Document:

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                                                                    Exhibit 10.1

                                    GUARANTY

            GUARANTY, dated as September 29, 2000 (this "GUARANTY"), by
Communication Intelligence Corporation, a Delaware corporation ("GUARANTOR"), in
favor of PenOp Limited, a company organized under the laws of England and Wales,
and PenOp Inc., a Delaware corporation (together, "SELLERS").

                              W I T N E S S E T H:

            WHEREAS, concurrent with the execution and delivery hereof, Sellers
are entering into an Asset Purchase Agreement, dated as of the date hereof (as
amended, supplemented or modified from time to time, the "PURCHASE AGREEMENT"),
with CIC Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary
of Guarantor ("SUBSIDIARY"), pursuant to which Subsidiary has agreed to purchase
certain of the assets used or usable in connection with Sellers' business (the
"ACQUISITION");

            WHEREAS, Guarantor has organized and has fully funded Subsidiary, in
order to enable Subsidiary to consummate the Acquisition, as a result of which
Guarantor will benefit directly from the Acquisition; and

            WHEREAS, to induce Sellers to execute and perform the Purchase
Agreement and Related Agreements (as defined in the Purchase Agreement)
Guarantor hereby guarantees the performance by Subsidiary and any Affiliate (as
defined in the Purchase Agreement) of Subsidiary that assumes Subsidiary's
obligations under the Purchase Agreement and/or any of the Related Agreements
(as defined in the Purchase Agreement) in accordance with the terms of the
Purchase Agreement and/or such Related Agreement, as the case may be (Subsidiary
and any such Affiliate(s), collectively, "OBLIGORS") of all of Obligors'
obligations under the Purchase Agreement and Related Agreements;

            NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Guarantor hereby agrees as
follows:

            1. GUARANTY. To induce Sellers to execute, deliver and perform the
Purchase Agreement and Related Agreements (as defined in the Purchase
Agreement), and in recognition of the direct and indirect benefits to be
received by Guarantor from the Acquisition, Guarantor hereby absolutely,
unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, the full and prompt performance of all obligations and payment when due
of any and all obligations and liabilities (including all obligations and
liabilities which but for the automatic stay under Section 362(a) of Title 11 of
the United States Code (11 U.S.C. Section 101, ET SEQ.) as amended from time to
time, or any successor statute (the "BANKRUPTCY CODE") would become due) of
Obligors to Sellers, or either of them, under the Purchase Agreement and the
Escrow Agreement, the Pledge Agreement, the Bill of Sale and Assignment and the
Assumption Agreement (each as defined in the Purchase Agreement) at any time and
from time to time based upon, arising out of or relating to the Purchase
Agreement and Related Agreements (as defined in the Purchase Agreement any of
such agreements, as the case may be)
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(all such obligations and liabilities, collectively, the "GUARANTEED
OBLIGATIONS"); provided, that the obligations of Guarantor hereunder shall be
subject to the condition that Obligors, or any of them, shall have failed to
comply with such Guaranteed Obligations for any reason (including, without
limitation, the liquidation, dissolution, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, composition or
readjustment of, or other similar proceedings affecting the status, existence,
assets or obligations of, any of the Obligors, including, without limitation,
any automatic stay under Section 362(a) of the Bankruptcy Code applicable to
it). If any of the Guaranteed Obligations becomes due hereunder, Guarantor
unconditionally promises to pay to Sellers, together with performance and
payment of such Guaranteed Obligations, without duplication, any and all
reasonable expenses, including but not limited to legal fees and costs, which
may be incurred by Sellers in enforcing this Guaranty and collecting any such
Guaranteed Obligations.

            2. NATURE OF OBLIGATIONS; INVALIDITY. (a) This Guaranty shall
constitute a guarantee of performance and payment and not of collection, and
Guarantor specifically agrees that it shall not be necessary, and that Guarantor
shall not be entitled to require (and Guarantor hereby waives any right, except
as cannot be waived under law, to require), before or as a condition of
enforcing the liability of Guarantor under this Guaranty or requiring payment of
the Guaranteed Obligations by Guarantor hereunder, or at any time thereafter,
that Sellers: (i) file suit or proceed to obtain or assert a claim against any
of Obligors or any person or other entity or association, trust, or
unincorporated organization (each a "PERSON") that may be liable for any
Guaranteed Obligation; (ii) make any other effort to obtain payment or
performance of any Guaranteed Obligation from any of Obligors or any other
Person that may be liable for such Guaranteed Obligation; (iii) exercise or
assert any other right or remedy to which Sellers are or may be entitled in
connection with any Guaranteed Obligation or any security or other guarantee
therefor; or (iv) assert or file any claim against the assets of any of Obligors
or any other Person that may be liable for any Guaranteed Obligation.

                  (b) No invalidity, irregularity or unenforceability of all or
any part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty. This Guaranty shall be primary,
absolute and unconditional and shall remain in full force and effect without
regard to, and shall not be released, suspended, impaired, discharged,
terminated or otherwise affected by, and the rights of Sellers to enforce this
Guaranty, whether by action at law, suit in equity or otherwise, shall not in
any way be affected by, (i) the liquidation, dissolution, receivership,
insolvency, bankruptcy, assignment for the benefit of creditors, reorganization,
composition or readjustment of, or other similar proceedings affecting the
status, existence, assets or obligations of, any of Obligors, including, without
limitation, any automatic stay under Section 362(a) of the Bankruptcy Code
applicable to it; or (ii) the occurrence of any event or the existence of any
other circumstances that might otherwise constitute a legal or equitable
discharge of or defense to a guarantor or surety with respect to any Guaranteed
Obligation, except to the extent any defense, other than any defense based upon
lack of authority or disability, could be asserted successfully by any of
Obligors. Sellers shall not be obligated to file any claim relating to any
Guaranteed Obligations in any bankruptcy, insolvency, liquidation,
reorganization or similar proceeding relating to any of Obligors, and any
failure of Sellers to so file shall not affect Guarantor's obligations
hereunder.

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            3. SUBORDINATION. Any of the indebtedness of Obligors now or
hereafter owing to Guarantor is hereby subordinated to the Guaranteed
Obligations.

            4. WAIVERS. (a) Sellers may exercise any other right or remedy
Sellers may have against any of Obligors or any other party, or any security,
without affecting or impairing in any way the liability of Guarantor hereunder
except to the extent the Guaranteed Obligations have been performed and paid.

                  (b) Guarantor waives notices of or any right to require its
consent to any amendment of, supplements to or modifications of the Purchase
Agreement and Related Agreements (as defined in the Purchase Agreement) and
notices of or any right to require its consent to the existence, modification,
creation or incurring of new or additional Guaranteed Obligations.

            5. REPRESENTATIONS AND WARRANTIES. In order to induce Sellers to
accept this Guaranty, Guarantor represents and warrants to Sellers that: all
requisite corporate actions for the execution, delivery and performance by
Guarantor of this Guaranty have been duly performed; Guarantor has the full
legal capacity and legal right, power and authority to enter into this Guaranty
and to consummate the transactions contemplated hereby; this Guaranty has been
duly executed and delivered by Guarantor; and this Guaranty, upon execution and
delivery, will be, a legal, valid and binding obligation of Guarantor,
enforceable in accordance with its terms, except to the extent that such
enforcement may be subject to applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws of general application affecting the rights and
remedies of creditors or secured parties, and that the availability of equitable
remedies, including specific performance, injunctive relief and reformation, may
be subject to equitable defenses and the discretion of the court before which
any proceeding therefor may be brought.

            6. REINSTATEMENT OF OBLIGATIONS. If a claim is ever made upon
Sellers for repayment or recovery of any amount or amounts received in payment
or on account of any of the Guaranteed Obligations and Sellers are required to
repay all or part of said amount for any reason whatsoever, then and in such
event Guarantor shall be and remain liable to Sellers hereunder for the amount
so repaid or recovered to the same extent as if such amount had never originally
been received by Sellers.

            7. MISCELLANEOUS. (a) NOTICES. All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party; overnight courier; registered or certified mail, return receipt
requested, postage prepaid; or facsimile transmission addressed as follows:

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            If to Guarantor:

                  Communication Intelligence Corporation
                  275 Shoreline Drive, Suite 500
                  Redwood Shores, CA 94065
                  Telephone: (650) 802-7700
                  Facsimile: (650) 802-7716
                  Attention:  Guido DiGregorio, President and Chief Executive
                              Officer

            With a copy to:

                  Baer Marks & Upham LLP
                  805 Third Avenue
                  New York, New York  10022
                  Telephone:  (212) 702-5714
                  Telecopy:  (212) 702-5941
                  Attention:  Jonathan J. Russo, Esq.

            If to Sellers:

                  PenOp Limited
                  PenOp Inc.
                  320 East 54th Street
                  New York, New York  10022
                  Telephone:  (212) 997-8800
                  Attention:  Howard I. Schechter, President

            With a copy to:

                  White & Case LLP
                  1155 Avenue of the Americas
                  New York, New York  10036
                  Telephone:  (212) 819-8200
                  Telecopy:  (212) 354-8113
                  Attention:  Steven Betensky, Esq.

                              and

                  Osborne Clarke
                  50 Queen Charlotte Street
                  Bristol BS1 4HE
                  United Kingdom
                  Telephone:  011 44 171 917-4204
                  Telecopy:  011 44 171 917-4205
                  Attention:  Bruce Roxburgh, Esq.

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or at such other address or addresses as may have been furnished in writing by
any party to the others in accordance with the provisions of this Section 7(a).
Notices and other communications provided in accordance with this Section 7(a)
shall be deemed delivered upon receipt. The furnishing of any notice or
communication required hereunder may be waived in writing by the party entitled
to receive such notice. Failure or delay in delivering copies of any notice to
persons designated above to receive copies shall in no way adversely affect the
effectiveness of such notice or communication.

                  (b) NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of
Sellers to exercise, and no delay in exercising, any right, remedy or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise by Sellers of any right, remedy or power hereunder preclude any other
or future exercise of any right, remedy or power. Each and every right, remedy
and power hereby granted to Sellers or allowed them by law or any other
agreement shall be cumulative and not exclusive of any other, and may be
exercised by Sellers at any time or from time to time.

                  (c) PARTIES OBLIGATED AND BENEFITED. This Guaranty shall be
binding upon, inure to the benefit of and be enforceable by Guarantor and its
permitted assigns and successors in interest. This Guaranty shall be binding
upon, inure to the benefit of and be enforceable by Sellers and their assigns
and successors in interest. Guarantor may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of Sellers.

                  (d) GOVERNING LAW; CONSENT TO JURISDICTION. This Guaranty
shall be governed by and construed and enforced in accordance with the law
(without giving effect to the law governing the principles of conflicts of law)
of the State of New York. Any action to enforce, or arising out of or relating
in any way to, any of the provisions of this Guaranty shall be brought and
prosecuted in the appropriate court or courts located within New York County,
State of New York, and the parties consent to the jurisdiction of said court or
courts and to service of process by registered mail, return receipt requested,
or by any other manner permitted by law. Each party hereto agrees to not assert,
by way of motion, as a defense or otherwise, in any such action, suit or
proceeding any claim that it is not subject personally to the jurisdiction of
such court, that the action, suit or proceeding is brought in an inconvenient
forum, that the venue of the action, suit or proceeding is improper or that this
Guaranty, or any other agreement or transaction related hereto or the subject
matter hereof or thereof may not be enforced in or by such court.

                  (e) HEADINGS DESCRIPTIVE. The headings of the several sections
and subsections of this Guaranty are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this Guaranty.

                  (f) SEVERABILITY. If any provision of this Guaranty shall be
held or deemed, by a court or other tribunal of competent jurisdiction, to be
invalid, inoperative or unenforceable because of the conflict of such provision
with any constitution or statute or rule of public policy or for any other
reason, such circumstance shall not have the effect of rendering any other
provision invalid, inoperative or unenforceable, and this Guaranty shall be
reformed and construed as if such invalid, inoperative or unenforceable
provision had never been

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contained herein and such provision reformed so that it is valid, operative and
enforceable to the maximum extent permitted.

                  (g) ENTIRE AGREEMENT. This Guaranty represents the entire
agreement between Guarantor and Sellers with respect to the subject matter
hereof. The terms of this Guaranty shall not be waived, altered, modified,
amended, supplemented or terminated in any manner whatsoever except by written
instrument signed by Sellers and Guarantor.

                  (h) COUNTERPARTS. This Guaranty may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
shall be considered one and the same instrument.

            IN WITNESS WHEREOF, Guarantor has caused this Guarantee to be duly
executed and delivered as of the date first above written.

                                    GUARANTOR:

                                    COMMUNICATION INTELLIGENCE CORPORATION

                                    By: /s/ PHILIP SASSOWER
                                       --------------------------------------
                                       Name:  Philip Sassower
                                       Title: Secretary

ACCEPTED:

September 29, 2000

SELLERS:

PENOP LIMITED

By: /s/ HOWARD SCHECHTER
   ----------------------------------
   Name:  Howard Schechter
   Title: Director

PENOP INC.

By:/s/ HOWARD SCHECHTER
   ----------------------------------
   Name:  Howard Schechter
   Title: President

                                       6<PAGE>

                                                                    Exhibit 10.2

                                ESCROW AGREEMENT

                  This ESCROW AGREEMENT (this "AGREEMENT"), dated as of October
6, 2000, is by and among CIC Acquisition Corp., a Delaware corporation
("BUYER"), PenOp Limited, a company organized under the laws of England and
Wales ("PENOP UK"), and PenOp Inc., a Delaware corporation ("PENOP"; each of
PenOp UK and PenOp being referred to herein individually as a "SELLER," and
being referred to together as "SELLERS"), and Citibank, N.A., a national banking
association, as escrow agent ("ESCROW AGENT").

                              W I T N E S S E T H:

                  WHEREAS, Buyer and Sellers are, concurrent with the execution
and delivery of this Agreement, consummating the acquisition by Buyer of certain
assets of Sellers, pursuant to that certain Asset Purchase Agreement by and
among Buyer and Sellers dated as of September 29, 2000 (the "ASSET PURCHASE
AGREEMENT");

                  WHEREAS, pursuant to Section 3.2(b)(ii) of the Asset Purchase
Agreement, Buyer and Sellers have agreed that 940,000 shares of the common stock
of Communication Intelligence Corporation, Buyer's parent corporation ("CIC";
shares of CIC's common stock being referred to herein as "SHARES"), shall be
deposited with Escrow Agent on the date hereof, so that such Shares (the
"INDEMNITY SHARES") and/or the proceeds of sale thereof may be used for the
payment of indemnification claims by Buyer against Sellers pursuant to the Asset
Purchase Agreement; and

                  WHEREAS, Escrow Agent has agreed to serve as escrow agent
hereunder in accordance with the terms and conditions set forth herein.

                  NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

                                   ARTICLE 1
                               GENERAL PROVISIONS

         1.1 Delivery. Concurrent with the execution of this Agreement, Buyer is
delivering to Escrow Agent the Indemnity Shares, registered in the names of
Sellers as provided pursuant to the Asset Purchase Agreement, together with duly
executed stock powers of Sellers therefor, endorsed in blank, which Indemnity
Shares are to be held, sold and otherwise disbursed by Escrow Agent pursuant to
the terms of this Agreement.

         1.2 Receipt. Escrow Agent hereby acknowledges receipt of the Indemnity
Shares.

         1.3 Indemnity Fund. The Indemnity Shares, as the number thereof shall
fluctuate from time to time as a result of sales and/or disbursements thereof by
Escrow Agent in

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accordance with the terms of this Agreement, and any cash proceeds of sales of
Indemnity Shares (in accordance with the terms hereof) then held by Escrow Agent
hereunder, and all cash paid into the Indemnity Fund by Sellers in accordance
with the terms and provisions of this Agreement, together with all interest,
dividends, distributions and other earnings and cash paid, payable or otherwise
distributed on or in respect of any of the foregoing (collectively, "Earnings")
then held by Escrow Agent in accordance with the terms of this Agreement, are
referred to herein collectively as the "INDEMNITY FUND." Escrow Agent shall
hold, invest and disburse the Indemnity Fund solely in accordance with the terms
and conditions of this Agreement.

         1.4 Investment of Indemnity Fund. During the term of this Agreement,
Escrow Agent shall, upon receipt of written instructions of Sellers and pending
the disbursement of the Indemnity Fund pursuant to the terms hereof, invest any
cash amounts then held by Escrow Agent as part of the Indemnity Fund in (a)
direct obligations of, or obligations fully guaranteed by, the United States of
America or any agency thereof, (b) certificates of deposit issued by a
commercial bank having a combined capital surplus and undivided profits of not
less than $100,000,000, (c) money market funds investing solely in any of the
above or (d) other investments as jointly instructed in writing by Sellers and
Buyer. Absent such written instructions, any cash held in the Indemnity Fund
will be deposited in the Citibank Market Deposit Account (MDA), a Private Bank
money market account.

         1.5 Sales of Indemnity Shares; Disbursement of Proceeds. At any time
during the term of this Agreement, Sellers shall be entitled to cause Escrow
Agent to sell any or all of the Indemnity Shares and other non-cash property
held as part of the Indemnity Fund and deposit the proceeds thereof in
accordance with the terms of this Agreement. To effect any such sale, Sellers
shall deliver written instructions to Escrow Agent and Buyer instructing Escrow
Agent to offer to sell on the appropriate Nasdaq market, through Escrow Agent's
registered broker-dealer, a specified number of Indemnity Shares, at a sale
price that will yield net proceeds of not less than $3.50 per Indemnity Share.
Sellers shall be entitled to specify in such instructions one or more purchasers
for such Indemnity Shares, provided that Sellers' written instructions contain
all instructions and information reasonably necessary to enable Escrow Agent to
effect such sale of Indemnity Shares to such specified purchasers. Escrow Agent
shall promptly execute such instructions. Notwithstanding the foregoing, Sellers
may cause Escrow Agent to offer to sell Indemnity Shares pursuant to this
Section 1.5 at a sale price that yields net proceeds of less than $3.50 per
Indemnity Share, provided that concurrently with such sale, Sellers determine
any such amounts and deposit with Escrow Agent cash in an amount representing
the difference between the product of $3.50 and the number of Indemnity Shares
sold pursuant to this Section 1.5 and the product of such number of Indemnity
Shares and the actual net sale proceeds per Indemnity Share sold pursuant to
this Section 1.5.

         1.6 Sales of Indemnity Shares. It is acknowledged that the Indemnity
Shares to be held pursuant to this Agreement are certificated, and that such
certificates bear restrictive

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legends. For any transaction pertaining to the distribution or sale of Indemnity
Shares, Buyer and Sellers agree to cooperate reasonably with Escrow Agent in all
lawful respects and to take any lawful action reasonably requested by Escrow
Agent in order to facilitate the sale or distribution of Indemnity Shares,
including but not limited to executing and delivering documents and agreements,
obtaining all required consents and paying any fees and expenses related to the
sale or distribution of the Indemnity Shares, provided that Buyer shall not be
liable for any fees or expenses related to the sale or distribution of Indemnity
Shares other than as expressly provided in Section 6.6(b) of the Asset Purchase
Agreement.

         1.7 Voting of Indemnity Shares. Prior to the disbursement of such
Indemnity Shares pursuant to Article 2 hereof, Sellers shall at all times be
entitled to exercise any and all voting rights pertaining to the Indemnity
Shares or any part thereof, provided that Sellers shall not exercise or refrain
from exercising any such right if such action would have a material adverse
effect on the value of the Indemnity Shares or any part thereof.

                                   ARTICLE 2
                           PROCEDURES FOR DISBURSEMENT
                               OF INDEMNITY SHARES

         2.1 General. Escrow Agent shall disburse the Indemnity Fund only in
accordance with this Section 2. The procedures set forth in this Section 2 shall
govern the application of the Indemnity Fund to satisfy indemnification claims
by Buyer pursuant to the Asset Purchase Agreement. The basis for indemnification
claims under the Asset Purchase Agreement shall be governed by the applicable
terms and provisions of the Asset Purchase Agreement, and the Asset Purchase
Agreement shall be controlling between Buyer and Sellers to the extent any term
or provision thereof is inconsistent with any term or provision of this
Agreement.

         2.2 Disbursement of Indemnity Fund in Accordance with Buyer's
Instructions.

                  (a) If, at any time on or prior to the second anniversary of
the date of this Agreement, Escrow Agent and Sellers receive a written notice
signed by Buyer, given pursuant to Section 6.1 and stating that Buyer is
entitled to payment in respect of an indemnification claim pursuant to the Asset
Purchase Agreement (specifying Buyer's good faith estimate of the amount of the
claim in dollars and setting forth in reasonable detail the basis for Buyer's
claim, the Share Value (as defined in Section 2.2(e)) and the number of
Indemnity Shares to be disbursed to Buyer in satisfaction of such claim, based
on the Share Value) ("BUYER CLAIM NOTICE"), Sellers shall be entitled to dispute
the contents of such Buyer Claim Notice by delivering to Buyer and Escrow Agent,
in a manner set forth in Section 6.1, a written notice signed by Sellers setting
forth in reasonable detail the basis for such dispute and the amount in dispute
("DISPUTE NOTICE"). Any such Dispute Notice shall be delivered to Buyer and
Escrow Agent within ten (10) business days following Sellers' receipt of the
Buyer Claim Notice from Buyer. If Escrow Agent receives a Dispute Notice from
Sellers in accordance with the terms hereof within such ten (10) business day
period, Escrow Agent shall continue to hold the amount of the Indemnity Fund
that is in

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dispute, calculated by Sellers using the value per Indemnity Share provided for
in Section 2.2(e) (to the extent the Indemnity Fund to be disbursed includes
Indemnity Shares), until such dispute is resolved in accordance with Section
3.5(e) hereof and shall otherwise comply with Section 2.2(b) hereof.

                  (b) Within ten (10) business days following Sellers' receipt
of a Buyer Claim Notice from Buyer, Sellers shall be entitled to pay the claim
set forth therein, in whole or in part, in cash in lieu of Indemnity Shares by
delivering to Escrow Agent and Buyer a written notice setting forth (i) the
amount of cash delivered to Escrow Agent and the claims with respect to which
such sum is being delivered, (ii) the number of Indemnity Shares to be disbursed
to Sellers in exchange for such cash payment, as determined in accordance with
Section 2.2(e) and (iii) the dollar amount of the difference between the amount
of Buyer's claim, as set forth in the Buyer Claim Notice, and the amount of cash
being delivered by Sellers to Escrow Agent with such notice (such difference,
the "UNPAID CLAIM AMOUNT," and such notice, a "PAYMENT NOTICE"). Escrow Agent
shall, within one (1) business day following receipt thereof, (i) deliver to
Buyer the cash deposited by Sellers with Escrow Agent pursuant to this Section
2.2(b), less any amount remaining in dispute, and (ii) contemporaneously
therewith release to Sellers the number of Indemnity Shares stated in the
Payment Notice; PROVIDED, that nothing herein shall be construed as limiting
Buyer's ability to challenge, at any time, the number of Indemnity Shares
released to Sellers pursuant to this Section 2.2(b) and Sellers' calculation
thereof pursuant to Section 2.2(e).

                  (c) If Escrow Agent and Buyer do not receive a Dispute Notice
from Sellers pursuant to Section 2.2(a) within the ten (10) business day period
referred to in Section 2.2(a), Buyer shall be entitled to disbursement, in
respect of the claim set forth in the applicable Buyer Claim Notice, of: (i)
cash in an amount equal to the lesser of (A) the difference between the amount
of such claim and the Unpaid Claim Amount and (B) the amount of cash in the
Indemnity Fund; and (ii) that number of Indemnity Shares equal to the difference
between the Unpaid Claim Amount and the amount of cash disbursed to Buyer
pursuant to Section 2.2(c)(i), divided by the Share Value. Within two (2)
business days following receipt of a written notice, signed by Buyer, stating
that Buyer is entitled to the disbursement of cash and/or Indemnity Shares
pursuant to this Section 2.2(c) (a copy of which notice Buyer shall deliver to
Sellers concurrent with the delivery thereof to Escrow Agent), and setting forth
the amounts thereof, Escrow Agent shall deliver to Buyer the amount of cash
and/or the number of Indemnity Shares set forth in such notice.

                  (d) Upon Buyer's receipt of Indemnity Shares or cash pursuant
to and in accordance with Section 2.2(c) having an aggregate value of the amount
of Buyer's claim set forth in the applicable Buyer Claim Notice, such claim
shall be deemed to have been satisfied in accordance with the terms of this
Agreement and the Asset Purchase Agreement. Notwithstanding the foregoing,
nothing herein shall be construed as a release or waiver of any right, claim or
interest of Buyer relating to or arising out of any claim or right not expressly
set forth in such Buyer Claim Notice.

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                  (e) For purposes of Sections 2.2(a) and 2.2(c)(ii), the value
of each Indemnity Share shall be deemed to be the average of the closing prices
per Share over the twenty (20) trading days immediately preceding the date of
the applicable Buyer Claim Notice (the "SHARE VALUE").

         2.3 Disbursement of Indemnity Fund After Two Years or if Fully Funded
in Cash.

                  (a) On the third business day after the second anniversary of
the date of this Agreement, Escrow Agent shall deliver to Sellers all Indemnity
Shares and other property and cash then remaining in the Indemnity Fund, except
for any portion thereof then held by Escrow Agent pursuant to Section 2.2(a) in
respect of any unresolved dispute between Buyer and Sellers or pursuant to
Section 3.5(e).

                  (b) Sellers shall be entitled at all times to deposit with
Escrow Agent cash, which shall become part of the Indemnity Fund and shall be
promptly invested by Escrow Agent in accordance with Section 1.4.

                  (c) Notwithstanding anything in this Agreement, if at any time
the sum of (i) the amount of cash in the Indemnity Fund (including the amount of
all cash theretofore delivered by Sellers to Escrow Agent pursuant to Section
2.3(b)), (ii) the value (calculated pursuant to Section 2.2(e)) of all Indemnity
Shares theretofore delivered by Escrow Agent to Buyer pursuant to Section 2.2(c)
or 2.5 hereof, (iii) the amount of all cash theretofore delivered by Escrow
Agent to Buyer pursuant to Section 2.2(c) hereof, (iv) the amount of all cash
theretofore delivered to Buyer pursuant to Section 2.4 hereof and (v) the amount
of all cash theretofore delivered by Sellers to Escrow Agent pursuant to Section
2.2(b) hereof in satisfaction of all or any claims made by Buyer pursuant to
Section 9 of the Asset Purchase Agreement, exceeds the amount of $3,290,000,
Sellers shall be entitled to the release of all Indemnity Shares and non-cash
property remaining in the Indemnity Fund, in accordance with the terms of this
Section 2.3(c). Promptly following Escrow Agent's receipt of a written notice,
signed by Sellers, certifying that the condition set forth in the preceding
sentence has been satisfied ("Release Notice") (a copy of which Release Notice
Sellers shall deliver to Buyer concurrent with the delivery thereof to Escrow
Agent), Escrow Agent shall deliver to Sellers, as directed by them in said
Release Notice, all Indemnity Shares and non-cash property then remaining in the
Indemnity Fund. In such event, if at such time Escrow Agent shall have been
holding Indemnity Shares with respect to any unresolved claim by Buyer against
Sellers pursuant to Section 2.2(a), a portion of the cash then held in the
Indemnity Fund, in an amount equal to the amount of such unresolved claim, shall
be held in respect of such unresolved claim as specified in writing by Buyer.

         2.4 Resolution Pursuant to Court Order or Arbitration. In the event
that any claim by Buyer hereunder is resolved pursuant to a court order from a
court of competent jurisdiction or an order of an arbitrator designated in
writing jointly by Buyer and Sellers, Sellers shall have the right to pay cash
in satisfaction of any such court order or order of an arbitrator, in which case

                                       5
<PAGE>

Sellers shall pay such cash amount to Buyer within ten (10) business days
following the entry of such order.

         2.5 Disbursement of Indemnity Fund in Accordance with Joint
Instructions or an Order. If at any time Escrow Agent receives (a) joint written
instructions signed by Buyer and Sellers regarding disposition of all or any
portion of the Indemnity Fund, (b) a final and nonappealable court order from a
court of competent jurisdiction regarding disposition of all or any portion of
the Indemnity Fund or (c) an order of an arbitrator designated in writing
jointly by Buyer and Sellers regarding disposition of all or any portion of the
Indemnity Fund, Escrow Agent shall disburse the Indemnity Fund or such portion
thereof in accordance with, and otherwise comply with, such instructions or
order.

         2.6 Disbursement of Earnings; Remaining Balance of Indemnity Fund. If
Escrow Agent disburses a portion of but less than all of the Indemnity Fund in
accordance with the terms and provisions of this Agreement, Escrow Agent shall
continue to hold that portion of the Indemnity Fund not disbursed, subject to
and in accordance with the terms of this Agreement.

         2.7 Interpleader. In the event any dispute should arise among the
parties hereunder, Escrow Agent may deposit the entirety of the Indemnity Fund
then held by it with the clerk of any court of competent jurisdiction in the
State of New York and interplead Buyer and Sellers.

                                   ARTICLE 3
                                  ESCROW AGENT

         3.1 Appointment and Duties. Buyer and each Seller hereby appoints
Escrow Agent to serve as escrow agent hereunder, and Escrow Agent hereby accepts
such appointment and agrees to perform its duties arising hereunder in
accordance with the terms and provisions of this Agreement.

         3.2 Compensation and Expenses. Compensation and expenses will be paid
to Escrow Agent one-half by Sellers (jointly and severally) and one-half by
Buyer, in accordance with Escrow Agent's fee schedule annexed hereto as
ATTACHMENT A.

         3.3 Indemnification. Sellers, on the one hand, and Buyer, on the other,
jointly and severally agree to indemnify Escrow Agent and hold it harmless from
any and all expenses, damages, claims, liabilities or losses suffered by Escrow
Agent arising out of its appointment hereunder, including without limitation, in
connection with any action, suit or other proceeding involving or arising out of
or based upon this Agreement, and to exonerate Escrow Agent from any liability
in connection with this Agreement, except as such may be determined by a court
of competent jurisdiction to have been caused by Escrow Agent's own gross
negligence, willful misconduct or bad faith in performing its duties as Escrow
Agent hereunder. Promptly after Escrow Agent's receipt of any notice of any
demand or claim or of the commencement of any action, suit or proceeding related
hereto, Escrow Agent shall, if a claim in respect thereof is to be

                                       6
<PAGE>

made against any of the other parties hereto, notify the other parties to this
Agreement in writing. For purposes hereof, the term "expense or loss" shall
include all amounts paid or payable to satisfy any claim, demand or liability,
or in settlement of any claim, demand, action, suit or proceeding arising out of
this Agreement settled with the express written consent of Buyer and Sellers,
and all costs and expenses, including without limitation, reasonable counsel
fees and disbursements, paid or incurred in investigating or defending against
any such claim, demand, action, suit or proceeding. Any such expense or loss as
between Buyer and Sellers shall be borne one-half by Buyer and one-half by
Sellers (jointly and severally). Buyer, on the one hand, and Sellers, on the
other, shall be entitled to seek contribution from the other with respect to
their obligation to hold Escrow Agent harmless hereunder, and nothing in this
Section 3.3 shall constitute a waiver of any claim that Buyer or Sellers may
have with respect to any right of contribution arising therefrom.

         3.4 Resignation. Escrow Agent may resign at any time by giving the
other parties hereto thirty (30) days' prior written notice to that effect in
accordance with Section 6.1 hereof. In such event, the successor escrow agent
shall be such person, firm or corporation as shall be mutually selected by Buyer
and Sellers. As soon as practicable after its resignation, Escrow Agent shall
turn over to the successor escrow agent so appointed all monies and property
held hereunder, upon presentation of such appropriate documentation appointing
the successor escrow agent as escrow agent hereunder and the acceptance of such
appointment. It is understood and agreed that such resignation shall not be
effective until a successor agrees to act hereunder; PROVIDED, that if no
successor is appointed and acting hereunder within thirty (30) days after such
notice is given, Escrow Agent may, at the expense of Buyer and Sellers, initiate
a stakeholder or other appropriate proceeding in a court of competent
jurisdiction in the State of New York and pay and deliver the Indemnity Fund
into such court, and Escrow Agent shall promptly notify Buyer and Sellers
thereof in writing.

         3.5 Rights of Escrow Agent

                  (a) Subject to the terms of this Agreement, Escrow Agent may
act in reliance upon any instructions, notice, certification, demand, consent,
authorization, receipt, power of attorney or other writing delivered to it by
any other party without being required to determine the authenticity or validity
thereof or the correctness of any fact stated therein, the propriety or validity
of the service thereof, or the jurisdiction of the court issuing any judgment or
order. Escrow Agent may act in reliance upon any signature believed by it to be
genuine, and may assume that such person has been properly authorized to do so.

                  (b) Escrow Agent may consult with legal counsel of its
selection in the event of any dispute or question as to the meaning or
construction of any of the provisions hereof or its duties hereunder, and Escrow
Agent shall incur no liabilities, and shall be fully protected, in acting in
good faith in accordance with the opinion and instructions of such counsel.
Sellers and Buyer, jointly and severally, agree to reimburse Escrow Agent on
demand for such reasonable

                                       7
<PAGE>

legal fees, disbursements and expenses. Sellers and Buyer agree that Sellers,
jointly and severally on the one hand, and Buyer, on the other hand, shall each
be liable for one-half of any such legal fees, disbursements and expenses
required to be paid to Escrow Agent hereunder.

                  (c) Escrow Agent shall be under no duty to give the property
held in escrow by it hereunder any greater degree of care than it gives its own
similar property.

                  (d) Escrow Agent shall invest the property held in escrow in
such a manner as directed herein, which may include deposits in Citibank and
mutual funds advised, serviced or made, available by Citibank or its affiliates
even though Citibank or its affiliates may receive a benefit or profit
therefrom.

THE PARTIES TO THIS AGREEMENT ACKNOWLEDGE THAT NON-DEPOSIT INVESTMENT PRODUCTS
ARE NOT OBLIGATIONS OF, OR GUARANTEED, BY CITIBANK/CITICORP OR ANY OF ITS
AFFILIATES; ARE NOT FDIC INSURED; AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING
THE POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. ONLY DEPOSITS IN THE UNITED
STATES ARE SUBJECT TO FDIC INSURANCE.

                  (e) In the event of any disagreement between/among any of the
parties to this agreement, or between/among them or either or any of them and
any other person, resulting in adverse claims or demands being made in
connection with the subject matter of the Escrow, or in the event that Escrow
Agent, in good faith, be in doubt as to what action it should take hereunder,
Escrow Agent may, at its option, refuse to comply with any claims or demands on
it, or refuse to take any other action hereunder, so long as such disagreement
continues or such doubt exists, and in any such event, Escrow Agent shall not
become liable in any way or to any person for its failure or refusal to act, and
Escrow Agent shall be entitled to continue so to refrain from acting until (i)
the rights of all parties shall have been fully and finally adjudicated by a
court of competent jurisdiction, or (ii) all differences shall have been
adjusted and all doubt resolved by agreement among all of the interested
persons, and Escrow Agent shall have been notified thereof in writing signed by
all such persons. In the event any such disagreement or doubt remains
unresolved, Escrow Agent shall have the option, after thirty (30) days' notice
to the other parties of its intention to do so, to file an action in
interpleader requiring the parties to answer and litigate any claims and rights
among themselves. The rights of Escrow Agent under this paragraph are cumulative
of all other rights which it may have by law or otherwise.

                  (f) All Earnings accrued on the Indemnity Fund hereunder shall
be for the account of PenOp UK. PenOp UK shall provide to Escrow Agent an
appropriate W-9 form for tax for identification number certification or a W-8
form for non-resident alien certification. Escrow Agent shall be responsible
only for income reporting to the Internal Revenue Service with respect to income
earned on the escrowed property.

                  (g) Subject to the terms of this Agreement, in the event funds
transfer instructions are given (other than in writing at the time of execution
of this Agreement), whether in writing, by telecopier or otherwise, Escrow Agent
is authorized to seek confirmation of such

                                       8
<PAGE>

instructions by telephone call back to the person or persons designated in
Attachment B annexed hereto, and Escrow Agent may rely upon the confirmations of
anyone purporting to be the person or persons so designated. To assure accuracy
of the instructions it receives, Escrow Agent may record such call backs. If
Escrow Agent is unable to verify the instructions, or is not satisfied with the
verification it receives, it will not execute the instruction until all issues
have been resolved. The persons and telephone numbers for call backs may be
changed only in writing actually received and acknowledged by Escrow Agent. The
parties agree to notify Escrow Agent of any errors, delays or other problems
within thirty (30) days after receiving notification that a transaction has been
executed. If it is determined that the transaction was delayed or erroneously
executed as a result of Escrow Agent's error, Escrow Agent's sole obligation is
to pay or refund such amounts as may be required by applicable law. In no event
shall Escrow Agent be responsible for any incidental or consequential damages or
expenses in connection with the instruction. Any claim for interest payable will
be at Escrow Agent's published savings account rate in effect in New York, New
York.

                                   ARTICLE 4
                           LIABILITIES OF ESCROW AGENT

         4.1 Limitations. Escrow Agent shall have no duties or responsibilities
other than those expressly set forth in the provisions of this Agreement and any
amendments hereto and those applicable to Escrow Agent by law, and no such
duties or responsibilities shall be implied or inferred.

         4.2 Collateral Agreements. Escrow Agent shall not be bound in any way
by any contract or agreement between the other parties hereto (other than this
Agreement and any amendments hereto), regardless of whether Escrow Agent has
knowledge of any such contract or agreement or of its terms or conditions.

         4.3 Sales of Indemnity Shares. Escrow Agent shall not be responsible
for any delay related to obtaining from CIBC Mellon Trust Company, CIC's
transfer agent, negotiable certificates evidencing the Indemnity Shares such
that Escrow Agent may sell or distribute the exact number of Indemnity Shares
requested or required to be sold or distributed by it hereunder. Escrow Agent
shall make any sale required by Section 1.5 hereof within a reasonable time
after obtaining such certificates in negotiable form from such transfer agent.
Escrow Agent shall not be liable for any loss incurred at such sale that is due
to fluctuations in market rates or penalties incurred because of early
redemption. Any legal opinion required in connection with the sale of any of the
Indemnity Shares shall be provided by Baer Marks & Upham LLP or such other
counsel as Buyer shall reasonably determine.

                                       9
<PAGE>

                                    ARTICLE 5
                                   TERMINATION

         5.1 Termination. This Agreement shall be terminated (i) upon
disbursement of the entire Indemnity Fund by Escrow Agent in accordance with the
terms hereof, (ii) by written consent signed by Buyer, Sellers and Escrow Agent,
or (iii) upon payment of the Indemnity Fund into a court of competent
jurisdiction in accordance with the provisions hereof. This Agreement shall not
be otherwise terminated.

                                    ARTICLE 6
                            MISCELLANEOUS PROVISIONS

         6.1 Notices. All notices, demands and requests required or permitted to
be given under this Agreement shall be (i) in writing, (ii) delivered by
personal delivery or sent by commercial delivery service (E.G., Federal Express
or United Parcel Service) or by registered or certified mail, return receipt
requested, (iii) deemed to have been given when received, and (iv) addressed as
follows:

                           If to Buyer, to:

                                      CIC Acquisition Corp.
                                      ? Communication Intelligence Corporation
                                      275 Shoreline Drive, Suite 500
                                      Redwood Shores, CA  94065
                                      Telephone:  (650) 802-7700
                                      Facsimile:  (650) 802-7716
                                      Attention:  Guido DiGregorio, President
                                                  and Chief Executive Officer

                                      With a copy to:

                                      Baer Marks & Upham LLP
                                      805 Third Avenue
                                      New York, NY  10022
                                      Telephone:  (212) 702-5700
                                      Facsimile:  (212) 702-5941
                                      Attention:  Jonathan J. Russo, Esq.

                           If to Sellers, to:

                                      PenOp Limited
                                      PenOp Inc.
                                      320 East 54th Street

                                       10
<PAGE>

                                      New York, NY  10022
                                      Telephone:  (212) 371-8948
                                      Facsimile:  011 44 1373 452 744 (c/o Nick
                                                  May)
                                      Attention:  Howard I. Schechter, President

                                      With a copy to:

                                      White & Case LLP
                                      1155 Avenue of the Americas
                                      New York, NY  10036
                                      Telephone:  (212) 819-8200
                                      Facsimile:  (212) 354-8113
                                      Attention:  Steven Betensky, Esq.

                           If to Escrow Agent, to:

                                      Citibank, N.A.
                                      The Private Bank
                                      120 Broadway, 2nd Floor
                                      New York, NY  10271
                                      Telephone:  (212) 266-4468
                                      Facsimile:   (212) 266-4550
                                      Attention:  John P. Howard

and to any such other or additional persons or addresses as any party from time
to time may designate in writing to the other parties hereto by means of a
notice that shall comply with the provisions of this Section 6.1. Failure or
delay in delivering copies of any notice to persons designated above to receive
copies shall in no way adversely affect the effectiveness of such notice or
communication.

         6.2 Benefit and Assignment. No party shall assign its rights or
obligations under this Agreement without the prior written consent of all other
parties hereto. Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.

         6.3 Entire Agreement; Amendment. This Agreement contains all of the
terms agreed upon by the parties with respect to the subject matter hereof. This
Agreement may be amended

                                       11
<PAGE>

only by a written instrument signed by all the parties hereto. No waiver of or
exception to any term, condition or provision of this Agreement, in any one or
more instances, shall be deemed to be or construed as a further or continuing
waiver of such term, condition or provision.

         6.4 Headings. The headings of the sections of this Agreement are for
convenience and reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.

         6.5 Governing Law; Submission to Jurisdiction. This Agreement shall be
governed by and construed and enforced in accordance with the laws (without
giving effect to the laws governing the principles of conflicts of law) of the
State of New York. Any action to enforce, or arising out of or relating in any
way to, any of the provisions of this Agreement shall be brought and prosecuted
in the appropriate court or courts located within New York County, State of New
York, and the parties consent to the jurisdiction of said court or courts and to
service of process by registered mail, return receipt requested, or by any other
manner permitted by law. Each party hereto agrees to not assert, by way of
motion, as a defense or otherwise, in any such action, suit or proceeding any
claim that it is not subject personally to the jurisdiction of such court, that
the action, suit or proceeding is brought in an inconvenient forum, that the
venue of the action, suit or proceeding is improper or that this Agreement, or
any other agreement or transaction related hereto or the subject matter hereof
or thereof may not be enforced in or by such court.

         6.6 Severability. If any provision of this Agreement shall be held or
deemed, by a court or other tribunal of competent jurisdiction, to be invalid,
inoperative or unenforceable because of the conflict of such provision with any
constitution or statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of rendering any other provision invalid,
inoperative or unenforceable, and this Agreement shall be reformed and construed
as if such invalid, inoperative or unenforceable provision had never been
contained herein and such provision reformed so that it is valid, operative and
enforceable to the maximum extent permitted.

         6.7 Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if the signatures on all counterparts are
upon one and the same instrument.

            [The remainder of this page is intentionally left blank.]

                                       12
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first above written.

                                    BUYER:

                                    CIC ACQUISITION CORP.

                                    By: /s/ PHILIP SASSOWER
                                        ----------------------------------------
                                    Name:  Philip Sassower
                                    Title: Chief Executive Officer

                                    SELLERS:

                                    PENOP LIMITED

                                    By: /s/ HOWARD SCHECHTER
                                        ----------------------------------------
                                    Name:  Howard Schechter
                                    Title: Director

                                    PENOP INC.

                                    By: /s/ HOWARD SCHECHTER
                                        ----------------------------------------
                                    Name:  Howard Schechter
                                    Title: President

                                    ESCROW AGENT:

                                    CITIBANK, N.A.

                                    By: /s/ BARRY MORRIS
                                        ----------------------------------------
                                    Name:  Barry Morris
                                    Title: Vice President

                                       13
<PAGE>

                                  ATTACHMENT A

                           ESCROW AGENT'S FEE SCHEDULE

The Escrow Agent shall be entitled to receive for its services rendered
hereunder a fee in the amount of $15,000.00. This fee covers account opening,
setup, and the first year of operation of the escrow account and is payable upon
account funding.

An additional fee of $5,000.00 covering the second year of operation of the
escrow account is payable upon the first anniversary of this agreement.

In addition, the Escrow Agent shall be entitled to receive reimbursement for all
reasonable out-of-pocket expenses incurred by it in connection with the
performance of its obligations hereunder.

                                       14
<PAGE>

                                  ATTACHMENT B

               PERSONS DESIGNATED FOR CONFIRMATION OF INSTRUCTIONS

For each of PenOp Limited and PenOp Inc.:

                      Name              Telephone Number
                      ----              ----------------

                Howard Schechter         (212) 371-8948

                  Robert Levin           (212) 867-4195

For CIC Acquisition Corp.:

                      Name              Telephone Number
                      ----              ----------------

                Philip Sassower          (212) 759-1909

                Guido DiGregorio         (650) 802-7700

                                      B-1

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