Exhibit 10.5


    

      Exhibit
        10.5

       

      CHANGE
        OF CONTROL AND RETENTION AGREEMENT

       

      This
        Change of Control and Retention Agreement (the “Agreement”) is made and entered
        into as of March 13, 2006, by and between Interactive Intelligence, Inc.,
        an
        Indiana corporation (the “Company”), and {Executive Name} (the “Executive”).


       

      Recitals:

       

      WHEREAS,
        the Executive is a key employee of the Company who possesses valuable
        proprietary knowledge of the Company, its business and operations and the
        markets in which the Company competes; and 

       

      WHEREAS,
        the Company draws upon the knowledge, experience, expertise and advice of
        the
        Executive to manage its business for the benefit of the Company’s shareholders;
        and 

       

      WHEREAS,
        the Company recognizes that, if a Change of Control were to occur, the resulting
        uncertainty regarding the consequences of such an event could adversely affect
        the performance of, and the Company’s ability to attract and retain, its key
        employees, including the Executive; and 

       

      WHEREAS,
        the Company believes that the existence of this Agreement will serve as an
        incentive to the Executive to remain in the employ of the Company, and would
        enhance the Company’s ability to call on and rely upon the Executive if a Change
        of Control were to occur; and 

       

      WHEREAS,
        the Company and the Executive desire to enter into this Agreement to encourage
        the Executive to continue to devote the Executive’s full attention and
        dedication to the success of the Company, and to provide specified compensation
        and benefits to the Executive in the event of a Termination Upon Change of
        Control pursuant to the terms of this Agreement. 

       

      NOW,
        THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS: 

       

      
        	1.  	
                PURPOSE

              


      

       

      The
        purpose of this Agreement is to provide specified compensation and benefits
        to
        the Executive in the event of his Termination Upon Change of Control. Subject
        to
        the terms of any applicable written employment agreement between Company
        and the
        Executive, either the Executive or Company may terminate the Executive’s
        employment at any time for any reason. 

       

      
        	2.  	
                TERMINATION
                  UPON CHANGE OF CONTROL

              


      

       

      2.1
        Prior
        Obligations.
        In the
        event of the Executive’s Termination Upon Change of Control, the Executive shall
        be entitled to the benefits described in this Section 2.1. 

       

      2.1.1
        Accrued
        Salary and Vacation.
        All
        salary and accrued vacation earned through the date of the Executive’s
        Termination Upon Change of Control shall be paid to Executive within thirty
        (30)
        days after the date on which the Executive's employment terminates (the
“Termination Date”). 

       

      2.1.2
        Accrued
        Bonus Payment.
        The
        Executive shall receive a lump sum payment of any bonus amounts (a) attributable
        to any of the Company’s completed fiscal periods for which a bonus was earned
        but is unpaid on the Termination Date, and (b) attributable to any uncompleted
        fiscal period for which a potential bonus award exists, to the extent that
        any
        such bonus was earned and is unpaid on the Executive’s Termination Upon Change
        of Control, in each case within thirty (30) days after the Termination Date.
        For
        purposes of this Section 2.1.2, the amount of bonus "earned" for an uncompleted
        fiscal period shall be based on the level of performance achieved as of the
        Termination Date.

       

      2.1.3
        Expense
        Reimbursement.
        Within
        ten (10) days following submission to the Company of proper expense reports
        by
        the Executive, the Company shall reimburse the Executive for all expenses
        incurred by the Executive in connection with the business of the Company
        prior
        to the Termination Date, consistent with the Company’s expense reimbursement
        policy in effect at the time each such expense was incurred. 

       

      2.2
        Additional
        Cash Severance Benefits.
        In the
        event of the Executive’s Termination Upon Change of Control, the Executive shall
        be entitled to receive from the Company an amount equal to: (a) if the
        Termination Date is prior to or on the effective date of the Change of Control,
        the Executive's Base Salary; or (b) if the Termination Date is after the
        effective date of the Change of Control, Executive's Base Salary, multiplied
        by
        a fraction, the numerator of which is that number of days equal to (i) 365
        minus
        (ii) the number of days between the effective date of the Change of Control
        and
        the Termination Date, and the denominator of which is 365. Subject to the
        following two sentences, the amount set forth in this Section 2.2 shall be
        paid
        in cash in a single lump sum payment within thirty (30) days following the
        Termination Date or, if later, the effective date of the Change of Control.
        The
        payment described in this Section 2.2 may not be made before the expiration
        of
        the Revocation Period described in Section 5.3, and it will not be made in
        the
        event the Executive revokes the General Release described in Section 5.3
        within
        the Revocation Period. If the Executive is a "specified employee" as defined
        in
        Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended
        (the
        "Code"), the payment described in this Section 2.2 will not be made before
        the
        date that is six months after the Termination Date (or, if earlier, the date
        of
        the Executive's death).

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      


       

      2.3
        Stock
        Options and Other Equity Grants.
        In the
        event of the Executive’s Termination Upon Change of Control, then all
        outstanding stock options and any other then unvested or restricted equity
        grant
        then held by the Executive (other than any grants the vesting of which is
        contingent upon specified performance criteria being met) that by their original
        terms would have become vested or exercisable, or upon which the restrictions
        would have lapsed, within two years following the Termination Upon Change
        of
        Control, shall have their vesting or exercisability accelerated and any
        restrictions thereon shall lapse, such that (a) 100% of all shares subject
        to
        each of the Executive’s options that by their original terms would have become
        vested or exercisable within two years following the Termination Upon Change
        of
        Control, shall fully vest and become exercisable and shall remain so exercisable
        in accordance with their terms, and (b) 100% of all shares of each of the
        Executive’s other equity grants that by their original terms would have become
        vested and the restrictions thereon would have lapsed within two years following
        the Termination Upon Change of Control, shall vest and all restrictions thereon
        shall lapse. If the Termination Upon Change of Control is such that the
        Termination Date occurs during the period commencing on or after the date
        that
        the Company first publicly announces a definitive agreement designed to result
        in a Change of Control, then all outstanding stock options and any other
        then
        unvested or restricted equity grant then held by the Executive shall remain
        in
        effect and not be cancelled until such time as (i) the Change of Control
        occurs,
        in which case such options and other unvested or restricted equity grants
        shall
        be treated as described in the first sentence of this Section 2.3; or (ii)
        the
        definitive agreement is terminated prior to the Change of Control, in which
        case
        the options and other unvested or restricted equity grants will terminate
        and be
        forfeited on the date of the termination of the definitive agreement; provided,
        however, that in no event may any options remain outstanding after the
        applicable expiration date of the option. Notwithstanding the foregoing,
        with
        regard to any equity grant the vesting of which is contingent upon specified
        performance criteria being met, the effect of the Executive's Termination
        Upon
        Change of Control shall be determined pursuant to the specific provisions
        of the
        applicable award agreement.

       

      2.4
        COBRA.
        In the
        event of the Executive’s Termination Upon Change of Control, the Company shall
        offer the Executive and his eligible family members the opportunity to elect
        to
        continue their medical, dental and vision coverage (if any) under the Company's
        benefit plans pursuant to the continuation coverage requirements of the
        Consolidated Budget Reconciliation Act of 1985, as amended (“COBRA”). The
        Executive shall be responsible for paying the required monthly premiums for
        that
        coverage, but, at the time of payment of the cash severance benefits described
        in Section 2.2, the Company shall also pay to the Executive a lump sum cash
        stipend equal to twelve (12) times the monthly premium then charged to qualified
        beneficiaries for COBRA continuation coverage for the Executive (if then
        covered) and any family members then covered under the Company’s medical,
        dental, and vision plans (if any). The Executive may, but is not obligated
        to,
        use the stipend for the payment of COBRA premiums. The Company will pay the
        stipend to the Executive whether or not the Executive or anyone in his family
        elects COBRA continuation coverage, whether or not the Executive continues
        COBRA
        continuation coverage for a full 12 months, and whether or not the Executive
        receives medical, dental, or vision benefits from a subsequent employer during
        the period in which he would otherwise be entitled to receive COBRA continuation
        coverage. 

       

      2.5
        Indemnification.
        In the
        event of the Executive’s Termination Upon Change of Control, (a) the Company
        shall continue to indemnify the Executive against all claims related to actions
        arising prior to the termination of the Executive’s employment to the fullest
        extent permitted by law or provided in the organizational documents of the
        Company or by contract, and (b) if the Executive was covered by the Company’s
        directors’ and officers’ insurance policy, or an equivalent thereto (the
“D&O Insurance Policy”), immediately prior to the Change of Control, the
        Company or its Successor shall continue to provide coverage under a D&O
        Insurance Policy for twenty-four (24) months following the Executive’s
        Termination Upon Change of Control on substantially the same terms of the
        D&O Insurance Policy in effect immediately prior to the Change of Control,
        unless the annual cost
        of
        such “tail” D&O Insurance Policy is not available at
        a cost
        not greater than 200% of the annual premium paid on the date of the Change
        of
        Control by the Company for such insurance (the “Insurance Cap”), in which case
        the Company shall cause to be obtained as much comparable insurance for as
        long
        a period (not to exceed twenty-four (24) months following the effective date
        of
        the Change of Control)
        as is
        available for a cost not to exceed the Insurance Cap;
        provided,
        however,
        that if
        the agreement relating to the Change of Control provides terms at least as
        favorable as those in this subsection (b) with respect to a "tail" D&O
        Insurance Policy for the benefit of the Executive, then the terms of such
        agreement shall control and this subsection (b) shall be of no further force
        or
        effect. 

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      


       

      
        	3.  	
                FEDERAL
                  EXCISE TAX UNDER SECTION 280G 

              


      

       

      3.1
        Avoidance
        of Excise Tax.
        If any
        amounts payable to the Executive under this Agreement or otherwise would
        be
        subject to the excise tax or denial of deduction imposed by Sections 280G
        and
        4999 of the Code (an "Excess Parachute Payment"), then the amounts payable
        under
        this Agreement or otherwise shall be reduced, or portions of applicable options
        or then unvested or restricted equity awards shall not vest or become
        exercisable as provided herein, in order to avoid any Excess Parachute
        Payment.

       

      3.2
        Calculation
        by Independent Public Accountants.
        Unless
        the Company and the Executive otherwise agree in writing, any calculation
        of the
        amount of any Excess Parachute Payments shall be made in writing by the
        Company’s independent public accountants (the “Accountants”), whose
        determination, absent manifest error, shall be conclusive and binding upon
        the
        Executive and the Company. For purposes of making such calculation, the
        Accountants may rely on reasonable, good faith interpretations concerning
        the
        application of Sections 280G and 4999 of the Code. The Company and the Executive
        shall furnish to the Accountants such information and documents as the
        Accountants may reasonably request in order to make the required calculation.
        The Company shall bear all fees and expenses the Accountants may charge in
        connection with such calculation. 

       

      
        	4.  	
                DEFINITIONS 

              


      

       

      4.1
        Capitalized
        Terms Defined.
        Capitalized terms used in this Agreement shall have the meanings set forth
        in
        this Section 4, unless the context clearly requires a different meaning.
        

       

      4.2
        “Base
        Salary”
        means
        the greater of (a) the annual salary of the Executive in effect immediately
        prior to the Change of Control, or (b) the annual salary of the Executive
        in
        effect immediately prior to the Termination Date. 

       

      4.3
        “Cause”
        means a
        good faith determination, on a reasonable basis, by not less than two thirds
        of
        the members of the Board of Directors of the Company (the “Board”) that the
        Executive: 

       

      (a)
        willfully failed to follow the lawful written directions of the Board of
        Directors of the Company provided to the Executive prior to such failure;
        provided that no termination for such Cause shall occur unless the Executive:
        (i) has been provided with notice, specifying such willful failure in reasonable
        detail, of the Company’s intention to terminate the Executive for Cause; and
        (ii) has failed to cure or correct such willful failure within thirty (30)
        days
        of receiving such notice;

       

      (b)
        engaged in gross misconduct which is materially detrimental to the Company;
        provided that no termination for such Cause shall occur unless the Executive:
        (i) has been provided with notice, specifying such gross misconduct in
        reasonable detail, of the Company’s intention to terminate the Executive for
        Cause; and (ii) has failed to cure or correct such gross misconduct within
        thirty (30) days of receiving such notice;

       

      (c)
        willfully failed to comply in any material respect with the Company’s
        Confidentiality and/or Proprietary Rights Agreement, the Company’s insider
        trading policy, or any other reasonable policies of the Company, in each
        case
        provided, or reasonably made available, to the Executive prior to such failure,
        where non-compliance would be materially detrimental to the Company; provided
        that no termination for such Cause shall occur unless the Executive: (i)
        has
        been provided with notice, specifying such willful failure in reasonable
        detail,
        of the Company’s intention to terminate the Executive for such Cause, and (ii)
        has failed to cure or correct such willful failure within thirty (30) days
        of
        receiving such notice; or

       

      (d)
        has
        been convicted of a felony (other than a felony arising from a violation
        of a
        motor vehicle law) or a crime involving moral turpitude, or it has been
        determined by a court that he or she committed a fraud, against the Company
        or a
        fraud against any other person or entity that is materially detrimental to
        the
        Company.

       

      4.4
        “Change
        of Control”
        means:


       

      (a)
        the
        acquisition by any “person” (as such term is used in Sections 13(d) and 14(d) of
        the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of the
“beneficial ownership” (as defined in Rule 13d-3 promulgated under the Exchange
        Act), directly or indirectly, of securities of the Company representing fifty
        (50%) percent or more of (i) the then outstanding shares of common stock
        of the
        Company, or (ii) the combined voting power of the Company’s then outstanding
        voting securities; provided, however, that the following acquisitions shall
        not
        constitute a Change of Control: (i) any
        acquisition directly from the Company (excluding
        an acquisition by virtue of the exercise of a conversion privilege),
        (ii) any acquisition by the Company, (iii) any acquisition
        by any
        employee benefit plan (or related trust) sponsored or maintained by the Company
        or any entity controlled by the Company, (iv) any acquisition by Donald
        E.
        Brown, M.D. or person controlled by him, or (vi) upon the death of Donald
        E.
        Brown, M.D., any acquisition triggered by his death by operation of law,
        by any
        testamentary bequest or by the terms of any trust or other contractual
        arrangement established by him;

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      


       

      (b)
        the
        Company is party to a merger or consolidation, or series of related
        transactions, which results in the voting securities of the Company outstanding
        immediately prior thereto failing to continue to represent (either by remaining
        outstanding or by being converted into voting securities of the surviving
        entity), directly or indirectly, at least fifty (50%) percent of the combined
        voting power of the voting securities of the Company or such surviving entity
        outstanding immediately after such merger or consolidation;

       

      (c)
        the
        sale or disposition of all or substantially all of the Company’s assets, or
        consummation of any transaction, or series of related transactions, having
        similar effect (other than to a subsidiary of the Company);

       

      (d)
        a
        change in the composition of the Board within any consecutive two-year period,
        as a result of which fewer than a majority of the directors are Incumbent
        Directors. “Incumbent Directors” shall mean directors who either (i) were
        directors of the Company as of the effective date of this Agreement, or (ii)
        are
        elected, or nominated for election, to the Board with the affirmative votes
        of a
        least a majority of those directors whose election or nomination was not
        in
        connection with an actual or threatened proxy contest related to the election
        of
        directors to the Company; or

       

      (e)
        the
        dissolution or liquidation of the Company.

       

      4.5
         “Disability”
        means
        the inability to engage in any substantial gainful activity by reason of
        any
        medically determinable physical or mental impairment that can be expected
        to
        result in death or can be expected to last for a period of not less than
        twelve
        (12) months.

       

      4.6
         “Good
        Reason”
        means
        the occurrence of any of the following conditions, without the Executive’s
        written consent:

       

      (a)
        assignment to the Executive of a title, position, responsibilities or duties
        that is not a Substantive Functional Equivalent to the title, position,
        responsibilities or duties which the Executive had immediately prior to the
        Change of Control;

       

      (b)
        a
        reduction in the Executive’s Base Salary or target bonus opportunity in effect
        immediately prior to the Change of Control (subject to applicable performance
        requirements with respect to the actual amount of bonus compensation earned
        that
        are similar to the applicable performance requirements in effect immediately
        prior to the Change of Control);

       

      (c)
        the
        failure of the Company (i) to continue to provide the Executive an opportunity
        to participate in any benefit or compensation plans provided to employees
        who
        held positions with the Company or its Successor comparable to the Executive’s
        position immediately prior to the Change of Control, or (ii) to provide the
        Executive all other fringe benefits (or the equivalent) in effect for the
        benefit of any employee group which includes any employee who held a position
        with the Company or its Successor comparable to the Executive’s position
        immediately prior to the Change of Control;

       

      (d)
        the
        Company’s requiring the Executive to (i) relocate to any office or location more
        than 50 miles (one-way) from the Company's office where the Executive was
        based
        immediately prior to the Change of Control, or (ii) to engage in travel in
        the
        performance of services for the Company at a frequency or for a duration
        substantially in excess of such travel required by the Company prior to the
        Change of Control;

       

      (e)
        a
        material breach of this Agreement by the Company, including failure of the
        Company to obtain the agreement of a Successor to perform all of the obligations
        of the Company under this Agreement; or

       

      (f)
        any
        act, set of facts or omissions with respect to the Executive that would,
        under
        applicable law, constitute a constructive termination of the
        Executive.

       

      Notwithstanding
        the foregoing, nothing described in any of subsections (a) through (f) above
        shall constitute Good Reason unless Executive provides Company written notice,
        in reasonable detail, of his or her belief that an action or inaction
        constituting such Good Reason has occurred and the Company fails to cure
        or
        correct such action or inaction, within thirty (30) days of its receipt of
        such
        written notice, such that the asserted Good Reason no longer exists.


       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      


       

      4.7
        “Substantive
        Functional Equivalent”
        means
        that, following a Change of Control, the Executive’s position must:

       

      (a)
        be in
        a substantive area of the Executive’s competence (e.g., finance or executive
        management) and not materially different from the position occupied immediately
        prior to the Change of Control;

       

      (b)
        allow
        the Executive to serve in a role and perform duties functionally equivalent
        to
        those performed immediately prior to the Change of Control; and

       

      (c)
        not
        otherwise constitute a material, adverse change in authority, title, status,
        responsibilities or duties from those of the Executive immediately prior
        to the
        Change of Control, causing the Executive to be of materially lesser rank
        or
        responsibility.

       

      4.8
        “Successor”
        means
        the Company as defined above and any successor to or assignee of substantially
        all of its business and/or assets. 

       

      4.9
        “Termination
        Upon Change of Control”
        means:

       

      (a)
        any
        termination of the employment of the Executive by the Company without Cause
        during the period commencing on or after the date that the Company first
        publicly announces a definitive agreement that results in a Change of Control
        (even though still subject to approval by the Company’s shareholders and other
        conditions and contingencies, but provided that the Change of Control actually
        occurs) and ending on the date which is eighteen (18) months following the
        Change of Control; or

       

      (b)
        any
        resignation by Executive for Good Reason where (i) such Good Reason occurs
        during the period commencing on or after the date that the Company first
        publicly announces a definitive agreement that results in a Change of Control
        (even though still subject to approval by the Company’s shareholders and other
        conditions and contingencies, but provided that the Change of Control actually
        occurs) and ending on the date which is eighteen (18) months following the
        Change of Control, and (ii) such resignation occurs within six (6) months
        following the occurrence of such Good Reason.

       

      Notwithstanding
        the foregoing, the term “Termination Upon Change of Control” shall not include
        any termination of the employment of the Executive: (1) by the Company for
        Cause; (2) by the Company as a result of the Disability of the Executive;
        (3) as
        a result of the death of the Executive; or (4) as a result of the retirement
        of
        the Executive or other voluntary termination of employment by the Executive
        for
        any reason other than Good Reason. 

       

      Anything
        to the contrary in this Agreement notwithstanding, if a Change in Control
        occurs
        and if Executive's employment with the Company was terminated either by the
        Company without Cause or by Executive for Good Reason, within six (6) months
        prior to the effective date of the Change of Control, and if it is reasonably
        demonstrated by Executive that such termination of employment (a) was at
        the
        request of a third party who has taken steps reasonably calculated to effect
        a
        Change of Control or (b) otherwise arose in connection with or anticipation
        of a
        Change of Control, then for all purposes of this Agreement, such termination
        shall constitute a "Termination Upon Change of Control."

       

      5.
         EXCLUSIVE
        REMEDY 

       

      5.1
        No
        Other Benefits Payable.
        The
        Executive shall be entitled to no other termination, severance or change
        of
        control compensation, benefits, or other payments from the Company as a result
        of any Termination Upon a Change of Control with respect to which the payments
        and/or benefits described in Section 2 have been provided to the Executive,
        except as expressly set forth in this Agreement. 

       

      5.2
        No
        Limitation of Regular Benefit Plans.
        Except
        as provided in Section 5.4 below, this Agreement is not intended to and shall
        not affect, limit or terminate any plans, programs or arrangements of the
        Company that are regularly made available to a significant number of employees
        or officers of the Company, including, without limitation, the Company’s stock
        option plans. 

       

      5.3
        Release
        of Claims.
        Notwithstanding anything in this Agreement to the contrary, the Executive
        shall
        not be entitled to receive the severance benefits described in Section 2.2
        of
        this Agreement or the stipend described in Section 2.4 of this Agreement
        unless
        (a) the Executive executes and delivers to the Company a general release
        of
        claims substantially in a form provided to the Executive by the Company prior
        to
        any Change of Control (the "General Release") and (b) the Executive does
        not
        revoke the General Release during the period of time (if any) specified in
        the
        General Release during which the Executive may revoke it ("Revocation Period").
        If the Executive is at least age 40 at the time he executes the General Release,
        the General Release will provide for a Revocation Period of at least seven
        (7)
        days (or such longer period required by applicable law for the General Release
        to be effective). If the General Release does not provide for a Revocation
        Period, then the Revocation Period shall be deemed to have expired on the
        date
        the Executive executes the General Release. The General Release shall not
        require the Executive to release any rights the Executive may have to be
        indemnified by the Company or that are otherwise provided under this Agreement.
        

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      


       

      5.4
        Noncumulation
        of Benefits.
        The
        Executive may not cumulate cash severance payments, stock option vesting
        and
        exercisability and other equity grant, based on the Executive ceasing to
        be an
        employee of the Company, under this Agreement, any other written agreement
        with
        the Company and/or another plan or policy of the Company. 

       

      6.
         NON-SOLICITATION 

       

      For
        a
        period of twelve (12) months after the Executive’s Termination Upon Change of
        Control, the Executive will not solicit the services or business of any employee
        or consultant of the Company, which, if accepted, would result in the
        discontinuance of that person’s or entity’s relationship with or to the Company,
        without the written consent of the Company. 

       

      7.
         ARBITRATION 

       

      7.1
        Disputes
        Subject to Arbitration.
        To the
        extent permitted by law, any claim, dispute or controversy arising out of
        this
        Agreement (other than claims relating to misuse or misappropriation of the
        intellectual property of the Company), the interpretation, validity or
        enforceability of this Agreement or the alleged breach hereof shall be submitted
        by the parties to binding arbitration by a sole arbitrator under the rules
        of
        the American Arbitration Association; provided, however, that (a) the arbitrator
        shall have no authority to make any ruling or judgment that would confer
        any
        rights with respect to the trade secrets, confidential and proprietary
        information or other intellectual property of the Company upon the Executive
        or
        any third party; and (b) this arbitration provision shall not preclude the
        Company from seeking legal and equitable relief from any court having
        jurisdiction with respect to any disputes or claims relating to or arising
        out
        of the misuse or misappropriation of the Company’s intellectual property.
        Judgment may be entered on the award of the arbitrator in any court having
        jurisdiction. 

       

      7.2
        Costs
        of Arbitration.
        All
        costs of arbitration, including reasonable attorneys fees of the Executive,
        will
        be borne by the Company, except that, if the Executive initiates arbitration
        and
        the arbitrator finds the Executive’s claims to be frivolous, the Executive shall
        be responsible for his own costs and attorneys fees. 

       

      7.3
        Site
        of Arbitration.
        The
        site of the arbitration proceeding shall be in Indianapolis, Indiana.


       

      8.
         NOTICES 

       

      For
        purposes of this Agreement, notices and all other communications provided
        for in
        the Agreement shall be in writing and shall be deemed to have been duly given
        when delivered or five (5) business days after being mailed, return receipt
        requested, as follows: 

       

      If
        to the
        Company: Interactive
        Intelligence, Inc.

      7601
        Interactive Way

      Indianapolis,
        Indiana 46278

      Attention:
        Chief Executive Officer

       

      and,
        if
        to the Executive, at the address indicated below. Either party may provide
        the
        other with written notices of change of such party’s address, which shall be
        effective upon receipt by the other party. 

       

      9. MISCELLANEOUS
        PROVISIONS 

       

      9.1
        Heirs
        and Representatives of the Executive; Successors and Assigns of the
        Company.
        This
        Agreement shall be binding upon and shall inure to the benefit of and be
        enforceable by the Executive’s personal and legal representatives, executors,
        administrators, successors, heirs, distributees, devises and legatees. This
        Agreement shall be binding upon and inure to the benefit of and be enforceable
        by the successors and assigns of the Company. The Company shall require any
        Successor, by agreement in form and substance satisfactory to Executive,
        to
        expressly assume and agree to perform this Agreement in the same manner and
        to
        the same extent that the Company would be required to perform it if no
        succession had taken place.

       

      9.2
        Amendment
        and Waiver.
        No
        provision of this Agreement shall be modified, amended, waived or discharged
        unless the modification, amendment, waiver or discharge is agreed to in writing,
        specifying such modification, amendment, waiver or discharge, and signed
        by the
        Executive and by an authorized officer of the Company (other than the
        Executive). No waiver by either party of any breach of, or of compliance
        with,
        any condition or provision of this Agreement by the other party shall be
        considered a waiver of any other condition or provision or of the same condition
        or provision at another time. 

       

      9.3
        Withholding
        Taxes.
        All
        payments made under this Agreement shall be subject to reduction to reflect
        all
        federal, state, local and other taxes required to be withheld by applicable
        law.


       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      


       

      9.4
        Severability.
        The
        invalidity or unenforceability of any provision or provisions of this Agreement
        shall not affect the validity or enforceability of any other provision hereof,
        which shall remain in full force and effect. 

       

      9.5
        Choice
        of Law.
        The
        validity, interpretation, construction and performance of this Agreement
        shall
        be governed by the laws of the State of Indiana, without regard to where
        the
        Executive has his residence or principal office or where he performs his
        duties
        hereunder. 

       

      9.6
        No
        Duty to Mitigate.
        The
        Executive is not required to seek alternative employment following termination,
        and payments called for under this Agreement will not be reduced by earnings
        from any other source, except as expressly provided herein. 

       

      9.7
        Employment
        Agreement.
        The
        Employment Agreement, dated as of {Blank}, by and between Executive and the
        Company (the "Employment Agreement") shall continue in full force and effect.
        To
        the extent there is a conflict between any of the terms of this Agreement
        and
        any of the terms of the Employment Agreement, the terms of this Agreement
        shall
        control. Without limitation of the foregoing, in the event Executive receives
        payments hereunder, he shall not be entitled to the payment referenced in
        Section 5(b) of the Employment Agreement. This Agreement and the Employment
        Agreement represent the entire agreement and understanding between the parties
        as to the subject matter herein (whether oral or written and whether express
        or
        implied). 

       

      9.8
        Code
        Section 409A Standards.
        To the
        extent that this Agreement is subject to the standards for nonqualified deferred
        compensation plans established by Code Section 409A (the "Section 409A
        Standards"), it will be effected, interpreted, and applied in a manner
        consistent with the Section 409A Standards. To the extent that any terms
        of this
        Agreement would subject the Executive to gross income inclusion, interest,
        or
        additional tax pursuant to Code Section 409A, those terms are to that extent
        superseded by the applicable Section 409A Standards.

       

      IN
        WITNESS
        WHEREOF,
        each of
        the parties has executed this Agreement, in the case of the Company, by its
        duly
        authorized officer, as of the day and year first above written.

       

      Executive:

      


                                     
        


      {Executive
        name}

      {address}

      


      Interactive
        Intelligence, Inc.

      


      


      /s/
        Donald E. Brown

      Donald
        E.
        Brown

      Chief
        Executive Officer