EXHIBIT 10.55
 
 
REGISTRATION RIGHTS AGREEMENT
 
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of August 5, 2010, by and among Communication Intelligence Corporation, a
Delaware corporation (the “Company”) and the persons executing this Agreement as
Investors (collectively, the “Investors” and each individually, an “Investor”).
 
WHEREAS, the Company and the other parties hereto wish to provide certain
arrangements with respect to the registration of shares of common stock, $.01
par value, of the Company (the “Common Stock”) under the Securities Act (as
defined below);
 
WHEREAS, the Company and certain of the Investors have entered into a Series B
Preferred Stock Purchase Agreement, dated June 21, 2010 (the “Purchase
Agreement”), pursuant to which, subject to the terms and conditions therein, the
Company is issuing and selling to such Investors, and such Investors are
purchasing from the Company, an aggregate of up to 2,000,000 shares of the
Company’s Series B Participating Convertible Preferred Stock, par value $0.01
per share (the “Series B Preferred Stock”);
 
WHEREAS, the Company and certain of the Investors have entered into an Exchange
Agreement, dated June 21, 2010 (the “Exchange Agreement”), pursuant to which,
subject to the terms and conditions therein, such Investors are converting and
exchanging all of the outstanding indebtedness of the Company under the Credit
Agreement for, and the Company is issuing, shares of Series B Preferred Stock;
 
WHEREAS, it is a condition to the obligations of the Investors under the
Purchase Agreement and the Exchange Agreement that this Agreement be executed by
the parties hereto, and the parties are willing to execute this Agreement and to
be bound by the provisions hereof.
 
NOW THEREFORE, for good and valuable consideration; the receipt and sufficiency
of which is hereby acknowledged by the parties, the parties hereby agree as
follows:
 
1. Certain Definitions
 
. As used in this Agreement, the following terms shall have the following
respective meanings:
 
“Certificate of Designation” shall mean the Certificate of Designation setting
forth the rights, preferences and privileges of the Series B Preferred Stock,
filed with the Secretary of State of the State of Delaware in accordance with
the Purchase Agreement.
 
“Commission” shall mean the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act.
 
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
 
“Investor Permitted Transferee” shall mean any affiliate of an Investor or any
entity or investment vehicle, including a partnership, in which an Investor
and/or its affiliates has a majority economic interest or which is managed by an
Investor or any of its affiliates.
 
 
 

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EXHIBIT 10.55
 
“Preferred Shares” shall mean shares of Series B Preferred Stock issued to the
Investors pursuant to the Exchange Agreement or the Purchase Agreement, or by
way of a stock dividend, stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization.
 
“Registration Expenses” shall mean the expenses so described in Section 5.
 
“Registrable Stock” shall mean (a) any shares of Common Stock issued or issuable
upon conversion of the Series B Preferred Stock owned by the Investors at any
time, and (b) any shares of Common Stock issued or issuable with respect to any
shares described in subsection (a) above by way of a stock dividend, stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization, but excluding such shares of Common Stock
which have been (i) registered under the Securities Act pursuant to an effective
registration statement filed thereunder and disposed of in accordance with the
registration statement covering them or (ii) publicly sold pursuant to Rule 144
under the Securities Act.
 
“Rule 144” shall mean Rule 144 promulgated under the Securities Act or any
successor rule thereto or any complementary rule thereto (such as Rule 144A).
 
“Securities Act” shall mean the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
 
“Selling Expenses” shall mean the expenses so described in Section 5.
 
2. Demand Registration Rights.  (a)           At any time following the closing
of the transactions contemplated by the Purchase Agreement and the Exchange
Agreement, the holders of Registrable Stock constituting at least one-third
(1/3) of the total shares of Registrable Stock then outstanding may request the
Company to register under the Securities Act all or any portion of the shares of
Registrable Stock held by such requesting holder or holders for sale in the
manner specified in such notice, provided that the aggregate offering price, as
such amount is determined on the cover page of the registration statement, shall
not be less than $2,000,000.  Such request shall specify the intended method of
disposition thereof by such holder or holders, including (i) the registration
requested is for an underwritten offering and (ii) if the Company is eligible
for registration on Form S-3, whether the registration statement covering such
Registrable Stock shall be a “shelf” and provide for the sale by the holder or
holders thereof of the Registrable Stock from time to time on a delayed or
continuous basis under Rule 415 under the Securities Act. For purposes of this
Section 2 and Sections 5, 9(a) and 9(d), the term “Registrable Stock” shall be
deemed to include the number of shares of Registrable Stock which have been
issued to or would be issuable to a holder of Preferred Shares upon conversion
of all Preferred Shares held by such holder at such time, provided, however,
that the only securities which the Company shall be required to register
pursuant hereto shall be shares of Common Stock, and provided, further, however,
that, in any underwritten public offering contemplated by this Section 2 or
Section 3, the holders of Preferred Shares shall be entitled to sell such
Preferred Shares to the underwriters for conversion and sale of the shares of
Common Stock issued upon conversion thereof.  In the event that any registration
pursuant to this Section 2 shall be, in whole or in part, an underwritten public
offering of Common Stock, the number of shares of Registrable Stock to be
included in such an underwriting may be reduced (pro rata among the requesting
holders based upon the number of shares of Registrable Stock beneficially owned
by such holders) if and to the extent that the managing underwriter shall be of
the opinion that such inclusion would adversely affect the marketing of the
securities to be sold by the Company therein; provided, however, that such
number of shares of Registrable Stock shall not be reduced if any shares are to
be included in such underwriting for the account of any person other than
requesting holders of Registrable Stock.
 
 
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EXHIBIT 10.55
 
(b) Following receipt of any notice under this Section 2, the Company shall
immediately notify all holders of Registrable Stock from whom notice has not
been received and shall use all reasonable commercial efforts to register under
the Securities Act, for public sale in accordance with the method of disposition
specified in such notice from requesting holders, the number of shares of
Registrable Stock specified in such notice (and in all notices received by the
Company from other holders within 30 days after receiving of such notice by the
Company).  If such method of disposition shall be an underwritten public
offering, the holders of a majority of the shares of Registrable Stock to be
sold in such offering may designate the managing underwriter of such offering,
subject to the approval of the Company, which approval shall not be unreasonably
withheld or delayed.  The Investors shall have up to three (3) demand
registrations on Form S-1 or any successor thereof and up to four (4) demand
registrations on Form S-3 or any successor thereof pursuant to this Section 2,
provided, however, that the Company shall not be obligated to effect more than
two such registrations in any twelve month period, provided, further, that such
obligation shall be deemed satisfied only when a registration statement covering
all shares of Registrable Stock specified in notices received as aforesaid or
such lesser amount required by the Commission pursuant to a comment letter, for
sale in accordance with the method of disposition specified by the requesting
holders, shall have become effective and the holders requesting such
registration are able to register and sell at least seventy-five percent (75%)
of the Registrable Stock allowed by the Commission to be registered in such
registration and, if such method of disposition is a firm commitment
underwritten public offering, all such shares shall have been sold pursuant
thereto.
 
(c) The Company shall use its commercially reasonable efforts to qualify under
the provisions of the Securities Act for registration on Form S-3 or any
successor thereto. Promptly following the date on which the Company becomes
eligible for registration on Form S-3 or any successor thereto, the Company
shall notify the holders of the Registrable Stock.
 
(d) The Company may postpone for a period of up to 45 days the filing of any
registration requested pursuant to this Section 2 if the Board of Directors of
the Company in good faith determines that such registration would require the
public disclosure of any plan, proposal or agreement by the Company with respect
to any financing, acquisition, recapitalization, reorganization or other
material transaction, the disclosure of which would be materially adverse to the
Company, and such determination is evidenced by the affirmative vote of a
majority of the board and included in the minutes of the meetings of the
Company’s Board of Directors; provided, however, that the Company may not
exercise such right of postponement for an aggregate number of days greater than
60 during any 12-month period and shall not register any securities for its own
account or that of any other stockholder during such postponement period (except
with respect to registration statements on Forms S-4, S-8 or another form not
available for registering the Registrable Stock for sale to the public).  In
addition to the foregoing, if any registration request under this Section 2 is
received at such time when the age of the Company’s audited financial statements
would become non-conforming under Rule 3-12 of Regulation S-X at the time the
Company is requested to file a registration statement pursuant to the terms
hereof, then the Company shall not be obligated to file any such registration
statement until the 10th day following the release of the Company’s audited
financial statements for the most recently completed fiscal
year.  Notwithstanding anything to the contrary herein, the Company shall not be
required to prepare audited financial statements to be filed in connection with
such registration statement for any period year except for a fiscal year ending
December 31.
 
 
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EXHIBIT 10.55
 
(e) The Company shall be entitled to include in any registration statement
referred to in this Section 2, for sale in accordance with the method of
disposition specified by the requesting holders, shares of Common Stock to be
sold by the Company for its own account (to the extent that the inclusion of
such shares by the Company shall not adversely affect the offering), and shall
not be entitled to include shares held by any persons other than the holders of
Registrable Stock.
 
3. Piggyback Registration Rights
 
.  If the Company at any time (other than pursuant to Section 2) proposes to
register any of its securities under the Securities Act for sale to the public,
whether for its own account or for the account of other security holders or both
(except with respect to registration statements on Forms S-4, S-8 or another
form not available for registering the Registrable Stock for sale to the
public), each such time it will give prompt written notice to all holders of
outstanding Registrable Stock of its intention to do so. Upon the written
request of any such holder, received by the Company within 30 days after the
giving of any such notice by the Company, to register any of its Registrable
Stock, the Company will use its best efforts to cause the Registrable Stock as
to which registration shall have been so requested to be included in the
securities to be covered by the registration statement proposed to be filed by
the Company, all to the extent required to permit the sale or other disposition
by the holder of such Registrable Stock so registered. In the event that any
registration pursuant to this Section 3 shall be, in whole or in part, an
underwritten public offering of Common Stock, the number of shares of
Registrable Stock to be included in such an underwriting may be reduced if and
to the extent that the managing underwriter shall be of the opinion that such
inclusion would adversely affect the marketing of the securities to be sold by
the Company therein. In the event that the managing underwriter on behalf of all
underwriters limits the number of shares to be included in a registration
pursuant to this Section 3, or shall otherwise require a limitation of the
number of shares to be included in the registration, then the Company will
include in such registration:
 
(i) first, securities proposed by the Company to be sold for its own account;
 
(ii) second, shares of Registrable Stock requested to be included by holders
pursuant to this Section 3; and
 
(iii) third, securities requested to be included by any other holders,
 
 
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EXHIBIT 10.55
 
provided, however, that such number of shares of Registrable Stock shall not be
reduced if any shares are to be included in such underwriting for the account of
any person other than the Company or requesting holders of Registrable Stock and
provided further, that in no event shall the Registrable Stock requested to be
included by holders pursuant to this Section 3 constitute less than thirty
percent (30%) of all shares to be registered in such registration (in such
event, the Company agrees to reduce the shares of Common Stock it proposes to
register for its own account or the account of holders initially requesting or
demanding registration in order to assure that such Registrable Stock constitute
at least thirty percent (30%) of the shares to be registered).  The securities
to be included in any such registration pursuant to clause (ii) above shall be
allocated on a pro rata basis among the requesting holders based upon the number
of shares of Registrable Stock then held by such holders. Notwithstanding the
foregoing provisions, the Company may withdraw any registration statement
referred to in this Section 3 without thereby incurring any liability to the
holders of Registrable Stock.
 
4. Registration Procedures
 
.  If and whenever the Company is required by the provisions of Sections 2 or 3
to use its reasonable best efforts to effect the registration of any shares of
Registrable Stock under the Securities Act, the Company will, as expeditiously
as possible:
 
(a) prepare and promptly, and in any event within 45 days after the request for
registration has been delivered to the Company, file with the Commission a
registration statement with respect to such securities and use reasonable best
efforts to cause such registration statement to become and remain effective for
the period of the distribution contemplated thereby (determined as hereinafter
provided) or in the case of a registration requested to be a “shelf”, for as
long as requested to the extent permitted by applicable law;
 
(b) prepare and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for the period specified
in paragraph (a) above and comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Stock covered by such registration
statement in accordance with the sellers’ intended method of disposition set
forth in such registration statement for such period;
 
(c) furnish to each seller of Registrable Stock and to each underwriter such
number of copies of the registration statement and the prospectus included
therein (including each preliminary prospectus) as such persons reasonably may
request in order to facilitate the public sale or other disposition of the
Registrable Stock covered by such registration statement;
 
(d) use its reasonable best efforts to register or qualify the Registrable Stock
covered by such registration statement under the securities or “blue sky” laws
of such jurisdictions as the sellers of Registrable Stock or, in the case of an
underwritten public offering, the managing underwriter reasonably shall request,
provided, however, that the Company shall not for any such purpose be required
to qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service of
process in any such jurisdiction;
 
(e) use its reasonable best efforts to list the Registrable Stock covered by
such registration statement with any securities exchange on which the Common
Stock of the Company is then listed;
 
 
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EXHIBIT 10.55
 
(f) provide a transfer agent and registrar for all such Registrable Stock not
later than the effective date of such registration statement;
 
(g) immediately notify each seller of Registrable Stock and each underwriter
under such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus contained in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing, and at the request of any such seller prepare and furnish to such
seller a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Stock, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing;
 
(h) if the offering is underwritten and at the request of any seller of
Registrable Stock, furnish on the date that Registrable Stock is delivered to
the underwriters for sale pursuant to such registration: (i) an opinion dated
such date of counsel representing the Company for the purposes of such
registration, addressed to the underwriters and to such seller, stating that
such registration statement has become effective under the Securities Act and
that (A) to the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the Securities Act, (B) the
registration statement, the related prospectus and each amendment or supplement
thereof comply as to form in all material respects with the requirements of the
Securities Act (except that such counsel need not express any opinion as to
financial statements or financial or statistical data contained therein) and
(C) to such other effects as reasonably may be requested by counsel for the
underwriters or by such seller or its counsel, and (ii) a letter dated such date
from the independent public accountants retained by the Company, addressed to
the underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to such registration as such underwriters or sellers reasonably may
request;
 
(i) use its reasonable best efforts to cooperate with the sellers in the
disposition of the Registrable Stock covered by such registration statement,
including without limitation in the case of an underwritten offering causing key
executives of the Company and its subsidiaries to participate under the
direction of the managing underwriter in a “road show” scheduled by such
managing underwriter in such locations and of such duration as in the judgment
of such managing underwriter are appropriate for such underwritten offering;
 
(j) in connection with the preparation and filing of each registration statement
registering Registrable Stock under the Securities Act, and before filing any
such registration statement or any other document in connection therewith, give
the participating holders and their underwriters, if any, and their respective
counsel and accountants, the opportunity to review and comment on such
registration statement, each prospectus included therein or filed with the
Commission, each amendment thereof or supplement thereto and any related
underwriting agreement or other document to be filed, and give each of the
aforementioned persons such access to its books and records, including all
financial and other records, pertinent corporate documents and properties of the
Company, and such opportunities to discuss the business of the Company with its
officers, directors and employees and the independent public accountants who
have certified its financial statements as shall be necessary, in the opinion of
such holders, underwriters, counsel or accountants, to conduct a reasonable
investigation within the meaning of the Securities Act; and
 
 
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EXHIBIT 10.55
 
(k) otherwise comply with the Securities Act, the Exchange Act and any other
applicable rules and regulations of the Commission, and make available to its
securities holders, as soon as reasonably practicable, an earning statement
covering the period of at least 12 months after the effective date of such
registration statement, which earning statement shall satisfy Section 11(a) of
the Securities Act and any applicable regulations thereunder, including
Rule 158.
 
For purposes of Sections 4(a) and 4(b) and of Section 2(d), the period of
distribution of Registrable Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Registrable Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Registrable Stock covered thereby and 120 days
after the effective date thereof or in the case of a registration requested to
be a “shelf”, for as long as requested to the extent permitted by applicable
law.
 
In connection with each registration hereunder, the sellers of Registrable Stock
will furnish to the Company in writing such information with respect to
themselves and the proposed distribution by them as reasonably shall be
necessary in order to assure compliance with federal and applicable state
securities laws.
 
In connection with each registration pursuant to Sections 2 or 3 covering an
underwritten public offering, the Company and each seller agree to enter into a
written underwriting agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company’s size and investment stature;
provided, however, that (i) the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of the
underwriters shall also be made to and for the benefit of such sellers of
Registrable Stock, (ii) no seller shall be required to make, and the Company
shall ensure that no underwriter requires any seller to make, any
representations and warranties to or agreements with any underwriter in a
registration effected pursuant to Sections 2 or 3 other than customary
representations, warranties and agreements relating to such seller’s title to
Registrable Stock and authority to enter into the underwriting agreement,
(iii) the liability of each seller of Registrable Stock respect of any
indemnification, contribution or other obligation of such seller of Registrable
Stock arising under such underwriting agreement (A) shall be limited to losses
arising out of or based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement, incorporated document or other such disclosure document or other
document or report, in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such seller of Registrable Stock
expressly for inclusion therein and (B) shall not in any event exceed an amount
equal to the net proceeds to such seller of Registrable Stock (after deduction
of all underwriters’ discounts and commissions) from the disposition of the
Registrable Securities disposed of by such seller of Registrable Stock pursuant
to such registration.
 
 
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EXHIBIT 10.55
 
5. Expenses
 
.  All expenses incurred by the Company in complying with Sections 4 and 5,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel and independent public accountants
for the Company, fees and expenses (including counsel fees) incurred in
connection with complying with state securities or “blue sky” laws, fees of the
Financial Industry Regulatory Authority, fees of transfer agents and registrars,
costs of insurance and reasonable fees and disbursements of one counsel for the
sellers of Registrable Stock, but excluding any Selling Expenses, are called
“Registration Expenses.” All underwriting discounts and selling commissions
applicable to the sale of Registrable Stock are called “Selling Expenses.”
 
The Company will pay all Registration Expenses in connection with each
registration statement under Sections 2 or 3. All Selling Expenses in connection
with each registration statement under Sections 2 or 3 shall be borne by the
participating sellers in proportion to the number of shares sold by each, or by
such participating sellers as they may agree.
 
6. Indemnification and Contribution
 
.  (a)  In the event of a registration of any of the Registrable Stock under the
Securities Act pursuant to Sections 2 or 3, the Company will indemnify and hold
harmless each seller of Registrable Stock thereunder, each underwriter of such
Registrable Stock thereunder, the managers, members, partners, officers,
directors, agents, advisors and employees of each of them (collectively, the
“Representatives”) and each other person, if any, who controls or is alleged to
control such seller or underwriter within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, settlement amounts paid,
fines, costs (including, without limitation, attorneys’ fees) (individually, a
“Loss” and collectively, the “Losses”), joint or several, to which such seller,
underwriter, controlling person or their respective Representatives may become
subject under the Securities Act or otherwise, insofar as such Losses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any registration
statement under which such Registrable Stock were registered under the
Securities Act pursuant to Sections 2 or 3, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or arises out of or are based upon any violation or
alleged violation of any federal, state or other law, rule or regulation
relating to any action or inaction in connection therewith, and will reimburse
each such seller, each such underwriter and each such controlling person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Loss or action, provided, however, that the
Company will not be liable to any such indemnitee if and to the extent that any
such Loss arises solely out of or is based solely upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information with respect to such indemnitee furnished by such indemnitee in
writing specifically for use in such registration statement or prospectus.  The
indemnification and contribution obligations of the Company contained in this
Section 6 shall remain in full force and effect regardless of any investigation
made by or on behalf of such indemnified person and shall survive any transfer
of Registrable Stock.
 
 
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EXHIBIT 10.55
 
(b) In the event of a registration of any of the Registrable Stock under the
Securities Act pursuant to Sections 2 or 3, each seller of such Registrable
Stock thereunder, severally and not jointly, will indemnify and hold harmless
the Company, each person, if any, who controls the Company within the meaning of
the Securities Act, each officer of the Company who signs the registration
statement, each director of the Company, each underwriter and each person who
controls any underwriter within the meaning of the Securities Act, against all
Losses, joint or several, to which the Company or such officer, director,
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such Losses (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which such
Registrable Stock was registered under the Securities Act pursuant to Sections 2
or 3, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such Loss, provided, however,
that such seller will be liable hereunder in any such case if and only to the
extent that any such Loss arises solely out of or is based solely upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with information pertaining to such seller, as
such, furnished in writing to the Company by such seller specifically for use in
such registration statement or prospectus, and provided, further, however, that
the liability of each seller hereunder shall be limited to the proportion of any
such Loss which is equal to the proportion that the public offering price of the
shares sold by such seller under such registration statement bears to the total
public offering price of all securities sold thereunder, but not in any event to
exceed the net proceeds received by such seller from the sale of Registrable
Stock covered by such registration statement (after deduction of all
underwriters’ discounts and commissions and all other expenses and damages paid
by such seller in connection with the registration in question). Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Company or any such director, officer, underwriter or
controlling person and shall survive any transfer of Registrable Stock.
 
(c) Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the
indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 6 and shall only relieve it
from any liability which it may have to such indemnified party under this
Section 6 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 6 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected, provided,
however, that, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or
 
 
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EXHIBIT 10.55
 
additional to those available to the indemnifying party or if the interests of
the indemnified party reasonably may be deemed to conflict with the interests of
the indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying party as incurred.  No indemnifying party, in the defense of any
such claim or litigation, shall, except with the consent of each indemnified
party, consent to entry of any judgment or enter into any settlement unless such
judgment or settlement includes as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation, includes only money damages
(as opposed to equitable relief) and does not include any statement as to the
fault or culpability of such indemnified party.
 
(d) In order to provide for just and equitable contribution to joint liability
under the Securities Act in any case in which either (i) any holder of
Registrable Stock exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 6 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 6 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling holder or any such controlling
person in circumstances for which indemnification is provided under this
Section 6; then, and in each such case, the Company and such holder will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportion so that such
holder is responsible for the portion represented by the percentage that the
aggregate public offering price of its Registrable Stock offered by the
registration statement bears to the aggregate public offering price of all
securities offered by such registration statement, and the Company is
responsible for the remaining portion; provided, however, that, in any such
case, (A) no such holder will be required to contribute any amount in excess of
the net proceeds received by it from the sale of all such Registrable Stock
offered by it pursuant to such registration statement (after deduction of all
underwriters’ discounts and commissions and all other damages and expenses paid
by such seller in connection with the registration in question); and (B) no
person or entity guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any
person or entity who was not guilty of such fraudulent misrepresentation.
 
7. Changes in Common Stock or Series B Preferred Stock.  If, and as often as,
there is any change in the Common Stock or the Series B Preferred Stock by way
of a stock split, stock dividend, combination or reclassification, or through a
merger, consolidation, reorganization or recapitalization, or by any other
means, appropriate adjustment shall be made in the provisions hereof so that the
rights and privileges granted hereby shall continue with respect to the Common
Stock or the Series B Preferred Stock as so changed.
 
 
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EXHIBIT 10.55
 
8. Rule 144 Reporting
 
.  With a view to making available the benefits of certain rules and regulations
of the Commission which may at any time permit the sale of the Registrable Stock
to the public without registration, the Company agrees to:
 
(a) make and keep public information available, as those terms are understood
and defined in Rule 144 under the Securities Act;
 
(b) use its reasonable best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
 
(c) furnish to each holder of Registrable Stock forthwith upon request a written
statement by the Company as to its compliance with the reporting requirements of
such Rule 144 and of the Securities Act and the Exchange Act, a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents so filed by the Company as such holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing such holder
to sell any Registrable Stock without registration.
 
9. Miscellaneous.
 
(a) Successors and Assigns.  All covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
(including without limitation transferees of any Preferred Shares or Registrable
Stock), whether so expressed or not, provided, however, that the rights
conferred herein on the holders of Preferred Shares or Registrable Stock to
require the registration of shares of Registrable Stock shall only inure to the
benefit of a transferee of Preferred Shares or Registrable Stock if (i) there is
transferred to such transferee shares representing at least five percent (5%) of
the outstanding shares of Registrable Stock (assuming the conversion of all
Preferred Shares into Registrable Stock) or (ii) such transferee is an Investor
Permitted Transferee or a partner, shareholder or affiliate of a party
hereto.  Transfer of registration rights to an Investor Permitted Transferee or
to a partner, member or shareholder of any Investor will be without restriction
as to minimum shareholding.  Any transferee to whom rights under this Agreement
are transferred shall (i) as a condition to such transfer, deliver to the
Company a written instrument by which such transferee agrees to be bound by the
obligations imposed upon holders under this Agreement to the same extent as if
such transferee were a holder under this Agreement and (ii) be deemed to be a
holder hereunder.
 
(b) Notices.  All notices, requests, consents and other communications hereunder
shall be in writing and shall be delivered by nationally recognized overnight
courier, mailed by certified or registered mail, return receipt requested, or
sent by facsimile, addressed as follows:
 
 
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EXHIBIT 10.55
 
(i) if to the Company or any Investor, at the address of such party set forth on
the signature pages to the Purchase Agreement or the Exchange Agreement, as the
case may be;
 
with copies (which shall not constitute notice) to:
 
Pillsbury Winthrop Shaw Pittman LLP
 
1540 Broadway
 
New York, New York 10036
 
Attention: Jonathan J. Russo, Esq.
 
Facsimile No.: (212) 858-1500
 
and
 
Davis Wright Tremaine LLP
 
1300 SW Fifth Avenue, Suite 2300
 
Portland, OR 97201
 
Attention: Michael C. Phillips, Esq.
 
Facsimile No.: (503) 778-5299
 
(ii) if to any subsequent holder of Preferred Shares, to it at such address as
may have been furnished to the Company in writing by such holder;
 
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Preferred Shares or
Registrable Stock) or to the holders of Preferred Shares or Registrable Stock
(in the case of the Company) in accordance with the provisions of this
paragraph.
 
(c) Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
conflict of law principles.
 
(d) Amendments, Waivers and Consents.  This Agreement may not be amended or
modified, and no provision hereof may be waived, without the written consent of
the Company and the holders of at least a majority of the outstanding shares of
Registrable Stock (assuming the conversion of all Preferred Shares into
Registrable Stock).  The Company shall deliver copies of such consent to any
holders who did not execute the same. Neither this Agreement, nor any provision
hereof, may be changed, waived, discharged or terminated orally or by course of
dealing, but only by an instrument in writing.
 
(e) No Waivers.  No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
 
 
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EXHIBIT 10.55
 
(f) Headings.  The headings of the Sections and paragraphs of this Agreement
have been inserted for convenience of reference only and do not constitute a
part of this Agreement.
 
(g) Counterparts.  This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Any person who, after the date hereof,
acquires shares of Preferred Stock shall become a party to this Agreement as a
“Investor” and a holder of “Registrable Stock” for all purposes hereunder, all
upon execution by such person and the Company of a counterpart of this
Agreement.
 
(h) Termination of Registration Rights.  The obligations of the Company to
register shares of Registrable Stock under Sections 2 or 3 shall terminate as to
each holder of Registrable Stock on the date such holder is not an Affiliate (as
defined in Rule 144 under the Securities Act) of the Company and such holder
owns less than one percent (1%) of the Company’s outstanding Common Stock (on an
converted basis).
 
(i) Additional Registration Rights.  The Company shall not grant to any
additional registration rights after the date hereof without the consent of the
Investors holding at least the majority of the Registrable Stock unless such
registrations rights are subordinate in all respects to the Investors’ rights
contained herein.
 
(j) Company Registration.  In the event that the registration requirements under
the Securities Act are amended or eliminated to accommodate a “Company
registration” or similar approach, this Agreement shall be deemed amended to the
extent necessary to reflect such changes and the intent of the parties hereto
with respect to the benefits and obligations of the parties, and in such
connection, the Company shall use its reasonable best efforts to provide holders
of Registrable Stock equivalent benefits to those provided under this Agreement.
 
(k) Cumulative Remedies.  None of the rights, powers or remedies conferred upon
the Investors on the one hand or the Company on the other hand shall be mutually
exclusive, and each such right, power or remedy shall be cumulative and in
addition to every other right, power or remedy, whether conferred by this
Agreement or now or hereafter available at law, in equity, by statute or
otherwise.  In addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, each of the Investors and the
Company will be entitled to specific performance under this Agreement.  The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations contained in this Agreement
and hereby agrees to waive and not to assert in any action for specific
performance of any such obligation the defense that a remedy at law would be
adequate.
 
(l) Jurisdiction.  Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby shall be brought in any
federal or state court located in the County of New York in the State of New
York, and each of the parties hereby consents to the jurisdiction of such courts
(and of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit,
 
 
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EXHIBIT 10.55
 
action or proceeding which is brought in any such court has been brought in an
inconvenient forum.  Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court.  Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 9(b) (other
than by facsimile transmission) shall be deemed effective service of process on
such party.
 
(m) Waiver of Jury Trial.  TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, THE INVESTORS AND THE COMPANY HEREBY WAIVE, AND COVENANT THAT
NEITHER THE COMPANY NOR THE INVESTORS WILL ASSERT, ANY RIGHT TO TRIAL BY JURY ON
ANY ISSUE IN ANY PROCEEDING, WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE, IN
RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR
BASED UPON THIS AGREEMENT, ANY OTHER AGREEMENT OR THE SUBJECT MATTER HEREOF OR
THEREOF OR IN ANY WAY CONNECTED WITH, RELATED OR INCIDENTAL TO THE DEALINGS OF
THE INVESTORS AND THE COMPANY HEREUNDER OR THEREUNDER, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER IN TORT OR CONTRACT OR OTHERWISE. The
Company acknowledges that it has been informed by the Investors that the
provisions of this Section 9(m) constitute a material inducement upon which the
Investors are relying and will rely in entering into this Agreement. Any
Investor or the Company may file an original counterpart or a copy of this
Section 9(m) with any court as written evidence of the consent of the Investors
and the Company to the waiver of the right to trial by jury.
 
(n) Severability. If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
 
[Remainder of Page Intentionally Left Blank]
 

 
 
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EXHIBIT 10.55 

IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed as of the day and year first above written.
 

 
THE COMPANY

COMMUNICATION INTELLIGENCE CORPORATION

By:    /s/ Guido
DiGregorio                                                                       
Name: Guido Di Gregorio
Title:  CEO

Signature Page to Registration Rights Agreement
 
 

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EXHIBIT 10.55 

IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed as of the day and year first above written.
 

 
 
INVESTOR
 

 
By: [ SIGNATURES OMITTED ]
 

 
By:                                                                           
Name:
Title:
 

 
Signature Page to Registration Rights Agreement