COMMUNICATION INTELLIGENCE CORP (Form: 8-K, Received: 04/04/2011 12:59:25)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): March 31, 2011

Communication Intelligence Corporation

(Exact name of registrant as specified in its charter)

Delaware	000-19301	94-2790442
(State or other	(Commission File Number)	(I.R.S. Employer
jurisdiction of		Identification No.)
incorporation)

275 Shoreline Drive, Suite 500

Redwood Shores, CA 94065

(Address of principal executive offices)

Registrant’s telephone number, including area code

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into Material Definitive Agreement

Item 3.02 Unregistered Sales of Equity Securities

On March 31, 2011, Communication Intelligence Corporation (the “Company”) entered into subscription agreements (the “Subscription Agreements”) with 15 investors (each an “Investor,” and, collectively, the “Investors”) relating to the sale and issuance of an aggregate of 800,000 shares of Series C Convertible Preferred Stock (the “Series C Preferred Stock”) and warrants to purchase an aggregate of 35,555,556 shares of the Company’s Common Stock (each a “Warrant,” and, collectively, the “Warrants”). The Company received $800,000 in gross proceeds from the offering. The terms for the sale and issuance of the Series C Preferred Stock and Warrants were the same as those terms under which the Company sold shares of Series C Preferred Stock and warrants on December 31, 2010 (the “Series C Financing”). Pursuant to the Subscription Agreements, the Company agreed to issue and sell to the Investors in a private placement an aggregate of 800,000 shares of Series C Preferred Stock and Warrants to purchase an aggregate of 35,555,556 shares of Common Stock for an aggregate purchase price of $1.00 per share of Series C Preferred Stock. The Warrants are exercisable at any time after the date of issuance until December 31, 2013. The rights, preferences and privileges of the Series C Preferred Stock were previously described in detail in the Company’s definitive consent statement on Schedule 14A filed with the Securities and Exchange Commission (“SEC”) on December 21, 2010. The sale of shares of Series C Preferred Stock and the issuance of the Warrants on March 31, 2011 is referred to collectively herein as the “Follow-On Series C Financing”.

In connection with the closing of the Follow-On Series C Financing, the Company also entered into Amendment No. 1 (“Amendment No. 1”) to the Registration Rights Agreement dated December 31, 2010 among the Company and the investors in the Series C Financing (the “Registration Rights Agreement”). Under the terms of Amendment No. 1, the shares of Common Stock issuable upon conversion of shares of Series C Preferred Stock sold in the Follow-On Series C Financing and upon exercise of any outstanding Warrants issued to the Investors have the same registration rights as those granted to the investors in the December 31, 2010 Series C Financing. The material terms of the Registration Rights Agreement were previously described in detail in the Company’s definitive consent statement on Schedule 14A filed with the SEC on December 21, 2010.

In connection with the private placement of the Series C Preferred Stock and Warrants, the Company paid SG Phoenix LLC an administrative fee of $50,000 in cash and issued it a warrant to purchase 1,777,778 shares of Common Stock at an initial exercise price of $0.0225 per share. SG Phoenix LLC is an entity controlled by Messrs. Philip Sassower and Andrea Goren, directors of the Company. In addition, Messrs. Sassower and Goren are co-managers of the managing member of the Phoenix Venture Fund, LLC, one of the Company's principal stockholders.

The private placement was approved by a Special Committee of the Company's Board of Directors and the entire Board of Directors.

The shares of Series C Preferred Stock and Warrants, and the shares of Common Stock issuable upon exercise of the Warrants, were offered and sold to the Investors in reliance on the exemptions provided by Section 4(2) of the Securities Act of 1933, as amended (“Securities Act”), and Regulation D promulgated under the Securities Act and in reliance on similar exemptions under applicable state laws. Certificates representing such securities contain restrictive legends preventing sale, transfer or other disposition, unless registered under the Securities Act or pursuant to an exemption thereunder.

Item 7.01 Regulation FD Disclosure

On April 4, 2011, the Company issued a press release announcing the Company’s closing of the Follow-On Series C Financing. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein. In accordance with General Instruction B.2 of Form 8-K, Exhibit 99.1 hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

10.61 Form of Subscription Agreement

10.62 Amendment No. 1 to Registration Rights Agreement

99.1 Press Release dated April 4, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Communication Intelligence Corporation
April 4, 2011
	By:	/s/ Craig Hutchison

		Craig Hutchison
		Vice President and Assistant Treasurer


Exhibit		Description
10.61		Form of Subscription Agreement
10.62		Amendment No. 1 to Registration Rights Agreement
99.1		Press Release dated April 4, 2011

EXHIBIT 10.61

SUBSCRIPTION AGREEMENT

Name and Address of Subscriber

__________________________

Total Amount of Investment

Communication Intelligence Corporation

c/o SG Phoenix LLC

110 East 59 th Street, Suite 1901

New York, NY 10022

Re: Series C Preferred Stock and Warrant Offering

Ladies and Gentlemen:

Reference is hereby made to (i) the confidential term sheet (the “ Term Sheet ”), dated March 9, 2011, of Communication Intelligence Corp., a Delaware corporation (the “ Company ”), attached hereto as Exhibit A ; (ii) the Company’s Annual Report on Form 10-K for the year ended December 31, 2009; (iii) the Company’s Quarterly Reports on Form 10-Q for the three months ended March 31, 2010, June 30, 2010 and September 30, 2010; (iv) the Company’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission (the “ SEC ”) on December 21, 2010; and (v) each of the Company’s Current Reports on Form 8-K filed with the SEC between March 31, 2010 and the date hereof.

Pursuant to the Term Sheet, the Company proposes to offer and sell to accredited investors up to $800,000 of the Company’s Series C Participating Convertible Preferred Stock (the “ Series C Preferred Stock ”), at a purchase price of $1.00 per share (the “ Offering ”). The Series C Preferred Stock issued in the Offering will be convertible into shares of the Company’s common stock (“ Common Stock ”) at a conversion price equal to $0.0225 per share. Each share of Series C Preferred Stock will include a detachable warrant (“ Warrant ”) to purchase that number of shares of the Common Stock equal to the Total Amount of Investment (as defined below) divided by $0.0225 and will expire on December 31, 2013. The Warrant will have an initial exercise price of $0.0225 per share. The Offering is expected to be consummated no later than March 31, 2011.

1. Subscription. The undersigned hereby executes and delivers this Subscription Agreement (the “ Subscription Agreement ”) and subscribes for and agrees to purchase __________ shares of Series C Preferred Stock at a price per share of $1.00 and the Warrants attached thereto in the Offering for $___________ (the “ Total Amount of Investment ”). The Total Amount of Investment should be remitted promptly to SG Phoenix LLC (“ SG Phoenix ”), as escrow agent, upon execution of this Subscription Agreement and will be held in escrow by SG Phoenix to be used to purchase shares of Series C Preferred Stock and Warrants in the Offering. The Total Amount of Investment is payable either by check made out to “CIC Series C

EXHIBIT 10.61

Escrow”, or by wire transfer using the following instructions:

2. Subscription Instruments. The undersigned is delivering to the Company a copy of this Subscription Agreement duly completed and executed by the undersigned.

3. Representations and Warranties. In connection with the undersigned’s subscription, the undersigned hereby represents and warrants as follows:

(a) (i) The undersigned acknowledges that the undersigned has carefully reviewed the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, including, without limitation, the description of risk factors contained therein, each of the Company’s Quarterly Reports on Form 10-Q for the three months ended March 31, 2010, June 30, 2010 and September 30, 2010, each of the Company’s Current Reports on Form 8-K filed with the SEC between March 31, 2010 and the date hereof, and the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on December 21, 2010.

(ii) The undersigned has such knowledge and experience in financial and business matters that he, she or it is capable of evaluating the merits and risks of an investment in the Company and making an informed investment decision with respect thereto. The undersigned has obtained sufficient information to evaluate the merits and risks of the investment and to make such a decision.

(iii) The undersigned is an “ Accredited Investor ” (as such term is defined in Rule 501(a) of Regulation D of the Securities Act of 1933, as amended (the “ Securities Act ”)).

(b) The undersigned has had access to all documents, records and books of the Company which the undersigned (or the undersigned’s advisor) considers necessary or appropriate to make an informed decision pertaining to this investment. Additionally, the undersigned has been provided the opportunity to ask questions and receive answers concerning the terms and provisions of the Series C Preferred Stock and the Warrants and to obtain any additional information which the Company possesses, or can acquire without unreasonable effort or expense that is relevant to the undersigned’s investment decision. To the extent the undersigned has not sought information regarding any particular matter, the undersigned represents that he, she or it had and has no interest in doing so and that such matters are not material to the undersigned in connection with this investment.

(c) The undersigned (i) has adequate means of providing for the undersigned’s current needs and possible personal contingencies and those of the undersigned’s family, if applicable, in the same manner as the undersigned would have been able to provide prior to making the investment contemplated herein, (ii) has no need for liquidity in this

EXHIBIT 10.61

investment, (iii) is aware of and able to bear the risks of the investment for an indefinite period of time and (iv) presently, based on existing conditions, is able to afford a complete loss of such investment.

(d) The undersigned recognizes that an investment in the Series C Preferred Stock and the Warrants (collectively, the “ Securities ”) involves significant risks and the undersigned may lose his, her or its entire investment in the Securities.

(e) The undersigned understands that the Securities are “ restricted securities ” as that term is defined pursuant to Rule 144 of the Securities Act, and have not been registered under the Securities Act or under certain state securities laws in reliance upon exemptions therefrom for nonpublic offerings. The undersigned understands that the Securities must be held indefinitely unless the sale thereof is subsequently registered under the Securities Act and under certain state securities laws or an exemption or exemptions from such registration are available. The undersigned understands that, except as expressly provided in the Term Sheet, the Company is under no obligation to register the Securities under the Securities Act or to register or qualify the Securities under any other applicable securities law, or to comply with any other exemption under the Securities Act or any other securities law, and that the undersigned has no right to require such registration.

(f) The Securities are being purchased solely for the undersigned’s account for investment and not for the account of any other person and not with a view to or for distribution, assignment or resale in connection with any distribution within the meaning of the Securities Act, and no other person has a direct or indirect beneficial interest in such Securities. The undersigned represents that the undersigned has no agreement, understanding, commitment or other arrangement with any person and no present intention to sell, transfer or assign any Securities.

(g) The undersigned agrees not to sell or otherwise transfer the Securities or the underlying shares of common stock unless they are registered under the Securities Act and under any applicable state securities laws, or an exemption or exemptions from such registration are available.

(h) The undersigned has all requisite legal capacity and power to enter into this Subscription Agreement which constitutes a valid and binding agreement of the undersigned enforceable against the undersigned in accordance with its terms; and the person signing this Subscription Agreement on behalf of the undersigned is empowered and duly authorized to do so. The undersigned, if a corporation, partnership, trust or other entity, is authorized and otherwise duly qualified to purchase and hold the Securities and to enter into this Subscription Agreement and such entity has not been formed for the specific purpose of acquiring the Securities in the Company unless all of its equity owners qualify as accredited individual investors.

(i) All information which the undersigned has provided to SG Phoenix and the Company concerning the undersigned, the undersigned’s financial position and knowledge of financial and business matters, or, in the case of a

EXHIBIT 10.61

corporation, partnership, trust or other entity, concerning such knowledge of the person making the investment decision on behalf of such entity, including all information contained in this Subscription Agreement, is true, correct and complete as of the date set forth on the signature page hereof, and if there should be any adverse change in such information prior to the subscription being accepted, the undersigned will immediately provide the Company with such information.

(j) The offering and sale of the Securities to the undersigned were not made through any advertisement in printed media of general and regular paid circulation, radio or television or any other form of advertisement, or as part of a general solicitation.

(k) The undersigned shall pay all sales, transfer, income, use, and similar taxes arising out of or in connection with the Securities in accordance with all applicable laws.

4. Confidentiality . The undersigned hereby acknowledges and agrees that the Term Sheet and the information contained in this Subscription Agreement may contain material information about the Company that has not been disclosed to the public generally. The undersigned understands that it and its representatives could be subject to fines, penalties and other liabilities under applicable securities laws if the undersigned or any of its representatives trades in the Company’s securities while in possession of any material, non-public information concerning the Company. The undersigned agrees not to trade, and not to allow any of its representatives to trade, in the Company’s securities until such time as the undersigned or such representatives are no longer prohibited from so trading under all applicable securities laws (whether because the Company publicly disclosed all material information about the Company contained in the Term Sheet and this Subscription Agreement, neither the Term Sheet nor this Subscription Agreement contains material, non-public information or otherwise).

5. Indemnification. The undersigned agrees to indemnify and hold harmless the Company and its stockholders, officers, directors, employees, advisors, attorneys and agents (including SG Phoenix) from and against all liability, damage, losses, costs and expenses (including reasonable attorneys’ fees and court costs) which they may incur by reason of any breach of the representations and warranties and agreements made by the undersigned herein or in any document provided by the undersigned to the Company.

6. Market Standoff Provision . The undersigned hereby agrees that, if so requested in writing by the Company or any managing underwriter (the “ Managing Underwriter ”) in connection with any registration of the offering by the Company of any securities of the Company under the Securities Act, the undersigned shall not sell or otherwise transfer any securities of the Company during the 180-day period (or such other period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company) (the “ Market Standoff Period ”) following the effective date of a registration statement of the Company filed under the Securities Act. The Company may impose stop-transfer instructions with respect to the Securities subject to the foregoing restrictions until the end of such Market Standoff Period.

7. Legend. The undersigned understands and agrees that the Company will cause the legend set forth below, or a legend substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Securities (or the securities underlying the Securities), together with any other legend that may be required by federal or state securities laws or deemed necessary or desirable by the Company:

EXHIBIT 10.61

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION DOES NOT VIOLATE THE PROVISIONS THEREOF.

8. Additional Action . The undersigned shall, upon the request of SG Phoenix or the Company, from time to time, execute and deliver promptly to SG Phoenix or the Company all instruments and documents of further assurances or otherwise, and will do any and all such acts and things, as may be reasonably required to carry out the obligations of the undersigned hereunder and to consummate the transactions contemplated hereby.

9. Miscellaneous.

(a) The undersigned agrees not to transfer or assign this Subscription Agreement, or any of the undersigned’s interest herein, and further agrees that the transfer or assignment of the Securities acquired pursuant hereto shall be made only in accordance with all applicable laws. The covenants, representations and warranties contained in this Subscription Agreement shall be binding on the undersigned’s heirs, legal representatives, successors and assigns and shall inure to the benefit of the respective successors and assigns of the Company.

(b) The undersigned agrees that subject to any applicable state law, the undersigned may not cancel, terminate or revoke this Subscription Agreement or any agreement of the undersigned made hereunder and that this Subscription Agreement shall survive the acceptance hereof by the Company as well as the death or disability of the undersigned and shall be binding upon the undersigned’s heirs, executors, administrators, successors and assigns.

(c) This Subscription Agreement, together with the Exhibits attached hereto, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by all parties hereto.

(d) This Subscription Agreement shall be enforced, governed and construed in all respects in accordance with the laws of the State of New York, without regard to its conflicts of law rules.

(e) Within five (5) days after receipt of a written request from the Company, the undersigned agrees to provide such information, to execute and deliver such documents and to take, or forbear from taking, such actions as may be necessary to consummate the transactions contemplated herein and to comply with any and all laws and ordinances to which the Company is subject.

EXHIBIT 10.61

(f) For the convenience of the parties, any number of counterparts hereof may be executed and each such executed counterpart shall be deemed an original, but all such counterparts together shall constitute one and the same instrument.

(g) This Subscription Agreement may be executed by the undersigned and transmitted by facsimile to SG Phoenix, as administrative agent, with the original Subscription Agreement being sent to SG Phoenix and if so executed and transmitted this Subscription Agreement will be for all purposes as effective as if the parties had delivered an executed original Subscription Agreement.

[ Signature Pages Follow ]

EXHIBIT 10.61

SUBSCRIBER SIGNATURE PAGE

IN WITNESS WHEREOF, the undersigned has duly executed this Subscription Agreement as of the date first above written.

Total Amount of Investment

For Individuals :

Print Name Above

Sign Name Above

Social Security Number

For Entities :

Print Name of Entity Above

By:

Name:

Title:

Employer Identification Number

or Tax ID Number

EXHIBIT 10.61

SUBSCRIPTION ACCEPTANCE

IN WITNESS WHEREOF, the undersigned hereby accepts the subscription on behalf of the Company in accordance with the terms of the foregoing Subscription Agreement as of the date first above written.

SG PHOENIX LLC

By:

Name:

Title: Member

AMENDMENT NO. 1 TO THE REGISTRATION RIGHTS AGREEMENT

AMENDMENT NO. 1 (this “ Amendment Agreement ”), dated as of March 31, 2011, to the Registration Rights Agreement dated as of December 31, 2010 (as amended, restated, supplemented or otherwise modified from time to time, the “ Agreement ”) by and among Communication Intelligence Corporation, a Delaware corporation (the “ Company ”), and the signatories hereto.

WHEREAS , the Company and the existing holders of shares of Series C Preferred Stock and Warrants are parties to the Agreement, which sets forth the registration rights granted to the holders of Series C Preferred Stock and Warrants in connection with the shares of Company common stock issuable upon the conversion of the Series C Preferred Stock or exercise of the Warrants;

WHEREAS , the Company intends to issue and sell up to 800,000 shares of Series C Preferred Stock (the “ Follow-On Series C Shares ”) and detachable three-year warrants to purchase a total of 35,555,556 shares of Company common stock at an exercise price of $0.0225 per share (the “ Follow-On Series C Warrants ”) to accredited investors for a purchase price of $1.00 per share pursuant to a private placement (the “ Follow-On Offering ”);

WHEREAS , the Company and the undersigned holders desire to amend the Agreement, effective as of the date hereof, to, among other things, (i) allow for the purchasers of Follow-On Series C Shares and Follow-On Series C Warrants issued in the Follow-On Offering (the “ Additional Investors ”) to become parties to the Agreement and be granted the registration rights set forth therein, (ii) amend the definition of “Investors” to include the Additional Investors and (iii) amend the definition of “Preferred Shares” to include the Follow-On Series C Shares and “Warrants” to include the Follow-On Warrants issued in the Follow-On Offering;

WHEREAS , Section 9(i) of the Agreement provides that the Company will not grant any additional registration rights after the date of the Agreement without the consent of the holders of at least a majority of the Registrable Stock unless such registration rights are subordinate in all respects to the rights contained in the Agreement;

WHEREAS , Section 9(d) of the Agreement provides that amendments to the Agreement may only become effective with the written consent of the Company and the holders of at least a majority of the Registrable Stock (assuming the conversion of all Preferred Shares and Warrants into Registrable Stock);

WHEREAS , the holders of at least a majority of the Registrable Stock wish to consent to the grant of the registration rights set forth in the Agreement to the Additional Investors; and

WHEREAS , the Company and the holders of at least a majority of the outstanding shares of Registrable Stock under the Agreement wish to consent to the amendments contained herein and, upon execution of this Amendment Agreement by the Company and such holders, the requirements of Section 9(d) of the Agreement will be satisfied.

NOW, THEREFORE , in consideration of the premises and the agreements, provisions and covenants herein contained, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties do hereby agree, as follows:

1. Definitions in this Amendment Agreement . Except as otherwise defined in this Amendment Agreement (including the preamble and the recitals hereof), capitalized terms are used herein with the meanings ascribed to such terms in the Agreement.

2. Consent to Additional Parties to the Agreement . The undersigned holders of at least a majority of the Registrable Stock hereby consent to the addition of the Additional Investors as parties to the Agreement and of the grant of the registration rights set forth in the Agreement to such Additional Investors. The Company shall require each Additional Investor to agree in writing to be subject to the terms and conditions of the Agreement, and that such terms and conditions shall inure to the benefit of such Additional Investors, by executing and delivering a Joinder Agreement, in substantially the form attached as Exhibit A , and upon execution and delivery of such Joinder Agreement, each such Additional Investor shall be deemed to be an Investor under the Agreement.

3. Consent to Amendments to the Agreement . The Company and the undersigned holders of at least a majority of the outstanding shares of Registrable Stock hereby consent to the amendments to the Agreement contained in this Amendment Agreement and acknowledge that, upon execution of this Amendment Agreement by the Company and such holders, the requirements of Section 9(d) of the Agreement will be satisfied.

4. Amendment to Recitals of the Agreement . The Recitals to the Agreement are hereby amended and restated in their entirety to read as follows:

“WHEREAS, the Company and the other parties hereto wish to provide certain arrangements with respect to the registration of shares of common stock, $0.01 par value, of the Company (the “ Common Stock ”) under the Securities Act (as defined below);

WHEREAS, the Company and certain of the Investors who are signatories thereto have entered into a Series C Preferred Stock Purchase Agreement, dated as of December 9, 2010 (the “ Purchase Agreement ”), pursuant to which, subject to the terms and conditions therein, the Company is issuing and selling to such Investors, and such Investors are purchasing from the Company, an aggregate of up to 3,000,000 shares of the Company’s Series C Participating Convertible Preferred Stock, par value $0.01 per share (the “ Series C Preferred Stock ”), and warrants to purchase shares of Common Stock (the “ Warrants ”) up to an aggregate amount of 133,333,333 shares (subject to adjustments);

WHEREAS, SG Phoenix LLC, on behalf of the Company, and certain investors (the “ Additional Investors ”) have entered into subscription agreements, pursuant to which, subject to the terms and conditions therein, the Company is issuing and selling to such Additional Investors, and such Additional Investors are purchasing from the Company, an aggregate of up to 800,000 shares of Series C Preferred Stock and warrants

EXHIBIT 10.62

to purchase up to 35,555,556 shares of Common Stock (subject to adjustments) (the “ Follow-On Offering ”); and

WHEREAS, it is a condition to the obligations of the Investors under the Purchase Agreement and the Additional Investors pursuant to the Follow-On Offering that this Agreement be executed by the parties hereto, and the parties are willing to execute this Agreement and to be bound by the provisions hereof.”

5. Amendment to Definition of “Investors” in the Agreement . The definition of “Investors” in the Agreement is hereby amended effective as of the date hereof to include the Additional Investors in the Offering.

6. Amendment to Definition of “Preferred Shares” and “Warrants” in the Agreement . The definition of “Preferred Shares” in Section 1 of the Agreement is hereby amended and restated in its entirety to read as follows:

“ Preferred Shares ” means shares of Series C Preferred Stock issued to the Investors pursuant to the Purchase Agreement or the Follow-On Offering, or by way of a stock dividend, stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization.”

The definition of “Warrants” is hereby added to Section 1 of the Agreement and reads as follows:

“ Warrants ” means the Warrants issued to the Investors pursuant to the Purchase Agreement or the Follow-On Offering.

7. Effectiveness of Amendments . The amendments to the Agreement contained in this Amendment Agreement shall become effective on and as of the date hereof. From and after such date, each reference in the Agreement to the “Agreement”, or any like expression referring to the Agreement, shall be deemed to refer to the Agreement as amended by this Amendment Agreement. The Agreement, other than as amended hereby, shall remain unchanged and in full force and effect.

8. Counterparts; Facsimile . This Amendment Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute but one and the same instrument. Delivery of a counterpart hereof by facsimile transmission or by e-mail transmission shall be as effective as delivery of a manually executed counterpart hereof.

9. Governing Law . This Amendment Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of law principles.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE TO FOLLOW]

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

COMPANY:	COMMUNICATION INTELLIGENCE CORPORATION By: /s/ Craig Hutchison Name: Craig Hutchison Title: Vice President and Assistant Treasurer
REQUIRED HOLDERS:	PHOENIX VENTURE FUND LLC By: SG Phoenix Ventures LLC, its Managing Member By: /s/ Andrea Goren Name: Andrea Goren Title: Member
	/s/ Michael W. Engmann MICHAEL W. ENGMANN
	MDNH PARTNERS L.P. By: /s/ Michael W. Engmann Name: Michael W. Engmann Title: General Partner

Signature Page to Amendment No. 1 to the Registration Rights Agreement

communication intelligence corporation

FOR IMMEDIATE RELEASE

CIC CLOSES FOLLOW-ON FINANCING ROUND

Investor Demand Leads to Second Closing of Series C Preferred Stock;

Funding Provides CIC with Additional Runway to Demonstrate Progress

Redwood Shores, CA, April 4, 2011 – Communication Intelligence Corporation (“CIC” or the “Company”) (OTCQB: CICI), a leading supplier of electronic signature solutions and the recognized leader in biometric signature verification, reported today that it had closed a follow-on round of funding with a number of new and existing investors to provide additional working capital.

The supplemental financing totaled $800,000 in gross proceeds from the issuance of Series C Participating Convertible Preferred Stock (“Series C Preferred”) and warrants. The closing occurred on March 31, 2011, and represents a follow-on investment on the same terms and conditions as the Company’s Series C Preferred financing that closed on December 31, 2010. Detailed information on the Series C Preferred is included in the Company’s definitive consent solicitation statement that was filed with the Securities and Exchange Commission on December 21, 2010.

“We are pleased to have completed a second closing of Series C Preferred,” stated Philip Sassower, CIC’s Chairman and Chief Executive Officer. “While we do not have an immediate need for capital, this follow-on offering is expected to provide us with additional runway to demonstrate progress and demonstrates investors’ positive reaction to the significant changes implemented at CIC over the past several months. This additional funding brings the total amount raised between December and last Thursday’s closing to approximately $3 million, which, coupled with the recapitalization that was implemented in August 2010, positions CIC for improved performance in the coming quarters and beyond, as our new management team executes our enhanced go-to-market initiatives.”

CIC is a leading supplier of electronic signature products and the recognized leader in biometric signature verification. CIC enables companies to achieve truly paperless workflow in their electronic business processes by providing multiple signature technologies across virtually all applications. CIC’s solutions are available both in SaaS and on-premise delivery models and afford “straight-through-processing,” which can increase customer revenue by enhancing user experience and can also

275 shoreline drive #500 · redwood shores · ca 94065 usa · 650-802-7888 t · 650-802-7777 f

EXHIBIT 99.1

reduce costs through paperless and virtually error-free electronic transactions that can be completed significantly quicker than paper-based procedures. CIC is headquartered in Redwood Shores, California. For more information, please visit our website at http://www.cic.com . CIC’s logo is a registered trademark of CIC.

Forward Looking Statements

Certain statements contained in this press release, including without limitation, statements containing the words “believes”, “anticipates”, “hopes”, “intends”, “expects”, and other words of similar import, constitute “forward looking” statements within the meaning of the Private Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors, which may cause actual events to differ materially from expectations. Such factors include the following (1) technological, engineering, quality control or other circumstances which could delay the sale or shipment of products containing the Company’s technology; (2) economic, business, market and competitive conditions in the software industry and technological innovations which could affect customer purchases of the Company’s solutions; (3) the Company’s inability to protect its trade secrets or other proprietary rights, operate without infringing upon the proprietary rights of others or prevent others from infringing on the proprietary rights of the Company; and (4) general economic and business conditions and the availability of sufficient financing.

Contact Information:

Investor Relations & Media Inquiries:

275 shoreline drive #500 · redwood shores · ca 94065 usa · 650-802-7888 t · 650-802-7777 f