EXHIBIT 10.16(ii)
 
FIRST LEASE AMENDMENT

THIS FIRST LEASE AMENDMENT (the "Amendment") is executed this 19th day of
September, 2001, by and between DUKE REALTY LIMITED PARTNERSHIP, an Indiana
limited partnership ("Landlord"), and INTERACTIVE INTELLIGENCE, INC., an Indiana
corporation ("Tenant").

W I T N E S S E T H :

WHEREAS, Landlord (formerly known as Duke-Weeks Realty Limited Partnership) and
Tenant entered into a certain lease dated April 1, 2001 (the "Lease"), whereby
Tenant agreed to lease from Landlord approximately 180,000 rentable square feet
of space in a building to be constructed (the "Original Premises") located at
Woodland Corporate Park, Indianapolis, Indiana; and

WHEREAS, Landlord and Tenant desire to reduce the Original Premises to
approximately 120,000 rentable square feet (the "Leased Premises"); and

WHEREAS, Landlord and Tenant desire to amend certain provisions of the Lease to
reflect such reduction in square footage and any other changes to the Lease;

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants
herein contained and each act performed hereunder by the parties, Landlord and
Tenant hereby enter into this Amendment.

1.           Incorporation of Recitals.  The above recitals are hereby
incorporated into this Amendment as if fully set forth herein.

2.           Amendment of Article 1.  Lease of Premises.  Section 1.01 of
Article 1 is hereby amended as follows:

 
A.
*Leased Premises (shown outlined in red on Amended Exhibit A attached
hereto):  Building Address:  Woodland Corporate Park ("Building"), located on
the land identified on Amended Exhibit A-1 (the "Land");

 
B.
**Rentable Area:  approximately 120,000 rentable square feet; paragraph 2 of
this subsection B remains unchanged;

D.           **Minimum Annual Rent:

Years 1-5
$2,010,000.00 per year
Years 6-10
$2,286,000.00 per year
Years 11-15
$2,706,000.00 per year;

E.           **Monthly Rental Installments:

Months 1-60
$167,500.00 per month
Months 61-120
$190,500.00 per month
Months 121-180
$225,500.00 per month;

The parties commit that they will work diligently to complete and approve (i)
the rendering; (ii) the site layout; and (iii) the Building floor plan on or
before November 15, 2001 so as to enable Landlord to place orders for steel,
pre-cast and long lead construction materials. Provided however, that if items
(i), (ii) and (iii) are not finalized and approved on or before April 1, 2002
(for any reason other than Landlord’s delay) the Minimum Annual Rent and Monthly
Rental Installments shall be:

Years 1-5
$2,047,200.00 per year
Years 6-10
$2,323,200.00 ,per year
Years 11-15
$2,743,200.00 per year;

Months 1-60
$170,600.00 per month
Months 61-120
$193,600.00 per month
Months 121-180
$228,600.00 per month;

 
G.           Target Commencement Date:  April 1, 2003
Target Occupancy Date:  March 1, 2003;

I.           Broker:  Duke Realty Limited Partnership representing Landlord;

K.           Working Drawings Approval Date:  (See Amended Exhibit B);

L.           Addresses for payments and notices:

Landlord:                                Duke Realty Limited Partnership
Attn:  Property Management
600 East 96th Street, Suite 100
Indianapolis, Indiana 46240

With Payments to:               Duke Realty Limited Partnership
P.O. Box 66259
Indianapolis, Indiana  46266

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Tenant Prior to
Commencement Date:          Interactive Intelligence, Inc
Attn:  John R. Gibbs
8909 Purdue, Suite 300
Indianapolis, Indiana 46268

After Commencement
Date:                                           Interactive Intelligence, Inc.
*(To be completed when address is established for the Building)
**(To be adjusted by Landlord to reflect actual square footage after
construction of the Building and the Leased Premises is completed.)
 ____________________________

3.           Amendment of Section 2.02.A.  Shell Work.  Section 2.02.A. of the
Lease is hereby amended by deleting Preliminary Exhibit B-1, Exhibit B-1 and
Exhibit B-1A and substituting Amended Preliminary Exhibit B-1, Amended Exhibit
B-1, and Amended Exhibit B-1A, respectively, in lieu thereof.

4.           Amendment of Section 2.02.B.  Tenant Finish
Improvements.  Section 2.02.B. of the Lease is hereby amended by deleting
Exhibit B-2 and substituting Amended Exhibit B-2 in lieu thereof.

5.           Amendment of Section 2.02.C.  Project Design Schedule and
Permits.  Section 2.02.C. of the Lease is hereby amended by deleting "Exhibit
B-3" and substituting "Amended Exhibit B-3" in lieu thereof.

6.           Amendment of Section 2.02.D.  Substantial
Completion.  Section 2.02.D. of the Lease is hereby amended by deleting the
phrase "Exhibit B-1, B-1A and B-2" and substituting the phrase "Amended Exhibit
B-1, B-1A and B-2" in lieu thereof.  Section 2.02.D. of the Lease is hereby
further amended by deleting the phrase "July 1, 2002" and substituting the
phrase "May 1, 2003" in lieu thereof and deleting the phrase "November 1, 2002"
and substituting the phrase "September 1, 2003" in lieu thereof.

7.           Amendment of Section 2.02.F.  Fixturing.  Section 2.02.F. of the
Lease is hereby amended by deleting the first sentence and substituting the
following in lieu thereof:

Tenant shall have the right and privilege of going into the second (2nd) and
third (3rd) floors of the Leased Premises commencing sixty (60) days prior to
the Occupancy Date, subject to Tenant Caused Delays or any other events beyond
Landlord's control, and the first (1st) floor commencing thirty (30) days prior
to the Occupancy Date and continuing through the Occupancy Date to complete
interior decoration work and to otherwise prepare the Leased Premises for its
occupancy, provided, however, that its schedule in so doing shall be
communicated to and coordinated with Landlord so as not to unreasonably
interfere with or delay other work of Landlord in the Leased Premises.

8.           Amendment of Section 2.02.G.  Tenant Caused Delays.  Section 2.02
of the Lease is hereby amended by deleting the phrase "Exhibit B-3" and
substituting the phrase "Amended Exhibit B-3" in lieu thereof.

9.           Amendment of Section 2.02.H.  Compliance.  Section 2.02.H. of the
Lease is hereby amended by deleting the phrase "Exhibit B-1" and substituting
the phrase "Amended Exhibit B-1", in lieu thereof.

10.           Amendment of Section 3.02.D.  Real Estate Taxes.  Section 3.02.D.
of the Lease is hereby amended by deleting the second paragraph in its entirety
and substituting the following in lieu thereof:

Tenant hereby warrants and represents to Landlord that Tenant has received real
estate tax abatements for the Building acceptable to Tenant and waives any right
it might have or claim to terminate the Lease based on its obtaining such real
estate tax abatement.  Tenant understands and agrees that it is responsible for
any and all Real Estate Taxes accruing during the Lease Term with regard to the
Building and the Land and agrees to indemnify and hold harmless Landlord from
and against any and all losses, claims or damages resulting from Tenant's
failure to comply with its obligations under this Section or under any agreement
between Landlord and Tenant and the City of Indianapolis, Indiana with respect
to real estate tax abatement for the Building and Land, except to the extent of
such losses, claims or damages directly resulting from Landlord's failure to
comply with its obligations under this Section or under any agreement between
Landlord and Tenant and the City of Indianapolis, Indiana with respect to real
estate tax abatement.  Landlord hereby agrees that the full amount which is
abated is for the benefit of Tenant. To permit Tenant to take the actions
necessary to maintain property tax abatement deductions on the Building,
Landlord shall (i) upon reasonable notice from Tenant, execute such tax
abatement applications, forms, resolutions, agreements, and other materials,
provided the same shall be in a form reasonably acceptable to Landlord;
(ii) upon reasonable notice from Tenant, provide Tenant with information in its
possession with respect to the Building necessary to prepare such applications,
forms, resolutions, agreements and other materials; (iii) upon reasonable notice
from Tenant, either appear or authorize Tenant to appear on behalf of Landlord
at any public hearing related to maintaining real estate tax abatement on the
Building; and (iv) shall forward to Tenant promptly upon receipt any notice of
assessment or change in assessment relating to the Building.
 
 

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11.           Amendment of Section 6.01.  Services To Be Provided.  Section 6.01
(g) is hereby amended by deleting the phrase "Exhibit B" and substituting the
phrase "Amended Exhibit B-2" in lieu thereof.

12. Amendment of Section 16.11(A).  Signage.  Section 16.11 (A) is hereby
amended by deleting the phrase "Exhibit B-4" and substituting the phrase
"Amended Exhibit B-4" in lieu thereof.

13.           Amendment of Section 16.13.  Parking.  Section 16.13 of the Lease
is hereby amended by deleting the phrase "Exhibit B-1" and substituting the
phrase "Amended Exhibit B-1" in lieu thereof.

14.          Amendment of Section 16.14.  Relocation and Discretionary
Allowances.  Section 16.14(b) is hereby deleted in its entirety and the
following is substituted in lieu thereof:

(b)           a discretionary allowance in the amount of Five Hundred Six
Thousand Seven Hundred Dollars ($506,700.00).  A portion of the discretionary
allowance in the amount of Two Hundred Sixty Thousand Dollars ($260,000.00)
shall be paid to Tenant or at Tenant’s direction, upon execution of this
Amendment and the balance thereof in the amount of Two Hundred Forty six
Thousand Seven Hundred Dollars ($246,700.00) shall be payable upon the later to
occur of (i) payment by Tenant of the first Monthly Rental Installment, or (ii)
the Commencement Date.

15.           Amendment of Section 16.16.  Phase I Building Expansion
Option.  Section 16.16 of the Lease is hereby amended by (i) deleting the phrase
"Exhibit A" and substituting the phrase "Amended Exhibit A" in lieu thereof and
(ii) by deleting the phrase "not less than 110,000 rentable square feet and not
more that 250,000 rentable square feet" and substituting the phrase
"approximately 160,000 rentable square feet".  Section 16.16 of the Lease is
hereby further amended by deleting the phrase "June 30, 2003" and substituting
the phrase "March 31, 2004" in lieu thereof.

16.           Amendment of Section 16.17.  Phase II Building Expansion
Option.  Section 16.17 of the Lease is hereby amended by deleting the phrase
"Exhibit A" and substituting the phrase "Amended Exhibit A" in lieu
thereof.  Section 16.17 is further amended by deleting all reference therein to
any option granted to Tenant to choose to build Phase II Building Expansion
Option as two (2) buildings and shall provide that Tenant’s Phase II Building
shall be one (1) building containing approximately 90,000 rentable square
feet.  Section 16.17 of the Lease is hereby further amended by (i) deleting the
phrase "May 31, 2005" and substituting the phrase "March 31, 2006" in lieu
thereof; and (ii) deleting the phrase "May 31, 2003" and substituting the phrase
"March 31, 2004" in lieu thereof.

17.           Amendment of Section 16.18.  Phase III Building Expansion Option.
Section 16.18 of the Lease is hereby amended by (i) deleting the phrase "Exhibit
A" and substituting the phrase "Amended Exhibit A" in lieu thereof and by
deleting the phrase "not less than 110,000 rentable square feet and not more
that 250,000 rentable square feet" and substituting the phrase "approximately
180,000 rentable square feet".  The last paragraph of Section 16.18 of the Lease
is hereby amended by deleting the phrase "May 31, 2003" and substituting the
phrase "March 31, 2004" in lieu thereof and deleting the phrase "May 31, 2005"
and substituting the phrase "March 31, 2006" in lieu thereof.

18.           Amendment of Section 16.20.  Right of First Offer for the ViFi
Expansion Space.  Section 16.20 of the Lease is hereby amended by deleting the
phrase "Exhibit A" and substituting the phrase "Amended Exhibit A" in lieu
thereof.

19.           Amendment of Section 16.21.  Name Change of Park.  Section 16.21
of the Lease is hereby amended by deleting the first sentence and substituting
the following in lieu thereof:

Upon Tenant's execution of a new lease or an amendment of this Lease with
Landlord to exercise its Phase I Building Expansion Option as set forth in
Section 16.16 hereof, and for so long as Interactive Intelligence, Inc. remains
the Tenant hereunder and is and remains open and operating in all or
substantially all of the Leased Premises under the tradename "Interactive
Intelligence", Landlord shall change the name of Woodland Corporate Park to
"Interactive Park".

20.           Tenant's Representations and Warranties.  The undersigned
represents and warrants to Landlord that (i) Tenant is duly organized, validly
existing and in good standing in accordance with the laws of the state under
which it was organized; (ii) all action necessary to authorize the execution of
this Amendment has been taken by Tenant; and (iii) the individual executing and
delivering this Amendment on behalf of Tenant has been authorized to do so, and
such execution and delivery shall bind Tenant.  Tenant, at Landlord's request,
shall provide Landlord with evidence of such authority.

21.           Examination of Amendment.  Submission of this instrument for
examination or signature to Tenant does not constitute a reservation or option,
and it is not effective until execution by and delivery to both Landlord and
Tenant.

22.           Definitions.  Except as otherwise provided herein, the capitalized
terms used in this Amendment shall have the definitions set forth in the Lease.

23.           Incorporation.  This Amendment shall be incorporated into and made
a part of the Lease, and all provisions of the Lease not expressly modified or
amended hereby shall remain in full force and effect.

*(To be completed when address is established for the Building)
 
**(To be adjusted by Landlord to reflect actual square footage after
construction of the Building and the Leased Premises is completed)

 
 
 

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed on the
day and year first written above.

LANDLORD:

DUKE REALTY LIMITED PARTNERSHIP,
an Indiana limited partnership

By:  Duke Realty Corporation,
its general partner

By: /s/ William E. Linville, III
William E. Linville, III
Regional Executive Vice President
 

TENANT:

INTERACTIVE INTELLIGENCE, INC.,
an Indiana corporation

By: /s/ John R.
Gibbs                                                                

Printed:  John R.
Gibbs                                                                           

Title: Executive Vice
President                                                                           

STATE OF Indiana                                                      )
) SS:
COUNTY OF Marion                                                      )

Before me, a Notary Public in and for said County and State, personally appeared
John R. Gibbs, by me known and by me known to be the Executive Vice President of
Interactive Intelligence, Inc., an Indiana corporation, who acknowledged the
execution of the foregoing "First Lease Amendment" on behalf of said
corporation.

WITNESS my hand and Notarial Seal this 18th  of September, 2001.

/s/ Traci L.
Shaw                                                                
Notary Public

Traci L. Shaw                                                                
(Printed Signature)

My Commission Expires:  March 14, 2007

My County of Residence:  Marion