THIS
SECURITY HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (OID). PURSUANT TO
TREASURY REGULATION §1.1275-3(b)(1), FRANCIS V. DANE, A REPRESENTATIVE OF THE
ISSUER HEREOF WILL, BEGINNING TEN DAYS AFTER THE ISSUE DATE OF THIS SECURITY,
PROMPTLY MAKE AVAILABLE TO THE HOLDER UPON REQUEST THE INFORMATION DESCRIBED IN
TREASURY REGULATION §1.1275-3(b)(1)(i). MR. DANE MAY BE REACHED AT TELEPHONE
NUMBER (650) 802-7737.




[FORM OF] SECURED PROMISSORY
NOTE






$[____________]




May 28,
2009                                                                                                     New
York, New York




FOR VALUE RECEIVED, COMMUNICATION
INTELLIGENCE CORPORATION (the “Borrower”),having an office at 275
Shoreline Drive, Suite 500, Redwood Shores, California 94065, hereby promises to
pay to the order of [_________________________] (the “Payee”), or its registered
assigns, the principal amount of [__________] Dollars and 00/100 ($[_________])
on December 31, 2010 (the “Maturity Date”).TheBorrower shall make
principal payments on this Secured Promissory Note (this “Note”) on or before the
Maturity Date in accordance with that certain Credit Agreement, dated as of June
5, 2008 (as it may be amended, supplemented or otherwise modified from time to
time, the “Credit
Agreement”; the terms defined therein and not otherwise defined herein
being used herein as therein defined), by and among the Borrower, the Lenders
party thereto, and SG Phoenix LLC, as Collateral Agent.




The
Borrower also promises to pay interest on the unpaid principal amount hereof,
from the date hereof until paid in full, at the rates and at the times which
shall be determined in accordance with the provisions of the Credit
Agreement.




This Note
is being executed and delivered by the Borrower to the Payee to evidence the
Loan made by the Payee to the Borrower pursuant to the Credit
Agreement.




This Note
is issued with a detachable Warrant evidencing the right initially to purchase a
number of shares of Common Stock of the Borrower equal to the principal amount
of this Note divided by 0.06, at an initial exercise price of Six Cents ($0.06)
per share.




This Note
is entitled to the benefits of the Credit Agreement and the Loan Documents,
including the Pledge and Security Agreement. This Note may be prepaid, in whole
or in part (together with interest accrued thereon at the time of such
prepayment), at any time.




All cash
payments of principal and interest in respect of this Note shall be made in
lawful money of the United States of America in same day funds to the Payee’s
account set forth in Section 1.5(a) of the
Credit Agreement (or any other account as may be designated by the Payee to the
Borrower in writing from time to time) and otherwise in accordance with the
provisions of the Credit Agreement. The Payee hereby agrees, by its acceptance
hereof, that, before











disposing
of this Note or any part hereof, it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest hereon has
been paid; provided
thatthe failure
to make a notation of any payment made on this Note shall not limit or otherwise
affect the obligations of the Borrower hereunder with respect to payments of
principal of or interest on this Note.




This Note
and all amounts payable hereunder are secured by a pledge of certain Collateral
and is entitled to the benefits of the Pledge and Security
Agreement.




Upon the
occurrence of an Event of Default, the unpaid balance of the principal amount of
this Note, together with all accrued and unpaid interest thereon, may become, or
may be declared to be, due and payable in the manner, upon the conditions and
with the effect provided inthe Credit
Agreement.




The
Borrower hereby waives demand, presentment, protest and notice of any kind and
consents to the extension of time of payments, the release, surrender or
substitution of any and all security or guarantees for the obligations evidenced
hereby or other indulgence with respect to this Note, all without notice and
agrees that no such extension or other indulgence, and no substitution, release
or surrender of collateral shall discharge or otherwise affect the liability of
the Borrower. No delay or omission on the part of the Payee in exercising any
right hereunder shall operate as a waiver of such right or of any other right
hereunder, and a waiver of any such right on any one occasion shall not be
construed as a bar to or waiver of any such right on any future
occasion.




This Note
and the rights and obligations of the Borrower and the Payee hereunder shall be
governed by and construed in accordance with the laws of the State of New York.
The Borrower hereby irrevocably consents to the jurisdiction of any state or
federal court located in New York, New York.




In the
event of any litigation with respect to the obligations evidenced by this Note,
the Borrower WAIVES THE RIGHT TO A TRIAL BY JURY and all rights of setoff and
rights to interpose permissive counterclaims and cross claims. The Borrower
further agrees to pay the Payee for the costs and expenses of enforcement and
collection of this Note, including attorneys’ fees and expenses and court costs.
All such costs and expenses shall be immediately due and payable.




The terms
of this Note are subject to amendment only in the manner provided in the Credit
Agreement.




This Note
shall be binding upon the successors, assigns and legal representatives of the
Borrower and inure to the benefit of the Payee, its successors, endorsees,
assigns and legal representatives.




If any
term or provision of this Note shall be held invalid, illegal or unenforceable,
the validity of all other terms and provisions hereof shall in no way be
affected thereby.




This Note
is a full recourse obligation of the Borrower and is not limited to the
Collateral.








[Signature page
follows.]


2




IN
WITNESS WHEREOF, theBorrower has executed
this Secured Promissory Note as of the date first written above.





COMMUNICATION
INTELLIGENCE CORPORATION





By:Name:Title: