<PAGE>
                                                                     EXHIBIT 4.1



                                  FORM OF NOTE


        THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR
        FOR SALE IN CONNECTION WITH, THE DISTRIBUTION THEREOF. THIS NOTE HAS NOT
        BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
        STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, OFFERED FOR SALE,
        TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION
        UNDER OR EXEMPTION FROM SUCH ACT AND ALL APPLICABLE STATE SECURITIES
        LAWS.

                               CRITICAL PATH, INC.

                    CONVERTIBLE SUBORDINATED PROMISSORY NOTE


$                                                     San Francisco, California
 ---------------------                                March 9, 2004

               Critical Path, Inc., a California corporation (the "Company"),
the principal office of which is located in San Francisco, California, for value
received hereby promises to pay to the order of _____________________________,
or its registered assigns ("Holder"), the sum of _______________________________
dollars ($_________), or such lesser amount as shall then equal the outstanding
principal amount hereof on the terms and conditions set forth hereinafter. The
outstanding principal amount hereof and all accrued and unpaid interest hereon,
as set forth below, shall be due and payable on the earlier to occur of (i)
March 9, 2008, (ii) when declared due and payable by Holder upon the occurrence
of an Event of Default (as defined below), (iii) consummation of a Qualified
Asset Sale, (iv) a Change of Control, or (v) any sale of capital stock or Stock
Equivalents by the Company, any cash capital contribution from any third person
or any other debt or equity financing consummated by the Company after the date
of issuance of this Note which, in the case of (v), individually or in the
aggregate raises proceeds of at least forty million dollars ($40,000,000) in
cash or cash equivalents (the earliest of the events set forth in items (i)-(v)
immediately above, the "Maturity Date").

               The following is a statement of the rights of the Holder of this
Note and the conditions to which this Note is subject, and to which the Holder
hereof, by the acceptance of this Note, agrees:

               1. Definitions. Except as otherwise defined herein, each
capitalized term used herein shall have the meaning assigned to it in the Note
Purchase Agreement, as in effect on the date hereof, and without regard to any
subsequent termination of the Note Purchase Agreement. All other references to
the Note Purchase Agreement in this Note refer to the Note Purchase Agreement as
in effect on the date hereof, and without regard to any subsequent termination
of the Note Purchase Agreement. As used in this

<PAGE>
Note, the following terms, unless the context otherwise requires, have the
following meanings:

                      1.1 "Affiliate" means any Person who is an "affiliate" as
defined in Rule 12b-2 of the General Rules and Regulations of the Securities
Exchange Act of 1934, as amended.

                      1.2 "Capitalized Lease Obligations" means, with respect to
any Person, all rental obligations of such Person which, under GAAP, are or will
be required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.

                      1.3 "Change of Control" shall mean (i) any merger,
consolidation or other business combination transaction (or series of related
transactions) in which the stockholders owning a majority of the voting
securities of the Company prior to such transaction do not own a majority of the
voting securities of the surviving entity, (ii) any tender offer, exchange offer
or other transaction whereby any Person or "group" (as defined in Rule 13d-3 of
the General Rules and Regulations of the Securities Exchange Act of 1934, as
amended) (other than General Atlantic Partners 74, L.P., GAP Coinvestment
Partners II, L.P., GapStar, LLC, GAP-W, LLC, GAPCO GmbH & Co. KG, Campina
Enterprises Limited, Cenwell Limited, Great Affluent Limited, Dragonfield
Limited and Lion Cosmos Limited and the Affiliates of the foregoing, provided
that Affiliates shall be deemed not to include any portfolio companies of any of
the foregoing) obtains a majority of the outstanding shares of capital stock
entitled to vote in the election of directors, (iii) any proxy contest in which
a majority of the Board of Directors of the Company (or persons appointed by
such Board of Directors) prior to such contest do not constitute a majority of
the Company's Board of Directors after such contest or (iv) any other
transaction described in any stockholder rights agreement or "poison pill," if
any, to which the Company is party, which may permit the holders of any rights
or similar certificates to exercise the rights evidenced thereby.

                      1.4 "Company" shall have the meaning set forth in the
recitals hereto, and includes any corporation that shall succeed to or assume
the obligations of the Company under this Note.

                      1.5 "Common Conversion Date" shall have the meaning set
forth in Section 3.1(b) hereof.

                      1.6 "Common Stock" means the common stock, par value
$0.001 per share, of the Company.

                      1.7 "Conversion Date" shall mean the Subsequent Closing
Date.

                      1.8 "Domestic Subsidiary" shall have the meaning set forth
in Section 5.10 hereof.



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                      1.9 "Event of Default" shall have the meaning set forth in
Section 6 hereof.

                      1.10 "GA Notes" shall mean the Convertible Subordinated
Promissory Notes, each dated November 26, 2003, issued by the Company to the GAP
Entities pursuant to the Purchase and Exchange Agreement.

                      1.11 "GAP Entities" shall mean General Atlantic Partners
74, L.P., GAP Coinvestment Partners II, L.P., GapStar, LLC and GAPCO GmhH & Co.
KG.

                      1.12 "Guarantor" shall have the meaning set forth in the
Security Agreement.

                      1.13 "Holder" shall mean the registered holder of this
Note from time to time, and in the plural, shall mean all registered holders of
Notes from time to time issued by the Company pursuant to the Note Purchase
Agreement.

                      1.14 "Intercreditor Agreement" shall mean the
Intercreditor Agreement, dated the date hereof, among the GAP Entities, the
January Lenders, Guggenheim Portfolio Company XIII, Crosslink Crossover Fund IV,
L.P., Sagamore Hill Hub Fund, Ltd., Criterion Capital Partners, Ltd., Criterion
Capital Partners, Institutional, Criterion Capital Partners, L.P. and Capital
Ventures International.

                      1.15 "Interest Amount" shall have the meaning set forth in
Section 3.1 hereof.

                      1.16 "Investment" means (i) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or otherwise)
of assets (other than equipment, inventory, supplies or other assets acquired in
the ordinary course of business of the Company), capital stock, bonds, notes,
debentures, partnership, joint venture or other ownership interests or other
securities of any Person, (ii) any deposit with, or advance, loan or other
extension of credit to, or on behalf of, any Person (other than deposits made in
connection with the purchase of equipment, inventory, services, leases, supplies
or other assets in the ordinary course of business of the Company), and (iii)
any other capital contribution to or investment in any Person, including,
without limitation, any guaranty obligation incurred for the benefit of any
Person. For the sake of clarity, Investments shall include any transfer of
property or assets by the Company to any of its Subsidiaries or by any
Subsidiary of the Company to any other Subsidiary.

                      1.17 "January Lenders" shall mean Permal U.S.
Opportunities Limited, Zaxis Equity Neutral, L.P., Zaxis Institutional Partners,
L.P., Zaxis Offshore Limited, Zaxis Partners, L.P. and Passport Master Fund,
L.P.

                      1.18 "January Note Agreement" shall mean the Convertible
Note Purchase Agreement, dated January 16, 2004, among the January Lenders and
the Company.



                                       3
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                      1.19 "January 2004 Notes" shall mean the Convertible
Subordinated Promissory Notes, each dated January 16, 2003, issued by the
Company to the January Lenders pursuant to the January Note Agreement.

                      1.20 "Loan Documents" shall have the meaning set forth in
the Security Agreement.

                      1.21 "Note" shall mean this note, and in the plural, shall
mean all notes issued to the Lenders pursuant to the terms of the Note Purchase
Agreement, including this Note, and all amendments, modifications and extensions
thereto.

                      1.22 "Note Purchase Agreement" means that certain
Convertible Note Purchase Agreement, dated March 9, 2004, among the Company, the
Holder and the other parties thereto from time to time, and all amendments,
modifications and extensions thereto.

                      1.23 "Permitted Investments" means (i) Investments in cash
or cash equivalents, (ii) accounts receivable created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; (iii) Investments existing on the closing date, and
listed on Schedule 3.27 to the Note Purchase Agreement, (iv) guaranty
obligations permitted by Section 5.3 of this Agreement, (v) loans to employees,
directors or officers of the Company in connection with the award of convertible
bonds or capital stock under a stock incentive plan, stock option plan or other
equity-based compensation plan or arrangement, (vi) other advances or loans to
employees, directors, officers or agents of the Company in the ordinary course
of business not to exceed $500,000 in the aggregate at any time outstanding;
(vii) loans, advances and investments in foreign Subsidiaries (that are not
incorporated or otherwise organized under the laws of the United States of
America or any state thereof) in an amount not to exceed $1,000,000 in the
aggregate at any time outstanding; (viii) any acquisition for which the prior
written consent of the Holders of a majority of the outstanding principal amount
of all of the Notes issued by the Company pursuant to the Note Purchase
Agreement has been obtained, (ix) other loans, advances and investments of a
nature not contemplated by the foregoing sections in an amount not to exceed
$500,000 in the aggregate at any time outstanding or (x) Investments by the
Company in the Guarantor.

                      1.24 "Permitted Liens" shall have the meaning set forth in
Section 5.4.

                      1.25 "Person" means any individual, firm, corporation,
partnership, trust, joint venture, joint stock company, limited liability
company, Governmental Authority or other entity of any kind, and shall include
any successor (by merger or otherwise) of such entity.

                      1.26 "Price Per Share" shall have the meaning attributed
to such term in the Series E Certificate of Determination, as filed with the
Secretary of State of the State of California.




                                       4
<PAGE>
                      1.27 "Purchase and Exchange Agreement" shall mean the
Convertible Note Purchase and Exchange Agreement, dated November 18, 2003, among
the Company, the GAP Entities, GAP-W, LLC and the other parties thereto, as
amended.

                      1.28 "Qualified Asset Sale" means the sale, transfer or
other disposition of any of the assets of the Company or any of its
Subsidiaries, other than (a) sales of assets in the ordinary course of business,
(b) sales of assets where the proceeds are used to repay Indebtedness owing to
SVB, (c) the sale, transfer or other disposition of assets of the Company where
the proceeds are applied to the purchase price or traded in for credit against
the purchase price of other assets, provided that any such purchase is made, or
credit issued, within 90 days of the sale, transfer or other disposition, and
(d) one or more sales of the Company's assets (other than sales otherwise
included in clauses (a), (b), and (c) immediately above) which collectively
yield up to an aggregate of one million dollars ($1,000,000) in gross proceeds
to the Company while this Note is outstanding.

                      1.29 "Restricted Payment" means (a) any dividend or other
distribution (whether in cash, securities or other property) with respect to any
shares of any class of capital stock of the Company or any of its Subsidiaries
or (b) any payment (whether in cash, securities or other property), including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any shares of any class
of capital stock of the Company or any Subsidiary or any option, warrant or
other right to acquire any such shares of capital stock of the Company or any
Subsidiary.

                      1.30 "Security Agreement" means that certain Guaranty and
Security Agreement, of even date herewith between the Company, Compass Holding
Corp., the Lenders and the other parties thereto from time to time, and all
amendments, modifications and extensions thereto.

                      1.31 "Series E Conversion Price" shall have the meaning
set forth in the Series E Certificate of Determination.

                      1.32 "Series E Preferred Stock" means the Series E
Preferred Stock, par value $0.001, of the Company.

                      1.33 "Subordination Agreement" shall have the meaning set
forth in Section 5.3.

                      1.34 "Subsequent Closing Date" shall have the meaning set
forth in Section 2.4(e) of the Note Purchase Agreement.

                      1.35 "SVB" means Silicon Valley Bank, a California
chartered bank, or any Affiliates thereof.

                      1.36 "Ten Percent Holder" means, with respect to a class
of equity securities of the Company, a Person (together with such Person's
Affiliates) who, directly or indirectly, beneficially owns 9.9% or more of such
class of equity securities of



                                       5
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the Company, as defined by Section 13(d) of the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.

                      1.37 "UCC" shall have the meaning set forth in Section
5.4.

               2. Interest. Simple interest shall accrue at the rate of ten
percent (10%) per annum (or such lesser amount as shall equal the highest rate
of interest allowable under applicable law) (the "Interest Rate"), on the
outstanding principal of this Note from the date of this Note until the Maturity
Date or the date this Note is otherwise repaid. The Company shall not be
obligated to make any payments of interest which shall have accrued under this
Note prior to the Maturity Date. Interest shall be calculated on the basis of a
360-day year for the actual number of days elapsed. In the event that the
principal amount of this Note, any interest, or any amount payable hereunder is
not paid in full when such amount becomes due and payable, or upon the
occurrence of an Event of Default, interest shall accrue at the lesser of (a)
the initial Interest Rate plus five percent (5%) per annum or (b) the highest
rate of interest allowable under applicable law, on the balance of all amounts
outstanding until such overdue amounts are paid or the Event of Default is
cured, and such interest shall be payable on demand.

               3. Conversion.

                      3.1 Conversion.

                             (a) On the Conversion Date, the principal amount of
this Note plus the accrued and unpaid interest thereon (the "Interest Amount"),
shall be automatically converted into the number of fully paid and nonassessable
shares of Series E Preferred Stock equal to the quotient obtained by dividing
(a) the entire principal amount of this Note plus the Interest Amount by (b) the
Price Per Share.

                             (b) In the event that the Conversion Date has not
occurred on or prior to August 15, 2004 (the "Common Conversion Date"), then,
following the Common Conversion Date, the principal amount of this Note plus the
Interest Amount shall be convertible, at the option of Holder and from time to
time, only into Common Stock at a conversion price per share equal to $2.18, as
adjusted for any stock dividends, stock splits or similar consolidations or
subdivisions, following the date hereof; provided, however, that Holder shall
not be permitted to convert any portion of the principal of this Note or the
Interest Amount into Common Stock pursuant to this Section 3.1(b) if, at the
time of such conversion, the conversion would cause Holder to be a Ten Percent
Holder.

                      3.2 Notice of Conversion. Upon conversion of this Note as
provided in Section 3.1, Holder shall surrender this Note to the Company and
shall state the name or names in which the certificate or certificates for such
shares of Series E Preferred Stock or Common Stock, as the case may be, are to
be issued. The Person or Persons entitled to receive the shares of Series E
Preferred Stock or Common Stock, as the case may be, issuable upon such
conversion shall be treated for all purposes as the record holder or holders (a)
of such shares of Series E Preferred Stock as of the



                                       6
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Conversion Date and (b) of such shares of Common Stock as of the date of any
conversion pursuant to Section 3.1(b).

                      3.3 Delivery of Stock Certificates. Upon conversion of
this Note as provided in Section 3.1, the Company at its expense will issue and
deliver to Holder of this Note a certificate or certificates (bearing such
legends as are required by applicable state and federal securities laws in the
opinion of counsel to the Company) for the number of full shares of Series E
Preferred Stock or Common Stock, as the case may be, issuable upon such
conversion.

                      3.4 Mechanics and Effect of Conversion. No fractional
shares of Series E Preferred Stock or Common Stock, as the case may be, shall be
issued upon conversion of this Note. In lieu of the Company issuing any
fractional shares to Holder upon the conversion of this Note, the Company shall
pay to Holder the amount of outstanding principal and interest that is not so
converted. Upon conversion of all amounts due under this Note, the Company shall
be released from all of its obligations under this Note.

               4. Adjustments. The number of shares of Series E Preferred Stock
or Common Stock convertible hereunder are subject to adjustment from time to
time as follows:

                      4.1 Merger, Sale of Assets, Etc. Subject to Section 4.2,
if at any time while this Note remains outstanding and unexpired there shall be
(a) a reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (b) a merger or
consolidation of the Company with or into another corporation in which the
Company is not the surviving entity, or a merger in which the Company is the
surviving entity but the shares of the Company's capital stock outstanding
immediately prior to the merger are converted by virtue of the merger into other
property, whether in the form of securities, cash or otherwise or (c) a sale or
transfer of the Company's stock, properties or assets as, or substantially as,
an entirety to any other Person, then, as a part of such reorganization, merger,
consolidation, sale or transfer, lawful provision shall be made so that Holder
shall thereafter be entitled to receive by converting this Note the number of
shares of stock or other securities or property of the successor corporation
resulting from such reorganization, merger, consolidation, sale or transfer that
a holder of the shares deliverable upon conversion of this Note would have been
entitled to receive in such reorganization, consolidation, merger, sale or
transfer if this Note had been converted immediately before such reorganization,
merger, consolidation, sale or transfer (notwithstanding that the Stockholder
Approval may not yet have been obtained), all subject to further adjustment as
provided in this Section 4. The foregoing provisions of this Section 4.1 shall
similarly apply to successive reorganizations, consolidations, mergers, sales
and transfers and to the stock or securities of any other corporation. If the
per share consideration payable to Holder hereof for shares in connection with
any such transaction is in a form other than cash or marketable securities, then
the value of such consideration shall be determined in good faith by the
Company's Board of Directors based on the amount the Holder would have otherwise
been entitled to receive had the transaction or transactions not occurred.



                                       7
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In all events, appropriate adjustment (as determined in good faith by the
Company's Board of Directors) shall be made in the application of the provisions
of this Note with respect to the rights and interests of Holder after the
transaction, to the end that the provisions of this Note shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event upon conversion of this Note. The
Company shall be obligated to retain and set aside, or otherwise make fair
provision for exercise of the right of the Holder to receive, the shares of
stock and/or other securities, cash or other property provided for in this
Section 4.1.

                      4.2 Election of Holder upon Merger or Sale of Assets.
Notwithstanding anything to the contrary contained herein, if an event shall
occur as provided in Section 4.1 hereof that would otherwise result in the
occurrence of the Maturity Date pursuant to clause (iii) or (iv) of the first
paragraph of this Note, then the Holder may, in its sole discretion, by written
notice to the Company elect to convert the principal amount of this Note plus
the Interest Amount into the number of shares of stock or other securities or
property described in Section 4.1, in lieu of receiving payment in full of all
amounts outstanding under this Note. The number of shares of stock or other
securities or property to be issued upon such conversion shall be determined in
accordance with Section 4.1 hereof, taking into account the occurrence of such
event.

                      4.3 Reclassification, Etc. If the Company shall, at any
time while this Note, or any portion thereof, remains outstanding and unexpired,
by reclassification of securities or otherwise, change any of the securities as
to which conversion rights under this Note exist into the same or a different
number of securities of any other class or classes, this Note shall thereafter
represent the right to acquire such number and kind of securities as would have
been issuable with respect to the securities that were subject to the conversion
rights under this Note immediately prior to such reclassification or other
change, and the Price Per Share shall be appropriately adjusted, all subject to
further adjustment as provided in this Section 4.

                      4.4 Split, Subdivision or Combination of Shares. If the
Company at any time while this Note, or any portion thereof, remains outstanding
and unexpired shall split, subdivide or combine the shares of Series E Preferred
Stock or Common Stock into a different number of securities of the same class,
the Price Per Share or conversion price, as the case may be, shall be
proportionately adjusted.

                      4.5 Series E Adjustments. The initial Series E Conversion
Price of the shares of Series E Preferred Stock issued upon conversion of this
Note pursuant to Section 3.1 shall equal the Series E Conversion Price in effect
on the Conversion Date, subject to the adjustment of such Series E Conversion
Price from time to time thereafter as provided in the Series E Certificate of
Determination.

                      4.6 Certificate as to Adjustments. Upon the occurrence of
each adjustment or readjustment pursuant to this Section 4, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to Holder a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based.



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                      4.7 No Impairment. The Company will not, by any voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed hereunder by the Company, but will at all times in
good faith assist in the carrying out of all the provisions of this Section 4
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of Holder against impairment.

               5. Covenants. The Company covenants and agrees that until the
earlier of (i) the date on which all Obligations (as defined in the Security
Agreement) have been paid in full or (ii) the date on which all amounts
outstanding under the Notes have converted pursuant to Section 3.1(a) or Section
3.1(b):

                      5.1 Financial Statements and Other Information. The
Company shall deliver to the Holder of this Note the financial statements and
other information required to be delivered under Section 8.1 of the Note
Purchase Agreement.

                      5.2 Financial Covenants. The Company shall at all times
comply with the financial and other covenants set forth in Schedule 8.5 to the
Note Purchase Agreement as if such covenants were set forth herein.

                      5.3 Indebtedness. The Company shall not, and shall not
permit any Subsidiary to, issue, incur, assume, create or have outstanding any
Indebtedness, provided, however, that the foregoing shall not restrict nor
operate to prevent:

                             (a) Indebtedness in favor of the Holders under the
Loan Documents;

                             (b) Indebtedness existing on the date hereof, as
set forth on Schedule 3.22 to the Note Purchase Agreement;

                             (c) Indebtedness for accounts payable incurred in
the ordinary course of business by the Company;

                             (d) Indebtedness incurred solely for the purpose of
financing the acquisition of any equipment, machinery, software, improvements or
any other similar property, or extensions, renewals or replacements of any of
the foregoing for the same or a lesser amount; provided, that the aggregate
outstanding principal amount of all Indebtedness permitted pursuant to this
clause (d) outstanding for more than sixty (60) days after the incurrence of
such Indebtedness shall not at any time exceed $500,000;

                             (e) Indebtedness of the Company evidenced by
Capitalized Lease Obligations, provided, that in no event shall the aggregate
principal amount of Capitalized Lease Obligations permitted by this clause (e)
exceed $500,000 at any time outstanding; and



                                       9
<PAGE>
                             (f) Any extension, renewal, refinancing, refunding,
or replacement (each, a "refinancing") of Indebtedness permitted by clauses (b)
and (e) above, on such terms and conditions as are, on the whole, not materially
more onerous to the Company than the terms and conditions of such original
Indebtedness on the date of such refinancing (including that the principal
amount of such refinancing Indebtedness does not exceed the principal amount of,
plus the amount of accrued and unpaid interest on, the Indebtedness so
refinanced (plus the amount of reasonable premium and fees and expenses incurred
in connection therewith)), provided that, in the case of a refinancing of
Indebtedness owed by the Company or any Subsidiary to SVB, this clause (f) shall
only apply to the extent consistent with the Subordination Agreement, dated as
of the date hereof, by and among SVB, the Holders and the Company (the
"Subordination Agreement").

                      5.4 Liens. The Company shall not, and shall not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets (real or personal, tangible or
intangible) of the Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable), or assign any right to
receive income or permit the filing of any financing statement under the Uniform
Commercial Code, as from time to time in effect in the relevant jurisdiction
(the "UCC"), or any other similar notice of Lien under any similar recording or
notice statute; provided, that the provisions of this Section 5.4 shall not
prevent the creation, incurrence, assumption or existence of the following:

                             (a) Liens arising in the ordinary course of
business by statute in connection with worker's compensation, unemployment
insurance, old age benefits, social security obligations, statutory obligations
or other similar charges (other then Liens arising under ERISA), good faith cash
deposits in connection with tenders, contracts or leases to which the Company or
any Subsidiary is a party or other cash deposits required to be made in the
ordinary course of business, provided, that such Liens do not have a material
adverse effect on the ability of the Company to repay amounts due under the
Notes;

                             (b) inchoate Liens for taxes, assessments or
governmental charges or levies not yet due or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by appropriate
proceedings for which adequate reserves have been established in accordance with
GAAP;

                             (c) Liens in respect of property or assets of the
Company or its Subsidiaries imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's and mechanics' liens and other similar
Liens arising in the ordinary course of business, and (i) which do not in the
aggregate materially detract from the value of the Company's and its
Subsidiaries' property or assets taken as a whole or result in a material
adverse effect on the Condition of the Company or (ii) which are



                                       10
<PAGE>
being contested in good faith by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property or assets
subject to any such Lien;

                             (d) the pledge of assets for the purpose of
securing an appeal, stay or discharge in the course of any legal proceeding,
provided that the aggregate amount of liabilities of the Company and its
Subsidiaries secured by a pledge of assets permitted under this subsection,
including interest and penalties thereon, if any, shall not be in excess of
$500,000 at any one time outstanding;

                             (e) any interest or title of a lessor under any
operating lease;

                             (f) easements, rights-of-way, restrictions and
other similar encumbrances against real property incurred in the ordinary course
of business;

                             (g) the Liens existing on the date hereof
identified on Schedule 3.22 to the Note Purchase Agreement;

                             (h) Liens on cash deposited with account debtors to
secure performance by the Company or any Subsidiary in the ordinary course of
business subject to customary and reasonable terms;

                             (i) Liens upon assets of the Company or its
Subsidiaries subject to Capitalized Lease Obligations, provided, that (A) such
Liens only serve to secure the payment of Indebtedness permitted by Section
5.3(e) arising under such Capitalized Lease Obligation and (B) the Lien
encumbering the asset giving rise to the Capitalized Lease Obligation does not
encumber any other asset of the Company or its Subsidiaries;

                             (j) Liens placed upon equipment, machinery,
software, improvements or any other similar property, used in the ordinary
course of business of the Company or any of its Subsidiaries at the time of the
acquisition thereof by the Company or any of its Subsidiaries or within ninety
(90) days thereafter to secure Indebtedness permitted by Section 5.3(d) above;
provided, that the Liens encumbering the equipment, machinery software,
improvements or any other similar property so acquired do not encumber any other
asset of the Company or its Subsidiaries;

                             (k) set-off rights of depository institutions; and

                             (l) Liens created by the Security Agreement
(collectively with clauses (a) through (k) hereof, the "Permitted Liens").

                      5.5 Fundamental Changes. The Company will not, and will
not permit any Subsidiary to, merge into or consolidate with any other Person,
or permit any other Person to merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of (in one transaction or a series of
transactions) all or substantially all of its



                                       11
<PAGE>
assets, or all or substantially all of the stock of any of its Subsidiaries (in
each case, whether now owned or hereafter acquired), or liquidate or dissolve,
except that, if at the time and immediately after giving effect thereto no Event
of Default shall have occurred and be continuing (i) the Company or any of its
Subsidiaries may, with the prior written consent of the Holders, merge with or
into any other Person; (ii) any wholly-owned Subsidiary of the Company (other
than the Guarantor) may merge with or into the Company or any other wholly-owned
Subsidiary of the Company; (iii) any Subsidiary (other than the Guarantor, and
except as otherwise prohibited by this Note) may sell, transfer, lease or
otherwise dispose of its assets to the Company or to another wholly-owned
Subsidiary of the Company; and (iv) any Subsidiary may liquidate or dissolve if
the board of directors of the Company determine in good faith that such
liquidation or dissolution is in its best interests and is not disadvantageous
to the Holders.

                      5.6 Restricted Payments. The Company will not, and the
Company will not permit any Subsidiary to, declare or make, or agree to pay or
make, directly or indirectly, any Restricted Payment, except that (i) any
Subsidiary may make a Restricted Payment to the Company or any of its
wholly-owned Subsidiaries, and (ii) the Company or any of its Subsidiaries may
make any Restricted Payment required by the terms of the Note Purchase Agreement
and the other documents executed in connection therewith.

                      5.7 Transactions with Affiliates. The Company will not,
and the Company will not permit any Subsidiary to, sell, lease or otherwise
transfer any property or assets to, or purchase lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) transactions that are at prices and on terms and
conditions not less favorable to the Company or such Subsidiary than could be
obtained on an arm's length basis from unrelated third parties, (b) transactions
exclusively between the Company and the Guarantor and (c) transactions under the
agreements listed on Schedule 3.17 to the Note Purchase Agreement.

                      5.8 Investments. The Company will not, and the Company
will not permit any Domestic Subsidiary (as hereinafter defined) to, make an
Investment in any Person, except for Permitted Investments.

                      5.9 Nature of Business. The Company will not, and the
Company will not permit any Subsidiary to, engage in any business other than
that conducted on the date hereof and any businesses reasonably related thereto.

                      5.10 Property of Existing Domestic Subsidiaries. The
Company will not permit, or suffer to allow, any Subsidiary that is incorporated
or otherwise organized under the laws of the United States of America or any
state thereof (a "Domestic Subsidiary"), excluding the Guarantor, to (i) own,
hold, lease, license, purchase or otherwise acquire any personal or real
property (excluding any material intellectual property) in excess of $50,000 for
all property held by such Subsidiary, or $250,000 in the aggregate for all
property held by all Domestic Subsidiaries (ii) maintain



                                       12
<PAGE>
any deposit account in its name, (iii) own or otherwise hold any rights to any
material intellectual property or (iv) otherwise conduct any business or
maintain operations.

                      5.11 Formation of Subsidiaries. The Company will not, and
will not cause or permit any of its Subsidiaries to, form, acquire or permit the
existence of any new domestic Subsidiary, without causing such domestic
Subsidiary to execute and deliver to the Holders a secured guaranty of the Notes
and related security document, in form and substance satisfactory to the
Holders.

                      5.12 Books and Records. The Company shall keep proper
books of record and account, in which full and correct entries shall be made of
all financial transactions and the assets and business of the Company and its
Subsidiaries in accordance with GAAP consistently applied.

                      5.13 Inspection. The Company shall, and shall cause each
of its Subsidiaries to, permit representatives of the Holders to visit and
inspect any of its properties, to examine its corporate, financial and operating
records and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with their respective directors, officers and
independent public accountants, all at such reasonable times during normal
business hours and as often as may be reasonably requested upon notice to the
Company.

                      5.14 Maintenance of Business. The Company shall, and shall
cause each Subsidiary to, preserve and maintain its existence. The Company
shall, and shall cause each Subsidiary to, preserve and keep in force and effect
all licenses, permits, franchises, approvals, patents, trademarks, trade names,
trade styles, copyrights, and other property rights necessary to the proper
conduct of its business, except where the failure to do so could not reasonably
be expected to have a material adverse effect on the Condition of the Company or
on the prospects of repayment of the Notes.

                      5.15 Maintenance of Properties. The Company shall, and
shall cause each Subsidiary to, maintain, preserve and keep its property and
equipment in good repair, working order and condition (ordinary wear and tear
excepted) and shall from time to time make all needful and proper repairs,
renewals, replacements, additions and betterments thereto so that at all times
the efficiency thereof shall by fully preserved and maintained, except in each
case to the extent that, in the reasonable business judgment of such Person, any
such property or equipment is no longer necessary for the proper conduct of the
business of such Person.

               6. The occurrence of any one or more of the following events
shall constitute an "Event of Default":

                      6.1 Failure To Pay. (i) The failure of the Company to pay
any principal due under any of the Notes when due and payable (whether by
acceleration, declaration, extension or otherwise), or (ii) the failure of the
Company to pay any other amounts due under any of the Notes when due and payable
if such failure is not cured within five (5) days of Company's receipt of notice
thereof from any of the Holders.



                                       13
<PAGE>
                      6.2 Financial Covenants. The failure of Company or any of
its Subsidiaries to perform, observe or comply with any of the Financial
Covenants set forth on Schedule 8.5 to the Note Purchase Agreement, and
incorporated by reference in this Note in Section 5.2.

                      6.3 Other Covenants and Agreements. The failure of Company
or any of its Subsidiaries to perform, observe or comply with any of the
covenants of this Note, the Security Agreement or any of the other Loan
Documents (other than the Financial Covenants set forth on Schedule 8.5 to the
Note Purchase Agreement, and incorporated by reference in this Note in Section
5.2), if such failure is not cured within sixty (60) days.

                      6.4 Representations and Warranties. If any representation
or warranty made by the Company or any of its Subsidiaries in the Loan Documents
is not true and correct in all material respects on the Initial Closing Date.

                      6.5 Default on Other Obligations. The occurrence of any
condition or default under any other indebtedness for borrowed money of the
Company or any of its Subsidiaries with a principal amount of at least five
hundred thousand dollars ($500,000) that results in the acceleration of such
indebtedness which is not cured within sixty (60) days.

                      6.6 Involuntary Bankruptcy. There shall be filed against
the Company or any of its Subsidiaries an involuntary petition or other pleading
seeking the entry of a decree or order for relief under the United States
Bankruptcy Code or any similar federal or state insolvency or similar laws
ordering: (a) the liquidation of the Company or any of its Subsidiaries or (b) a
reorganization of the Company or any of its Subsidiaries or the business and
affairs of the Company or any of its Subsidiaries or (c) the appointment of a
receiver, liquidator, assignee, custodian, trustee or similar official for the
Company or any of its Subsidiaries of the property of the Company or any of its
Subsidiaries.

                      6.7 Voluntary Bankruptcy. The commencement by the Company
or any of its Subsidiaries of a voluntary case under the federal bankruptcy laws
or any federal or state insolvency or similar laws or the consent by the Company
or any of its Subsidiaries to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian or similar official for the
Company or any of its Subsidiaries of any of the property of the Company or any
of its Subsidiaries or the making by the Company or any of its Subsidiaries of
an assignment for the benefit of creditors, or the failure by Company or any of
its Subsidiaries generally to pay its debts as the debts become due.

                      6.8 Judgments, Awards. Any judgment or order for the
payment of money is rendered against the Company or any of its Subsidiaries in
an amount in excess of five hundred thousand dollars ($500,000) individually or
in the aggregate and either (i) enforcement proceedings are commenced by any
creditor upon such judgment or order and not stayed, or (ii) there is any period
of sixty (60) consecutive



                                       14
<PAGE>
days during which such judgment has not been paid in full or a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, is not in effect.

                      6.9 Attachment by Lenders. Any assets of the Company or
any of its Subsidiaries shall be attached, levied upon, seized or repossessed,
or come into the possession of a trustee, receiver or other custodian and a
determination by any Holder, in good faith but in its sole discretion, that the
same could have a material adverse effect on the prospect for the Holders to
fully and punctually realize the full benefits conferred on the Holders by the
Loan Documents.

                      6.10 Adverse Change in Financial Condition. Any event
having a material adverse effect on the business, operations, assets, properties
or condition of the Company and its Subsidiaries taken as a whole shall have
occurred and be continuing or a material adverse effect on the validity or
enforceability of this or any of the other Loan Documents or the rights or
remedies of the Holders hereunder or thereunder.

               7. Remedies. Upon and after the occurrence of an Event of
Default, the Holder shall be entitled to the exercise the rights and remedies
set forth in the Security Agreement, the other Loan Documents and under
applicable law, all such rights and remedies being cumulative and enforceable
alternatively, successively or concurrently.

               8. Prepayment. The Company may not prepay this Note prior to the
Maturity Date without the prior written consent of the Holders.

               9. Seniority.

                             (a) Except as set forth in the Subordination
Agreement, the Notes will rank senior in right of payment to all other
indebtedness of the Company, other than the GA Notes and the January 2004 Notes,
with respect to which the Notes will be pari passu in right of payment in
accordance with the Intercreditor Agreement.

                             (b) Notwithstanding anything to the contrary
contained in the Notes, this Note and the other Notes, and the terms and the
conditions hereof and thereof, are subject to the Intercreditor Agreement.

               10. Assignment. Subject to the restrictions on transfer described
in Section 12 below, the rights and obligations of the Company and Holder shall
be binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties. The Company shall not be permitted to assign this
Note without the prior written consent of the Holders.

               11. Waiver of Notice. The Company hereby waives notice,
presentment, demand, protest and notice of dishonor.

               12. Transfer of This Note. With respect to any offer, sale or
other disposition of this Note, Holder will give written notice to the Company
prior thereto, describing briefly the manner thereof, together with a written
opinion of such Holder's



                                       15
<PAGE>
counsel, to the effect that such offer, sale or other distribution may be
effected without registration or qualification (under any federal or state law
then in effect); provided, that no opinion shall be required for any transfer to
an Affiliate or if the transfer is made in compliance with the Securities Act,
so long as the transferee can make the same representations and warranties at
the time of transfer as set forth in Sections 4.5, 4.6, 4.7, 4.8, 4.9, 4.10 and
4.11 of the Note Purchase Agreement. Promptly upon delivering such written
notice and opinion, if so required, Holder may sell or otherwise dispose of this
Note, all in accordance with the terms of the notice delivered to the Company.
Each Note thus transferred shall bear a legend as to the applicable restrictions
on transferability in order to ensure compliance with the Securities Act, unless
in the opinion of counsel for the Company such legend is not required in order
to ensure compliance with the Securities Act. The Company may issue stop
transfer instructions to its transfer agent in connection with such
restrictions. Notwithstanding the foregoing, the Holder shall not be permitted
to transfer this Note to any Person who is not an Affiliate until the earlier of
(i) the obtaining of Stockholder Approval, (ii) the receipt of written notice
from the Company that Stockholder Approval cannot be obtained, or the occurrence
of an actual vote of the Company's shareholders entitled to vote (whether by
written consent or at a meeting specially called for such purpose), the result
of which is a decision by a majority of the Company's shareholders entitled to
vote to decline to grant Stockholder Approval, (iii) six (6) months from the
date hereof and (iv) the occurrence of an Event of Default. This Note is
registered as to both principal and stated interest with the Company (or its
agent) within the meaning of section 1.871-14(c)(1)(i) of the Income Tax
Regulations. Accordingly, notwithstanding anything to the contrary in this
paragraph, this Note, together with any interest thereon, may be transferred
only (i) upon surrender of the Note by the transferor to the Company (or its
agent) and the reissuance of the Note (or the issuance of a new Note) to the
transferee, or (ii) by transfer of the right to principal and interest through a
book-entry system meeting the requirements of section 1.871-14(c)(1)(i)(B) of
the Income Tax Regulations that is maintained by the Company (or its agent). In
the case of a Holder that is not a "United States person" within the meaning of
section 7701(a)(30) of the Internal Revenue Code of 1986, as amended (the
"Code"), so long as an exception under section 871(h) or section 881(c) of the
Code does not apply, the Company (or its agent) shall not withhold any U.S.
federal income tax with respect to such Holder provided that the Holder timely
provides the Company (or its agent) with a statement that meets the requirements
of section 871(h)(5) of the Code.

               13. Treatment of Note. To the extent permitted by generally
accepted accounting principles, the Company will treat, account and report the
Note as debt and not equity for accounting purposes and with respect to any
returns filed with federal, state or local tax authorities.

               14. Notices. Any notice, request or other communication required
or permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if sent by nationally recognized courier
service or mailed by registered or certified mail, postage prepaid, to the
respective addresses of the parties as set forth on the signature pages hereto
or if sent by facsimile to the respective facsimile numbers of the parties set
forth on the signature pages hereto. Any party hereto may by notice so given
change its address for future notice hereunder. Notice shall conclusively



                                       16
<PAGE>
be deemed to have been given and received when personally delivered or three (3)
business days after deposited in the mail or one business day after sent by
courier or upon confirmation of facsimile delivery in the manner set forth
above.

               15. No Stockholder Rights. Nothing contained in this Note shall
be construed as conferring upon Holder or any other Person the right to vote or
to consent or to receive notice as a stockholder in respect of meetings of
stockholders for the election of directors of the Company or any other matters
or any rights whatsoever as a stockholder of the Company.

               16. Governing Law. This Note shall be governed by and construed
in accordance with the laws of the State of California, excluding that body of
law relating to conflict of laws.

               17. Amendments and Waivers. No amendments or waivers of any
provision of this Note, and no consent by the Holder to any departure by the
Company, shall in any event be effective unless the same shall be in writing,
and signed by the Holders of a majority of the outstanding principal amount of
all of the Notes issued by the Company pursuant to the Note Purchase Agreement,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given.

               18. Severability. Any provision of this Note that is prohibited
or unenforceable in a jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

               19. WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND THE HOLDER
HEREBY (A) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE OF RIGHT BY A JURY, AND (B) WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH THE COMPANY AND THE HOLDER MAY BE PARTIES, ARISING OUT OF,
IN CONNECTION WITH OR IN ANY WAY PERTAINING TO THIS NOTE, ANY OF THE LOAN
DOCUMENTS AND/OR ANY TRANSACTIONS, OCCURRENCES, COMMUNICATIONS, OR
UNDERSTANDINGS (OR THE LACK OF ANY OF THE FOREGOING) RELATING IN ANY WAY TO
DEBTOR-CREDITOR RELATIONSHIP BETWEEN THE PARTIES. IT IS UNDERSTOOD AND AGREED
THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL
PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE
NOT PARTIES TO THIS NOTE. THIS WAIVER OF JURY TRIAL IS SEPARATELY GIVEN,
KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE COMPANY AND THE HOLDER, AND THE
COMPANY AND THE HOLDER HEREBY AGREE THAT NO REPRESENTATIONS OF FACT OR OPINION
HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN
ANY WAY MODIFY OR NULLIFY ITS EFFECT. THE COMPANY AND THE



                                       17
<PAGE>
HOLDER ARE HEREBY AUTHORIZED TO SUBMIT THIS NOTE TO ANY COURT HAVING
JURISDICTION OVER THE SUBJECT MATTER AND THE COMPANY AND THE HOLDER, SO AS TO
SERVE AS CONCLUSIVE EVIDENCE OF SUCH WAIVER OF RIGHT TO TRIAL BY JURY. EACH OF
THE COMPANY AND THE HOLDER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED
IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT
LEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, AND/OR THAT IT HAS HAD THE
OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

               20. Heading; References. All headings used herein are used for
convenience only and shall not be used to construe or interpret this Note.
Except as otherwise indicated, all references herein to Sections refer to
Sections hereof.


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                                       18
<PAGE>

               IN WITNESS WHEREOF, the Company has caused this Note to be issued
this 9th day of March, 2004.



                                    COMPANY:

                                    CRITICAL PATH, INC.,
                                    a California corporation


                                    By:
                                       -----------------------------------------
                                       Name:  William E. McGlashan, Jr.
                                       Title:  Chairman, Chief Executive Officer

                                       Critical Path, Inc.
                                       350 The Embarcadero
                                       San Francisco, CA 94105-1204
                                       Telecopy:  (415) 541-2300
                                       Attention:  Chief Financial Officer

                                       With a copy to:

                                       Pillsbury Winthrop LLP
                                       50 Fremont Street
                                       San Francisco, CA 94105
                                       Telecopy:  (415) 983-1200
                                       Attention:  Gregg Vignos, Esq.



Name of Holder:
               --------------------------------
Address:
         --------------------------------------

         --------------------------------------

Telephone:
          -------------------------------------
Facsimile:
          -------------------------------------