Document:

ex10_3.htm

    Exhibit 10.3

     

    INTERACTIVE
INTELLIGENCE, INC.

     

    1999
STOCK OPTION AND INCENTIVE PLAN

     

    (Restated
to reflect all amendments adopted through February 22, 2000)

     

     

    1.  Plan
Purpose.  The purpose of the Plan is to promote the long-term
interests of the Company and its shareholders by providing a means for
attracting and retaining officers and key employees of the Company and its
Affiliates.

     

    2.  Definitions.  The
following definitions are applicable to the Plan:

     

    "Affiliate"—means
any "parent corporation" or "subsidiary corporation" of the Company as such
terms are defined in Section 424(e) and (f), respectively, of the Code and
any other corporation or other entity (including partnerships, limited liability
companies, and joint ventures) controlled by or under common control with the
Company.

     

    "Award"—means,
individually or collectively, the grant by the Committee of an Incentive Stock
Option, a Non-Qualified Stock Option, or Restricted Stock, or any combination
thereof, as provided in the Plan.

     

    "Board or
Board of Directors"—means the Board of Directors of the Company.

     

    "Cashless
Exercise"—means, if there is a public market for the Shares, the payment of the
Exercise Price (a) through a "same day sale" commitment from the
Participant and an NASD Dealer whereby the Participant irrevocably elects to
exercise the Option and to sell a portion of the Shares so purchased in order to
pay the Exercise Price, and whereby the NASD Dealer irrevocably commits upon
receipt of such stock to forward the Exercise Price directly to the Company, or
(b) through a "margin" commitment from the Participant and an NASD Dealer
whereby the Participant irrevocably elects to exercise the Option and to pledge
the Shares so purchased to the NASD Dealer in a margin account as security for a
loan from the NASD Dealer in the amount of the Exercise Price and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the
Exercise Price directly to the Company.

     

    "Cause"—means,
for purposes of determining whether and when a Participant has incurred a
Termination of Continuous Service for Cause, any act or failure to act which
permits the Company to terminate the written agreement or arrangement between
the Participant and the Company or an Affiliate for "cause" as defined in such
agreement or arrangement or, in the event there is no such agreement or
arrangement or the agreement or arrangement does not define the term "cause,"
then "Cause" for purposes of the Plan shall mean any act or failure to act
deemed to constitute "cause" under the Company's established and applied
practices, policies or guidelines applicable to the Participant.

     

    "Change
in Control"—means each of the events specified in the following clauses
(i) through (iii): (i) any third person, including a "group" as
defined in Section 13(d)(3) of the Exchange Act shall, after the date of
the adoption of the Plan by the Board, first become the beneficial owner of
Shares of the Company with respect to which 25% or more of the total number of
votes for the election of the Board of Directors of the Company may be cast,
(ii) as a result of, or in connection with, any cash tender offer, exchange
offer, merger or other business combination, sale of assets or contested
election, or combination of the foregoing, the persons who were directors of the
Company shall cease to constitute a majority of the Board of Directors of the
Company or (iii) the stockholders of the Company shall approve an agreement
providing either for a transaction in which the Company will cease to be an
independent publicly owned entity or for a sale or other disposition of all or
substantially all the assets of the Company.

     

    "Code"—means
the Internal Revenue Code of 1986, as amended.

     

    "Committee"—means
the Committee referred to in Section 3 hereof.

     

    "Company"—means
Interactive Intelligence, Inc., an Indiana corporation.

     

    "Continuous
Service"—means the absence of any interruption or termination of service as an
employee of the Company or an Affiliate. Service shall not be considered
interrupted in the case of sick leave, military leave, or any other leave of
absence approved by the Company or in the case of any transfer between the
Company and an Affiliate or any successor to the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    "Disability"—means
a mental or physical illness that entitles the Participant to receive benefits
under the long-term disability plan of the Company or an Affiliate.
Notwithstanding the foregoing, a Disability shall not qualify under the Plan if
it is the result, as determined by the Committee, of (a) an intentionally
self-inflicted injury or an intentionally self-induced sickness, or (b) an
injury or disease contracted, suffered or incurred while participating in a
criminal offense. The determination of a Disability for purposes of the Plan
shall not be construed to be an admission of a disability for any other
purpose.

     

    "Employee"—means
any person, including an officer or director, who is employed by the Company or
any Affiliate.

     

    "Exchange
Act"—means the Securities Exchange Act of 1934, as amended.

     

    "Exercise
Price"—means the price per Share at which the Shares subject to an Option may be
purchased upon exercise of such Option.

     

    "Incentive
Stock Option"—means an option to purchase Shares granted by the Committee
pursuant to the terms of the Plan which is intended to qualify under
Section 422 of the Code.

     

    "Market
Value"—means the last reported sale price on the date in question (or, if there
is no reported sale on such date, on the last preceding date on which any
reported sale occurred) of one Share on the principal exchange on which the
Shares are listed for trading, or if the Shares are not listed for trading on
any exchange, on the NASDAQ National Market System or any similar system then in
use, or, if the Shares are not listed on the NASDAQ National Market System, the
mean between the closing high bid and low asked quotations of one Share on the
date in question as reported by NASDAQ or any similar system then in use, or, if
no such quotations are available, the fair market value on such date of one
Share as the Committee shall determine.

     

    "NASD
Dealer"—means a broker-dealer who is a member of the National Association of
Securities Dealers, Inc.

     

    "Non-Qualified
Stock Option"—means an option to purchase Shares granted by the Committee
pursuant to the terms of the Plan, which option is not intended to qualify under
Section 422 of the Code.

     

    "Option"—means
an Incentive Stock Option or a Non-Qualified Stock Option.

     

    "Participant"—means
any officer, key employee, or consultant of the Company or any Affiliate or any
other individual who is selected by the Committee to receive an
Award.

     

    "Plan"—means
the Interactive Intelligence, Inc. 1999 Stock Option and Incentive Plan, as
set forth in this instrument and as hereafter amended from time to
time.

     

    "Reorganization"—means
the liquidation or dissolution of the Company or any merger, consolidation or
combination of the Company (other than a merger, consolidation or combination in
which the Company is the continuing entity and which does not result in the
outstanding Shares being converted into or exchanged for different securities,
cash or other property or any combination thereof).

     

    "Restricted
Period"—means the period of time selected by the Committee for the purpose of
determining when restrictions are in effect under Section 10 hereof with
respect to Restricted Stock awarded under the Plan.

     

    "Restricted
Stock"—means Shares which have been contingently awarded to a Participant by the
Committee subject to the restrictions referred to in Section 10 hereof, so
long as such restrictions are in effect.

     

    "Retirement"—means
the date on which a Participant attains age sixty-five (65) or such other
"normal retirement age" as the Company shall specify in its written
policies.

     

    "Securities
Act"—means the Securities Act of 1933, as amended.

     

    "Shares"—means
the common stock, $.01 par value, of the Company and shall include common stock
as it may be changed from time to time as described in Section 11
hereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    "Termination
of Continuous Service"—means the occurrence of any act or event or any failure
to act whether pursuant to an employment agreement or otherwise that actually or
effectively causes or results in a Participant ceasing, for whatever reason, to
be an Employee of the Company or an Affiliate, including, but not limited to,
death, Disability, Retirement, termination by the Company or an Affiliate of the
Participant's employment with the Company or an Affiliate (whether with or
without Cause), and voluntary resignation or termination by the Participant of
his or her employment with the Company or an Affiliate. A Termination of
Continuous Service also shall occur with respect to an Employee who is employed
by an Affiliate if the Affiliate shall cease to be an Affiliate of the Company
and the Participant shall not immediately thereafter become an Employee of the
Company or another Affiliate. For purposes of the Plan, transfers or changes of
employment of a Participant between the Company and an Affiliate (or between
Affiliates) shall not be deemed a Termination of Continuous
Service.

     

    3.  Administration.  The
Plan shall be administered by the Committee, which shall consist of two or more
members of the Board, each of whom shall be a "non-employee director" as
provided under Rule 16b-3 of the Exchange Act, and an "outside director" as
provided under Section 162(m) of the Code. Failure by the Committee to be
so comprised shall not result in the cancellation, termination, expiration, or
lapse of any Award. The members of the Committee shall be appointed by the
Board. If the Committee does not exist, or for any other reason determined by
the Board, the Board may take any action under the Plan that would otherwise be
the responsibility of the Committee. Except as limited by the express provisions
of the Plan, the Committee shall have sole and complete authority and discretion
to (a) select Participants and grant Awards; (b) determine the number
of Shares to be subject to and the types of Awards generally, as well as to
individual Awards granted under the Plan; (c) determine the terms and
conditions upon which Awards shall be granted under the Plan; (d) prescribe
the form and terms of instruments evidencing such grants; (e) establish
procedures and regulations for the administration of the Plan; (f) construe
and interpret the Plan, any Award agreement executed in connection therewith,
and any other agreements or instruments entered into under the Plan;
(g) make all determinations deemed necessary or advisable for the
administration of the Plan; and (h) establish, amend, or waive rules and
regulations for the administration of the Plan.

     

    A
majority of the Committee shall constitute a quorum, and the acts of a majority
of the members present at any meeting at which a quorum is present, or acts
approved in writing by all members of the Committee without a meeting, shall be
acts of the Committee. All determinations and decisions made by the Committee
pursuant to the provisions of the Plan shall be final, conclusive, and binding
on all persons, and shall be given the maximum deference permitted by law. Each
Award shall be evidenced by a written agreement between the Company and the
Participant and shall contain such terms and conditions established by the
Committee consistent with the provisions of the Plan. Any notice or document
required to be given to or filed with the Committee will be properly given or
filed if hand delivered (and a delivery receipt is received) or mailed by
certified mail, return receipt requested, postage paid, to the Committee at
8909 Purdue Road, Suite 300, Indianapolis, Indiana 46268.

     

    4.  Participants.  The
Committee may select from time to time Participants from those officers, key
employees and consultants of the Company or its Affiliates and such other
individuals who, in the opinion of the Committee, have the capacity for
contributing in a substantial measure to the successful performance of the
Company or its Affiliates. Neither the Plan nor any Award agreement executed
under the Plan shall constitute a contract of employment between a Participant
and the Company or an Affiliate, and participation in the Plan shall not give a
Participant the right to be rehired by or retained in the employment of the
Company or an Affiliate.

     

    5.  Shares
Subject to Plan.  Subject to adjustment by the operation of
Sections 11 and 12 hereof, the maximum number of Shares with respect to
which Awards may be granted under the Plan is Three Million Seven Hundred Fifty
Thousand (3,750,000) Shares. The number of Shares which may be granted under the
Plan to any Participant during any calendar year of the Plan, under all forms of
Awards, shall not exceed Two Hundred Fifty Thousand (250,000) Shares. The Shares
with respect to which Awards may be made under the Plan may either be authorized
and unissued Shares or unissued Shares heretofore or hereafter reacquired and
held as treasury Shares. With respect to any Option which terminates or is
surrendered for cancellation or with respect to Restricted Stock which is
forfeited, new Awards may be granted under the Plan with respect to the number
of Shares as to which such termination or forfeiture has occurred.

     

    Subject
to the limitations set forth in the Plan, the Committee shall have full
authority to determine the number of Shares available for Awards, and in its
discretion may include (without limitation) as available for distribution any
Shares that have ceased to be subject to an Award, any Shares subject to an
Award that have been previously forfeited, and any Shares under an Award that
otherwise terminates without the issuance of Shares being made to a
Participant.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Shares
issued upon exercise of an Award shall be subject to the terms and conditions
specified herein and to such other terms, conditions and restrictions as the
Committee in its discretion may determine or provide in the Award agreement. The
Company shall not be required to issue or deliver any certificates for Shares or
other property prior to (a) the listing of such Shares on any stock
exchange (or other public market) on which the Shares may then be listed (or
regularly traded); and (b) the completion of any registration or
qualification of such Shares under federal, state, local or other law, or any
ruling or regulation of any government body which the Committee determines to be
necessary or advisable. The Company may cause any certificate for any Shares to
be delivered hereunder to be properly marked with a legend or other notation
reflecting the limitations on transfer of such Shares as provided in the Plan or
as the Committee may otherwise require. Participants, or any other persons
entitled to benefits under the Plan, must furnish to the Committee such
documents, evidence, data, or other information as the Committee considers
necessary or desirable for the purpose of administering the Plan. The benefits
under the Plan for each Participant, and each other person who is entitled to
benefits hereunder, are to be provided on the condition that he furnish full,
true, and complete data, evidence, or other information, and that he will
promptly sign any document reasonably related to the administration of the Plan
requested by the Committee. No fractional Shares shall be issued under the Plan;
rather, fractional Shares shall be aggregated and then rounded to the next lower
whole Share.

     

    6.  General
Terms and Conditions of Options.  The Committee shall have full
and complete authority and discretion, except as expressly limited by the Plan,
to grant Options and to provide the terms and conditions (which need not be
identical among Participants) thereof. In particular, the Committee shall
prescribe the following terms and conditions: (a) the type of Option;
(b) the Exercise Price; (c) the number of Shares subject to, and the
expiration date of, any Option; (d) the manner, time and rate (cumulative
or otherwise) of exercise of such Option; (e) the restrictions, if any, to
be placed upon such Option or upon Shares which may be issued upon exercise of
such Option; and (f) such other terms and conditions consistent with the
Plan as the Committee determines in its discretion. The Committee may, as a
condition of granting any Option, require that a Participant agree to surrender
for cancellation one or more Options previously granted to such
Participant.

     

    7.  Exercise
of Options.  

     

    (a)  Restriction on
Exercise.  Except as provided in Section 14, all Options
granted under the Plan shall be exercisable during the lifetime of the
Participant to whom such Option was granted only by such Participant, and except
as provided in Section 8, no Option may be exercised unless, at the time
the Participant exercises the Option, the Participant has maintained Continuous
Service since the date of the grant of the Option. Except as provided in
Section 13, or as otherwise determined by the Committee, all Options
granted under the Plan shall vest and become exercisable in accordance with the
following schedule:

     

    
      	 
      	 	
              Percentage
      of Option

              Shares
      Vested

              and
      Exercisable

            	 
	
              Date
      of Vesting

            	 	
              Percent
    Vested

            	 	 	
              Cumulative

            	 
	
              First
      anniversary of date of Option grant

            	 	 	25
      	%	 	 	25
      	%
	
              Second
      anniversary of date of Option grant

            	 	 	25
      	%	 	 	50
      	%
	
              Third
      anniversary of date of Option grant

            	 	 	25
      	%	 	 	75
      	%
	
              Fourth
      anniversary of date of Option grant

            	 	 	25
      	%	 	 	100
      	%

    

     

    (b)  Method of
Exercise.  To exercise an Option under the Plan, the
Participant must give written notice to the Company specifying the number of
Shares with respect to which the Participant elects to exercise the Option
together with full payment of the Exercise Price. The date of exercise shall be
the date on which the notice is received by the Company. Payment may be made
either (i) in cash (including check, bank draft, or money order),
(ii) by tendering Shares already owned by the Participant for more than six
months and having a Market Value on the date of exercise equal to the Exercise
Price, (iii) the delivery of cash by a broker-dealer as a Cashless
Exercise, or (iv) by any other means determined by the Committee in its
sole discretion.

     

    (c)  Reload
Provision.  In the event a Participant exercises an Option and
pays all or a portion of the Exercise Price in Shares, in the manner permitted
by Section 7(b), such Participant may (either pursuant to terms of the
Award agreement or pursuant to the sole discretion of the Committee at the time
the Option is exercised) be issued a new Option to purchase additional Shares
equal to the number of Shares surrendered to the Company in such payment. Such
new Option shall (a) have an Exercise Price equal to the Market Value per
Share on the grant date of the new Option, (b) first be exercisable six
(6) months from such grant date, and (c) expire on the same date as
the original Option so exercised by payment of the Exercise Price in
Shares.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    8.  Termination
of Options.  Unless otherwise specifically provided by the
Committee in the Award agreement between the Participant and the Company, each
Option granted under the Plan shall terminate as provided in this
Section 8.

     

    (a)  Maximum
Term.  Unless sooner terminated under the provisions of this
Section 8, Options shall expire on the earlier of the date specified by the
Committee or the expiration of ten (10) years from the date of
grant.

     

    (b)  Termination for
Cause.  If the Participant incurs a Termination of Continuous
Service for Cause, all rights under any Options granted to the Participant shall
terminate immediately upon the Participant's Termination of Continuous Service,
and the Participant shall (if the Committee in its sole discretion exercises its
rights under this Section 8(b) within ten (10) days of such
Termination of Continuous Service) repay to the Company within ten
(10) days of the Committee's demand therefor the amount of any gain
realized by the Participant upon any exercise within the 90-day period prior to
the Termination of Continuous Service of any Options granted to such Participant
under the Plan.

     

    (c)  Termination Due to
Retirement or Without Cause or Voluntary Termination.  If the
Continuous Service of a Participant is terminated by reason of Retirement,
terminated by the Company without Cause, or by Voluntary Termination, the
Participant may exercise outstanding Options to the extent that the Participant
was entitled to exercise the Options at the date of Termination of Continuous
Service, but only within the period of one (1) month immediately succeeding
the Participant's Termination of Continuous Service, and in no event after the
applicable expiration dates of the Options. Any Option that is not exercisable
on the date of Termination of Continuous Service shall terminate and be
forfeited effective on such date.

     

    (d)  Termination Due to Death
or Disability.  In the event of the Participant's death or
Disability, the Participant or the Participant's beneficiary, as the case may
be, may exercise outstanding Options to the extent that the Participant was
entitled to exercise the Options at the date of Termination of Continuous
Service, but only within the one (1)-year period immediately succeeding the
Participant's Termination of Continuous Service in the case of Disability, and
in no event after the applicable expiration date of the Options. Any Option that
is not exercisable on the date of Termination of Continuous Service shall
terminate and be forfeited effective on such date.

     

    (e)  Committee
Discretion.  Notwithstanding the provisions of the foregoing
paragraphs of this Section 8, the Committee may, in its sole discretion,
establish different terms and conditions pertaining to the effect of the
Termination of Continuous Service, to the extent permitted by applicable federal
and state law.

     

    9.  Incentive
Stock Options.  Incentive Stock Options may be granted only to
Participants who are Employees. Any provisions of the Plan to the contrary
notwithstanding, (i) no Incentive Stock Option shall be granted more than
ten (10) years from the date the Plan is adopted by the Board of Directors
of the Company and no Incentive Stock Option shall be exercisable more than ten
(10) years from the date such Incentive Stock Option is granted,
(ii) the Exercise Price of any Incentive Stock Option shall not be less
than the Market Value per Share on the date such Incentive Stock Option is
granted, (iii) any Incentive Stock Option shall not be transferable by the
Participant to whom such Incentive Stock Option is granted other than by will or
the laws of descent and distribution and shall be exercisable during such
Participant's lifetime only by such Participant, and (iv) no Incentive
Stock Option shall be granted which would permit a Participant to acquire,
through the exercise of Incentive Stock Options in any calendar year, Shares or
Shares of any capital stock of the Company or any Affiliate thereof having an
aggregate Market Value (determined as of the time any Incentive Stock Option is
granted) in excess of One Hundred Thousand Dollars ($100,000). The foregoing
limitation shall be determined by assuming that the Participant will exercise
each Incentive Stock Option on the date that such Option first becomes
exercisable. Notwithstanding the foregoing, in the case of any Participant who,
at the date of grant, owns stock possessing more than Ten Percent (10%) of the
total combined voting power of all classes of capital stock of the Company or
any Affiliate, the Exercise Price of any Incentive Stock Option shall not be
less than One Hundred Ten Percent (110%) of the Market Value per Share on the
date such Incentive Stock Option is granted and such Incentive Stock Option
shall not be exercisable more than five (5) years from the date such
Incentive Stock Option is granted.

     

    10.  Terms
and Conditions of Restricted Stock.  The Committee shall have
full and complete authority, subject to the limitations of the Plan, to grant
awards of Restricted Stock and, in addition to the terms and conditions
contained in paragraphs (a) through (g) of this Section 10, to
provide such other terms and conditions (which need not be identical among
Participants) in respect of such Awards as the Committee shall determine and
provide in the agreement referred to in paragraph (d) of this
Section 10.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (a)  Restricted
Period.  At the time of an Award of Restricted Stock, the
Committee shall establish for each Participant a Restricted Period during which,
or at the expiration of which, the Shares of Restricted Stock shall vest. The
Committee may also restrict or prohibit the sale, assignment, transfer, pledge,
or other encumbrance of the Shares of Restricted Stock by the Participant during
the Restricted Period. Except for such restrictions, and subject to
paragraphs (c), (d) and (e) of this Section 10 and
Section 11 hereof, the Participant as owner of such Shares shall have all
the rights of a stockholder, including but not limited to the right to receive
all dividends paid on such Shares and the right to vote such Shares. Except in
the case of grants of Restricted Stock which are intended to qualify as
"performance-based compensation" under Section 162(m) of the Code, the
Committee shall have the authority, in its discretion, to accelerate the time at
which any or all of the restrictions shall lapse with respect to any Shares of
Restricted Stock prior to the expiration of the Restricted Period with respect
thereto, or to remove any or all of such restrictions, whenever it may determine
that such action is appropriate by reason of changes in applicable tax or other
laws or other changes in circumstances occurring after the commencement of such
Restricted Period.

     

    (b)  Lapse and
Forfeiture.  Except as provided in Section 13 hereof, if a
Participant incurs a Termination of Continuous Service for any reason (other
than death, Disability or Retirement), unless the Committee shall otherwise
determine, all Shares of Restricted Stock theretofore awarded to such
Participant and which at the time of such Termination of Continuous Service are
subject to the restrictions imposed by paragraph (a) of this
Section 10 shall upon such Termination of Continuous Service be forfeited
and returned to the Company. If a Participant incurs a Termination of Continuous
Service by reason of death or Disability, then the restrictions with respect to
the Ratable Portion of the Shares of Restricted Stock shall lapse and such
Shares shall be free of restrictions and shall not be forfeited. The Ratable
Portion shall be determined with respect to each separate Award of Restricted
Stock issued and shall be equal to (i) the number of Shares of Restricted
Stock awarded to the Participant multiplied by the portion of the Restricted
Period that expired at the date of the Participant's death or Disability reduced
by (ii) the number of Shares of Restricted Stock awarded with respect to
which the restrictions had lapsed as of the date of the death or Disability of
the Participant. Likewise, on the date set forth in the applicable Award
agreement, the Restricted Stock for which restrictions have not lapsed by the
last day of the Restricted Period shall be forfeited and returned to the Company
and thereafter shall be available for the grant of new Awards under the
Plan.

     

    (c)  Legend on
Certificates.  Each certificate issued in respect of Shares of
Restricted Stock awarded under the Plan shall be registered in the name of the
Participant and deposited by the Participant, together with a stock power
endorsed in blank, with the Company and shall bear the following (or a similar)
legend:

     

    "The
sale, pledge or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary or by operation of law is subject to
the terms and conditions (including forfeiture) contained in the Interactive
Intelligence, Inc. 1999 Stock Option and Incentive Plan and an Award
agreement entered into between the registered owner and Interactive
Intelligence, Inc. Copies of such Plan and Award agreement are on file in
the office of the Secretary of Interactive Intelligence, Inc."

     

    (d)  Award
Agreement.  At the time of an Award of Shares of Restricted
Stock, the Participant shall enter into an Agreement with the Company in a form
specified by the Committee, agreeing to the terms and conditions of the Award,
and to such other matters as the Committee shall in its sole discretion
determine.

     

    (e)  Dividend
Rights.  At the time of an Award of Shares of Restricted Stock,
the Committee may, in its discretion, determine that the payment to the
Participant of dividends declared or paid on such Shares by the Company or a
specified portion thereof, shall be deferred until the earlier to occur of
(i) the lapsing of the restrictions imposed under paragraph (a) of
this Section 10, or (ii) the forfeiture of such Shares under
paragraph (b) of this Section 10, and shall be held by the Company for
the account of the Participant until such time. In the event of such deferral,
there shall be credited at the end of each year (or portion thereof) interest on
the amount of the account at the beginning of the year at a rate per annum as
the Committee, in its discretion, may determine. Payment of deferred dividends,
together with interest accrued thereon as aforesaid, shall be made upon the
earlier to occur of the events specified in (i) and (ii) of the
immediately preceding sentence.

     

    (f)  Lapse of
Restrictions.  At the expiration of the restrictions imposed by
paragraph (a) of this Section 10, the Company shall redeliver to the
Participant (or where the relevant provision of paragraph (b) of this
Section 10 applies in the case of a deceased Participant, to his legal
representative, beneficiary or heir) the certificate(s) and stock power
deposited with it pursuant to paragraph (c) of this Section 10 and the
Shares represented by such certificate(s) shall be free of the restrictions
referred to in paragraph (a) of this Section 10. Notwithstanding any
other provision of this Section 10 and Section 12 to the contrary, in
the case of grants of Restricted Stock that are intended to qualify as
"performance-based compensation" under Section 162(m) of the Code, no
Shares of Restricted Stock shall become vested unless the performance goals with
respect to such Restricted Stock shall have been satisfied. If the vesting of
Shares of Restricted Stock is accelerated after the applicable performance goals
have been met, the amount of Restricted Stock distributed shall be discounted by
the Committee to reasonably reflect the time value of money in connection with
such early vesting.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (g)  Section 162(m)
Performance Restrictions.  Notwithstanding any other provision
of this Section 10 to the contrary, for purposes of qualifying grants of
Restricted Stock as "performance-based compensation" under Section 162(m)
of the Code, the Committee shall establish restrictions based upon the
achievement of performance goals. The specific targets under the performance
goals that must be satisfied for the Restricted Period to lapse or terminate
shall be set by the Committee on or before the latest date permissible to enable
the Restricted Stock to qualify as "performance-based compensation" under
Section 162(m) of the Code. The business criteria for performance goals
under this Section 10 shall be one or more of the return on equity, total
revenues, net earnings, or earnings per share of the Company as selected by the
Committee on, where applicable, a consolidated basis, for a calendar year
calculated in accordance with generally accepted accounting principles
consistently applied. In granting Restricted Stock that is intended to qualify
under Section 162(m), the Committee shall follow any procedures determined
by it in its sole discretion from time to time to be necessary, advisable or
appropriate to ensure qualification of the Restricted Stock under
Section 162(m) of the Code.

     

    11.  Adjustments
Upon Changes in Capitalization.  In the event of any change in
the Shares by virtue of any stock dividends, stock splits, recapitalizations, or
reclassifications or any acquisition, merger, consolidation, share exchange,
tender offer, or other combination involving the Company that does not
constitute a Change in Control but that results in the acquisition of a
subsidiary by the Company, or in the event that other stock shall be substituted
for the Shares as the result of any merger, consolidation, share exchange, or
reorganization or any similar transaction which constitutes a Change in Control
of the Company, the Committee shall correspondingly adjust (a) the number,
kind, and class of Shares which may be delivered under the Plan; (b) the
number, kind, class, and price of Shares subject to outstanding Awards (except
for mergers or other combinations in which the Company is the surviving entity);
and (c) the numerical limits of Section 5, all in such manner as the
Committee in its sole discretion shall determine to be advisable or appropriate
to prevent the dilution or diminution of such Awards; provided, however, in no
event shall the One Hundred Thousand Dollar ($100,000) limit on Incentive Stock
Options contained in Section 9 be affected by an adjustment under this
Section 11. The Committee's determination in this respect shall be final
and conclusive.

     

    12.  Effect
of Reorganization.  Awards will be affected by a Reorganization
as follows:

     

    (a) If
the Reorganization is a dissolution or liquidation of the Company then
(i) the restrictions of Section 10(a) on Shares of Restricted Stock
shall lapse, and (ii) each outstanding Option shall terminate, but each
Participant to whom the Option was granted shall have the right, immediately
prior to such dissolution or liquidation to exercise his Option in full,
notwithstanding the provisions of Section 9, and the Company shall notify
each Participant of such right within a reasonable period of time prior to any
such dissolution or liquidation.

     

    (b) If
the Reorganization is a merger or consolidation, upon the effective date of such
Reorganization (i) each Optionee shall be entitled, upon exercise of his
Option in accordance with all of the terms and conditions of the Plan, to
receive in lieu of Shares, Shares of such stock or other securities or
consideration as the holders of Shares shall be entitled to receive pursuant to
the terms of the Reorganization; and (ii) each holder of Restricted Stock
shall receive Shares of such stock or other securities as the holders of Shares
received which shall be subject to the restrictions set forth in
Section 10(a) unless the Committee accelerates the lapse of such
restrictions and the certificate(s) or other instruments representing or
evidencing such Shares or securities shall be legended and deposited with the
Company in the manner provided in Section 10 hereof.

     

    The
adjustments contained in this Section 12 and the manner of application of
such provisions shall be determined solely by the Committee.

     

    13.  Effect
of Change in Control.  Unless the Committee shall have
otherwise provided in the Award agreement reflecting the applicable Award, upon
the occurrence of a Change in Control (a) any Restricted Period with
respect to Restricted Stock theretofore awarded to a Participant shall lapse and
all Shares awarded as Restricted Stock shall become fully vested in the
Participant to whom such Shares were awarded and (b) all Options
theretofore granted and not fully exercisable shall become exercisable in full
and shall remain so exercisable in accordance with their terms; provided,
however, that no Option which has previously been exercised or otherwise
terminated shall become exercisable.

     

    14.  Assignments
and Transfers.  Except as otherwise determined by the
Committee, no Award nor any right or interest of a Participant under the Plan in
any instrument evidencing any Award under the Plan may be assigned, encumbered,
or transferred except, in the event of the death of a Participant, by will or
the laws of descent and distribution.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    15.  Employee
Rights Under Plan.  No officer, Employee or other person shall
have a right to be selected as a Participant nor, having been so selected, to be
selected again as a Participant and no officer, Employee or other person shall
have any claim or right to be granted an Award under the Plan or under any other
incentive or similar plan of the Company or any Affiliate. Neither the Plan nor
any action taken thereunder shall be construed as giving any Employee any right
to be retained in the employ of the Company or any Affiliate.

     

    16.  Delivery
and Registration of Stock.  Except with respect to Restricted
Stock as provided in Section 10, no person shall have any rights of a
shareholder (including, but not limited to, voting and dividend rights) as to
Shares subject to an Option until, after proper exercise of the Option or other
action as may be required by the Committee in its discretion, such Shares shall
have been recorded on the Company's official shareholder records (or the records
of its transfer agents or registrars) as having been issued and transferred to
the Participant. Upon exercise of the Option or any portion thereof, the Company
will have a reasonable period in which to issue and transfer the Shares to the
Participant, and the Participant will not be treated as a shareholder for any
purpose whatsoever prior to such issuance and transfer. No payment or adjustment
shall be made for cash dividends or other rights for which the record date is
prior to the date such Shares are recorded as issued and transferred in the
Company's official shareholder records (or the records of its transfer agents or
registrars), except as provided herein or in an Award agreement. The Company's
obligation to deliver Shares with respect to an Award shall, if the Committee so
determines, be conditioned upon the receipt of a representation as to the
investment intention of the Participant to whom such Shares are to be delivered,
in such form as the Company shall determine to be necessary or advisable to
comply with the provisions of the Securities Act or any other applicable federal
or state securities legislation. It may be provided that any representation
requirement shall become inoperative upon a registration of the Shares or other
action eliminating the necessity of such representation under the Securities Act
or other securities legislation. The Company shall not be required to deliver
any Shares under the Plan prior to (i) the admission of such Shares to
listing on any stock exchange or system on which Shares may then be listed, and
(ii) the completion of such registration or other qualification of such
Shares under any state or federal law, rule, or regulation, as the Company shall
determine to be necessary or advisable.

     

    17.  Withholding
Tax.  Upon the termination of the Restricted Period with
respect to any Shares of Restricted Stock or the issuance of Shares pursuant to
the exercise of any Option (or at any such earlier time, if any, that an
election is made by the Participant under Section 83(b) of the Code, or any
successor provision thereto, to include the value of such Shares in income), the
Company may, in lieu of requiring the Participant or other person receiving such
Shares, to pay the Company the amount of any taxes which the Company is required
to withhold with respect to such Shares, retain a sufficient number of Shares
held by it to cover the amount required to be withheld. The Company shall have
the right to deduct from all dividends paid with respect to Shares of Restricted
Stock the amount of any taxes which the Company is required to withhold with
respect to such dividend payments.

     

    Where a
Participant or other person is entitled to receive Shares pursuant to the
exercise of an Option pursuant to the Plan, the Company may, in lieu of
requiring the Participant or such other person to pay the Company the amount of
any taxes which the Company is required to withhold with respect to such Shares,
retain a number of such Shares sufficient to cover the amount required to be
withheld.

     

    18.  Loans.  

     

    (a)  Loans
Authorized.  The Company may make loans to a Participant in
connection with Restricted Stock or the exercise of Options subject to the
following terms and conditions and such other terms and conditions not
inconsistent with the Plan, including the rate of interest, if any, as the
Company shall impose from time to time.

     

    (b)  Limitations on
Loans.  No loan made under the Plan shall exceed (i) with
respect to Options, the sum of (A) the aggregate option price payable upon
exercise of the Option in relation to which the loan is made, plus (B) the
amount of the reasonably estimated income taxes payable by the Participant, and
(ii) with respect to Restricted Stock, the amount of reasonably estimated
income taxes payable by the Participant. In no event may any such loan exceed
the Market Value of the related Shares at the time of the loan.

     

    (c)  Minimum
Terms.  No loan shall have an initial term exceeding three
(3) years; provided, that loans under the Plan shall be renewable at the
discretion of the Committee; and, provided, further, that the indebtedness under
each loan shall become due and payable on a date no later than (i) one year
after Termination of Continuous Service by the Participant due to death,
Disability or Retirement, or (ii) the day of Termination of Continuous
Service by the Participant for any reason other than death, Disability or
Retirement.

     

    (d)  Payment of
Loans.  Loans under the Plan may be satisfied by the
Participant, as determined by the Committee, in cash or, with the consent of the
Committee, in whole or in part in Shares at Market Value on the date of such
payment.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (e)  Collateral.  When
a loan shall have been made, Shares having an aggregate Market Value equal to
the amount of the loan may, in the discretion of the Committee, be required to
be pledged by the Participant to the Company as security for payment of the
unpaid balance of the loan. Portions of such Shares may, in the discretion of
the Committee, be released from time to time as it deems not to be needed as
security.

     

    (f)  Legal
Requirements.  Every loan shall meet all applicable laws,
regulations, and rules of the Federal Reserve Board and any other governmental
agency having jurisdiction.

     

    19.  Amendment,
Suspension or Termination.  The Board may supplement, amend,
alter, or discontinue the Plan in its sole discretion at any time and from time
to time, but no supplement, amendment, alteration, or discontinuation shall be
made which would impair the rights of a Participant under an Award theretofore
granted without the Participant's consent, except that any supplement,
amendment, alteration, or discontinuation may be made to (a) avoid a
material charge or expense to the Company or an Affiliate; (b) cause the
Plan to comply with applicable law; or (c) permit the Company or an
Affiliate to claim a tax deduction under applicable law. In addition, subject to
the provisions of this Section 19, the Board, in its sole discretion at any
time and from time to time, may supplement, amend, alter, or discontinue the
Plan without the approval of the Company's shareholders (a) to the extent
such approval is not required by applicable law or the terms of a written
agreement; and (b) so long as any such amendment or alteration does not
increase the number of Shares subject to the Plan (other than pursuant to
Section 11) or increase the maximum number of Options or Shares of
Restricted Stock that the Committee may award to an individual Participant under
the Plan. The Committee may supplement, amend, alter, or discontinue the terms
of any Award theretofore granted, prospectively or retroactively, on the same
conditions and limitations (and exceptions to limitations) as apply to the Board
under the foregoing provisions of this Section 19, and further subject to
any approval or limitations the Board may impose. Notwithstanding any provision
of the Plan to the contrary, if any right, Award or Award agreement under the
Plan would cause a transaction of or acquisition by the Company to be ineligible
for "pooling of interest" accounting treatment that would, but for such right
hereunder, otherwise be eligible for such accounting treatment, the Committee
may amend, modify, or adjust the right, the Award or the Award agreement of a
Participant (without the prior consent, approval, or authorization of the
Participant) so that pooling of interest accounting treatment shall be available
with respect to such transaction or acquisition even if any such amendment,
modification, or adjustment would be detrimental to or impair the rights of a
Participant under the Plan.

     

    20.  Effective
Date and Term of Plan.  The Plan shall become effective upon
its approval by the holders of at least a majority of the outstanding Shares at
a meeting at which approval of the Plan is considered and shall continue in
effect for a term of ten (10) years from the date of adoption unless sooner
terminated under Section 19 hereof.

     

    21.  Legal
Construction.  

     

    (a)  Gender and
Number.  Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.

     

    (b)  Severability.  In
the event any provision of the Plan shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining parts of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid
provision had never been included herein.

     

    (c)  Requirements of
Law.  The grant of Awards and the issuance of Shares under the
Plan shall be subject to all applicable statutes, laws, rules, and regulations
and to such approvals and requirements as may be required from time to time by
any governmental authorities or any securities exchange or market on which the
Shares are then listed or traded.

     

    (d)  Governing
Law.  Except to the extent preempted by the Federal laws of the
United States of America, the Plan and all Award agreements shall be construed
in accordance with and governed by the laws of the State of Indiana without
giving effect to any choice or conflict of law provisions, principles or rules
(whether of the State of Indiana or any other jurisdiction) that would cause the
application of any laws of any jurisdiction other than the State of
Indiana.

     

    (e)  Headings.  The
descriptive headings, sections, and paragraphs of the Plan are provided herein
for convenience of reference only and shall not serve as a basis for
interpretation or construction of the Plan.

     

    (f)  Mistake of
Fact.  Any mistake of fact or misstatement of facts shall be
corrected when it becomes known by a proper adjustment to an Award or Award
agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (g)  Evidence.  Evidence
required of anyone under the Plan may be by certificate, affidavit, document, or
other information which the person relying thereon considers pertinent and
reliable, and signed, made, or presented by the proper party or
parties.

     

    22.  No
Effect on Employment or Service.  Neither the Plan nor the
grant of any Awards or the execution of any Award agreement shall confer upon
any Participant any right to continued employment by the Company or shall
interfere with or limit in any way the right of the Company to terminate any
Participant's employment or service at any time, with or without Cause.
Employment with the Company and its Affiliates is on an at-will basis only,
unless otherwise provided by a written employment or severance agreement, if
any, between the Participant and the Company or an Affiliate, as the case may
be. If there is any conflict between the provisions of the Plan and an
employment or severance agreement between a Participant and the Company, the
provisions of such employment or severance agreement shall control, including,
but not limited to, the vesting and nonforfeiture of any Awards.

     

    23.  No
Company Obligation.  Unless required by applicable law, the
Company, an Affiliate, the Board of Directors, and the Committee shall not have
any duty or obligation to affirmatively disclose material information to a
record or beneficial holder of Shares or an Award, and such holder shall have no
right to be advised of any material information regarding the Company or any
Affiliate at any time prior to, upon, or in connection with the receipt,
exercise, or distribution of an Award. In addition, the Company, an Affiliate,
the Board of Directors, the Committee, and any attorneys, accountants, advisors,
or agents for any of the foregoing shall not provide any advice, counsel, or
recommendation to any Participant with respect to, without limitation, any
Award, any exercise of an Option, or any tax consequences relating to an
Award.

     

    24.  Participation.  No
Employee or consultant shall have the right to be selected to receive an Award
under the Plan or, having been selected, to be selected to receive a future
Award. Participation in the Plan will not give any Participant any right or
claim to any benefit under the Plan, unless such right or claim has specifically
accrued under the terms of the Plan.

     

    25.  Liability
and Indemnification.  No member of the Board, the Committee, or
any officer or Employee of the Company or any Affiliate shall be personally
liable for any action, failure to act, decision, or determination made in good
faith in connection with the Plan. By participating in the Plan, each
Participant agrees to release and hold harmless the Company and its Affiliates
(and their respective directors, officers, and employees) and the Committee from
and against any tax liability, including, but not limited to, interest and
penalties, incurred by the Participant in connection with his receipt of Awards
under the Plan and the payment and exercise thereof. Each person who is or shall
have been a member of the Committee, or of the Board, shall be indemnified and
held harmless by the Company against and from (a) any loss, cost,
liability, or expense (including, but not limited to, attorneys' fees) that may
be imposed upon or reasonably incurred by him in connection with or resulting
from any claim, action, suit, or proceeding to which he may be a party or in
which he may be involved by reason of any action taken or failure to act under
the Plan or any Award agreement; and (b) any and all amounts paid by him in
settlement thereof, with the Company's prior written approval, or paid by him in
satisfaction of any judgment in any such claim, action, suit, or proceeding
against him; provided, however, that he shall give the Company an opportunity,
at the Company's expense, to handle and defend such claim, action, suit, or
proceeding before he undertakes to handle and defend the same on his own behalf.
The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company's Articles of Incorporation or By-Laws, by contract, as a matter of law,
or otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.

     

    26.  Successors.  All
obligations of the Company under the Plan, with respect to Awards granted
hereunder, shall be binding on any successor to the Company, whether or not the
existence of such successor is the result of a Change in Control. The Company
shall not, and shall not permit its Affiliates to, recommend, facilitate, agree,
or consent to a transaction or series of transactions which would result in a
Change in Control of the Company unless and until the person or persons or
entity or entities acquiring control of the Company as a result of such Change
in Control agree(s) to be bound by the terms of the Plan insofar as it pertains
to Awards theretofore granted and agrees to assume and perform the obligations
of the Company and its successor.

     

    27.  Beneficiary
Designations.  Any Participant may designate, on such forms as
may be provided by the Committee for such purpose, a beneficiary to whom any
vested but unpaid Award shall be paid in the event of the Participant's death.
Each such designation shall revoke all prior designations by the Participant and
shall be effective only if given in a form and manner acceptable to the
Committee. In the absence of any such designation, any vested benefits remaining
unpaid at the Participant's death shall be paid to the Participant's estate and,
subject to the terms of the Plan and of the applicable Award agreement, any
unexercised vested Award may be exercised by the administrator or executor of
the Participant's estate.

     

    28.  Funding.  Benefits
payable under the Plan to any person will be paid by the Company from its
general assets. Shares to be distributed hereunder shall be issued directly by
the Company from its authorized but unissued Shares or acquired by the Company
on the open market, or a combination thereof. Neither the Company nor any of its
Affiliates shall be required to segregate on their books or otherwise establish
any funding procedure for any amount to be used for the payment of benefits
under the Plan. The Company or any of its Affiliates may, however, in their sole
discretion, set funds aside in investments to meet any anticipated obligations
under the Plan. Any such action or set-aside shall not be deemed to create a
trust of any kind between the Company or any of its Affiliates and any
Participant or other person entitled to benefits under the Plan or to constitute
the funding of any Plan benefits. Consequently, any person entitled to a payment
under the Plan will have no rights greater than the rights of any other
unsecured general creditor of the Company or its Affiliates.ex10_16i.htm

    

    Exhibit
10.16(i)

    

    

    

    

    

    

    

    

    

    OFFICE
LEASE AGREEMENT

    

    by and
between

    

    

    DUKE-WEEKS
REALTY LIMITED PARTNERSHIP,

    an
Indiana limited partnership

    

    ("Landlord")

    

    

    and

    

    

    

    INTERACTIVE
INTELLIGENCE, INC.,

    an
Indiana corporation

    

    

    ("Tenant")

    

    

    Date:
April 1, 2001

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    OFFICE LEASE
INDEX

     

    ARTICLE
1 - LEASE OF PREMISES

     

    Section
1.01.  Basic Lease Provisions and Definitions. 

    Section
1.02.  Lease of Premises. 

     

    ARTICLE
2 - TERM AND POSSESSION 

     

    Section
2.01.  Term. 

    Section
2.02.  Construction.  

    Section
2.03.  Tenant's Acceptance of the Leased Premises.  

    Section
2.04.  Surrender of the Premises. 

    Section
2.05.  Holding Over.  

     

    ARTICLE
3 - RENT  

     

    Section
3.01.  Base Rent.  

    Section
3.02.  Annual Rental Adjustment Definitions.  

    Section
3.03.  Payment of Additional Rent. 

    Section
3.04.  Late Charges.  

     

    ARTICLE
4 - SECURITY DEPOSIT  

     

     

    ARTICLE
5 - OCCUPANCY AND USE  

     

    Section
5.01.  Use.  

    Section
5.02.  Covenants of Tenant Regarding Use.  

    Section
5.03.  Landlord's Rights Regarding Use. 

     

    ARTICLE
6 - UTILITIES AND OTHER BUILDING SERVICES 

     

    Section
6.01.  Services to be Provided. 

    Section
6.02.  Additional Services. 

    Section
6.03.  Interruption of Services. 

     

    ARTICLE
7 - REPAIRS, MAINTENANCE AND ALTERATIONS 

     

    Section
7.01.  Repair and Maintenance of Building.  

    Section
7.02.  Repair and Maintenance of Leased Premises.  

    Section
7.03.  Alterations.  

    Section
7.04.  Trade Fixtures. 

     

    ARTICLE
8 - CASUALTY  

     

    Section
8.01.  Casualty.  

    Section
8.02.  All Risk Coverage Insurance. 

     

    ARTICLE
9 - LIABILITY INSURANCE  

     

    Section
9.01.  Tenant's Responsibility. 

    Section
9.02.  Tenant's Insurance. 

    Section
9.03.  Landlord's Responsibility. 

    Section
9.04.  Landlord's Insurance. 

     

    ARTICLE
10 - EMINENT DOMAIN  

     

     

    ARTICLE
11 - ASSIGNMENT AND SUBLEASE  

     

     

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      ARTICLE
12 - TRANSFERS BY LANDLORD  

       

      Section
12.01.  Sale of the Building. 

      Section
12.02.  Subordination and Estoppel Certificate.  

       

      ARTICLE
13 - DEFAULT AND REMEDY  

       

      Section
13.01.  Default.  

      Section
13.02.  Remedies.  

      Section
13.03.  Landlord's Default and Tenant's Remedies.  

      Section
13.04.  Limitation of Landlord's Liability.  

      Section
13.05.  Nonwaiver of Defaults. 

      Section
13.06.  Attorneys' Fees. 

       

    

    ARTICLE
14 - LANDLORD'S RIGHT TO RELOCATE TENANT 

     

    [Intentionally
Omitted]  

     

    ARTICLE
15 - TENANT'S RESPONSIBILITY REGARDING ENVIRONMENTAL LAWS AND HAZARDOUS
SUBSTANCES  

     

    Section
15.01.  Environmental Definitions. 

    Section
15.02.  Compliance.  

    Section
15.03.  Restrictions on Tenant. 

    Section
15.04.  Notices, Affidavits, Etc. 

    Section
15.05.  Landlord's Rights. 

    Section
15.06.  Tenant's Indemnification. 

    Section
15.07.  Existing Conditions. 

    Section
15.08.  Landlord's Representations. 

    Section
15.09.  Landlord's Indemnification. 

     

    ARTICLE
16 - MISCELLANEOUS  

     

    Section
16.01.  Benefit of Landlord and Tenant. 

    Section
16.02.  Governing Law. 

    Section
16.03.  Guaranty.  

    Section
16.04.  Force Majeure. 

    Section
16.05.  No Representation or Option. 

    Section
16.06.  Indemnification for Leasing Commissions.  

    Section
16.07.  Notices.  

    Section
16.08.  Partial Invalidity; Complete Agreement.  

    Section
16.09.  Financial Statements. 

    Section
16.10.  Representations and Warranties. 

    Section
16.11.  Signage.  

    Section
16.12.  Satellite Dishes. 

    Section
16.13.  Parking.  

    Section
16.14.  Relocation and Discretionary Allowances.  

    Section
16.15.  Right of First Offer to Purchase the Buildings.  

    Section
16.16.  Phase I Building Expansion Option.  

    Section
16.17.  Phase II Building Expansion Option.  

    Section
16.18.  Phase III Building Expansion Option.  

    Section
16.19.  Option to Extend. 

    Section
16.20.  Right of First Offer for the ViFi Expansion Space.  

    Section
16.21.  Name Change of Park. 

    Section
16.22.  Infrastructure Improvements. 

    Section
16.23.  Early Occupancy. 

    

    EXHIBITS

    Exhibit A - Leased
Premises

    Exhibit B - Tenant Finish
Improvements

    Exhibit C - Rules and
Regulations

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    OFFICE
LEASE

    

    THIS
OFFICE LEASE is executed this 1st day of April 2001, by and between DUKE-WEEKS
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:

    

    ARTICLE 1 - LEASE OF
PREMISES

    

    Section
1.01.  Basic Lease Provisions and Definitions.

    

    
      	
              A.

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

            

    

    

    B.           **Rentable
Area:  approximately 180,000 rentable square feet;

    

    Landlord
shall use  the standards described in the Standard Method for
Measuring Floor Area in Office Buildings, ANS1Z65.1-1996, as promulgated by the
Building Owners and Managers Association International (BOMA), consistently
applied, in determining the Rentable Area and the rentable area of the
Building.  The Rentable Area shall include the area within the Leased
Premises plus a pro rata portion of the area covered by the common areas within
the Building, as reasonably determined by Landlord prior to the Occupancy Date,
as hereinafter defined.  Landlord's determination of Rentable Area
made in good faith shall presumptively be deemed correct for all purposes
hereunder; provided, however, Tenant shall have the right, at any time prior to
the Commencement Date, to have the Leased Premises and Building measured by
Tenant's architect and, in the event of a disparity of or dispute to Landlord's
measurement, either (a) Landlord and Tenant shall mutually agree on the Rentable
Area of the Leased Premises and the rentable area of the Building, or (b)
Landlord and Tenant shall agree to have the Leased Premises and Building
measured by an independent architect mutually agreed upon by Landlord and
Tenant, in which event Landlord and Tenant agree to abide by such certified
remeasurement.  If the rentable square footage of the Leased
Premises/Building, as measured by said independent architect, is one thousand
(1,000) feet or more smaller than Landlord's determination of the rentable
square footage of the Leased Premises/Building, then the costs of said
independent architect shall be borne by Landlord, otherwise said costs shall be
borne by Tenant.  Upon determination of the actual Rentable Area of
the Leased Premises and rentable area of the Building, the Minimum Annual Rent
and all other rents payable by Tenant hereunder shall be adjusted to reflect the
actual square footage.

    

    
      	
              C.  

            	
              **Building
      Expense
Percentage:  100%;

            

    

    

    D.           **Minimum
Annual Rent:

    

    
      	
              Years
      1 – 5

            	
              $2,826,000.00
      per year

            
	
              Years
      6 – 10

            	
              $3,240,000.00
      per year

            
	
              Years
      11 - 15

            	
              $3,870,000.00
      per year

            

    

    

    E.           **Monthly
Rental Installments:

    

    

    
      	
              Months
      1 – 60

            	
              $   235,500.00
      per month

            
	
              Months
      61 – 120

            	
              $   270,000.00
      per month

            
	
              Months
      121 – 180

            	
              $   322,500.00
      per month

            

    

    

    

      

    

      
      * (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)

    

     

     

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

    
      	
              F.  

            	
              Term:  Fifteen
      (15) years and zero (0) months;

            

    

    

    G.           Target
Commencement Date:  June 1, 2002

    Target
Occupancy Date: May 1, 2002;

    

    H.           Security
Deposit:  None;

    

    
      	
              I.

            	
              Broker:  Duke-Weeks
      Realty Limited Partnership representing Landlord and none representing
      Tenant;

            

    

    

    
      	
              J.

            	
              Permitted
      Use:  General office purposes including computer and software
      test labs; software development labs; training and demonstration rooms for
      employees, customers and resellers; software sales; exercise facility;
      cafeteria and food service; and uses ancillary to any of the
      foregoing;

            

    

    

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

    

    L.           Address
for payments and notices as follows:

    

    Landlord:                                Duke-Weeks
Realty Limited Partnership

    Attn:  Property
Management

    600 East
96th
Street, Suite 100

    Indianapolis,
Indiana  46240

    

    With
Rental

    Payments
to:                                           Duke-Weeks
Realty Limited Partnership

    P.O. Box
66259

    Indianapolis,
Indiana  46266

    

    Tenant:                                           Interactive
Intelligence, Inc.

    
      	
               
      

            	
              Prior
      to

            	
              8909
      Purdue, Suite 300

            

    

    
      	
              Commencement
      Date:

            	
              Indianapolis,
      IN  46268

            

    

    
      	
               
      

            	
              Attn:
      John R. Gibbs

            

    

    

    After

    Commencement
Date:                                           Interactive
Intelligence, Inc.

    ***_____________________________________________

    _____________________________________________

    

    M.           Guarantor(s):  None;

    

    
      	
              N.

            	
              Landlord's
      Share of Operating Expenses:  $3.75 per square foot of the
      Rentable Area.

            

    

    

    Section
1.02.  Lease of Premises.

    

    Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord under the terms
and conditions herein the Leased Premises.

    

    ARTICLE 2 - TERM AND
POSSESSION

    

    Section
2.01.  Term.

    

    The term
of this Lease (the "Lease Term") shall be the period of time specified in Item F
of the Basic Lease Provisions and shall commence on such date which is thirty
(30) days after Substantial Completion, as defined in Section 2.02.D, below (the
"Commencement Date").  The "Occupancy Date" shall be the date of
Substantial Completion.

    

    

      

    

      
      *** To be the address of the Building after
completion

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Section
2.02.  Construction.

    

    A.           Shell
Work.  The scope of the work for the shell improvements ("Shell
Work") to be performed by Landlord is set forth in the preliminary plans and
specifications, working drawings and written descriptions thereto all of which
are listed on the attached Preliminary Exhibit
B-1.  Landlord will prepare final plans and specifications and
actual working drawings which shall be substantially similar to Preliminary
Exhibit B-1 and which, upon completion and Tenant's approval, shall be
substituted and attached hereto as Exhibit
B-1 ("Shell Plans and Specifications").  Landlord shall, at its
sole cost and expense, construct in a good and workmanlike manner all of the
improvements and supply all work, labor, materials and equipment necessary to
complete the Shell Work in accordance with the Shell Plans and Specifications,
which shall include, without limitation, the complete construction of the
Building and all Common Areas, including the installation of landscaping,
parking lots, driveways and all improvements as shown on the Shell Plans and
Specifications for the benefit of the Leased Premises.  Shell
Work shall also include all monument and other signage and infrastructure
improvements for Interactive Park as shown on the attached Exhibit
B-1A.

    

    B.           Tenant Finish
Improvements.  Landlord agrees to perform and complete the work
on the tenant finish improvements for the Leased Premises ("Tenant Finish
Improvements") in accordance with Tenant's plans and specifications which shall
be mutually agreed upon by both Landlord and Tenant and, upon completion,
attached hereto as Exhibit
B-2 ("Interior Plans and Specifications").  Landlord shall
allow Tenant to review the major subcontractor bids associated with such
work.  Landlord shall provide an allowance for the costs of the tenant
finish improvements to the Leased Premises in an amount not to exceed
Twenty-three Dollars ($23.00) per rentable square foot of the Leased Premises
(the "Tenant Finish Allowance").  Landlord further agrees to provide
an allowance for the costs of initial space planning and construction drawing
services, to be completed by Tenant's selected space planner, in the amount of
One Dollar and Twenty-five Cents ($1.25) per rentable square foot of the Leased
Premises (the "Design Allowance").  The Tenant Finish Allowance shall
be used to construct and pay for the Tenant Finish Improvements and , any
remaining balance may be used for costs of wiring, cabling, relocation and other
associated expenses of Tenant.  The Tenant Finish Allowance shall be
paid by Landlord directly to the Construction Manager (as hereinafter defined),
contractor, and/or subcontractors performing the Tenant Finish Improvements, and
after completion of all Tenant Finish Improvements and payment of all costs
relating thereto, the remaining balance shall be made available to Tenant for
payment of such wiring, cabling, relocation and other associated expenses of
Tenant, which expenses shall be reimbursed to Tenant by Landlord within thirty
(30) days of Landlord's receipt of invoices for such other expenses from Tenant,
provided that the final costs of the Tenant Finish Improvements shall have been
determined.  Any unused portion of the Tenant Finish Allowance up to
an amount not to exceed Three Dollars ($3.00) per rentable square foot of the
Leased Premises shall be applied in equal monthly installments toward Tenant's
Minimum Annual Rent hereunder over the initial Lease Term
hereof.  Tenant shall reimburse Landlord for any cost or expense
attributable to the Tenant Finish Improvements which exceeds the Tenant Finish
Allowance no later than the Commencement Date.  The Design Allowance
shall be paid by Landlord directly to Tenant's space planner within thirty (30)
days after Landlord receives invoices for the design services provided by such
space planner for the Leased Premises.  Tenant shall be solely
responsible for any costs charged by such space planner in excess of the Design
Allowance.

    

    Landlord
and Tenant hereby agree that all work on the Tenant Finish Improvements in the
Leased Premises shall be performed by Duke Construction Limited Partnership or
another affiliate of Landlord (collectively, the "Construction Manager") which
shall receive a construction management fee of ten percent (10%) of the total
costs of the Tenant Finish Improvements, including general
conditions.  The Construction Manager will competitively bid all
tenant finish improvements, will use commercially reasonable efforts to obtain
at least three (3) bids, and will manage the entire construction
process.  In the event the Construction Manager determines, after the
bidding process, that the tenant finish improvements cannot be completed for the
amount of the Tenant Finish Allowance, Landlord hereby agrees to confer with
Tenant concerning possible revisions to the Interior Plans and
Specifications.

    

    C.           Project Design Schedule and
Permits.  The Shell Plans and Specifications and the Interior
Plans and Specifications shall be finalized and the Shell Work and Tenant Finish
Improvements shall be constructed by Landlord in accordance with the Project
Schedule attached hereto as Exhibit
B-3.  Landlord shall apply for and obtain as expeditiously as
possible, at its sole cost and expense, all permits, licenses and certificates
necessary for the construction and completion of the Shell Work and Tenant
Finish Improvements and for the occupancy of the Building.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    D.           Substantial
Completion.  The Leased Premises shall be deemed to be
substantially completed ("Substantially Complete" or "Substantial Completion")
at such time as the Shell Work and the Tenant Finish Improvements have all been
completed in substantial accordance with Exhibit
B-1, B-1A and B-2 subject only to minor punch list items of work which do
not substantially interfere with Tenant's use of the Building, the Common Areas
or the
Leased Premises in accordance with the terms of this Lease.  Landlord
shall provide a written notice to Tenant of its best estimate of the date of
Substantial Completion at least seven (7) days prior thereto.  In the
event Landlord and Tenant do not agree upon the date of Substantial Completion,
Landlord shall furnish Tenant with the architect of record's architect's
certificate of substantial completion which shall conclusively establish such
date.  If Substantial Completion has not occurred on or before July 1,
2002 as extended for any Tenant Caused Delays, as hereinafter defined, or force
majeure event, then Landlord shall pay to Tenant Five Thousand Dollars
($5,000.00) per day for each day that Substantial Completion is
delayed.  If Substantial Completion has not occurred on or before
November 1, 2002 as extended for any Tenant Caused Delays, or force majeure
event, Tenant may terminate this Lease by providing written notice thereof to
Landlord within fifteen (15) days after such period and thereafter each party
shall be released from further liability hereunder.  In the event that
the date of Substantial Completion is delayed due to any force majeure event,
Landlord will use commercially reasonable efforts to provide interim space to
Tenant at market rental rates.

    

    E.           Landlord's
Warranty.  Landlord warrants that the Building and the Leased
Premises will be free from defects for a period of one (1) year after the
Commencement Date.  In addition, Landlord shall thereafter assign to
Tenant or make available for Tenant's benefit any assignable warranties from
non-affiliated third parties applicable to the construction performed and
equipment installed in the Leased Premises in accordance with this
Section.

    

    F.           Fixturing.  Tenant
shall have the right and privilege of going into the first (1st),
fourth (4th) and
fifth (5th) floors
of the Leased Premises commencing sixty (60) days prior to the Occupancy Date,
as hereinafter defined, and the remaining two (2) floors 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, subject to Tenant Caused Delays or any other events beyond
Landlord’s control, 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.  Landlord shall have no liability whatsoever for any loss or
damage to any of Tenant's fixtures, equipment or any other items brought into
the Leased Premises prior to the Occupancy Date.  Notwithstanding the
foregoing, all of the terms and conditions of this Lease will become effective
upon Tenant taking possession of the Leased Premises for fixturing purposes as
contemplated by this Section, except for payment of Minimum Annual Rent and
Annual Rental Adjustment, which shall commence on the Commencement
Date.

    

    G.           Tenant Caused
Delays.  Tenant Caused Delay or Delays shall mean any delay
caused by or resulting from the following or any combination of the
following:  (1) failure of Tenant to fully comply with the Project
Schedule attached hereto as Exhibit
B-3; (2) any change orders requested by Tenant; (3) failure of Tenant to
timely or properly arrange its furnishings or be present for any scheduled
walk-through of the Leased Premises, Building or Common Areas; (4) failure of
Tenant to respond promptly to any reasonable request of Landlord; (5) Tenant’s
fixturing of the Leased Premises prior to the Commencement Date unless
coordinated with Landlord in accordance with Section 2.02.E above; or (6)
arising from or in connection with Section 3.02.D, below.

    

    H.           Compliance.  Landlord
shall cause all construction performed by or on behalf of Landlord hereunder to
be made
in accordance with all applicable laws, rules, codes, ordinances and
regulations, including the Americans With Disabilities and all applicable
governmental zoning and building ordinances and codes in effect as of the time
of Substantial Completion of the Shell Work and Tenant Finish Improvements,
respectively.  Such construction shall be in a good and workmanlike
manner with new materials and the Shell Work and public areas will be of similar
quality to the Six Parkwood Crossing building and in conformity with the
requirements set forth in Exhibit
B-1.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Section
2.03.  Tenant's Acceptance of the Leased Premises.

    

    Upon
delivery of possession of the Leased Premises to Tenant as hereinbefore
provided, Tenant shall execute a letter of understanding acknowledging
(i) the Commencement Date and Expiration Date of this Lease, and
(ii) that Tenant has accepted the Leased Premises for occupancy and the
date of such acceptance and that the condition of the Leased Premises, including
the Tenant Finish Improvements, and the Building, to Tenant's knowledge, was at
the time satisfactory and in conformity with the provisions of this Lease in all
respects, except for any patent defects as to which Tenant shall give written
notice to Landlord within thirty (30) days after such delivery and except for
any latent defects as to which Tenant shall give written notice to Landlord
within one (1) year after the Commencement Date.  Landlord shall
promptly thereafter correct all such defects.  Such letter of
understanding shall become a part of this Lease.  If Tenant takes
possession of and occupies the Leased Premises, Tenant shall be deemed to have
accepted the Leased Premises in the manner described in this Section 2.03, even
though the letter of understanding provided for herein may not have been
executed by Tenant.  Landlord's obligations under this
Section 2.03 are in addition to Landlord's warranty obligation under
Subsection 2.02E.

    

    Section
2.04.  Surrender of the Premises.

    

    Upon the
expiration or earlier termination of this Lease, Tenant shall immediately
surrender the Leased Premises to Landlord in broom-clean condition and in good
order, condition and repair except for ordinary wear and tear, condemnation and
damage which Tenant is not obligated to repair.  Tenant shall remove
its personal property, computer equipment, wiring and cabling (including above
ceiling) in the Leased Premises, at its sole cost and expense.  Tenant
shall, at its expense, promptly repair any damage caused by any such removal,
and shall restore the Leased Premises to the condition existing prior to the
installation of the items so removed except for ordinary wear and tear,
condemnation and damage which Tenant is not obligated to repair.  All
Tenant property which is not removed by the later of (i) ten (10) days following
Landlord's written demand therefore or (ii) termination hereof shall be
conclusively deemed to have been abandoned and Landlord shall be entitled to
dispose of such property at Tenant's cost without incurring any liability to
Tenant.  The provisions of this section shall survive the expiration
or other termination of this Lease.

    

    Section
2.05.  Holding Over.

    

    If Tenant
retains possession of the Leased Premises after the expiration or earlier
termination of this Lease, with Landlord's consent, Tenant shall become a tenant
from month to month at One Hundred Twenty-five Percent (125%) of the Monthly
Rental Installment and Annual Rental Adjustment for the Leased Premises in
effect upon the date of such expiration or earlier termination, and otherwise
upon the terms, covenants and conditions herein specified, so far as
applicable.  Acceptance by Landlord of rent after expiration or
earlier termination of the Lease Term shall not result in a renewal of this
Lease.  Notwithstanding such month-to-month tenancy, Tenant shall
vacate and surrender the Leased Premises to Landlord upon Tenant being given
thirty (30) days' prior written notice from Landlord to vacate which notice may
be given at anytime during a month.  This Section 2.04 shall in no way
constitute a consent by Landlord to any holding over by Tenant upon the
expiration or earlier termination of the Lease Term, nor limit Landlord's
remedies in such event.

    

    ARTICLE 3 -
RENT

    

    Section
3.01.  Base Rent.

    

    Tenant
shall pay to Landlord the Minimum Annual Rent in the Monthly Rental Installments
in advance, without deduction or offset on the Commencement Date and on or
before the first day of each and every calendar month thereafter during the
Lease Term.  The Monthly Rental Installments for any partial calendar
month at the beginning or end of the Lease Term shall be prorated.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Section
3.02.  Annual Rental Adjustment Definitions.

    

    
      	
              A.

            	
              "Annual Rental
      Adjustment" - shall mean the amount of Tenant's Proportionate Share
      of Operating Expenses for a particular calendar year as well as one
      hundred percent (100%) of Real Estate Taxes payable during said calendar
      year.

            

    

    

    
      	
              B.

            	
              "Operating
      Expenses" - shall mean the reasonable
      amount of all of Landlord's costs and expenses paid or incurred in
      operating, repairing, replacing and maintaining the Building (including
      the Common Areas as defined below) in good condition and repair for a
      particular calendar year, including by way of illustration and not
      limitation: insurance premiums and deductibles; water, sewer, electrical
      and other utility charges other than the separately billed electrical and
      other charges paid by Tenant as provided in this Lease; service and other
      charges incurred in the repair, replacement, operation and maintenance of
      the elevators and the heating,
      ventilation and air-conditioning system; cleaning and other janitorial
      services; tools and supplies; repair costs; landscape maintenance costs;
      security services; license, permit and inspection fees; management or
      administrative fees not
      to exceed three and one-half percent (31⁄2%) of the gross rents for the
      Building; supplies, costs, wages and related employee benefits payable for
      the management, maintenance and operation of the Building; maintenance,
      repair and replacement of the driveways, parking and sidewalk areas
      (including snow and ice removal), landscaped areas, and lighting;
      maintenance and repair costs, dues, fees and assessments incurred under
      any covenants or owners association (which, if created, shall be according
      to reasonable and customary standards for Class A office parks) (the
      "Covenants").  Operating Expenses shall not include the cost of
      any capital improvement except as follows: reasonable costs and expenses
      which would, under generally accepted accounting principals, be regarded
      as operating and maintenance costs and expenses, including those which
      would normally be amortized over a period not to exceed five (5) years;
      amortization of capital improvements that produce a net reduction in
      operating costs together with interest at the rate of ten percent (10%)
      per annum on the unamortized balance thereof (but not to exceed the amount
      of the reduction in operating costs); the cost or portion thereof
      reasonably allocable to the Building or the Land, amortized over such
      period as Landlord shall reasonably determine, together with interest of
      ten percent (10%) per annum on the unamortized balance, of any capital
      improvements made to the Building by Landlord after the date of this Lease
      which are required under governmental law or regulation that was not
      applicable to the Building at the time the Building was constructed.
      .

            

    

    

    Operating
Expenses shall not include expenses incurred by Landlord with regard to:
(i) Landlord's warranty obligations hereunder; (ii) replacement of the
roof, foundation or structure of the Building, or correction of any construction
defect, or restoration or repair of any damage by fire, windstorm or other
casualty to the extent covered by insurance  of the type to be
maintained by Landlord hereunder; (iii) repairs, replacement or maintenance
to the extent directly caused by the negligence or intentional misconduct of
Landlord or its affiliates or their  agents, employees or contractors
or other tenants of the Building, if any; (iv) expenses incurred at the
request of a specific tenant which benefit only that tenant; (v) expenses
incurred in leasing or procuring tenants, including tenant finish improvements;
(vi) legal expenses or costs incidental to any disputes or negotiations
with tenants or mortgagees; (vii) interest or principal payments (or late
charges, fees or premiums) on any mortgage or other similar indebtedness of
Landlord; (viii) any ground lease rental; (ix) rental for items (except
when needed in connection with normal repairs and maintenance of permanent
systems) which if purchased, rather than rented, would constitute a capital
improvement which is specifically excluded in this Section; (x) costs
incurred by Landlord due to violation by Landlord or other tenants of the
Building, if any, of the terms and conditions of any lease of space in the
Building; (xi) advertising and promotional expenditures, and costs of signs
in or on the Building identifying the owner of the Building or other tenants'
signs, excluding interior Building signage/directionals; (xii)  Real Estate
Taxes which are paid directly by Tenant pursuant to Section 3.03;
(xiii) costs resulting from Landlord's breach hereof; (xiv) any
depreciation allowance or other expense of charge in respect to any capital
improvements, except as otherwise specifically provided in this Lease; (xv) any
cost billed to and paid directly or reimbursed by a tenant or for which Landlord
is otherwise reimbursed in any manner; (xvi) cost for which Landlord has been
compensated by management or administrative fee; or (xvii) extraordinary parking
lot repairs.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

    
      	
              C.

            	
              "Tenant's Proportionate
      Share of Operating Expenses" - shall be an amount equal to the
      remainder of (i) the product of Tenant's Building Expense Percentage times
      the Building Operating Expenses less (ii) Landlord's Share of Operating
      Expenses, provided that such amount shall not be less than
      zero.

            

    

    

    
      	
              D.

            	
              "Real Estate
      Taxes" - shall include (i) any form of real estate tax or
      assessment or service payments in lieu thereof, and (ii) any license fee,
      commercial rental tax, improvement bond or other similar charge or tax
      (other than inheritance, income or estate taxes) imposed upon the Building
      or Common Areas (or against Landlord's business of leasing the Building)
      in lieu of real estate taxes, assessments or revise payments during the
      Lease Term by any authority having the power to so charge or tax, together
      with reasonable costs and expenses of contesting the validity or amount of
      Real Estate Taxes.

            

    

    

    Tenant
desires to obtain and maintain real estate tax abatement deductions for the
Building, and Tenant shall use its best efforts to promptly obtain said
abatements.  Tenant shall make the payment of any and all application
and other fees associated therewith.  Should Tenant's tax abatement
application not be successful by the thirty-third (33rd) day
after the date of execution of this Lease, Tenant may terminate this Lease by
giving written notice of such termination to Landlord and this Lease shall
terminate and the parties shall be released from all liability hereunder except
that Tenant shall reimburse Landlord for all of Landlord's out-of-pocket costs
and expenses incurred in the preparation of the construction documents through
the date Landlord receives said termination notice.  Tenant shall make
such payment to Landlord within ten (10) days of receipt of Landlord's
invoice.  Landlord agrees not to apply for a building permit or
otherwise commence construction until Tenant's real estate tax abatement
application is approved; provided, however, that if the Project Schedule cannot
be complied with as a result thereof, such delay will constitute a Tenant Caused
Delay.  Immediately upon execution of this Lease, Tenant shall prepare
and file any required applications, forms, resolutions, agreements or other
materials, whether for or on behalf of Tenant or Landlord.  To permit
Tenant to take the actions necessary to obtain and 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 obtaining or 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.  Tenant further
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.  Notwithstanding anything contained herein to the contrary,
in the event Tenant is successful in obtaining real estate tax abatement for the
Building, Landlord hereby agrees that the full amount which is abated is for the
benefit of Tenant.

    

    
      	
              E.

            	
              "Common Areas" -
      shall mean the areas of the Building and the Land which are designed for
      use in common by all tenants of the Building and their respective
      employees, agents, customers, invitees and others, and includes, by way of
      illustration and not limitation, entrances and exits, hallways and
      stairwells, elevators,
      restrooms, sidewalks, driveways, parking areas, landscaped areas and other
      areas as may be designated by Landlord as part of the Common Areas of the
      Building.  Tenant shall have the exclusive right to the use of
      the Common Areas except that Landlord shall have the right to permit
      others to use the Common Areas for nominal uses, such as jogging on marked
      trails and sidewalks, and to grant easements for
      utilities.  Landlord shall not reduce or materially modify any
      portion of the Common Areas without Tenant's written
    consent.

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Section
3.03.  Payment of Additional Rent.

    

    In
addition to the Minimum Annual Rent specified in this Lease, Tenant shall pay to
Landlord as "Additional Rent" for the Leased Premises, in each calendar year or
partial calendar year, during the Lease Term, an amount equal to the Annual
Rental Adjustment excluding Real Estate Taxes for such calendar year or partial
calendar year.  In the case of the calendar year of the Commencement
Date, Landlord shall provide such notice prior to the Commencement
Date.  The Annual Rental Adjustment excluding Real Estate Taxes shall
be estimated annually by Landlord, and written notice thereof shall be given to
Tenant prior to the beginning of each calendar year.  Tenant shall pay
to Landlord each month, at the same time the Monthly Rental Installment is due,
an amount equal to one-twelfth (1/12) of the estimated Annual Rental Adjustment
excluding Real Estate Taxes.  If the cost of utility, janitorial or
other services increase during a calendar year, Landlord may increase the
estimated Annual Rental Adjustment excluding Real Estate Taxes during such year
by giving Tenant written notice to that effect, and thereafter Tenant shall pay
to Landlord, in each of the remaining months of such year, an amount equal to
the amount of such increase in the estimated Annual Rental Adjustment excluding
Real Estate Taxes for the remainder of the year divided by the number of months
remaining in such year.  Within a reasonable time after the end of
each calendar year, Landlord shall prepare and deliver to Tenant a statement
showing the actual Annual Rental Adjustment excluding Real Estate
Taxes.  Within thirty (30) days after receipt of the aforementioned
statement, Tenant shall pay to Landlord, or Landlord shall credit against the
next rent payment or payments due from Tenant, as the case may be, the
difference between the actual Annual Rental Adjustment excluding Real Estate
Taxes for the preceding calendar year and the estimated amount paid by Tenant to
Landlord during such year.  In addition, Tenant shall pay, before
delinquency, any and all Real Estate Taxes as defined in Section 3.02.D, above,
directly to the appropriate taxing authority.  If Tenant fails for any
reason to pay the Real Estate Taxes when same is due and payable, Landlord shall
have the right, but not the obligation, to pay the Real Estate Taxes directly to
the taxing authority and Tenant shall immediately reimburse Landlord for the
cost thereof.  Such amount shall accrue interest from the date
Landlord pays such amount, pursuant to Section 3.04, below, shall include any
penalties, late fees and any interest assessed due to such
delinquency.

    

    Tenant or
its accountants shall have the right to inspect, at reasonable time and in a
reasonable manner, during the one hundred twenty (120) day period following the
delivery of Landlord's statement of the actual amount of the Annual Rental
Adjustment excluding Real Estate Taxes, such of Landlord's books of account and
records as pertain to and contain information concerning such costs and expenses
for the Building for the prior calendar year in order to verify the amounts
thereof.

    

    In the
event the first audit discloses (i) errors made during the prior calendar
year which, when totaled, indicate that the sum overcharged to and paid by
Tenant, exceeds five percent (5%) of the Annual Rental Adjustment excluding Real
Estate Taxes plus Landlord's Share of Operating Expenses (the "Total Expenses"),
the audit shall be at the expense of Landlord, not to exceed Two Thousand Five
Hundred Dollars ($2,500.00), or (ii) no errors or an error which equals or
is less than five percent (5%) of the Total Expenses, the audit shall be at the
expense of Tenant.

    

    For each
subsequent audit, where the audit discloses errors exceeding five percent (5%)
of the Total Expenses, Landlord shall pay for such audit and, if the audit
discloses errors equal to or less than five percent (5%) of the Total Expenses,
Tenant shall pay the costs of the audit.  If Landlord spends more than
eight (8) hours to accommodate Tenant's right to audit hereunder, Tenant shall
also pay to Landlord as additional rent Seventy-five Dollars ($75.00) per hour
for each additional hour that Tenant's audit takes of Landlord's property
manager's or asset manager's time, provided such audit discloses no error or an
error greater than five percent (5%) of the Total Expenses.  The
results of the audit (regardless of the degree of the error, if any) shall be
binding upon Landlord and Tenant, and Landlord shall thereafter, if appropriate,
change its method of calculating the Operating Expenses consistent with the
results of the audit.  Tenant agrees to hold the information obtained
from such audit confidential and shall not disclose the same without Landlord's
express written permission except as necessary to enforce the Lease or protect
Tenant's rights hereunder.

    

    If Tenant
shall not elect to cause an audit within the time period permitted hereby, then
Landlord's statement shall be conclusively deemed to have been approved and
accepted by Tenant.  Pending resolution of any dispute with respect to
statements of Tenant's Annual Rental Adjustment, Tenant shall pay its Annual
Rental Adjustment as shown on such statement, and upon final determination of
the amount of Tenant's Annual Rental Adjustment, Landlord shall promptly refund
any overpayment to Tenant or Tenant shall promptly pay any amount due to
Landlord, as applicable.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Section
3.04.  Late Charges.

    

    Tenant
acknowledges that Landlord shall incur certain additional unanticipated
administrative and legal costs and expenses if Tenant fails to timely pay any
payment required hereunder.  Therefore, in addition to the other
remedies available to Landlord hereunder, if any payment required to be paid by
Tenant to Landlord hereunder shall become overdue, such unpaid amount shall bear
interest from the due date thereof to the date of payment at the prime rate (as
defined by a bank or financial institution used by Landlord) of interest ("Prime
Rate") plus six percent (6%) per annum.

    

    ARTICLE 4 - SECURITY
DEPOSIT

    

    [Intentionally
Omitted]

    

    ARTICLE 5 - OCCUPANCY AND
USE

    

    Section
5.01.  Use.

    

    The
Leased Premises shall be used by Tenant for the Permitted Use and for no other
purposes without the prior written consent of
Landlord.  Notwithstanding the foregoing and subject to the provisions
of Section 7.03, below, Tenant shall have the right, at Tenant's sole cost and
expense, to build an indoor athletic facility such as tennis or basketball for
exclusive use by Tenant and its employees on the Land.  The location,
size and design of the facility shall be subject to the mutual approval of
Landlord and Tenant.

    

    Section
5.02.  Covenants of Tenant Regarding Use.

    

    Tenant
shall (i) use and maintain the Leased Premises and conduct its business thereon
in a safe, careful, reputable and lawful manner, (ii) comply with the Covenants
and all laws, rules, regulations, orders, ordinances, directions and
requirements of any governmental authority or agency, now in force or which may
hereafter be in force applicable to Tenant's use or occupancy of the Leased
Premises, including without limitation those which shall impose upon Landlord or
Tenant any duty with respect to or triggered by a change in the use or
occupation of, or any improvement or alteration by Tenant to, the Leased
Premises after Tenant's occupancy thereof, (iii) comply with and obey all
reasonable directions of Landlord, including the Building Rules and Regulations
attached hereto as Exhibit
C.  Tenant shall not use the Leased Premises, or allow the
Leased Premises to be used, for any purpose or in any manner which would
invalidate any policy of insurance now or hereafter carried on the Building or
increase the rate of premiums payable on any such insurance policy unless Tenant
reimburses Landlord for any increase in premium charged.

    

    Section
5.03.  Landlord's Rights Regarding Use.

    

    In
addition to the rights specified elsewhere in this Lease, Landlord shall have
the following rights regarding the use of the Leased Premises or the Common
Areas, each of which may be exercised without notice or liability to Tenant
except as herein provided to the contrary: (a) if Tenant or a Permitted
Transferee does not lease one hundred percent (100%) of the Building, Landlord
may install such signs, advertisements or notices or tenant identification
information on the directory board or tenant access doors as it shall deem
necessary or proper; provided the same does not materially interfere with access
to the Leased Premises; (b) if Tenant or a Permitted Transferee does not lease
one hundred percent (100%) of the Building, Landlord shall have the right at any
time to control, change but not materially diminish or otherwise alter the
Common Areas in such manner as it reasonably deems necessary; (c) Landlord, its
employees and agents and any mortgagee of the Building shall have the right to
enter any part of the Leased Premises at reasonable times and upon reasonable
notice and with the presence of a Tenant representative (except in the case of
an emergency) for the purposes of examining or inspecting the same, showing the
same to prospective purchasers, mortgagees or tenants and making such repairs,
alterations or improvements to the Leased Premises or the Building as Landlord
may deem necessary or desirable.  Landlord shall incur no liability to
Tenant for such entry, nor shall such entry constitute an eviction of Tenant or
a termination of this Lease, or entitle Tenant to any abatement of rent
therefor; providing Landlord shall use commercially reasonable efforts to
minimize interference with Tenant's use of the Leased Premises in the exercise
of its rights hereunder.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    ARTICLE 6 - UTILITIES AND
OTHER BUILDING SERVICES

    

    Section
6.01.  Services to be Provided.

    

    Provided
Tenant is not in default, Landlord shall furnish to Tenant, except as noted
below, the following utilities and other building services to the extent
reasonably necessary for Tenant's comfortable use and occupancy of the Leased
Premises for the Permitted Use or as may be required by law or directed by
governmental authority:

    

    
      	
              (a)

            	
              Heating,
      ventilation and air-conditioning between the hours of 7:00 a.m. and 8:00
      p.m. Monday through Friday and 7:00 a.m. to 1:00 p.m. on Saturday of each
      week except on legal holidays and HVAC twenty-four (24) hours per day,
      seven (7) days per week, for the computer labs identified on the
      construction documents;

            

    

    

    
      	
              (b)

            	
              Electrical
      current not to exceed seven (7) watts per square foot; provided, however,
      additional wattage not to exceed fifteen (15) watts per square foot shall
      be provided to the HVAC system and computer labs (approximately 7,000
      square feet);

            

    

    

    (c)           Water
in the Common Areas and Leased Premises for lavatory and drinking
purposes;

    

    (d)           Automatic
elevator service;

    

    
      	
              (e)

            	
              Cleaning
      and janitorial service in the Leased Premises and Common Areas on Monday
      through Friday of each week except legal holidays; provided, however,
      Tenant shall be responsible for carpet cleaning other than routine
      vacuuming;

            

    

    

    (f)           Washing
of windows at intervals reasonably established by Landlord;

    

    
      	
              (g)

            	
              Replacement
      of all lamps, bulbs, starters and ballasts in Building standard lighting
      (Landlord's standard tenant finish improvements being described in Exhibit
      B) as required from time to time as a result of normal
      usage;

            

    

    

    
      	
              (h)

            	
              Cleaning
      and maintenance of the Common Areas, including the removal of rubbish, ice
      and snow; and

            

    

    

    
      	
              (i)

            	
              Except
      as otherwise provided in this Lease, repair and maintenance of the Leased
      Premises, the Building and Common
Areas.

            

    

    

    
      	
              (j)

            	
              Access
      to the Leased Premises twenty-four (24) hours a day, seven (7) days a
      week; and

            

    

    

    (k)           Twenty-four
(24) hours, seven (7) days per week monitoring of the exterior door locking
system.

    

    Upon
reasonable advance written notice, the foregoing services may be increased or
decreased at the reasonable request of Tenant. In the event of utility
deregulation, Landlord shall choose the utility service
provider.  Charges for utilities and services provided by Landlord, if
any, shall not exceed the charges that would have been payable if such utilities
and services had been directly billed by the utilities or service providers to
Tenant.

    

    Section
6.02.  Additional Services.

    

    If Tenant
requests any other utilities or building services in addition to those
identified above or any of the above utilities or building services in
frequency, scope, quality or quantity substantially greater than those which
Landlord reasonably determines are normally required by tenants in comparable
office buildings conducting operations similar to Tenant, then Landlord shall
use reasonable efforts to attempt to furnish Tenant with such additional
utilities or building services.  In the event Landlord is able to and
does furnish such additional utilities or building services, the costs thereof
shall be borne by Tenant, who shall reimburse Landlord monthly for the same as
additional rent at the same time Monthly Rental Installments and other
additional rent is due.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    If any
lights, density of staff, machines or equipment used by Tenant in the Leased
Premises materially affect the temperature otherwise maintained by the
Building's air-conditioning system or generate substantially more heat in the
Leased Premises than that which would normally be generated by that typically
used by tenants in comparable office buildings and such usage materially
overburden the Building's systems and equipment, then Landlord shall have the
right to install any machinery or equipment which Landlord considers reasonably
necessary in order to correct such material overburden, including equipment
which modifies the Building's air-conditioning system; provided, however,
Landlord shall consult with Tenant prior to installation of any such machinery
or equipment.  All reasonable costs expended by Landlord to install
any such machinery and equipment and any additional costs of operation and
maintenance occasioned thereby shall be borne by Tenant, who shall reimburse
Landlord for the same as provided in this Section 6.02.

    

    Section
6.03.  Interruption of Services.

    

    Tenant
understands, acknowledges and agrees that any one or more of the utilities or
other building services identified in Section 6.01 may be interrupted by reason
of accident, emergency or other causes beyond Landlord's control, or may be
discontinued or diminished temporarily by Landlord or other persons until
certain repairs, alterations or improvements can be made.  Landlord
shall not be liable in damages or otherwise for any failure or interruption of
any utility service and no such failure or interruption shall entitle Tenant to
terminate this Lease or withhold sums due hereunder.

    

    Notwithstanding
anything in this Lease to the contrary, Landlord shall use commercially
reasonable efforts to promptly restore utility service and in the event
restoration of service is within Landlord's control and Landlord fails to use
commercially reasonable efforts to restore such service within a reasonable
time, thereby causing all or a material portion of the Leased Premises to be
rendered untenantable (meaning that Tenant is unable to use such space in the
normal course of its business) by Tenant for the use permitted under this Lease
for more than three (3) consecutive days after notice from Tenant to Landlord
that such service has been interrupted, Minimum Annual Rent and Annual Rental
Adjustment shall abate on a per diem basis in the proportion which the
untenantable portion of the Leased Premises bears to the total area of the
Leased Premises for each day after such three (3) day period during which the
Leased Premises remain untenantable.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    ARTICLE 7 - REPAIRS,
MAINTENANCE AND ALTERATIONS

    

    Section
7.01.  Repair and Maintenance of Building.

    

    Landlord
shall make all necessary repairs to the Building, including the exterior walls,
exterior doors, windows, corridors and other Common Areas, and Landlord shall
keep the Building and the Common Areas in a safe, clean and neat condition and
use reasonable efforts to keep all equipment used in connection therewith in
good condition and repair, the costs of which shall be included in Operating
Expenses to the extent provided in Section 3.02, provided, however, that to the
extent any of the foregoing items require repair because of the negligence,
misuse or default of Tenant, its employees or agents, Landlord shall make such
repairs solely at Tenant's expense except to the extent covered by insurance of
the type to be maintained by Landlord hereunder.

    

    Section
7.02.  Repair and Maintenance of Leased Premises.

    

    Landlord
shall keep and maintain the Leased Premises in good order, condition and repair,
the costs of which shall be included in Operating Expenses to the extent
provided in Section 3.02, provided, however, that to the extent any items in the
Leased Premises require repair because of the negligence, misuse or default of
Tenant, its employees or agents, Landlord shall make such repairs solely at
Tenant's expense except to the extent covered by insurance of the type to be
maintained by Landlord hereunder.

    

    Section
7.03.  Alterations.

    

    Tenant
shall not permit alterations in or to the Leased Premises unless and until the
plans have been approved by Landlord in writing, which approval as to interior
non-structural alterations shall not be unreasonably withheld, conditioned or
delayed.  As a condition of such approval, Landlord may require Tenant
to remove the alterations and restore the Leased Premises upon termination of
this Lease; otherwise, all such alterations shall at Landlord's option become a
part of the realty and the property of Landlord, and shall not be removed by
Tenant.  Tenant shall ensure that all alterations shall be made in
accordance with all applicable laws, regulations and building codes, in a good
and workmanlike manner and of quality equal to or better than the original
construction of the Building.  No person shall be entitled to any lien
derived through or under Tenant for any labor or material furnished to the
Leased Premises, and nothing in this Lease shall be construed to constitute a
consent by Landlord to the creation of any lien.  If any lien is filed
against the Leased Premises for work claimed to have been done for or material
claimed to have been furnished to Tenant, Tenant shall cause such lien to be
discharged of record within thirty (30) days after filing.  Tenant
shall indemnify Landlord from all costs, losses, expenses and attorneys' fees in
connection with any construction or alteration under this Section 7.03, not
performed by Landlord or an affiliate, and any related
lien.  Notwithstanding anything contained herein to the contrary,
Tenant shall have the right, without Landlord's consent, and in compliance with
all other provisions of this Section, to make any non-structural alterations to
the Leased Premises which do not materially impact the Building's mechanical or
electrical systems, and the aggregate cost of which does not exceed Fifty
Thousand Dollars ($50,000.00) per project for a total project cost not to exceed
One Hundred Fifty Thousand Dollars ($150,000.00) per year, provided that Tenant
gives Landlord fifteen (15) business days prior written notice of any such
alteration, along with copies of all plans and specifications relating thereto
and complies with Landlord's reasonable and customary procedures.

    

    Section
7.04.  Trade Fixtures.

    

    Any trade
fixtures installed on the Leased Premises by Tenant at its own expense, such as
movable partitions, counters, shelving, showcases, mirrors and the like, may,
and, at the request of Landlord, shall be removed on the expiration or earlier
termination of this Lease, provided that Tenant is not then in default, that
Tenant bears the cost of such removal, and further that Tenant repairs at its
own expense any and all damage to the Leased Premises resulting from such
removal.  If Tenant fails to remove any and all such trade fixtures
from the Leased Premises on the expiration or earlier termination of this Lease,
all such trade fixtures shall become the property of Landlord unless Landlord
elects to require their removal, in which case Tenant shall, at its expense,
promptly remove the same and restore the Leased Premises to their prior
condition.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    ARTICLE 8 -
CASUALTY

    

    Section
8.01.  Casualty.

    

    In the
event of total or partial destruction of the Building or the Leased Premises by
fire or other casualty, Landlord agrees to promptly restore and repair the
Building or Leased Premises; provided, however, Landlord's obligation hereunder
shall be limited to the reconstruction of the Building, Leased Premises and the
Tenant Finish Improvements as were originally required to be made by
Landlord.  Landlord shall give Tenant written notice within thirty
(30) days of the casualty of Landlord's estimated date to complete such
restoration and repair.  In the event that such notice discloses that
such date of completion is more than one hundred eighty (180) days from the
casualty date, Landlord and Tenant shall endeavor in good faith to agree upon a
schedule for the completion of such repair or rebuilding.  If no such
agreement is reached within thirty (30) days of Tenant's receipt of notice
estimating the date of completion, Tenant may terminate this Lease, effective
upon the date of casualty, by delivery of written notice thereof to Landlord
within fifteen (15) days of the expiration of the thirty (30) day negotiating
period identified above.  Rent shall proportionately abate during the
time that the Leased Premises or part thereof are unusable because of any such
damage until substantial completion of the
restoration.  Notwithstanding the foregoing, if the Leased Premises
are destroyed by a casualty which is not covered by the insurance required
hereunder or, if covered, such insurance proceeds are not released by any
mortgagee entitled thereto or are insufficient to rebuild the Building, then
Landlord may, upon thirty (30) days' written notice delivered to Tenant within
thirty (30) days of the casualty, terminate this Lease with respect to matters
thereafter accruing.  All restoration shall comply with all
construction requirements imposed hereby on the original construction of the
Building, Leased Premises or the original Tenant Finish
Improvements.

    

    Section 8.02.  All
Risk Coverage Insurance.

    

    During
the Lease Term, Landlord shall maintain all risk coverage insurance on the
Building, including the Leased Premises, for the full replacement value of the
Building, against loss or damage by fire or other casualty (namely, the perils
against which insurance is afforded by a standard fire insurance policy and
extended coverage endorsement) and plate glass insurance, but
shall not protect Tenant's property on the Leased Premises or the Building; and,
notwithstanding the provisions of Section 9.01 and Section 9.03, neither party
shall be liable for any damage to the other's property, regardless of cause,
including the negligence of either party and its employees, agents and
invitees.  Tenant hereby expressly waives any right of recovery
against Landlord for damage to any property of Tenant located in or about the
Leased Premises, however caused, including the negligence of Landlord and its
employees, agents and invitees.  Notwithstanding the provisions of
Section 9.01 below, Landlord hereby expressly waives any rights of recovery
against Tenant for damage to the Leased Premises, the Building, Common Areas or
other property of Landlord located therein, however caused, including the
negligence of Tenant and its employees, agents and invitees which is insured
against under Landlord's all risk coverage insurance or which would have been
insured against had Landlord carried the all risk coverage insurance as required
above.  All insurance policies maintained by Landlord or Tenant as
provided in this Lease shall contain an agreement by the insurer waiving the
insurer's right of subrogation against the other party to this
Lease.

    

    ARTICLE 9 - LIABILITY
INSURANCE

    

    Section
9.01.  Tenant's Responsibility.

    

    Tenant
shall assume the risk of, be responsible for, have the obligation to insure
against, and indemnify Landlord and hold it harmless from any and all liability
for any loss of or damage or injury to any person (including death resulting
therefrom) or property (other than Landlord's property as provided in Section
8.02) occurring in the Leased Premises, regardless of cause, except for any loss
or damage from fire or other casualty as provided in Section 8.02 and except for
that caused directly by the sole negligence of Landlord or its employees,
agents, customers and invitees; and Tenant hereby releases Landlord from any and
all liability for the same.  Tenant's obligation to indemnify Landlord
hereunder shall include the duty to defend against any claims asserted by reason
of such loss, damage or injury and to pay any judgments, settlements, costs,
fees and expenses, including attorneys' fees, incurred in connection
therewith.  This provision shall survive the expiration or earlier
termination of this Lease.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Section
9.02.  Tenant's Insurance.

    

    Tenant
shall carry general public liability and property damage insurance, issued by
one or more insurance companies reasonably acceptable to Landlord, with the
following minimum coverages:

    

    (a)           Worker's
Compensation:  minimum statutory amount.

    

    
      	
              (b)

            	
              Commercial
      General Liability Insurance, including blanket, contractual liability,
      broad form property damage, personal injury, completed operations,
      products liability, and fire damage:  Not less than $3,000,000
      Combined Single Limit for both bodily injury and property
      damage.

            

    

    

    
      	
              (c)

            	
              All
      Risk Coverage, Vandalism and Malicious Mischief, and Sprinkler Leakage
      insurance, if applicable, for the full cost of replacement of Tenant's
      property.

            

    

    

    (d)           Business
interruption insurance.

    

    The
insurance policies shall protect Tenant and Landlord as their interests may
appear, naming Landlord and Landlord's managing agent and mortgagee as
additional insureds, and shall provide that they may not be canceled on less
than thirty (30) days' prior written notice to Landlord.  Tenant shall
furnish Landlord with Certificates of Insurance evidencing all required
coverages on or before the Commencement Date.  If Tenant fails to
carry such insurance and furnish Landlord with such Certificates of Insurance
after a request to do so, Landlord may obtain such insurance and collect the
cost thereof from Tenant.  Notwithstanding anything contained to the
contrary herein, any and all risks under the insurance required of Tenant under
this Lease, at Tenant's option, may be (a) insured under single policies or
by a combination of policies; or (b) insured, in whole or in part, under an
excess or umbrella liability policy.

    

    Section
9.03.  Landlord's Responsibility.

    

    Landlord
shall assume the risk of, be responsible for, have the obligation to insure
against, and indemnify Tenant and hold it harmless from, any and all liability
for any loss of or damage or injury to person (including death resulting
therefrom) or property (other than Tenant's property as provided in Section
8.02) occurring in, on or about the Common Areas, regardless of cause, except
for that caused by the sole negligence of Tenant and its employees, agents,
customers and invitees; and Landlord hereby releases Tenant from any and all
liability for the same.  Landlord's obligation to indemnify Tenant
hereunder shall include the duty to defend against any claims asserted by reason
of such loss, damage or injury and to pay any judgments, settlements, costs,
fees and expenses, including attorneys' fees, incurred in connection
therewith.  This provision shall survive the expiration or earlier
termination of this Lease.

    

    Section
9.04.  Landlord's Insurance.

    

    In
addition to the insurance required under Section 8.02, Landlord shall keep in
full force and effect during the term of this Lease public liability and
property damage insurance in standard form with respect to the Building and the
Common Areas and the operation thereof having a minimum limit of combined
coverage of bodily injury and property damage of not less then Three Million
Dollars ($3,000,000.00).  Landlord shall provide Tenant with copies of
certificates of insurance evidencing all required coverage under Section 8.02
and Section 9.04.  In addition, Landlord shall name Tenant as an
additional insured on such insurance policy or policies.

    

    ARTICLE 10 - EMINENT
DOMAIN

    

    If all or
any substantial part of the Building or Common Areas shall be acquired by the
exercise of eminent domain, Landlord or Tenant may terminate this Lease by
giving written notice to the other party within fifteen (15) days after
possession thereof is so taken.  If all or any part of the Building,
Leased Premises or Common Areas shall be acquired by the exercise of eminent
domain so that the Leased Premises shall become untenantable by Tenant and
inadequate for the Permitted Use, Tenant may terminate this Lease by giving
written notice to Landlord within fifteen (15) days after possession thereof is
so taken.  All damages awarded shall belong to Landlord; provided,
however, that Tenant may claim dislocation damages if such amount is not
subtracted from Landlord's award.  If a part of the Leased Premises,
Building or Common Areas shall be taken or conveyed but the remaining part is
tenantable and adequate for Tenant's use, then this Lease shall be terminated as
to the part taken or conveyed as of the date Tenant surrenders possession;
Landlord shall make such repairs, alterations and improvements as may be
necessary to render the part not taken or conveyed tenantable to the extent the
condemnation award proceeds received by Landlord are sufficient therefor; and
the rent shall be reduced in proportion to the part of the Leased Premises so
taken or conveyed.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    ARTICLE 11 - ASSIGNMENT AND
SUBLEASE

    

    Tenant
shall not assign this Lease or sublet the Leased Premises in whole or in part
without Landlord's prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned.  In the event of any
permitted assignment or subletting, Tenant shall remain primarily liable
hereunder.  The acceptance of rent from any other person shall not be
deemed to be a waiver of any of the provisions of this Lease or to be a consent
to the assignment of this Lease or the subletting of the Leased
Premises.  Without in any way limiting Landlord's right to refuse to
consent to any assignment or subletting of this Lease, Landlord reserves the
right to refuse to give such consent if in Landlord's reasonable opinion the
Leased Premises or Building are or may be in any way adversely affected by the
business reputation of the proposed assignee or subtenant is
unacceptable.  If Landlord refuses to give its consent to any proposed
assignment or subletting of all or substantially all of the Leased Premises,
Landlord may, at its option, within thirty (30) days after receiving notice of
the proposal, terminate this Lease by giving Tenant one hundred twenty (120)
days' prior written notice of such termination, whereupon each party shall be
released from all further obligations and liability
hereunder.  Notwithstanding the foregoing, Tenant may assign the Lease
or sublease all or any portion of the Leased Premises without Landlord's consent
to any of the following (a "Permitted Transferee"), provided that the business
reputation following the transfer is equal to or exceeds that of Tenant as of
the date of execution of this Lease:  (i) any successor corporation or
other entity resulting from a public offering, merger or consolidation of
Tenant; (ii) any purchaser of all or substantially all of Tenant's assets; or
(iii) any entity which controls, is controlled by, or is under common control
with Tenant.  Tenant shall give Landlord thirty (30) days prior
written notice of such assignment or sublease.  Any Permitted
Transferee shall assume in writing all of Tenant's obligations under this
Lease.  Tenant shall nevertheless at all times remain fully
responsible and liable for the payment of rent and the performance and
observance of all of Tenant's other obligations under this
Lease.  Nothing in this paragraph is intended to nor shall permit
Tenant to transfer its interest under this Lease as part of a fraud or
subterfuge to intentionally avoid its obligations under this Lease (for example,
transferring its interest to a shell corporation that subsequently files a
bankruptcy), and any such transfer shall constitute a Default
hereunder.

    

    ARTICLE 12 - TRANSFERS BY
LANDLORD

    

    Section
12.01.  Sale of the Building.

    

    Landlord
shall have the right to sell the Building at any time during the Lease Term,
subject only to the rights of Tenant hereunder; and such sale shall operate to
release Landlord from liability hereunder after the date of such conveyance,
provided the new owner assumes all liability hereunder.

    

    Section
12.02.  Subordination and Estoppel Certificate.

    

    Landlord
shall have the right to subordinate this Lease to any mortgage presently
existing or hereafter placed upon the Building by so declaring in such mortgage,
provided the mortgagee executes a non-disturbance, attornment and subordination
agreement reasonably acceptable to Tenant.  Within ten (10) days
following receipt of a written request from Landlord, Tenant shall execute and
deliver to Landlord, without cost, any instrument reasonably necessary to
confirm the subordination of this Lease and an estoppel certificate in such form
as Landlord may reasonably request certifying (i) that, as to Tenant, this Lease
is in full force and effect and unmodified or stating the nature of any
modification, (ii) the date to which rent has been paid, (iii) that there are
not, to Tenant's actual knowledge, any uncured defaults or specifying such
defaults if any are claimed, and (iv) any other matters or state of facts
reasonably required respecting the Lease, provided that such matters or state of
facts are limited to Tenant's actual knowledge.  Such estoppel may be
relied upon by Landlord and by any purchaser or mortgagee of the
Building.  Notwithstanding the foregoing, if the mortgagee shall take
title to the Leased Premises through foreclosure or deed in lieu of foreclosure,
Tenant shall be allowed to continue in possession of the Leased Premises as
provided for in this Lease so long as Tenant shall not be in
default.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    ARTICLE 13 - DEFAULT AND
REMEDY

    

    Section
13.01.  Default.

    

    The
occurrence of any of the following shall be a "Default":

    

    
      	
              (a)

            	
              Tenant
      fails to pay any Monthly Rental Installment or Additional Rent within ten
      (10) days after the same is due, or Tenant fails to pay any other amounts
      due Landlord from Tenant within thirty (30) days after written notice
      thereof from Landlord to Tenant.

            

    

    

    
      	
              (b)

            	
              Tenant
      fails to perform or observe any other term, condition, covenant or
      obligation required under this Lease for a period of thirty (30) days
      after notice thereof from Landlord; provided, however, that if the nature
      of Tenant's default is such that more than thirty (30) days are reasonably
      required to cure, then such default shall be deemed to have been cured if
      Tenant commences such performance within said thirty (30) day period and
      thereafter diligently completes the required action within a reasonable
      time.

            

    

    

    
      	
              (c)

            	
              Tenant
      shall assign or sublet all or a portion of the Leased Premises in
      contravention of the provisions of Article 11 of this
    Lease.

            

    

    

    
      	
              (d)

            	
              All
      or substantially all of Tenant's assets in the Leased Premises or Tenant's
      interest in this Lease are attached or levied under execution (and Tenant
      does not discharge the same within sixty (60) days thereafter); a petition
      in bankruptcy, insolvency or for reorganization or arrangement is filed by
      or against Tenant (and Tenant fails to secure a stay or discharge thereof
      within sixty (60) days thereafter); the admission in writing by Tenant
      that Tenant is insolvent and unable to pay its debts as they become due;
      Tenant makes a general assignment for the benefit of creditors; Tenant
      takes the benefit of any insolvency action or law; the appointment of a
      receiver or trustee in bankruptcy for Tenant or its assets if such
      receivership has not been vacated or set aside within thirty (30) days
      thereafter.

            

    

    

    In
addition to the above Defaults, the parties agree that if there shall be three
(3) or more Defaults under paragraph (a) of this section during any twelve (12)
month period, regardless of whether such Defaults are ultimately cured, then
such Defaults shall, at Landlord's option, represent a separate
Default.

    

    Section
13.02.  Remedies.

    

    Upon the
occurrence of any Default, Landlord shall have the following rights and
remedies, in addition to those allowed by law or in equity, any one or more of
which may be exercised without further notice to Tenant:

    

    
      	
              (a)

            	
              Landlord
      may re-enter the Leased Premises and cure any default of Tenant, and
      Tenant shall reimburse Landlord as additional rent for any costs and
      expenses which Landlord thereby incurs; and Landlord shall not be liable
      to Tenant for any loss or damage which Tenant may sustain by reason of
      Landlord's action.

            

    

    

    
      	
              (b)

            	
              Landlord
      may terminate this Lease and thereafter (i) neither Tenant nor any person
      claiming under or through Tenant shall be entitled to possession of the
      Leased Premises, and Tenant shall immediately surrender the Leased
      Premises to Landlord; and (ii) Landlord may re-enter the Leased Premises
      and dispossess Tenant and any other occupants of the Leased Premises by
      any lawful means and may remove their effects, without prejudice to any
      other remedy which Landlord may have.  Upon the termination of
      Tenant's right to possession of the Leased Premises, with or without
      terminating this Lease, Landlord may declare the present value discounted
      at a rate of ten percent (10%) of all rent which would have been due under
      this Lease for the balance of the Lease Term less the present value
      discounted at the rate of ten percent (10%) of all net rent that Landlord
      reasonably estimates that Landlord will receive via a reletting of the
      Leased Premises for the balance of the Lease Term after taking into
      account anticipated vacancy periods, to be immediately due and payable,
      whereupon Tenant shall be obligated to pay the same to
      Landlord.  In addition, Tenant shall pay to Landlord all costs
      and expenses which Landlord may incur by reason of Tenant's default
      ("Default Damages"), which shall include without limitation expenses of
      preparing the Leased Premises for re-letting, demolition, repairs, tenant
      finish improvements and brokers' and attorneys' fees, it being expressly
      understood and agreed that the liabilities and remedies specified in this
      subsection (b) shall survive the termination of this
  Lease.

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

    
      	
              (c)

            	
              Landlord
      may, without terminating this Lease, re-enter the Leased Premises and
      re-let on a commercially reasonable terms all or any part thereof for a
      term different from that which would otherwise have constituted the
      balance of the Lease Term and for rent and on terms and conditions
      different from those contained herein, whereupon Tenant shall be
      immediately obligated to pay to Landlord as liquidated damages the present
      value (as calculated in subsection (b) above of the difference between the
      rent provided for herein and that provided for in any lease covering a
      subsequent re-letting of the Leased Premises, for the period which would
      otherwise have constituted the balance of the Lease Term, together with
      all of Landlord's Default Damages.

            

    

    

    
      	
              (d)

            	
              Landlord
      may sue for injunctive relief or to recover damages for any loss resulting
      from the breach.

            

    

    

    
      	
              (e)

            	
              If
      Landlord terminates this Lease or Tenant's right to possession, Landlord's
      duty to mitigate its damages under this Lease shall be as
      follows:   (1) Landlord shall be required only to use
      reasonable efforts to mitigate, which shall not exceed such efforts as
      Landlord generally uses to lease other space in other buildings which it
      leases, and (2) Landlord shall not be deemed to have failed to
      mitigate if it incurs costs and expenses for repairs, maintenance,
      changes, alterations and improvements to the Leased Premises (whether to
      prevent damage or to prepare the Leased Premises for reletting), brokerage
      commissions, advertising costs, attorneys' fees, any economic incentives
      given to replacement tenants, and costs of collecting rent from
      replacement tenants.  The obligations set forth in this
      paragraph shall not serve to shift the burden of proof from Tenant to
      Landlord with respect to proving whether or not Landlord mitigated its
      damages.

            

    

    

    Section
13.03.  Landlord's Default and Tenant's Remedies.

    

    Landlord
shall be in default if it fails to perform any term, condition, covenant or
obligation required under this Lease for a period of thirty (30) days after
written notice thereof from Tenant to Landlord; provided, however, that if the
term, condition, covenant or obligation to be performed by Landlord is such that
it cannot reasonably be performed within thirty days, such default shall be
deemed to have been cured if Landlord commences such performance within said
thirty-day period and thereafter diligently undertakes to complete the
same.  Upon the occurrence of any such default, Tenant may sue for
injunctive relief or to recover damages for any loss directly resulting from the
breach, but Tenant shall not be entitled to terminate this Lease or withhold,
offset or abate any sums due hereunder.  Notwithstanding the
foregoing, it shall be a default under and breach of this Lease by Landlord if
it shall fail to perform or observe any term, condition, covenant or obligation
required to be performed or observed by it under this Lease, which failure
prevents Tenant from conducting its normal business operations in the Leased
Premises, for a period of ten (10) days after notice thereof from Tenant;
provided, however, that if the term, condition, covenant or obligation to be
performed by Landlord is of such nature that the same cannot reasonably be
performed within such ten-day period, such default shall be deemed to have been
cured if Landlord commences such performance within said ten-day period and
thereafter diligently undertakes to complete the same and does so complete the
required action within a reasonable time.  Upon the occurrence of any
such default, Tenant may sue for injunctive relief or to recover damages for any
loss resulting from the breach, but Tenant shall not be entitled to terminate
this Lease or withhold or abate any rent due hereunder except as specifically
provided elsewhere in this Lease.  Notwithstanding the foregoing, in
the event of an Emergency Situation, as hereinafter defined, if the default is
not cured after reasonable notice to (or diligent attempts to notify) Landlord,
Tenant may cure the default at Landlord’s expense, provided that such cure is
not more extensive than is reasonably necessary under the
circumstances.  “Emergency Situation” as used in this Section means a
situation which poses an immediate threat to the physical well being of persons
in or on the Leased Premises or of damage to property in or on the Leased
Premises.

    

    Section
13.04.  Limitation of Landlord's Liability.

    

    If
Landlord shall fail to perform any term, condition, covenant or obligation
required to be performed by it under this Lease and if Tenant shall, as a
consequence thereof, recover a money judgment against Landlord, Tenant agrees
that it shall look solely to Landlord's right, title and interest in and to the
Building for the collection of such judgment; and Tenant further agrees that no
other assets of Landlord shall be subject to levy, execution or other process
for the satisfaction of Tenant's judgment.

    

    Section
13.05.  Nonwaiver of Defaults.

    

    Neither
party's failure or delay in exercising any of its rights or remedies or other
provisions of this Lease shall constitute a waiver thereof or affect its right
thereafter to exercise or enforce such right or remedy or other
provision.  No waiver of any default shall be deemed to be a waiver of
any other default.  Landlord's receipt of less than the full rent due
shall not be construed to be other than a payment on account of rent then due,
nor shall any statement on Tenant's check or any letter accompanying Tenant's
check be deemed an accord and satisfaction.  No act or omission by
Landlord or its employees or agents during the term of this Lease shall be
deemed an acceptance of a surrender of the Leased Premises, and no agreement to
accept such a surrender shall be valid unless in writing and signed by
Landlord.

    

    Section
13.06.  Attorneys' Fees.

    

    If either
party defaults in the performance or observance of any of the terms, conditions,
covenants or obligations contained in this Lease and the non-defaulting party
obtains a judgment against the defaulting party, then the defaulting party
agrees to reimburse the non-defaulting party for the attorneys' fees incurred
thereby.

    

    ARTICLE 14 - LANDLORD'S
RIGHT TO RELOCATE TENANT

    

    [Intentionally
Omitted]

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE 15 - TENANT'S
RESPONSIBILITY REGARDING ENVIRONMENTAL LAWS AND HAZARDOUS
SUBSTANCES

    

    Section
15.01.  Environmental Definitions.

    

    
      	
              A.

            	
              "Environmental
      Laws" - All present or future federal, state and municipal laws,
      ordinances, rules and regulations applicable to the environmental and
      ecological condition of the Leased Premises, the rules and regulations of
      the Federal Environmental Protection Agency or any other federal, state or
      municipal agency or governmental board or entity having jurisdiction over
      the Leased Premises.

            

    

    

    
      	
              B.

            	
              "Hazardous
      Substances" - Those substances included within the definitions of
      "hazardous substances," "hazardous materials," "toxic substances" "solid
      waste" or "infectious waste" under Environmental
  Laws.

            

    

    

    Section
15.02.  Compliance.

    

    Tenant,
at its sole cost and expense, shall promptly comply with the Environmental Laws
including any notice from any source issued pursuant to the Environmental Laws
which shall impose any duty upon Tenant resulting from Tenant's use, occupancy,
maintenance or alteration of the Leased Premises whether such notice shall be
served upon Landlord or Tenant.

     

    Section
15.03.  Restrictions on Tenant.

    

    Tenant
shall operate its business in compliance with all Environmental
Laws.  Tenant shall not cause or permit the use, generation, release,
manufacture, refining, production, processing, storage or disposal of any
Hazardous Substances on, under or about the Leased Premises, or the
transportation to or from the Leased Premises of any Hazardous Substances,
except as necessary and appropriate for its Permitted Use in which case the use,
storage or disposal of such Hazardous Substances shall be performed in
compliance with the Environmental Laws and the highest standards prevailing in
the industry.

    

    Section
15.04.  Notices, Affidavits, Etc.

    

    Either
party shall immediately notify the other party of (i) any violation by it, its
employees, agents, representatives, customers, invitees or contractors of the
Environmental Laws on, under or about the Leased Premises, or (ii) the presence
or suspected presence of any Hazardous Substances on, under or about the Leased
Premises and shall immediately deliver to the other party any notice received by
it relating to (i) and (ii) above from any source.  Tenant shall
execute affidavits, representations and the like within five (5) days of
Landlord's request therefor concerning Tenant's actual knowledge and belief
regarding the presence of any Hazardous Substances on, under or about the Leased
Premises caused by Tenant.

    

    Section
15.05.  Landlord's Rights.

    

    Landlord
and its agents shall have the right, but not the duty, upon advance notice and
in the presence of a Tenant representative (except in the case of emergency when
no notice or representation shall be required) to inspect the Leased Premises
and conduct tests thereon to determine whether or the extent to which there has
been a violation of Environmental Laws by Tenant or whether there are Hazardous
Substances on, under or about the Leased Premises.  In exercising its
rights herein, Landlord shall use reasonable efforts to minimize interference
with Tenant's business but such entry shall not constitute an eviction of
Tenant, in whole or in part, and Landlord shall not be liable for any
interference, loss, or damage to Tenant's property directly caused by Landlord's
actions so long as Landlord uses such reasonable efforts.  If Tenant
and its agents fail to provide a representative to accompany Landlord or its
agents and Landlord provide advance notice as herein required, then Tenant shall
be deemed to have waived the Tenant representation requirement.

    

    Section
15.06.  Tenant's Indemnification.

    

    Tenant
shall indemnify Landlord and Landlord's managing agent from any and all claims,
losses, liabilities, costs, expenses and damages, including reasonable
attorneys' fees, costs of testing and remediation costs, incurred by Landlord in
connection with any breach by Tenant of its obligations under this Article
15.  The covenants and obligations under this Article 15 shall survive
the expiration or earlier termination of this Lease.

    

    Section
15.07.  Existing Conditions.

    

    Notwithstanding
anything contained in this Article 15 to the contrary, Tenant shall not have any
liability to Landlord under this Article 15 resulting from any conditions
existing, or events occurring, or any Hazardous Substances existing or
generated, at, in, on, under or in connection with the Leased Premises, the
Building or the Land prior to the Occupancy Date of this Lease or any Hazardous
Substance on, under or about the Leased Premises caused by Landlord or its
affiliates or their agents, employees or contractors.

    

    Section
15.08.  Landlord's Representations.

    

    Landlord
represents and warrants that, to its actual knowledge based solely upon and
except as disclosed in the Environmental Report for the Land dated September 9,
1993, and its control of the Land since September 9, 1993 (a) as of the date of
execution of this Lease, there are no and, (b) prior to Tenant's occupancy,
there will be no Hazardous Substances on, under or about the Land.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Section
15.09.  Landlord's Indemnification.

    

    Notwithstanding
anything above to the contrary, Landlord shall indemnify Tenant from any and all
claims, losses, liabilities, costs expenses and damages, including reasonable
attorneys' fees, cost of testing and remediation costs, Tenant incurs by reason
of any breach by Landlord of any representation contained in Section 15.08 or
Landlord's violation of any Environmental Laws or the generation, use or release
of any Hazardous Substances by Landlord or its affiliates, their agents,
employees or contractors on, under or about the Leased Premises, the Building or
the Land.  Landlord shall bear all cost of removing or otherwise
remediating Hazardous Substances or of taking any other action required by
Environmental Laws resulting from any conditions existing or event occurring, or
any Hazardous Substance existing or generated, at, in, on, under or in
connection with the Leased Premises, the Building or the Land prior to the
Occupancy Date.  The covenants and obligations under this Article 15
shall survive the expiration or earlier termination of this Lease.

    

    ARTICLE 16 -
MISCELLANEOUS

    

    Section
16.01.  Benefit of Landlord and Tenant.

    

    This
Lease shall inure to the benefit of and be binding upon Landlord and Tenant and
their respective successors and assigns.

    

    Section
16.02.  Governing Law.

    

    This
Lease shall be governed in accordance with the laws of the State where the
Building is located.

    

    Section
16.03.  Guaranty.

    

    [Intentionally
Omitted]

    

    Section
16.04.  Force Majeure.

    

    Landlord
and Tenant (except with respect to any payment obligation) shall be excused for
the period of any delay in the performance of any obligation hereunder when such
delay is occasioned by causes beyond its control, including but not limited to
work stoppages, boycotts, slowdowns or strikes; shortages of materials,
equipment, labor or energy; unusual weather conditions; or acts or omissions of
governmental or political bodies, provided that such party shall have used
reasonable efforts to minimize the impact of any such event.

    

    Section 16.05.  No
Representation or Option.

    

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

    

    Section
16.06.  Indemnification for Leasing Commissions.

    

    The
parties hereby represent and warrant that the only real estate brokers involved
in the negotiation and execution of this Lease are the Brokers.  In
the event that Meridian Real Estate Services claims that it is owed compensation
in connection with this Lease and the options granted herein, Tenant shall be
solely responsible for paying any compensation due Meridian Real Estate
Services.  Each party shall indemnify the other from any and all
liability for the breach of this representation and warranty on its part and
shall pay any compensation to any other broker or person who may be entitled
thereto.

    

    Section
16.07.  Notices.

    

    Any
notice required or permitted to be given under this Lease or by law shall be
deemed to have been given if it is written and delivered in person or by
overnight courier or mailed by certified mail, postage prepaid, to the party who
is to receive such notice at the address specified in Article 1.  When
so mailed, the notice shall be deemed to have been given as of the date it was
mailed.  Either party may change its address by giving written notice
thereof to the other party.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Section
16.08.  Partial Invalidity; Complete Agreement.

    

    If any
provision of this Lease shall be held to be invalid, void or unenforceable, the
remaining provisions shall remain in full force and effect.  This
Lease represents the entire agreement between Landlord and Tenant covering
everything agreed upon or understood in this transaction.  There are
no oral promises, conditions, representations, understandings, interpretations
or terms of any kind as conditions or inducements to the execution hereof or in
effect between the parties.  No change or addition shall be made to
this Lease except by a written agreement executed by Landlord and
Tenant.

    

    Section
16.09.  Financial Statements.

    

    During
the Lease Term and any extensions thereof, Tenant shall provide to Landlord on
an annual basis, a copy of Tenant's most recent financial statements (certified
and audited if the Minimum Annual Rent hereunder exceeds $100,000.00) prepared
as of the end of Tenant's fiscal year within thirty (30) days of the completion
thereof.  Such financial statements shall be signed by Tenant who
shall attest to the truth and accuracy of the information set forth in such
statements, or if the Minimum Annual rent hereunder exceeds $100,000.00, said
statements shall be certified and audited.  All financial statements
provided by Tenant to Landlord hereunder shall be prepared in conformity with
generally accepted accounting principles, consistently applied.

    

    Section
16.10.  Representations and Warranties.

    

    The
undersigned represent and warrant that (i) such party is duly organized, validly
existing and in good standing (if applicable) in accordance with the laws of the
state under which it was organized; and (ii) the individual executing and
delivering this Lease has been properly authorized to do so, and such execution
and delivery shall bind such party.  Landlord represents that the Land
is properly zoned for the Permitted Use.

    

    Section
16.11.  Signage.

    

    A. Exterior Building
Signage.  Provided that Tenant complies with all applicable
federal, state and local laws, ordinances, rules and regulations including, but
not limited to, zoning and other municipal and county regulations (collectively,
"Governmental Laws"), Tenant may, at its own cost and expense, erect two signs
on the Building identifying its business consistent with Exhibit
B-4 attached hereto.  One sign shall be located on the
expressway side of the Building, and the other sign shall be in a location
mutually agreed upon by both Tenant and Landlord on the North face of the
Building, both signs to be near the top of the Building
("Signs").  The location, style and size of the Signs shall be subject
to Landlord's prior written approval, which approval shall not be unreasonably
withheld, conditioned or delayed.  Tenant agrees to maintain such
Signs in a safe, lawful and first-class condition and in compliance with all
Governmental Laws throughout the Lease Term.  Upon expiration or early
termination of the Lease Term, Tenant shall remove the Signs and repair all
damage to the Building caused thereby.  Landlord does not represent or
warrant that the Governmental Laws will permit Tenant to install and/or use the
Signs throughout the Lease Term; however, Landlord agrees not to take any action
which would negate Tenant's ability to maintain such Signs and to provide
reasonable cooperation to Tenant in connection with any application required by
Governmental Laws.  Any language in the Lease notwithstanding, Tenant
shall indemnify and hold harmless Landlord from any and all liability for any
loss of or damage or injury to any person (including death resulting therefrom)
or property connected with or arising from the Signs or the rights granted
Tenant herein.  The obligations of Tenant herein shall survive the
expiration or earlier termination of this Lease.  So long as no other
tenant of the Building, excluding any Permitted Transferee, leases 30,000 or
more square feet of the Building, Tenant shall have the exclusive right to
exterior building signage.

    

    B. Monument
Sign.  So long as Tenant or a Permitted Transferee leases one
hundred percent (100%) of the Building, and provided that such signage is
permitted by the Governmental Laws, Landlord agrees to provide an exclusive
monument sign (the "Monument Sign") identifying Tenant’s business as well as the
business of the other manor tenants in the Building, if any, throughout the
Lease Term.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Section
16.12.  Satellite Dishes.

    

    a.           Provided
that Tenant complies with all Governmental Laws, as defined in Section 16.11.A,
above, Tenant shall have the non-exclusive right during the Lease Term (and the
exclusive right during all periods in which Tenant or a Permitted Transferee
leases one hundred percent (100%) of the Building), at its own cost and expense
and subject to the terms hereof, to install, operate and maintain on the roof of
the Building, up to three (3) microwave satellite dishes ("Dishes") for use
exclusively by Tenant.  Tenant shall be solely responsible for
obtaining any necessary permits and licenses required to install and operate the
Dishes.  Copies of such permits and licenses shall be provided to
Landlord.  Tenant shall also be required, at Tenant's sole cost, to
install screening surrounding the Dishes as may be reasonably required by
Landlord.

    

    b.           The
size, location, design and manner of installation of the Dishes and all related
wiring and screening shall be designated and approved by Landlord, which
approval shall not be unreasonably withheld, conditioned or
delayed.  After obtaining written approval of Landlord, Tenant shall
have reasonable access to the roof for installation, operation, maintenance and
repair of the Dishes and shall have the right to install all reasonable wiring
related thereto.  However, unless otherwise approved by Landlord in
writing, in no event shall Tenant be permitted to penetrate the roof membrane in
connection with the installation or maintenance of the Dishes.

    

    c.           Tenant
represents and warrants that the installation and maintenance of the Dishes will
not cause any damage to the structural portions of the
Building.  Tenant shall be responsible for repairing any such damages
to the structure, or, at Landlord's option, Landlord shall repair any such
damage at Tenant's sole cost and expense and Tenant shall immediately reimburse
Landlord for said costs and expenses upon receipt of Landlord's
invoice.

    

    d.           Tenant
shall install, operate and maintain the Dishes in accordance with Governmental
Laws.  Prior to installation of the Dishes, Tenant shall, on behalf of
the installer, provide Landlord with a certificate of insurance reasonably
satisfactory to Landlord.

    

    e.           Tenant
reserves the right to discontinue its use of all or any of the Dishes at any
time prior to the termination of the Lease or any renewal or extension thereof
for any reason whatsoever, provided that Tenant gives thirty (30) days prior
written notice thereof to Landlord.  Tenant shall be responsible for
all costs of removal and shall repair all damage to the Building caused
thereby.  Notwithstanding the foregoing, Tenant agrees within ten (10)
days after written notice from Landlord to remove the Dishes in the event any
governmental entity or applicable law or regulation requires removal
thereof.  Such removal shall be in accordance with all of the terms
and conditions set forth herein.  If Tenant elects not to remove the
Dishes from the Building, upon expiration or earlier termination of this Lease,
or after expiration of the ten (10) day notice period provided herein, Landlord
may deem the Dish(es) to have been abandoned by Tenant and they shall become the
property of Landlord.

    

    f.           Any
language in the Lease notwithstanding, Landlord shall not be liable and Tenant
shall indemnify, defend and hold Landlord harmless from and against any and all
liability, damages (including but not limited to personal injury, death, or
property damages), costs, expenses, and attorneys' fees incurred by Landlord
arising from any Dish related cause whatsoever, including those arising from the
installation, use, maintenance and removal thereof, except to the extent of
Landlord's negligence or willful misconduct and only to the extent not covered
by insurance required to be maintained by Landlord.

    

    g.           Notwithstanding
the grant of this right, Landlord shall maintain control over the roof of the
Building, and nothing herein shall be deemed Landlord's consent for Tenant to
use the roof for any other purpose than the installation, operation, maintenance
and repair of the Dishes in conjunction with the operation of its
business.

    

    h.           Tenant
represents and warrants that it shall use the Dishes solely for its own use and
not for any "resale", leasing or licensing use.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Section
16.13.  Parking.

    

    Tenant
shall have the exclusive right to use all surface parking areas located on the
Land.  Landlord shall provide the underground parking facility
depicted on Exhibit
B-1.  Collectively, such surface and underground parking areas
shall contain a minimum of four (4) parking spaces per 1,000 square feet of
space in the Building at all times during the term hereof.  Subject to
Governmental Laws, Tenant shall have the exclusive right to designate all or any
portion of such parking as reserved parking or visitor only
parking.  Tenant shall not be required to pay a fee for the use of
such parking spaces.  Only one vehicle shall be parked in each space
at any one time.

    

    Section
16.14.  Relocation and Discretionary Allowances.

    

    In
addition to the Tenant Finish Allowance and Design Allowance, and for and in
consideration of Tenant leasing the Leased Premises for the term and otherwise
under and in accordance with this Lease, Landlord hereby agrees to provide to
Tenant:

    

    (a) a relocation allowance in the
amount of One Hundred Twenty-five Thousand Dollars ($125,000.00) (the
"Relocation Allowance"); and

    

    (b)           a
discretionary allowance in the amount of Six Hundred Thirty Thousand Dollars
($630,000).  The allowances are payable upon the later to occur of (i)
payment by Tenant of the first Monthly Rental Installment, or (ii) the
Commencement Date, except that Two Hundred Sixty Thousand Dollars ($260,000.00)
of the discretionary allowance shall be paid to Tenant within thirty (30) days
of the later to occur of (a) execution of this Lease by Landlord and Tenant, or
(b) extinguishment (either through the passage of time or voluntary waiver) of
Tenant's right to terminate this Lease pursuant to Section 3.02.D.

    

    Section
16.15.  Right of First Offer to Purchase the
Buildings.

    

    During
the original Lease Term (and any extension thereto pursuant to the exercise of
Tenant's expansion rights under Sections 16.16, 16.17, 16.18 and/or 16.20),
provided that (i) Tenant (as used in this Section 16.15, the term "Tenant" shall
also include any Permitted Transferee that succeeds to Tenant's rights under
Article 11, above) is not in Default at the time it exercises this option or
purchases the Building; and (ii) Tenant originally named herein or a Permitted
Transferee remains in possession of all or substantially all of the Leased
Premises, Landlord shall notify Tenant in writing ("Landlord’s Notice") if, at
any time during the original Lease Term, Landlord intends to sell the Building
to a third party unaffiliated with Landlord, provided, however, that Landlord
shall have no obligation to notify Tenant if (a) the Building is part of a
multi-building package being offered for sale by Landlord, or (b) or the
prospective purchaser is a mortgagee holding a mortgage on the Building, or a
successor to Landlord which has obtained or is in the process of obtaining fee
title interest in the Building as a result of foreclosure or any mortgage deed
in lieu thereof, or (c) a person or entity which is owned, controlled, or under
common or joint control by Landlord (the sale to which shall not extinguish
Tenant's rights under this Section).  Upon receipt of Landlord's
Notice, Tenant shall have the option to purchase the Building at the purchase
price and Landlord shall provide Tenant with pertinent information regarding the
operation of the Building ("Information") and upon such other terms and
conditions as are set forth in Landlord's Notice ("Right of First Offer to
Purchase Building").  Tenant shall have ten (10) business days after
receipt of Landlord’s Notice in which to notify Landlord of its election to
purchase the Building on the terms and conditions contained in Landlord’s
Notice.  In the event Tenant fails to notify Landlord of its agreement
to purchase the Building upon the terms and conditions contained in Landlord’s
Notice within said ten (10) business day period, such failure shall be
conclusively deemed a rejection to purchase the Building, whereupon Tenant shall
have no further rights with respect to purchasing the Building and Landlord
shall be free to sell the Building to a third party, providing that (i) Landlord
may not sell the Building to a third party unaffiliated with Landlord for a
price which is less than ninety-five percent (95%) of Landlord's offer price to
Tenant within six (6) months of the date of Landlord's Notice and (ii) if
Landlord does not sell the Building at a price at least ninety-five percent
(95%) of Landlord's offer price to Tenant within such six (6) month period,
Tenant's right of first offer under this Section shall be
reinstated.  If Tenant properly exercises its Right of First Offer to
Purchase the Building, then within thirty (30) days of Tenant notifying Landlord
of its agreement to purchase the Building pursuant to this Section or such
additional time as agreed by Landlord and Tenant in writing, Landlord and Tenant
shall enter into a purchase agreement containing the terms and conditions set
forth in Landlord’s Notice and such other mutually agreed upon terms and
conditions.  Tenant acknowledges and agrees that this Right of First
Offer to Purchase Building is personal in nature to Interactive Intelligence,
Inc. and may not be assigned except to a Permitted Transferee without the prior
written consent of Landlord, which consent may be withheld for any
reason.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

    In the
event that any building(s) are constructed pursuant to Tenant's exercise of its
option under Sections 16.16, 16.17, 16.18 or 16.20 of this Lease, then Tenant's
Right of First Offer to Purchase the Building as set forth in this Section 16.15
shall apply to each building so constructed (i.e., Phase I Building, Phase II
Building and Phase II Building).

    

    Section
16.16.  Phase I Building Expansion Option.

    

    Provided
that (i) Tenant is not in Default at the time it exercises this option; (ii)
Tenant (as used in this Section 16.16, the term "Tenant" shall also include any
Permitted Transferee that succeeds to Tenant's rights under Article 11, above)
has a tangible net worth of at least Fifty Million Dollars ($50,000,000.00) at
the time of exercise of the option, and (iii) Tenant originally named herein
remains in possession of all or substantially all of the Building, Tenant shall
have the option to cause Landlord to construct a new building and related
improvements on land contiguous to the Building as shown as Phase I Building on
Exhibit
A, which new building shall contain not less than 110,000 rentable square
feet and not more than 250,000 rentable square feet (the "Phase I Building")
provided that Tenant gives Landlord written notice of its exercise of this
option on or before the later of June 30, 2003 or the end of the first (1st) year
of the Lease Term.  Tenant shall be required to lease 100% of the
Phase I Building for a term coterminous with the original Lease Term; provided,
however, that the minimum term for the Phase I Building shall be ten (10) years
and the Lease Term for the Leased Premises shall be extended, if necessary, to
be coterminous with the term for the Phase I Building.  If Tenant
properly exercises its Phase I Building Expansion Option, then within thirty
(30) days of Landlord's receipt of such written exercise, Landlord and Tenant
shall enter into a written lease for the Phase I Building containing the terms
and conditions set forth in this Section 16.16.  Except for the
economic terms and expansion rights, such lease shall be on the same terms and
conditions contained in this Lease.  In addition, Landlord and Tenant
shall enter into an amendment of this Lease in the event that the lease term is
extended as set forth above in order to reflect the extended terms and
applicable Minimum Annual Rent (as set forth below) during such extended
term.  Provided that Tenant fully cooperates with Landlord's building
schedule, the Phase I Building will be delivered and rent will commence no later
than twelve (12) months (or fifteen (15) months in the event the lease for the
Phase I Building is executed during the period commencing August 1 and
continuing through December 31 of any year) after execution of said lease and,
if applicable, amendment of this Lease.

    

    The
Minimum Annual Rent for the Phase I Building will be derived from the following
formula:

    

    
      	
              Years
      1 - 5:

            	
              [(Project
      Costs of the Phase I Building x *.1295) ÷ .975] + Landlord's Share of
      Operating Expenses

            

    

    *subject to adjustment as set forth
below

    

    Example: [($100.00 x .1295) ÷ .975] +
$4.00  = $17.28

    

    
      	
              Years
      6 - 10

            	
              [(Minimum
      Annual Rent for years 1 - 5 - Landlord's Share of Operating Expenses) x
      one hundred sixteen percent (116%)] + Landlord's Share of Operating
      Expenses

            

    

    

    
      	
               
      

            	
              Example:
      [($17.28 - $4.00) x 1.16] + $4.00 =
$19.41

            

    

    

    
      	
              Years
      11 – 15

            	
              [(Minimum
      Annual Rent for years 6 - 10 - Landlord's Share of Operating Expenses) x
      one hundred sixteen percent (116%)] + Landlord's Share of Operating
      Expenses

            

    

    

    
      	
               
      

            	
              Example:
      [($19.41 - $4.00) x 1.16] + $4.00 =
$21.88

            

    

    

    For
purposes of this Section, "Project Costs" shall consist of the total of all
reasonable and customary hard and soft costs of constructing the Phase I
Building and common areas including the land for the Phase I Building and common
areas.  All hard and soft cost items shall be competitively bid, and
Landlord agrees to obtain at least three (3) bids.  The land for the
Phase I Building and common areas shall be valued at $185,000 per acre, subject
to an annual increase of five percent (5%) per year commencing June 1,
2002.  The development fee shall be an amount equal to four (4%) of
the Project Costs and the construction management fee shall be an amount equal
to ten percent (10%) of the Project Costs minus the value of the
land.  The Project Costs shall not include any leasing fees and Tenant
shall be solely responsible for compensating any real estate brokers and
consultants it may utilize in exercising its option.  In the event
that Tenant is rated as "Investment Grade" by Moody's or Standard and Poor's
rating service at the time of its exercise of the option, then the ".975"
multiplier as used in the above formula shall be increased to
".99".  In the event that the United States Ten-Year Treasury Rate
increases by more than 150 basis points from the execution date of this Lease to
the execution date of the lease for the Phase I Building, then the ".1295"
multiplier as used in the above formula shall be increased basis point for basis
point for each point in excess of 150.  For example, if the United
States Ten-Year Treasury Rate during the applicable period increased by 155
basis points, then the ".1295" multiplier would be increased to
".130".

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

    The
Annual Rental Adjustment for the Phase I Building shall be the same as set forth
in this Lease except that Landlord's Share of Operating Expenses shall be Four
Dollars ($4.00) per rentable square foot of the Phase I Building, subject to an
annual increase of three percent (3%) per year commencing on October 1, 2001 and
continuing through the date of occupancy under the lease for the Phase I
Building, at which point the amount shall be fixed and no longer subject to
increase.

    

    The
Minimum Annual Rent for the Leased Premises during any extended term
necessitated by the ten (10) year coterminous provision as referenced above
shall be an amount equal to the Minimum Annual Rent then being quoted by
Landlord to prospective tenants for space of comparable size and quality and
with similar or equivalent improvements as are found in similar buildings in the
vicinity, excluding free rent and other concessions.  Notwithstanding
the foregoing, in no event shall the Minimum Annual Rent during the extension
term be less than the Minimum Annual Rent payable during the last year of the
original lease term under the applicable lease or more than, on a per rentable
square foot basis, the Minimum Annual Rent for the Phase I Building during such
period covered by the extension term.  The Minimum Monthly Rent shall
be an amount equal to one-twelfth (1/12) of the Minimum Annual Rent for the
extension term and shall be paid at the same time and in the same manner as
provided in the Lease.  For each rentable square foot of space for
which the lease term is extended under said coterminous provision, Tenant shall
receive from Landlord at the commencement of the lease term of the Phase I
Building a tenant finish allowance equal to One Dollar ($1.00) per rentable
square foot for each year of the extended term, which allowance shall, at
Tenant's discretion, be allocable to any building in Interactive
Park.

    

    Section
16.17.  Phase II Building Expansion Option.

    

    In the
event that Tenant (as used in this Section 16.17, the term "Tenant" shall also
include any Permitted Transferee that succeeds to Tenant's interest under
Article 11, above) has properly exercised its Phase I Building Expansion Option,
then provided that (i) Tenant is not in Default at the time it exercises this
option; (ii) Tenant has a tangible net worth of at least Seventy-five Million
Dollars ($75,000,000.00) at the time of exercise of the option, and (iii) Tenant
originally named herein remains in possession of all or substantially all of the
Building, Tenant shall have the option to cause Landlord to construct one (1) or
two (2) new buildings and related improvements as shown as Phase II Building
site on Exhibit
A, which, (i) if Tenant chooses to have one (1) building built, shall
contain approximately 180,000 rentable square feet, or (ii) if Tenant chooses to
have two (2) buildings built, each building shall contain not less than
approximately 60,000 rentable square feet each and not more than approximately
120,000 rentable square feet each and, collectively, the rentable square footage
of the two new buildings shall equal approximately 180,000 rentable square feet
(the "Phase II Building") provided that Tenant gives Landlord written notice of
its exercise of this option on or before the later of May 31, 2005 or the end of
the third (3rd) year of the Lease Term.  Tenant shall be required to
lease one hundred percent (100%) of the Phase II Building for a term coterminous
with the Lease Term for the Leased Premises and the Phase I Building and, if
applicable, the Phase III Building; provided, however, that the minimum term for
the Phase II Building shall be ten (10) years and the Lease Term for the Leased
Premises and the Phase I Building and, if applicable, the Phase III Building
shall be extended, if necessary, to be coterminous with the term for the Phase
II Building.  If Tenant properly exercises its Phase II Building
Expansion Option, then within thirty (30) days of Landlord's receipt of such
written exercise, Landlord and Tenant shall enter into a written lease for the
Phase III Building containing the terms and conditions set forth in this Section
16.17.  Except for the economic terms and expansion rights, such lease
shall be on the same terms and conditions contained in this Lease.  In
addition, Landlord and Tenant shall enter into an amendment of this Lease and
the lease for the Phase I Building and, if applicable, the Phase III Building in
the event that the Lease Term is extended as set forth above in order to reflect
the extended term and applicable Minimum Annual Rent (as set forth below) during
such extended term.  Provided that Tenant fully cooperates with
Landlord's building schedule, the Phase II Building will be delivered and rent
will commence no later than twelve (12) months (or fourteen (14) months in the
event the lease for the Phase II Building is executed during the period
commencing August 1 and
continuing through December 31 of any year) after execution of said lease and,
if applicable, amendment of this Lease and the leases for the Phase I Building
and Phase II Building.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    The
Minimum Annual Rent for the Phase II Building will be derived from the following
formula:

    

    
      	
              Years
      1 - 5:

            	
              [(Project
      Costs of the Phase II Building   x *.1295) ÷ .975] +
      Landlord's Share of Operating
Expenses

            

    

    *subject to adjustment as set forth
below

    

    Example: [($100.00 x .1295) ÷ .975] +
$4.00  = $17.28

    

    
      	
              Years
      6 - 10

            	
              [(Minimum
      Annual Rent for years 1 - 5 – Landlord's Share of Operating Expenses) x
      one hundred sixteen percent (116%)] + Landlord's Share of Operating
      Expenses

            

    

    

    
      	
               
      

            	
              Example:
      [($17.28 - $4.00) x 1.16] + $4.00 =
$19.41

            

    

    

    
      	
              Years
      11 – 15

            	
              [(Minimum
      Annual Rent for years 6 – 10 – Landlord's Share of Operating Expenses) x
      one hundred sixteen percent (116%)] + Landlord's Share of Operating
      Expenses

            

    

    

    
      	
               
      

            	
              Example:
      [($19.41 - $4.00) x 1.16] + $4.00 =
$21.88

            

    

    

    For
purposes of this Section, "Project Costs" shall consist of the total of all
reasonable and customary hard and soft costs of constructing the Phase II
Building and common areas including the land for the Phase II Building and
common areas.  All hard and soft cost items shall be competitively
bid, and Landlord agrees to obtain at least three (3) bids.  The land for the
Phase II Building and common areas shall be valued at $185,000 per acre, subject
to an annual increase of five percent (5%) per year commencing June 1,
2002.  The development fee shall be an amount equal to four (4%) of
the Project Costs and the construction management fee shall be an amount equal
to ten percent (10%) of the Project Costs minus the value of the
land.  The Project Costs shall not include any leasing fees and Tenant
shall be solely responsible for compensating any real estate brokers and
consultants it may utilize in exercising its option.  In the event
that Tenant is rated as "Investment Grade" by Moody's or Standard and Poor's
rating service at the time of its exercise of the option, then the ".975"
multiplier as used in the above formula shall be increased to
".99".  In the event that the United States Ten-Year Treasury Rate
increases by more than 150 basis points from the execution date of this Lease to
the execution date of the lease for the Phase II Building, then the ".1295"
multiplier as used in the above formula shall be increased basis point for basis
point for each point in excess of 150.  For example, if the United
States Ten-Year Treasury Rate during the applicable period increased by 155
basis points, then the ".1295" multiplier would be increased to
".130".

    

    The
Annual Rental Adjustment for the Phase II Building shall be the same as set
forth in this Lease except that Landlord's Share of Operating Expenses shall be
Four Dollars ($4.00) per rentable square foot of the Phase II Building, subject
to an annual increase of three percent (3%) per year commencing on October 1,
2001 and continuing through the date of occupancy under the lease for the Phase
II Building, at which point the amount shall be fixed and no longer subject to
increase.

    

    The
Minimum Annual Rent for the Leased Premises and the Phase I Building and, if
applicable, the Phase III Building during any extended term necessitated by the
ten (10) year coterminous provision as referenced above shall be an amount equal
to the Minimum Annual Rent then being quoted by Landlord to prospective tenants
for space of comparable size and quality and with similar or equivalent
improvements as are found in similar buildings in the vicinity, excluding free
rent and other concessions.  Notwithstanding the foregoing, in no
event shall the Minimum Annual Rent during the extension term be less than the
Minimum Annual Rent payable during the last year of the original lease term
under the applicable lease or more than, on a per rentable square foot basis,
the Minimum Annual Rent for the Phase II Building during such period covered by
the extension term.  The Minimum Monthly Rent shall be an amount equal
to one-twelfth (1/12) of the Minimum Annual Rent for the extension term and
shall be paid at the same time and in the same manner as provided in the
Lease.  For each rentable square foot of space for which the lease
term(s) is(are) extended under said coterminous provision, Tenant shall receive
from Landlord at the commencement of the lease term of the Phase II Building a
tenant finish allowance equal to One Dollar ($1.00) per rentable square foot for
each year of the extended term(s), which allowance shall, at Tenant's
discretion, be allocable to any building in Interactive Park.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Tenant
acknowledges and agrees that the rights set forth in this Section 16.17 are
contingent upon Tenant properly exercising its Phase I Building Expansion Option
and in the event that Tenant fails to properly exercise said option on or before
the later of May 31, 2003 or the end of the first (1st) year
of the Lease Term, this option shall be null and void and of no further
effect.

    

    Section
16.18.  Phase III Building Expansion Option.

    

    In the
event that Tenant (as used in this Section 16.18, the term "Tenant" shall also
include any Permitted Transferee that succeeds to Tenant's interest under
Article 11, above) has properly exercised its Phase I Building Expansion Option,
then during the original Lease Term, provided that (i) Tenant is not in Default
at the time it exercises this option; (ii) Tenant has a tangible net worth of at
least Seventy-five Million Dollars ($75,000,000.00) at the time of exercise of
the option, and (iii) Tenant originally named herein remains in possession of
all or substantially all of the Building, Tenant shall have the option to cause
Landlord to construct a new building or buildings, as the case may be, and
related improvements on land as shown as Phase III Building on Exhibit
A, which new building shall contain not less than approximately 110,000
rentable square feet and not more than approximately 250,000 rentable square
feet (the "Phase III Building") provided that Tenant gives Landlord written
notice of its exercise of this option on or before the end of the Lease
Term.  Tenant shall be required to lease 100% of the Phase III
Building for a term coterminous with the Lease Term for the Leased Premises and
the Phase I Building and, if applicable, Phase II Building; provided, however,
that the minimum term for the Phase III Building shall be ten (10) years and the
Lease Term for the Leased Premises, Phase I Building and, if applicable, Phase
II Building shall be extended, if necessary, to be coterminous with the term for
the Phase III Building.  If Tenant properly exercises its Phase III
Building Expansion Option, then within thirty (30) days of Landlord's receipt of
such written exercise, Landlord and Tenant shall enter into a written lease for
the Phase III Building containing the terms and conditions set forth in this
Section 16.16.  Except for the economic terms and expansion rights,
such lease shall be on the same terms and conditions contained in this
Lease.  In addition, Landlord and Tenant shall enter into an amendment
of this Lease and the lease for the Phase I Building and, if applicable, Phase
II Building in the event that the lease term is extended as set forth above in
order to reflect the extended term and applicable Minimum Annual Rent ( as set
forth below) during such extended term.

    

    Provided
that Tenant fully cooperates with Landlord's building schedule, the Phase III
Building will be delivered and rent will commence no later than twelve (12)
months (or fifteen (15) months in the event a new lease for the Phase III
Building is executed during the period commencing August 1 and
continuing through December 31 of any year) after execution of said lease and,
if applicable, amendment of this Lease.

    

    The
Minimum Annual Rent for the Phase III Building will be derived from the
following formula:

    

    
      	
              Years
      1 - 5:

            	
              [(Project
      Costs of the Phase III Building x *.1295) ÷ .975] + Landlord's Share of
      Operating Expenses

            

    

    *subject to adjustment as set forth
below

    

    Example: [($100.00 x .1295) ÷ .975] +
$4.00  = $17.28

    

    
      	
              Years
      6 - 10

            	
              [(Minimum
      Annual Rent for years 1 – 5 – Landlord's Share of Operating Expenses) x
      one hundred sixteen percent (116%)] + Landlord's Share of Operating
      Expenses

            

    

    

    Example: [($17.28 - $4.00) x 1.16] +
$4.00 = $19.41

    

    
      	
              Years
      11 – 15

            	
              [(Minimum
      Annual Rent for years 6 – 10 – Landlord's Share of Operating Expenses) x
      one hundred sixteen percent (116%)] + Landlord's Share of Operating
      Expenses

            

    

    

    
      	
               
      

            	
              Example:
      [($19.41 - $4.00) x 1.16] + $4.00 =
$21.88

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    For
purposes of this Section, "Project Costs" shall consist of the total of all
reasonable and customary hard and soft costs of constructing the Phase III
Building and common areas including the land for the Phase III Building and
common areas.  All hard and soft cost items shall be competitively
bid, and Landlord agrees to obtain at least three (3) bids.  The Phase
III Building and common areas shall be valued at $185,000 per acre, subject to
an annual increase of five percent (5%) per year commencing June 1,
2002.  The development fee shall be an amount equal to four (4%) of
the Project Costs and the construction management fee shall be an amount equal
to ten percent (10%) of the Project Costs minus the value of the
land.  The Project Costs shall not include any leasing fees and Tenant
shall be solely responsible for compensating any real estate brokers and
consultants it may utilize in exercising its option.  In the event
that Tenant is rated as "Investment Grade" by Moody's or Standard and Poor's
rating service at the time of its exercise of the option, then the ".975"
multiplier as used in the above formula shall be increased to
".99".  In the event that the United States Ten-Year Treasury Rate
increases by more than 150 basis points from the execution date of this Lease to
the execution date of the lease for the Phase III Building, then the ".1295"
multiplier as used in the above formula shall be increased basis point for basis
point for each point in excess of 150.  For example, if the United
States Ten-Year Treasury Rate during the applicable period increased by 155
basis points, then the ".1295" multiplier would be increased to
".130".

    

    The
Annual Rental Adjustment for the Phase III Building shall be the same as set
forth in this Lease except that Landlord's Share of Operating Expenses shall be
Four Dollars ($4.00) per rentable square foot of the Phase III Building, subject
to an annual increase of three percent (3%) per year commencing on October 1,
2001 and continuing through the date of occupancy under the lease for the Phase
III Building, at which point the amount shall be fixed and no longer subject to
increase.

    

    The
Minimum Annual Rent for the Leased Premises, Phase I Building and Phase II
Building during any extended term necessitated by the ten (10) year coterminous
provision as referenced above shall be an amount equal to the Minimum Annual
Rent then being quoted by Landlord to prospective tenants for space of
comparable size and quality and with similar or equivalent improvements as are
found in similar buildings in the vicinity, excluding free rent and other
concessions.  Notwithstanding the foregoing, in no event shall the
Minimum Annual Rent during the extension term be less than the Minimum Annual
Rent payable during the original lease term under the applicable lease or more
than, on a per rentable square foot basis, the Minimum Annual Rent for the Phase
III Building during such period covered by the extension term.  The
Minimum Monthly Rent shall be an amount equal to one-twelfth (1/12) of the
Minimum Annual Rent for the extension term and shall be paid at the same time
and in the same manner as provided in the Lease.  For each rentable
square foot of space for which the lease term(s) is(are) extended under said
coterminous provision, Tenant shall receive from Landlord at the commencement of
the lease term of the Phase III Building a tenant finish allowance equal to One
Dollar ($1.00) per rentable square foot for each year of the extended term(s),
which allowance shall, at Tenant's discretion, be allocable to any building in
Interactive Park.

    

    Tenant
acknowledges and agrees that the rights set forth in this Section 16.18 are
contingent upon Tenant properly exercising its Phase I Building Expansion Option
and in the event that Tenant fails to properly exercise said option on or before
the later of May 31, 2003 or the end of the first (1st) year
of the Lease Term and the later of May 31, 2005, this option shall be null and
void and of no further effect.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Section
16.19.  Option to Extend.

    

    Provided
(i) Tenant (as used in this Section 16.19, the term "Tenant" shall also include
any Permitted Transferee that succeeds to Tenant's interest under Article 11,
above) is not in Default hereunder at the time it exercises this option, (ii)
the creditworthiness of Tenant is no less than on the date hereof, (iii) Tenant
originally named herein remains in possession of all or substantially all of the
Leased Premises, Tenant shall have the option to extend the Original Term for
five (5) successive periods of five (5) years each (the "Extension
Term(s)").  The Extension Term shall be upon the same terms and
conditions contained in the Lease during the initial Lease Term (the "Original
Term") except (i) this provision giving five (5) extension options shall be
amended to reflect the remaining options to extend, if any and (ii) the Minimum
Annual Rent shall be adjusted as set forth below (the "Rent
Adjustment").  Tenant shall exercise such option by (i) delivering to
Landlord, no later than nine (9) months prior to the expiration of the Original
Term or, if applicable, the Extension Term, written notice of Tenant's desire to
extend the Original Term or, if applicable, the Extension Term, and (ii)
delivering to Landlord within fifteen (15) business days of receipt of the Rent
Adjustment, written notice of its rejection thereof (which rejection shall
terminate Tenant's option to extend), or that Tenant disputes Landlord's
determination of the Rental Adjustment and shall include Tenant's good faith
determination of what the Rental Adjustment should be.  In the case of
a notice disputing the Rental Adjustment, Landlord and Tenant shall mutually
work together for a period of ten (10) days to resolve the dispute and, if
unable to agree upon the Rental Adjustment within said period, Landlord and
Tenant shall in good faith participate in non-binding arbitration of the Rental
Adjustment for a period of thirty (30) days.  Unless Landlord
otherwise agrees in writing, Tenant's failure to timely exercise such option
shall waive it and any succeeding option.  Landlord shall notify
Tenant of the amount of the Rent Adjustment no later than sixty (60) days after
receipt of Tenant's exercise of its option.  If Tenant properly
exercises its option to extend, Landlord and Tenant shall execute an amendment
to the Lease reflecting the terms and conditions of the Extension
Term.

    

    The
Minimum Annual Rent for the applicable Extension Term shall be an amount equal
to the Minimum Annual Rent then being quoted by Landlord to prospective tenants
of the Building for space of comparable size and quality and with similar or
equivalent improvements as are found in the Building, and if none, then in
similar buildings in the vicinity, excluding free rent and other concessions;
provided, however, that in no event shall the Minimum Annual Rent per square
foot during any Extension Term be less than the highest Minimum Annual Rent per
square foot payable during the immediately preceding term.  The
Minimum Monthly Rent shall be an amount equal to one-twelfth (1/12) of the
Minimum Annual Rent for the Extension Term and shall be paid at the same time
and in the same manner as provided in the Lease.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Section
16.20.  Right of First Offer for the ViFi Expansion
Space.

    

    In the
event that (a) Landlord chooses to construct a new office building and related
improvements on land contiguous to the building commonly known as 7820
Innovation Boulevard, Woodland Corporate Park, as shown on Exhibit
A (currently planned to contain approximately 90,000 rentable square feet
("ViFi Expansion Space")), and (b) Virtual Financial Services, its successors
and assigns ("ViFi") have waived all rights to the ViFi Expansion Space, then
provided that (i) Tenant (as used in this Section 16.20, the term "Tenant" shall
also include any Permitted Transferee that succeeds to Tenant's interest under
Article 11, above) is not in Default at the time it exercises this option, (ii)
Tenant has a tangible net worth of not less than Seventy-five Million Dollars
($75,000,000.00) at the time of exercise, and (iii) Tenant originally named
herein remains in possession of all or substantially all of the Leased Premises,
Landlord shall notify Tenant in writing ("Landlord's Notice") of the
availability of such new office building for lease before entering into a lease
with a third party other than ViFi for all or part of the ViFi Expansion
Space.  Tenant shall have five (5) business days from its receipt of
Landlord's Notice to deliver to Landlord a written acceptance agreeing to lease
the entire ViFi Expansion Space on the terms and conditions contained in
Landlord's Notice.  In the event Tenant fails to notify Landlord of
its acceptance within said five (5) business day period, such failure shall be
conclusively deemed a waiver of Tenant's Right of First Offer for the ViFi
Expansion Space and a rejection of the ViFi Expansion Space, whereupon Tenant
shall have no further rights with respect to the ViFi Expansion Space and
Landlord shall be free to lease the ViFi Expansion Space to one or more third
parties.  In the event Tenant accepts the ViFi Expansion Space on the
terms and conditions specified in Landlord's Notice, the term for the ViFi
Expansion Space shall be coterminous with the term for the original Leased
Premises; provided, however, that the minimum term for the ViFi Expansion Space
shall be ten (10) years and the Term for the original Leased Premises shall be
extended, to be coterminous with the term for the ViFi Expansion
Space.  The Minimum Annual Rent for the ViFi Expansion Space shall be
equal to the rate which is then being quoted by Landlord to prospective new
tenants for the ViFi Expansion Space, excluding free rent and other concessions,
provided, however, that in no event shall Tenant's Minimum Annual Rent per
square foot for the ViFi Expansion Space be less than the highest Minimum Annual
Rent per square foot payable during the original Lease Term for the original
Leased Premises.  The Minimum Annual Rent for the original Leased
Premises during any such extended term shall be an amount equal to the Minimum
Annual Rent then being quoted by Landlord to prospective new tenants of the ViFi
Expansion Space, excluding free rent and other concessions, provided, however,
that in no event shall the Minimum Annual Rent during such extended term be less
than the highest Minimum Annual Rent payable during the original Lease Term for
the original Leased Premises.  It is understood and agreed that this
Right of First Offer for the ViFi Expansion Space is subject to and subordinate
to any and all rights granted to ViFi prior to the date hereof.

    

    Section
16.21.  Name Change of Park.

    

    Upon the
later to occur of (i) Tenant's possession and occupancy of the Leased Premises,
or (ii) payment by Tenant of the first Monthly Rental Installment and for so
long as Interactive Intelligence, Inc. remains the "Tenant" hereunder and is
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".  Such change of name shall
include all internal and external signage and all advertising and promotional
material.  The cost of such change shall be borne by
Landlord.  If Tenant shall assign all of its interest under the Lease
to a Permitted Transferee, Landlord shall, if so requested by the Permitted
Transferee, change the name of Interactive Park to a name mutually acceptable to
Landlord and the Permitted Transferee; provided, however, that all costs of such
name change shall be borne by the Permitted Transferee.

    

    Section
16.22.  Infrastructure Improvements.

    

    Landlord
and/or Tenant have negotiated and obtained or will obtain from the City of
Indianapolis and the State of Indiana infrastructure improvements for
construction or improvement to the sanitary sewer, storm water sewer, water line
and entrance road that will service the Building and Common Areas and related
improvements (collectively, the "Infrastructure Grant").  Landlord
acknowledges and agrees that the value of such improvements is Two Hundred Five
Thousand Dollars ($205,000.00).  Landlord agrees to pay such amount to
Tenant upon completion of the infrastructure improvements or, if such
improvements are not entirely completed by the City and the State, to pay such
portion of such amount that corresponds to the value of such items
completed.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Section
16.23.  Early Occupancy.

    

    Landlord
will allow Tenant to take possession and occupancy of the Leased Premises on the
Occupancy Date, which shall be one month prior to the Commencement
Date.  All of the terms and conditions of this Lease will become
effective upon Tenant taking possession and occupancy of the Leased Premises,
except for the payment of Minimum Annual Rent and Annual Rental Adjustment,
which will commence on the Commencement Date.

    

    IN
WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and
year first above written.

    

    LANDLORD:

    

    DUKE-WEEKS
REALTY LIMITED PARTNERSHIP,

    an
Indiana limited partnership

    

    By:           Duke-Weeks
Realty Corporation,

    its
general partner

    

    By: /s/ Chris
Seger

    Chris
Seger

    Senior
Vice President

    Indiana
Office

    

    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 to be the Executive Vice
President of Interactive Intelligence, Inc., an Indiana corporation, who
acknowledged the execution of the foregoing "Office Lease" on behalf of said
corporation.

    

    WITNESS
my hand and Notarial Seal this 1st day of April ,
2001.

    

    /s/ Traci L.
Shaw

    Notary
Public

    Traci L.
Shaw

    (Printed
Signature)

    

    My
Commission Expires: March 14,
2001

    

    My County
of Residence: Marion

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

    EXHIBIT
C

    

    RULES
AND REGULATIONS

    

    

    1.           The
sidewalks, entrances, passages, courts, elevators, vestibules, stairways,
corridors or halls shall not be obstructed or used for any purpose other than
ingress and egress.

    

    2.           No
awnings or other projections shall be attached to the outside walls of the
Building.  Neither the interior nor the exterior of any windows shall
be coated or otherwise sunscreened without written consent of
Landlord.

    

    3.           No
sign, advertisement, notice or handbill shall be exhibited, distributed, painted
or affixed by any tenant on, about or from any part of the Leased Premises or
the Building without the prior written consent of Landlord.  In the
event of the violation of the foregoing by any tenant, Landlord may remove or
stop same without any liability, and may charge the expense incurred in such
removal or stopping to tenant.  The lobby directory will be provided
exclusively for the display of the name and location of tenants only, and
Landlord reserves the right to exclude any other names
therefrom.  Nothing may be placed on the exterior of corridor walls or
corridor doors other than Landlord's standard lettering.

    

    4.           The
sashes, sash doors, windows, and doors that reflect or admit light and air into
halls, passageways or other public places in the Building shall not be covered
or obstructed by tenant.

    

    5.           The
sinks and toilets and other plumbing fixtures shall not be used for any purpose
other than those for which they were constructed, and no sweepings, rubbish,
rags, or other substances shall be thrown therein.  All damages
resulting from any misuse of the fixtures shall be borne by the tenant who, or
whose subtenants, assignees or any of their servants, employees, agents,
visitors or licensees shall have caused the same.

    

    6.           No
tenant shall mark, paint, drill into, or in any way deface any part of the
Leased Premises or the Building.  Landlord shall direct electricians
as to where and how telephone or telegraph wires are to be
introduced.

    

    7.           No
bicycles, vehicles, birds or animals of any kind (except seeing eye dogs) shall
be brought into or kept in or about the Leased Premises.  No tenant
shall cause or permit any unusual or objectionable odors to be produced or
permeate the Leased Premises.

    

    8.           No
tenant shall occupy or permit any portion of the Leased Premises to be occupied
as an office for the manufacture or sale of liquor, narcotics, or tobacco in any
form, or as a medical office, or as a barber or manicure shop, or an employment
bureau without the express written consent of Landlord.  The Leased
Premises shall not be used for lodging or sleeping or for any immoral or illegal
purpose.

    

    9.           No
tenant shall make, or permit to be made any unseemly or disturbing noises or
disturb or interfere with occupants of this or neighboring buildings or premises
or those having business with them, whether by the use of any musical
instrument, radio, phonograph, unusual noise, or in any other way.  No
tenant shall throw anything out of doors, windows or down the
passageways.

    

    10.           No
tenant, subtenant or assignee nor any of its servants, employees, agents,
visitors or licensees, shall at any time bring or keep upon the Leased Premises
any inflammable, combustible or explosive fluid, chemical or substance or
firearm.

    

    11.           No
additional locks or bolts of any kind shall be placed upon any of the doors or
windows by any tenant, nor shall any changes be made in existing locks or the
mechanism thereof if the same unreasonably interferes with Landlord's ability to
perform its obligations under the Lease.  Each tenant must upon the
termination of his tenancy, restore to the Landlord all keys of doors, offices,
and toilet rooms, either furnished to, or otherwise procured by, such tenant and
in the event of the loss of keys so furnished, such tenant shall pay to the
Landlord the cost of replacing the same or of changing the lock or locks opened
by such lost key if Landlord shall deem it necessary to make such
changes.

     

    
       Exhibit
"C"

        
          

        

      

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    

    12.           No
Tenant shall overload the floors of the Leased Premises.  All damage
to the floor, structure or foundation of the Building due to improper
positioning or storage items or materials shall be repaired by Landlord at the
sole cost and expense of tenant, who shall reimburse Landlord immediately
therefor upon demand.  Landlord reserves the right to inspect all
safes, freight or other bulky articles to be brought into the Building and to
exclude from the Building all safes, freight or other bulky articles which
violate any of these Rules and Regulations or the Lease of which these Rules and
Regulations are a part.  The Landlord reserves the right to prescribe
the weight and position of all safes, which must be placed upon supports
approved by Landlord to distribute the weight.

    

    13.           No
tenant shall purchase janitorial or maintenance or other like services, from any
person or persons not approved by Landlord, which approval shall not be
unreasonably withheld, delayed or conditioned.

    

    14.           Landlord
agrees that Tenant shall have the right to use pictures of the Building and the
address and name of the Building, campus and Park in any of its promotional
materials.  Landlord shall have the right to prohibit any advertising
by any tenant which, in Landlord's opinion tends to impair the reputation of the
Building or its desirability as an office location, and upon written notice from
Landlord any tenant shall refrain from or discontinue such
advertising.

    

    15.           Landlord
reserves the right to require all persons entering the Building between the
hours of 8 p.m. and 7 a.m. and at all hours on Sunday and legal holidays to
register with Landlord's security personnel.  Tenant shall be
responsible for all persons entering the Building at tenant's invitation,
express or implied.  Landlord shall in no case be liable for damages
for any error with regard to the admission to or exclusion from the Building of
any person.  In case of an invasion, mob riot, public excitement or
other circumstances rendering such action advisable in Landlord's opinion,
Landlord reserves the right without any abatement of rent to require all persons
to vacate the Building and to prevent access to the Building during the
continuance of the same for the safety of the tenants and the protection of the
Building and the property in the Building.

    

    16.           Outside
parties are prohibited from canvassing, soliciting and peddling in the Building,
and each tenant shall report and otherwise cooperate to prevent the
same.

    

    17.           All
office equipment of any electrical or mechanical nature shall be placed by
tenant in the Leased Premises in settings which will, to the maximum extent
possible, absorb or prevent any vibration, noise and annoyance.

    

    18.           No
air-conditioning unit or other similar apparatus shall be installed or used by
any tenant without the written consent of Landlord, which consent shall not be
unreasonably withheld, delayed or conditioned.

    

    19.           There
shall not be used in any space, or in the public halls of the Building, either
by any tenant or others, any hand trucks except those equipped with rubber tires
and rubber side guards.

    

    20.           The
Building is a smoke-free Building.  Smoking is strictly prohibited
within the Building.  Smoking shall only be allowed in areas
designated as a smoking area by Landlord.  Tenant and its employees,
representatives, contractors or invitees shall not smoke within the Building or
throw cigar or cigarette butts or other substances or litter of any kind in or
about the Building, except in receptacles placed in it for that
purpose.

    

    21.           Tenants
will see that all doors are securely locked.

    

    22.           Parking
spaces associated with the Building are intended for the exclusive use of
passenger vehicles.  Except for intermittent deliveries, no vehicles
other than passenger vehicles may be parked in a parking space without the
express written permission of Landlord.

    

    23.           Tenant
shall be responsible for and cause the proper disposal of medical waste,
including hypodermic needles, created by its employees.

    

    It is
Landlord's desire to maintain in the Building the highest standard of dignity
and good taste consistent with comfort and convenience for
tenants.  Any action or condition not meeting this high standard
should be reported directly to Landlord.

     

     

     Exhibit
"C"

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