Document:

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                                                                   EXHIBIT 10.36

                           LOAN AND SECURITY AGREEMENT

                               CRITICAL PATH, INC.
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                           LOAN AND SECURITY AGREEMENT

                                TABLE OF CONTENTS

<TABLE>
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HEADING                                                                                    PAGE
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1.      ACCOUNTING AND OTHER TERMS...........................................................  1

2.      LOAN AND TERMS OF PAYMENT............................................................  1
        2.1    Promise to Pay................................................................  1
        2.2    Overadvances..................................................................  2
        2.3    Interest Rate, Payments.......................................................  2
        2.4    Fees and Expense..............................................................  3

3.      CONDITIONS OF LOANS..................................................................  3
        3.1    Conditions Precedent to Initial Credit Extension..............................  3
        3.2    Conditions Precedent to all Credit Extensions.................................  4

4.      CREATION OF SECURITY INTEREST........................................................  4

5.      REPRESENTATIONS AND WARRANTIES.......................................................  4
        5.1    Due Organization and Authorization............................................  4
        5.2    Collateral....................................................................  4
        5.3    Litigation....................................................................  5
        5.4    No Material Adverse Change in Financial Statements............................  5
        5.5    Solvency......................................................................  5
        5.6    Regulatory Compliance.........................................................  5
        5.7    Investments...................................................................  6
        5.8    Full Disclosure...............................................................  6
        5.9    Subordinated Debt.............................................................  6

6.      AFFIRMATIVE COVENANTS................................................................  6
        6.1    Government Compliance.........................................................  6
        6.2    Financial Statements, Reports, Certificates...................................  6
        6.3    Inventory; Returns............................................................  7
        6.4    Taxes.........................................................................  7
        6.5    Insurance.....................................................................  7
        6.6    Primary Accounts..............................................................  7
        6.7    Financial Covenants...........................................................  8
        6.8    Registration of Intellectual Property Rights..................................  8
        6.9    Subordination.................................................................  8
        6.10   Further Assurances............................................................  8

7.      NEGATIVE COVENANTS...................................................................  8
        7.1    Dispositions..................................................................  9
        7.2    Changes in Business, Ownership, Management or Business Locations..............  9
        7.3    Mergers or Acquisitions.......................................................  9
        7.4    Indebtedness..................................................................  9
        7.5    Encumbrances..................................................................  9
        7.6    Distributions; Investments....................................................  9
</TABLE>

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<TABLE>
<S>                                                                                           <C>
        7.7    Transactions with Affiliates..................................................  9
        7.8    Subordinated Debt............................................................  10
        7.9    Compliance...................................................................  10

8.      EVENTS OF DEFAULT...................................................................  10
        8.1    Payment Default..............................................................  10
        8.2    Covenant Default.............................................................  10
        8.3    Material Adverse Change......................................................  10
        8.4    Attachment...................................................................  11
        8.5    Insolvency...................................................................  11
        8.6    Other Agreements.............................................................  11
        8.7    Judgments....................................................................  11
        8.8    Misrepresentations...........................................................  11

9.      BANK'S RIGHTS AND REMEDIES..........................................................  11
        9.1    Rights and Remedies..........................................................  11
        9.2    Power of Attorney............................................................  12
        9.3    Accounts Collection..........................................................  12
        9.4    Bank Expenses................................................................  12
        9.5    Bank's Liability for Collateral..............................................  12
        9.6    Remedies Cumulative..........................................................  13
        9.7    Demand Waiver................................................................  13

10.     NOTICES.............................................................................  13

11.     CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER.........................................  13

12.     GENERAL PROVISIONS..................................................................  13
        12.1   Successors and Assigns.......................................................  13
        12.2   Indemnification..............................................................  13
        12.3   Time of Essence..............................................................  14
        12.4   Severability of Provision....................................................  14
        12.5   Amendments in Writing, Integration...........................................  14
        12.6   Counterparts.................................................................  14
        12.7   Survival.....................................................................  14
        12.8   Confidentiality..............................................................  14
        12.9   Attorneys' Fees, Costs and Expenses..........................................  14

13.     DEFINITIONS.........................................................................  15
</TABLE>

EXHIBITS

Exhibit A - Description of Collateral
Exhibit B - Payment/Advance Request Form
Exhibit C - Form of Compliance Certificate

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                           LOAN AND SECURITY AGREEMENT

      THIS LOAN AND SECURITY AGREEMENT dated as of the Effective Date, between
SILICON VALLEY BANK, a California-chartered bank ("Bank") whose address is 3003
Tasman Drive, Santa Clara, California 95054, and CRITICAL PATH, INC., a
California corporation ("Borrower") whose address is 350 The Embarcadero, San
Francisco, California 94105, provides the terms on which Bank will lend to
Borrower and Borrower will borrow from Bank. The parties agree as follows:

1.    ACCOUNTING AND OTHER TERMS.

      Accounting terms not defined in this Agreement will be construed in
accordance with GAAP. Calculations and determinations must be made in accordance
with GAAP. The term "financial statements" includes the notes and schedules. The
terms "including" and "includes" always mean "including (or includes) without
limitation," in this or any other Loan Document. Capitalized terms in this
Agreement shall have the meanings set forth in Section 13.

2.    LOAN AND TERMS OF PAYMENT.

2.1   PROMISE TO PAY.

      Borrower will pay Bank the unpaid principal amount of all Credit
Extensions and interest on the unpaid principal amount of all Credit Extensions.

2.1.1 REVOLVING ADVANCES.

      (a) Bank will make Revolving Advances not exceeding at any time the
Committed Revolving Line, minus the sum of (i) all amounts then outstanding
under the Cash Management Services Sublimit, (ii) the then-outstanding principal
balance of all Revolving Advances, (iii) the Foreign Exchange Sublimit and (D)
the face amount of all outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit). Amounts borrowed under this Section 2.1.1 may
be repaid and reborrowed during the term of this Agreement.

      (b) To obtain a Revolving Advance, Borrower must notify Bank by facsimile
or telephone by 12:00 p.m., Pacific Time, one Business Day prior to the day on
which the Revolving Advance is to be made. Borrower must promptly confirm the
notification by delivering to Bank a completed Loan Payment/Advance Request Form
in the form attached as Exhibit B. Bank will credit Revolving Advances to
Borrower's deposit account. Bank may make Revolving Advances under this
Agreement based on instructions from a Responsible Officer or his or her
designee, or without instructions if the Revolving Advances are necessary to
meet Obligations which have become due. Bank may rely on any telephonic notice
given by a person whom Bank believes is a Responsible Officer or designee.
Borrower will indemnify Bank for any loss Bank suffers due to such reliance.

      (c) The Committed Revolving Line terminates on the Revolving Maturity
Date, when all Revolving Advances, and all accrued and unpaid interest thereon,
are immediately due and payable.

      (d) Bank's obligation to lend the undisbursed portion of the Committed
Revolving Line or any other credit available hereunder to Borrower will
terminate if, in Bank's sole discretion, there has been a Material Adverse
Change or there has occurred any material adverse deviation from the most recent
business plan of Borrower presented to and accepted by Bank prior to the
execution of this Agreement.

2.1.2 CASH MANAGEMENT SERVICES SUBLIMIT.

      Borrower may use up to the entire amount from time to time available under
Section 2.1.1(a) (the "Cash Management Services Sublimit") for Bank's cash
management services, which may include

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merchant services, direct deposit of payroll, business credit card and check
cashing services identified in various cash management services agreements
related to such services (the "Cash Management Services"). All amounts at any
one time outstanding under the Cash Management Services Sublimit will reduce, on
a dollar-for-dollar basis, the amount otherwise available to be borrowed under
the Committed Revolving Line. Any amounts Bank pays on behalf of Borrower, and
any amounts that are not paid by Borrower, for any Cash Management Services will
be treated as Revolving Advances under the Committed Revolving Line and will
accrue interest at the rate for Revolving Advances. Borrower agrees to execute
any further documentation in connection with the Cash Management Services as
Bank may request.

2.1.3 FOREIGN EXCHANGE SUBLIMIT.

      To the extent that the Foreign Exchange Sublimit (as calculated herein) is
not exceeded, Borrower may enter into foreign exchange forward contracts with
Bank under which Borrower commits to purchase from or sell to Bank a set amount
of foreign currency more than one Business Day after the contract date (the "FX
Forward Contract"). The Foreign Exchange Sublimit (the "Foreign Exchange
Sublimit") shall be an amount equal to 10% of the face amount of all outstanding
FX Forward Contracts; provided, however, that at no time may the Foreign
Exchange Sublimit ever exceed the Committed Revolving Line (as adjusted in
accordance with Section 2.1.1(a) hereof). The aggregate amount of the Foreign
Exchange Sublimit shall at all times reduce, on a dollar-for-dollar basis, the
amount otherwise available to be borrowed under the Committed Revolving Line.
Bank may terminate the FX Forward Contracts if an Event of Default occurs.

2.1.4 LETTERS OF CREDIT SUBLIMIT.

      Bank will issue Letters of Credit for Borrower's account in an aggregate
face amount not to exceed the Committed Revolving Line, in each case minus the
sum of (i) the then-outstanding principal balance of the Revolving Advances,
plus (ii) all amounts then-outstanding under the Cash Management Sublimit plus
(iii) the Foreign Exchange Sublimit; provided, however, that the face amount of
outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit) may at no time exceed the Committed Revolving Line. Each Letter of
Credit will have an expiry date of not later than 180 days after the Revolving
Maturity Date, but Borrower's reimbursement obligation will be secured by cash
on terms acceptable to Bank at any time after the Revolving Maturity Date if the
term of this Agreement is not extended by Bank. Borrower agrees to execute any
further documentation in connection with the Letters of Credit as Bank may
reasonably request.

2.2   OVERADVANCES.

      If the sum of Borrower's Obligations under Sections 2.1.1, 2.1.2, 2.1.3
and 2.1.4 at any time exceeds the Committed Revolving Line, then Borrower will
be in an Overadvance to the extent of such excess amount. If Borrower is in an
Overadvance, then Borrower shall immediately take each of the following actions
(unless otherwise agreed to by Bank): (i) Borrower shall repay to Bank the
amount by which all outstanding principal and accrued interest relating to
Revolving Advances exceeds the Committed Revolving Line; and (ii) Borrower shall
secure its Obligations with respect to the aggregate sum of all outstanding
Letters of Credit, the Foreign Exchange Sublimit and Cash Management Services
then being utilized with cash to be held in a certificate of deposit account
with Bank in the amount that such an aggregate sum exceeds the Committed
Revolving Line, such cash to be held by Bank as Collateral until such time as
the Overadvance is repaid and Borrower's Obligations with respect to the Letters
of Credit, the Foreign Exchange Sublimit and the Cash Management Services are
satisfied.

2.3   INTEREST RATE, PAYMENTS.

      (a) Revolving Advances shall accrue interest on the aggregate principal
balance thereof from time to time outstanding at a per annum rate equal to the
Prime Rate plus forty five basis points (0.45%).

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After an Event of Default, Obligations shall accrue interest at a rate equal to
five percent (5.00%) above the rate effective immediately before the Event of
Default. The interest rate increases or decreases when the Prime Rate changes.
Interest is computed on a 360-day year for the actual number of days elapsed.

      (b) Interest on outstanding Revolving Advances shall be due and payable in
arrears on the first day of each month. Bank will debit any of Borrower's
deposit accounts, including Account Number 3300229151, for principal and
interest payments, and any other amounts Borrower owes Bank when due. These
debits are not a set-off. Payments received after 12:00 noon, Pacific Time, are
considered received at the opening of business on the next Business Day. When a
payment shall be due on a day that is not a Business Day, the payment is due on
the next Business Day and additional fees and interest shall accrue to such
date.

2.4   FEES AND EXPENSE.

2.4.1 FACILITY FEE.

      Borrower will pay Bank a fully-earned, non-refundable facility fee in the
amount of Seventy-Five Thousand Dollars ($75,000), due and payable on the
Effective Date.

2.4.2 CANCELLATION FEE

      In the event that Borrower elects to cancel the credit facility available
to it under this Agreement within six (6) months after the Effective Date,
Borrower shall pay bank a cancellation fee in the amount of Seventy-Five
Thousand Dollars ($75,000), due and payable on the date as of which Borrower
cancels the credit facility.

2.4.3 UNUSED COMMITMENT FEE

      Borrower will pay Bank an Unused Commitment Fee equal to forty five basis
points (0.45%) per annum (annualized) of the average unused portion of the
Committed Revolving Line. Such Unused Commitment Fee shall be payable in
quarterly installments, on the first day of the month following the end of each
fiscal quarter of Borrower, in an amount equal to the product of (i) the average
unused portion of the Committed Revolving Line during such fiscal quarter
multiplied by (ii) eleven and one-quarter basis points (0.1125%).

2.4.4 LETTER OF CREDIT FEE.

      Borrower will pay the Letter of Credit Fee at the time of the issuance or
renewal of each Letter of Credit, and on each anniversary thereof.

2.4.5 BANK EXPENSES.

      Borrower will pay all Bank Expenses (including reasonable attorneys' fees)
incurred through and after the date of this Agreement. All Bank Expenses are due
and payable upon demand from Bank.

3.    CONDITIONS OF LOANS.

3.1   CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSION.

      Bank's obligation to make the first Credit Extension is, in addition to
the other applicable conditions precedent set forth in this Section 3, subject
to the satisfaction of the following conditions precedent:

      (a) Bank shall have received the agreements, documents and fees that it
requires in accordance

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with this Agreement.

      (b) Bank shall have received from Borrower evidence satisfactory to Bank
showing Bank as loss payee on all of Borrower's insurance policies pursuant to
Section 6.5.

      (c) Bank shall have received from Borrower evidence satisfactory to Bank
that a lien on the Collateral in favor of Union Bank has been released.

      (d) Bank shall have entered into an account control agreement with Munder
Capital in form and substance acceptable to Bank.

3.2   CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS.

      Bank's obligations to make each Credit Extension, including the initial
Credit Extension, is subject to the satisfaction of the following conditions
precedent:

      (a) Bank shall have timely received a Loan Payment/Advance Request Form.

      (b) The representations and warranties in Section 5 shall be true on the
date of the Loan Payment/Advance Request Form, and on the effective date of each
Credit Extension, and no Event of Default shall have occurred and be continuing,
or result from the Credit Extension. Each Credit Extension is Borrower's
representation and warranty on that date that the representations and warranties
of Section 5 remain true.

4.    CREATION OF SECURITY INTEREST.

      Borrower grants Bank a continuing security interest in all presently
existing and later acquired Collateral to secure all Obligations and the
performance of each of Borrower's duties under the Loan Documents. Except for
Permitted Liens, Bank's security interest will be a first priority security
interest in the Collateral. Bank may place a "hold" on any deposit account
pledged as Collateral. If this Agreement is terminated, Bank's lien and security
interest in the Collateral will continue until Borrower fully satisfies its
Obligations.

5.    REPRESENTATIONS AND WARRANTIES.

      Borrower represents and warrants as follows:

5.1   DUE ORGANIZATION AND AUTHORIZATION.

      Borrower and each Subsidiary is duly existing and in good standing in its
jurisdiction of formation and is qualified and licensed to do business in, and
in good standing in, each jurisdiction in which the conduct of its business or
its ownership of property requires that it be qualified, except where the
failure to do so could not reasonably be expected to cause a Material Adverse
Change. Borrower is a California corporation.

      The execution, delivery and performance by Borrower of the Loan Documents
have been duly authorized and do not conflict with Borrower's formation
documents or constitute an event of default under any material agreement by
which Borrower is bound. Borrower is not in default under any agreement to which
or by which it is bound in which the default could reasonably be expected to
cause a Material Adverse Change.

5.2   COLLATERAL.

      Borrower has good title to its Collateral, free of Liens except Permitted
Liens. The Accounts are

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bona fide, existing obligations, and the service or property that is the subject
of each Account has been performed or delivered to the account debtor or its
agent for immediate shipment to and unconditional acceptance by the account
debtor. Borrower has no notice of any actual or imminent Insolvency Proceeding
of any account debtor. All Inventory is in all material respects of good and
marketable quality, free from material defects. Borrower owns or possesses
adequate rights to use all of its respective Intellectual Property, except for
non-exclusive licenses granted to its respective customers in the ordinary
course of business. Each Patent is valid and enforceable, no part of the
Intellectual Property has been judged invalid or unenforceable (in whole or in
part), and no claim has been made that any part of the Intellectual Property
violates the rights of any third party, except to the extent such claim, if the
subject of an unfavorable decision, ruling or finding, could not reasonably be
expected to cause a Material Adverse Change.

5.3   LITIGATION.

      Except as described in Borrower's filings with the SEC, there are no
material actions or proceedings pending or, to the knowledge of Borrower's
Responsible Officers, threatened by or against Borrower or any Subsidiary in
which an adverse decision could reasonably be expected to cause a Material
Adverse Change.

5.4   NO MATERIAL ADVERSE CHANGE IN FINANCIAL STATEMENTS.

      All separate or consolidated financial statements for Borrower and any
Subsidiary delivered to Bank fairly present in all material respects such
entity's separate and consolidated financial condition and separate and
consolidated results of operations. There has not been any Material Adverse
Change in Borrower's consolidated financial condition since the date of the most
recent financial statements submitted to Bank.

5.5   SOLVENCY.

      The fair salable value of Borrower's assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities. Borrower is not
left with unreasonably small capital after the transactions contemplated in this
Agreement, and Borrower is able to pay its debts (including trade debts) as they
mature.

5.6   REGULATORY COMPLIANCE.

      Neither Borrower nor any Subsidiary is an "investment company" or a
company "controlled" by an "investment company" under the Investment Company
Act. Neither Borrower nor any Subsidiary is engaged, as one of its material
activities, in extending credit for margin stock (under Regulations T and U
promulgated by the Board of Governors of the Federal Reserve System). Borrower
has complied in all material respects with the Federal Fair Labor Standards Act.
Borrower has not violated any laws, ordinances or rules applicable to Borrower,
the violation of which could reasonably be expected to cause a Material Adverse
Change. None of Borrower's or any Subsidiary's properties or assets has been
used by Borrower or any Subsidiary or, to the best of Borrower's knowledge, by
previous Persons, in disposing, producing, storing, treating or transporting any
hazardous substance other than in a legal manner in compliance with all
environmental laws and regulations. Each of Borrower and each Subsidiary has
timely filed all required tax returns and paid, or made adequate provision to
pay, all material taxes, except those being contested in good faith with
adequate reserves under GAAP. Each of Borrower and each Subsidiary has obtained
all consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all government authorities that are necessary to
continue its business as currently conducted, except where the failure to do so
could not reasonably be expected to cause a Material Adverse Change.

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5.7   INVESTMENTS.

      Borrower owns no stock, partnership interest or other equity securities
except for Permitted Investments.

5.8   FULL DISCLOSURE.

      No written representation, warranty or other statement of Borrower in any
certificate or written statement given to Bank (taken together with all such
written certificates and written statements to Bank) contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained in the certificates or statements not misleading in
light of the circumstances in which they were made, it being recognized by Bank
that the projections and forecasts provided by Borrower in good faith and based
upon reasonable assumptions are not viewed as facts and that actual results
during the period or periods covered by such projections and forecasts may
differ from the projected and forecasted results.

5.9   SUBORDINATED DEBT.

      All existing Indebtedness of Borrower to entities other than Bank,
including but not limited to the Indebtedness of Borrower pursuant to those
certain 5-3/4% Convertible Subordinated Notes due April 1, 2005 that were issued
by Borrower on or about April 1, 2000, is subordinated to the Indebtedness of
Borrower to Bank hereunder.

6.    AFFIRMATIVE COVENANTS.

      Borrower will do all of the following for so long as Bank has an
obligation to lend, or there are outstanding Obligations:

6.1   GOVERNMENT COMPLIANCE.

      Borrower will maintain, and will cause each of its Subsidiaries to
maintain, its legal existence and good standing in its respective jurisdiction
of formation and maintain qualification in each jurisdiction in which the
failure to so qualify could reasonably be expected to result in a Material
Adverse Change. Borrower will comply, and will cause each of its Subsidiaries to
comply, with all laws, ordinances and regulations to which it is subject,
noncompliance with which could cause a Material Adverse Change.

6.2   FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.

      (a) Borrower will deliver to Bank: (i) as soon as available, but no later
than 30 days after the last day of each month, company-prepared unaudited
balance sheets and income statements covering the operations of Borrower and its
Subsidiaries during the period, certified by a Responsible Officer and in a form
substantially the same as that which is accepted by the SEC; (ii) as soon as
available but no later than 180 days after the last day of Borrower's fiscal
year, audited financial statements for Borrower and its Subsidiaries prepared
under GAAP, consistently applied, together with an with an opinion which is
unqualified on the financial statements from an independent certified public
accounting firm acceptable to Bank; (iii) within five days of filing,
electronically delivered copies of all statements, reports and notices made
available to Borrower's securities holders or to any holders of Subordinated
Debt and all Forms 10-K, 10-Q and 8-K filed by Borrower with the Securities and
Exchange Commission; (iv) a prompt report of any material legal actions pending
or threatened against Borrower or any Subsidiary that could result in damages or
costs to Borrower or any Subsidiary of $500,000 or more; (v) prompt notice of
any material change in the composition of the Intellectual Property, including
any subsequent ownership right of Borrower or any Subsidiary in or to any
Copyright, Patent or Trademark not shown in any intellectual property security
agreement between Borrower and Bank or knowledge of an event that could
reasonably be expected to cause a Material Adverse Change to the value of the
Intellectual Property; and (vi)

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budgets, sales projections, operating plans and other financial information that
Bank might reasonably request.

      (b) Borrower will deliver to Bank, concurrently with the delivery of the
monthly financial statements and the annual financial statements, a Compliance
Certificate, in the form of Exhibit C, signed by a Responsible Officer.

      (c) Within 30 days after the last day of each month, Borrower will deliver
to Bank a listing of aged accounts receivable and accounts payable, indicating
invoice dates, certified to be true, correct and complete by a responsible
officer.

      (d) Borrower will allow Bank to audit the Collateral at Borrower's
expense. Such audits will be conducted no more often than semi-annually unless
an Event of Default has occurred and is continuing (in which case the foregoing
limitation on frequency will not apply).

6.3   INVENTORY; RETURNS.

      Borrower will keep all Inventory in good and marketable condition, free
from material defects. Returns and allowances between Borrower and its account
debtors will follow Borrower's customary practices as they exist on the
Effective Date. Borrower must promptly notify Bank of all returns, recoveries,
disputes and claims that involve more than $500,000.

6.4   TAXES.

      Borrower will make, and will cause each Subsidiary to make, timely payment
of all material federal, state, and local taxes or assessments (other than taxes
and assessments which Borrower is contesting in good faith, with adequate
reserves maintained in accordance with GAAP) and will deliver to Bank, on demand
but after reasonable notice to Borrower, appropriate certificates attesting to
the payment.

6.5   INSURANCE.

      Borrower will keep its business and the Collateral insured for risks and
in amounts as Bank may reasonably request and as is ordinary and customary for
Borrower's size and industry. Insurance policies will be in forms, with
companies, and in amounts that are reasonably satisfactory to Bank. All property
policies will have a lender's loss payable endorsement showing Bank as an
additional loss payee, all liability policies will show the Bank as an
additional insured, and all policies will provide that the insurer must give
Bank at least 20 days notice before canceling its policy. At Bank's request,
Borrower will deliver certified copies of policies and evidence of all premium
payments. Proceeds payable under any policy will, at Bank's option, be payable
to Bank on account of the Obligations. Notwithstanding the foregoing, so long as
no Event of Default has occurred and is continuing, Borrower shall have the
option of applying the proceeds of any casualty policy to the replacement or
repair of destroyed or damaged property; provided that, at the occurrence and
during the continuance of an Event of Default, all proceeds payable under any
such casualty policy shall, at the option of Bank, be payable to Bank on account
of the Obligations.

6.6   PRIMARY ACCOUNTS.

      Borrower shall, within 60 days after the Effective Date, establish its
primary operating accounts with the Bank. In addition, Borrower shall at all
times maintain the lesser of $5,000,000 or at least 25% of its total cash and
cash equivalents in accounts with Bank or an Affiliate of Bank. Promptly after
the Effective Date, Borrower shall provide Bank with signed control agreements,
in form and substance substantially the same as those already provided by Bank
to Borrower, from all holders of investment properties or deposit accounts in
which Borrower has an interest; provided, however, that Borrower shall

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provide Bank with such a control agreement covering its accounts with Munder
Capital prior to the initial Credit Extension.

6.7   FINANCIAL COVENANTS.

6.7.1 PERFORMANCE TO PLAN.

      As at the end of each fiscal quarter of Borrower's fiscal year, Borrower
shall have maintained a minimum EBITDA equal to or greater than:

<TABLE>
<CAPTION>
                 Period                                   Minimum EBITDA
                 ------                                   --------------
<S>                                                       <C>
                Q3, 2002                                  ($8,500,000)
                Q4, 2002                                  ($4,000,000)
                Q1, 2003                                  ($6,250,000)
                Q2, 2003                                  $1,000,000
</TABLE>

6.7.2 MINIMUM UNRESTRICTED CASH.

      As at the end of each month, Borrower shall have maintained minimum
Unrestricted Cash (as reflected on Borrower's monthly balance sheet) as follows:
(i) if the outstanding Obligations are less than $10,000,000 then Unrestricted
Cash of at least $20,000,000 and (ii) if Outstanding Obligations equal or exceed
$10,000,000 then Unrestricted Cash of at least $30,000,000. Notwithstanding the
foregoing, Borrower shall at all times maintain minimum Domestic Unrestricted
Cash of at least two times (2x) the aggregate amount of Advances then
outstanding.

6.8   REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS.

      Borrower will register with the United States Copyright Office all of
Borrower's Intellectual Property consisting of copyrights and copyrightable
materials, and Borrower shall register additional Intellectual Property
consisting of copyrights and copyrightable materials as such are developed or
acquired, including material revisions or additions to any product, before the
sale or licensing of the product to any third party. Borrower will promptly
notify Bank of the filing of applications and the registration of all
Intellectual Property rights of Borrower, and will execute and deliver such
instruments and documents as Bank may request to evidence or perfect Bank's
security interest therein. Borrower will: (i) protect, defend and maintain the
validity and enforceability of its Intellectual Property and promptly advise
Bank in writing of material infringements; and (ii) not allow any of its
Intellectual Property to be abandoned, forfeited or dedicated to the public
without Bank's prior written consent.

6.9   SUBORDINATION.

      Borrower shall take all actions necessary to ensure that all Indebtedness
of Borrower other than the Obligations is and at all times shall remain
Subordinated Debt or structurally subordinated to the Obligations.

6.10  FURTHER ASSURANCES.

      Borrower will execute all further instruments and take all further actions
as Bank reasonably requests to perfect or continue Bank's security interest in
the Collateral and to effect the purposes of this Agreement, including without
limitation providing Bank with control agreements, in form and substance
acceptable to Bank, for any and all deposit accounts and securities accounts
maintained by Borrower.

7.    NEGATIVE COVENANTS.

      For so long as Bank has an obligation to lend or there are any outstanding
Obligations, Borrower

                                       8
<PAGE>
will not do any of the following without Bank's prior written consent, which
will not be unreasonably withheld:

7.1   DISPOSITIONS.

      Borrower will not convey, sell, lease, transfer or otherwise dispose of
(collectively "Transfer"), or permit any of its Subsidiaries to Transfer, all or
any part of its business or property, except for Transfers of: (i) Inventory in
the ordinary course of business; (ii) non-exclusive licenses and similar
arrangements for the use of the property of Borrower or its Subsidiaries in the
ordinary course of business; (iii) worn-out or obsolete equipment; (iv) other
Transfers which do not exceed $500,000 in aggregate fair market value in any one
fiscal year of Borrower; or (v) assets that are unrelated to the business or
operations of Borrower (such as Intellectual Property related to discontinued
product lines or divested businesses).

7.2   CHANGES IN BUSINESS, OWNERSHIP, MANAGEMENT OR BUSINESS LOCATIONS.

      Borrower will not engage in, or permit any of its Subsidiaries to engage
in, any business other than the businesses currently engaged in by Borrower and
its Subsidiaries, or businesses reasonably related thereto. There shall not be a
material change in Borrower's ownership (other than a sale of Borrower's equity
securities in a public offering or to venture capital investors of which Bank
has been given written notice). Borrower will not, without at least 30 days
prior written notice, relocate its chief executive office or add any new offices
or business locations in which Borrower maintains or stores over $100,000 in
Borrower's assets or property.

7.3   MERGERS OR ACQUISITIONS.

      Borrower will not merge or consolidate, or permit any of its Subsidiaries
to merge or consolidate, with any other Person unless Borrower ( or such
Subsidiary, as the case may be) is the surviving entity, or acquire, or permit
any of its Subsidiaries to acquire, all or substantially all of the capital
stock or property of another Person except where such transactions do not exceed
$5,000,000.00 in the aggregate and no Event of Default has occurred and is
continuing or would exist after giving effect to the transaction. A Subsidiary
may liquidate, unwind, merge or consolidate into another Subsidiary or into
Borrower, so long as Borrower remains the obligor of all Obligations.

7.4   INDEBTEDNESS.

      Borrower will not create, incur, assume or be liable for any Indebtedness,
or permit any Subsidiary to do so, other than Permitted Indebtedness.

7.5   ENCUMBRANCES.

      Borrower will not create, incur or allow to exist any Lien on any of its
properties, or assign or convey any right to receive income (including the sale
of any Accounts), or permit any of its Subsidiaries to do so, except for
Permitted Liens, or permit any Collateral not to be subject to the first
priority security interest herein granted to Bank, subject only to Permitted
Liens.

7.6   DISTRIBUTIONS; INVESTMENTS.

      Borrower will not directly or indirectly acquire or own any Person, or
make any Investment in any Person (other than Permitted Investments) or permit
any of its Subsidiaries to do so, or pay any dividends or make any distribution
or payment related to, or redeem, retire or purchase any of, its capital stock.

7.7   TRANSACTIONS WITH AFFILIATES.

      Borrower will not directly or indirectly enter into or permit any material
transaction with any

                                       9
<PAGE>
Affiliate, except transactions that are in the ordinary course of Borrower's
business, on terms less favorable to Borrower than would be obtained in an arm's
length transaction with a non-affiliated Person, provided that Borrower may
appropriately compensate its executive officers in such manner as is determined
by Borrower's board of directors.

7.8   SUBORDINATED DEBT.

      Borrower will not make or permit any payment on any Subordinated Debt
except under the express terms of the Subordinated Debt, or amend any provision
in any document relating to the Subordinated Debt, without Bank's prior written
consent.

7.9   COMPLIANCE.

      Borrower will not, and will not permit any of its Subsidiaries to: (i)
become an "investment company" or a company controlled by an "investment
company," under the Investment Company Act of 1940, or undertake as one of its
material activities extending credit to purchase or carry margin stock, or use
the proceeds of any Credit Extension for that purpose; (ii) fail to meet the
minimum funding requirements of ERISA, permit a Reportable Event or Prohibited
Transaction (as defined in ERISA) to occur; or (iii) fail to comply with the
Federal Fair Labor Standards Act or violate any other law or regulation
applicable to Borrower, if the violation could reasonably be expected to cause a
Material Adverse Change.

8.    EVENTS OF DEFAULT.

8.1   PAYMENT DEFAULT.

      Borrower fails to pay any of the Obligations within three days after their
due date. During the three day period, the failure to cure the default is not
itself an Event of Default (but Bank shall have no obligation to make a Credit
Extension during the three day period).

8.2   COVENANT DEFAULT.

      (a) Borrower fails to perform any obligation under Article 6, or violates
any of the covenants in Article 7 of this Agreement, or

      (b) Borrower fails or neglects to perform, keep or observe any other
material term, provision, condition, covenant or agreement in this Agreement, in
any other Loan Documents or in any other present or future agreement between
Borrower and Bank and, as to any default under such other term, provision,
condition, agreement or covenant that can be cured, has failed to cure the
default within ten (10) days after the occurrence thereof; provided, however,
that if the default cannot by its nature be cured within the ten-day period, and
such default is likely to be cured within a reasonable time thereafter, then
Borrower shall have an additional reasonable time period (which shall not in any
case exceed ten additional days) to cure such default. During the ten-day period
and (if applicable) the additional ten-day period, the failure to cure the
default is not itself an Event of Default (but Bank shall have no obligation to
make a Credit Extension during such periods).

8.3   MATERIAL ADVERSE CHANGE.

      There occurs (i) a material adverse change in the business, operations or
condition (financial or otherwise) of the Borrower, (ii) a material impairment
of the prospect of repayment of any portion of the Obligations, or (iii) a
material impairment to the value or priority of Bank's security interest in the
Collateral (or any material portion thereof).

                                       10
<PAGE>
8.4   ATTACHMENT.

      Any material portion of Borrower's assets is attached, seized or levied
on, or comes into possession of a trustee or receiver, and the attachment,
seizure or levy is not removed, or the possession by a trustee or receiver is
not terminated, in ten days; or Borrower is enjoined, restrained or prevented by
court order from conducting a material part of its respective businesses; or a
judgment or other claim becomes a Lien on a material portion of Borrower's
assets; or a notice of lien, levy or assessment is filed against any of
Borrower's assets by any government agency and not paid within ten days after
Borrower receives notice thereof. None of the foregoing is an Event of Default
if stayed or if a bond is posted pending contest by Borrower (but Bank shall
have no obligation to make a Credit Extension during such stay period or pending
contest).

8.5 INSOLVENCY.

      Borrower becomes insolvent or begins an Insolvency Proceeding, or an
Insolvency Proceeding is begun against Borrower and is not dismissed or stayed
within 30 days (but Bank shall have no obligation to make a Credit Extension
before any Insolvency Proceeding is dismissed).

8.6   OTHER AGREEMENTS.

      There is a material default in any agreement between Borrower and a third
party that gives the third party the right to accelerate any Indebtedness
exceeding $250,000 or that could reasonably be expected to cause a Material
Adverse Change.

8.7   JUDGMENTS.

      A money judgment(s) in the aggregate of at least $500,000 is rendered
against Borrower and is unsatisfied and unstayed for ten days (but Bank shall
have no obligation to make a Credit Extension before the judgment is stayed or
satisfied) and is not otherwise covered by indemnification of, or insurance
coverages with respect to, the Borrower.

8.8   MISREPRESENTATIONS.

      Borrower or any Person acting for Borrower, makes any material
misrepresentation or material misstatement, in light of the circumstances in
which it was made, now or later in any warranty or representation in this
Agreement or in any writing delivered to Bank or in order to induce Bank to
enter this Agreement or any Loan Document.

9.    BANK'S RIGHTS AND REMEDIES.

9.1   RIGHTS AND REMEDIES.

      When an Event of Default occurs and is continuing and any period for cure
as set forth in Section 8 hereof has expired, Bank may, without notice or
demand, do any or all of the following:

      (a) Declare all Obligations immediately due and payable (but if an Event
of Default described in Section 8.5 occurs all Obligations are immediately due
and payable without any action by Bank);

      (b) Stop advancing money or extending credit for Borrower's benefit under
this Agreement or under any other agreement between Borrower and Bank;

      (c) Settle or adjust disputes and claims directly with account debtors for
amounts, on terms and in any order that Bank considers advisable;

                                       11
<PAGE>
      (d) Make any payments and do any acts that Bank considers necessary or
reasonable to protect its security interest in the Collateral and in furtherance
thereof: (i) Borrower will assemble the Collateral if Bank requires and make it
available as Bank designates; (ii) Bank may enter premises where the Collateral
is located, take and maintain possession of any part of the Collateral, and pay,
purchase, contest or compromise any Lien which appears to be prior or superior
to its security interest and pay all expenses incurred; and (iii) Borrower
grants Bank a license to enter and occupy any of its premises, without charge,
to exercise any of Bank's rights or remedies;

      (e) Apply to the Obligations any (i) balances and deposits of Borrower
that Bank holds, and (ii) amounts held by Bank owing to or for the credit or the
account of Borrower;

      (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, advertise for sale, and sell the Collateral, and in furtherance thereof:
(i) Bank is granted a non-exclusive, royalty-free license or other right to use,
without charge, Borrower's labels, Patents, Copyrights, Mask Works, rights of
use of any name, trade secrets, trade names, Trademarks, service marks and
advertising matter, or any similar property as it pertains to the Collateral, in
completing production of, advertising for sale and selling any Collateral; and
(ii) Borrower's rights under all licenses and all franchise agreements inure to
Bank's benefit in connection with the foregoing; and

      (g) Dispose of the Collateral according to the Code.

9.2   POWER OF ATTORNEY.

      Borrower irrevocably appoints and constitutes Bank as its lawful
attorney-in-fact, with full power and in the name of Borrower, to do all of the
following upon the occurrence and continuation of an Event of Default: (i)
endorse Borrower's name on any checks or other forms of payment or security;
(ii) sign Borrower's name on any invoice or bill of lading for any Account or
drafts against account debtors, (iii) make, settle and adjust all claims under
Borrower's insurance policies; (iv) settle and adjust disputes and claims about
the Accounts directly with account debtors, for amounts and on terms Bank
determines reasonable; and (v) transfer the Collateral into the name of Bank or
a third party as the Code permits. Notwithstanding the foregoing, Bank may
exercise the power of attorney to sign Borrower's name on any documents
necessary to perfect or continue the perfection of any security interest
regardless of whether an Event of Default has occurred. Bank's appointment as
Borrower's attorney-in-fact, and all of Bank's rights and powers, are coupled
with an interest and irrevocable until all Obligations have been fully repaid
and performed and Bank's obligation to provide Credit Extensions terminates.

9.3   ACCOUNTS COLLECTION.

      When an Event of Default occurs and continues, Bank may notify any Person
owing Borrower money of Bank's security interest in the funds and verify the
amount of the Account. Borrower must collect all payments in trust for Bank and,
if requested by Bank, immediately deliver the payments to Bank in the form
received from the account debtor, with proper endorsements for deposit.

9.4   BANK EXPENSES.

      If Borrower fails to pay any amount or furnish any required proof of
payment to third persons, Bank may make all or part of the payment or obtain
insurance policies required in Section 6.5, and take any action under the
policies that Bank deems prudent. Any amounts paid by Bank are Bank Expenses and
immediately due and payable, bearing interest at the then-applicable rate and
secured by the Collateral. No payments by Bank are deemed an agreement to make
similar payments in the future or constitute Bank's waiver of any Event of
Default.

9.5   BANK'S LIABILITY FOR COLLATERAL.

                                       12
<PAGE>
      If Bank complies with the Code, it shall not be liable for: (i) the
safekeeping of the Collateral; (ii) any loss or damage to the Collateral; (iii)
any diminution in the value of the Collateral; or (iv) any act or default of any
carrier, warehouseman, bailee, or other person. Borrower bears all risk of loss,
damage or destruction of the Collateral.

9.6   REMEDIES CUMULATIVE.

      Bank's rights and remedies under this Agreement, the other Loan Documents
and all other agreements are cumulative. Bank has all rights and remedies
provided under the Code, by law and in equity. Bank's exercise of one right or
remedy is not an election, and Bank's waiver of any Event of Default is not a
continuing waiver. Bank's delay is not a waiver, election or acquiescence. No
waiver is effective unless signed by Bank, and then is only effective for the
specific instance and purpose for which it was given.

9.7   DEMAND WAIVER.

      Borrower waives demand, notice of default or dishonor, notice of payment
and nonpayment, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension or renewal of accounts, documents,
instruments, chattel paper and guaranties held by Bank on which Borrower is
liable.

10.   NOTICES.

      All notices or demands by any party about this Agreement or any other
related agreement must be in writing and be personally delivered or sent by an
overnight delivery service, by certified mail, (postage prepaid, return receipt
requested) or by telefacsimile to the addresses set forth at the beginning of
this Agreement. A party may change its notice address by giving the other party
written notice thereof.

11.   CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER.

      California law governs the Loan Documents without regard to principles of
conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of
the State and Federal courts in Santa Clara County, California.

BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS
WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

12.   GENERAL PROVISIONS

12.1  SUCCESSORS AND ASSIGNS.

      This Agreement binds and is for the benefit of the successors and
permitted assigns of each party. Borrower may not assign this Agreement or any
rights under it without Bank's prior written consent, which may be granted or
withheld in Bank's discretion. Bank has the right, without the consent of or
notice to Borrower, to sell, transfer, negotiate or grant participations in all
or any part of, or any interest in, Bank's obligations, rights and benefits
under this Agreement.

12.2  INDEMNIFICATION.

      Borrower will indemnify, defend and hold harmless Bank and its officers,
employees, and agents against: (i) all obligations, demands, claims, and
liabilities asserted by any other party in connection with

                                       13
<PAGE>
the transactions contemplated by the Loan Documents; and (ii) all losses and
Bank Expenses incurred or paid by Bank from, following or consequential to
transactions between Bank and Borrower (including reasonable attorneys fees and
expenses), except for losses caused by Bank's gross negligence or willful
misconduct.

12.3  TIME OF ESSENCE.

      Time is of the essence for the performance of all obligations in this
Agreement.

12.4  SEVERABILITY OF PROVISION.

      Each provision of this Agreement is severable from every other provision
in determining the enforceability of any provision.

12.5  AMENDMENTS IN WRITING, INTEGRATION.

      All amendments to this Agreement must be in writing and signed by Borrower
and Bank. This Agreement represents the entire agreement about this subject
matter, and supersedes prior negotiations or agreements. All prior agreements,
understandings, representations, warranties and negotiations between the parties
about the subject matter of this Agreement merge into this Agreement and the
other Loan Documents.

12.6  COUNTERPARTS.

      This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and
delivered, are an original, and all of which, taken together, constitute one
Agreement.

12.7  SURVIVAL.

      All covenants, representations and warranties made in this Agreement
continue in full force while any Obligations remain outstanding. The obligations
of Borrower in Section 12.2 to indemnify Bank will survive until all statutes of
limitations for actions that may be brought against Bank have run.

12.8  CONFIDENTIALITY.

      In handling any confidential information, Bank will exercise the same
degree of care that it exercises for its own proprietary information, but
disclosure of information may be made by Bank: (i) to Bank's subsidiaries or
affiliates in connection with their present or prospective business relations
with Borrower; (ii) to prospective transferees or purchasers of any interest in
the Obligations or the Loan Documents; (iii) as required by law, regulation,
subpoena or other order; (iv) as required in connection with Bank's examination
or audit; and (v) as Bank considers appropriate in exercising remedies under
this Agreement. Confidential information does not include information that
either: (i) is in the public domain or in Bank's possession when disclosed to
Bank, or becomes part of the public domain after disclosure to Bank; or (ii) is
disclosed to Bank by a third party, if Bank does not know that the third party
is prohibited from disclosing the information.

12.9  ATTORNEYS' FEES, COSTS AND EXPENSES.

      In any action or proceeding between Borrower and Bank arising out of the
Loan Documents, the prevailing party will be entitled to recover its reasonable
attorneys' fees and other reasonable costs and

                                       14
<PAGE>
expenses incurred, in addition to any other relief to which it may be entitled.

13.   DEFINITIONS.

      In this Agreement:

      "ACCOUNTS" are all existing and later arising accounts, contract rights
and other obligations owed to Borrower in connection with its sale or lease of
goods (including the licensing of software and other technology) or provision of
services, all credit insurance, guaranties, other security and all merchandise
returned or reclaimed by Borrower, and Borrower's Books relating to any of the
foregoing.

      "ADVANCE" or "ADVANCES" are amounts advanced under the Loan Documents to
or on behalf of Borrower, including but not limited to the aggregate of (i) all
amounts utilized under the Cash Management Services Sublimit; (ii) the
then-outstanding principal balance of all Revolving Advances; (iii) the face
amount of all outstanding Letters of Credit (including drawn but unreimbursed
Letters of Credit); and (iv) all amounts utilized under the Foreign Exchange
Sublimit.

      "AFFILIATE" of a Person is a Person that owns or directly or indirectly
controls the Person, any Person that controls or is controlled by or is under
common control with the Person, and each of that Person's senior executive
officers, directors, partners and, for any Person that is a limited liability
company, that Person's managers and members.

      "BANK EXPENSES" are the costs and expenses (including, but not limited to,
all audit fees and expenses and reasonable attorneys' fees and expenses) for
preparing, negotiating, administering, defending and enforcing the Loan
Documents (including appeals and Insolvency Proceedings).

      "BORROWER'S BOOKS" are all of Borrower's books and records, including
ledgers, records regarding Borrower's assets or liabilities, the Collateral,
business operations or financial condition and all computer programs or discs or
any equipment containing the information.

      "BUSINESS DAY" is any day that is not a Saturday, Sunday or other day on
which the Bank is closed.

      "CASH MANAGEMENT SERVICES" are defined in Section 2.1.2.

      "CASH MANAGEMENT SERVICES SUBLIMIT" is defined in Section 2.1.2.

      "CODE" is the Uniform Commercial Code, as applicable.

      "COLLATERAL" is the property described on Exhibit A.

      "COMMITTED REVOLVING LINE" is $15,000,000.

      "COMMITMENT TERMINATION DATE" is the date that is one day prior to the
one-year anniversary of the Effective Date.

      "COMPLIANCE CERTIFICATE" is attached as Exhibit C.

      "CONTINGENT OBLIGATION" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; (ii) any obligations for undrawn letters of credit for the account of
that Person; and (iii) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement

                                       15
<PAGE>
designated to protect a Person against fluctuation in interest rates, currency
exchange rates or commodity prices; but "Contingent Obligation" does not include
endorsements in the ordinary course of business. The amount of a Contingent
Obligation is the stated or determined amount of the primary obligation for
which the Contingent Obligation is made or, if not determinable, the maximum
reasonably anticipated liability for it determined by the Person in good faith;
but the amount may not exceed the maximum of the obligations under the guarantee
or other support arrangement.

      "COPYRIGHTS" are all copyright rights, applications or registrations and
like protections in each work or authorship or derivative work, whether
published or not (whether or not it is a trade secret) now or later existing,
created, acquired or held.

      "CREDIT EXTENSION" is each Revolving Advance, Cash Management Service,
Letter of Credit, FX or Forward Contract or any other extension of credit made
by Bank to Borrower or for Borrower's benefit.

      "CURRENT LIABILITIES" are equal to (i) the aggregate amount of Borrower's
Total Liabilities which mature within one (1) year, including all outstanding
Letters of Credit (including drawn but unreimbursed Letters of Credit) and all
amounts outstanding under corporate credit cards, plus (ii) all outstanding
principal under the Committed Revolving Line.

      "DOLLARS" and "$" is United States dollars.

      "DOMESTIC UNRESTRICTED CASH" is Unrestricted Cash held in accounts at
financial institutions that are located within the United States of America.

      "EBITDA" is earnings from ongoing operations before interest expenses,
taxes, depreciation and amortization as determined in accordance with GAAP.

      "EFFECTIVE DATE" is September 30, 2002.

      "ERISA" is the Employment Retirement Income Security Act of 1974, and its
regulations.

      "EVENT OF DEFAULT" is the occurrence of any event described in Article 8
but does not include any cure period provided therein.

      "FOREIGN EXCHANGE SUBLIMIT" is defined in Section 2.1.3.

      "FX FORWARD CONTRACT" is defined in Section 2.1.3.

      "GAAP" is generally accepted accounting principles, consistently applied
over the period(s) in question.

      "INDEBTEDNESS" is (a) indebtedness for borrowed money or the deferred
price of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.

      "INSOLVENCY PROCEEDINGS" are proceedings by or against any Person under
the United States Bankruptcy Code or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization, arrangement
or other relief.

      "INTELLECTUAL PROPERTY" is:

      (a)Copyrights, Trademarks, Patents and Mask Works, including all
amendments, renewals,

                                       16
<PAGE>
extensions and licenses or other rights to use same, and all license fees and
royalties from the use of same;

      (b)Any trade secrets and any intellectual property rights in computer
software and computer software products now or later existing, created, acquired
or held;

      (c)All design rights which may be available to Borrower or Guarantor now
or later created, acquired or held;

      (d)Any claims for damages (past, present or future) for infringement of
any of the rights above, with the right, but not the obligation, to sue and
collect damages for use or infringement of the intellectual property rights
above; and

      (e) All proceeds and products of the foregoing, including all insurance,
indemnity and warranty payments.

      "INVENTORY" is present and future inventory in which Borrower has any
interest, including merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products intended for sale or
lease or to be furnished under a contract of service, of every kind and
description now or later owned by or in the custody or possession, actual or
constructive, of Borrower, including inventory temporarily out of its custody or
possession or in transit and including returns on any accounts or other proceeds
(including insurance proceeds) from the sale or disposition of any of the
foregoing and any documents of title.

      "INVESTMENT" is any beneficial ownership (including stock, partnership
interest or other securities) of any Person, or any loan, advance or capital
contribution to any Person.

      "LETTERS OF CREDIT" is described in Section 2.1.3.

      "LETTER OF CREDIT FEE" is: (i) for the issuance of each Letter of Credit,
an amount equal to one and one-half percent (1.50%) of the face amount of such
Letter of Credit; and (ii) for the renewal of each Letter of Credit, an amount
equal to one and one-half percent (1.50%) of the face amount of such Letter of
Credit.

      "LIEN" is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.

      "LOAN DOCUMENTS" are, collectively, this Agreement, any note or notes and
any other present or future agreement between Borrower to or for the benefit of
Bank in connection with this Agreement, all as amended, extended or restated.

      "MASK WORKS" are all mask works or similar rights available for the
protection of semiconductor chips, now owned or later acquired.

      "MATERIAL ADVERSE CHANGE" is described in Section 8.3.

      "OBLIGATIONS" are debts, principal, interest, Bank Expenses and other
amounts that Borrower owes to Bank now or later, including cash management
services, letters of credit and foreign exchange contracts (if any) and
including interest accruing after Insolvency Proceedings begin, and debts,
liabilities or obligations of Borrower assigned to Bank.

      "OVERADVANCE" is described in Section 2.2.

      "PATENTS" are patents, patent applications and like protections, including
improvements, divisions,

                                       17
<PAGE>
continuations, renewals, reissues, extensions and continuations-in-part of the
same.

      "PERMITTED INDEBTEDNESS" is:

      (a)Borrower's indebtedness to Bank under this Agreement or any other Loan
Document;

      (b)Indebtedness existing on the Effective Date that is acceptable to Bank
and shown on the Schedules;

      (c)Subordinated Debt;

      (d)Indebtedness to trade creditors incurred in the ordinary course of
business;

      (e)Indebtedness secured by Permitted Liens;

      (f) Indebtedness of Borrower to any Subsidiary and Contingent Obligations
of any Subsidiary with respect to obligations of Borrower (provided that the
primary obligations are not prohibited hereby), and Indebtedness of any
Subsidiary to any other Subsidiary and Contingent Obligations of any Subsidiary
with respect to obligations of any other Subsidiary (provided that the primary
obligations are not prohibited hereby);

      (g) Other Indebtedness, not otherwise permitted by Section 7.4, not
exceeding $250,000 in the aggregate outstanding at any time; and

      (h) Extensions, refinancings, modifications, amendments and restatements
of any items of Permitted Indebtedness (a) through (f) above, provided that the
principal amount thereof is not increased or the terms thereof are not modified
to impose more burdensome terms upon Borrower or its Subsidiary, as the case may
be.

      "PERMITTED INVESTMENTS" are:

      (a)Investments existing on the Effective Date that are acceptable to Bank
and shown on the Schedules;

      (b) (i) marketable direct obligations issued or unconditionally guaranteed
by the United States or its agency or any State maturing within one year from
its acquisition, (ii) commercial paper maturing no more than 1 year after its
creation and having the highest rating from either Standard & Poor's Corporation
or Moody's Investors Service, Inc., and (iii) Bank's certificates of deposit
issued maturing no more than 1 year after issue;

      (c) Investments consisting of the endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of
Borrower;

      (d) Investments accepted in connection with Transfers permitted by Section
7.1;

      (e) Investments of Subsidiaries in or to other Subsidiaries or Borrower
and Investments by Borrower in Subsidiaries not to exceed $500,000 in the
aggregate in any fiscal year;

      (f) Investments consisting of (i) travel advances and employee relocation
loans and other employee loans and advances in the ordinary course of business,
and (ii) loans to employees, officers or directors relating to the purchase of
equity securities of Borrower or its Subsidiaries pursuant to employee stock
purchase plans or agreements approved by Borrower's Board of Directors;

                                       18
<PAGE>
      (g) Investments (including debt obligations) received in connection with
the bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or suppliers
arising in the ordinary course of business;

      (h) Investments consisting of notes receivable of, or prepaid royalties
and other credit extensions, to customers and suppliers who are not Affiliates,
in the ordinary course of business; provided that this paragraph (h) shall not
apply to Investments of Borrower in any Subsidiary;

      (i) Joint ventures or strategic alliances in the ordinary course of
Borrower's business consisting of the non-exclusive licensing of technology, the
development of technology or the providing of technical support, provided that
any cash investments by Borrower do not exceed $250,000 in the aggregate in any
fiscal year;

      (j)checking, savings, money market and investment accounts with Bank or an
Affiliate of Bank;

      (k)distributions payable solely in Borrower's capital stock;

      (l) conversions of any of Borrower's convertible securities into other
securities pursuant to the terms of such convertible securities or otherwise in
exchange therefore; and

      (m)repurchases of stock from any former employees, consultants or
directors pursuant to the terms of the applicable repurchase agreements,
provided that such repurchases shall not in the aggregate exceed $250,000 and no
Event of Default has occurred and is continuing or would exist after giving
effect to such repurchase.

      "PERMITTED LIENS" are:

      (a)Liens existing on the Effective Date that are acceptable to Bank and
shown on the Schedules or arising under this Agreement or other Loan Documents;

      (b)Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith and for which
Borrower maintains adequate reserves on its Books, if they have no priority over
any of Bank's security interests;

      (c)Purchase money Liens existing on equipment when acquired, if the Lien
is confined to the property and improvements and the proceeds of the equipment;

      (d)Licenses or sublicenses granted in the ordinary course of Borrower's
business and any interest or title of a licensor or under any license or
sublicense, if the licenses and sublicenses permit granting Bank a security
interest, including any letter of credit issued for the account of Borrower to
ensure Borrower's performance under such license or sublicense;

      (e) Leases or subleases granted in the ordinary course of Borrower's
business, including in connection with Borrower's leased premises or leased
property;

      (f) Liens incurred in the extension, renewal or refinancing of the
indebtedness secured by Liens described in (a) through (c), but any extension,
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness so secured may not
increase;

      (g) Liens arising from judgments, decrees or attachments in circumstances
not constituting an Event of Default under Section 8.4 or 8.7;

                                       19
<PAGE>
      (h) Liens in favor of other financial institutions arising in connection
with Borrower's deposit accounts held at such institutions, provided that Bank
has a perfected security interest in the amounts held in such deposit accounts;

      (i) Other Liens not described above arising in the ordinary course of
business and not having or not reasonably likely to cause a Material Adverse
Change in Borrower and its Subsidiaries taken as a whole; and

      (j) Escrow agreements with respect to Intellectual Property granted by
Borrower in connection with licenses of Borrower's products, all in the ordinary
course of Borrower's business.

      "PERSON" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company association, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
firm, joint stock company, estate, entity or government agency.

      "PRIME RATE" is Bank's most recently announced "prime rate," even if it is
not the lowest rate at which Bank makes loans or otherwise extends credit. The
Prime Rate may change from time to time over the term of this Agreement.

      "RESPONSIBLE OFFICER" is each of the Chief Executive Officer, the
Controller, the President and the Chief Financial Officer of Borrower.

      "REVOLVING ADVANCE" or "REVOLVING ADVANCES" is a principal advance (or
advances) of funds under the Committed Revolving Line.

      "REVOLVING MATURITY DATE" is September 29, 2003.

      "SCHEDULES" are the attached schedules of exceptions.

      "SEC" is the U.S. Securities and Exchange Commission.

      "SUBORDINATED DEBT" is debt incurred by Borrower that is subordinated to
Borrower's Indebtedness owed to Bank and that is reflected in a written
agreement in a manner and form acceptable to Bank and approved by Bank in
writing.

      "SUBSIDIARY" is, for Borrower, all entities noted on the attached Schedule
entitled "Subsidiaries".

      "TOTAL LIABILITIES" are, on any day, obligations that should, under GAAP,
be classified as liabilities on Borrower's consolidated balance sheet, including
all Indebtedness and the current portion of Subordinated Debt allowed to be
paid, but excluding all other Subordinated Debt.

      "TRADEMARKS" are trademark and servicemark rights, registered or not,
applications to register and registrations and like protections, and the entire
goodwill of the business of Borrower connected with the trademarks.

      "UNUSED COMMITMENT FEE" is the fee payable by Borrower to Bank under
Section 2.4.4 hereof.

                                       20
<PAGE>
      "UNRESTRICTED CASH" is all cash that (i) is not subject to any Lien or
(ii) does not otherwise fall within the definition of "restricted cash" as
determined under GAAP.

      IN WITNESS WHEREOF, each of the parties hereto has caused its duly
authorized representative to execute and deliver this Agreement on the date
first set forth above.

<TABLE>
<S>                                               <C>
BANK:                                             BORROWER:

SILICON VALLEY BANK,                              CRITICAL PATH, INC.,
a California-chartered bank                       a California corporation

By:            /s/                                By: /s/ Laureen DeBuono
    ----------------------------------------          -------------------

Name:                                             Name:  Laureen DeBuono
      --------------------------------------

Title:                                            Title: Chief Financial Officer and Executive Vice President
       -------------------------------------             ----------------------------------------------------
</TABLE>

                                       21
<PAGE>
                                    EXHIBIT A

      The Collateral consists of all of Borrower's right, title and interest in
and to the following:

      All goods and equipment now owned or hereafter acquired, including without
limitation all machinery, fixtures, vehicles (including motor vehicles and
trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;

      All inventory, now owned or hereafter acquired, including without
limitation all merchandise, raw materials, parts, supplies, packing and shipping
materials, work-in-process and finished products, including such inventory as is
temporarily out of Borrower's custody or possession or in transit and also
including any returns upon any accounts or other proceeds (including insurance
proceeds) resulting from the sale or disposition of any of the foregoing, and
any documents of title representing any of the above;

      All contract rights and general intangibles now owned or hereafter
acquired, including without limitation goodwill, trademarks, servicemarks, trade
styles, trade names, patents, patent applications, leases, license agreements,
franchise agreements, blueprints, drawings, purchase orders, customer lists,
route lists, infringements, claims, computer programs, computer discs, computer
tapes, literature, reports, catalogs, design rights, income tax refunds,
payments of insurance and rights to payment of any kind;

      All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties and other security therefor, as well as all
merchandise returned to or reclaimed by Borrower;

      All documents, cash, deposit accounts, securities, securities
entitlements, securities accounts, investment property, financial assets,
letters of credit, certificates of deposit, instruments and chattel paper now
owned or hereafter acquired, and Borrower's Books relating to the foregoing;

      All copyright rights, copyright applications, copyright registrations and
like protections in each work of authorship and derivative work thereof, whether
published or unpublished, now owned or hereafter acquired; all trade secret
rights, including all rights to unpatented inventions, know-how, operating
manuals, license rights and agreements and confidential information, now owned
or hereafter acquired; all mask work or similar rights available for the
protection of semiconductor chips, now owned or hereafter acquired; all claims
for damages by way of any past, present and future infringement of any of the
foregoing;

      All of Borrower's Intellectual Property; and

      All of Borrower's Books relating to the foregoing and any and all claims,
rights and interests in any of the above and all substitutions for, additions
and accessions to and proceeds thereof.
<PAGE>
                                    EXHIBIT B

LOAN PAYMENT/ADVANCE REQUEST FORM

FAX TO:                                             DATE:
       --------------------------                        -----------------------

[ ] Loan Payment:

                               CRITICAL PATH, INC.
From Account #                                 To Account #
              ---------------------------                  ---------------------
                    (Deposit Account #)                         (Loan Account #)
Principal $                       and/or Interest $
           ----------------------                  -----------------------------

All Borrower's representation and warranties in the Loan and Security Agreement
are true, correct and complete in all material respects to on the date of the
telephone transfer request for and advance, but those representations and
warranties expressly referring to another date shall be true, correct and
complete in all material respects as of the date:

AUTHORIZED SIGNATURE:                           Phone Number:
                     -------------------------               -------------------

[ ] LOAN ADVANCE:

COMPLETE OUTGOING WIRE REQUEST SECTION BELOW IF ALL OR A PORTION OF THE FUNDS
FROM THIS LOAN ADVANCE ARE FOR AN OUTGOING WIRE.

From Account #                                 To Account #
              ---------------------------                  ---------------------
                    (Loan Account #)                         (Deposit Account #)
   Amount of Revolving Advance $
                                -------------------

All Borrower's representation and warranties in the Loan and Security Agreement
are true, correct and complete in all material respects to on the date of the
telephone transfer request for and advance, but those representations and
warranties expressly referring to another date shall be true, correct and
complete in all material respects as of the date:

AUTHORIZED SIGNATURE:                           Phone Number:
                     -------------------------               -------------------

OUTGOING WIRE REQUEST

COMPLETE ONLY IF ALL OR A PORTION OF FUNDS FROM THE LOAN ADVANCE ABOVE ARE TO BE
WIRED. Deadline for same day processing is 12:00 p.m., P.T.

Beneficiary Name:                             Amount of Wire: $
                 ------------------------                     ------------------
Beneficiary Bank:                             Account Number:
                 ------------------------                    -------------------
City and Sate:
              ----------------------------------
Beneficiary Bank Transit (ABA) #: __ __ __ __ __ _ __
Beneficiary Bank Code (Swift, Sort, Chip, etc.):
                                                --------

                          (FOR INTERNATIONAL WIRE ONLY)

Intermediary Bank:                          Transit (ABA) #:
                  -----------------------                   --------------------
For Further Credit to:
                      ----------------------------------------------------------
Special Instruction:
                    ------------------------------------------------------------

By signing below, I (we) acknowledge and agree that my (our) funds transfer
request shall be processed in accordance with and subject to the terms and
conditions set forth in the agreements(s) covering funds transfer service(s),
which agreements(s) were previously received and executed by me (us).

Authorized Signature:
                     -----------------------
Print Name/Title:
                 ---------------------------
Telephone #
           ---------------------------------

2nd Signature (If Required):
                            -----------------------
Print Name/Title:
                 ---------------------------
Telephone #
           ---------------------------------
<PAGE>
                                    EXHIBIT C

                             COMPLIANCE CERTIFICATE

TO:     SILICON VALLEY BANK
FROM:   CRITICAL PATH, INC.
DATED:  ______________

      The undersigned authorized officer of Critical Path, Inc. ("Borrower")
certifies that under the terms and conditions of the Loan and Security Agreement
dated as of September 30, 2002 between Borrower and Bank (the "Agreement"), (i)
Borrower is in complete compliance for the period ending on the date first set
forth above with all required covenants except as noted below and (ii) all
representations and warranties in the Agreement are true and correct in all
material respects on this date, provided that any representation or warranty
that specified an earlier date continues to be true as of that specified earlier
date. Attached are the required documents supporting the certification. The
Officer certifies that these are prepared in accordance with Generally Accepted
Accounting Principles (GAAP) consistently applied from one period to the next
except as explained in an accompanying letter or footnotes. The Officer
acknowledges that no borrowings may be requested at any time or date of
determination that Borrower is not in compliance with any of the terms of the
Agreement, and that compliance is determined not just at the date this
certificate is delivered.

PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES" COLUMN.

<TABLE>
<CAPTION>
 REPORTING COVENANTS                                 REQUIRED                        COMPLIES
 -------------------                                 --------                        --------
<S>                                                  <C>                             <C>
 Interim financial statements + CC                   Monthly within 30 days          Yes      No
 Annual audited financial statements + CC            Within 180 days of FYE          Yes      No
 A/R Aging by Invoice Date                           Monthly within 30 days          Yes      No
</TABLE>

FINANCIAL COVENANTS

A.    Minimum Unrestricted Cash (maintain on a monthly basis)

<TABLE>
<CAPTION>
                                                                           ACTUAL      COMPLIES
                                                                           ------      --------
<S>                                                                      <C>           <C>
    If outstanding Obligations are less than $10,000,000.00,                           Yes   No
    then Unrestricted Cash of at least $20,000,000.00.

    If outstanding Obligations equal or exceed $10,000,000.00,                         Yes   No
    then Unrestricted Cash of at least $30,000,000.00.

    At all times, Domestic Unrestricted Cash of at least two times
    (2x) then outstanding Advances
</TABLE>

B.    Minimum EBITDA (measured on a quarterly basis)

<TABLE>
<CAPTION>
                                      PERIOD          REQUIRED        ACTUAL         COMPLIES
                                      ------          --------        ------         --------
<S>                                 <C>              <C>              <C>            <C>
                                    Q3, 2002         ($8,500,000)                    Yes   No

                                    Q4, 2002         ($4,000,000)                    Yes   No

                                    Q1, 2003         ($6,250,000)                    Yes   No

                                    Q2, 2003         $1,000,000                      Yes   No

Have there been updates to Borrower's Intellectual Property?                         Yes   No
</TABLE>

Borrower has deposit and/or investment accounts only at the following
institutions:
             ----------------------
<PAGE>
COMMENTS REGARDING EXCEPTIONS:  See Attached.

Sincerely,

Critical Path, Inc.,
a California corporation

--------------------------------------
Signature

--------------------------------------
Title

--------------------------------------
Date

               BANK USE ONLY
Received by:
             ------------------------------
                   AUTHORIZED SIGNER
Date:
      -------------------------------------

Verified:
          ---------------------------------
                   AUTHORIZED SIGNER

Date:
      -------------------------------------

Compliance Status:               Yes     No<PAGE>

                                                                   EXHIBIT 10.38

================================================================================

                            SHARE PURCHASE AGREEMENT

                                  by and among

                              CRITICAL PATH, INC.,

                            CRITICAL PATH JAPAN K.K.

                               MITSUI & CO., LTD.,

                             MITSUI & CO. (U.S.A.),

                         NTT COMMUNICATIONS CORPORATION,

                                       and

                                 NEC CORPORATION

                            Dated as of June 6, 2002

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                         Page
                                                                                         ----
<S>                                                                                      <C>
ARTICLE 1 DEFINITIONS......................................................................2
    1.1    Certain Definitions.............................................................2

ARTICLE 2 CONSIDERATION; CLOSING; CLOSING DELIVERABLES....................................10
    2.1    Sale of Shares.................................................................10
    2.2    Purchase Price Adjustment......................................................11
    2.3    Wire Instructions..............................................................11
    2.4    Closing; Closing Deliverables..................................................11
    2.5    Buyer's Conditions to Closing..................................................13
    2.6    Sellers' Conditions to Closing.................................................14
    2.7    Consummation of Closing........................................................14
    2.8    Appointment of Directors and Statutory Auditors................................14
    2.9    Termination of Shareholders Agreement..........................................14

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE SELLERS...................................15
    3.1    Authority; No Conflicts........................................................15
    3.2    Capitalization; Ownership of Shares, Options and Claims........................16
    3.3    Financial Information; Undisclosed Liabilities.................................16
    3.4    Loans, Notes, Accounts Receivable; Accounts Payable............................16
    3.5    Material Agreements............................................................16
    3.6    Consents and Approvals.........................................................17
    3.7    Litigation; Proceedings........................................................17
    3.8    Actions and Proceedings, etc...................................................17
    3.9    Compliance with Applicable Laws................................................17
    3.10   Disclosure.....................................................................17

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER.........................................18
    4.1    Authority; No Conflicts; Governmental Consents.................................18
    4.2    Actions and Proceedings, etc...................................................19
    4.3    Disclosure.....................................................................19

ARTICLE 5 COVENANTS OF THE SELLERS........................................................19
    5.1    Notice of Changes; Updates.....................................................19
    5.2    Non-Solicitation...............................................................20
    5.3    Further Assurances.............................................................20
    5.4    Complete Copies................................................................20
    5.5    Conduct Prior to Closing of Sellers............................................20

ARTICLE 6.................................................................................20
    6.1    Cooperation....................................................................20
    6.2    Confidential Information.......................................................21
    6.3    Release........................................................................21
</TABLE>

                                      -i-

<PAGE>

<TABLE>
<CAPTION>
                                                                                         Page
                                                                                         ----
<S>                                                                                      <C>
    6.4    Publicity......................................................................22
    6.5    Access to Information..........................................................22
    6.6    Expenses.......................................................................22

ARTICLE 7 NON-SOLICITATION OF CPP CUSTOMERS...............................................23
    7.1    Non-Solicitation Agreement.....................................................23
    7.2    Non-Solicitation Covenants: Scope and Choice of Law............................24
    7.3    Non-Solicitation Covenants: Assignment by Buyer................................24
    7.4    Non-Solicitation Covenants: Remedy for Breach..................................24

ARTICLE 8 TAX REPRESENTATIONS AND COVENANTS...............................................24
    8.1    Tax Definitions................................................................24
    8.2    Tax Representations and Covenants..............................................25

ARTICLE 9 EMPLOYEE BENEFITS AND EMPLOYEE ARRANGEMENTS.....................................27
    9.1    Seconded Employees.............................................................27
    9.2    Discharged Employees...........................................................27

ARTICLE 10 INDEMNIFICATION................................................................28
    10.1   Survival.......................................................................28
    10.2   Indemnification by the Sellers.................................................28
    10.3   Indemnification by Buyer.......................................................28
    10.4   Procedures Relating to Indemnification.........................................29
    10.5   Limitations....................................................................30
    10.6   No Contribution................................................................30

ARTICLE 11 TERMINATION....................................................................31
    11.1   Bases for Termination..........................................................31
    11.2   Notice of Termination, Return of Documents.....................................31
    11.3   Effect of Termination..........................................................31

ARTICLE 12 GENERAL PROVISIONS.............................................................31
    12.1   Assignment.....................................................................31
    12.2   No Third-Party Beneficiaries...................................................32
    12.3   Amendments; Waiver.............................................................32
    12.4   Waiver of Compliance...........................................................32
    12.5   Notices........................................................................32
    12.6   Interpretation.................................................................33
    12.7   Counterparts...................................................................33
    12.8   Severability...................................................................33
    12.9   Governing Law..................................................................34
    12.10  Dispute Forum..................................................................34
    12.11  Exhibits and Schedules.........................................................34
    12.12  Entire Agreement...............................................................34
</TABLE>

                                      -ii-

<PAGE>

EXHIBITS:

Exhibit A  - Form of Termination Agreement I
Exhibit B  - Form of Termination Agreement II
Exhibit C  - Seller Wire Transfer Instructions
Exhibit D  - Form of Cross Receipt
Exhibit E1 - Form of Buyer's Certificate
Exhibit E2 - Form of Buyer Sub's Certificate
Exhibit F  - Form of CPP Certificate
Exhibit G  - Form of Sellers' Certificate
Exhibit H  - Form of NTTCOM's Certificate

SCHEDULES:

Schedule 2.1    - Share Ownership (pre-Closing)
Schedule 2.2    - Estimated Balance Sheet
Schedule 2.8    - Directors and Statutory Auditors (post-Closing)
Schedule 3.3    - Financial Statements (December 31, 2001 and April 30, 2002)
Schedule 7.1    - CPP Customers
Schedule 8.2    - Exceptions to Tax Representations
Schedule 9.1(a) - Mitsui Seconded Employees
Schedule 9.1(b) - NTTCOM Seconded Employees
Schedule 9.2    - Terms of Discharged Employee Settlement Agreements

                                     -iii-

<PAGE>

                            SHARE PURCHASE AGREEMENT

                This SHARE PURCHASE AGREEMENT (together with all schedules,
appendices and exhibits hereto, the "AGREEMENT"), dated as of June 6, 2002 (the
"EFFECTIVE DATE"), is made by and among Critical Path, Inc., a California
corporation ("CRITICAL PATH"), Critical Path Japan K.K., a company organized and
existing under the laws of Japan and a wholly owned subsidiary of Buyer ("BUYER
SUB"), Mitsui & Co., Ltd., a company organized and existing under the laws of
Japan ("MITSUI"), Mitsui & Co. (U.S.A.), Inc., a New York corporation ("MITSUI
U.S.A."), NTT Communications Corporation, a company organized and existing under
the laws of Japan ("NTTCOM"), NEC Corporation, a company organized and existing
under the laws of Japan ("NEC" and together with MITSUI, Mitsui U.S.A. and
NTTCOM the "SELLERS" or individually, a "SELLER"). Critical Path, together with
its subsidiaries (including Buyer Sub) and operating either directly or through
such subsidiaries, is hereinafter referred to as "BUYER").

                              W I T N E S S E T H:

                WHEREAS, Critical Path, MITSUI and NTTCOM made and entered into
as of the 23rd day of May 2000, an agreement entitled SHAREHOLDERS AGREEMENT
(the "SHAREHOLDERS AGREEMENT"), for the purpose of jointly incorporating and
operating Critical Path Pacific, Inc. ("CPP") in Japan under the laws of Japan
and providing for the purchase of all of the issued and outstanding capital
stock of CPP (the "SHARES");

                WHEREAS, pursuant to the Shareholders Agreement, CPP was
incorporated on the 26th day of May 2000 and at such time the shareholders
subscribed for and purchased the following number of Shares:

                Critical Path:Sixteen Thousand (16,000) Shares

                MITSUI: Fourteen Thousand (14,000) Shares

                NTTCOM: Ten Thousand (10,000) Shares;

                WHEREAS, as of the date hereof, MITSUI directly owns 24% of the
Shares, Mitsui U.S.A. directly owns 6% of the Shares, NTTCOM directly owns 25%
of the Shares, NEC directly owns 5% of the Shares and Critical Path directly
owns 40% of the Shares;

                WHEREAS, MITSUI and CPP made and entered into as of the 21st day
of June 2000, an agreement entitled MANAGEMENT AND SALES ASSISTANCE AGREEMENT
(the "MITSUI AGREEMENT"), whereby MITSUI undertook to provide CPP with
management and sales assistance throughout the term thereof;

                WHEREAS, NTTCOM and CPP made and entered into as of the 21st day
of June 2000, an agreement entitled TECHNICAL AND SALES ASSISTANCE AGREEMENT
(the "NTTCOM AGREEMENT"), whereby NTTCOM undertook to provide CPP with technical
and sales assistance throughout the term thereof;

                                       1
<PAGE>

                WHEREAS, on the 12th day of March 2002, Buyer, MITSUI and NTTCOM
decided to conduct a study for the dissolution of CPP (the "DISSOLUTION STUDY")
and on the 29th day of March 2002 the Board of Directors of CPP (the "BOARD")
resolved that CPP should pursue the Dissolution Study;

                WHEREAS, notwithstanding the undertaking of the Dissolution
Study as described above, on the 23rd day of April 2002 Buyer sent to MITSUI and
NTTCOM a "LETTER OF OFFER FOR PURCHASE OF SHARES IN CRITICAL PATH PACIFIC, INC."
(the "LETTER OF OFFER") whereby Buyer offered to purchase all of the Shares of
CPP held by MITSUI, NTTCOM, MITSUI U.S.A. and NEC;

                WHEREAS, after receipt of the Letter of Offer, MITSUI, NTTCOM,
Mitsui U.S.A. and NEC held discussions regarding the proposed purchase by Buyer
of such Shares;

                WHEREAS, now, notwithstanding anything to the contrary set forth
in Articles 12, 18 and 19 of the Shareholders Agreement, Buyer wishes to
purchase from the Sellers, and the Sellers wish to sell to Buyer all of the
Shares now held by the Sellers, on the terms and conditions as herein below set
forth;

                NOW THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

        1.1 Certain Definitions. For all purposes of this Agreement except as
expressly provided or unless the context otherwise requires the following
definitions shall apply:

                "ACCOUNT PREPARATION RULES" shall mean the rules for the
preparation of the Monthly Management Accounts of CPP which were adopted by
CPP's Management Executive Committee.

                "AFFILIATE" or "AFFILIATE" shall mean, with respect to any
Person, any other Person directly or indirectly Controlling, Controlled by or
under common Control with such first Person.

                "AGENTS" or "AGENTS" shall mean officers, other employees,
independent contractors, consultants, directors, shareholders, affiliates and
other agents or representatives.

                "AGREEMENT" shall have the meaning assigned thereto in the
preamble.

                "APRIL 30 BALANCE SHEET" shall mean the unaudited balance sheet
of CPP as of April 30, 2002 attached to Schedule 3.3.

                "APPROVAL" shall have the meaning assigned thereto in Section
3.10.

                                       2
<PAGE>

                "AUDITOR" shall have the meaning assigned thereto in Section
2.2(b).

                "BOARD" shall have the meaning assigned thereto in the recitals.

                "BUSINESS DAY" shall mean any day that is not a Saturday, Sunday
or other day on which banking institutions in Tokyo, Japan are authorized or
required by law or executive order to close.

                "BUYER" shall have the meaning assigned thereto in the preamble.

                "BUYER DELIVERABLES" shall have the meaning assigned thereto in
Section 2.4(a).

                "BUYER INDEMNITEES" shall have the meaning assigned thereto in
Section 10.2.

                "BUYER PARTIES" shall have the meaning assigned thereto in
Section 6.3.

                "BUYER SUB" shall have the meaning assigned thereto in the
preamble.

                "BUYER'S INDEMNIFICATION CAP" shall have the meaning assigned
thereto in Section 10.5.

                "CASH" means cash and cash equivalents, including the line items
of the applicable CPP balance sheets entitled "cash in hand", "deposit in banks"
and "short term loans".

                "CASH ADJUSTMENT" shall have the meaning assigned thereto in
Section 2.2(a).

                "CLAIM" shall have the meaning assigned thereto in Section
10.4(b).

                "CLOSING" shall have the meaning assigned thereto in Section
2.4.

                "CLOSING CPP EQUITY" shall mean the assets, less liabilities, of
CPP determined by reference to the Closing Balance Sheet.

                "CLOSING CASH BALANCE" shall mean the total amount of Cash held
by CPP as of May 31, 2002, as reflected on the Closing Balance Sheet.

                "CLOSING DATE" shall have the meaning assigned thereto in
Section 2.4.

                "CLOSING BALANCE SHEET" shall have the meaning assigned thereto
in Section 2.2.

                "CODE" shall mean the Internal Revenue Code of 1986, as amended,
and any successor federal tax statute.

                "COLLATERAL AGREEMENTS" shall mean Termination Agreement I and
Termination Agreement II.

                "CONFIDENTIAL INFORMATION" shall have the meaning assigned
thereto in Section 6.2.

                                       3
<PAGE>

                "CONTRACTS" shall mean any contract, agreement, indenture, note,
bond, loan, instrument, lease, conditional sale agreement, purchase order,
mortgage, deed of trust, license, permit, concession, grant, franchise,
commitment, guarantee, other evidence of indebtedness or other binding
arrangement, understanding or agreement, whether or not written, to which CPP is
a party, each a "Contract."

                "CONTROL" shall mean the power to direct the affairs of a Person
by reason of ownership of voting shares, by contract or otherwise.

                "CP SEC DOCUMENTS" shall mean the reports, proxies, information
statements and prospectuses filed by Buyer with the U.S. Securities Exchange
Commission since December 31, 2000.

                "CPP" shall have the meaning assigned thereto in the preamble.

                "CPP BUSINESS" shall mean the business of CPP to deliver
advanced Internet messaging solutions to businesses in Japan as conducted on the
Effective Date.

                "CPP CUSTOMER" shall have the meaning assigned thereto in
Section 7.1.

                "CPP CEO" shall have the meaning set forth in Section 3.10.

                "CPP CFO" shall have the meaning set forth in Section 3.10.

                "CPP CIO" shall have the meaning set forth in Section 3.10.

                "CPP SERVICES" shall mean Internet communications services
including messaging and collaboration solutions for wireless, secure, unified
messaging, basic email and personal information management as provided by CPP on
the Effective Date.

                "CRITICAL PATH" shall have the meaning assigned thereto in the
preamble.

                "DIRECT CLAIM" shall have the meaning assigned thereto in
Section 10.4.

                "DISCHARGED EMPLOYEES" shall have the meaning assigned thereto
in Section 9.2.

                "DISCHARGED EMPLOYEE SETTLEMENT AGREEMENTS" shall have the
meaning assigned thereto in Section 9.2.

                "DISCLOSING PARTY" shall have the meaning assigned thereto in
Section 6.2.

                "DISSOLUTION STUDY" shall have the meaning assigned thereto in
the recitals.

                "EFFECTIVE DATE" shall have the meaning assigned thereto in the
preamble.

                "EMPLOYEE CLAIM INDEMNITEE" shall have the meaning assigned
thereto in Section 9.2.

                "EQUITY ADJUSTMENT" shall have the meaning assigned thereto in
Section 2.2(a).

                                       4
<PAGE>

                "ESTIMATED CPP EQUITY" shall mean the assets, less liabilities,
of CPP determined by reference to the Estimated Balance Sheet.

                "ESTIMATED CASH BALANCE" shall mean the total amount of cash and
cash equivalents held by CPP as of May 31, 2002, as reflected on the Estimated
Balance Sheet.

                "ESTIMATED BALANCE SHEET" shall mean the estimated unaudited
balance sheet of CPP as of May 31, 2002 attached to Schedule 2.2 hereto.

                "FINANCIAL STATEMENTS" shall mean the following as attached to
Schedule 3.3 (i) an audited (a) balance sheet of CPP as of December 31, 2001,
(b) the related statements of operations, changes in stockholders equity, and
cash flows for such fiscal year then ended, and (c) all related notes and
schedules, if any; and (ii) (a) the April 30 Balance Sheet, (b) the related
statements of operations, changes in stockholders equity, and cash flows for the
period then ended, and (c) all related notes and schedules, all of which have
been reviewed, but not audited, by CPP's independent public accountant.

                "GAAP" shall mean generally accepted accounting principles in
Japan, consistently applied.

                "GOVERNMENTAL AUTHORIZATION" shall mean any approval, consent,
license, permit, waiver, or other authorization issued, granted, given, or
otherwise made available by or under the authority of any Governmental Entity or
pursuant to any Legal Requirement.

                "GOVERNMENTAL ENTITY" shall mean any supranational, national,
state, municipal or local government or any agency, authority, bureau,
commission, department or similar body or instrumentality thereof, or any court,
tribunal, administrative or rulemaking agency or entity having jurisdiction over
the parties, CPP, the CPP Business and/or the Transactions.

                "INCLUDING" shall mean including without limitation.

                "INDEMNIFIABLE LOSSES" shall have the meaning assigned thereto
in Section 10.2.

                "INITIAL PURCHASE PRICE" shall have the meaning assigned thereto
in Section 2.1.

                "KNOWLEDGE" with respect to a Person, shall mean the knowledge
of the senior management and responsible employees of such Person after due
inquiry.

                "KNOWLEDGE OF THE CPP MANAGEMENT" shall mean the knowledge after
due inquiry of the CPP CEO and the CPP CFO.

                "LEGAL REQUIREMENT" shall mean any federal, state, local,
municipal, foreign or other law, statute, legislation, constitution, principle
of common law or equity, resolution, ordinance, code, edict, decree,
proclamation, treaty, convention, rule, regulation, permit, ruling, directive,
pronouncement, requirement (licensing or otherwise), specification,
determination, decision, opinion or interpretation that is, has been or may in
the future be issued, enacted, adopted, passed, approved, promulgated, made,
implemented or otherwise put into effect by or under the authority of any
Governmental Entity.

                                       5
<PAGE>

                "LETTER OF OFFER" shall have the meaning assigned thereto in the
recitals.

                "LIENS" shall mean any liens, mortgages, liabilities, options,
debts, claims, restrictions, preemptive rights, security interests, secured
claims, charges, voting and disposition restrictions or any other encumbrances
of any kind whether contingent, liquidated, disputed, known or unknown.

                "MTP" shall have the meaning assigned thereto in Section 7.1.

                "MATERIAL ADVERSE EFFECT" shall mean, with respect to any
Person, any change, event or effect that, individually or in the aggregate,
could reasonably be expected to have a material adverse effect on (i) the
ability of such Person to perform its obligations under this Agreement or
otherwise consummate the Transactions, (ii) the business, assets, property,
conditions, results of operations, value or financial or other condition of such
Person (as such business in presently conducted and as proposed to be conducted
in the future).

                "MATERIAL AGREEMENT" shall mean (a) any lease for real or
personal property (whether as lessor or lessee); (b) any agreement for the
purchase of materials, supplies, goods, services, equipment or other assets
other than in the ordinary course of business; (c) any consulting services,
sales, distribution or other similar agreement providing for the sale by CPP of
materials, supplies, goods, services, equipment or other assets; (d) any
partnership, joint venture or other similar agreement or arrangement; (e) any
agreement relating to the acquisition or disposition of any business (whether by
merger, sale of stock, sale of assets or otherwise); (f) any agreement relating
to indebtedness for borrowed money or the deferred purchase price of property;
(g) any license, franchise or similar agreement; (h) any agency, dealer, sales
representative, marketing or other similar agreement other than in the ordinary
course of business; or (i) any other agreement, commitment, arrangement or plan
not made in the ordinary course of business.

                "MAY 2002 MONTHLY GROSS REVENUE" shall have the meaning assigned
thereto in Section 7.3.

                "MITSUI" shall have the meaning assigned thereto in the
preamble.

                "MITSUI AGREEMENT" shall have the meaning assigned thereto in
the recitals.

                "MITSUI SECONDED EMPLOYEES" shall have the meaning assigned
thereto in Section 9.1(a).

                "MITSUI SECONDMENT AGREEMENTS" shall mean the agreements between
CPP and MITSUI regarding the secondment of certain employees to CPP, including
the letter dated December 21, 2000 and the memorandum dated December 21, 2000,
with respect to the secondment of Shoji Sakata; the letter dated April 25, 2000
and the memorandum dated June 16, 2000 with respect to the secondment of Ichiro
Ishii; and the letter dated May 26, 2000 and the memorandum dated June 16, 2000
with respect to the secondment of Hiroko Kitano.

                "MITSUI LEASE AGREEMENTS" shall mean the following contracts
between Mitsui Leasing & Development, Ltd. and CPP: (a) Contract Number
L001883400, dated June 1, 2000,

                                       6
<PAGE>

(b) Contract Number L001884200, dated June 1, 2000, (c) Contract Number
L001884500, dated June 1, 2000, (d) Contract Number L002221000, dated May 26,
2000, (e) Contract Number L002223600, dated May 26, 2000, (f) Contract Number
L002224100, dated May 26, 2000, (g) Contract Number L002225000, dated May 26,
2000, (h) Contract Number L002655300, dated September 26, 2000, (i) Contract
Number L010469900, dated December 1, 2000, and (j) Contract Number L012553100,
dated August 1, 2001.

                "MITSUI U.S.A." shall have the meaning assigned thereto in the
preamble.

                "NEC" shall have the meaning assigned thereto in the preamble.

                "NON-SOLICITATION PERIOD" shall have the meaning assigned
thereto in Section 7.1.

                "NTTCOM" shall have the meaning assigned thereto in the
preamble.

                "NTTCOM AGREEMENT" shall have the meaning assigned thereto in
the recitals.

                "NTTCOM SECONDED EMPLOYEES" shall have the meaning assigned
thereto in Section 9.1(b).

                "NTTCOM SECONDMENT AGREEMENTS" shall mean the agreements between
CPP and NTTCOM regarding the secondment of certain employees to CPP, including
the memorandum dated June 1, 2000 and the letter dated September 29, 2000, with
respect to, among other things, the secondment of Yutaka Ogawa and Mitsunobu
Matsunaga.

                "ORDINARY COURSE OF BUSINESS" shall mean the ordinary and usual
course of CPP's business consistent with past practices.

                "ORDER" shall mean any award, decision, injunction, judgment,
order, ruling, subpoena, or verdict entered, issued, made or rendered by any
court, administrative agency or other Governmental Entity or by any arbitrator.

                "ORGANIZATIONAL DOCUMENTS" shall mean the articles or
certificate of incorporation and the bylaws of a corporation or a Kabushiki
Kaisha or any charter or similar document adopted or filed in connection with
the creation, formation or origination of a Person and any amendment to any of
the forgoing.

                "PERMITS" shall mean any permit, license, certificate,
concession, approval, consent, ratification, permission, clearance,
confirmation, exemption, waiver, franchise, certification, designation, rating,
registration, variance, qualification, accreditation or authorization issued,
granted, given or otherwise made available by or under the authority of a
Governmental Entity.

                "PERSON" shall mean an individual, corporation, association,
partnership, limited liability company, joint venture, trust or unincorporated
organization, other form of business or legal entity or Governmental Entity.

                                       7
<PAGE>

                "PRE-CLOSING TAX PERIOD" shall have the meaning assigned thereto
in Section 8.1.

                "PRO RATA SHARE" shall have the meaning assigned thereto in
Section 9.2.

                "PROCEEDING" shall mean any action, arbitration, audit, claim,
hearing, investigation, litigation, or suit (whether civil, criminal,
administrative, investigative, or informal) commenced, brought, conducted or
heard by or before or otherwise involving, any Person or Governmental Entity or
arbitrator.

                "PURCHASE PRICE" shall have the meaning assigned thereto in
Section 2.1.

                "PURCHASE PRICE ADJUSTMENT" shall have the meaning assigned
thereto in Section 2.2(a).

                "RECEIVING PARTY" shall have the meaning assigned thereto in
Section 6.2.

                "RELEVANT SELLER" shall have the meaning assigned thereto in
Section 10.2.

                "RETURNS" shall have the meaning assigned thereto in Section
8.2.

                "SCHEDULE" or "SCHEDULE" shall mean a schedule attached hereto
which sets forth exceptions to the representations and warranties and certain
other information called for herein. If a document or matter is disclosed in a
Schedule in connection with a specific section of this Agreement, such document
or matter shall not be deemed to be disclosed in the Schedule in connection with
any other section or provision except where specific repetition or
cross-reference is made.

                "SECONDED EMPLOYEES" shall mean the Mitsui Seconded Employees
and the NTTCOM Seconded Employees.

                "SELLER" and "SELLERS" shall have the meanings assigned thereto
in the preamble.

                "SELLER DELIVERABLES" shall have the meaning assigned thereto in
Section 2.4(b).

                "SELLER INDEMNITEES" shall have the meaning assigned thereto in
Section 10.3.

                "SELLER PARTIES" shall have the meaning assigned thereto in
Section 6.3.

                "SELLER'S INDEMNIFICATION CAP" shall have the meaning assigned
thereto in Section 10.5.

                "SHARES" shall have the meaning assigned thereto in the
recitals.

                "SHAREHOLDERS AGREEMENT" shall have the meaning assigned thereto
in the recitals.

                "SURVIVAL DATE" shall have the meaning assigned thereto in
Section 10.1.

                                       8
<PAGE>

                "TAX" shall have the meaning assigned thereto in Section 8.1.

                "TAX ASSET" shall have the meaning assigned thereto in Section
8.1.

                "TAXING AUTHORITY" shall have the meaning assigned thereto in
Section 8.1.

                "TAX SHARING AGREEMENT" shall have the meaning assigned thereto
in Section 8.1.

                "TERMINATION AGREEMENT I" shall mean an agreement between CPP
and MITSUI, substantially in the form attached hereto as Exhibit A, for the
termination of (i) the Mitsui Agreement and (ii) the Mitsui Secondment
Agreements.

                "TERMINATION AGREEMENT II" shall mean an agreement between CPP
and NTTCOM, substantially in the form attached hereto as Exhibit B, for the
termination of (i) the NTTCOM Agreement and (ii) the NTTCOM Secondment
Agreement.

                "THIRD-PARTY CLAIM" shall have the meaning assigned thereto in
Section 10.4(a).

                "TRANSACTIONS" shall mean the transactions contemplated by this
Agreement and the Collateral Agreements and all of the actions, events and
transactions set forth therein and any of the agreements in connection with such
actions, events and transactions.

                "UNAUDITED CLOSING BALANCE SHEET" shall have the meaning
assigned thereto in Section 2.2.

                                       9
<PAGE>

                                    ARTICLE 2

                  CONSIDERATION; CLOSING; CLOSING DELIVERABLES

        2.1 Sale of Shares. Subject to the terms and conditions set forth
herein, the Sellers hereby agree to sell to Buyer, through Buyer Sub, all of the
Shares held by Sellers, which Shares are listed on Schedule 2.1 and Buyer,
through Buyer Sub, hereby agrees to pay the Sellers a purchase price of Three
Hundred Sixty Million Yen (Yen360,000,000) in cash (the "INITIAL PURCHASE
PRICE"), subject to the adjustment set forth in Section 2.2 (such purchase price
after such adjustment shall be hereinafter referred to as the "PURCHASE PRICE")
according to each Seller's percentage ownership of the Shares, which percentages
and the corresponding number of Shares owned by each Seller are set forth on
Schedule 2.1.

        2.2 Purchase Price Adjustment.

                (a) Purchase Price Adjustment. The aggregate Purchase Price will
be adjusted, on a Yen for Yen basis, by the sum of the Equity Adjustment and the
Cash Adjustment, so that the Purchase Price will be increased if such sum is a
positive value and the Purchase Price will be decreased if such sum is a
negative value (the "PURCHASE PRICE ADJUSTMENT"), provided that in no event
shall the Purchase Price Adjustment exceed twenty percent (20%) of the Initial
Purchase Price. No adjustment shall be made unless (i) the absolute value of
Equity Adjustment is greater than 2% of the Estimated CPP Equity or (ii) the
absolute value of the Cash Adjustment is greater than 2% of the Estimated Cash
Balance. The "EQUITY ADJUSTMENT" will be equal to the difference between the
Closing CPP Equity and the Estimated CPP Equity. The "CASH ADJUSTMENT" will be
equal to the difference between the Closing Cash Balance and the Estimated Cash
Balance. For the avoidance of any doubt, the Purchase Price Adjustment shall not
take into account any decrease in the Closing Cash Balance resulting from the
payment of the Initial Purchase Price from any CPP account, if applicable.

                (b) Preparation and Delivery of Balance Sheets. The Estimated
CPP Equity and the Estimated Cash Balance shall be set forth on an unaudited
estimated balance sheet of CPP as of May 31, 2002 (the "ESTIMATED BALANCE
SHEET") which (i) shall be prepared in accordance with the Account Preparation
Rules, (ii) shall be certified by the Chief Financial Officer of CPP as of the
date of delivery and (iii) together with all related accounting work papers
shall be delivered by the Sellers to Buyer at least seven (7) Business Days
prior to the Closing Date. The Parties shall cause the Chief Financial Officer
of CPP to prepare a balance sheet of CPP as of May 31, 2002 (the "UNAUDITED
CLOSING BALANCE SHEET") which (i) shall be prepared in accordance with the
Account Preparation Rules, (ii) shall be certified by the Chief Financial
Officer of CPP as of the date of delivery and (iii) together with all related
accounting work papers shall be delivered simultaneously to Chuo Aoyama Audit
Corporation, or such other independent accounting firm as is reasonably
acceptable to all the parties (the "AUDITOR") and the parties hereto no later
than June 15, 2002. The "CLOSING BALANCE SHEET", setting forth the Closing CPP
Equity and the Closing Cash Balance, shall be the Unaudited Closing Balance
Sheet, as approved in accordance with subsection (c) below and as audited by the
Auditor.

                (c) Disputes. The Unaudited Closing Balance Sheet shall be
subject to the review of and shall be satisfactory to Buyer. After its receipt
of the Unaudited Closing Balance

                                       10
<PAGE>

Sheet, Buyer shall have one week in which to reject the Unaudited Closing
Balance Sheet by written notice to the Sellers. If Buyer does not reject the
Unaudited Closing Balance Sheet within this period it will be deemed approved.
If Buyer rejects the Unaudited Closing Balance, the parties will use their best
efforts to have the Unaudited Closing Balance Sheet revised to the satisfaction
of all parties. In the event that there is a dispute between Buyer, on the one
hand, and the Sellers, on the other hand, regarding the Unaudited Closing
Balance Sheet that cannot be resolved between the parties, each party shall
appoint an auditor to meet in an attempt to resolve such dispute. In the event
that such auditors are unable to resolve the dispute, they shall jointly appoint
a third neutral auditor which shall make a final determination with respect to
the subject of such dispute. On the resolution of any dispute in accordance with
this subsection (c), the Unaudited Closing Balance Sheet shall be deemed
approved.

                (d) Settlement of the Purchase Price Adjustment. The Price
Adjustment Amount shall be settled by the parties within five (5) Business Days
following the later of (i) the receipt by the parties of the audit report with
respect to the Closing Balance Sheet or (ii) the resolution of any dispute with
respect thereto in accordance with subsection (c) above. Payment shall be made
by wire transfer to a bank account, as designated by the applicable transferee,
of Buyer or each Seller, and in the case of the Sellers shall be made on a pro
rata basis in accordance with each Seller's respective percentage ownership of
the Shares as set forth on Schedule 2.1.

        2.3 Wire Instructions. Attached hereto as Exhibit C are the wire
transfer instructions prepared by each Seller designating the accounts to which
the pro rata amounts of the Initial Purchase Price payable to such Seller at
Closing shall be paid by Buyer Sub.

        2.4 Closing; Closing Deliverables. The closing (the "CLOSING") of the
purchase and sale of the Shares shall be held (1) at the offices of Morrison &
Foerster LLP, AIG Building, 11th Floor 1-1-3 Marunouchi, Chiyoda-ku Tokyo, Japan
100-0005, at 10:00 a.m., local time, on June 6, 2002, or (2) at such other
place, time, and/or date as the parties hereto may otherwise agree. The date on
which the Closing shall occur is hereinafter referred to as the "CLOSING DATE."
At or prior to the Closing, the parties to the Agreement shall deliver the
following items:

        (a) Buyer shall deliver the following items to the Sellers (the "BUYER
DELIVERABLES"):

                (i)     At the Closing, through Buyer Sub, the Initial Purchase
                        Price, pro rata according to each Seller's ownership of
                        the Shares as listed on Schedule 2.1, as directed by the
                        Sellers prior to the Closing;

                (ii)    A cross-receipt, substantially in the form of Exhibit D,
                        executed by Critical Path and Buyer Sub indicating
                        receipt by Buyer Sub of certificates representing all
                        Shares being transferred by the Sellers to Buyer Sub;

                (iii)   At the Closing, a certificate of the corporate secretary
                        of Critical Path substantially in the form of Exhibit E1
                        attaching copies of the resolutions of the board of
                        directors of Critical Path approving the

                                       11
<PAGE>

                        Transactions and any other resolutions adopted by
                        such board in connection with the Transactions; and

                (iv)    At the Closing, a certificate of the corporate secretary
                        of Buyer Sub substantially in the form of Exhibit E2
                        attaching copies of the resolutions of the board of
                        directors of Buyer Sub approving the Transactions and
                        any other resolutions adopted by such board in
                        connection with the Transactions.

                (b) Each Seller shall deliver, or cause to be delivered the
following items to Buyer (the "SELLER DELIVERABLES"):

                (i)     At the Closing, the certificates representing all of the
                        Shares owned by such Seller;

                (ii)    A cross-receipt, substantially in the form of Exhibit D,
                        executed by each Seller indicating receipt by such
                        Seller of the portion of the Initial Purchase Price
                        payable to it;

                (iii)   The Collateral Agreements, each duly executed by each
                        Seller party thereto;

                (iv)    At the Closing, a certificate of the Representative
                        Director of CPP substantially in the form of Exhibit F
                        attaching copies of (A) the Articles of Incorporation of
                        CPP as in effect on the Closing Date and (B) the
                        resolutions of the Board approving the Transactions and
                        any other resolutions adopted by the Board in connection
                        with the Transactions;

                (v)     At the Closing, each Seller other than NTTCOM shall
                        deliver a certificate of the Representative Director (or
                        the President, corporate secretary or other director or
                        executive officer of such Seller with responsibility for
                        the maintenance of corporate records), substantially in
                        the form of Exhibit G attaching copies of the
                        resolutions of the board of directors of such Seller
                        approving the Transactions and any other resolutions
                        adopted by such board in connection with the
                        Transactions (or otherwise certifying approval of the
                        Transactions by such Seller in accordance with such
                        Seller's Articles of Incorporation and internal
                        procedures and Japanese law);

                (vi)    At the Closing, NTTCOM shall deliver a certificate of
                        the Senior Vice President of NTTCOM's General Affairs
                        Department, substantially in the form of Exhibit H,
                        certifying that the board of directors of NTTCOM has
                        adopted resolutions approving the Transactions and the
                        execution of this Agreement;

                (vii)   At the Closing, MITSUI shall deliver to Buyer the
                        executed resignation letters of all directors and
                        statutory auditors of CPP nominated by MITSUI and NTTCOM
                        shall deliver to Buyer the

                                       12
<PAGE>

                        executed resignation letters of all directors and
                        statutory auditors of CPP nominated by NTTCOM; and

                (viii)  At the Closing, a copy of the commercial registry of CPP
                        issued and certified by the local legal bureau as of a
                        date within five Business Days of the Closing Date.

        2.5 Buyer's Conditions to Closing. The obligation of Buyer to purchase
and pay, through Buyer Sub, for the Shares owned by the Sellers shall be subject
to the satisfaction (or waiver by Buyer) as of the Closing of the following
conditions:

                (a) (i) The representations and warranties of the Sellers made
in this Agreement and in any certificate or other document to be delivered in
connection with this Agreement shall be true and correct in all respects (in the
case of any representation or warranty containing any materiality qualification)
or in all material respects (in the case of any representation or warranty
without any materiality qualification) on the Effective Date and on and as of
the Closing Date, as though made on and as of the Closing Date (unless and to
the extent any such representation or warranty speaks specifically as of an
earlier date, in which case, as of such earlier date); and (ii) the Sellers
shall have performed or complied in all respects with all obligations and
covenants required by this Agreement to be performed or complied with by the
Sellers by the time of the Closing;

                (b) Other than any Proceeding disclosed in the CP SEC Documents,
there shall be no Proceeding pending or threatened which (i) seeks to restrain,
enjoin or prevent the consummation or otherwise affect or undo any of the
Transactions, (ii) seeks to recover damages or to obtain other relief in
connection with any of the Transactions, (iii) seeks severance or wrongful
termination remedies from CPP, (iv) asserts that any Person other than a Seller
or Buyer is the holder or beneficial owner of the any of the Shares or is
entitled to any portion of the Purchase Price, or (v) if adversely determined is
likely to have a Material Adverse Effect on Critical Path, Buyer Sub or CPP. No
preliminary or permanent injunction or other Order by any Governmental Entity
which prevents consummation of any of the Transactions shall have been issued
and remain in effect;

                (c) All consents, authorizations, Orders and approvals of, and
registrations, declarations and filings with, any Governmental Entity, required
for or in connection with the execution and delivery of this Agreement and the
consummation of the Transactions shall have been obtained or made;

                (d) Buyer shall have received all the Seller Deliverables, which
shall be satisfactory to Buyer;

                (e) Buyer shall have completed, to its satisfaction, its due
diligence investigation; and

                (f) All original minute books, ledgers and registers (including
the share register) and other corporate records relating to the organization,
ownership and maintenance of CPP shall be in the corporate headquarters of CPP
and Buyer Sub shall have been given access to and control over such records.

                                       13
<PAGE>

        2.6 Sellers' Conditions to Closing. The obligations of the Sellers to
sell and deliver the Shares to Buyer Sub are subject to the satisfaction (or
waiver by the Sellers) as of the Closing of the following conditions:

                (a) The representations and warranties of Buyer made in this
Agreement and in any certificate or other document to be delivered in connection
with this Agreement shall be true and correct in all respects (in the case of
any representation or warranty containing any materiality qualification) or in
all material respects (in the case of any representation or warranty without any
materiality qualification), on and as of the Closing Date, as though made on and
as of the Closing Date (unless and to the extent any such representation or
warranty speaks specifically as of an earlier date, in which case, as of such
earlier date), and Buyer shall have performed or complied in all material
respects with the obligations and covenants required by this Agreement to be
performed or complied with by Buyer by the time of the Closing.

                (b) Other than any Proceeding disclosed in the CP SEC Documents,
there shall be no Proceeding pending or threatened which (i) seeks to restrain,
enjoin or prevent the consummation or otherwise affect any of the Transactions,
(ii) seeks to recover damages or to obtain other relief in connection with any
of the Transactions, (iii) asserts that any Person other than a Seller or Buyer
is the holder or beneficial owner of the any of the Shares or is entitled to any
portion of the Purchase Price, or (iv) if adversely determined is reasonably
likely to have a Material Adverse Effect on Critical Path, Buyer Sub or any
Seller. No preliminary or permanent injunction or other Order by any
Governmental Entity which prevents consummation of any of the Transactions shall
have been issued and remain in effect;

                (c) All consents, authorizations, Orders and approvals of, and
registrations, declarations and filings with, any Governmental Entity, required
for or in connection with the execution and delivery of this Agreement and the
consummation of the Transactions shall have been obtained or made; and

                (d) The Sellers shall have received all the Buyer Deliverables,
which shall be satisfactory to the Sellers;

        2.7 Consummation of Closing. All acts, deliveries and confirmations
comprising the Closing regardless of chronological sequence shall be deemed to
occur contemporaneously and simultaneously upon the occurrence of the last act,
delivery or confirmation of the Closing and none of such acts, deliveries, or
confirmations shall be effective unless and until the last of the same shall
have occurred.

        2.8 Appointment of Directors and Statutory Auditors. As of Closing,
Buyer Sub hereby nominates and elects to the positions of director and statutory
auditor the persons listed on Schedule 2.8, as specified.

        2.9 Termination of Shareholders Agreement. The parties waive any rights
they may have under the Shareholders Agreement, including those set forth in
Articles 12, 17, 18 and 19, with respect to the Transactions. Upon the Closing,
the Shareholders Agreement shall be terminated with respect to all parties
thereto and shall become immediately null and void,

                                       14
<PAGE>

provided that, notwithstanding anything to the contrary in Article 20 of the
Shareholders Agreement, only the provisions of Articles 22 and 28 shall survive
such termination.

                                    ARTICLE 3

                  REPRESENTATIONS AND WARRANTIES OF THE SELLERS

        As of the Effective Date and as of the Closing Date, with respect to any
applicable statement in Sections 3.1, 3.6, 3.8 or 3.10 of this ARTICLE 3,
NTTCOM, Mitsui U.S.A. and NEC each warrant, represent and covenant to Buyer on
behalf of such Seller and not on behalf of any other Seller; and with respect to
any applicable statement in this ARTICLE 3, MITSUI warrants, represents, and
covenants to Buyer on behalf of MITSUI and not on behalf of any other Seller, as
follows:

        3.1 Authority; No Conflicts.

                (a) Each Seller (other than Mitsui U.S.A.) is duly organized and
validly existing under the laws of Japan. Mitsui U.S.A. is duly organized,
validly existing and in good standing under the laws of the State of New York.
Each Seller has all requisite corporate power and authority to enter into and
perform the covenants in this Agreement and the Collateral Agreements to which
such Seller is a party, and to consummate the Transactions. All corporate acts
and other proceedings required to be taken by each Seller to authorize the
execution, delivery and performance of this Agreement, the Collateral Agreements
to which such Seller is a party and the consummation of the Transactions have
been duly and properly taken. This Agreement has been (and the Collateral
Agreements to which such Seller is a party, when executed and delivered will be)
duly executed and delivered by each Seller and, assuming the due execution
hereof by the other parties hereto, this Agreement constitutes (and the
Collateral Agreements to which such Seller is a party, when executed and
delivered, will constitute) the valid and binding obligation of each Seller,
enforceable against each Seller in accordance with its terms.

                (b) Neither the execution and delivery of this Agreement by the
Sellers nor the performance or consummation of the Transactions by the Sellers
will directly or indirectly (with or without notice or lapse of time or both)
(i) contravene, conflict with or result in a violation of (A) any provision of
CPP's Articles of Incorporation or (B) any resolution adopted by the Board or
shareholders of CPP, (ii) contravene, conflict with or result in a violation of
or give any Governmental Entity or other Person the right to challenge any of
the Transactions or to exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which CPP or any Seller, or any of the assets owned
or used by CPP may be subject, (iii) cause Buyer or CPP to become subject to, or
liable for the payment of any Tax, (iv) contravene, conflict with or result in a
violation or a breach of any provision of, or give any Person the right to
declare a default of, or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify any Contract; or
(v) result in the imposition or creation of any Lien upon or with respect to any
of the assets owned or used by CPP.

        3.2 Capitalization; Ownership of Shares, Options and Claims. To the
Knowledge of the CPP Management, CPP has no outstanding options, warrants,
subscriptions, rights

                                       15
<PAGE>

agreements or other commitments which either (i) obligate CPP to issue, sell or
transfer any shares of the capital stock of CPP or any successor-in-interest,
(ii) obligate CPP or any other Person to register, repurchase, redeem or
otherwise acquire any outstanding shares of the capital stock of CPP, or (iii)
may be the basis for a claim by any Person that such Person has an interest
(contingent or otherwise) in the capital stock of CPP or any
successor-in-interest. To the Knowledge of the CPP Management, other than the
shares owned by Buyer, all issued and outstanding shares of capital stock of CPP
are owned beneficially and of record by the Sellers in such amounts as shown in
Schedule 2.1 hereto and are free and clear of all Liens.

        3.3 Financial Information; Undisclosed Liabilities.

                (a) To the Knowledge of the CPP Management, the Financial
Statements reflect, and the Closing Balance Sheet when delivered will reflect,
reserves appropriate and adequate for all known liabilities and losses
(including appropriate and adequate reserves for inventory, bad debt and accrued
liabilities) in accordance with the Account Preparation Rules which are based on
normal accounting policies and practice in Japan.

                (b) To the Knowledge of the CPP Management, CPP does not have
any obligations, indebtedness or liabilities (including liabilities to current
and former employees, including such liabilities arising out of any severance
obligation, benefit plan, health plan, dental plan, long or short term
disability plan, life insurance plan, or other similar plan or policy of CPP),
whether known, unknown, contingent or otherwise, other than: (i) those disclosed
or adequately reserved for in the April 30 Balance Sheet in accordance with the
Account Preparation Rules which are based on normal accounting policies and
practice in Japan, (ii) obligations, indebtedness or liabilities incurred since
April 30, 2002 in the ordinary course of business or (iii) obligations pursuant
to the Discharged Employee Settlement Agreements.

        3.4 Loans, Notes, Accounts Receivable; Accounts Payable. To the
Knowledge of the CPP Management, the April 30 Balance Sheet provides, and the
Closing Date Balance Sheet when delivered will provide, an accurate and complete
breakdown and aging of all accounts receivable, notes receivable and other
receivables of CPP as of the dates thereof. To the Knowledge of the CPP
Management, all receivables set forth on the April 30 Balance Sheet and the
Closing Date Balance Sheet (a) have arisen only from bona fide transactions in
the ordinary course of business, (b) represent valid obligations, (c) are
current and collectible in the aggregate face amounts thereof without any
counterclaim or set-off when due, except to the extent of the normal allowance
for doubtful accounts with respect to accounts receivable that are computed in a
manner consistent with past practices and are reflected in the April 30 Balance
Sheet or the Closing Date Balance Sheet, as the case may be, and (d) are owned
by CPP free of all Liens other than Permitted Liens. The accounts payable of CPP
reflected on the April 30 Balance Sheet and the Closing Date Balance Sheet
arose, and have arisen, from bona fide transactions.

        3.5 Material Agreements. To the Knowledge of the CPP Management, there
are no Material Agreements to which CPP is a party or by which CPP is currently
bound that have not been presented to and approved by the Board. To the
Knowledge of the CPP Management, CPP and each other party thereto have performed
all of the obligations required to be due, paid or performed by them to date,
have received no notice of default and are not in default (with due notice or
lapse of time or both) under any Material Agreement to which CPP is a party. To
the

                                       16
<PAGE>

Knowledge of the CPP Management, there has not been any breach or anticipated
breach by CPP or any other party of any Material Agreement to which CPP is a
party.

        3.6 Consents and Approvals. No consent, approval, authorization or
permit of, or registration, declaration, report or filing with, or notice to any
Governmental Entity or any other Person is required to be obtained or made by
the Sellers in connection with the execution and delivery of this Agreement, the
Collateral Agreements and the consummation of the Transactions.

        3.7 Litigation; Proceedings. To the Knowledge of the CPP Management,
there is not currently, and there has not been, any Proceeding against or
affecting CPP or its properties, and there is not currently pending or
threatened any Proceeding or third party claim, including claims by employees,
customers or suppliers, or claims by any Governmental Entity, whether or not
covered by insurance.

        3.8 Actions and Proceedings, etc. There is no pending Proceeding that
has been commenced against any Seller or, to the Knowledge of the CPP
Management, CPP, that challenges, or may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the
Transactions.

        3.9 Compliance with Applicable Laws. To the Knowledge of the CPP
Management, CPP is, and has at all times since its inception been, in compliance
with all applicable Legal Requirements. To the Knowledge of the CPP Management,
CPP is not, nor since its inception has it been, in violation of any applicable
Order or other requirement of any Governmental Entity. To the Knowledge of the
CPP Management, immediately after the Closing, each Permit held by CPP will be
valid and in full force and effect with respect to CPP and no such Permit has
been threatened with revocation.

        3.10 Disclosure. No statement, representation or warranty of any
Relevant Seller contained in this Agreement, the Collateral Agreements or other
document or information furnished (or to be furnished), whether orally, in
writing or in any medium, in connection with the Transactions, by or on behalf
of the Relevant Seller to Buyer or its Agents, contains any untrue statement of
or omits to state any material fact. The Relevant Seller has not omitted any
information with respect to matters within its Knowledge and control that is
material to CPP, the Collateral Agreements or the Transactions from the
documents or information furnished to Buyer and its Agents, including
information with respect to CPP's capitalization, corporate records, financial
statements and accounts, personal and real property, intellectual property,
suppliers and customers, employees or insurance. There are no facts or
circumstances not fully disclosed in this Agreement or in the other documents
and information furnished (orally, in writing or in any medium) which should be
disclosed to Buyer in order to make any of the representations or warranties
made by the Relevant Seller herein not misleading in any material respect. In
addition to the above representations and warranties, MITSUI and NTTCOM hereby
respectively represent and warrant to Buyer as follows.

                (a) MITSUI represents and warrants to Buyer that, Shoji Sakata,
the Chief Executive Officer of CPP (the "CPP CEO"), whom MITSUI has nominated
pursuant to Article 8.4 of the Shareholders Agreement, and, Ichiro Ishii, the
Chief Financial Officer of CPP (the

                                       17
<PAGE>

"CPP CFO"), whom MITSUI has nominated pursuant to Section 3.1 of the Mitsui
Agreement, (i) have each performed their respective functions and duties and
caused CPP to be operated up to the Effective Date, and will perform their
respective functions and duties and cause CPP to be operated until the Closing
Date, in strict accordance with the Shareholders Agreement, the applicable laws
and regulations of Japan and the Articles of Incorporation and internal rules
and regulations of CPP and (ii) have not taken, or directly or indirectly caused
CPP to take, and will not take, or cause CPP directly or indirectly to take, any
action by which CPP has incurred or will incur any hidden and contingent
liabilities, in each case without (one of the following, "APPROVAL") (x)
referring such action to the Board at a meeting of the Board at which a member
of the Board appointed by Buyer was or is present and voted to approve such
action or (y) such action being approved through the CPP Ringi application
process (in accordance with its rules and procedures), provided that such
application was, or the results of such process were approved by a member of the
Board appointed by Buyer.

                (b) NTTCOM represents and warrants to Buyer that, Yutaka Ogawa,
the Chief Information Officer of CPP (the "CPP CIO") whom NTTCOM has nominated
pursuant to Article 3.1 of NTTCOM Agreement (i) has performed his functions and
duties and caused CPP to be operated up to the Effective Date, and will perform
his functions and duties and cause CPP to be operated until the Closing Date, in
strict accordance with the Shareholders Agreement, the applicable laws and
regulations of Japan and the Articles of Incorporation of CPP and (ii) has not
taken, or directly or indirectly caused CPP to take, and will not take, or cause
CPP directly or indirectly to take, any action by which CPP has incurred or will
incur any hidden and contingent liabilities, in each case without Approval.

                                    ARTICLE 4

                     REPRESENTATIONS AND WARRANTIES OF BUYER

        Buyer hereby represents and warrants to the Sellers as follows:

        4.1 Authority; No Conflicts; Governmental Consents.

                (a) Critical Path is duly organized, validly existing and in
good standing under the laws of the State of California. Buyer Sub is duly
organized and validly existing under the laws of Japan. Both Critical Path and
Buyer Sub have all requisite corporate power and authority to enter into and
perform the covenants in this Agreement and the Collateral Agreements to which
each is a party and to consummate the Transactions. All corporate acts and other
proceedings required to be taken by Critical Path or Buyer Sub to authorize the
execution, delivery and performance of this Agreement and the Collateral
Agreements to which each is a party and the consummation of the Transactions
have been duly and properly taken. This Agreement has been (and the Collateral
Agreements to which Critical Path or Buyer Sub is a party, when executed and
delivered will be) duly executed and delivered by Critical Path or Buyer Sub, as
the case may be, and, assuming the due execution hereof by the other parties
hereto, this Agreement constitutes (and the Collateral Agreements to which
Critical Path or Buyer Sub is a party, when executed and delivered, will
constitute) the valid and binding obligation of Critical Path or Buyer Sub, as
the case may be, enforceable against Critical Path or Buyer Sub in accordance
with its terms.

                                       18
<PAGE>

                (b) Neither the execution and delivery of this Agreement by
Critical Path or Buyer Sub nor the performance or consummation of the
Transactions by Critical Path or Buyer Sub will give any Person the right to
prevent, delay, or otherwise interfere with any of the Transactions pursuant to
(i) any provision of Critical Path's or Buyer Sub's Organizational Documents,
(ii) any resolution adopted by the board of directors or shareholders of
Critical Path or Buyer Sub, (iii) any Legal Requirement or Order to which
Critical Path or Buyer Sub may be subject, or (iv) any Contract to which
Critical Path or Buyer Sub is a party or by which Critical Path or Buyer Sub may
be bound.

                (c) No consent, approval, authorization or permit of, or
registration, declaration, report or filing with, or notice to any Governmental
Entity or any other Person is required to be obtained or made by Critical Path
or Buyer Sub in connection with the execution and delivery of this Agreement,
the Collateral Agreements and the consummation of the Transactions.

        4.2 Actions and Proceedings, etc. There is no pending Proceeding that
has been commenced against Critical Path or Buyer Sub and that challenges, or
may have the effect of preventing, delaying, making illegal, or otherwise
interfering with, any of the Transactions.

        4.3 Disclosure. Buyer represents and warrants to the Sellers that,
Shinji Tsukamoto, previously the Chief Operating Officer and currently the Vice
President of Marketing of CPP whom Buyer has nominated (i) has performed his
functions and duties and caused CPP to be operated up to the Effective Date, and
will perform his functions and duties and cause CPP to be operated until the
Closing Date, in strict accordance with the Shareholders Agreement, the
applicable laws and regulations of Japan and the Articles of Incorporation of
CPP and (ii) has not taken, or directly or indirectly caused CPP to take, and
will not take, or cause CPP directly or indirectly to take, any action by which
CPP has incurred or will incur any hidden and contingent liabilities, in each
case without (x) referring such action to the Board at a meeting of the Board at
which a member of the Board appointed by the Relevant Seller was or is present
and voted to approve such action or (y) such action being approved through the
CPP Ringi application process (in accordance with its rules and procedures),
provided that such application was, or the results of such process were approved
by a member of the Board appointed by the Relevant Seller.

                                    ARTICLE 5

                            COVENANTS OF THE SELLERS

        Each of the Sellers severally and not jointly covenants and agrees as
follows:

        5.1 Notice of Changes; Updates.(a) Each Seller shall give Buyer prompt
written notice if such Seller becomes aware of any event, condition, fact or
circumstance: (i) that occurred or existed on or prior to the Effective Date and
that caused or constitutes an inaccuracy in or a breach of any representation,
warranty or covenant made by such Seller under this Agreement and which was
unknown to such Seller on the date of this Agreement; or (ii) that occurs or
arises or exists after the Effective Date and that causes an inaccuracy in or a
breach of any representation, warranty or covenant made by such Seller in this
Agreement.

                                       19
<PAGE>
        5.2 Non-Solicitation. Each Seller agrees that it shall not, directly or
indirectly, through any officer, employee, director, agent or otherwise,
solicit, initiate or encourage the initiation or inquiries or proposals from,
provide any confidential information to, or participate in any discussions or
negotiations or cooperate with, any Person (other than Buyer and its Affiliates
and officers, employees, representatives and agents) relating to any transaction
involving any sale by such Seller) of CPP's assets, securities or any similar
transaction involving CPP or otherwise facilitate or encourage any effort or
attempt to do or seek any of the foregoing. Each Seller agrees to promptly
advise Buyer of, and communicate to Buyer the terms of, any such inquiry or
proposal such Seller may receive with respect to CPP's assets or securities and
will cease and cause to be terminated any existing activities or negotiations
with any Persons previously conducted with respect to any such inquiry or
proposal.

        5.3 Further Assurances. From time to time after the Closing, at the
request of Buyer and for no further consideration, each Seller shall, and shall
cause its affiliates to, execute, acknowledge and deliver such assignments,
transfers, consents and other documents and instruments and take such other
actions as may be reasonably requested to consummate the Transactions, or to
effectuate any action contemplated under this Agreement. This Section 5.4 shall
not obligate any Seller to take any action with respect to any renegotiations of
Mitsui Lease Agreements.

        5.4 Complete Copies. Prior to Closing, the Sellers shall ensure that the
following are retained by CPP and made available to Buyer at the offices or
facilities of CPP and shall deliver the following to Buyer to the extent that
(i) such materials are not available in the offices or facilities of CPP or (ii)
the originals of such materials are in the Sellers' possession or in the
possession of any of the Sellers' accountants, attorneys and other third
parties: (a) all material business records, including all financial records,
bank information, leases, deeds, deeds of trust, security interests, permits,
documents evidencing registration of, and applications for, intellectual
property, insurance records, litigation files, customer and supplier
information, employment records and Material Agreements, each in the form in
which each of such documents is in effect, and (b) all original minute books,
ledgers and registers (including the share register), corporate seals and other
corporate records relating to the organization, ownership and maintenance of CPP
that are required to be maintained pursuant to applicable law or customarily
maintained by Japanese companies.

        5.5 Conduct Prior to Closing of Sellers. Each Seller commits to Buyer
that, between the date of this Agreement and the Closing such Seller shall not
sell, dispose of, mortgage, pledge or otherwise transfer or encumber any
interest in any of the Shares.

                                    ARTICLE 6

                         MUTUAL COVENANTS OF THE PARTIES

        Each of the Sellers and Buyer covenants and agrees as follows:

        6.1 Cooperation. The parties hereto shall use their best efforts in good
faith to perform and fulfill all conditions and obligations to be fulfilled or
performed by them and it hereunder to the end that the Transactions will be
fully and timely consummated. No party shall

                                       20
<PAGE>

take any action that is intended or could reasonably be expected to cause any
other party to fail to perform and fulfill all conditions and obligations to be
fulfilled or performed, or that is intended or could reasonably be expected to
cause the Transactions not to be fully and timely consummated. Buyer, MITSUI and
NTTCOM shall vote and shall cause its representatives on the Board to vote in
favor of or consent to any and all actions required to be approved by it in
order to consummate the Transactions.

        6.2 Confidential Information. For a period of three (3) years following
the Closing Date, each and every party to this Agreement ("RECEIVING PARTY")
shall keep secret and retain in strictest confidence, and shall not use for the
benefit of itself or others, all confidential information relating, in the case
of the Sellers, to the business or operations of CPP, Buyer or any other Seller,
and, in the case of Buyer, to the business or operations of any Seller (the
"CONFIDENTIAL INFORMATION"), including "know-how," trade secrets, customer
lists, details of client or consultant contracts, pricing policies, marketing
plans or strategies, product development techniques or plans, business
acquisition plans, designs and design projects, inventions and research projects
exclusively relating, in the case of the Sellers, to the business or operations
of CPP, Buyer or any other Seller, and, in the case of Buyer, to the business or
operations of any Seller (any of CPP, Buyer or the Sellers, as applicable, the
"DISCLOSING PARTY"), and the Receiving Party shall not disclose such
Confidential Information to anyone outside of the Disclosing Party, except with
the express written consent of the relevant Disclosing Party. After the Closing,
Buyer shall cause CPP not to disclose any Confidential Information of any Seller
to anyone outside of such Seller, without such Seller's express written consent.
"Confidential Information" shall not include any information that (i) is or
becomes generally available and known to the public other than due to a breach
of this Agreement; (ii) is lawfully received from a third party free to disclose
such information to such Receiving Party after due inquiry by the Receiving
Party of any such obligation; (iii) was released without restriction on use or
disclosure pursuant to the approval of the Disclosing Party; (iv) is known or
possessed by the Receiving Party at the time it received the Confidential
Information if the Receiving Party can prove that such information was in its
possession at such time; (v) such Receiving Party can prove that such
information was independently developed by the Receiving Party without the use
of the Confidential Information; or (vi) is required by law, regulation, or
direction of any Governmental Entity to be disclosed by such Receiving Party,
provided that the Receiving Party gives prompt written notice of such
requirement to the Disclosing Party prior to such disclosure and provides
reasonable assistance to the Disclosing Party at their expense in obtaining an
order protecting the information from public disclosure.

        6.3 Release.

                (a) Each Seller hereby, on behalf of itself and its respective
successors and assigns, fully and forever releases, discharges and covenants not
to sue: CPP, Critical Path and Buyer Sub and each such person's partners,
employees, officers, directors, beneficiaries, agents, stockholders, attorneys,
representatives, successors, assigns and heirs, and any parent, subsidiary,
division, affiliated or related companies and their respective predecessors,
successors and assigns (collectively, "BUYER PARTIES"), from or for, as
applicable, any and all sums of money, accounts, claims, demands, contracts,
actions, debts, controversies, agreements, liabilities, obligations, damages and
causes of action whatsoever, of whatever kind or nature, whether known or
unknown, fixed or contingent, or suspected or unsuspected by them, which they
now own, hold,

                                       21
<PAGE>

have or claim to have, or at any time heretofore owned, held, had or claimed to
have, including specifically but not exclusively and without limiting the
generality of the foregoing, any and all claims, known or unknown, suspected or
unsuspected by reason of any matter or thing alleged or referred to, or directly
or indirectly or in any way connected with or arising out of or which may
hereafter be claimed to arise out of this Agreement, the Collateral Agreements
and the Transactions or out of the relationship among the Sellers and Critical
Path as shareholders of CPP. Notwithstanding the foregoing, the Sellers do not
release Buyer Parties from covenants, obligations, or liabilities of Buyer
Parties explicitly undertaken pursuant to this Agreement.

                (b) Critical Path and Buyer Sub hereby, on their own behalf and,
after the Closing, on behalf of CPP and their and CPP's respective successors
and assigns, fully and forever release, discharge and covenant not to sue, and
after the Closing shall cause CPP to fully and forever release, discharge and
covenant not to sue: each Seller and each of such Seller's partners, employees,
officers, directors, beneficiaries, agents, stockholders, attorneys,
representatives, successors, assigns and heirs, and any parent, subsidiary,
division, affiliated or related companies and their respective predecessors,
successors and assigns (collectively, "SELLER PARTIES"), from or for, as
applicable, any and all sums of money, accounts, claims, demands, contracts,
actions, debts, controversies, agreements, liabilities, obligations, damages and
causes of action whatsoever, of whatever kind or nature, whether known or
unknown, fixed or contingent, or suspected or unsuspected by them, which they
now own, hold, have or claim to have, or at any time heretofore owned, held, had
or claimed to have, including specifically but not exclusively and without
limiting the generality of the foregoing, any and all claims, known or unknown,
suspected or unsuspected by reason of any matter or thing alleged or referred
to, or directly or indirectly or in any way connected with or arising out of or
which may hereafter be claimed to arise out of this Agreement, the Collateral
Agreements and the Transactions or out of the relationship among the Sellers and
Critical Path as shareholders of CPP. Notwithstanding the foregoing, Critical
Path, Buyer Sub and CPP do not release the Seller Parties from covenants,
obligations, or liabilities of the Seller Parties explicitly undertaken pursuant
to this Agreement.

        6.4 Publicity. The Sellers and Buyer agree that no public release or
announcement concerning the Transactions shall be issued by a party without the
prior written consent of the other parties.

        6.5 Access to Information. After the Closing, upon reasonable notice,
the parties agree to furnish or cause to be furnished to each other and their
representatives, employees, counsel and accountants access, during normal
business hours, to such information (including records pertinent to the CPP
Business) and assistance relating to the CPP Business as are reasonably
necessary for financial reporting and accounting matters, the preparation and
filing of any tax returns, reports or forms or the defense of any tax claim or
assessment.

        6.6 Expenses. All costs and expenses incurred in connection with this
Agreement and the Transactions will be paid by the party incurring such costs
and expenses, whether or not the Transactions are consummated, except as
otherwise expressly provided herein; provided, however; that the parties shall
cause CPP not to incur any non de minimis out-of-pocket expenses in connection
with this Agreement.

                                       22
<PAGE>

                                    ARTICLE 7

                        NON-SOLICITATION OF CPP CUSTOMERS

        7.1 Non-Solicitation Agreement.

                (a) For and in consideration of the Transactions, with respect
to the six (6) month period beginning on the Closing Date (the "NON-SOLICITATION
PERIOD"), MITSUI and NTTCOM severally hereby covenant as set forth in this
Section 7.1.

                (b) MITSUI hereby covenants with Buyer that it shall cause its
Information Business Group and MITSUI ASSOCIATE & TELEPARK CORP., an Affiliate
of MITSUI ("MTP"), not to solicit or entice the current customers of CPP
described in Schedule 7.1 ("CPP CUSTOMERS") to use such services similar to and
competitive with the CPP Services as the Information Business Group of Mitsui or
MTP may provide.

                (c) NTTCOM hereby covenants with Buyer that it shall cause the
Solution Business Division of NTTCOM not to solicit or entice any CPP Customer
to use such services similar to and competitive with CPP Services as the
Solution Business Division of NTTCOM may provide.

                (d) If MITSUI or NTTCOM are requested to do so by CPP, MITSUI or
NTTCOM, as applicable, will use commercially reasonable efforts to assist CPP in
CPP's promotion of the CPP Services. If CPP shall have successfully obtained new
customers thanks to MITSUI's or NTTCOM's assistance, Buyer shall cause CPP to
pay to either MITSUI or NTTCOM, as applicable, in consideration of such
assistance a commission at the rate of five percent (5%) of CPP's monthly gross
revenue from such customers for the period of one (1) year from the date when
those customers started using the CPP Services. Buyer shall cause CPP to pay the
earned commission to MITSUI or NTTCOM, as applicable, within two (2) weeks after
receipt by CPP of the related payments from the applicable customers.

                (e) During the Non-solicitation Period, MITSUI shall cause all
of its divisions which are using CPP Services at the Effective Date to continue
to use the CPP Services, provided that quality and functions of CPP Services
remains equivalent to or better than the quality and functions of the CPP
Services as provided on the Effective Date.

                (f) During the Non-solicitation Period, NTTCOM shall cause its
Platform Technology Development Division, which is using CPP Services at the
Effective Date, to continue to use the CPP Services, provided that quality and
functions of CPP Services remains equivalent to or better than the quality and
functions of the CPP Services as provided on the Effective Date.

        7.2 Non-Solicitation Covenants: Scope and Choice of Law. It is the
understanding of the parties that the scope of the covenants contained in this
ARTICLE 7, both as to time and area covered, are necessary to protect the rights
of Buyer and CPP and the goodwill that is a part of the CPP Business. It is the
intention of Buyer, MITSUI and NTTCOM that these covenants as set forth in
Section 7.1 be enforced to the greatest extent (but to no greater extent than
would be permitted under the law of Japan) in time, area, and degree of
participation as is permitted by the

                                       23
<PAGE>

law of that jurisdiction whose law is found to be applicable to any acts in
breach of these covenants. If any part of such covenant is held invalid, void or
unenforceable by any court of competent jurisdiction, such invalidity, voidness,
or unenforceability shall in no way render invalid, void, or unenforceable any
other part of such covenant or any separate covenants not declared invalid, void
or unenforceable; and this Agreement shall in such case be construed as if the
invalid, void, or unenforceable provisions were omitted.

        7.3 Non-Solicitation Covenants: Assignment by Buyer. Buyer, MITSUI and
NTTCOM agree that the covenants of MITSUI and NTTCOM set forth in this ARTICLE 7
may be assigned by Buyer to any Person to whom the CPP Business is transferred
by the sale or transfer of CPP's Shares, assets or otherwise, provided that, in
the event that such sale or transfer results in a change in control of CPP other
than through a change of control or reorganization of Buyer (or any successor),
the prior written consent of MITSUI and NTTCOM, which consent shall not be
unreasonably withheld, shall be required to effect the assignment of such
covenants. It is the intention of Buyer, MITSUI and NTTCOM that these covenants
of each Seller shall inure to the benefit of any Person that may succeed to the
CPP Business (as acquired by Buyer under this Agreement) with the same force and
effect as if these covenants were made directly with such successor. To the
extent required by Japanese law, Buyer shall procure a written agreement from
such buyer, assignee, transferee or other acquiring entity in which said entity
agrees to be bound by the relevant terms and conditions of this Agreement.

        7.4 Non-Solicitation Covenants: Remedy for Breach. Buyer, MITSUI and
NTTCOM agree that, in the event of any breach of the covenants in Section 7.1 by
MITSUI or NTTCOM, such breaching Seller shall be liable to CPP for liquidated
damages which shall be calculated in accordance with the following formula:

                (i) CPP's May 2002 Monthly Gross Revenue (as defined below) for
each CPP Customer with respect to which the covenants set forth in Section 7.1
have been breached, multiplied by (ii) the number of months of the remaining
Non-solicitation Period from the first month in which CPP receives less than the
May 2002 Monthly Gross Revenue from such customer, multiplied by (iii) three
(3). For the purpose of this ARTICLE 7, the "MAY 2002 MONTHLY GROSS REVENUE"
shall mean the amount of gross revenue which CPP is entitled to receive from the
relevant customer in consideration of the provision of CPP Services during May
2002.

                                    ARTICLE 8

                        TAX REPRESENTATIONS AND COVENANTS

        MITSUI represents, warrants and covenants to Buyer, on behalf of MITSUI
and not on behalf of any other Seller, as of the Effective Date and as of the
Closing Date as follows:

        8.1 Tax Definitions. The following terms, as used herein, have the
following meanings:

                                       24
<PAGE>

                "PRE-CLOSING TAX PERIOD" means any Tax period ending on or
before the close of business on the Closing Date or, in the case of any Tax
period which includes, but does not end on, the Closing Date, the portion of
such period up to and including the Closing Date.

                "TAX" means (a) any net income, alternative or add-on minimum
tax, gross income, gross receipts, sales, use, ad valorem, value added,
transfer, franchise, profits, license, withholding, payroll, employment, excise,
corporate excise, severance, stamp, occupation, premium, property, environmental
or windfall profit tax, custom, duty or other tax, governmental fee or other
like assessment or charge of any kind whatsoever, together with any interest,
penalty, addition-to-tax or additional amount imposed by any governmental
authority (domestic or foreign) responsible for the imposition of any such tax
(a "TAXING AUTHORITY"), (b) any liability of CPP for the payment of any amount
of the type described in clause (a) above as a result of being a member of an
affiliated, consolidated, combined or unitary group, and (c) any liability of
CPP for the payment of any amount as a result of being party to any Tax Sharing
Agreement or with respect to the payment of any amounts of the type described in
clauses (a) or (b) above as a result of any express or implied obligation to
indemnify any other Person.

                "TAX ASSET" means any net operating loss, net capital loss,
investment tax credit, foreign tax credit, charitable deduction carryover or any
other credit or tax attribute which could reduce Taxes (including, without
limitation, credits or other tax attributes which could reduce alternative
minimum Taxes).

                "TAX SHARING AGREEMENT" means any existing Tax sharing
agreements or arrangements (whether or not written) binding CPP and any other
agreement or arrangement (including any arrangement required or permitted by
law) which (a) requires CPP to make any Tax payment to or for the account of any
other Person, (b) affords any other Person to utilize any Tax Asset of CPP to
reduce such other Person's Taxes, (c) affords CPP the right to utilize any Tax
Asset of any other Person to reduce any Taxes of CPP, (d) requires or permits
the transfer or assignment of income, revenues, receipts, or gains, or (e)
requires or permits CPP to determine its Tax liability by taking into account or
by reference to the Tax liability, income, revenues, receipts or gains of any
other Person.

        8.2 Tax Representations and Covenants. Except as set forth on Schedule
8.2(a), to the Knowledge of the CPP Management:

                (a) all Tax returns, statements, reports and forms (including
estimated tax or information returns and reports) required to be filed with any
Taxing Authority with respect to any Pre-Closing Tax Period by or on behalf of
CPP (collectively, the "RETURNS") have been or will be timely filed when due in
accordance with all applicable laws, except where the failure to file would not
subject CPP to any liabilities (including any interest, penalties or
addition-to-tax);

                (b) as of the time of filing, the Returns correctly reflected
(and, as to any Returns not filed as of the Effective Date, will correctly
reflect) in all material respects the facts regarding the income, business,
assets, operations, activities and status of CPP and any other information, as
required to be shown therein;

                                       25
<PAGE>

                (c) all Taxes due and payable (whether shown on or reportable on
the Returns) have been timely paid, or withheld and remitted to the appropriate
Taxing Authority;

                (d) the charges, accruals and reserves for Taxes with respect to
CPP for any Pre-Closing Tax Period (including any Pre-Closing Tax Period for
which no Return has yet been filed) reflected on the April 30 Balance Sheet
(excluding any provision for deferred income taxes), as adjusted for operations
and transactions in the ordinary course of business since the date of the April
30 Balance Sheet, are adequate to cover such Taxes;

                (e) CPP is not delinquent in the payment of any Tax nor has it
requested any extension of time within which to file any Return, which Return
has not yet been filed;

                (f) CPP has not granted any extension or waiver of the statute
of limitations period applicable to any Return, which period (after giving
effect to such extension or waiver) has not yet expired;

                (g) there is no Proceeding now pending or, to the knowledge of
CPP, threatened against or with respect to CPP in respect of any Tax or Tax
Asset;

                (h) CPP has not filed any request for ruling or determination of
any Taxing Authority in respect of any Tax which has been denied during the past
five years or which is pending;

                (i) CPP does not own any interest in real property in any
jurisdiction in which a Tax is imposed on the transfer of a controlling interest
in an entity that owns any interest in real property;

                (j) CPP has not been a member of an affiliated, consolidated,
combined or unitary group and is not liable for the taxes of any other Person;

                (k) all information set forth in the notes to the Financial
Statements relating to Tax matters is true and complete;

                (l) CPP is not a party to any Tax Sharing Agreement or is
otherwise under any obligation to pay any third party an amount with respect to
any Tax;

                (m) since the date of the April 30 Balance Sheet, neither CPP
nor any Affiliate of CPP has, to the extent it may affect or relate to CPP, made
or changed any tax election, changed any annual tax accounting period, adopted
or changed any method of tax accounting, filed any amended Return, entered into
any closing agreement, settled any Tax claim or assessment, surrendered any
right to claim a Tax refund, or consented to any extension or waiver of the
limitation period applicable to any Tax claim or assessment, if any such action
would have the effect of increasing the Tax liability or decreasing any Tax
Asset of CPP;

                (n) since the date of the April 30 Balance Sheet, CPP has not
reserved any amount for or made any payment of Taxes to any other Person or any
Taxing Authority except for such Taxes as were due or payable to the Taxing
Authority or had been properly estimated in accordance with applicable law as
applied in a manner consistent with past practices of CPP; and

                                       26
<PAGE>

                (o) CPP is in compliance with the terms and conditions of any
applicable Tax exemptions, Tax agreements or Tax orders of any government to
which it may be subject or which may have claimed, and the transactions
contemplated by this Agreement will not have any adverse effect on such
compliance.

                                    ARTICLE 9

                   EMPLOYEE BENEFITS AND EMPLOYEE ARRANGEMENTS

        9.1 Seconded Employees.

                (a) On or prior to Closing, MITSUI shall terminate the Mitsui
Secondment Agreements (effective as of Closing) or other secondment arrangements
with each employee or consultant of CPP listed on Schedule 9.1(a) (the "MITSUI
SECONDED EMPLOYEES") and shall obtain an appropriate settlement and release
agreement from each such Mitsui Seconded Employee to protect CPP from claims
that may be brought by such Mitsui Seconded Employee against CPP.

                (b) On or prior to Closing, NTTCOM shall terminate the NTTCOM
Secondment Agreements (effective as of closing) or other secondment arrangements
with each employee or consultant of CPP listed on Schedule 9.1(b) (the "NTTCOM
SECONDED EMPLOYEES") and shall obtain an appropriate settlement and release
agreement from each such NTTCOM Seconded Employee to protect CPP from claims
that may be brought by such NTTCOM Seconded Employee against CPP.

        9.2 Discharged Employees.

                (a) Prior to the termination of any employee of CPP within sixty
(60) days following Closing (any employee terminated during such period, a
"DISCHARGED EMPLOYEE"), Buyer shall cause CPP to use its best efforts to
negotiate and enter into a severance settlement agreement on terms the same as
or better than (from the employee's standpoint) those set forth on Schedule 9.2
(the "DISCHARGED EMPLOYEE SETTLEMENT AGREEMENTS") with such Discharged Employee.

                (b) In the event that any Discharged Employee seeks severance or
wrongful termination remedies from CPP, Buyer, MITSUI or NTTCOM, or any of their
Affiliates, past, present and future directors, officers, employees, agents or
representatives (together, the "EMPLOYEE CLAIM INDEMNITEE"), other than with
respect to any breach by Buyer or CPP of any Discharged Employee Settlement
Agreement, Buyer, MITSUI and NTTCOM agree to indemnify the other Employee Claim
Indemnitees against Indemnifiable Losses relating to, resulting from or arising
out of the employment or termination of the Discharged Employees, in each case
in accordance with its Pro Rata Share. The "PRO RATA SHARE" of each of Buyer,
MITSUI and NTTCOM shall be determined by dividing (x) the number of Shares held
by such person prior to Closing by (y) the number of shares held by Buyer,
MITSUI and NTTCOM together prior to Closing. Such indemnification shall be
provided in accordance with the procedures set forth in Section 10.4.

                                       27
<PAGE>

                                   ARTICLE 10

                                 INDEMNIFICATION

        10.1 Survival. The representations and warranties of the parties shall
survive the execution and delivery hereof and the delivery of all of the
documents executed in connection herewith and shall continue in full force and
effect after the Effective Date and after the Closing Date and shall remain in
full force and effect until the first anniversary of the Closing Date (the
"SURVIVAL DATE"), provided, however, that (a) all representations and warranties
set forth in ARTICLE 8 shall survive until thirty (30) days after expiration of
all applicable statutes of limitations; and (b) any claim for indemnification
based upon a breach of any such representation or warranty and asserted prior to
the Survival Date by written notice in accordance with Section 10.4 shall
survive until final resolution of such claim. Any covenants, agreements or
undertakings of a party contained herein or made pursuant hereto that by their
terms are to be performed after the Closing Date, shall survive until fully
performed.

        10.2 Indemnification by the Sellers. Each Seller (the "RELEVANT SELLER")
shall severally indemnify, defend and hold harmless CPP, Critical Path, Buyer
Sub, their Affiliates and each of their past, present and future directors,
officers, employees, agents and representatives (together, the "BUYER
INDEMNITEES") from and against, and pay or reimburse the Buyer Indemnitees for,
any and all losses, liabilities, obligations, claims, damages, civil or criminal
penalties and fines, out-of-pocket costs and expenses, including any attorneys'
fees and expenses, without duplication ("INDEMNIFIABLE LOSSES") relating to,
resulting from or arising out of:

                (a) any inaccuracy in, or breach of, any representation or
warranty by the Relevant Seller contained herein, in any Collateral Agreement or
in any certificate delivered pursuant to this Agreement;

                (b) any breach by the Relevant Seller of any covenant, agreement
or undertaking by the Relevant Seller contained in this Agreement, the
Collateral Agreements or in any certificate delivered pursuant to this
Agreement; and

                (c) any claim by a Seconded Employee of the Relevant Seller for
any severance payment or compensation or employee benefits due to such Seconded
Employee after the Closing Date.

        10.3 Indemnification by Buyer. Buyer shall indemnify, defend and hold
harmless the Sellers, their Affiliates and each of their past, present and
future directors, officers, employees, agents and representatives (together, the
"SELLER INDEMNITEES") from and against, and pay or reimburse the Seller
Indemnitees for, any and all Indemnifiable Losses relating to, resulting from or
arising out of:

                (a) any inaccuracy in, or breach of, any representation or
warranty by Buyer (including Buyer Sub) contained herein, in any Collateral
Agreement or in any certificate delivered pursuant to this Agreement; and

                                       28
<PAGE>

                (b) any breach by Buyer of any covenant, agreement or
undertaking by Buyer (including Buyer Sub) contained in this Agreement, the
Collateral Agreements or in any certificate delivered pursuant to this
Agreement.

        10.4 Procedures Relating to Indemnification.

                (a) In order for an indemnified party to be entitled to any
indemnification provided for under this ARTICLE 10 in respect of, arising out of
or involving a claim or demand made by any Person, firm, governmental authority
or corporation against the indemnified party (a "THIRD-PARTY CLAIM"), such
indemnified party must notify the indemnifying party in writing, and in
reasonable detail, of the Third-Party Claim as promptly as reasonably possible
after receipt by such indemnified party of written notice of the Third-Party
Claim but no later than the applicable Survival Date. The indemnified party
shall deliver to the indemnifying party, within five Business Days after the
indemnified party's receipt thereof, copies of all notices and documents
(including court papers) received by the indemnified party relating to the
Third-Party Claim. If a Third-Party Claim is made against an indemnified party,
the indemnifying party, promptly upon receipt of notice of such Third-Party
Claim, will acknowledge its obligation to indemnify the indemnified party
therefor.

                (b) In order for an indemnified party to be entitled to any
indemnification provided for under this ARTICLE 10 in respect of, arising out of
or involving a claim or demand made by the indemnified party (a "DIRECT CLAIM"
and, together with a Third-Party Claim, a "Claim"), the indemnified party must
notify the indemnifying party in reasonable detail, of the Direct Claim as
promptly as reasonably possible after the indemnified party becomes aware of
such claim but no later than the applicable Survival Date. The indemnified party
shall deliver to the indemnifying party, within five Business Days after the
indemnified party's receipt thereof, copies of all notices and documents
(including court papers) received by the indemnified party relating to the
Direct Claim. If a Direct Claim is made, the indemnifying party, promptly upon
receipt of notice of such Direct Claim, will acknowledge its obligation to
indemnify the indemnified party therefor.

                (c) In connection with any claim giving rise to indemnity
hereunder or resulting from or arising out of any claim by a Person who is not a
party, the indemnifying party at its sole cost and expense may, upon written
notice to the indemnified party, assume the defense of any such claim if the
indemnifying party acknowledges to the indemnified party in writing its
obligation to indemnify the indemnified party with respect to all elements of
such claim, and thereafter diligently conducts the defense thereof with counsel
reasonably acceptable to the indemnified party. The indemnified party shall be
entitled to employ counsel separate from counsel employed by the indemnifying
party in any such action and to participate therein, but the fees and expenses
of such counsel employed by the indemnified party shall be at their expense
unless counsel for the indemnified party shall have advised that it is
reasonably likely that the indemnified party may raise a defense or claim that
is inconsistent with any defense or claim available to the indemnifying party,
in which case such fees and expenses shall be borne by the indemnifying party.
In no event shall the indemnifying party consent to the entry of any judgment or
enter into any settlement (or have any liability for losses with respect
thereto) which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to all indemnified parties of a release from all
liability with respect to such claims.

                                       29
<PAGE>

                (d) If the indemnifying party does not assume the defense of
such claim within thirty (30) days after written notice thereof from the
indemnified party or does not thereafter diligently conduct such defense in a
manner acceptable to the indemnified party, the indemnified party may defend
against such claim in such manner as they may deem appropriate and at the sole
cost and expense of the indemnifying party.

        10.5 Limitations.

                (a) The right to indemnification or other remedy based on the
representations, warranties, covenants and obligations in this Agreement will
not be affected by any investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) at any time whether before or after the
Effective Date or the Closing Date, with respect to, the accuracy or inaccuracy
of or compliance with any such representations, warranties, covenants and
obligations. The waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification or other
remedy based on such representations, warranties, covenants and obligations.

                (b) The foregoing indemnification provisions are in addition to,
and not in derogation of, any statutory or common law remedy any party may have
for breach of representation, warranty, or covenant.

                (c) Notwithstanding anything herein to the contrary, no Seller
shall be obligated to indemnify the Buyer Indemnitees or any other Seller
Indemnitees under this ARTICLE 10 to the extent that the aggregate of all
Indemnifiable Losses of the Buyer Indemnitees and the other Seller Indemnitees,
including all Indemnifiable Losses arising under ARTICLES 7 or 9, exceeds the
portion of the Purchase Price received by such Seller (or, in the case of
MITSUI, by MITSUI, NEC and Mitsui U.S.A.) (with respect to each Seller, the
"SELLER'S INDEMNIFICATION Cap"); provided, however, that the Seller's
Indemnification Cap shall not apply to any indemnification obligation of such
Seller (x) arising out of, relating to or resulting from fraud or intentional
misrepresentation by such Seller; (y) arising out of, relating to or resulting
from a breach of any of such Seller's representations, warranties or covenants
in ARTICLE 8 or Section 6.2; or (z) if the Transaction does not close.

                (d) Notwithstanding anything herein to the contrary, Buyer shall
not be obligated to indemnify the Seller Indemnitees under this ARTICLE 10 to
the extent that the aggregate of all Indemnifiable Losses of the Seller
Indemnitees, including all Indemnifiable Losses arising under ARTICLE 9, exceeds
the Purchase Price (the "BUYER'S INDEMNIFICATION CAP"); provided, however, that
the Buyer's Indemnification Cap shall not apply to any Buyer indemnification
obligation (x) arising out of, relating to or resulting from fraud or
intentional misrepresentation by Buyer (including Buyer Sub); (y) arising out
of, relating to or resulting from a breach of any of Buyer's (including Buyer
Sub's) representations, warranties or covenants in Section 6.2; or (z) if the
Transaction does not close.

        10.6 No Contribution. Each Seller waives, and acknowledges and agrees,
that he, she, it and they will not have and will not exercise or assert (or
attempt to exercise or assert), any right of contribution, right of subrogation,
right of indemnity or other similar right or remedy

                                       30
<PAGE>

against CPP, with respect to any action or failure to act by CPP occurring on or
prior to the Closing or in connection with any actual or alleged breach of any
representation, warranty, covenant or other obligation or agreement set forth in
this Agreement or any certificate delivered in connection with this Agreement.

                                   ARTICLE 11

                                   TERMINATION

        11.1 Bases for Termination. Anything contained herein to the contrary
notwithstanding, this Agreement may be terminated and the Transactions abandoned
at any time prior to the Closing Date:

                (a) by mutual written consent of the parties hereto;

                (b) by Buyer if any of the conditions set forth in Section 2.5
shall have become incapable of fulfillment, and shall not have been waived by
Buyer;

                (c) by the Sellers if any of the conditions set forth in Section
2.6 shall have become incapable of fulfillment, and shall not have been waived
by the Sellers;

                (d) by Buyer or the Sellers if the Closing does not occur on or
prior to July 31, 2002;

provided, however, that the party seeking termination pursuant to clause (b),
(c) or (d) is not in material breach of any of its representations, warranties,
or in material breach of any of its covenants or agreements contained in this
Agreement.

        11.2 Notice of Termination, Return of Documents. In the event of
termination by the Sellers, on the one hand, or by Buyer, on the other, pursuant
to this ARTICLE 11, written notice thereof shall forthwith be given to the other
party and the Transactions shall be terminated, without further action by any
party.

        11.3 Effect of Termination. If this Agreement is terminated and the
Transactions are abandoned as described in this ARTICLE 11, this Agreement shall
become void and of no further force and effect, except for the provisions of (a)
Section 6.2 (Confidential Information), (b) Section 6.6 (Expenses), (c) Section
6.2 (Publicity), and (d) this Section 11.3. Nothing in this ARTICLE 11 shall be
deemed to release any party from any liability for any breach by such party of
the terms and provisions of this Agreement or to impair the right of any party
to compel specific performance by another party of its obligations under this
Agreement.

                                   ARTICLE 12

                               GENERAL PROVISIONS

        12.1 Assignment. Except as set forth below or as otherwise provided in
this Agreement, this Agreement and the rights and obligations hereunder shall
not be assignable or transferable by any of Buyer or the Sellers without the
prior written consent of each of the other

                                       31
<PAGE>

parties hereto, which consent shall not be unreasonably withheld. This Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns. To this end, to the extent
required by Japanese law, the relevant party shall procure a written agreement
from such assignee, transferee or other acquiring entity in which said entity
agrees to be bound by the relevant terms and conditions of this Agreement.

        12.2 No Third-Party Beneficiaries. Except for Persons entitled to
indemnification under ARTICLE 10 hereof, this Agreement is for the sole benefit
of the parties hereto, and nothing herein express or implied shall give or be
construed to give to any Person or entity, other than the parties hereto, any
legal or equitable rights hereunder, including any right to enforce any
obligations of any party hereto.

        12.3 Amendments; Waiver. No amendment to this Agreement shall be
effective unless it shall be in writing and signed by each party hereto.

        12.4 Waiver of Compliance. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party entitled to
the benefits thereof only by a written instrument signed by the party, granting
such waiver, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure.

        12.5 Notices. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by hand or sent
by prepaid telex, cable or telecopy, or sent, postage prepaid, by registered,
certified or express mail, or reputable overnight courier service and shall be
deemed given when delivered by hand, telexed, cabled or telecopied, three days
after mailing (one Business Day in the case of express mail or overnight courier
service), as follows:

                (i)     if to Buyer or Buyer Sub:

                        Critical Path, Inc.
                        350 The Embarcadero
                        San Francisco, CA 94105
                        Attention:  Chief Financial Officer and General Counsel
                        Facsimile:  (415) 541-2300

                        with a copy to:

                        Morrison & Foerster LLP
                        425 Market Street
                        San Francisco, California 94105
                        Attention:  Robert Townsend, Esq.
                        Facsimile:  (415) 268-7522

                (ii)    if to a Seller:

                                       32
<PAGE>

                        if to MITSUI:

                        Mitsui & Co., Ltd.
                        2-1 Ohtemachi 1-Chome, Chiyoda-ku, Tokyo 100-0004
                        Attention: General Manager, Media Business Division
                        Facsimile: (03) 3285-8625

                        if to Mitsui U.S.A.:

                        Mitsui & Co. (U.S.A.), Inc.
                        200 Park Avenue New York, NY. 10166-0130
                        Attention: General Manager, Electronics &
                                   Information Business Dept.
                        Facsimile: (212) 878-4323

                        if to NTTCOM:

                        NTT Communications Corporation
                        NISHI-SHINBASHI BLDG.B TOWER
                        14-1, Nishi-Shinbashi 2-Chome, Minato-ku, Tokyo 105-0003
                        Attention: Executive Manager, Manufacturing &
                                   Supply Chain Sales Department,
                                   Solution Business Division
                        Facsimile: (03) 3539-3703

                        if to NEC:

                        NEC Corporation
                        34-2 Shiba 5-Chome, Minato-ku, Tokyo 108-8421
                        Attention: Department manager, 4th Sales Department
                                   Transportation & Service Industries
                                   Solutions Division
                        Facsimile: (03) 3798-9754

        12.6 Interpretation. The headings contained in this Agreement, in any
Exhibit, Appendix or Schedule hereto and in the table of contents to this
Agreement, are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. This Agreement shall be construed
without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted.

        12.7 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other party.

        12.8 Severability. If any provision of this Agreement or the application
of any such provision to any Person or circumstance shall be held invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof.

                                       33
<PAGE>

        12.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Japan applicable to agreements made and to be
performed entirely within Japan, without regard to the conflicts of law
principles of Japan.

        12.10 Dispute Forum. If any dispute shall arise in respect of or in
connection with this Agreement, the parties hereto shall try to amicably settle
it through good-faith deliberation among the parties hereto. Shall such dispute
not be amicably settled within three (3) months after the date of occurrence
thereof, it shall be finally settled through arbitration conducted in English in
Tokyo, Japan in accordance with the rules of at the Japan Commercial Arbitration
Association. The costs of the arbitration, including any Japanese Commercial
Arbitration Association administration fee, the arbitrator's fee, and costs of
the use of facilities during the hearings, shall be borne equally by the parties
to the arbitration. Attorneys' fees may be awarded to the prevailing or most
prevailing party at the discretion of the arbitrator. The arbitrator shall not
have any power to alter, amend, modify or change any of the terms of this
Agreement. The award rendered therein shall be final and binding upon the
parties hereto. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.

        12.11 Exhibits and Schedules. All Exhibits, Appendices and Schedules
annexed hereto or referred to herein that are delivered concurrently with the
signing of this Agreement are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Inclusion of any matter in any
Schedule does not imply that such matter would, under the provisions of this
Agreement, have to be included in such Schedule. If any event, condition, fact
or circumstance that is required to be disclosed in any Schedule hereto would
require a change to such Schedule if the Schedule were dated as of the date of
the occurrence, existence or discovery of such event, condition, fact or
circumstance, then the Sellers shall promptly deliver to Buyer an update to the
Schedule specifying such change and shall use its best efforts to remedy same,
as applicable; provided, however, that no such update shall be deemed to
supplement or amend the Schedule attached hereto for the purpose of (i)
determining the accuracy of any of the representations and warranties made by
the Sellers in this Agreement or (ii) determining whether any of the conditions
set forth in ARTICLE 2 have been satisfied.

        12.12 Entire Agreement. This Agreement contains the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and, except to the extent specifically set forth herein, supersedes all
prior agreements and understandings relating to such subject matter.

         [The remainder of this page has been intentionally left blank.
                     The next page is the signature page.]

                                       34
<PAGE>

                IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the date first written above.

                                        CRITICAL PATH, INC.

                                        By: /s/ William McGlashan
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                        CRITICAL PATH JAPAN K.K.

                                        By: /s/
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                        MITSUI & CO., LTD.

                                        By: /s/
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                        MITSUI & CO. (U.S.A.), INC.

                                        By: /s/
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

<PAGE>

                                        NTT COMMUNICATIONS CORPORATION

                                        By: /s/
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                        NEC CORPORATION

                                        By: /s/
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

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