Exhibit 10.37


THIS WARRANT AND THE
SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE
SECURITIES LAWS OR COMMUNICATION INTELLIGENCE CORPORATION SHALL HAVE RECEIVED
AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES
ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.


WARRANT TO PURCHASE


SHARES OF COMMON STOCK


OF


COMMUNICATION INTELLIGENCE CORPORATION


Expires:                              ,
200X


	
  No.: W2006-    

  	
   

  	
  Number of Shares:                  

  
	
  Date of Issuance:
                               ,
  200X

  	
   

  	
   

  



 


FOR VALUE
RECEIVED, subject to the provisions hereinafter set forth, the undersigned,
Communication Intelligence Corporation, a Delaware corporation (together with
its successors and assigns, the “Issuer”), hereby certifies that                                                           
or its registered assigns is entitled to subscribe for and purchase, during the
Term (as hereinafter defined), up to                                                                                        
(                             )
shares (subject to adjustment as hereinafter provided) of the duly authorized,
validly issued, fully paid and non-assessable Common Stock of the Issuer, at an
exercise price per share equal to the Warrant Price then in effect, subject,
however, to the provisions and upon the terms and conditions hereinafter set
forth.  Capitalized terms used in this
Warrant and not otherwise defined herein shall have the respective meanings
specified in Section 8 hereof.


1.                                       Term.  The term of this Warrant shall commence on                     ,
200X [date of issuance, but no earlier than June 30,
2007] and shall expire at 5:00 p.m., eastern time, on               ,
200X [3 years after commencing date] (such
period being the “Term”).


2.                                       Method
of Exercise; Payment; Issuance of New Warrant; Transfer and Exchange.


(a)                                  Time
of Exercise.  The purchase rights
represented by this Warrant may be exercised in whole or in part at any time
during the Term.



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(b)                                 Method
of Exercise.  The Holder hereof may
exercise this Warrant, in whole or in part, by the surrender of this Warrant
(with the exercise form attached hereto duly executed) at the principal office
of the Issuer, and by the payment to the Issuer of an amount of consideration
therefor equal to the Warrant Price in effect on the date of such exercise
multiplied by the number of shares of Warrant Stock with respect to which this
Warrant is then being exercised, payable at such Holder’s election by certified
or official bank check or by wire transfer to an account designated by the
Issuer.


(c)                                  Issuance
of Stock Certificates.  In the event
of any exercise of the rights represented by this Warrant in accordance with
and subject to the terms and conditions hereof, (i) certificates for the shares
of Warrant Stock so purchased shall be dated the date of such exercise and
delivered to the Holder hereof within a reasonable time after such exercise,
and the Holder hereof shall be deemed for all purposes to be the holder of the
shares of Warrant Stock so purchased as of the date of such exercise and (ii)
unless this Warrant has expired, a new Warrant representing the number of
shares of Warrant Stock, if any, with respect to which this Warrant shall not
then have been exercised (less any amount thereof which shall have been
canceled in payment or partial payment of the Warrant Price as hereinabove
provided) shall also be issued to the Holder hereof at the Issuer’s expense
within such time.


(d)                                 Transferability
of Warrant.  Subject to Section 2(e),
this Warrant may be transferred by a Holder without the consent of the
Issuer.  If transferred pursuant to this
paragraph and subject to the provisions of Section 2(e), this Warrant may be
transferred on the books of the Issuer by the Holder hereof in person or by
duly authorized attorney, upon surrender of this Warrant at the principal
office of the Issuer, properly endorsed (by the Holder executing an assignment
in the form attached hereto) and upon payment of any necessary transfer tax or
other governmental charge imposed upon such transfer.  This Warrant is exchangeable at the principal
office of the Issuer for Warrants to purchase the same aggregate number of
shares of Warrant Stock, each new Warrant to represent the right to purchase
such number of shares of Warrant Stock as the Holder hereof shall designate at
the time of such exchange.  All Warrants
issued upon a transfer or exchange shall be dated the Original Issue Date and
shall be identical with this Warrant except as to the number of shares of
Warrant Stock issuable pursuant hereto.


(e)                                  Compliance
with Securities Laws.


(i)                                     The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant or
the shares of Warrant Stock to be issued upon exercise hereof, as applicable,
are being acquired for the Holder’s own account and not as a nominee for any
other party, and for investment, and that the Holder will not offer, sell or
otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon
exercise hereof, except pursuant to an effective registration statement, or an
exemption from registration, under the Securities Act and any applicable state
securities laws.


(ii)                                  Except
as provided in Section 2(e)(iii), this Warrant and all certificates
representing shares of Warrant Stock issued upon exercise hereof shall be
stamped or imprinted with a legend in substantially the following form:



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THIS WARRANT AND THE
SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE
SECURITIES LAWS OR COMMUNICATION INTELLIGENCE CORPORATION SHALL HAVE RECEIVED
AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES
ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.


(iii)                               The
Issuer agrees to reissue this Warrant or certificates representing any of the
Warrant Stock, without the legend set forth above if at such time, prior to
making any transfer of any such securities, the Holder shall give written
notice to the Issuer describing the manner and terms of such transfer and
removal as the Issuer may reasonably request. 
Such proposed transfer and removal will not be effected until: (a)
either (i) the Issuer has received an opinion of counsel reasonably
satisfactory to the Issuer, to the effect that the registration of such
securities under the Securities Act is not required in connection with such
proposed transfer, (ii) a registration statement under the Securities Act
covering such proposed disposition has been filed by the Issuer with the
Securities and Exchange Commission and has become effective under the
Securities Act, (iii) the Issuer has received other evidence reasonably
satisfactory to the Issuer that such registration and qualification under the
Securities Act and state securities laws are not required, or (iv) the Holder
provides the Issuer with reasonable assurances that such security can be sold
pursuant to Rule 144 under the Securities Act; and (b) either (i) the Issuer
has received an opinion of counsel reasonably satisfactory to the Issuer, to
the effect that registration or qualification under the securities or “blue sky”
laws of any state is not required in connection with such proposed disposition,
or (ii) compliance with applicable state securities or “blue sky” laws has been
effected or a valid exemption exists with respect thereto.  The Issuer will respond to any such notice
from the Holder within five (5) business days. 
In the case of any proposed transfer under this Section 2(e), the Issuer
will use reasonable best efforts to comply with any such applicable state
securities or “blue sky” laws, but shall in no event be required, (x) to
qualify to do business in any state where it is not then qualified, or (y) to
take any action that would subject it to tax or to the general service of
process in any state where it is not then subject.  The restrictions on transfer contained in
this Section 2(e) shall be in addition to, and not by way of limitation of, any
other restrictions on transfer contained in any other section of this
Warrant.  Whenever a certificate
representing the Warrant Stock is required to be issued to a the Holder without
a legend, in lieu of delivering physical certificates representing the Warrant
Stock, provided the Issuer’s transfer agent is participating in the DTC Fast
Automated Securities Transfer program, the Issuer shall use



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its reasonable
best efforts to cause its transfer agent to electronically transmit the Warrant
Stock to the Holder by crediting the account of the Holder’s Prime Broker with
DTC through DWAC (to the extent not inconsistent with any provisions of this
Warrant or the Purchase Agreement).


3.                                       Stock
Fully Paid; Reservation and Listing of Shares; Covenants.


(a)                                  Stock
Fully Paid.  The Issuer represents,
and warrants to the Holder, and covenants and agrees for the benefit of the
Holder that all shares of Warrant Stock which may be issued upon the exercise
of this Warrant or otherwise hereunder will, upon issuance, be duly authorized,
validly issued, fully paid and non-assessable and free from all taxes, liens,
charges or other encumbrances of any nature whatsoever created by or through
the Issuer.  The Issuer further covenants
and agrees that during the period within which this Warrant may be exercised,
the Issuer will at all times have authorized and reserved for the purpose of
the issue upon exercise of this Warrant a sufficient number of shares of Common
Stock to provide for the exercise of this Warrant.


(b)                                 Reservation.  If any shares of Common Stock required to be
reserved for issuance upon exercise of this Warrant or as otherwise provided
hereunder require registration or qualification with any governmental authority
under any federal or state law before such shares may be so issued, the Issuer
will in good faith use its best efforts at its expense to cause such shares to
be duly registered or qualified.  If the
Issuer shall list any shares of Common Stock on any securities exchange or
market it will, at its expense, list thereon, maintain and increase when
necessary such listing, of, all shares of Warrant Stock from time to time
issued upon exercise of this Warrant or as otherwise provided hereunder
(provided that such Warrant Stock has been registered pursuant to a
registration statement under the Securities Act then in effect), and, to the
extent permissible under the applicable securities exchange rules, all unissued
shares of Warrant Stock which are at any time issuable hereunder, so long as
any shares of Common Stock shall be so listed. 
The Issuer will also so list on each securities exchange or market, and
will maintain such listing of, any other securities which the Holder of this
Warrant shall be entitled to receive upon the exercise of this Warrant if at
the time any securities of the same class shall be listed on such securities
exchange or market by the Issuer.


(c)                                  Covenants.  The Issuer shall not by any action including,
without limitation, amending the Certificate of Incorporation or the by-laws of
the Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms or provisions
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of the Holder hereof against dilution (to the
extent specifically provided herein) or impairment.  Without limiting the generality of the
foregoing, the Issuer will (i) not permit the par value, if any, of its Common
Stock to exceed the then effective Warrant Price, (ii) not amend or modify any
provision of the Certificate of Incorporation or by-laws of the Issuer in any
manner that would adversely affect the rights of the Holder of this Warrant, (iii)
take all such action as may be reasonably necessary in order that the Issuer
may validly and legally issue fully paid and nonassessable shares of Common
Stock, free and clear of any liens, claims, encumbrances and



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restrictions
(other than as provided herein) upon the exercise of this Warrant, and (iv) use
its best efforts to obtain all such authorizations, exemptions or consents from
any public regulatory body having jurisdiction thereof as may be reasonably
necessary to enable the Issuer to perform its obligations under this Warrant.


(d)                                 Loss,
Theft, Destruction of Warrants.  Upon
receipt of evidence satisfactory to the Issuer of the ownership of and the
loss, theft, destruction or mutilation of any Warrant and, in the case of any
such loss, theft or destruction, upon receipt of indemnity or security
reasonably satisfactory to the Issuer or, in the case of any such mutilation,
upon surrender and cancellation of such Warrant, the Issuer will make and
deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new
Warrant of like tenor and representing the right to purchase the same number of
shares of Common Stock.


4.                                       Adjustment
of Warrant Price and Warrant Share Number. 
The number of shares of Common Stock for which this Warrant is exercisable,
and the price at which such shares may be purchased upon exercise of this
Warrant, shall be subject to adjustment from time to time as set forth in this
Section 4. The Issuer shall give the Holder notice of any event described below
which requires an adjustment pursuant to this Section 4 in accordance with
Section 5.


(a)                                  Recapitalization,
Reorganization, Reclassification, Consolidation, Merger or Sale.


(i)  In case the Issuer after the Original Issue
Date shall do any of the following (each, a “Triggering Event”): (a)
consolidate with or merge into any other Person and the Issuer shall not be the
continuing or surviving corporation of such consolidation or merger, or (b)
permit any other Person to consolidate with or merge into the Issuer and the
Issuer shall be the continuing or surviving Person but, in connection with such
consolidation or merger, any Capital Stock of the Issuer shall be changed into
or exchanged for Securities of any other Person or cash or any other property,
or (c) transfer all or substantially all of its properties or assets to any
other Person, or (d) effect a capital reorganization or reclassification of its
Capital Stock, then, and in the case of each such Triggering Event, proper
provision shall be made so that, upon the basis and the terms and in the manner
provided in this Warrant, the Holder of this Warrant shall be entitled upon the
exercise hereof at any time after the consummation of such Triggering Event, to
the extent this Warrant is not exercised prior to such Triggering Event, to
receive at the Warrant Price in effect at the time immediately prior to the
consummation of such Triggering Event in lieu of the Common Stock issuable upon
such exercise of this Warrant prior to such Triggering Event, the Securities,
cash and property to which such Holder would have been entitled upon the
consummation of such Triggering Event if such Holder had exercised the rights
represented by this Warrant immediately prior thereto, subject to adjustments
(subsequent to such corporate action) as nearly equivalent as possible to the
adjustments provided for elsewhere in this Section 4.


(ii)                                  Notwithstanding
anything contained in this Warrant to the contrary, a Triggering Event shall
not be deemed to have occurred if, prior to the consummation thereof, each
Person (other than the Issuer) which may be required to deliver any Securities,
cash or property upon the exercise of this Warrant as provided herein shall



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assume, by written
instrument delivered to, and reasonably satisfactory to, the Holder of this
Warrant, (A) the obligations of the Issuer under this Warrant (and if the
Issuer shall survive the consummation of such Triggering Event, such assumption
shall be in addition to, and shall not release the Issuer from, any continuing
obligations of the Issuer under this Warrant) and (B) the obligation to deliver
to such Holder such Securities, cash or property as, in accordance with the
foregoing provisions of this subsection (a), such Holder shall be entitled to
receive, and such Person shall have similarly delivered to such Holder an
opinion of counsel for such Person, which counsel shall be reasonably
satisfactory to such Holder, or in the alternative, a written acknowledgement
executed by the President or Chief Financial Officer of the Issuer, stating
that this Warrant shall thereafter continue in full force and effect and the
terms hereof (including, without limitation, all of the provisions of this
subsection (a)) shall be applicable to the Securities, cash or property which
such Person may be required to deliver upon any exercise of this Warrant or the
exercise of any rights pursuant hereto.


(b)                                 Stock
Dividends, Subdivisions and Combinations. 
If at any time the Issuer shall:


(i)                                     take
a record of the holders of its Common Stock for the purpose of entitling them
to receive a dividend payable in, or other distribution of, shares of Common
Stock,


(ii)                                  subdivide
its outstanding shares of Common Stock into a larger number of shares of Common
Stock, or


(iii)                               combine
its outstanding shares of Common Stock into a smaller number of shares of
Common Stock,


then (1) the
number of shares of Common Stock for which this Warrant is exercisable
immediately after the occurrence of any such event shall be adjusted to equal
the number of shares of Common Stock which a record holder of the same number
of shares of Common Stock for which this Warrant is exercisable immediately
prior to the occurrence of such event would own or be entitled to receive after
the happening of such event, and (2) the Warrant Price then in effect shall be
adjusted to equal (A) the Warrant Price then in effect multiplied by the number
of shares of Common Stock for which this Warrant is exercisable immediately
prior to the adjustment divided by (B) the number of shares of Common Stock for
which this Warrant is exercisable immediately after such adjustment.


(c)                                  Certain
Other Distributions.  If at any time
the Issuer shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive any divi­dend or other distribution of:


(i)                                     cash
(other than a cash dividend payable out of earnings or earned surplus legally
available for the payment of dividends under the laws of the jurisdiction of
incorporation of the Issuer),



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(ii)                                  any
evidences of its indebtedness, any shares of stock of any class or any other
securities or property of any nature whatsoever (other than cash, Common Stock
Equivalents or Additional Shares of Common Stock), or


(iii)                               any
warrants or other rights to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities or
property of any nature whatsoever (other than cash, Common Stock Equivalents or
Additional Shares of Common Stock),


then (1) the
number of shares of Common Stock for which this Warrant is exercisable shall be
adjusted to equal the product of the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to such adjustment multiplied by
a fraction (A) the numerator of which shall be the Per Share Market Value of
Common Stock at the date of taking such record and (B) the denominator of which
shall be such Per Share Market Value minus the amount allocable to one share of
Common Stock of any such cash so distributable and of the fair value (as
determined in good faith by the Board of Directors of the Issuer and supported
by an opinion from an investment banking firm of recognized national standing
acceptable to (but not affiliated with) the Holder) of any and all such
evidences of indebtedness, shares of stock, other securities or property or
warrants or other subscription or purchase rights so distributable, and (2) the
Warrant Price then in effect shall be adjusted to equal (A) the Warrant Price
then in effect multiplied by the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to the adjustment divided by (B)
the number of shares of Common Stock for which this Warrant is exercisable
immediately after such adjustment.  A
reclassification of the Common Stock (other than a change in par value, or from
par value to no par value or from no par value to par value) into shares of
Common Stock and shares of any other class of stock shall be deemed a
distribution by the Issuer to the holders of its Common Stock of such shares of
such other class of stock within the meaning of this Section 4(c) and, if the
outstanding shares of Common Stock shall be changed into a larger or smaller
number of shares of Common Stock as a part of such reclassification, such
change shall be deemed a subdivision or combination, as the case may be, of the
outstanding shares of Common Stock within the meaning of Section 4(b).


(d)                                 Fractional
Interests.  In computing ad­justments
under this Section 4, fractional interests in Common Stock shall be taken into
account to the near­est one one-hundredth (1/100th) of a share.


(e)                                  When
Adjustment Not Required.  If the
Issuer shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or distribution or subscription or
purchase rights and shall, thereafter and before the distribution to
stockholders thereof, legally abandon its plan to pay or deliver such dividend,
distribution, subscription or purchase rights, then thereafter no adjustment
shall be required by reason of the taking of such record and any such
adjustment previously made in respect thereof shall be rescinded and annulled.


(f)                                    Form
of Warrant after Adjustments.  The
form of this Warrant need not be changed because of any adjustments in the
Warrant Price or the number and kind of Securities purchasable upon the
exercise of this Warrant.



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(g)                                 Escrow
of Warrant Stock.  If after any
property becomes distributable pursuant to this Section 4 by reason of the
taking of any record of the holders of Common Stock, but prior to the
occurrence of the event for which such record is taken, and the Holder exer­cises
this Warrant, any shares of Common Stock issuable upon exercise by reason of
such adjustment shall be deemed the last shares of Common Stock for which this
Warrant is exercised (notwithstanding any other provision to the contrary
herein) and such shares or other property shall be held in escrow for the
Holder by the Issuer to be issued to the Holder upon and to the extent that the
event actually takes place, upon payment of the current Warrant Price.  Notwithstanding any other provision to the
contrary herein, if the event for which such record was taken fails to occur or
is rescinded, then such escrowed shares shall be cancelled by the Issuer and
escrowed property returned.


5.                                       Notice
of Adjustments.  Whenever the Warrant
Price or Warrant Share Number shall be adjusted pursuant to Section 4 hereof
(for purposes of this Section 5, each an “adjustment”), the Issuer shall cause
its Chief Financial Officer to prepare and execute a certificate setting forth,
in reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated (including a
description of the basis on which the Board made any determination hereunder),
and the Warrant Price and Warrant Share Number after giving effect to such
adjustment, and shall cause copies of such certificate to be delivered to the
Holder of this Warrant promptly after each adjustment.  Any dispute between the Issuer and the Holder
of this Warrant with respect to the matters set forth in such certificate may
at the option of the Holder of this Warrant be submitted to one of the national
accounting firms currently known as the “big four” selected by the Holder; provided
that the Issuer shall have ten (10) days after receipt of notice from such
Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer shall have no such right
of objection.  The firm selected by the
Holder of this Warrant as provided in the preceding sentence shall be
instructed to deliver a written opinion as to such matters to the Issuer and
such Holder within thirty (30) days after submission to it of such dispute.  Such opinion shall be final and binding on
the parties hereto.


6.                                       Fractional
Shares.  No fractional shares of
Warrant Stock will be issued in connection with any exercise hereof, but in
lieu of such fractional shares, the Issuer shall make a cash payment therefor
equal in amount to the product of the applicable fraction multiplied by the Per
Share Market Value then in effect.


7.                                       Definitions.  For the purposes of this Warrant, the
following terms have the following meanings:


“Additional Shares of
Common Stock” means all shares of Common Stock issued by the Issuer after
the Original Issue Date, and all shares of Other Common, if any, issued by the
Issuer after the Original Issue Date, except for Permitted Financings (as
defined in the Purchase Agreement) and the Other Warrants.


“Certificate of
Incorporation” means the Certificate of Incorporation of the Issuer as in
effect on the Original Issue Date, and as hereafter from time to time amended,



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modified, supplemented or restated in accordance with
the terms hereof and thereof and pursuant to applicable law.


“Board”
shall mean the Board of Directors of the Issuer.


“Capital Stock”
means and includes (i) any and all shares, interests, participations or other
equivalents of or interests in (however designated) corporate stock, including,
without limitation, shares of preferred or preference stock, (ii) all
partnership interests (whether general or limited) in any Person which is a
partnership, (iii) all membership interests or limited liability company
interests in any limited liability company, and (iv) all equity or ownership
interests in any Person of any other type.


“Common Stock”
means the Common Stock, par value $0.01 per share, of the Issuer and any other
Capital Stock into which such stock may hereafter be changed.


“Convertible
Securities” means evidences of Indebtedness, shares of Capital Stock or
other Securities which are or may be at any time convertible into or
exchangeable for Additional Shares of Common Stock.  The term “Convertible Security” means one of
the Convertible Securities.


“Governmental
Authority” means any governmental, regulatory or self-regulatory entity,
department, body, official, authority, commission, board, agency or
instrumentality, whether federal, state or local, and whether domestic or
foreign.


“Holder”
means the Person who holds this Warrant. 
The term “Holders” means one of the Persons who shall from time to time
hold this Warrant.


“Independent
Appraiser” means a nationally recognized or major regional investment
banking firm or firm of independent certified public accountants of recognized
standing (which may be the firm that regularly examines the financial
statements of the Issuer) that is regularly engaged in the business of
appraising the Capital Stock or assets of corporations or other entities as
going concerns, and which is not affiliated with either the Issuer or the
Holder of any Warrant.


“Issuer”
means Communication Intelligence Corporation, a Delaware corporation, and its
successors and assigns.


“Majority
Holders” means at any time the Holders of Warrants exercisable for a
majority of the shares of Warrant Stock issuable under the Warrants at the time
outstanding.


“Original Issue
Date” means              ,
200X.


“OTC Bulletin
Board” means the over-the-counter electronic bulletin board.



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“Other Common”
means any other Capital Stock of the Issuer of any class which shall be
authorized at any time after the date of this Warrant (other than Common Stock)
and which shall have the right to participate in the distribution of earnings
and assets of the Issuer without limitation as to amount.


“Other Warrants”
means the warrants to purchase shares of Common Stock issued to the other
Purchasers pursuant to the Purchase Agreement.


“Outstanding Common
Stock” means, at any given time, the aggregate amount of outstanding shares
of Common Stock, assuming full exercise, conversion or exchange (as applicable)
of all options, warrants and other Securities which are convertible into or
exercisable or exchangeable for, and any right to subscribe for, shares of
Common Stock that are outstanding at such time.


“Person” means an
individual, corporation, limited liability company, partnership, joint stock
company, trust, unincorporated organization, joint venture, Governmental
Authority or other entity of whatever nature.


“Per Share
Market Value” means on any particular date (a) the closing bid price for a
share of Common Stock in the over-the-counter market, as reported
by the OTC Bulletin Board or in the National Quotation Bureau Incorporated (or
similar organization or agency succeeding to its functions of reporting prices)
at the close of business on such date, or (b) if the Common Stock is not then
reported by the OTC Bulletin Board or the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions of
reporting prices), then the average of the “Pink Sheet” quotes for the relevant
conversion period, as determined in good faith by the Holder, or (c) if the
Common Stock is not then publicly traded the fair market value of a share of
Common Stock as determined by the Board in good faith; provided, however,
that the Majority Holders, after receipt of the determination by the Board,
shall have the right to select, jointly with the Issuer, an Independent
Appraiser, in which case, the fair market value shall be the determination by
such Independent Appraiser; and provided, further that all
determinations of the Per Share Market Value shall be appropriately adjusted
for any stock dividends, stock splits or other similar transactions during such
period.  The determination of fair market
value shall be based upon the fair market value of the Issuer determined on a
going concern basis as between a willing buyer and a willing seller and taking
into account all relevant factors determinative of value, and shall be final
and binding on all parties.  In
determining the fair market value of any shares of Common Stock, no
consideration shall be given to any restrictions on transfer of the Common
Stock imposed by agreement or by federal or state securities laws, or to the
existence or absence of, or any limitations on, voting rights.


“Purchase
Agreement” means the Note and Warrant Purchase Agreement dated as of August
     , 2006, among the Issuer and the Purchasers.


“Purchasers”
means the purchasers of the Notes and Warrants issued by the Issuer pursuant to
the Purchase Agreement.



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“Securities”
means any debt or equity securities of the Issuer, whether now or hereafter
authorized, any instrument convertible into or exchangeable for Securities or a
Security, and any option, warrant or other right to purchase or acquire any
Security.  “Security” means one of the
Securities.


“Securities Act”
means the Securities Act of 1933, as amended, or any similar federal statute
then in effect.


“Subsidiary”
means any corporation at least 50% of whose outstanding Voting Stock shall at
the time be owned directly or indirectly by the Issuer or by one or more of its
Subsidiaries, or by the Issuer and one or more of its Subsidiaries.


“Term” has the meaning specified in Section 1
hereof.


“Trading Day” means (a) a day on which the
Common Stock is traded on the OTC Bulletin Board, or (b) if the Common Stock is
not traded on the OTC Bulletin Board, a day on which the Common Stock is quoted
in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding
its functions of reporting prices); provided, however, that in
the event that the Common Stock is not listed or quoted as set forth in (a) or
(b) hereof, then Trading Day shall mean any day except Saturday, Sunday and any
day which shall be a legal holiday or a day on which banking institutions in
the State of New York are authorized or required by law or other government
action to close.


“Voting Stock”
means, as applied to the Capital Stock of any corporation, Capital Stock of any
class or classes (however designated) having ordinary voting power for the
election of a majority of the members of the Board of Directors (or other
governing body) of such corporation, other than Capital Stock having such power
only by reason of the happening of a contingency.


“Warrants”
means the Warrants issued and sold pursuant to the Purchase Agreement,
including, without limitation, this Warrant, and any other warrants of like
tenor issued in substitution or exchange for any thereof pursuant to the
provisions of Section 2(c) or 2(d) hereof or of any of such other Warrants.


“Warrant Price”
initially means $0.51 per share as such price may be adjusted from time to time
as shall result from the adjustments specified in this Warrant, including
Section 4 hereto.


“Warrant Share
Number” means at any time the aggregate number of shares of Warrant Stock
which may at such time be purchased upon exercise of this Warrant, after giving
effect to all prior adjustments and increases to such number made or required
to be made under the terms hereof.



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“Warrant Stock”
means Common Stock issuable upon exercise of any Warrant or Warrants or
otherwise issuable pursuant to any Warrant or Warrants.


9.                                       Other
Notices.  In case at any time:


(A)                              the
Issuer shall make any distributions to the holders of Common Stock; or


(B)                                the
Issuer shall authorize the granting to all holders of its Common Stock of
rights to subscribe for or purchase any shares of Capital Stock of any class or
other rights; or


(C)                                there
shall be any reclassification of the Capital Stock of the Issuer; or


(D)                               there
shall be any capital reorganization by the Issuer; or


(E)                                 there
shall be any (i) consolidation or merger involving the Issuer or (ii) sale,
transfer or other disposition of all or substantially all of the Issuer’s
property, assets or business (except a merger or other reorganization in which
the Issuer shall be the surviving corporation and its shares of Capital Stock
shall continue to be outstanding and unchanged and except a consolidation,
merger, sale, transfer or other disposition involving a wholly-owned
Subsidiary); or


(F)                                 there
shall be a voluntary or involuntary dissolution, liquidation or winding-up of
the Issuer or any partial liquidation of the Issuer or distribution to holders
of Common Stock;


then,
in each of such cases, the Issuer shall give written notice to the Holder of
the date on which (i) the books of the Issuer shall close or a record shall be
taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take
place.  Such notice also shall specify
the date as of which the holders of Common Stock of record shall participate in
such dividend, distribution or subscription rights, or shall be entitled to
exchange their certificates for Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
disposition, dissolution, liquidation or winding-up, as the case may be.  Such notice shall be given at least twenty
(20) days prior to the action in question and not less than ten (10) days prior
to the record date or the date on which the Issuer’s transfer books are closed
in respect thereto.  This Warrant
entitles the Holder to receive copies of all financial and other information
distributed or required to be distributed to the holders of the Common Stock.



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10.                                 Amendment
and Waiver.  Any term, covenant,
agreement or condition in this Warrant may be amended, or compliance therewith
may be waived (either generally or in a particular instance and either
retroactively or prospectively), by a written instrument or written instruments
executed by the Issuer and the Majority Holders; provided, however,
that no such amendment or waiver shall reduce the Warrant Share Number,
increase the Warrant Price, shorten the period during which this Warrant may be
exercised or modify any provision of this Section 10 without the consent of the
Holder of this Warrant.


11.                                 Governing
Law.  THIS WARRANT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA,
WITHOUT GIVING EFFECT TO ANY OF ITS PRINCIPLES OF CONFLICTS OF LAW WHICH WOULD
RESULT IN THE APPLICATION OF THE SUBSTANTIVE LAW OF ANOTHER JURISDICTION.


12.                                 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 earlier of (i) the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile telephone number specified for notice prior to 5:00 p.m., eastern
time, on a Trading Day, (ii) the Trading Day after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice later than 5:00 p.m., eastern time, on
any date and earlier than 11:59 p.m., eastern time, on such date, (iii) the
Trading Day following the date of mailing, if sent by nationally recognized overnight
courier service or (iv) actual receipt by the party to whom such notice is
required to be given.  The addresses for
such communications shall be with respect to the Holder of this Warrant or of
Warrant Stock issued pursuant hereto, addressed to such Holder at its last
known address or facsimile number appearing on the books of the Issuer
maintained for such purposes, or with respect to the Issuer, addressed to:


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 the Issuer) 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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Copies
of notices to the Holder shall be sent to [Insert name, address,
phone and fax number].  Any
party hereto may from time to time change its address for notices by giving at
least ten (10) days written notice of such changed address to the other party
hereto.


13.                                 Remedies.  The Issuer stipulates that the remedies at
law of the Holder of this Warrant in the event of any breach or threatened
breach by the Issuer in the performance of or compliance with any of the terms
or provisions of this Warrant are not and will not be adequate and that, to the
fullest extent permitted by law, such terms or provisions may be specifically
enforced by a decree for the specific performance of any agreement contained
herein or by an injunction against a violation of any of the terms or
provisions hereof or otherwise.


14.                                 Successors
and Assigns.  This Warrant and the
rights evidenced hereby shall inure to the benefit of and be binding upon the
successors and assigns of the Issuer, the Holder hereof and (to the extent
provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall
be enforceable by any such Holder or Holders of Warrant Stock.


15.                                 Severability.  If, in any action before any court or agency
legally empowered to enforce any provision contained herein, any provision
hereof is found to be unenforceable, then such provision shall be deemed
modified to the extent necessary to make it enforceable by such court or
agency.  If any such provision is not
enforceable as set forth in the preceding sentence, the unenforceability of
such provision shall not affect the other provisions of this Warrant, but this
Warrant shall be construed as if such unenforceable provision had never been contained
herein.


16.                                 Headings.  The headings of the Sections of this Warrant
are for convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant and shall not influence the construction or
interpretation of this Warrant.


[SIGNATURE PAGE FOLLOWS]



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IN WITNESS WHEREOF, the Issuer has executed this
Warrant as of the day and year first above written.


	
  

  	
  COMMUNICATION INTELLIGENCE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
        Name:
  Frank Dane

  
	
   

  	
        Title:
  Chief Financial and Legal Officer

  




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EXERCISE FORM


WARRANT


COMMUNICATION INTELLIGENCE CORPORATION


The undersigned                                 ,
pursuant to the provisions of the within Warrant, hereby elects to purchase              
shares of Common Stock of                           
covered by the within Warrant.


	
  Dated: 

  	
   

  	
   

  	
   

  	
  Signature

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
									



 


ASSIGNMENT


FOR
VALUE RECEIVED,                                 
hereby sells, assigns and transfers unto                                 
the within Warrant and all rights evidenced thereby and does irrevocably
constitute and appoint                                 ,
attorney, to transfer the said Warrant on the books of the within named
corporation.


	
  Dated: 

  	
   

  	
   

  	
   

  	
  Signature

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
									



 


PARTIAL ASSIGNMENT


FOR
VALUE RECEIVED,                                   
hereby sells, assigns and transfers unto                                     
the right to purchase                   
shares of Warrant Stock evidenced by the within Warrant together with all
rights therein, and does irrevocably constitute and appoint                                       ,
attorney, to transfer that part of the said Warrant on the books of the within
named corporation.


	
  Dated: 

  	
   

  	
   

  	
   

  	
  Signature

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
									



 


FOR USE BY THE ISSUER ONLY:


This
Warrant No. W2006-        canceled (or
transferred or exchanged) this          
day of                         ,
        , shares of Common Stock issued
therefor in the name of



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                                ,
Warrant No. 2006 W-           
issued for          shares of Common
Stock in the name of                                 .



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