlord's prior reasonable approval
of the proposed size, weight and location of the Dish and method for fastening
the Dish to the roof, and that Tenant will at its sole cost comply with all
Governmental Requirements and the conditions of any bond or warranty maintained
by Landlord on the roof. Landlord may supervise any roof penetration. Tenant
shall repair any damage to the Building caused by Tenant's installation,
maintenance, replacement, use or removal of the Dish. The Dish shall remain the
property of Tenant, and Tenant may remove the Dish at its cost at any time
during the Term. Tenant shall remove the Dish at its cost upon expiration or
termination of the Lease. Tenant shall protect, defend, indemnify and hold
harmless Landlord from and against claims, damages, liabilities, costs and
expenses of every kind and nature, including attorneys' fees, incurred by or
asserted against Landlord arising out of Tenant's installation, maintenance,
replacement, use or removal of the Dish.

                                      26
<PAGE>
 
         IN WITNESS WHEREOF, the parties hereto have executed this Lease.

                                            LANDLORD:

                                            CARRAMERICA REALTY, L.P., a Delaware
                                            limited partnership, t/a Riata
                                            Corporate Park

                                            By:  CarrAmerica Realty GP Holdings,
                                                 Inc., a Delaware corporation,
                                                 General Partner


                                                 By:    /s/ PHILIP L. HAWKINS
                                                        ------------------------
                                                 Name:  PHILIP L. HAWKINS
                                                        ------------------------
                                                 Title: MANAGING DIRECTOR
                                                        ------------------------


                                            TENANT:

                                            PERVASIVE SOFTWARE INC., a Delaware
                                            corporation
                                            


                                            By:    /s/ JOHN FARR
                                                   -----------------------------
                                            Name:  John Farr
                                                   -----------------------------
                                            Title: Director of Finance
                                                   -----------------------------


                                      27
<PAGE>
 
                                  APPENDIX A

                       LEGAL DESCRIPTION OF THE PROJECT


Lots 4, 5, 6, 7 and 9, Amended Plat, Riata Section Two, Block B, recorded in
Book 98, Page 19, of the Plat Records of Travis County, Texas.




                                      A-1
<PAGE>
 
                                 APPENDIX A-1

                           SITE PLAN OF THE PROJECT




                                     [MAP]


                                      A-1

<PAGE>
 
                                  APPENDIX B

                             RULES AND REGULATIONS

         1.  Tenant shall not place anything, or allow anything to be placed
near the glass of any window, door, partition or wall which may, in Landlord's
reasonable judgment, appear unsightly from outside of the Building.

         2.  The Building directory shall be available to Tenant solely to
display names of Tenant's departments and department heads and their location in
the Building, which display shall be as directed by Landlord.

         3.  The sidewalks, halls, passages, exits, entrances, elevators and
stairways shall not be obstructed by any tenant or used by any tenant for any
purposes other than for ingress to and egress from the Premises. Tenant shall
lend its full cooperation to keep such areas free from all obstruction and in a
clean and sightly condition and shall move all supplies, furniture and equipment
as soon as received directly to the Premises and move all such items and waste
being taken from the Premises (other than waste customarily removed by employees
of the Building) directly to the shipping platform at or about the time arranged
for removal therefrom. The halls, passages, exits, entrances, elevators,
stairways, balconies and roof are not for the use of the general public and
Landlord shall, in all cases, retain the right to control and prevent access
thereto by all persons whose presence in the judgment of Landlord, reasonably
exercised, shall be prejudicial to the safety, character, reputation and
interests of the Building. Neither Tenant nor any employee or invitee of Tenant
shall go upon the roof of the Building, provided that such parties may go upon
the roof of the Building, subject to Landlord's prior reasonable approval and
requirements, in order to install any equipment otherwise permitted under the
Lease.

         4.  The toilet rooms, urinals, wash bowls and other apparatuses shall
not be used for any purposes other than that for which they were constructed,
and no foreign substance of any kind whatsoever shall be thrown therein, and to
the extent caused by Tenant or its employees, the expense of any breakage,
stoppage or damage resulting from the violation of this rule shall be borne by
Tenant.

         5.  Tenant shall not cause any unnecessary janitorial labor or services
by reason of Tenant's carelessness or indifference in the preservation of good
order and cleanliness.

         6.  Except as contemplated in the Initial Improvement Plans, Tenant
shall not install or operate any refrigerating, heating or air conditioning
apparatus (other than a household-type refrigerator), or carry on any mechanical
business without the prior written consent of Landlord, not to be unreasonably
withheld, delayed or conditioned; use the Premises for housing, lodging or
sleeping purposes; or permit preparation or warming of food in the Premises
(warming of coffee and individual meals with employees and guests excepted).
Tenant shall not occupy or use the Premises or permit the Premises to be
occupied or used for any purpose, act or thing which is in violation of any
Governmental Requirement or which may be dangerous to persons or property.

         7.  Other than as permitted under the Lease, Tenant shall not bring
upon, use or keep in the Premises or the Building any kerosene, gasoline or
inflammable or combustible fluid or material, or any other articles deemed
hazardous to persons or property, or use any method of heating or air
conditioning other than that supplied or approved by Landlord, which approval
shall not be unreasonably withheld, delayed or conditioned.

         8.  Landlord shall have sole power to direct electricians as to where
and how wires are to be introduced, provided that Tenant may direct the location
of telephone wires after notifying Landlord in writing as to the location of
such wires. No boring or cutting for wires is to be allowed without the consent
of Landlord. The location of telephones, call boxes and other office equipment
affixed to the Premises shall be subject to the approval of Landlord.

         9.  Subject to Tenant's reasonable security needs (but provided
Landlord has a means of access to all portions of the Premises at all times), no
additional locks shall be placed upon any doors, windows or transoms in or to
the Premises. Tenant shall not change existing locks or the mechanism thereof.
Upon termination of the lease, Tenant shall deliver to Landlord all keys and
passes for offices, rooms, parking lot and toilet rooms which shall have been
furnished Tenant.

                                      B-1
<PAGE>
 
             In the event of the loss of keys so furnished, Tenant shall pay
Landlord the actual costs therefor. Tenant shall not make, or cause to be made,
any such keys and shall order all such keys solely from Landlord and shall pay
Landlord for the actual cost of any keys in addition to the initial sets of keys
furnished by Landlord for each lock, as required by Tenant.

         10. Tenant shall not install linoleum, tile, carpet or other floor
covering so that the same shall be affixed to the floor of the Premises in any
manner except as approved by Landlord.

         11. No furniture, packages, supplies, equipment or merchandise will be
received in the Building or carried up or down in any elevator, except between
such hours and in such elevator as shall be designated by Landlord, and with
such padding or other precautions as may be required by Landlord and which has
been approved with respect to other tenants in the Project, if applicable.
Tenant shall not take or permit to be taken in or out of other entrances of the
Building any item normally taken in or out through any trucking concourse or
service doors.

         12. Tenant shall use all reasonable efforts to cause all doors to the
Premises to be closed and securely locked and shall turn off all utilities,
lights and machines before leaving the Building at the end of the day.

         13. Without the prior written consent of Landlord, Tenant shall not use
the name of the Project or any picture of the Project in connection with, or in
promoting or advertising the business of, Tenant, except Tenant may use the
address of the Building as the address of its business.

         14. Tenant shall cooperate fully with Landlord to assure the most
effective operation of the Premises' or the Building's heating and air
conditioning, and shall refrain from attempting to adjust any controls, other
than room thermostats installed for Tenant's use. Tenant shall keep corridor
doors closed in any multi-tenant building it occupies in the Project.

         15. Tenant assumes full responsibility for protecting the Premises from
theft, robbery and pilferage, which may arise from a cause other than Landlord's
negligence, which includes keeping doors locked and other means of entry to the
Premises closed and secured.

         16. Peddlers, solicitors and beggars shall be reported to the office of
the Project or as Landlord otherwise requests.

         17. Tenant shall not advertise the business, profession or activities
of Tenant conducted in the Project in any manner which violates the letter or
spirit of any code of ethics adopted by any recognized association or
organization pertaining to such business, profession or activities.

         18. No bicycle or other vehicle and no animals or pets shall be allowed
in the Premises, halls, freight docks, or any other parts of the Building,
except that blind persons may be accompanied by "seeing eye" dogs.
Notwithstanding the foregoing, Tenant may, at its expense, install bicycle racks
in Tenant's shipping and receiving room for use by Tenant's employees. Tenant
shall not make or permit any noise, vibration or odor to emanate from the
Premises, or do anything therein tending to create, or maintain, a nuisance, or
do any act tending to injure the Building or the Project.

         19. Tenant acknowledges that Building or Project security problems may
occur which may require the employment of extreme security measures in the day-
to-day operation of the Building or the Project.

         Accordingly:

             (a)  Landlord may, at any time, or from time to time, or for
regularly scheduled time periods, as deemed advisable by Landlord and/or its
agents, in their reasonable discretion, require by written notice to Tenant that
persons entering or leaving the Building or the Project identify themselves to
watchmen or other employees designated by Landlord, by registration,
identification or otherwise.

                                      B-2
<PAGE>
 
             (b)  Tenant agrees that it and its employees will cooperate fully
with Building and Project employees in the implementation of any and all
security procedures.

             (c)  Such security measures shall be the sole responsibility of
Landlord, and Tenant shall have no liability for any action taken by Landlord in
connection therewith, it being understood that Landlord is not required to
provide any security procedures and shall have no liability for such security
procedures or the lack thereof.

         20. Tenant shall not do or permit the manufacture or sale of any
fermented, intoxicating or alcoholic beverages without obtaining written consent
of Landlord.

         21. Tenant shall not disturb the quiet enjoyment of any other tenant.

         22. Except as permitted under the Lease, Tenant shall not provide any
janitorial services or cleaning without Landlord's written consent and then only
subject to supervision of Landlord and at Tenant's sole responsibility and by
janitor or cleaning contractor or employees at all times satisfactory to
Landlord.

         23. Landlord may retain a pass key to the Premises and be allowed
admittance thereto at all times to enable its representatives to examine the
Premises from time to time and to exhibit the same, subject to the terms of the
Lease.

         24. No equipment, mechanical ventilators, awnings, special shades or
other forms of window covering shall be permitted either inside or outside the
windows of the Premises without the prior written consent of Landlord (which,
with respect to items located inside the windows of the Premises, shall not be
unreasonably withheld, delayed or conditioned), and then only at the expense and
risk of Tenant, and they shall be of such shape, color, material, quality,
design and make as may be approved by Landlord.

         25. Tenant shall not during the term of this Lease canvas or solicit
other tenants of the Building for any purpose, except in the ordinary course of
Tenant's business.

         26. Tenant shall not install or operate any phonograph, musical or
sound- producing instrument or device, radio receiver or transmitter, TV
receiver or transmitter, or similar device in the Building, nor install or
operate any antenna, aerial, wires or other equipment inside or outside the
Building, nor operate any electrical device from which may emanate electrical
waves which may interfere with or impair radio or television broadcasting or
reception from or in the Building or elsewhere, without in each instance the
prior written approval of Landlord. The use thereof, if permitted, shall be
subject to control by Landlord to the end that others shall not be disturbed.
Notwithstanding the foregoing, Tenant's employees may operate ordinary
household-type radios within offices in the Premises, and Tenant may operate
ordinary household-type televisions in conference rooms in the Premises.

         27. Tenant shall promptly cause all rubbish and waste to be removed
from the Premises.

         28. Tenant shall not exhibit, sell or offer for sale, Rent or exchange
in the Premises or at the Project any article, thing or service, except those
ordinarily embraced within the use of the Premises specified in Section 6 of
this Lease, without the prior written consent of Landlord.

         29. Tenant shall list all furniture, equipment and similar articles
Tenant desires to remove from any multi-tenant building within the Premises and
deliver a copy of such list to Landlord and procure a removal permit from the
Office of the Building authorizing Building employees to permit such articles to
be removed.

         30. Tenant shall consult with Landlord regarding the loading capacity
of any floors in the Premises or any public corridors or elevators in the
Building, and Tenant shall be liable for any damage covered by any overloading
unless Tenant obtained Landlord's prior authorization for same.

         31. Tenant shall not do any painting in the Premises, or mark, paint,
cut or drill into, drive nails or screws into, or in any way deface any part of
the Premises or the Building, outside or inside, without the prior 

                                      B-3
<PAGE>
 
written consent of Landlord, except as approved in the Initial Improvement
Plans, as necessary in the ordinary course of business or as commonly done in
decorating or equipping office space (such as message and white boards), subject
to Section 5A of the Lease.

         32. Except as otherwise provided herein, whenever Landlord's consent,
approval or satisfaction is required under these Rules, then unless otherwise
stated, any such consent, approval or satisfaction must be obtained in advance,
such consent or approval may be granted or withheld in Landlord's reasonable
discretion, and Landlord's satisfaction shall be determined in its reasonable
judgment. In addition, Landlord shall enforce these Rules on a non-
discriminatory basis.

         33. Tenant and its employees shall cooperate in all fire drills
conducted by Landlord in the Building.

                                      B-4
<PAGE>
 
                                  APPENDIX C

                         TENANT IMPROVEMENT AGREEMENT

         1.  INITIAL IMPROVEMENTS. Landlord has heretofore delivered to Tenant
those certain plans for construction of the base building (the "Base Building
Work") as prepared by Good, Fulton & Farrell Architects and dated November 20,
1997 (revised January 15, 1998) (the "Base Building Plans"). Tenant shall,
within ten (10) days after the date of the Lease, either provide comments to
such Base Building Plans or approve the same. Tenant shall be deemed to have
approved such Base Building Plans if it does not provide comments on such Base
Building Plans within the required time period. Tenant may only comment on the
Base Building Plans to the extent they conflict with the specifications set
forth in Appendix C-1 and Appendix C-2 attached hereto. If Tenant provides
Landlord with comments to the initial draft of the Base Building Plans, Landlord
shall provide revised Base Building Plans to Tenant incorporating Tenant's
comments within one (1) week after receipt of Tenant's comments. Tenant shall
within one (1) week after receipt then either provide comments to such revised
Base Building Plans or approve such Base Building Plans. Tenant shall be deemed
to have approved such revised Base Building Plans if Tenant does not provide
comments on such Base Building Plans within the required time period. The
process described above shall be repeated, if necessary, until the Base Building
Plans have been finally approved by Tenant.

         Landlord shall cause to be performed the improvements (the "Initial
Improvements") in the Premises in accordance with plans and specifications
mutually approved by Tenant and Landlord as set forth below and incorporating
such mutually-approved Base Building Plans (the "Initial Improvement Plans"),
which approvals shall not be unreasonably withheld, delayed or conditioned. The
Initial Improvements above Base Building Work shall be performed at the Tenant's
cost, subject to the Landlord's Contribution (hereinafter defined). Base
Building Work shall include, without limitation, installation of fiber optics,
cabling, a four (4) inch conduit linking Buildings 6, 7, 8 and 9 within the
Project to accommodate Tenant's communications and data cabling, and shower
facilities on the first (1st) floor of the Building, all as set forth in the
Base Building Plans. Landlord and Tenant agree that the building shell plans for
Building 7 and Building 9 will be generally consistent with the Base Building
Plans.

         Tenant shall cause the Initial Improvement Plans to be prepared, at
Tenant's cost, by a registered professional architect (currently contemplated to
be RTG Partners, Inc.), and mechanical and electrical engineer(s). Such
engineer(s) shall be reasonably approved in advance by the Landlord. Prior to
close-of-business on May 1, 1998, Tenant shall furnish the initial draft of the
Initial Improvement Plans to Landlord for Landlord's review and approval.
Landlord shall within two (2) weeks after receipt either provide comments to
such Initial Improvement Plans or approve the same. Landlord shall be deemed to
have approved such Initial Improvement Plans if it does not provide comments on
such Initial Improvement Plans within the required time period. If Landlord
provides Tenant with comments to the initial draft of the Initial Improvement
Plans, Tenant shall provide revised Initial Improvement Plans to Landlord
incorporating Landlord's comments within one (1) week after receipt of
Landlord's comments. Landlord shall within one (1) week after receipt then
either provide comments to such revised Initial Improvement Plans or approve
such Initial Improvement Plans. Landlord shall be deemed to have approved such
revised Initial Improvement Plans if Landlord does not provide comments on such
Initial Improvement Plans within the required time period. The process described
above shall be repeated, if necessary, until the Initial Improvement Plans have
been finally approved by Landlord. Tenant hereby agrees that the Initial
Improvement Plans for the Initial Improvements shall comply with all applicable
Governmental Requirements. Landlord's approval of any of the Initial Improvement
Plans (or any modifications or changes thereto) shall not impose upon Landlord
or its agents or representatives any obligation with respect to the design of
the Initial Improvements or the compliance of such Initial Improvements or the
Initial Improvement Plans with applicable Governmental Requirements except with
respect to Landlord's Base Building Work.

         Landlord, with consultation of Tenant, shall select a contractor to
perform the construction of the Initial Improvements, provided that Tenant, at
its option, may require Landlord to select Flynn Construction as the contractor.
Landlord shall use commercially reasonable efforts to cause the Initial
Improvements to be substantially completed, except for minor "Punch List" items,
on or before the Estimated Completion Date specified in this Appendix C, subject
to Tenant Delay (as defined in Section 4 hereof) and Force Majeure.

                                      C-1
<PAGE>
 
         Landlord, or an agent of Landlord, shall provide project management
services in connection with the construction of the Initial Improvements and the
Change Orders (hereinafter defined). Such project management services shall be
performed, at Tenant's cost, for a fee of two percent (2%) of all direct "hard"
costs related to the construction of the Initial Improvements and the Change
Orders up to $20.00 per Rentable Square Foot of the Building, to be deducted
from Landlord's Contribution. During the course of construction of the Initial
Improvements, Landlord or its agent shall provide Tenant with monthly
construction progress reports.

         2.  CHANGE ORDERS. If, prior to the Commencement Date, Tenant shall
require improvements or changes (individually or collectively, "Change Orders")
to the Premises in addition to, revision of, or substitution for the Initial
Improvements, Tenant shall deliver to Landlord for its approval plans and
specifications for such Change Orders. Within five (5) business days of
Landlord's receipt thereof, Landlord shall either approve of the plans for
Change Orders or advise Tenant of the revisions required, or else Landlord shall
be deemed to have approved such plans. Tenant shall revise and redeliver the
plans and specifications to Landlord within five (5) business days of Landlord's
advice or Tenant shall be deemed to have abandoned its request for such Change
Orders. Tenant shall pay for all preparations and revisions of plans and
specifications, and the construction of all Change Orders, subject to Landlord's
Contribution.

         3.  LANDLORD'S CONTRIBUTION. Landlord shall contribute an amount up to
$2,238,305 ("Landlord's Contribution") toward the costs incurred for the Initial
Improvements and Change Orders, including costs for engineering and
architectural services and permitting and construction management fees. Landlord
has no obligation to pay for costs of the Initial Improvements or Change Orders
in excess of Landlord's Contribution. If the cost of the Initial Improvements
and/or Change Orders exceeds the Landlord's Contribution, Tenant shall pay such
overage to Landlord on a prorata basis as construction of the Initial
Improvements and/or Change Orders progresses, within thirty (30) days after
invoice. If Landlord's Contribution exceeds the total cost paid by Landlord
toward the cost of the Initial Improvements and the Change Orders as of the
Commencement Date, then, at Tenant's option, such excess shall be applied within
sixty (60) days after the Completion Date as follows: (i) a maximum of Five and
No/100 Dollars ($5.00) per Rentable Square Foot shall be applied as a credit
against Tenant's actual moving expenses and actual costs for its signage, phone
systems and cabling [provided that no more than Two and No/100 Dollars ($2.00)
per Rentable Square Foot out of such excess may be applied as a credit against
Tenant's actual moving expenses], and (ii) in the event any excess remains after
application under clause (i) preceding, a maximum of One and No/100 Dollar
($1.00) per Rentable Square Foot shall be applied as a credit against Tenant's
first required payment of Base Rent.

         The Landlord Contribution amount set forth above is based on a base
contribution amount of $25.00 per Rentable Square Foot within the Premises,
proportionately reduced to reflect the preset delayed Commencement Dates for
certain portions of the Premises as set forth in Section 2 of Appendix F. In the
event Tenant triggers an earlier Commencement Date for any portion of the
Premises by occupying such portion earlier than the preset dates, the Landlord
Contribution shall be increased proportionately and paid within thirty (30) days
after such occupancy. In addition, in the event the Rentable Square Footage of
the Premises is adjusted under Section 1C of this Lease, the Landlord
Contribution shall be adjusted accordingly.

         4.  COMMENCEMENT DATE DELAY.

         A.  The Commencement Date shall not occur until the earlier of the
first Monday following the date Initial Improvements have been substantially
completed (such date, the "Completion Date") or Tenant's occupancy and
conducting of business in the Premises after the Completion Date, except to the
extent that any delay in the Completion Date shall be directly caused by any one
or more of the following (a "Tenant Delay"):

             (a)  Tenant's request for Change Orders whether or not any such
Change Orders are actually performed; or

             (b)  Contractor's performance of any Change Orders; or

             (c)  Tenant's request for materials, finishes or installations
requiring unusually long lead times; or

                                      C-2
<PAGE>
 
             (d)  Tenant's delay in reviewing, revising or approving plans
and specifications beyond the periods set forth herein; or

             (e)  Tenant's delay in providing information critical to the normal
progression of the project. Tenant shall provide such information as soon as
reasonably possible, but in no event longer than seven (7) days after receipt of
such request for information from the Landlord; or

             (f)  Tenant's delay in making payments to Landlord for costs of the
Initial Improvements and/or Change Orders in excess of the Landlord's
Contribution; or

             (g)  Any other act or omission by Tenant, its agents, contractors
or persons employed by any of such persons.

If the Completion Date is delayed for any reason, then Landlord shall cause
Landlord's Architect to certify the date on which the Initial Improvements would
have been completed but for such Tenant Delay, or were in fact completed without
any Tenant Delay, which certified date shall be the Completion Date for all
purposes under this Lease. Tenant Delays shall not include any delays caused by
Landlord's delay in reviewing, revising or approving plans and specifications
beyond the periods set forth herein.

         B.  If the Completion Date has not occurred by the "Estimated
Completion Date", subject to Tenant Delay and Force Majeure, as Tenant's sole
remedy (other than Tenant's termination right set forth below), Landlord shall
pay to Tenant as liquidated damages (or Tenant may deduct as liquidated damages
from its first and, if necessary, subsequent payments of Base Rent) one (1)
day's rent (calculated at a daily rate based on a 30-day month) plus $2,000.00
for each day that the Completion Date is delayed beyond the Estimated Completion
Date. Although Landlord and Tenant recognize that the damages which will be
suffered by Tenant should Landlord fail to timely complete the Initial
Improvements will be difficult to determine with precision, Landlord and Tenant
nevertheless covenant and agree that the liquidated damages to which Tenant is
entitled hereunder are a reasonable forecast of the damages which will be
suffered by Tenant by reason of Landlord's delay. The "Estimated Completion
Date" shall mean November 15, 1998, plus (i) the number of calendar days, if
any, after January 31, 1998 until and including the date of this Lease, and (ii)
the number of calendar days, if any, after March 1, 1998, until and including
the date of final approval of the Initial Improvement Plans.

         C.  If the Completion Date has not occurred within one hundred twenty
(120) days after the "Estimated Completion Date", subject to Tenant Delay and
Force Majeure delay, then Tenant, in addition to its rights under Section 4.B
above but otherwise as its sole remedy, may terminate this Lease by written
notice to Landlord, in which event the parties hereto shall have no liability or
further obligation under this Lease, and Landlord shall immediately refund the
Security Deposit to Tenant.

         D.  In the event Tenant requires Landlord to use Flynn Construction as
the contractor for construction of the Initial Improvements, the "Completion
Date" as used in the preceding two paragraphs shall mean the date the Base
Building Work has been substantially completed.

         5.  ACCESS BY TENANT PRIOR TO COMMENCEMENT OF TERM. Landlord at its
discretion may permit Tenant and its agents to enter the Premises prior to the
Commencement Date to prepare the Premises for Tenant's use and occupancy without
incurring Rent obligations solely as a result of such entry. Any such permission
shall constitute a license only, conditioned upon Tenant's:

         (a) working in harmony with Landlord and Landlord's agents,
contractors, workmen, mechanics and suppliers and with other tenants and
occupants of the Building;

         (b) obtaining in advance Landlord's approval (not to be unreasonably
withheld, conditioned or delayed) of the contractors proposed to be used by
Tenant and depositing with Landlord in advance of any work the contractor's
affidavit for the proposed work and the waivers of lien from the contractor and
all subcontractors and suppliers of material; and

                                      C-3
<PAGE>
 
         (c) furnishing Landlord with such insurance as Landlord may reasonably
require against liabilities which may arise out of such entry.

         Landlord shall not be liable in any way for any injury, loss or damage
which may occur to any of Tenant's property or installations in the Premises
prior to the Commencement Date unless resulting from Landlord's gross negligence
or willful misconduct. Tenant shall protect, defend, indemnify and save harmless
Landlord from all liabilities, costs, damages, fees and expenses arising out of
the activities of Tenant or its agents, contractors, suppliers or workmen in the
Premises or the Building. Any entry and occupation permitted under this Section
shall be governed by Section 5 and all other terms of the Lease, including,
without limitation, Section 3B of the Lease.

         6.  MISCELLANEOUS. Terms used in this Appendix C shall have the
meanings assigned to them in the Lease. The terms of this Appendix C are subject
to the terms of the Lease.

                                      C-4
<PAGE>
 
                                 APPENDIX C-1

                                SHELL CONDITION

Riata Corporate Park buildings shall have the following shell conditions in
place and ready for Tenant's use:

 .        Electrical power ceiling distribution grid. Note: Landlord reserves the
         right to separately meter the Tenant's premises.
         
 .        Suspended acoustical tile grid stocked on floor.

 .        All HVAC central distribution ducts, mixing boxes, thermostat controls,
         perimeter flex duct, perimeter slot and grid diffusers, return air
         ceiling plenum work ("saddle" type diffusers to be a tenant improvement
         item).

 .        Separate telephone and data distribution rooms on each floor, with
         necessary power for communications equipment and plywood mounting
         boards.

 .        Potable water at the designated points of entry for entire building.

 .        All "core" functions including, but not limited to, restrooms, recessed
         (chilled water) drinking fountains, HVAC room(s), telephone and
         electrical rooms, finished elevator lobbies, exit signs at corridors,
         all fire and life safety equipment, etc.
         
 .        Sprinkler grid; dropped heads with chrome semi-recessed nozzles (1/220
         square feet allocation).

 .        2'x 4' "second look" lay-in ceiling panels stocked on each lease space
         floor.
         
 .        2 tubed parabolic light features stocked on each lease space floor
         (1/80 square feet allocation).

 .        Blinds installed - in plastic bags.

 .        Exterior walls and Basic configuration of core walls and columns -
         drywall/tape & float (not painted).
         
 .        Shell building 2'x 4' "lay in" light fixtures are 2 tube T-8 electrical
         ballast fixtures at 80 square feet per fixture.
         
 .        Shell building design calls for 15 CFM per person.

 .        Shell electrical design provides 8.0 watts per square foot actually
         available for Tenant use after lighting and HVAC loads are
         accommodated.
         

                                     C-1-1
<PAGE>
 
                                 APPENDIX C-2

                             BASE BUILDING PROFILE

Electric

 .        City of Austin - Single feed.

 .        277/480 volt, 3 phase, 4 wire, 60 hertz service.

 .        8 watts per square foot for Tenant's use for lighting and power.

 .        Service switchboard shall be configured to allow the addition of at
         least one additional switch for future connection.
         
Floor Loading and Structural Features

 .        Increased floor loading capacity in the center of the building allows
         for file rooms, etc.
         
HVAC

 .        Three 105 ton Variable Air Volume (VAV) air cooling roof-top units.

General Features

 .        Variable air volume offering approximately 20 separately controlled
         climate/comfort zones per floor.
         
 .        60 separate thermostats (1 per zone).

 .        Direct Digital Controls (DDC) energy management system allows morning
         warm up, morning cool down, night setback and optimum start and stop.

 .        After-hours operation by zone.

 .        Outside air intake to enhance indoor air quality.

 .        Low emissivity 1" insulated dual pane glazing for energy conservation.

Fiber Optic Capability

 .        Telephone service.

 .        Single feed - Time Warner.

Elevators

 .        Three (3) 3,000 lb. hydraulic passenger elevators rated at 150 feet per
         minute.
         
 .        Enhanced passenger cab finishes.

 .        Security card access for after-hours operation.

Security Features

 .        Card-key systems throughout for entry into building and elevators.


                                     C-2-1
<PAGE>
 
 .        Elevators are designed with card-key interlock in order to provide for
         additional access control to the tenant floors.

 .        Card-key access control system can be expanded to permit access control
         to individual office suites as well as particular offices or
         departments within the premises.
         
 .        Two-way intercoms strategically located at the building entrances and
         elevator cabs provide for direct voice communication provided on a 24-
         hour a day, seven day per week basis.
         
 .        Metal halide site lighting providing an average of 1 foot candles.

Life Safety Systems - State of the Art

 .        Automatic fire sprinkler system.

 .        Fire alarm system including smoke detectors and sprinkler system flow
         switches.
         
 .        Stand-by battery pack powered lighting.

Construction Methods and Materials

 .        The fully sprinklered building conforms to "type II one hour"
         construction throughout.
         
 .        The building primarily consists of a precast concrete structure.

 .        Exterior walls are a combination of precast concrete with carefully
         designed finishes and patterns, green vision glass, and aluminum
         panels.

 .        Suns screens are provided to protect the non-recessed portions of the
         glass and to add subtle detail and shadow patterns to the building
         face.

 .        Additional details added to the top floor glazing through the use of
         vertical fin elements.
         
 .        Vision glass is green low "E" dual pane for noise control, insulating
         qualities and energy efficiency.

 .        Roof top equipment is screened by an extension of the building wall,
         which also emphasizes the sophisticated interlocking design of the
         project.

 .        Latest technology roofing and insulating materials ensure a low
         maintenance, energy efficient and weather tight roof.

 .        A monumental portal provides protection for the entry into the two-
         story lobby.
         
 .        An elegant steel and concrete stair provides direct access from the
         lobby to the second floor.

Lobby

 .        Two story "atrium" entry lobby.

 .        Grand stair to second floor with open balcony.

 .        Polished stone flooring.

 .        Matched wood veneers at elevator lobby walls.


                                     C-2-2
<PAGE>
 
Plaza Area

 .        Shaded outdoor meeting areas with arbor shelters.

 .        Flowering native trees and shrubs.

 .        Textured walks and planter walls.

 .        Comfortable seating and picnic areas.

Other Points

 .        Satellite dishes can be accommodated on the roof of the Building in
         accordance with CarrAmerica guidelines and at Tenant's expense, as
         provided in Section 30 of the Lease.
         
 .        Tenant's need for backup diesel generator can be accommodated on pad at
         grade at rear of Building and at Tenant's expense.
         
 .        Separate mail and vending area on ground floor.


                                     C-2-3
<PAGE>
 
                                  APPENDIX D

          MORTGAGES OR GROUND LEASES CURRENTLY AFFECTING THE PROJECT

                                     None.


                                      D-1
<PAGE>
 
                                  APPENDIX E

                        COMMENCEMENT DATE CONFIRMATION


Landlord:         CarrAmerica Realty, L.P., a Delaware limited partnership
                  t/a Riata Corporate Park

Tenant:           Pervasive Software Inc., a Delaware corporation

         This Commencement Date Confirmation is made by Landlord and Tenant
pursuant to that certain Lease dated as of _________, 199__ (the "Lease") for
certain premises known as Riata Corporate Park Building 8 (the "Premises"). This
Confirmation is made pursuant to Item 9 of the Schedule to the Lease.

         1.  Lease Commencement Date, Termination Date. Landlord and Tenant
hereby agree that the Commencement Date of the Lease is _____________, 199__,
and the Termination Date of the Lease is _______________, _____.

         2.  Acceptance of Premises. Tenant has inspected the Premises (or
applicable portion thereof) and affirms that the Premises (or such portion(s)
thereof known as Suite(s) _______) is acceptable in all respects in its current
"as is" condition, subject to the "punch list"-type items shown on Exhibit A
attached hereto.

         3.  Incorporation. This Confirmation is incorporated into the Lease,
and forms an integral part thereof. This Confirmation shall be construed and
interpreted in accordance with the terms of the Lease for all purposes.

                                       
                                       TENANT:

                                       PERVASIVE SOFTWARE INC.,
                                       a Delaware corporation

                                       By:
                                                 -------------------------------
                                       Name:
                                                 -------------------------------
                                       Title:
                                                 -------------------------------


                                       LANDLORD:

                                       CARRAMERICA REALTY, L.P., a Delaware
                                       limited partnership

                                       By:       CarrAmerica Realty GP Holdings,
                                                 Inc., a Delaware corporation,
                                                 General Partner

                                                 By:
                                                           ---------------------
                                                 Name:
                                                           ---------------------
                                                 Title:
                                                           ---------------------


                                      E-1
<PAGE>
 
                                  APPENDIX F

                              SPECIAL PROVISIONS


         1.  EXTENSION OPTION. Subject to Subsection 1C below, Tenant may at its
option extend the Term of this Lease for the entire Premises for two (2)
successive periods of five (5) years each. Each such period is called a "Renewal
Term", and the first such five (5) year period is called the "First Renewal
Term" and the second such five (5) year period is called the "Second Renewal
Term". Each Renewal Term shall be upon the same terms contained in this Lease,
excluding the provisions of Appendix C of this Lease and except for the payment
of Base Rent during the Renewal Term; and any reference in the Lease to the
"Term" of the Lease shall be deemed to include any Renewal Term and apply
thereto, unless it is expressly provided otherwise. Tenant shall have no
additional extension options.

             A.   The Base Rent during a Renewal Term shall be the greater of
(i) the average Base Rent over the initial Term of the Lease, or (ii) the then
prevailing market rate (including rent concessions typical for the relevant
market as set forth below) for a comparable term commencing on the first day of
the Renewal Term for tenants of comparable size and creditworthiness for
comparable space (including the extent of tenant improvements) in the Project
and other first-class office buildings in the Austin Northwest and Far Northwest
suburban markets, as reasonably determined by Landlord based upon independent
market research reports.

             B.   To exercise its option, Tenant must deliver an initial
non-binding notice to Landlord not more than eighteen (18) months nor less than
twelve (12) months prior to the proposed commencement of the Renewal Term.
Within forty-five (45) days of Landlord's receipt of Tenant's initial
non-binding notice, Landlord shall calculate and inform Tenant of the Base Rent
for the Premises during the Renewal Term. Such calculation shall be final and
shall not be recalculated at the actual commencement of the Renewal Term. Tenant
shall give Landlord final binding notice of its intent to exercise its option to
extend within thirty (30) days after receiving Landlord's written calculation of
Base Rent. If Tenant fails to give either its initial nonbinding notice or its
final binding notice timely, Tenant will be deemed to have waived its option to
extend. In the event Landlord fails to timely provide Tenant with its Base Rent
calculation as aforesaid, Tenant may notify Landlord thereof. If Landlord fails
to provide such calculation within thirty (30) days of such notice, Tenant may
notify Landlord thereof a second time. If Landlord still does not provide such
calculation within thirty (30) days of such second notice, then Base Rent for
the Renewal Term shall be deemed to be the average Base Rent over the initial
Term of the Lease.

             C.   Tenant's option to extend this Lease is subject to the
conditions that: (i) on the date that Tenant delivers its final binding notice
exercising an option to extend, Tenant is not in default under this Lease after
the expiration of any applicable notice and cure periods, and (ii) Tenant shall
not have assigned this Lease, or sublet any portion of the Premises under a
sublease which is in effect at any time during the final 12 months of the
initial Term or First Renewal Term, as applicable, except for an assignment
pursuant to Section 17D of the Lease or a sublease of less than one-third (_) of
the then-current total Rentable Square Footage of the Premises.

             D.   Tenant agrees to accept the Premises at the commencement of
the Renewal Term in its then-present condition, "AS IS" and "WITH ALL FAULTS."

         2.  HOLD/TAKE SPACE. Notwithstanding anything to the contrary in the
Lease, the "Premises" as of the Commencement Date shall consist of 70,000
Rentable Square Feet in the Building (the "Initial Space"). Thereafter,
additional portions of the Building shall be added to the "Premises" as follows:
10,000 Rentable Square Feet commencing six (6) months after the Commencement
Date (the "First Take Space") or upon Tenant's occupancy of such space,
whichever is sooner; an additional 8,000 Rentable Square Feet commencing twelve
(12) months after the Commencement Date or upon Tenant's occupancy of such
space, whichever is sooner (the "Second Take Space"); and an additional 3,332
Rentable Square Feet commencing eighteen (18) months after the Commencement Date
or upon Tenant's occupancy of such space, whichever is sooner (the "Third Take
Space"). No later than June 1, 1998, Tenant shall notify Landlord in writing as
to Tenant's desired location of the Initial Space, First Take Space, Second Take
Space and Third Take Space in the Building. Landlord will then cause Landlord's
Architect to delineate such spaces on the Initial Improvement Plans and to
verify the square footage thereof.

                                      F-1
<PAGE>
 
         3.  EXPANSION OPTIONS.

             A.   First Expansion Option. Tenant shall have the option of
expanding the Premises to include a portion of Building 7 or Building 9 (the
"First Expansion Space"), as determined by Landlord pursuant to the provisions
below. Tenant may exercise this option by delivering written notice thereof to
Landlord on or not greater than thirty (30) days before the last day of the
second (2nd) Lease Year. Within thirty (30) days after Tenant's notice as
aforesaid, Landlord shall notify Tenant of the location of the First Expansion
Space (which shall be within either Building 7 or Building 9 in the Project),
the size of the First Expansion Space (actual delivery of which shall be not
greater than 25,000 contiguous rentable square feet nor less than 15,000
contiguous rentable square feet) and the date Landlord estimates it will deliver
the First Expansion Space to Tenant (which shall be not more than forty-eight
(48) months following the Commencement Date nor less than thirty-six (36) months
following the Commencement Date). The Tenant Improvement Agreement set forth in
Appendix C shall apply to the First Expansion Space, except that (i) the Initial
Improvements shall be only those improvements to be performed within the First
Expansion Space, (ii) "Commencement Date" shall be changed to "Expansion
Commencement Date", and (iii) the amount of the Landlord's Contribution per
Rentable Square Foot for the First Expansion Space shall be equal to (a) $25.00
x Y/120 x Z, where Y equals the number of calendar months between the Expansion
Commencement Date and the end of the initial 10-year Term and Z equals the
number of Rentable Square Feet within the First Expansion Space, less (b) the
total amount of monetary concessions granted to prior third party tenant(s) of
the First Expansion Space for tenant improvement allowances, moving expenses,
signage and phone systems and cabling. Except as expressly modified herein, all
other terms of the Lease shall apply to the First Expansion Space to the same
extent as if such space were originally included in the definition of the
Premises.

             B.   Second Expansion Option. Tenant shall have the option of
expanding the Premises to include a portion of Building 7 or Building 9 (the
"Second Expansion Space"), as determined by Landlord pursuant to the provisions
below. Tenant may exercise this option by delivering written notice thereof to
Landlord on or not greater than thirty (30) days before the last day of the
fourth (4th) Lease Year. Within thirty (30) days after Tenant's notice as
aforesaid, Landlord shall notify Tenant of the location of the Second Expansion
Space (which shall be within either Building 7 or Building 9 in the Project, in
Landlord's sole discretion, provided that Landlord will consider Tenant's
preference that such space be located adjacent to the First Expansion Space or
at least in the same building as the First Expansion Space, without any
obligation on Landlord to do so), the size of the Second Expansion Space (which
shall be not greater than 20,000 contiguous rentable square feet nor less than
10,000 contiguous rentable square feet) and the date Landlord estimates it will
deliver the Second Expansion Space to Tenant (delivery of which shall be not
more than seventy-two (72) months following the Commencement Date nor less than
sixty (60) months following the Commencement Date). The Tenant Improvement
Agreement set forth in Appendix C shall apply to the Second Expansion Space,
except that (i) the Initial Improvements shall be only those improvements to be
performed within the Second Expansion Space, (ii) "Commencement Date" shall be
changed to "Expansion Commencement Date", and (iii) the amount of the Landlord's
Contribution per Rentable Square Foot for the Second Expansion Space shall be
equal to (a) $25.00 x Y/120 x Z, where Y equals the number of calendar months
between the Expansion Commencement Date and the end of the initial 10-year Term
and Z equal the number of Rentable Square Feet within the Second Expansion
Space, less (b) the total amount of monetary concessions granted to prior third
party tenant(s) of the Second Expansion Space for tenant improvement allowances,
moving expenses, signage, phone systems and cabling and lease termination fees.
Except as expressly modified herein, all other terms of the Lease shall apply to
the Second Expansion Space to the same extent as if such space were originally
included in the definition of the Premises.

             C.   Lease Amendment to Reflect Expansion. Promptly after Tenant's
exercise of its expansion options under Subsection 3A and/or Subsection 3B of
this Appendix F, Landlord shall execute and deliver to Tenant an amendment to
the Lease to reflect changes in the Premises, Base Rent, Tenant's Proportionate
Share and any other appropriate terms changed by the addition of the First
Expansion Space or Second Expansion Space, as applicable. The amendment shall
also specify any additional electrical equipment to be used in the Expansion
Space, the consumption costs, if applicable, for which Tenant will owe pursuant
to Section 4C of the Lease. Within fifteen (15) days thereafter, Tenant and
Landlord shall execute the amendment with any changes that may be mutually
agreed upon.

                                      F-2
<PAGE>
 
         4.  RIGHT OF FIRST REFUSAL. Subject to Subsection 4B below, Landlord
hereby grants to Tenant for the term of the Lease (as same may be extended) a
right of first refusal for the balance of the building in which the First
Expansion Space is (or will be) located (the "RFR Space"), to be exercised in
accordance with Subsection A below. For purposes of this Section 4 of Appendix
F, the building in which the First Expansion Space is (or will be) located shall
be as designated by Landlord pursuant to Subsection 3A above or, if such
designation has not yet occurred, as otherwise designated by Landlord in writing
to Tenant with or prior to the First Landlord's RFR Notice (defined below).

             A.   In the event Landlord receives a bona fide offer from a
third party to lease all or a portion of the RFR Space acceptable to Landlord,
or Landlord makes a legitimate bona fide offer to a third party with respect to
all or a portion of the RFR Space acceptable to such third party, Landlord shall
so notify Tenant ("Landlord's RFR Notice"), identifying the available RFR Space
and accompanied by a copy of such offer. Tenant shall notify Landlord within
seven (7) business days of receipt of Landlord's RFR Notice whether it desires
to lease the RFR Space on the terms set forth in the copy of the offer
accompanying Landlord's RFR Notice. If Tenant does not notify Landlord within
said 7-business day period that it will lease the RFR Space, Landlord shall be
free to lease such space to such third party on the terms of the offer made by
or to such party and Tenant shall have no further right of first refusal for
such RFR Space unless and until, after either the term of any lease (or any
renewal thereof) between Landlord and such third party expires or such third
party affirmatively and finally rejects such space without entering into a lease
therefor, Landlord again receives from or makes a mutually acceptable bona fide
offer to a third party for the lease of such RFR Space. If Tenant exercises its
right of first refusal with respect to the RFR Space, such space shall be added
to the Premises for all purposes of this lease for the remaining Term of the
Lease on (a) the terms specified in the copy of the offer accompanying
Landlord's RFR Notice, and (b) the terms of this Lease to the extent that they
do not conflict with the terms specified in the copy of the offer accompanying
Landlord's RFR Notice. Tenant's refusal of a portion of RFR Space shall in no
way affect Tenant's right of first refusal as set forth herein with respect to
the balance of the RFR Space.

             B.   Tenant's right of first refusal as set forth above is subject
to the conditions that: (i) on the date that Tenant delivers its notice
exercising its right of first refusal, Tenant is not in default under this Lease
after the expiration of any applicable notice and cure periods, and (ii) Tenant
shall not have assigned the Lease, or sublet any portion of the Premises under a
sublease which is in effect at any time during the period commencing with
Tenant's delivery of its notice and ending on the date the RFR Space is added to
the Premises, except for an assignment or sublease pursuant to Section 17D of
the Lease or subleases of less than one-third (1/3) of the then-current total
Rentable Square Footage of the Premises.

             C.   Promptly after Tenant's exercise of its right of first refusal
under this Paragraph 4, Landlord shall execute and deliver to Tenant an
amendment to the Lease to reflect changes in the Premises, Base Rent, Tenant's
Proportionate Share and any other appropriate terms changed by the addition of
the RFR Space. Within fifteen (15) days after Tenant's receipt of an accurate
amendment from Landlord, Tenant shall execute and return the amendment.

         5.  TERMINATION OPTION. Tenant may at its option terminate this Lease
in its entirety (the "Termination Option") effective as of the last day of the
seventh (7th) Lease Year (the "Early Termination Date") by delivering written
notice of its intent to terminate this Lease (the "Termination Notice") to
Landlord on or before the date twelve (12) months prior to the Early Termination
Date accompanied by payment of one-half (1/2) of the Termination Fee (defined
below). The other one-half (1/2) of the Termination Fee shall be paid by Tenant
to Landlord on the earlier to occur of Tenant's vacation of the Premises or the
Early Termination Date. If Tenant fails to timely deliver its Termination Notice
and pay the initial one-half (1/2) of the Termination Fee, Tenant will be deemed
to have waived such Termination Option. If (i) there are any uncured defaults by
Tenant under this Lease as of the date Tenant delivers the Termination Notice or
as of the Early Termination Date, or (ii) Tenant's exercise of its expansion
and/or right of first refusal rights under this Appendix F or any other
expansion of the Premises has resulted in the "Premises" under this Lease
totalling more than 152,331 Rentable Square Feet in Buildings 6, 7, 8 and 9 as
of the Early Termination Date, the Termination Option shall be void, and the
Lease shall remain in effect. If Tenant properly exercises its Termination
Option, this Lease shall terminate as of the Early Termination Date, with all
remaining obligations of the parties thereupon extinguished in full. In the
event the Premises consists of Building 8 only as of the Early Termination 
Date, the "Termination Fee" shall equal $2,290,000.00. In the event the Premises

                                      F-3
<PAGE>
 
has expanded beyond Building 8 as of the Early Termination Date, whether
pursuant to this Appendix F or otherwise, then the Termination Fee as aforesaid
shall increase by the following amounts: (a) the total aggregate amount of
Landlord's Contribution for such expansion space, plus any other monetary
concession granted to Tenant for such space under the terms of this Lease or
otherwise (e.g., moving expenses, equipment allowances, rent credits, etc.),
which would be unamortized as of the Early Termination Date, assuming that such
total aggregate amount were to be fully amortized over the term of the Lease (as
amended) applicable to the expansion space, using an interest rate of 10% per
annum, plus (b) the difference between (i) the total amount of Base Rent which
would have been due and payable by Tenant for such expansion space over the
period from the term commencement date for such expansion space until the Early
Termination Date, using the average Base Rent per square foot per year for such
space from such expansion commencement date until the originally scheduled
Termination Date of the Lease applicable to such expansion space, less (ii) the
total amount of Base Rent actually paid by Tenant for such shorter period with
respect to such expansion space, plus (c) the sum of the monthly installments of
Base Rent and Operating Cost Share Rent which would have been payable in the
first four (4) full calendar months following the Early Termination Date with
respect to such expansion space. Any amendment to the Lease done in connection
with expansion of the Premises shall contain a recalculation of the Termination
Fee in accordance with the foregoing, provided that such recalculation shall be
self-operative upon such expansion of the Premises, without regard to whether
same is addressed in a Lease amendment.


                                      F-4
<PAGE>
 
                                  APPENDIX G

                           FORM OF LETTER OF CREDIT

                     [Letterhead of Financial Institution]


                         IRREVOCABLE LETTER OF CREDIT
                               No. _____________


                          _____________________, ____



CarrAmerica Realty, L.P.
t/a Riata Corporate Park,
as Landlord under the Lease
referred to below

8240 North MoPac, Suite 105
Austin, Texas  78759
Attn:  Market Officer


Gentlemen:

         1.  We hereby establish, at the request and for the account of
Pervasive Software Inc. (the "Tenant"), in your favor as Landlord ("Landlord"),
or any successor or assign of Landlord, under that certain Lease between
Landlord and Tenant, dated as of ____________________, 1998 (the "Lease"), and
Landlord's successors and assigns, our Irrevocable Letter of Credit No. ______,
in the amount of U.S. $175,000.00 (the "Stated Amount"), as more fully set forth
hereinafter, effective immediately and expiring at the close of banking business
at our [office address of Financial Institution] office on _____________________
(the "Stated Expiration Date"). 

         2.  Funds under this Letter of Credit are available to you against 
your sight draft(s) drawn on us, stating on its face:  "Drawn under [Name of 
Financial Institution] Irrevocable Letter of Credit No. ______" and 
accompanied by your written, completed and executed certificate in the form
attached hereto as Schedule 1 with appropriate insertions. Such draft(s) and
certificate(s) shall be dated the date of presentation, which shall be made at
any time during our business hours on a Business Day (as hereinafter defined) at
our main office located at _________________________, _______, Texas 
(Attention: _________________), or at any other office of ours located in 
________, Texas, that may be designated by us by written notice delivered to 
you. If we receive your draft(s) and certificate(s) at such office, we shall, 
by no later than 11:00 a.m., ________, Texas time, on the third Business Day 
following the date of such demand, make payment to you of the amount demanded.
All payments hereunder shall be made in immediately available funds to the 
Landlord at the address set forth above in Austin, Texas. "Business Day" shall 
mean any day other than a Saturday, Sunday, or other day on which national 
banks in the city in which is located the office of the Landlord or [Name of 
Financial Institution] are authorized or required by law to close.

         3.  You may make multiple drawings hereunder; provided, however, that
each drawing honored by us hereunder shall reduce the amount available under
this Letter of Credit by the amount of such drawing. Drawings hereunder shall
never exceed the Stated Amount.

         4.  This Letter of Credit shall automatically terminate upon the
earliest of (i) our honoring of the final drawing available to be made
hereunder, (ii) the surrender to us by you of this Letter of Credit for
cancellation, or (iii) the Stated Expiration Date hereof.


                                      G-1
<PAGE>
 
         5.  Drawings on this Letter of Credit shall be delivered with the
appropriate form of certificate attached hereto and all other communications
with respect hereto shall be in writing and shall be addressed to us at the
address set forth above, specifically referring to the number of this Letter of
Credit and shall be deemed made when actually received by us.

         6.  Except as expressly provided herein, this Letter of Credit is
subject to the Uniform Customs and Practices for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500 (the "UCP"). To
the extent applicable, provisions of the UCP shall prevail; this Letter of
Credit shall be governed by and construed in accordance with the laws of the
United States of America and the State of Texas, including the Business and
Commerce Code as in effect in the State of Texas on the date hereof.

         7.  We hereby agree that drafts drawn and presented in conformance with
the terms hereof shall be duly honored.

                                       Very truly yours,

                                       [Name of Financial Institution]


                                       By:
                                                 -------------------------------
                                       Name:
                                                 -------------------------------
                                       Title:
                                                 -------------------------------



                                      G-2
<PAGE>
 
                                                             Schedule 1
                                                             to Letter of Credit

                            CERTIFICATE FOR DRAWING


         Capitalized terms used, but not otherwise defined herein, shall have
the meanings ascribed to them in that certain Irrevocable Letter of Credit No.
______ (the "Letter of Credit") dated ____________, _____, issued by 
_______________________________(the "Issuer") for the benefit of the 
undersigned (the "Landlord").

         The undersigned, a duly authorized officer of the Landlord, hereby
certifies to the Issuer, with reference to the Letter of Credit, that:

             (1)  The Landlord is the Landlord under the Lease.

             [One of the following two provisions is to be selected depending
         upon Landlord's rationale for making a drawing under the Letter of
         Credit:]
         
             (2)  The Landlord is making a drawing under the Letter of Credit
         with respect to a payment due under the Lease which has not been
         received by the Landlord after default and lapse of any applicable
         notice and cure period.
         
             (3)  The amount which is due and payable under the Lease and which
         shall be due and payable under the Letter of Credit following the date
         of presentation of the sight draft accompanying this Certificate, is
         $___________________, and the amount of such sight draft does not
         exceed the current amount of the Letter of Credit.

                                     [or]

             (2)  The term of the Lease has not expired and the Landlord is
         making a drawing under the Letter of Credit with respect to Tenant's
         failure to provide an identical renewal or replacement letter of credit
         at least thirty (30) days prior to the expiration of the Letter of
         Credit.
         
         IN WITNESS WHEREOF, the Landlord has executed and delivered this
Certificate as of the ____ day of _______________________, 199_.


                                                                               ,
                                                 ------------------------------
                                                 as the Landlord


                                                 By:
                                                           ---------------------
                                                 Name:
                                                           ---------------------
                                                 Title:
                                                           ---------------------


                                      G-3