Document:

<PAGE>
                                                                   Exhibit 10.40

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THESE SECURITIES MAY NOT BE OFFERED OR
SOLD IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT.

                         THE TRANSFER OF THIS WARRANT IS
                         RESTRICTED AS DESCRIBED HEREIN.

                             BIZNESSONLINE.COM, INC.

               Warrant for the Purchase of Shares of Common Stock,
                            par value $0.01 per Share

No. KB-1                                                         200,000 Shares

                  THIS CERTIFIES that, for value received, KAUFMAN BROS., L.P.,
800 Third Avenue - 25th Floor, New York, New York 10022 (the "Holder"), is
entitled to subscribe for and purchase from BIZNESSONLINE.COM, INC., a Delaware
corporation (the "Company"), upon the terms and conditions set forth herein, at
any time or from time to time after June 19, 2000, and before 5:00 P.M. on June
19, 2005, New York time (the "Exercise Period"), 200,000 shares of the Company's
Common Stock, par value $0.01 per share ("Common Stock"), at a price of $5.63
per share (the "Exercise Price"). As used herein the term "this Warrant" shall
mean and include this Warrant and any Common Stock or Warrants hereafter issued
as a consequence of the exercise or transfer of this Warrant in whole or in
part. This Warrant may not be sold, transferred, assigned or hypothecated except
that it may be transferred, in whole or in part, to (i) not more that ten
officers or partners of the Holder (or the officers or partners of any such
partner); (ii) a successor to the Holder, or the officers or partners of such
successor; (iii) a purchaser of substantially all of the assets of the Holder;
or (iv) by operation of law; and the term the "Holder" as used herein shall
include any transferee to whom this Warrant has been transferred in accordance
with the above.

                  The number of shares of Common Stock issuable upon exercise of
the Warrant (the "Warrant Shares") and the Exercise Price may be adjusted from
time to time as hereinafter set forth.

                  1. This Warrant may be exercised during the Exercise Period,
as to the whole or any lesser number of whole Warrant Shares, by the surrender
of this Warrant (with the election at the end hereof duly executed) to the
Company at its office at 1720 Route 34, P.O. Box 1347, Wall, New Jersey 07719 or
at such other place as is designated in writing by the Company, together with a
certified or bank cashier's check payable to the order of the

<PAGE>

Company in an amount equal to the Exercise Price multiplied by the number of
Warrant Shares for which this Warrant is being exercised (the "Stock Purchase
Price").

                  2. (a) In lieu of the payment of the Stock Purchase Price, the
         Holder shall have the right (but not the obligation), to require the
         Company to convert this Warrant, in whole or in part, into shares of
         Common Stock (the "Conversion Right") as provided for in this Section
         2. Upon exercise of the Conversion Right, the Company shall deliver to
         the Holder (without payment by the Holder of any of the Stock Purchase
         Price) that number of shares of Common Stock (the "Conversion Shares")
         equal to the quotient obtained by dividing (x) the value of this
         Warrant (or portion thereof as to which the Conversion Right is being
         exercised if the Conversion Right is being exercised in part) at the
         time the Conversion Right is exercised (determined by subtracting the
         aggregate Stock Purchase Price of the shares of Common Stock as to
         which the Conversion Right is being exercised in effect immediately
         prior to the exercise of the Conversion Right from the aggregate
         Current Market Price (as defined in Section 6(d) hereof) of the shares
         of Common Stock as to which the Conversion Right is being exercised) by
         (y) the Current Market Price of one share of Common Stock immediately
         prior to the exercise of the Conversion Right.

                           (b) The Conversion Right provided under this Section
         2 may be exercised in whole or in part and at any time and from time to
         time while this Warrant remains outstanding. In order to exercise the
         Conversion Right, the Holder shall surrender to the Company, at its
         offices, this Warrant with the Notice of Conversion at the end hereof
         duly executed. The presentation and surrender shall be deemed a waiver
         of the Holder's obligation to pay all or any portion of the aggregate
         purchase price payable for the shares of Common Stock as to which such
         Conversion Right is being exercised. This Warrant (or so much thereof
         as shall have been surrendered for conversion) shall be deemed to have
         been converted immediately prior to the close of business on the day of
         surrender of such Warrant for conversion in accordance with the
         foregoing provisions.

                  3. Upon each exercise of the Holder's rights to purchase
Warrant Shares or Conversion Shares, the Holder shall be deemed to be the holder
of record of the Warrant Shares or Conversion Shares issuable upon such exercise
or conversion, notwithstanding that the transfer books of the Company shall then
be closed or certificates representing such Warrant Shares or Conversion Shares
shall not then have been actually delivered to the Holder. As soon as
practicable after each such exercise or conversion of this Warrant, the Company
shall issue and deliver to the Holder a certificate or certificates for the
Warrant Shares or Conversion Shares issuable upon such exercise or conversion,
registered in the name of the Holder or its designee. If this Warrant should be
exercised or converted in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant evidencing the right
of the Holder to purchase the balance of the Warrant Shares (or portions
thereof) subject to purchase hereunder.

<PAGE>

                  4. Any Warrant issued upon the transfer or exercise or
conversion in part of this Warrant shall be numbered and shall be registered in
a Warrant Register as they are issued. The Company shall be entitled to treat
the registered holder of any Warrant on the Warrant Register as the owner in
fact thereof for all purposes and shall not be bound to recognize any equitable
or other claim to or interest in such Warrant on the part of any other person,
and shall not be liable for any registration or transfer of Warrants which are
registered or to be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with the actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration or transfer, or
with the knowledge of such facts that its participation therein amounts to bad
faith. This Warrant shall be transferable only on the books of the Company upon
delivery thereof duly endorsed by the Holder or by his duly authorized attorney
or representative, or accompanied by proper evidence of succession, assignment,
or authority to transfer. In all cases of transfer by an attorney, executor,
administrator, guardian, or other legal representative, duly authenticated
evidence of his or its authority shall be produced. Upon any registration of
transfer, the Company shall deliver a new Warrant or Warrants to the person
entitled thereto. This Warrant may be exchanged, at the option of the Holder
thereof, for another Warrant, or other Warrants of different denominations, of
like tenor and representing in the aggregate the right to purchase a like number
of Warrant Shares (or portions thereof), upon surrender to the Company or its
duly authorized agent. Notwithstanding the foregoing, the Company shall have no
obligation to cause Warrants to be transferred on its books to any person if, in
the opinion of counsel to the Company, such transfer does not comply with
applicable law, including without limitations, the provisions of the Securities
Act of 1933, as amended (the "Act"), and the rules and regulations thereunder
and any state securities laws or regulations.

                  5. The Company shall at all times reserve and keep available
out of its authorized and unissued Common Stock, solely for the purpose of
providing for the exercise of the rights to purchase all Warrant Shares and/or
Conversion Shares granted pursuant to this Warrant, such number of shares of
Common Stock as shall, from time to time, be sufficient therefor. The Company
covenants that all shares of Common Stock issuable upon exercise of this
Warrant, upon receipt by the Company of the full Exercise Price therefor, and
all shares of Common Stock issuable upon conversion of this Warrant, shall be
validly issued, fully paid, non-assessable, and free of preemptive rights.

                  6. (a) In case the Company shall at any time after the date
         hereof (i) declare a dividend on the outstanding shares of Common Stock
         payable solely in the shares of its capital stock, (ii) subdivide the
         outstanding Common Stock, (iii) combine the outstanding Common Stock
         into a smaller number of shares, or (iv) issue any shares of its
         capital stock by reclassification of the Common Stock (including any
         such reclassification in connection with a consolidation or merger in
         which the Company is the continuing corporation), then, in each case,
         the Exercise Price, and the number and kind of securities issuable upon
         exercise or conversion of this Warrant, in effect at the time of the
         record date for such dividend or of the effective date of such
         subdivision, combination, or reclassification, shall be proportionately
         adjusted so that the Holder after such time shall be entitled to
         receive the aggregate number and kind of shares

<PAGE>

         which, if such Warrant had been exercised or converted immediately
         prior to such time, he would have owned upon such exercise or
         conversion and been entitled to receive by virtue of such dividend,
         subdivision, combination, or reclassification. Such adjustment shall be
         made successively whenever any event listed above shall occur.

                           (b) In case the Company shall issue or fix a record
         date for the issuance to all holders of Common Stock of rights,
         options, or warrants to subscribe for or purchase Common Stock (or
         securities convertible into or exchangeable for Common Stock) at a
         price per share (or having a conversion or exchange price per share, if
         a security convertible into or exchangeable for Common Stock) less than
         the lesser of (i) the current Exercise Price, or (ii) the Current
         Market Price per share of Common Stock on such record date, whichever
         applies (the "Trigger Price"), then, in each case, the Exercise Price
         shall be adjusted by multiplying the Exercise Price in effect
         immediately prior to such record date by a fraction, the numerator of
         which shall be the number of shares of Common Stock outstanding on such
         record date plus the number of shares of Common Stock which the
         aggregate offering price of the total number of shares of Common Stock
         so to be offered (or the aggregate initial conversion or exchange price
         of the convertible or exchangeable securities so to be offered) would
         purchase at such Trigger Price and the denominator of which shall be
         the number of shares of Common Stock outstanding on such record date
         plus the number of additional shares of Common Stock to be offered for
         subscription or purchase (or into which the convertible or exchangeable
         securities so to be offered are initially convertible or exchangeable).
         Such adjustment shall become effective at the close of business on such
         record date; PROVIDED, HOWEVER, that, to the extent the shares of
         Common Stock (or securities convertible into or exchangeable for shares
         of Common Stock) are not delivered, the Exercise Price shall be
         readjusted after the expiration of such rights, options, or warrants
         (but only with respect to Warrants exercised after such expiration), to
         the Exercise Price which would then be in effect had the adjustments
         made upon the issuance of such rights, options, or warrants been made
         upon the basis of delivery of only the number of shares of Common Stock
         (or securities convertible into or exchangeable for shares of Common
         Stock) actually issued. In case any subscription price may be paid in a
         consideration part or all of which shall be in a form other than cash,
         the value of such consideration shall be as determined in good faith by
         the board of directors of the Company, whose determination shall be
         conclusive absent manifest error. Shares of Common Stock owned by or
         held for the account of the Company or any majority-owned subsidiary
         shall not be deemed outstanding for the purpose of any such
         computation.

                           (c) In case the Company shall distribute to all
         holders of Common Stock (including any such distribution made to the
         stockholders of the Company in connection with a consolidation or
         merger in which the Company is the continuing corporation) evidences of
         its indebtedness or assets (other than cash dividends or distributions
         and dividends payable in shares of Common Stock), or rights, options,
         or warrants to subscribe for or purchase Common Stock, or securities
         convertible into or exchangeable for shares of Common Stock (excluding
         those with respect to the issuance of which an adjustment of the
         Exercise Price is provided pursuant to Section 6(b)

<PAGE>

         hereof), then, in each case, the Exercise Price shall be adjusted by
         multiplying the Exercise Price in effect immediately prior to the
         record date for the determination of stockholders entitled to receive
         such distribution by a fraction, the numerator of which shall be the
         Trigger Market Price per share of Common Stock on such record date,
         less the fair market value (as determined in good faith by the board of
         directors of the Company, whose determination shall be conclusive
         absent manifest error) of the portion of the evidences of indebtedness
         or assets so to be distributed, or of such rights, options, or warrants
         or convertible or exchangeable securities, applicable to one share, and
         the denominator of which shall be such Trigger Market Price per share
         of Common Stock. Such adjustment shall be made whenever any such
         distribution is made, and shall become effective on the record date for
         the determination of stockholders entitled to receive such
         distribution.

                           (d) For the purpose of any computation under this
         Section 6, the Current Market Price per share of Common Stock on any
         date shall be deemed to be the average of the daily closing prices for
         the 30 consecutive trading days immediately preceding the date in
         question. The closing price for each day shall be the last reported
         sales price regular way or, in case no such reported sale takes place
         on such day, the closing bid price regular way, in either case on the
         principal national securities exchange (including, for purposes hereof,
         the NASDAQ SmallCap Market) on which the Common Stock is listed or
         admitted to trading or, if the Common Stock is not listed or admitted
         to trading on any national securities exchange, the highest reported
         bid price for the Common Stock as furnished by the National Association
         of Securities Dealers, Inc. through NASDAQ or a similar organization if
         NASDAQ is no longer reporting such information. If on any such date the
         Common Stock is not listed or admitted to trading on any national
         securities exchange and is not quoted by NASDAQ or any similar
         organization, the fair value of a share of Common Stock on such date,
         as determined in good faith by the board of directors of the Company,
         whose determination shall be conclusive absent manifest error, shall be
         used.

                           (e) No adjustment in the Exercise Price shall be
         required if such adjustment is less than $.05 PROVIDED, HOWEVER, that
         any adjustments which by reason of this Section 6 are not required to
         be made shall be carried forward and taken into account in any
         subsequent adjustment. All calculations under this Section 6 shall be
         made to the nearest cent or to the nearest one-thousandth of a share,
         as the case may be.

                           (f) In any case in which this Section 6 shall require
         that an adjustment in the Exercise Price be made effective as of a
         record date for a specified event, the Company may elect to defer,
         until the occurrence of such event, issuing to the Holder, if the
         Holder exercised or converted this Warrant after such record date, the
         shares of Common Stock, if any, issuable upon such exercise or
         conversion over and above the shares of Common Stock, if any, issuable
         upon such exercise or conversion on the basis of the Exercise Price in
         effect prior to such adjustment; PROVIDED, HOWEVER, that the Company
         shall deliver to the Holder a due bill or other appropriate instrument

<PAGE>

         evidencing the Holder's right to receive such additional shares upon
         the occurrence of the event requiring such adjustment.

                           (g) Upon each adjustment of the Exercise Price as a
         result of the calculations made in Sections 6(b) or 6(c) hereof, this
         Warrant shall thereafter evidence the right to purchase, at the
         adjusted Exercise Price, that number of shares (calculated to the
         nearest thousandth) obtained by dividing (i) the product obtained by
         multiplying the number of shares purchasable upon exercise of this
         Warrant prior to adjustment of the number of shares by the Exercise
         Price in effect prior to adjustment of the Exercise Price, by (ii) the
         Exercise Price in effect after such adjustment of the Exercise Price.

                           (h) Whenever there shall be an adjustment as provided
         in this Section 6, the Company shall promptly cause written notice
         thereof to be sent by registered mail, postage prepaid, to the Holder,
         at its address as it shall appear in the Warrant Register, which notice
         shall be accompanied by an officer's certificate setting forth the
         number of Warrant Shares purchasable upon the exercise of this Warrant
         and the Exercise Price after such adjustment and setting forth a brief
         statement of the facts requiring such adjustment and the computation
         thereof, which officer's certificate shall be conclusive evidence of
         the correctness of any such adjustment absent manifest error.

                           (j) Notwithstanding anything to the contrary herein,
         the Company shall not be required to issue fractions of shares of
         Common Stock or other capital stock of the Company upon the exercise or
         conversion of this Warrant or any adjustment to the number of shares
         this Warrant may be exercised for or converted into. If any fraction of
         a share would be issuable on the exercise or conversion of this Warrant
         (or specified portions thereof) or adjustment thereto, the Company
         shall purchase such fraction for an amount in cash equal to the same
         fraction of the Current Market Price of such share of Common Stock on
         the date of exercise or conversion of this Warrant.

                  7.      (a) In case of any consolidation with or merger of the
         Company with or into another corporation (other than a merger or
         consolidation in which the Company is the surviving or continuing
         corporation), or in case of any sale, lease, or conveyance to another
         corporation of the property and assets of the Company as an entirety or
         substantially as an entirety, such successor, leasing, or purchasing
         corporation, as the case may be, shall (i) execute with the Holder an
         agreement providing that the Holder shall have the right thereafter to
         receive upon exercise or conversion of this Warrant solely the kind and
         amount of shares of stock and other securities, property, cash, or any
         combination thereof receivable upon such consolidation, merger, sale,
         lease, or conveyance by a holder of the number of shares of Common
         Stock for which this Warrant might have been exercised or converted
         immediately prior to such consolidation, merger, sale, lease, or
         conveyance, and (ii) make effective provision in its certificate of
         incorporation or otherwise, if necessary, to effect such agreement.
         Such agreement shall provide for adjustments which shall be as nearly
         equivalent as practicable to the adjustments in Section 6.

<PAGE>

                           (b) In case of any reclassification or change of the
         shares of Common Stock issuable upon exercise or conversion of this
         Warrant (other than a change in par value or from no par value to a
         specified par value, or as a result of a subdivision or combination,
         but including any change in the shares into two or more classes or
         series of shares), or in case of any consolidation or merger of another
         corporation into the Company in which the Company is the continuing
         corporation and in which there is a reclassification or change
         (including a change to the right to receive cash or other property) of
         the shares of Common Stock (other than a change in par value, or from
         no par value to a specified par value, or as a result of a subdivision
         or combination, but including any change in the shares into two or more
         classes or series of shares), the Holder shall have the right
         thereafter to receive upon exercise or conversion of this Warrant
         solely the kind and amount of shares of stock and other securities,
         property, cash, or any combination thereof receivable upon such
         reclassification, change, consolidation, or merger by a holder of the
         number of shares of Common Stock for which this Warrant might have been
         exercised or converted immediately prior to such reclassification,
         change, consolidation, or merger. Thereafter, appropriate provision
         shall be made for adjustments which shall be as nearly equivalent as
         practicable to the adjustments in Section 6.

                           (c) The above provisions of this Section 7 shall
         similarly apply to successive reclassifications and changes of shares
         of Common Stock and to successive consolidations, mergers, sales,
         leases, or conveyances.

                  8.       In case at any time the Company shall propose

                           (a) to pay any dividend or make any distribution on
         shares of Common Stock in shares of Common Stock or make any other
         distribution (other than regularly scheduled cash dividends which are
         not in a greater amount per share than the most recent such cash
         dividend) to all holders of Common Stock; or

                           (b) to issue any rights, warrants, or other
         securities to all holders of Common Stock entitling them to purchase
         any additional shares of Common Stock or any other rights, warrants, or
         other securities; or

                           (c) to effect any reclassification or change of
         outstanding shares of Common Stock, or any consolidation, merger, sale,
         lease, or conveyance of property, described in Section 7; or

                           (d) to effect any liquidation, dissolution, or
         winding-up of the Company; or

                           (e) to take any other action which would cause an
         adjustment to the Exercise Price;

<PAGE>

then, and in any one or more of such cases, the Company shall give written
notice thereof, by registered mail, postage prepaid, to the Holder at the
Holder's address as it shall appear in the Warrant Register, mailed at least 15
days prior to (i) the date as of which the holders of record of shares of Common
Stock to be entitled to receive any such dividend, distribution, rights,
warrants, or other securities are to be determined, (ii) the date on which any
such reclassification, change of outstanding shares of Common Stock,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up is expected to become effective, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange their shares for securities or other property, if any,
deliverable upon such reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up, or (iii) the date of such action which would require
an adjustment to the Exercise Price.

                  9. The issuance of any shares or other securities upon the
exercise or conversion of this Warrant, and the delivery of certificates or
other instruments representing such shares or other securities, shall be made
without charge to the Holder for any tax or other charge in respect of such
issuance. The Company shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue and delivery of any
certificate in a name other than that of the Holder and the Company shall not be
required to issue or deliver any such certificate unless and until the person or
persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.

                  10. (a) If, at any time prior to June 16, 2005, while any
Warrant or Warrant Shares are outstanding, the Company shall file a registration
statement with the Securities and Exchange Commission (the "Commission") to
register the sale any of its equity securities for its own account (and not for
the account of a security holder or holders) for cash, other than (w) a
registration relating to employee benefit plans and/or on Form S-8 or a
comparable or successor Form, (x) a registration relating to a corporate
reorganization or other transaction under Rule 145 and/or on Form S-4 or a
comparable or successor Form, or (y) a registration on any registration form
that does not permit secondary sales, the Company shall give the Holder at least
15 days prior written notice of the filing of such registration statement. If
requested by the Holder in writing within 10 days after receipt of any such
notice, the Company shall, at the Company's sole expense (other than the fees
and disbursements of counsel for the Holder and the underwriting discounts, if
any, payable in respect of the Warrant Shares sold by the Holder), register or
qualify all or, at the Holders' option, any portion of the Warrant Shares of the
Holder concurrently with the registration of such other securities, all to the
extent requisite to permit the public offering and sale of the Warrant Shares
through the facilities of all appropriate securities exchanges and the
over-the-counter market. As a condition to the registration of any Warrant
Shares in an underwritten public offering, the Holder shall (together with the
Company and the other holders of securities of the Company with registration
rights to participate therein distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
representative of the

<PAGE>

underwriter or underwriters selected by the Company. Notwithstanding the
foregoing, if the representative of the underwriter or underwriters of any such
offering shall advise the Company in writing that, in its opinion, the
distribution of all or a portion of the Warrant Shares requested to be included
in the registration concurrently with the securities being registered by the
Company would adversely affect the distribution of such securities by the
Company for its own account, the number of shares that may be included in such
registration in such offering shall be allocated as follows: (i) first, the
Company shall be permitted to include all shares of capital stock to be
registered thereby and (ii) second, the Holder shall be allowed to include such
additional amount as the lead managing underwriter deems appropriate, such
amount to be allocated among such Holder and any other selling stockholders on a
pro rata basis based on the total number of shares of capital stock held
thereby. As used herein, "Warrant Shares" shall mean the Warrant Shares and the
Conversion Shares which, in each case, have not been previously sold pursuant to
a registration statement or Rule 144 promulgated under the Act.

                           (b) In the event of a registration pursuant to the
provisions of this Section 10, the Company shall use its best efforts to cause
the Warrant Shares so registered to be registered or qualified for sale under
the securities or blue sky laws of such jurisdictions as the Holder may
reasonably request; PROVIDED, HOWEVER, that the Company shall not be required to
qualify to do business in any state by reason of this Section 10(b) in which it
is not otherwise required to qualify to do business.

                           (c) The Company shall keep effective any registration
or qualification contemplated by this Section 10 and shall from time to time
amend or supplement each applicable registration statement, preliminary
prospectus, final prospectus, application, document, and communication for such
period of time as shall be required to permit the Holder to complete the offer
and sale of the Warrant Shares covered thereby. The Company shall in no event be
required to keep any such registration or qualification in effect for a period
in excess of 90 days from the date on which the Holder is first free to sell
such Warrant Shares; PROVIDED, HOWEVER, that, if the Company is required to keep
any such registration or qualification in effect with respect to securities
other than the Warrant Shares beyond such period, the Company shall keep such
registration or qualification in effect as it relates to the Warrant Shares for
so long as such registration or qualification remains or is required to remain
in effect in respect of such other securities.

                           (d) In the event of a registration pursuant to the
provisions of this Section 10, the Company shall furnish to the Holder such
number of copies of the registration statement and of each amendment and
supplement thereto (in each case, including all exhibits), such reasonable
number of copies of each prospectus contained in such registration statement and
each supplement or amendment thereto (including each preliminary prospectus),
all of which shall conform to the requirements of the Act and the rules and
regulations thereunder, and such other documents, as the Holder may reasonably
request to facilitate the disposition of the Warrant Shares included in such
registration.

<PAGE>

                           (e) In the event of a registration pursuant to the
provisions of this Section 10, the Company shall furnish the Holder so
registered with an opinion of its counsel covering such matters as are
customarily the subject of opinions of issuer's counsel provided to underwriters
in underwritten public offerings.

                           (f) The Company agrees that until the Warrant has
expired or all of the Warrant Shares have been sold under a registration
statement or pursuant to Rule 144 under the Act, it shall keep current in filing
all reports, statements and other materials required to be filed with the
Commission to permit the Holder to sell the Warrant Shares under Rule 144.

                  11.      (a) Subject to the conditions set forth below, the
Company agrees to indemnify and hold harmless the Holder, its officers,
directors, partners, employees, agents, and counsel, and each person, if any,
who controls any such person within the meaning of Section 15 of the Act or
Section 20(a) of Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all loss, liability, charge, claim, damage, and
expense whatsoever (which shall include, for all purposes of this Section 11,
but not be limited to, reasonable attorneys' fees and any and all reasonable
expense whatsoever incurred in investigating, preparing, or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), as and when
incurred, arising out of, based upon, or in connection with (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in any
registration statement, preliminary prospectus, or final prospectus (as from
time to time amended and supplemented), or any amendment or supplement thereto,
relating to the sale of the Warrant Shares, or (B) in any application or other
document or communication (in this Section 11 collectively called an
"application") executed by or on behalf of the Company filed in any
jurisdiction in order to register or qualify any of the Warrant Shares under
the securities or blue sky laws thereof or filed with the Commission or any
securities exchange; or any omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, unless such statement or omission was made in reliance upon and
in conformity with written information furnished to the Company with respect to
the Holder by or on behalf of the Holder expressly for inclusion in any
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be, or
(ii) any breach of any representation, warranty, covenant, or agreement of the
Company contained in this Warrant. The foregoing agreement to indemnify shall
be in addition to any liability the Company may otherwise have, including
liabilities arising under this Warrant.

                  If any action is brought against the Holder or any of its
officers, directors, partners, employees, agents, or counsel, or any controlling
persons of such person (an "indemnified party") in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
indemnified party or parties shall promptly notify the Company in writing of the
institution of such action (but the failure so to notify shall not relieve the
Company from any liability pursuant to this Section 11(a) except to the extent
that such failure shall result in prejudice to the Company) and the Company
shall promptly assume the

<PAGE>

defense of such action, including the employment of counsel (reasonably
satisfactory to such indemnified party or parties) and payment of reasonable
expenses. Such indemnified party or parties shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action or the Company shall not have
promptly employed counsel reasonably satisfactory to such indemnified party or
parties to have charge of the defense of such actionor such indemnified party or
parties shall have reasonably concluded that there may be one or more legal
defenses available to it or them or to other indemnified parties which are
different from or additional to those available to the Companyin any of which
events such fees and expenses shall be borne by the Company and the Company
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties. The Company shall not be obligated to pay the fees
and expenses of more than one such separate counsel for any one such action or
proceeding in any one jurisdiction. Anything in this Section 11 to the contrary
notwithstanding, the Company shall not be liable for any settlement of any such
claim or action effected without its written consent, which shall not be
unreasonably withheld. The Company shall not, without the prior written consent
of each indemnified party that is not released as described in this sentence,
settle or compromise any action, or permit a default or consent to the entry of
judgment in or otherwise seek to terminate any pending or threatened action, in
respect of which indemnity may be sought hereunder (whether or not any
indemnified party is a party thereto), unless such settlement, compromise,
consent, or termination includes an unconditional release of each indemnified
party from all liability in respect of such action. The Company agrees promptly
to notify the Holder of the commencement of any litigation or proceedings
against the Company or any of its officers or directors in connection with the
sale of any Warrant Shares or any preliminary prospectus, prospectus,
registration statement, or amendment or supplement thereto, or any application
relating to any sale of any Warrant Shares.

                           (b) The Holder agrees to indemnify and hold harmless
the Company, each director of the Company, each officer of the Company who shall
have signed any registration statement covering Warrant Shares held by the
Holder, each other person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, and its or their
respective counsel, to the same extent as the foregoing indemnity from the
Company to the Holder in Section 11(a), but only with respect to statements or
omissions, if any, made in any registration statement, preliminary prospectus,
or final prospectus (as from time to time amended and supplemented), or any
amendment or supplement thereto, or in any application, in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Holder expressly for inclusion in any such registration statement,
preliminary prospectus, or final prospectus, or any amendment or supplement
thereto, or in any application, as the case may be. If any action shall be
brought against the Company or any other person so indemnified based on any such
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, and in respect of which
indemnity may be sought against the Holder pursuant to this Section 11(b), the
Holder shall have the rights and duties given to the

<PAGE>

Company, and the Company and each other person so indemnified shall have the
rights and duties given to the indemnified parties, by the provisions of Section
11(a).

                           (c) To provide for just and equitable contribution,
if (i) an indemnified party makes a claim for indemnification pursuant to
Section 11(a) or 11(b) (subject to the limitations thereof) but it is found in a
final judicial determination, not subject to further appeal, that such
indemnification may not be enforced in such case, even though this Agreement
expressly provides for indemnification in such case, or (ii) any indemnified or
indemnifying party seeks contribution under the Act, the Exchange Act or
otherwise, then the Company (including for this purpose any contribution made by
or on behalf of any director of the Company, any officer of the Company who
signed any such registration statement, any controlling person of the Company,
and its or their respective counsel), as one entity, and the Holder (including
for this purpose any contribution by or on behalf of an indemnified party), as a
second entity, shall contribute to the losses, liabilities, claims, damages, and
expenses whatsoever to which any of them may be subject, on the basis of
relevant equitable considerations such as the relative fault of the Company and
such Holder in connection with the facts which resulted in such losses,
liabilities, claims, damages, and expenses. The relative fault, in the case of
an untrue statement, alleged untrue statement, omission, or alleged omission,
shall be determined by, among other things, whether such statement, alleged
statement, omission, or alleged omission relates to information supplied by the
Company or by such Holder, and the parties' relative intent, knowledge, access
to information, and opportunity to correct or prevent such statement, alleged
statement, omission, or alleged omission. The Company and the Holder agree that
it would be unjust and inequitable if the respective obligations of the Company
and the Holder for contribution were determined by pro rata or per capita
allocation of the aggregate losses, liabilities, claims, damages, and expenses
(even if the Holder and the other indemnified parties were treated as one entity
for such purpose) or by any other method of allocation that does not reflect the
equitable considerations referred to in this Section 11(c). In no case shall the
Holder be responsible for a portion of the contribution obligation imposed on it
in excess of its pro rata share based on the number of shares of Common Stock
owned (or which would be owned upon exercise of all Warrant or Warrant Shares)
by it and included in such registration as compared to the total number of
shares of Common Stock included in such registration. No person guilty of a
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation. For purposes of this Section 11(c), each person,
if any, who controls the Holder within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and each officer, director, partner, employee,
agent, and counsel of each such Holder or control person shall have the same
rights to contribution as such Holder or control person and each person, if any,
who controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed any
such registration statement, each director of the Company, and its or their
respective counsel shall have the same rights to contribution as the Company,
subject in each case to the provisions of this Section 11(c). Anything in this
Section 11(c) to the contrary notwithstanding, no party shall be liable for
contribution with respect to the settlement of any claim or action

<PAGE>

effected without its written consent. This Section 11(c) is intended to
supersede any right to contribution under the Act, the Exchange Act or
otherwise.

                  12. Unless registered pursuant to the provisions of Section 10
hereof, the Warrant Shares or Conversion Shares issued upon exercise or
conversion of the Warrants shall be subject to a stop transfer order and the
certificate or certificates evidencing such Warrant Shares shall bear the
following legend:

         "THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933 OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE. THESE
         SECURITIES CANNOT BE SOLD OR TRANSFERRED WITHOUT SUCH REGISTRATION AND
         QUALIFICATION UNLESS AN EXEMPTION FROM SUCH REGISTRATION AND
         QUALIFICATION IS AVAILABLE AND THE COMPANY HAS RECEIVED AN OPINION OF
         COUNSEL SATISFACTORY TO THE COMPANY TO THAT EFFECT."

                  13. Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant (and upon surrender
of this Warrant if mutilated), and upon reimbursement of the Company's
reasonable incidental expenses, the Company shall execute and deliver to the
Holder thereof a new Warrant of like date, tenor, and denomination.

                  14. The Holder shall not have, solely on account of such
status, any rights of a stockholder of the Company, either at law or in equity,
or to any notice of meetings of stockholders or of any other proceedings of the
Company, except as provided in this Warrant.

                  15. This Warrant shall be construed in accordance with the
laws of the State of New York applicable to contracts made and performed within
such State, without regard to principles of conflicts of law.

                  16. The Company irrevocably consents to the jurisdiction of
the courts of the federal courts located in the City of New York in connection
with any action or proceeding arising out of or relating to this Warrant, any
document or instrument delivered pursuant to, in connection with or
simultaneously with this Warrant, or a breach of this Warrant or any such
document or instrument. In any such action or proceeding, the Company waives
personal service of any summons, complaint or other process and agrees that
service thereof may be made by registered mail, return receipt requested. Within
30 days after such service, or such other time as may be allowed under New York
law or as mutually agreed upon in writing by the attorneys for the parties to
such action or proceeding, the Company shall appear to answer such summons,
complaint or other process. Should the Company so served fail to appear or
answer within such period or such extended period, as the case may be, the
Company shall be deemed in default and judgment may be entered against the
Company for the amount as demanded in any summons, complaint or other process so
served.

<PAGE>

Dated: June 20, 2000

                                   BIZNESSONLINE.COM, Inc.

                                   By:/s/ S. Keith London
                                      -----------------------------------------
                                      S. Keith London, Executive Vice President

<PAGE>

                               FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder is permitted to transfer
the attached Warrant.)

                  FOR VALUE RECEIVED, ____________ hereby sells, assigns, and
transfers unto __________________ a Warrant to purchase __________ shares of
Common Stock, par value $.01 per share, of FastComm Communications Corporation
(the "Company"), together with all right, title, and interest therein, and does
hereby irrevocably constitute and appoint _________________ attorney to transfer
such Warrant on the books of the Company, with full power of substitution.

                                               Dated:
                                                     --------------------------

                                               By:
                                                  -----------------------------
                                                   Signature

         The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Warrant in every particular, without alteration
or enlargement or any change whatsoever.

<PAGE>

To:      BiznessOnline.com, Inc.

                              ELECTION TO EXERCISE

         The undersigned hereby exercises his or its rights to purchase _______
Warrant Shares covered by the within Warrant and tenders payment herewith in the
amount of $_________ in accordance with the terms thereof, and requests that
certificates for such securities be issued in the name of, and delivered to:

____________________________________________

____________________________________________

____________________________________________

(Print Name, Address and Social Security
or Tax Identification Number)

and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.

                                            Dated:
                                                  ----------------------

                                            By:
                                               --------------------------------
                                               Print Name

                                               --------------------------------
                                               Signature

Address:

__________________________________________

__________________________________________

__________________________________________

<PAGE>

To:      BiznessOnline.com, Inc.

                             CASHLESS EXERCISE FORM
            (To be executed upon conversion of the attached Warrant)

         The undersigned hereby irrevocably elects to surrender its Warrant for
the number of shares of Common Stock as shall be issuable pursuant to the
cashless exercise provisions of the within Warrant, in respect of __________
shares of Common Stock underlying the within Warrant, and requests that
certificates for such securities be issued in the name of and delivered to:

-----------------------------------------------------------------------------

-----------------------------------------------------------------------------

-----------------------------------------------------------------------------
                    (Print Name, Address and Social Security
                          or Tax Identification Number)

and, if such number of shares shall not be all the shares exchangeable or
purchasable under the within Warrant, that a new Warrant for the balance of the
Warrant Shares covered by the within Warrant be registered in the name of, and
delivered to, the undersigned at the addressed stated below.

Dated: _________________________            Name _____________________________
                                                     (Print)

Address: _____________________________________________________________

                                              ________________________________
                                                (Signature)Prepared by MERRILL CORPORATION www.edgaradvantage.com

QuickLinks
 -- Click here to rapidly navigate through this document
 

  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. 

2

    "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. 

3

     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 

4

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 

5

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 

6

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 

7

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. 

8

    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 

9

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 

10

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 

11

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, 

12

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. 

13

QuickLinks

INTERACTIVE INTELLIGENCE, INC. 1999 STOCK OPTION AND INCENTIVE PLAN (Restated to reflect all amendments adopted through February 22, 2000)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}]]