Exhibit 10.36

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD,
TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
RECEIPT BY THE MAKER OF AN OPINION OF COUNSEL IN THE FORM, SUBSTANCE AND SCOPE
REASONABLY SATISFACTORY TO THE MAKER THAT THIS NOTE MAY BE SOLD, TRANSFERRED, OR
OTHERWISE DISPOSED OF, UNDER AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND
SUCH STATE SECURITIES LAWS.

COMMUNICATION INTELLIGENCE CORPORATION

Non-Negotiable Promissory Note

due          , 200x

Dated: August      , 2006

 

$XXX

 

For value received, Communication Intelligence Corporation, a Delaware
corporation (the “Maker”), hereby promises to pay to the order of
                           (together with its successors, representatives, and
permitted assigns, the “Holder”), in accordance with the terms hereinafter
provided, the principal amount of up to                            Dollars
($                ), together with interest thereon.  This Note is being issued
pursuant to a Note and Warrant Purchase Agreement of even date herewith.

1.             Payments.  All payments under or pursuant to this Note shall be
made in United States Dollars in immediately available funds to the Holder at
such address as the Holder may designate from time to time in writing to the
Maker (which shall initially be the address set forth for Maker in Section 11)
or by wire transfer of funds to the Holder’s account, instructions for which are
attached hereto as Exhibit A.  The outstanding principal balance of this Note,
plus all accrued but unpaid interest, shall be due and payable on           ,
200X (the “Maturity Date”) or at such earlier time as provided herein.

2.             Note and Warrant Purchase Agreement.  This Note has been executed
and delivered pursuant to the Note and Warrant Purchase Agreement dated as of
August     , 2006 (the “Purchase Agreement”) by and between the Maker and the
Holder.  Capitalized terms used and not otherwise defined herein shall have the
meanings set forth for such terms in the Purchase Agreement.

3.             INTEREST; PAYMENT OF INTEREST.  BEGINNING ON THE ISSUANCE DATE OF
THIS NOTE (THE “ISSUANCE DATE”), THE OUTSTANDING PRINCIPAL BALANCE OF THIS NOTE
SHALL BEAR INTEREST, IN ARREARS, AT A RATE PER ANNUM EQUAL TO FIFTEEN PERCENT
(15%).  INTEREST SHALL BE COMPUTED ON THE BASIS OF A 360-DAY YEAR OF TWELVE (12)
30-DAY MONTHS AND SHALL ACCRUE COMMENCING ON THE ISSUANCE DATE. ACCRUED INTEREST
SHALL BE PAYABLE QUARTERLY IN ARREARS.

4.             TRANSFER.  THIS NOTE MAY NOT BE TRANSFERRED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE GRANTED AS SECURITY BY THE HOLDER.

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5.             REPLACEMENT.  UPON RECEIPT OF A DULY EXECUTED, NOTARIZED AND
UNSECURED WRITTEN STATEMENT FROM THE HOLDER WITH RESPECT TO THE LOSS, THEFT OR
DESTRUCTION OF THIS NOTE (OR ANY REPLACEMENT HEREOF), AND WITHOUT REQUIRING AN
INDEMNITY BOND OR OTHER SECURITY, OR, IN THE CASE OF A MUTILATION OF THIS NOTE,
UPON SURRENDER AND CANCELLATION OF SUCH NOTE, THE MAKER SHALL ISSUE A NEW NOTE,
OF LIKE TENOR AND AMOUNT, IN LIEU OF SUCH LOST, STOLEN, DESTROYED OR MUTILATED
NOTE.

6.             EVENTS OF DEFAULT; REMEDIES.  THE OCCURRENCE OF ANY OF THE
FOLLOWING EVENTS SHALL BE AN “EVENT OF DEFAULT” UNDER THIS NOTE:

6.1.                  THE MAKER SHALL FAIL TO MAKE THE PAYMENT OF ANY AMOUNT OF
PRINCIPAL OUTSTANDING ON THE MATURITY DATE HEREUNDER; OR

6.2.                  THE MAKER SHALL FAIL TO MAKE ANY PAYMENT OF ACCRUED
INTEREST WHEN DUE HEREUNDER; OR

6.3.                  DEFAULT SHALL BE MADE IN THE PERFORMANCE OR OBSERVANCE OF
ANY MATERIAL COVENANT, CONDITION OR AGREEMENT CONTAINED IN THIS NOTE OR THE
PURCHASE AGREEMENT AND SUCH DEFAULT IS NOT FULLY CURED WITHIN TEN (10) DAYS
AFTER THE OCCURRENCE THEREOF; OR

6.4.                  ANY MATERIAL REPRESENTATION OR WARRANTY MADE BY THE MAKER
HEREIN OR IN THE PURCHASE AGREEMENT SHALL PROVE TO HAVE BEEN FALSE OR INCORRECT
OR BREACHED IN A MATERIAL RESPECT ON THE DATE AS OF WHICH MADE; OR

6.5.                  THE MAKER SHALL (I) APPLY FOR OR CONSENT TO THE
APPOINTMENT OF, OR THE TAKING OF POSSESSION BY, A RECEIVER, CUSTODIAN, TRUSTEE
OR LIQUIDATOR OF ITSELF OR OF ALL OR A SUBSTANTIAL PART OF ITS PROPERTY OR
ASSETS, (II) MAKE A GENERAL ASSIGNMENT FOR THE BENEFIT OF ITS CREDITORS, (III)
COMMENCE A VOLUNTARY CASE UNDER THE UNITED STATES BANKRUPTCY CODE (AS NOW OR
HEREAFTER IN EFFECT) OR UNDER THE COMPARABLE LAWS OF ANY JURISDICTION (FOREIGN
OR DOMESTIC), (IV) FILE A PETITION SEEKING TO TAKE ADVANTAGE OF ANY BANKRUPTCY,
INSOLVENCY, MORATORIUM, REORGANIZATION OR OTHER SIMILAR LAW AFFECTING THE
ENFORCEMENT OF CREDITORS’ RIGHTS GENERALLY, (V) ACQUIESCE IN WRITING TO ANY
PETITION FILED AGAINST IT IN AN INVOLUNTARY CASE UNDER UNITED STATES BANKRUPTCY
CODE (AS NOW OR HEREAFTER IN EFFECT) OR UNDER THE COMPARABLE LAWS OF ANY
JURISDICTION (FOREIGN OR DOMESTIC), (VI) ISSUE A NOTICE OF BANKRUPTCY OR WINDING
DOWN OF ITS OPERATIONS OR ISSUE A PRESS RELEASE REGARDING SAME, OR (VII) TAKE
ANY ACTION UNDER THE LAWS OF ANY JURISDICTION (FOREIGN OR DOMESTIC) ANALOGOUS TO
ANY OF THE FOREGOING; OR

6.6.                  A PROCEEDING OR CASE SHALL BE COMMENCED IN RESPECT OF THE
MAKER, WITHOUT ITS APPLICATION OR CONSENT, IN ANY COURT OF COMPETENT
JURISDICTION, SEEKING (I) THE LIQUIDATION, REORGANIZATION, MORATORIUM,
DISSOLUTION, WINDING UP, OR COMPOSITION OR READJUSTMENT OF ITS DEBTS, (II) THE
APPOINTMENT OF A TRUSTEE, RECEIVER, CUSTODIAN, LIQUIDATOR OR THE LIKE OF IT OR
OF ALL OR ANY SUBSTANTIAL PART OF ITS ASSETS IN CONNECTION WITH THE LIQUIDATION
OR DISSOLUTION OF THE MAKER OR (III) SIMILAR RELIEF IN RESPECT OF IT UNDER ANY
LAW PROVIDING FOR THE RELIEF OF DEBTORS, AND SUCH PROCEEDING OR CASE DESCRIBED
IN CLAUSE (I), (II) OR (III) SHALL CONTINUE UNDISMISSED, OR UNSTAYED AND IN
EFFECT, FOR A PERIOD OF SIXTY (60) DAYS OR ANY ORDER FOR RELIEF SHALL BE ENTERED
IN AN INVOLUNTARY CASE UNDER UNITED STATES BANKRUPTCY CODE (AS NOW OR HEREAFTER
IN EFFECT) OR UNDER THE COMPARABLE LAWS OF ANY JURISDICTION (FOREIGN OR
DOMESTIC) AGAINST THE MAKER OR ACTION UNDER THE LAWS OF ANY JURISDICTION
(FOREIGN OR DOMESTIC) ANALOGOUS TO ANY OF THE FOREGOING SHALL BE TAKEN

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WITH RESPECT TO THE MAKER AND SHALL CONTINUE UNDISMISSED, OR UNSTAYED AND IN
EFFECT FOR A PERIOD OF SIXTY (60) DAYS.

7.             REMEDIES UPON AN EVENT OF DEFAULT.  IF AN EVENT OF DEFAULT SHALL
HAVE OCCURRED AND SHALL BE CONTINUING, THE HOLDER OF THIS NOTE MAY AT ANY TIME
AT ITS OPTION DECLARE THE ENTIRE UNPAID PRINCIPAL BALANCE OF THIS NOTE, TOGETHER
WITH ALL INTEREST ACCRUED THEREON, DUE AND PAYABLE, AND THEREUPON, THE SAME
SHALL BE ACCELERATED AND SO DUE AND PAYABLE, WITHOUT PRESENTMENT, DEMAND,
PROTEST, OR NOTICE, ALL OF WHICH ARE HEREBY WAIVED BY THE MAKER.  NO COURSE OF
DELAY ON THE PART OF THE HOLDER SHALL OPERATE AS A WAIVER THEREOF OR OTHERWISE
PREJUDICE THE RIGHT OF THE HOLDER.  NO REMEDY CONFERRED HEREBY SHALL BE
EXCLUSIVE OF ANY OTHER REMEDY REFERRED TO HEREIN OR NOW OR HEREAFTER AVAILABLE
AT LAW, IN EQUITY, BY STATUTE OR OTHERWISE.

8.             PREPAYMENT.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
HEREIN, THE MAKER SHALL HAVE THE RIGHT, AT SUCH MAKER’S OPTION, TO PREPAY ANY
AMOUNTS DUE HEREUNDER, INCLUDING THE ENTIRE UNPAID PRINCIPAL OR ANY PARTIAL
AMOUNT THEREOF AND ANY ACCRUED BUT UNPAID INTEREST, AT ANY TIME PRIOR TO THE
MATURITY DATE, WITH NO PREPAYMENT PENALTIES.

9.             No Rights as Shareholder.  Nothing contained in this Note shall
be construed as conferring upon the Holder the right to vote or to receive
dividends or to consent or to receive notice as a shareholder in respect of any
meeting of shareholders for the election of directors of the Maker or of any
other matter, or any other rights as a shareholder of the Maker.

10.           Notices.  Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the business day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (ii) upon actual receipt by the party to whom such notice is
required to be given.  The address for such notices and communications shall be
as follows:

If to the Maker:

 

Communication Intelligence Corporation

 

 

275 Shoreline Drive, Suite 500

 

 

Redwood Shores, California 94065

 

 

Attention: Frank Dane

 

 

Tel. No.: (650) 802-7888

 

 

Fax No.: (650) 802-7777

with copies (which copies

 

 

shall not constitute notice

 

 

to Maker) to:

 

Davis Wright Tremaine LLP

 

 

1300 S.W. Fifth Ave., 23rd Floor

 

 

Portland, Oregon 97201

 

 

Attention: Michael C. Phillips, Esq.

 

 

Tel. No. (503) 241-2300

 

 

Fax No.: (503) 778-5299

 

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If to the Holder:                    [Insert name, address, phone and fax
number.

With a copy to:                    [Insert name, address, phone and fax number]

11.           GOVERNING LAW.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING
EFFECT TO ANY OF THE CONFLICTS OF LAW PRINCIPLES WHICH WOULD RESULT IN THE
APPLICATION OF THE SUBSTANTIVE LAW OF ANOTHER JURISDICTION.  THIS NOTE SHALL NOT
BE INTERPRETED OR CONSTRUED WITH ANY PRESUMPTION AGAINST THE PARTY CAUSING THIS
NOTE TO BE DRAFTED.

12.           HEADINGS.  ARTICLE AND SECTION HEADINGS IN THIS NOTE ARE INCLUDED
HEREIN FOR PURPOSES OF CONVENIENCE OF REFERENCE ONLY AND SHALL NOT CONSTITUTE A
PART OF THIS NOTE FOR ANY OTHER PURPOSE.

13.           REMEDIES.  THE REMEDIES PROVIDED IN THIS NOTE SHALL BE CUMULATIVE
AND IN ADDITION TO ALL OTHER REMEDIES AVAILABLE UNDER THIS NOTE, AT LAW OR IN
EQUITY, AND NO REMEDY CONTAINED HEREIN SHALL BE DEEMED A WAIVER OF COMPLIANCE
WITH THE PROVISIONS GIVING RISE TO SUCH REMEDY.

14.           ASSIGNMENT.  HOLDER MAY NOT ASSIGN ANY OF ITS RIGHTS OR
OBLIGATIONS UNDER THIS NOTE WITHOUT OBTAINING THE PRIOR WRITTEN CONSENT OF
MAKER.

15.           AMENDMENTS.  THIS NOTE MAY NOT BE MODIFIED OR AMENDED IN ANY
MANNER EXCEPT IN WRITING EXECUTED BY THE MAKER AND THE HOLDER.

16.           COMPLIANCE WITH SECURITIES LAWS.  THE HOLDER OF THIS NOTE
ACKNOWLEDGES THAT THIS NOTE IS BEING ACQUIRED SOLELY FOR THE HOLDER’S OWN
ACCOUNT AND NOT AS A NOMINEE FOR ANY OTHER PARTY, AND FOR INVESTMENT, AND THAT
THE HOLDER SHALL NOT OFFER, SELL OR OTHERWISE DISPOSE OF THIS NOTE.  THIS NOTE
AND ANY NOTE ISSUED IN SUBSTITUTION OR REPLACEMENT THEREFOR SHALL BE STAMPED OR
IMPRINTED WITH A LEGEND IN SUBSTANTIALLY THE FOLLOWING FORM:

“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR RECEIPT BY THE MAKER OF AN
OPINION OF COUNSEL IN THE FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO
THE MAKER THAT THIS NOTE MAY BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE
DISPOSED OF, UNDER AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND SUCH STATE
SECURITIES LAWS.”

17.           ATTORNEYS’ FEES AND EXPENSES.  EACH OF THE MAKER AND THE HOLDER
HEREBY AGREE THAT THE PREVAILING PARTY IN ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS NOTE SHALL BE ENTITLED TO REIMBURSEMENT FOR
REASONABLE LEGAL FEES (INCLUDING REASONABLY INCURRED ATTORNEYS’ FEES) AND COSTS
FROM THE NON-PREVAILING PARTY.

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18.           PARTIES IN INTEREST.  THIS NOTE SHALL BE BINDING UPON, INURE TO
THE BENEFIT OF, AND BE ENFORCEABLE BY THE MAKER, THE HOLDER AND THEIR RESPECTIVE
SUCCESSORS AND PERMITTED ASSIGNS.

19.           FAILURE OR INDULGENCE NOT WAIVER.  NO FAILURE OR DELAY ON THE PART
OF THE HOLDER IN THE EXERCISE OF ANY POWER, RIGHT OR PRIVILEGE HEREUNDER SHALL
OPERATE AS A WAIVER THEREOF, NOR SHALL ANY SINGLE OR PARTIAL EXERCISE OF ANY
SUCH POWER, RIGHT OR PRIVILEGE PRECLUDE OTHER OR FURTHER EXERCISE THEREOF OR OF
ANY OTHER RIGHT, POWER OR PRIVILEGE.

This Note has been delivered as of the date set forth at the top of the first
page hereof.

 

MAKER:

 

COMMUNICATION INTELLIGENCE CORPORATION

 

 

 

By:

 

 

 

Name: Frank Dane

 

Its: Chief Financial and Legal Officer

 

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EXHIBIT A

WIRE INSTRUCTIONS

Payee:

 

 

 

 

 

Bank:

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

Bank No.:

 

 

 

 

 

Account No.:

 

 

 

 

 

Account Name:

 

 

 

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