CRITICAL PATH INC, S-3, 2000-05-05

CRITICAL PATH INC
S-3, 2000-05-05
BUSINESS SERVICES, NEC

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 5, 2000

REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CRITICAL PATH, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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CALIFORNIA 91-178830
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
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320 FIRST STREET
SAN FRANCISCO, CALIFORNIA 94105
(415) 808-8800
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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DOUGLAS T. HICKEY
CHIEF EXECUTIVE OFFICER
CRITICAL PATH, INC.
320 FIRST STREET
SAN FRANCISCO, CALIFORNIA 94105
(415) 808-8800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------

COPIES TO:

ALAN K. AUSTIN, ESQ.
MARK L. REINSTRA, ESQ.
BRIAN M. MCDANIEL, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(650) 493-9300

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ____________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ____________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

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TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED SHARE(1) PRICE(1) REGISTRATION FEE
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Common Stock par value
$0.01 per share........ 2,697,650 $45.75 $123,417,487.50 $32,582.22
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(1) Estimated in accordance with Rule 457(c) under the Securities Act solely for
the purpose of computing the registration fee based upon the average of the
high and low prices of the Common Stock on May 3, 2000, as quoted on the
Nasdaq National Market.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO THE REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

PROSPECTUS

logo
2,697,650 Shares

CRITICAL PATH, INC.

COMMON STOCK
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This Prospectus relates to the offering of our Common Stock held by certain
Selling Shareholders. See "Selling Shareholders". These Selling Shareholders may
sell the shares from time to time. We will pay certain of the expenses of this
offering; however, the Selling Shareholders will bear the cost of all brokerage
commissions and discounts. We will not receive any proceeds from the sale of
shares by the Selling Shareholders.

The Selling Shareholders may offer and sell all the shares in the
over-the-counter market or on one or more exchanges. The Selling Shareholders
may sell the shares at the then prevailing market price for the shares or in
negotiated transactions.

Our Common Stock is listed on the Nasdaq National Market under the symbol
"CPTH." On May 3, 2000, the closing price of our Common Stock on the Nasdaq
National Market was $45.13 per share.

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INVESTING IN OUR COMMON STOCK INVOLVES RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.

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The Securities and Exchange Commission (the "Commission") may take the view
that, under certain circumstances, the Selling Shareholders and any
broker-dealers or agents that participate with the Selling Shareholders in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of the Securities Act. Commissions, discounts or concessions received by any
such broker-dealer or agent may be deemed to be underwriting commissions under
the Securities Act. See "Plan of Distribution."

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The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities, or determined if this Prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
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THE DATE OF THIS PROSPECTUS IS , 2000
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You should rely only on the information contained in this Prospectus.
Neither we nor any of the Selling Shareholders have authorized anyone to provide
you with information different from that contained in this Prospectus. The
Selling Shareholders are offering to sell, and seeking offers to buy, shares of
Common Stock only in jurisdictions where offers and sales are permitted. The
information contained in this Prospectus is accurate only as of the date of this
Prospectus, regardless of the time of delivery of this Prospectus or of any sale
of our Common Stock. In this Prospectus, the "Company," "Critical Path," "we,"
"us," and "our" refer to Critical Path, Inc., a California corporation.

TABLE OF CONTENTS

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Where You Can Find More Information......................... 1
The Company................................................. 2
Risk Factors................................................ 4
Use of Proceeds............................................. 16
Selling Shareholders........................................ 16
Plan of Distribution........................................ 28
Legal Matters............................................... 29
Experts..................................................... 29
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WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference room at 450 Fifth Street, NW, Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. Our SEC filings are also available to the public from the SEC's
Website at "http://www.sec.gov."

The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this Prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:

- Our Annual Report on Form 10-K/A for the fiscal year ended December 31,
1999; and

- The description of our Common Stock set forth in our Registration
Statement on Form 8-A filed on February 1, 1999.

You may request a copy of these filings, at no cost, by writing or
telephoning us as follows:

Critical Path, Inc.
320 First Street
San Francisco, California 94105
Attention: Investor Relations
(415) 808-8800

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THE COMPANY

We are a leading provider of complete end-to-end Internet messaging and
collaboration solutions for Internet service providers or ISPs,
telecommunications providers, web hosting companies, web portals and
corporations. We provide services and products, both on a hosted and licensed
basis, that enable our customers to provide feature-rich email, messaging,
collaboration and directory services to their customers and employees. Our
allsourcing strategy provides flexibility to our customers by giving them the
option of using our Critical Path hosted services, licensing our software to run
on their own hardware, or selecting a combination of both. Our solutions enable
customers to improve messaging performance, reduce the cost of providing
messaging services and focus on other aspects of their businesses.

We have over 2,000 customers and reach over 100 million end-users and 20
million wireless devices through our customer relationships. Our customers
include leading Internet companies such as AltaVista, eBay, E*TRADE, ICQ (a
subsidiary of America Online) and Netscape as well traditional enterprises such
as General Electric, Proctor & Gamble and Promus Hotel Corporation.
International customers include Avantel, British Telecommunications, Cable and
Wireless, Eircell, Global Telesystems Group, Korea Telecom, Sina and Starmedia.
In addition, we have a number of relationships to expand our distribution
channels with companies such as British Telecommunications, Compuserve, France
Telecom, MCI Worldcom, Mitsui, Network Solutions, NTT, Qwest Communications,
Sprint, US West and VeriSign.

There are a number of trends that are driving demand for messaging and
collaboration solutions. Email has broadened from a simple messaging tool to a
widely accepted form of communication. At the same time, the complexity of
individual messages and the scale of the supporting applications and hardware
are growing dramatically, forcing businesses to dedicate significant resources
to the operation and maintenance of their messaging systems. In addition,
customers are increasingly demanding reliable and scalable service and enhanced
product offerings. Accordingly, it is important for businesses to adopt more
effective approaches to the management of their messaging and collaboration
needs.

Our end-to-end solutions complement our core email hosting services and
support the growing demands of our rapidly expanding worldwide customer base. We
provide a full spectrum of messaging and collaboration solutions, such as
calendaring, document archival, Internet fax, secure document delivery, resource
management and wireless access. Our solutions are supported by our global
infrastructure with data centers located worldwide connected to key Internet
exchange points.

In recent months, we have significantly expanded our range of products and
services and the delivery options we offer our domestic and international
customers. Our extended messaging solutions include support for wireless devices
through relationships with American Mobile Satellite, Arch Communications,
Cellnet, VAST and other international wireless carriers; integrated calendaring
and resource scheduling; bi-directional fax to email, security measures and
directory services and collaborative messaging. In addition to our outsourced
hosted services, we now offer midsourcing, where a customer selects which
products and services to outsource to augment their existing messaging
infrastructure, and insourcing, where a customer installs and maintains our
software.

Our objective is to be the premier provider of comprehensive, advanced
messaging and collaboration services. We plan to attain this goal by:

- Extending our technology leadership in messaging applications;

- Acquiring new businesses and technologies that could expand our product
and service offerings;

- Developing and leveraging strategic relationships;

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- Increasing our sales and marketing efforts;

- Offering value-added products and services such as secure guaranteed
delivery, collaborative messaging and calendaring; and

- Expanding our international presence.

RECENT DEVELOPMENTS

To achieve our objectives, we have announced several recent acquisitions
and strategic relationships that have expanded our range of products and
customers and broadened our global reach, including:

RemarQ Acquisition. On March 30, 2000, we acquired RemarQ Communities Inc.,
a provider of customized, collaborative message boards for business use. The
total purchase price was valued at approximately $267.5 million in our Common
Stock. The acquisition enables us to offer products that allow customers to hold
online discussions for knowledge exchange and team collaboration over extranets,
intranets, or the Internet.

Critical Path Pacific Alliance. We have signed a memorandum of
understanding to enter into a joint venture with Mitsui and Co., Ltd. and NTT
Communications Corp. to bring our messaging solutions to Japan. The joint
venture will leverage our technology, infrastructure and services; Mitsui's
extensive partnerships in Japan and throughout Asia; and NTT's Data Centers and
technical backbone to deliver advanced Internet messaging services to the
Japanese business and wireless markets.

Convertible Note Offering. On March 30, 2000, the Company issued $300
million of five-year, 5.75% Convertible Subordinated Notes due April 1, 2005 to
qualified institutional buyers in reliance on Rule 144A under the Securities Act
of 1933. Holders may convert the Notes into shares of Critical Path's Common
Stock at any time before their maturity or the business day before their
redemption or repurchase by Critical Path. The conversion rate is 9.8546 shares
per $1,000 principal amount of Notes, subject to adjustment in certain
circumstances. This is equivalent to a conversion price of approximately $101.48
per share.

Interest is payable on April 1 and October 1 of each year with the first
interest payment due on October 1, 2000. The Notes are subordinated in right of
payment to all senior debt of Critical Path and effectively subordinated to all
existing and future debt and all other liabilities of Critical Path's
subsidiaries.

On or after the third business day after April 1, 2003 through March 31,
2004, the Company has the option to redeem all or a portion of the Notes which
have not been previously converted at the redemption price equal to 102.30% of
the principal amount. During the period from April 1, 2004 through March 31,
2005, the Company has the option to redeem all or a portion of the Notes which
have not been previously converted at the redemption price equal to 101.15% of
the principal amount. The Notes will be non-callable for three years. In the
event of a "Change in Control," as defined in the Notes' Offering Circular, the
Holders have the option of requiring the Company to repurchase any Notes held at
a price of 100% of the principal amount of the Notes plus accrued interest to
the date of repurchase.

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RISK FACTORS

This offering involves a high degree of risk. You should carefully consider
the risks described below and the other information in this Prospectus before
deciding to invest in shares of our Common Stock. Our business, operating
results and financial condition could be adversely affected by any of the
following risks. The trading price of our Common Stock could decline due to any
of these risks, and you could lose all or part of your investment. You should
also refer to the other information set forth in this Prospectus, including our
financial statements and the related notes.

This Prospectus also contains forward-looking statements that involve risks
and uncertainties. These statements relate to our future plans, objectives,
expectations and intentions, and the assumptions underlying or relating to any
of these statements. These statements may be identified by the use of words such
as "expects," "anticipates," "intends," and "plans" and similar expressions. Our
actual results could differ materially from those discussed in these statements.
Factors that could contribute to such differences include, but are not limited
to, those discussed below and elsewhere in this Prospectus.

WE HAVE A LIMITED OPERATING HISTORY UPON WHICH YOU CAN EVALUATE OUR BUSINESS AND
FACE RISKS ASSOCIATED WITH EARLY STAGE COMPANIES THAT MAY ADVERSELY AFFECT OUR
BUSINESS.

Because we have had a limited operating history, it is difficult to
evaluate our business and we may face various risks, expenses and difficulties
associated with early stage companies. You should consider the risks, expenses
and difficulties that we may encounter when making your investment decision.
These risks include our ability to:

- Acquire businesses and technologies;

- Integrate the operations of the companies that we have recently acquired;

- Manage growing domestic and international operations;

- Create and maintain strategic relationships;

- Expand sales and marketing activities;

- Expand our customer base and retain key clients;

- Introduce new services;

- Compete in a highly competitive market;

- Upgrade our systems and infrastructure to handle any increases in
messaging traffic;

- Reduce service interruptions; and

- Recruit and retain key personnel.

WE HAVE A HISTORY OF LOSSES, EXPECT CONTINUING LOSSES AND WE MAY NEVER ACHIEVE
PROFITABILITY.

As of March 31, 2000, we had an accumulated deficit of approximately $206.4
million. We have not achieved profitability in any period, and expect to
continue to incur net losses for the foreseeable future. We expect that our
operating expenses will increase as we spend resources on building our business
and that this increase may have a negative effect on operating results and
financial condition in the near term.

We have spent heavily on technology and infrastructure development. We
expect to continue to spend substantial financial and other resources on
developing and introducing new end-to-end Internet

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messaging and collaboration solutions, and expanding our sales and marketing
organizations, strategic relationships and operating infrastructure. We expect
that our cost of revenues, sales and marketing expenses, general and
administrative expenses, operations and customer support expenses, and
depreciation and amortization expenses will continue to increase in absolute
dollars and may increase as a percent of revenues. If revenues do not
correspondingly increase, our operating results and financial condition could be
negatively affected.

Should we continue to incur net losses in future periods, we may not be
able to increase the number of employees or investment in capital equipment,
sales and marketing programs, and research and development in accordance with
our present plans. We may never obtain sufficient revenues to achieve
profitability. If we do achieve profitability, we may not sustain or increase
profitability in the future. This may, in turn, cause our stock price to
decline.

DUE TO OUR LIMITED OPERATING HISTORY AND THE EMERGING NATURE OF THE INTERNET
MESSAGING AND COLLABORATION SOLUTIONS MARKET, FUTURE REVENUES ARE UNPREDICTABLE,
AND OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE.

We cannot accurately forecast our revenues as a result of our limited
operating history and the emerging nature of the Internet messaging and
collaboration solutions market. Our revenues could fall short of expectations if
we experience delays or cancellations of even a small number of orders. We often
offer volume-based pricing, which may affect operating margins. A number of
factors are likely to cause fluctuations in operating results, including, but
not limited to:

- Continued growth of the Internet in general and of messaging and
collaboration usage in particular;

- Demand for outsourced messaging services;

- Demand for licensing of messaging, directory, and other products;

- Our ability to attract and retain customers and maintain customer
satisfaction;

- Our ability to upgrade, develop and maintain our systems and
infrastructure;

- The amount and timing of operating costs and capital expenditures
relating to expansion of business and infrastructure;

- Technical difficulties or system outages;

- The announcement or introduction of new or enhanced services by
competitors;

- Our ability to attract and retain qualified personnel with Internet
industry expertise, particularly sales and marketing personnel;

- The pricing policies of competitors;

- Failure to increase international sales; and

- Governmental regulation surrounding the Internet and messaging in
particular.

In addition to the factors set forth above, operating results will be
impacted by the extent to which we incur non-cash charges associated with
stock-based arrangements with employees and non-employees. In particular, we
have incurred and expect to continue to incur substantial non-cash charges
associated with the grant of warrants to our customers and other parties with
which we have commercial relationships. For example, we recognized a $2.1
million non-cash charge to advertising expense during the first quarter of 2000
in connection with the amortization of a warrant to ICQ, a subsidiary of America
Online.

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Period-to-period comparisons of operating results are not a good indication
of future performance. It is likely that operating results in some quarters will
be below market expectations. In this event, the price of our Common Stock is
likely to decline.

FURTHER ACQUISITIONS COULD RESULT IN DILUTION, OPERATING DIFFICULTIES AND OTHER
CONSEQUENCES.

We expect to acquire or invest in additional businesses, products, services
and technologies that complement or augment our service offerings and customer
base. Since January 1999, we have completed the acquisition of eight companies
for an aggregate consideration consisting of cash, Common Stock and the
assumption of stock options and warrants totaling approximately $1.3 billion.

We are currently engaged in discussions with a number of companies
regarding strategic acquisitions or investments. Although these discussions are
ongoing, we have not signed any definitive agreements, and cannot assure you
that any of these discussions will result in actual acquisitions. To be
successful, we will need to identify suitable acquisition candidates, integrate
disparate technologies and corporate cultures and manage a geographically
dispersed company. We cannot assure you that we will be able to do this
successfully. Acquisitions could divert attention from other business concerns
and could expose us to unforeseen liabilities. In addition, we may lose key
employees while integrating any new companies.

We expect to pay for acquisitions by issuing additional Common Stock, which
would dilute current shareholders. We may also use cash to make acquisitions. It
may be necessary for us to raise additional funds through public or private
financings. We cannot assure you that we will be able to raise additional funds
at any particular point in the future or on favorable terms. In addition, we may
be required to amortize significant amounts of goodwill and other intangible
assets in connection with future acquisitions, which would materially increase
operating expenses.

WE WILL FACE TECHNICAL, OPERATIONAL AND STRATEGIC CHALLENGES THAT MAY PREVENT US
FROM SUCCESSFULLY INTEGRATING REMARQ, DOCSPACE, ISOCOR, FAXNET, XETI, AMPLITUDE,
DOTONE AND FABRIK.

Acquisitions involve risks related to the integration and management of
acquired technology, operations and personnel. The integration of RemarQ,
docSpace, ISOCOR, FaxNet, Xeti, Amplitude, dotOne, and Fabrik Communications
into our business has been and will be a complex, time consuming and expensive
process and may disrupt our business if not completed in a timely and efficient
manner. We must operate as a combined organization utilizing, common information
and communication systems, operating procedures, financial controls and human
resources practices. In particular, we are currently evaluating, upgrading or
replacing our financial information systems and establishing uniformity among
the systems of the acquired businesses. We may encounter substantial
difficulties, costs and delays involved in integrating the operations of our
subsidiaries, including:

- potential incompatibility of business cultures;

- perceived adverse changes in business focus;

- potential conflicts in sponsor, advertising or strategic relationships;
and

- the loss of key employees and diversion of the attention of management
from other ongoing business concerns.

Consequently, we may not be successful in integrating acquired businesses
or technologies and may not achieve anticipated revenue and cost benefits. We
also cannot guarantee that these acquisitions will result in sufficient revenues
or earnings to justify our investment in, or expenses

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related to, these acquisitions or that any synergies will develop. If we fail to
execute our acquisition strategy successfully for any reason, our business will
suffer significantly.

WE HAVE EXPERIENCED RAPID GROWTH WHICH HAS PLACED A STRAIN ON RESOURCES AND OUR
FAILURE TO MANAGE GROWTH COULD CAUSE OUR BUSINESS TO SUFFER.

We have expanded our operations rapidly and intend to continue this
expansion. The number of our employees increased from 93 on December 31, 1998 to
921 on March 31, 2000. This expansion has placed, and is expected to continue to
place, a significant strain on managerial, operational and financial resources.
To manage any further growth, we will need to improve or replace our existing
operational, customer service and financial systems, procedures and controls.
Any failure to properly manage these systems and procedural transitions could
impair our ability to attract and service customers, and could cause us to incur
higher operating costs and delays in the execution of our business plan. We will
also need to continue the expansion of our operations and employee base. Our
management may not be able to hire, train, retain, motivate and manage required
personnel. In addition, our management may not be able to successfully identify,
manage and exploit existing and potential market opportunities. If we cannot
manage growth effectively, our business and operating results could suffer.

IF WE FAIL TO EXPAND SALES AND MARKETING ACTIVITIES, WE MAY BE UNABLE TO EXPAND
OUR BUSINESS.

Our ability to increase revenues will depend on our ability to successfully
recruit, train and retain sales and marketing personnel. We plan to continue to
invest significant resources to expand our sales and marketing organizations.
Competition for additional qualified personnel is intense and we may not be able
to hire and retain personnel with relevant experience.

The complexity and implementation of our Internet messaging services
require highly trained sales and marketing personnel to educate prospective
customers regarding the use and benefits of our services. Current and
prospective customers, in turn, must be able to educate their end-users. With
our relatively brief operating history and our plans for expansion, we have
considerable need to recruit, train and retain qualified staff. Any delays or
difficulties encountered in these staffing efforts would impair our ability to
attract new customers and to enhance our relationships with existing customers.
This in turn would adversely impact the timing and extent of revenues. Because
the majority of our sales and marketing personnel have recently joined us and
have limited experience working together, our sales and marketing organizations
may not be able to compete successfully against the larger and more experienced
sales and marketing organizations of our competitors. If we do not successfully
expand sales and marketing activities, our business could suffer and our stock
price could decline.

UNPLANNED SYSTEM INTERRUPTIONS AND CAPACITY CONSTRAINTS COULD REDUCE OUR ABILITY
TO PROVIDE MESSAGING AND COLLABORATION SERVICES AND COULD HARM OUR BUSINESS AND
REPUTATION.

Our customers have in the past experienced some interruptions in our
messaging service. We believe that these interruptions will continue to occur
from time to time. These interruptions are due to hardware failures, unsolicited
bulk email, or "spam," attacks and operating system failures. For example, in
January 2000, our customers experienced a service interruption due to an
operating system failure. Our revenues depend on the number of end-users who use
our messaging services. Our business will suffer if we experience frequent or
long system interruptions that result in the unavailability or reduced
performance of systems or networks or reduce our ability to provide email
services. We expect to experience occasional temporary capacity constraints due
to sharply increased traffic, which may cause unanticipated system disruptions,
slower response times, impaired quality and

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degradation in levels of customer service. If this were to continue to happen,
our business and reputation could suffer dramatically.

We have entered into service agreements with some customers that require
minimum performance standards, including standards regarding the availability
and response time of messaging services. If we fail to meet these standards, our
customers could terminate their relationships with us and we could be subject to
contractual monetary penalties. Any unplanned interruption of services may
adversely affect our ability to attract and retain customers.

IF WE DO NOT SUCCESSFULLY ADDRESS THE RISKS INHERENT IN THE EXPANSION OF OUR
INTERNATIONAL OPERATIONS, OUR BUSINESS COULD SUFFER.

We intend to continue to expand into international markets and to spend
significant financial and managerial resources to do so. If revenues from
international operations do not exceed the expense of establishing and
maintaining these operations, our business, financial condition and operating
results will suffer. At present, we have international operations in Argentina,
Brazil, Denmark, France, Germany, Ireland, Italy, Switzerland and the United
Kingdom and for the three months ended March 31, 2000 we derived approximately
50% of our revenues from international sales. We have limited experience in
international operations and may not be able to compete effectively in
international markets. We face certain risks inherent in conducting business
internationally, such as:

- Unexpected changes in regulatory requirements including U.S. export
restrictions on encryption technologies;

- Difficulties and costs of staffing and managing international operations;

- Differing technology standards;

- Difficulties in collecting accounts receivable and longer collection
periods;

- Political and economic instability;

- Fluctuations in currency exchange rates;

- Imposition of currency exchange controls;

- Potentially adverse tax consequences; and

- Reduced protection for intellectual property rights in some countries.

Any of these factors could adversely affect international operations and,
consequently, business and operating results. Specifically, failure to
successfully manage international growth could result in higher operating costs
than anticipated, or could delay or preclude altogether our ability to generate
revenues in key international markets.

WE DEPEND ON STRATEGIC RELATIONSHIPS AND OTHER SALES CHANNELS AND THE LOSS OF
ANY STRATEGIC RELATIONSHIPS COULD HARM OUR BUSINESS AND HAVE AN ADVERSE IMPACT
ON REVENUES.

We depend on strategic relationships to expand distribution channels and to
undertake joint product development and marketing efforts. Our ability to
increase revenues depends upon marketing services through new and existing
strategic relationships. We have entered into written agreements with ICQ (a
subsidiary of America Online), E*TRADE, Network Solutions, Sprint, MCI Worldcom
and US West, among others. We depend on a broad acceptance of outsourced
messaging services on the part of potential partners and acceptance of our
company as the supplier for these outsourced messaging services. We also depend
on joint marketing and product development through strategic relationships to
achieve market acceptance and brand recognition. For example, through our

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relationship with E*TRADE, we can conduct shared advertising campaigns and
include messaging services in E*TRADE's international strategic relationships.
Our agreements with strategic partners typically do not restrict them from
introducing competing services. These agreements typically are for terms of one
to three years, and automatically renew for additional one-year periods unless
either party gives prior notice of its intention to terminate the agreement. In
addition, these agreements are terminable by our partners without cause, and
some agreements are terminable by us, upon 30-120 days' notice. Most of the
agreements also provide for the partial refund of fees paid or other monetary
penalties in the event that our services fail to meet defined minimum
performance standards. Distribution partners may choose not to renew existing
arrangements on commercially acceptable terms, or at all. If we lose any
strategic relationships, fail to renew these agreements or relationships or fail
to develop new strategic relationships, business will suffer. The loss of any
key strategic relationships would have an adverse impact on current and future
revenue. In addition to strategic relationships, we also depend on the ability
of our customers to sell and market our services to their end-users.

WE MAY NOT BE ABLE TO RESPOND TO THE RAPID TECHNOLOGICAL CHANGE OF THE INTERNET
MESSAGING AND COLLABORATION INDUSTRY.

The Internet messaging industry is characterized by rapid technological
change, changes in user and customer requirements and preferences, and the
emergence of new industry standards and practices that could render our existing
services, proprietary technology and systems obsolete. We must continually
improve the performance, features and reliability of our services, particularly
in response to competitive offerings. Our success depends, in part, on our
ability to enhance our existing email and messaging services and to develop new
services, functionality and technology that address the increasingly
sophisticated and varied needs of prospective customers. If we don't properly
identify the feature preferences of prospective customers, or if we fail to
deliver email features which meet the standards of these customers, our ability
to market our service successfully and to increase revenues could be impaired.
The development of proprietary technology and necessary service enhancements
entail significant technical and business risks and require substantial
expenditures and lead-time. We may not be able to keep pace with the latest
technological developments. We may also be unable to use new technologies
effectively or adapt services to customer requirements or emerging industry
standards.

IF OUR SYSTEM SECURITY IS BREACHED, OUR BUSINESS AND REPUTATION COULD SUFFER.

A fundamental requirement for online communications is the secure
transmission of confidential information over public networks. Third parties may
attempt to breach our security or that of our customers. If these attempts are
successful, customers' confidential information, including customers' profiles,
passwords, financial account information, credit card numbers or other personal
information could be breached. We may be liable to our customers for any breach
in security and a breach could harm our reputation. We rely on encryption
technology licensed from third parties. Although we have implemented network
security measures, our servers are vulnerable to computer viruses, physical or
electronic break-ins and similar disruptions, which could lead to interruptions,
delays or loss of data. We may be required to expend significant capital and
other resources to license encryption technology and additional technologies to
protect against security breaches or to alleviate problems caused by any breach.
Failure to prevent security breaches may have a material adverse effect on
business and operating results.

9
<PAGE> 13

WE WILL CONTINUE TO DEPEND ON BROAD MARKET ACCEPTANCE FOR OUTSOURCED
INTERNET-BASED EMAIL SERVICE.

The market for outsourced Internet-based email service is new and rapidly
evolving. Concerns over the security of online services and the privacy of users
may inhibit the growth of the Internet and commercial online services. We cannot
estimate the size or growth rate of the potential market for our service
offerings, and we do not know whether our service will achieve broad market
acceptance. To date a substantial portion of our revenues have been derived from
sales of email service offerings and we currently expect that email service
offerings will account for a substantial portion of our revenues for the
foreseeable future. We depend on the widespread acceptance and use of
outsourcing as an effective solution for email. If the market for outsourced
email fails to grow or grows more slowly than we currently anticipate, our
business would suffer dramatically.

WE EXPECT THE MESSAGING SERVICES MARKET WILL BE VERY COMPETITIVE AND WE WILL
NEED TO COMPETE SUCCESSFULLY IN THIS MARKET.

We expect that the market for Internet-based email service will be
intensely competitive. In addition to competing with companies that develop and
maintain in-house solutions, we compete with email service providers, such as
USA.NET, Inc. and mail.com, and with product-based companies, such as
Software.com, Inc. and Lotus Development Corporation. We believe that
competition will increase and that companies such as Microsoft, which currently
offers email products primarily to Internet service providers that provide
access to the Internet; web hosting companies; web sites intended to be major
starting sites for users when they connect to the Internet, commonly referred to
as web portals; and corporations may leverage their existing relationships and
capabilities to offer email services.

We believe competition will increase as current competitors increase the
sophistication of their offerings and as new participants enter the market. Many
current and potential competitors have longer operating histories, larger
customer bases, greater brand recognition and significantly greater financial,
marketing and other resources than we do and may enter into strategic or
commercial relationships with larger, more established and better-financed
companies. Further, any delays in the general market acceptance of the email
hosting concept would likely harm our competitive position. Any delay would also
allow competitors additional time to improve their service or product offerings,
and provide time for new competitors to develop email service solutions and
solicit prospective customers within our target markets. Increased competition
could result in pricing pressures, reduced operating margins and loss of market
share, any of which could cause our business to suffer.

IF WE DO NOT SUCCESSFULLY ADDRESS SERVICE DESIGN RISKS, OUR REPUTATION COULD BE
DAMAGED AND OUR BUSINESS AND OPERATING RESULTS COULD SUFFER.

We must accurately forecast the features and functionality required by
target customers. In addition, we must design and implement service enhancements
that meet customer requirements in a timely and efficient manner. We may not
successfully determine customer requirements and may be unable to satisfy
customer demands. Furthermore, we may not be able to design and implement a
service incorporating desired features in a timely and efficient manner. In
addition, if any new service we launch is not favorably received by customers
and end-users, our reputation could be damaged. If we fail to accurately
determine customer feature requirements or service enhancements or to market
services containing such features or enhancements in a timely and efficient
manner, our business and operating results could suffer materially.

10
<PAGE> 14

WE NEED TO UPGRADE OUR SYSTEMS AND INFRASTRUCTURE TO ACCOMMODATE INCREASES IN
MESSAGING TRAFFIC.

We must continue to expand and adapt our network infrastructure as the
number of users and the amount of information we wish to transmit increases, and
as their requirements change. The expansion and adaptation of our network
infrastructure will require substantial financial, operational and management
resources. Due to the limited deployment of services to date, the ability of our
network to connect and manage a substantially larger number of customers at high
transmission speeds is unknown, and we face risks related to the network's
ability to operate with higher customer levels while maintaining expected
performance.

As the frequency and complexity of messaging increases, we will need to
make additional investments in our infrastructure, which may be expensive. In
addition, we may not be able to accurately project the rate or timing of
messaging traffic increases or upgrade our systems and infrastructure to
accommodate future traffic levels, which may cause service degradation or
outages. We may also not be able to achieve or maintain a sufficiently high
capacity of data transmission as customer usage increases. Customer demand for
our services could be greatly reduced if we fail to maintain high capacity data
transmission. In addition, as we upgrade our network infrastructure to increase
capacity available to customers, we are likely to encounter equipment or
software incompatibility which may cause delays in implementations. We may not
be able to expand or adapt our network infrastructure to meet additional demand
or customers' changing requirements in a timely manner or at all.

BECAUSE WE PROVIDE MESSAGING AND COLLABORATION SERVICES OVER THE INTERNET, OUR
BUSINESS COULD SUFFER IF EFFICIENT TRANSMISSION OF DATA OVER THE INTERNET IS
INTERRUPTED.

The recent growth in the use of the Internet has caused frequent
interruptions and delays in accessing the Internet and transmitting data. To
date we have not experienced a significant adverse effect from these
interruptions. However, because we provide messaging and collaboration services
over the Internet, interruptions or delays in Internet transmissions will
adversely affect customers' ability to send or receive their messages. We rely
on the speed and reliability of the networks operated by third parties.
Therefore, our market depends on improvements being made to the entire Internet
infrastructure to alleviate overloading and congestion.

We depend on telecommunications network suppliers such as Level 3, Qwest,
Exodus and TeleHouse to transmit messages across their networks. In addition, to
deliver our services, we rely on a number of public and private peering
interconnections, which are arrangements among access providers to carry one
another's traffic. If these providers were to discontinue these arrangements,
and alternative providers did not emerge or were to increase the cost of
providing access, our ability to transmit messaging traffic would be reduced. If
we were to increase our current prices to accommodate any increase in the cost
of providing access, it could negatively impact sales. If we did not increase
prices in response to rising access costs, margins would be negatively affected.
Furthermore, if additional capacity is not added as traffic increases, our
ability to distribute content rapidly and reliably through these networks will
be adversely affected.

IF WE ENCOUNTER SYSTEM FAILURES, WE MAY NOT BE ABLE TO PROVIDE ADEQUATE SERVICE
AND OUR BUSINESS AND REPUTATION COULD BE DAMAGED.

Our ability to successfully receive and send messages and provide
acceptable levels of customer service largely depends on the efficient and
uninterrupted operation of computer and communications hardware and network
systems. Our systems and operations are vulnerable to damage or interruption
from fire, flood, earthquake, power loss, telecommunications failure and similar
events. The occurrence of any of the foregoing risks could subject us to
contractual monetary penalties if we fail

11
<PAGE> 15

to meet minimum performance standards, and could have a material adverse effect
on business and operating results and damage our reputation.

WE MUST RECRUIT AND RETAIN OUR KEY EMPLOYEES TO EXPAND OUR BUSINESS.

Our success depends on the skills, experience and performance of senior
management and other key personnel, many of whom have worked together for only a
short period of time. For example, our Chief Operating Officer and Chief
Financial Officer have joined us within the past three months. The loss of the
services of any senior management or other key personnel, including the
President, David Thatcher, and Chief Executive Officer, Douglas Hickey, could
materially and adversely affect business results. We do not have long-term
employment agreements with any executive officers and other key personnel. Our
success also depends on our ability to recruit, retain and motivate other highly
skilled sales and marketing, technical and managerial personnel. Competition for
these people is intense, and we may not be able to successfully recruit, train
or retain qualified personnel. In particular, we may not be able to hire a
sufficient number of qualified software developers.

UNKNOWN SOFTWARE DEFECTS COULD DISRUPT SERVICES, WHICH COULD HARM OUR BUSINESS
AND REPUTATION.

Our service offerings depend on complex software, both internally developed
and licensed from third parties. Complex software often contains defects,
particularly when first introduced or when new versions are released. We may not
discover software defects that affect new or current services or enhancements
until after they are deployed. Although we have not experienced any material
software defects to date, it is possible that, despite testing, defects may
occur in the software. These defects could cause service interruptions, which
could damage our reputation or increase service costs, cause us to lose revenue,
delay market acceptance or divert development resources, any of which could
cause business to suffer.

WE MAY NEED ADDITIONAL CAPITAL AND RAISING ADDITIONAL CAPITAL MAY DILUTE
EXISTING SHAREHOLDERS.

We believe that existing capital resources will enable us to maintain
current and planned operations for at least the next 12 months. However, we may
be required to raise additional funds due to unforeseen circumstances. If
capital requirements vary materially from those current planned, we may require
additional financing sooner than anticipated. Such financing may not be
available in sufficient amounts or on terms acceptable to us and may be dilutive
to existing shareholders.

WE MAY NOT BE ABLE TO PROTECT INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS.

We regard our copyrights, service marks, trademarks, trade secrets and
similar intellectual property as critical to our success, and we rely on
trademark and copyright law, trade secret protection and confidentiality and/or
license agreements with employees, customers and partners to protect proprietary
rights. Despite these precautions, unauthorized third parties may infringe or
copy portions of our services or reverse engineer or obtain and use information
that we regard as proprietary. End-user license provisions protecting against
unauthorized use, copying, transfer and disclosure of the licensed program may
be unenforceable under the laws of certain jurisdictions and foreign countries.
The status of United States patent protection in the software industry is not
well defined and will evolve as the U.S. Patent and Trademark Office grants
additional patents. We have several patents pending in the United States and may
seek additional patents in the future. We do not know if the patent application
or any future patent application will be issued with the scope of the claims
sought, if at all, or whether any patents received will be challenged or
invalidated. In addition, the laws of some foreign countries do not protect
proprietary rights to the same extent as do

12
<PAGE> 16

the laws of the United States. Our means of protecting proprietary rights in the
United States or abroad may not be adequate and competitors may independently
develop similar technology.

Third parties may infringe or misappropriate copyrights, trademarks and
similar proprietary rights belonging to us. In addition, other parties have
asserted and may assert infringement claims against us. For example, a company
that we acquired is a party to a lawsuit involving alleged infringement of a
third party's patent. The recently acquired company has denied the allegations
of infringement and has made counterclaims. Although we have not received notice
of any other alleged patent infringement, we cannot be certain that our products
do not infringe issued patents that may relate to our products. In addition,
because patent applications in the United States are not publicly disclosed
until the patent is issued, applications may have been filed which relate to our
software products. We may be subject to legal proceedings and claims from time
to time in the ordinary course of business, including claims of alleged
infringement of trademarks and other intellectual property rights of third
parties. Intellectual property litigation is expensive and time-consuming and
could divert management's attention away from operating our business.

WE MAY NEED TO LICENSE THIRD-PARTY TECHNOLOGIES AND WE FACE RISKS IN DOING SO.

We intend to continue to license certain technology from third parties,
including web server and encryption technology. The market is evolving and we
may need to license additional technologies to remain competitive. We may not be
able to license these technologies on commercially reasonable terms or at all.
In addition, we may fail to successfully integrate any licensed technology into
our services. These third-party in-licenses may expose us to increased risks,
including risks related to the integration of new technology, the diversion of
resources from the development of proprietary technology, and an inability to
generate revenues from new technology sufficient to offset associated
acquisition and maintenance costs. An inability to obtain any of these licenses
could delay product and service development until equivalent technology can be
identified, licensed and integrated. Any such delays in services could cause our
business and operating results to suffer.

THE TRADING PRICES AND VOLUMES OF OUR STOCK HAVE BEEN VOLATILE AND WE EXPECT
THAT THIS VOLATILITY WILL CONTINUE.

Our stock price and trading volumes have been highly volatile since our
initial public offering on March 29, 1999. We expect that this volatility will
continue in the future due to factors such as:

- Actual or anticipated fluctuations in results of operations;

- Changes in or failure to meet securities analysts' expectations;

- Announcements of technological innovations and acquisitions;

- Introduction of new services by us or our competitors;

- Developments with respect to intellectual property rights;

- Conditions and trends in the Internet and other technology industries;
and

- General market conditions.

In addition, the stock market has from time to time experienced significant
price and volume fluctuations that have affected the market prices for the
common stocks of technology companies, particularly Internet companies. These
broad market fluctuations may result in a material decline in the market price
of our common stock. In the past, following periods of volatility in the market
price of a particular company's securities, securities class action litigation
has often been brought against that company. We may become involved in this type
of litigation in the future. Litigation is often

13
<PAGE> 17

expensive and diverts management's attention and resources, which could have a
material adverse effect on our business and operating results.

GOVERNMENTAL REGULATION AND LEGAL UNCERTAINTIES COULD IMPAIR THE GROWTH OF THE
INTERNET AND DECREASE DEMAND FOR OUR SERVICES OR INCREASE OUR COST OF DOING
BUSINESS.

Although there are currently few laws and regulations directly applicable
to the Internet and messaging services, a number of laws have been proposed
involving the Internet, including laws addressing user privacy, pricing,
content, copyrights, distribution, antitrust and characteristics and quality of
products and services. Further, the growth and development of the market for
messaging services may prompt calls for more stringent consumer protection laws
that may impose additional burdens on those companies conducting business
online. The adoption of any additional laws or regulations may impair the growth
of the Internet or commercial online services which could decrease the demand
for our services and increase our cost of doing business, or otherwise harm
business and operating results. Moreover, the applicability to the Internet of
existing laws in various jurisdictions governing issues such as property
ownership, sales and other taxes, libel and personal privacy is uncertain and
may take years to resolve.

WE MAY HAVE LIABILITY FOR INTERNET CONTENT AND WE MAY NOT HAVE ADEQUATE
LIABILITY INSURANCE.

As a provider of messaging services, we face potential liability for
defamation, negligence, copyright, patent or trademark infringement and other
claims based on the nature and content of the materials transmitted via our
services. We do not and cannot screen all of the content generated by our users,
and we could be exposed to liability with respect to this content. Furthermore,
some foreign governments, such as Germany, have enforced laws and regulations
related to content distributed over the Internet that are more strict than those
currently in place in the United States.

Although we carry general liability and umbrella liability insurance, our
insurance may not cover claims of these types or may not be adequate to
indemnify us for all liability that may be imposed. There is a risk that a
single claim or multiple claims, if successfully asserted against us, could
exceed the total of our coverage limits. There is also a risk that single claim
or multiple claims asserted against us may not qualify for coverage under our
insurance policies as a result of coverage exclusions that are contained within
these policies. Should either of these risks occur, capital contributed by our
stockholders may need to be used to settle claims. Any imposition of liability,
particularly liability that is not covered by insurance or is in excess of
insurance coverage could have a material adverse effect on our reputation and
business and operating results, or could result in the imposition of criminal
penalties.

FUTURE SALES OF OUR COMMON STOCK MAY DEPRESS THE PRICE OF OUR COMMON STOCK.

As of April 30, 2000, we had approximately 62.1 million shares of Common
Stock outstanding. Sales of a substantial number of shares of Common Stock in
the public market could cause the market price of our Common Stock to decline.
In the near future, 7.6 million shares, which amount includes the shares offered
hereunder, will become eligible for sale under an S-3 registration statement
that we will file to meet our registration rights obligations in connection with
recent acquisitions. Up to 2.9 million shares may be issued upon the conversion
of our Convertible Subordinated Notes and will become eligible for sale under an
S-3 registration statement that we will file to meet our registration rights
obligations in connection with our sale of Convertible Subordinated Notes.
Certain of our shareholders and warrantholders have registration rights with
respect to the Common Stock and Common Stock issuable under the warrants.

14
<PAGE> 18

OUR DIRECTORS, EXECUTIVE OFFICERS AND PRINCIPAL SHAREHOLDERS WILL BE ABLE TO
EXERT SIGNIFICANT INFLUENCE OVER US.

After this offering, our directors, executive officers and principal
shareholders will beneficially own a substantial portion of our outstanding
Common Stock. These shareholders, if they vote together, will be able to
exercise significant influence over all matters requiring shareholder approval,
including the election of directors and approval of significant corporate
transactions. This concentration of ownership may also delay or prevent a change
in control of our company.

OUR ARTICLES OF INCORPORATION AND BYLAWS CONTAIN PROVISIONS WHICH COULD DELAY OR
PREVENT A CHANGE IN CONTROL.

Our Articles of Incorporation and Bylaws contain provisions that could
delay or prevent a change in control of our company. These provisions could
limit the price that investors might be willing to pay in the future for shares
of our Common Stock. Some of these provisions:

- Authorize the issuance of preferred stock which can be created and issued
by the board of directors without prior stockholder approval, commonly
referred to as "blank check" preferred stock, with rights senior to those
of Common Stock;

- Prohibit shareholder action by written consent; and

- Establish advance notice requirements for submitting nominations for
election to the board of directors and for proposing matters that can be
acted upon by shareholders at a meeting.

15
<PAGE> 19

USE OF PROCEEDS

We will not receive any of the proceeds from the sale from time to time of
the Common Stock. All proceeds from the sale of the Common Stock will go to the
account of the Selling Shareholders. See "Selling Shareholders" and "Plan of
Distribution" below.

SELLING SHAREHOLDERS

The following table lists, as of the date of this Prospectus, (i) the name
of each of the Selling Shareholders, (ii) the number of shares of Common Stock
that each such Selling Shareholder beneficially owned as of such date, (iii) the
number of shares of Common Stock owned by each Selling Shareholder that may be
offered for sale from time to time by this Prospectus, and (iv) the number of
shares of Common Stock to be held by each such Selling Shareholder assuming the
sale of all the Common Stock offered under this Prospectus. Except as indicated,
none of the Selling Shareholders has held any position or office or had a
material relationship with us or any of our affiliates within the past three
years other than as a result of the ownership of our Common Stock. We may amend
or supplement this Prospectus from time to time to update the disclosure set
forth herein.

16
<PAGE> 20

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
SHARES SHARES WHICH MAY AFTER OFFERING(2)
BENEFICIALLY BE SOLD PURSUANT -------------------
SELLING SHAREHOLDER OWNED TO THIS PROSPECTUS NUMBER PERCENT(%)
------------------- ------------ ------------------ ------ ----------
<S> <C> <C> <C> <C>
Stan Kugell................................ 79,301 79,301 0 *
831 Beacon Street
Suite 120
Newton, Massachusetts 02459
Vimac FN2 Limited Partnership.............. 73,494 73,494 0 *
177 Milk St
Boston, Massachusetts 02109
Finova Mezzanine Capital Inc............... 63,076 63,076 0 *
500 Church Street Suite 120
Nashville, Tennessee 37219
38 Newbury Ventures/FNC Limited
Partnership.............................. 47,605 47,605 0 *
38 Newbury Street
Boston, Massachusetts 02116
Parker Family Limited Partnership.......... 42,404 42,404 0 *
253 Meadowbrook Road
Weston, Massachusetts 02193
LNY LLC.................................... 36,836 36,836 0 *
11 Beachside Common
Westport, Connecticut 60880
NSI LLC.................................... 35,836 35,836 0 *
38 Newbury Street
8th Floor
Boston, Massachusetts 02116
Margaret Shepherd.......................... 26,358 26,358 0 *
267 Clarendon Street
Boston, Massachusetts 02116
Andrew Egendorf............................ 24,884 24,884 0 *
10 Tower Road
PO Box 703
Lincoln, Massachusetts 01773
Vimac 96 Vintage Trust Limited
Partnership.............................. 21,364 21,364 0 *
177 Milk St
Boston, Massachusetts 02109
Margaret Hanneman.......................... 21,087 21,087 0 *
20 Woodfield Road
Wellesley, Massachusetts 02482
Thomas E. O'Conner......................... 19,651 19,651 0 *
38 Newbury Street
Eighth Floor
Boston, Massachusetts 02116
Donald A. Foss............................. 19,585 19,585 0 *
25505 West Twelve Mile Road Suit
Southfield, Michigan 48034
</TABLE>

17
<PAGE> 21

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
SHARES SHARES WHICH MAY AFTER OFFERING(2)
BENEFICIALLY BE SOLD PURSUANT -------------------
SELLING SHAREHOLDER OWNED TO THIS PROSPECTUS NUMBER PERCENT(%)
------------------- ------------ ------------------ ------ ----------
<S> <C> <C> <C> <C>
Richard Egan............................... 19,585 19,585 0 *
c/o Carruth Management LLC
87 Elm Street
Hopkinton, Massachusetts 01748
Robert & Linda K. Williams................. 19,585 19,585 0 *
175 Marlborough Street
Boston, Massachusetts 02116
Roger M. Marino............................ 19,585 19,585 0 *
James Driscoll............................. 19,305 19,305 0 *
2 Taylor Rd
Stow, Massachusetts 01775
Ron Hunter(4).............................. 17,513 8,669 8,844 *
4081 So Eagle Court
Aurora, Colorado 80014
Albert Waxman Family Charitable Remainder
Trust.................................... 16,563 16,563 0 *
c/o Bainco International Investors
38 Newbury Street
Boston, Massachusetts 02116
Eugene Wong................................ 16,401 16,401 0 *
97 Stone Wall Rd
Berkeley, California 94705
James K. Schuler........................... 14,182 14,182 0 *
3249 Diamond Hd Road
Honolulu, Hawaii 96815
Albert Waxman.............................. 14,099 14,099 0 *
11 Beachside Common
Westport Connecticut 60880
Eric D. Peterson........................... 13,463 13,463 0 *
141 Rosemont Drive
No Andover, Massachusetts 01845
G W Merck Trust Under Indenture FBO
Serena M. Hatch.......................... 12,750 12,750 0 *
c/o Paul Vurtis Fiduciary Trust
175 Federal St
Boston, Massachusetts 02110
The John Merck Fund........................ 12,750 12,750 0 *
11 Beacon St
Boston, Massachusetts 02108
420 Associates............................. 11,715 11,715 0 *
99 Park Ave., Suite 2200
New York, New York 10016
Robert Freeman............................. 11,471 11,471 0 *
30 Club Road
Rye, New York 10580
</TABLE>

18
<PAGE> 22

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
SHARES SHARES WHICH MAY AFTER OFFERING(2)
BENEFICIALLY BE SOLD PURSUANT -------------------
SELLING SHAREHOLDER OWNED TO THIS PROSPECTUS NUMBER PERCENT(%)
------------------- ------------ ------------------ ------ ----------
<S> <C> <C> <C> <C>
Aaron H. Eisendrath........................ 11,205 11,205 0 *
Alan D. Laff/Financial Plz Bldg A
77300 E Belleview Ave, Ste 204
Englewood, Colorado 80111-2616
Richard Chandler........................... 10,363 10,363 0 *
10845 Bobcat Terrace
Littleton, Colorado 80124
Cimarron Buser(5).......................... 10,250 4,686 5,564 *
10 Ravine Road
Wellesley, Massachusetts 02481
Jeffrey Parker Crut........................ 10,147 10,147 0 *
253 Meadowbrook Road
Weston, Massachusetts 02193
Tamara T. Fey Rev Trust.................... 8,774 8,774 0 *
1018 Shipwatch Drive East
Jacksonville, Florida 32225
101507 Canada Inc.......................... 8,235 8,235 0 *
252 Warren Road
Toronto, Ontario M4V 2S8
Canada
Atwood Family Trust........................ 8,211 8,211 0 *
31 Bittersweet Lane
Charlotte, Vermont 05445
Chuck Evans................................ 8,179 8,179 0 *
24 Long Hill Rd
Georgetown, Massachusetts 01833
Roger Ernest Ferrel, Jr. Living Trust...... 7,647 7,647 0 *
6724 Epping Way North
Jacksonville, Florida 32217
G W Merck Trust Under Will FBO Serena M.
Hatch.................................... 7,477 7,477 0 *
c/o Paul Vurtis Fiduciary Trust
175 Federal St
Boston, Massachusetts 02110
Alexander Levine........................... 7,121 7,121 0 *
790 Boylstm St Apt 26H
Boston, Massachusetts 02110
Frederick C. Lane.......................... 7,121 7,121 0 *
348 Grove Street
Needham, Massachusetts 02492
Hal Kelley(6).............................. 6,671 2,343 4,328 *
1131 E Phipps Place
Highland Ranch, California 80126
Hallberg Family Limited Partnership........ 6,588 6,588 0 *
30 Bernhard Road
North Haven, Connecticut 06473
</TABLE>

19
<PAGE> 23

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
SHARES SHARES WHICH MAY AFTER OFFERING(2)
BENEFICIALLY BE SOLD PURSUANT -------------------
SELLING SHAREHOLDER OWNED TO THIS PROSPECTUS NUMBER PERCENT(%)
------------------- ------------ ------------------ ------ ----------
<S> <C> <C> <C> <C>
James Considine............................ 6,588 6,588 0 *
5100 San Felipe
Suite 223E
Houston, Texas 77056
Jack Kotik................................. 6,554 6,554 0 *
192 Kennedy Drive Apt 802
Malden, Massachusetts 02148
Samuel E Bain, Jr.......................... 6,448 6,448 0 *
18 Chandler Circle
Weston, Massachusetts 02193
Arnold Thompson............................ 6,277 6,277 0 *
2910 Mountain Road
West Suffield, Connecticut 06093
Peter Deroetth............................. 5,477 5,477 0 *
Account Management Corp Profit Sharing
Plan..................................... 5,402 5,402 0 *
2 Newburry Street
Boston, Massachusetts 02116
Patricia T. Schuler........................ 5,402 5,402 0 *
3249 Diamond Hd Rd
Honolulu, Hawaii 96815
Karl Matthies & Deborah Matthies JTWROS.... 5,066 5,066 0 *
c.o Montgomery Securities
600 Montgomery Street
San Francisco, California 94111
Roger Ernest Ferrell CRUT.................. 5,000 5,000 0 *
6724 Epping Way North
Jacksonville, Florida 32217
David M. Paradise.......................... 4,943 4,943 0 *
30 Gammons Road
Newton, Massachusetts 02168
Dennis M. Crumpler......................... 4,913 4,913 0 *
50 Old Vermont Place
Atlanta, Georgia 30328
Bruce Slovin............................... 4,686 4,686 0 *
42 East 62nd Street
New York, New York 10021
Arnold Thompson IRA........................ 4,588 4,588 0 *
2910 Mountain Road
West Suffield, Connecticut
Lighthouse Capital......................... 3,901 3,901 0 *
100 Drake's Landing Road
Suite 260
Greenbrae, California 94904
</TABLE>

20
<PAGE> 24

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
SHARES SHARES WHICH MAY AFTER OFFERING(2)
BENEFICIALLY BE SOLD PURSUANT -------------------
SELLING SHAREHOLDER OWNED TO THIS PROSPECTUS NUMBER PERCENT(%)
------------------- ------------ ------------------ ------ ----------
<S> <C> <C> <C> <C>
Robert Adler............................... 3,744 3,744 0 *
c/o CCEN
200 Portland Street
Boston, Massachusetts
Arvind Sanger.............................. 3,560 3,560 0 *
c/o DLJ
277 Park Avenue
New York, New York 10172
Christopher H. Horgen...................... 3,560 3,560 0 *
4035 Chris Drive
Suite C
Huntsville, Alabama 35802
John C. Robertshaw......................... 3,560 3,560 0 *
166 East 81st Street
New York, New York 10028
Timothy Weller............................. 3,560 3,560 0 *
William D. Schmicker....................... 3,560 3,560 0 *
1146 Alpine Rd #100
Walnut Creek, California 94596
Donald E. Creamer Trust.................... 3,346 3,346 0 *
c/o Briarcliffe Partners
1507 Post Road
Warwich, Rhode Island 02888
William Thornton........................... 3,312 3,312 0 *
18 Bittersweet Lane
Weston Massachusetts 02173
Alan M. Goldfine Irrevocable Trust......... 3,295 3,295 0 *
770 Bolyston Street
Apartment 27B
Boston, Massachusetts 02199
Michael Ohanian 1992 Trust................. 3,295 3,295 0 *
80 Evergreen Way
Belmont, Massachusetts 02178
Jaaks LLC.................................. 3,016 3,016 0 *
104 Burning Drive
Voorhees, New Jersey 08043
Lewis V Van Amerongen...................... 2,928 2,928 0 *
c/o LVA Enterprises Inc.
667 Madison Ave
New York, New York 10021
The 1999 T Willis Trust, Wayne Willis
Trustee.................................. 2,635 2,635 0 *
22400 Shaker Blvd
Shaker Heights, Ohio 44122
</TABLE>

21
<PAGE> 25

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
SHARES SHARES WHICH MAY AFTER OFFERING(2)
BENEFICIALLY BE SOLD PURSUANT -------------------
SELLING SHAREHOLDER OWNED TO THIS PROSPECTUS NUMBER PERCENT(%)
------------------- ------------ ------------------ ------ ----------
<S> <C> <C> <C> <C>
The 1999 Willis Children Trust, Wayne
Willis Trustee........................... 2,635 2,635 0 *
22400 Shaker Blvd
Shaker Hieghts, Ohio 44122
Bob Robinson............................... 2,541 2,541 0 *
2496 W Sunset Dr
Littleton, Colorado 80120
Brooke Cobb & Virginia Cobb JTWR........... 2,457 2,457 0 *
56 Miles Standish Road
Weston, Massachusetts 02193
Lotz/O'Connor Trust
FBO Christopher O'Conner................. 2,457 2,457 0 *
38 Newbury Street
Eighth Floor
Boston, Massachusetts 02116
Lotz/O'Connor Trust FBO Jonathan
O'Conner................................. 2,457 2,457 0 *
38 Newbury Street
Eighth Floor
Boston, Massachusetts 02116
Alex Lipman................................ 2,343 2,343 0 *
133 Dawson Drive
Needham, Massachusetts 02492
Susan E. Pravda............................ 2,343 2,343 0 *
9 Burnham Road
W Newton, Massachusetts 02465
Todd Goodwin............................... 2,343 2,343 0 *
600 Madison Avenue
New York, New York 10022
Rosalie Davidson........................... 2,316 2,316 0 *
185 Buckminster Road
Brookline, Massachusetts 02146
M. Bruce Ohanian........................... 2,294 2,294 0 *
224 Marsh Street
Belmont, Massachusetts 02178
Veronica Heath............................. 2,294 2,294 0 *
18 Fernway
Winchester, Massachusetts
Robert Bernstein & Heleb Bernstein
JTWROS................................... 2,281 2,281 0 *
PO Box 607
Bedford, New York 10506
Dolores Stone.............................. 2,180 2,180 0 *
646 Towel Place
Palo Alto, California 94306
Lawrence Kaplan............................ 2,180 2,180 0 *
55 Penn Boulevard
Scarsdale, New York 10583
</TABLE>

22
<PAGE> 26

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
SHARES SHARES WHICH MAY AFTER OFFERING(2)
BENEFICIALLY BE SOLD PURSUANT -------------------
SELLING SHAREHOLDER OWNED TO THIS PROSPECTUS NUMBER PERCENT(%)
------------------- ------------ ------------------ ------ ----------
<S> <C> <C> <C> <C>
Anita Howe-Waxman.......................... 2,048 2,048 0 *
11 Beachside Common
Westport, Connecticut 60880
TFA Limited Partnership.................... 1,912 1,912 0 *
2910 Mountain Road
West Suffield, Connecticut 06093
Robert Thompson & Maura Thompson
JTWROS................................... 1,902 1,902 0 *
5 Gloucester Lane
North Granby, Connecticut 06060
Ronald & Julie Marra....................... 1,902 1,902 0 *
47 Judd Hill Road
Woodbury, Connecticut 06798
Steve Thompson & Diane Thompson JTWROS..... 1,890 1,890 0 *
5 Gloucester Lane
North Granby, Connecticut 06060
TLP Leasing................................ 1,859 1,859 0 *
77 Franklin St 4th Floor
Boston, Massachusetts 02110
George J Schietinger....................... 1,780 1,780 0 *
c/o Donaldson Lufkin Jenrette
217 Park Ave. 13th Floor
New York, New York 10172
Robert M. Berry............................ 1,780 1,780 0 *
823 Boston Post Rd
Weston, Massachusetts 02493
Steuart Evans.............................. 1,780 1,780 0 *
413 Randolph St
Huntsville, Alabama 35801
Mark A. Roman.............................. 1,744 1,744 0 *
30 Ashland Street
Arlington, Massachusetts 02476
Glenda E. Hyden............................ 1,662 1,662 0 *
5056 Elkhart Court
Aurora, Colorado 80015
Reynald Bonmati............................ 1,530 1,530 0 *
Premium Point
New Rochelle, New York 10801
Robert Levine & Suzanne Levine JTWROS...... 1,530 1,530 0 *
1740 Broadway
22nd Floor
New York, New York 11019
Jeanne Thompson............................ 1,529 1,529 0 *
2910 Mountain Road
West Suffield, Connecticut 06093
</TABLE>

23
<PAGE> 27

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
SHARES SHARES WHICH MAY AFTER OFFERING(2)
BENEFICIALLY BE SOLD PURSUANT -------------------
SELLING SHAREHOLDER OWNED TO THIS PROSPECTUS NUMBER PERCENT(%)
------------------- ------------ ------------------ ------ ----------
<S> <C> <C> <C> <C>
Jonathan Bowden............................ 1,529 1,529 0 *
c/o Equinox
344 Amsterdam Avenue
New York, New York 10024
Adrian Saraco.............................. 1,519 1,519 0 *
Av. De Los Incas 3732
Capital Federal 1427
Argentina
Cynthia Negrin............................. 1,480 1,480 0 *
169 Washington Street #10
Newton, Massachusetts
Jeffrey Willbanks(7)....................... 1,311 1,171 140 *
60 Cedar Road
Marshfield, Massachusetts 02050
Abigail Marr............................... 1,275 1,275 0 *
38 Newbury Street
8th Floor
Boston, Massachusetts 02116
James Willing.............................. 1,228 1,228 0 *
6 Clearwater Road
Winchester, Massachusetts 01890
Alan J. Carter, Sr......................... 1,171 1,171 0 *
102 A Mactanly Pl
Staunton, Virginia 24401
Hermann Associates LP...................... 1,171 1,171 0 *
c/o The Beacon Group
399 Park Avenue 18th Fl
New York, New York 10022
Venture Investment Management Company
LLC...................................... 1,068 1,068 0 *
177 Milk St
Boston, Massachusetts 02109
Robert Vigoda.............................. 860 860 0 *
3 Trodden Path
Lexington, Massachusetts 02193
John H. Buck III........................... 823 823 0 *
155 Hart Street
Beverly Farms, Massachusetts 01915
Kam Leung.................................. 813 813 0 *
39 Vane Street
N Quincy, Massachusetts 02171
Timothy Bryan.............................. 794 794 0 *
15 Grassmere Avenue
Winchester, Massachusetts 01890
</TABLE>

24
<PAGE> 28

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
SHARES SHARES WHICH MAY AFTER OFFERING(2)
BENEFICIALLY BE SOLD PURSUANT -------------------
SELLING SHAREHOLDER OWNED TO THIS PROSPECTUS NUMBER PERCENT(%)
------------------- ------------ ------------------ ------ ----------
<S> <C> <C> <C> <C>
David C. Volpe............................. 702 702 0 *
PO Box 646
28 Lost Horse Trail
Franklin, Massachusetts 02038
Joseph Colonna............................. 619 619 0 *
2 Hillcrest Ave
Nahant, Massachusetts 011908
Kendall Manning............................ 586 586 0 *
243 Beech Street
Belmont, Massachusetts 02478
Thomas G. Mendell.......................... 585 585 0 *
c/o The Beacon Group LLC
399 Park Ave
New York, New York 10022
William J. Oetgen MD....................... 585 585 0 *
701 Gleneagles Drive
Fort Washington, Maryland 20744
Adler Money Pension Purchase Plan.......... 560 560 0 *
15 Dix Street
Winchester, Massachusetts 01890
Emilio F. Panighetti(8).................... 546 151 395 *
38 Cherry St
Apt 1
Somerville, Massachusetts 02144
Craig Eisendrath........................... 493 493 0 *
617 Pine Street
Philadelphia, Pennsylvania 19106
Richard Boucher............................ 481 481 0 *
47 Bridge Street
Unit 6
East Greenwich, Rhode Island 02818
William Beiner(9).......................... 441 151 290 *
7135 Oak Hills Ln
Colorado Springs, Colorado 80919
Robert G Katz.............................. 412 412 0 *
256 Littlefield Road
Marlborough, Massachusetts 01752
Neil D. Crowley............................ 391 391 0 *
146 Milton Street
Dorchester, Massachusetts 02124
</TABLE>

25
<PAGE> 29

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
SHARES SHARES WHICH MAY AFTER OFFERING(2)
BENEFICIALLY BE SOLD PURSUANT -------------------
SELLING SHAREHOLDER OWNED TO THIS PROSPECTUS NUMBER PERCENT(%)
------------------- ------------ ------------------ ------ ----------
<S> <C> <C> <C> <C>
Maple Swan Limited......................... 382 382 0 *
PO Box 175, Frances House
Sir William Place, St Peter Port
Guernset GY1 4HQ
Jersey Channel Islands
Shiraz Moosajee............................ 379 379 0 *
815 St Paul Street
Denver, Colorado 802206
Bruce R. Fador............................. 377 377 0 *
71 Wildwood Street
Winchester, Massachusetts 01890
Julie Wagner............................... 355 355 0 *
40 Old Forge Rd
North Falmuth, Massachusetts 02556
Michael J. Murray.......................... 354 354 0 *
46 Adams Ave #3
Everett, Massachusetts 02149
Brian Twomey............................... 325 325 0 *
375 Gay St
Westwood, Massachusetts 02090
Betsy Eisendrath........................... 303 303 0 *
1650 Harvard St NW #606
Washington, DC 20009
Susan Erlich............................... 303 303 0 *
841 Humboldt St
Denver, Colorado 80218
R. A. McDonough............................ 292 292 0 *
523 Avondale Avenue
Los Angeles, California 90049
Kenneth Scotch............................. 272 272 0 *
PMB 191
2193 Commonwealth Avenue
Brighton, Massachusetts 02135
Allan Erlich............................... 151 151 0 *
841 Humboldt St
Denver, Colorado 80218
Gaston Gualdoni............................ 151 151 0 *
Parama 1087 2 Piso A
CP:1018 Capital Federal
Buenos Aires 1018
Argentina
Diego Martinez Nunez....................... 75 75 0 *
Parana 1087
Capital Federal 1018 1018
Argentina
</TABLE>

26
<PAGE> 30

- ------------------------
* Indicates less than one percent.

(1) The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Exchange Act, and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under
such rule, beneficial ownership includes any shares as to which the
individual has sole or shared voting power or investment power and also any
shares which the individual has the right to acquire within 60 days after
May 5, 2000 through the exercise of any stock option or other right. Unless
otherwise indicated in the footnotes, each person has sole voting and
investment power (or shares such powers with his or her spouse) with respect
to the shares shown as beneficially owned.

(2) Assumes the sale of all Common Stock offered under this Prospectus.

(3) Includes 13,607 shares subject to options exercisable within 60 days after
May 5, 2000.

(4) Includes 8,844 shares subject to options exercisable within 60 days after
May 5, 2000.

(5) Includes 5,564 shares subject to options exercisable within 60 days after
May 5, 2000.

(6) Includes 4,328 shares subject to options exercisable within 60 days after
May 5, 2000.

(7) Includes 140 shares subject to options exercisable within 60 days after May
5, 2000.

(8) Includes 395 shares subject to options exercisable within 60 days after May
5, 2000.

(9) Includes 290 shares subject to options exercisable within 60 days after May
5, 2000.

27
<PAGE> 31

PLAN OF DISTRIBUTION

The Selling Shareholders may offer and sell the Common Stock covered by
this Prospectus from time to time. The Selling Shareholder's pledgees, donees,
transferees or other successors in interest that receive such Common Stock as a
gift, partnership distribution or other non-sale related transfer may likewise
offer and sell the Common Stock from time to time. The Selling Shareholders will
act independently of us in making decisions with respect to the timing, manner
and size of each sale. The Selling Shareholders may sell the Common Stock on one
or more exchanges, including the Nasdaq National Market, or in the
over-the-counter market or otherwise, at prices and at terms then prevailing or
at prices related to the then current market prices or in negotiated
transactions. The Selling Shareholders may sell the Common Stock by one or more
of the following means of distribution: (a) a block trade in which the
broker-dealer so engaged will attempt to sell the shares as agent, but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this Prospectus; and (c) ordinary
brokerage transactions and transactions in which the broker solicits purchasers.
We may amend this Prospectus from time to time to describe a specific plan of
distribution. In connection with distributions of the Common Stock or otherwise,
the Selling Shareholders may enter into hedging transactions with broker-dealers
or other financial institutions. In connection with such transactions,
broker-dealers or other financial institutions may engage in short sales of our
Common Stock in the course of hedging the positions they assume with the Selling
Shareholders. The Selling Shareholders may also sell our Common Stock short and
redeliver the shares covered by this Prospectus to close out such short
positions. The Selling Shareholders may also enter into option or other
transactions with broker-dealers or other financial institutions which require
the delivery to such broker-dealer or other financial institution of the Common
Stock offered under this Prospectus, which Common Stock such broker-dealer or
other financial institution may resell pursuant to this Prospectus (as
supplemented or amended to reflect such transaction). The Selling Shareholders
may also pledge the shares of Common Stock registered hereunder to a broker-
dealer or other financial institution and, upon a default, such broker-dealer or
other financial institution may effect sales of the pledged Common Stock
pursuant to this Prospectus (as supplemented or amended to reflect such
transaction). In addition, the Selling Shareholder may also sell the Common
Stock under Rule 144 rather than pursuant to this Prospectus if the shares so
qualify for resale under Rule 144.

In effecting sales, brokers, dealers or agents engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate. Brokers,
dealers or agents may receive commissions, discounts or concessions from the
Selling Shareholders in amounts to be negotiated prior to the sale. Such brokers
or dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales, and any such commission, discount or concession may be deemed to be
underwriting discounts or commissions under the Securities Act. We will pay all
expenses incident to the offering and sale of the Common Stock covered by this
Prospectus to the public other than any commissions and discounts of
underwriters, dealers or agents and any transfer taxes.

In order to comply with the securities laws of certain states, if
applicable, the Common Stock will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Common Stock may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.

We have advised the Selling Shareholders that the anti-manipulation rules
set forth in Regulation M under the Exchange Act may apply to sales of the
Shares in the market and to the activities of the Selling Shareholders and its
affiliates. In addition, we will make copies of this

28
<PAGE> 32

Prospectus available to the Selling Shareholders and have informed them of the
need for delivery of copies of this Prospectus to purchasers at or prior to the
time of any sale of the Common Stock covered by this Prospectus. The Selling
Shareholders may indemnify any broker-dealer that participates in transactions
involving the sale of the Common Stock against certain liabilities, including
liabilities arising under the Securities Act.

At the time a particular offer of the shares of Common Stock covered by
this Prospectus is made, if required, a prospectus supplement will be
distributed that will set forth the number of shares being offered and the terms
of the offering, including the name of any underwriter, dealer or agent, the
purchase price paid by any underwriter, any discount, commission and other item
constituting compensation, any discount, commission or concession allowed or
reallowed or paid to any dealer, and the proposed selling price to the public.

The Selling Shareholders may or may not sell all or any of the Common Stock
covered by this Prospectus.

We have agreed with the Selling Shareholders to keep the Registration
Statement of which this Prospectus constitutes a part effective until July 2001.
The Company intends to de-register any of the shares not sold by the Selling
Shareholders at the end of such period; however, at such time, any unsold shares
may be freely tradable subject to compliance with Rule 144 of the Securities
Act.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto,
California, our legal counsel.

EXPERTS

Our consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K/A for the year ended December 31,
1999, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

29
<PAGE> 33

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

WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE A STATEMENT THAT DIFFERS FROM
WHAT IS IN THIS PROSPECTUS. IF ANY PERSON DOES MAKE A STATEMENT THAT DIFFERS
FROM WHAT IS IN THIS PROSPECTUS, YOU SHOULD NOT RELY ON SUCH STATEMENT. THIS
PROSPECTUS IS NOT AN OFFER TO SELL, NOR IS IT SEEKING AN OFFER TO BUY, THESE
SECURITIES IN ANY STATE IN WHICH THE OFFER OR SALE IS NOT PERMITTED. THE
INFORMATION IN THIS PROSPECTUS IS COMPLETE AND ACCURATE AS OF ITS DATE, BUT THE
INFORMATION MAY CHANGE AFTER THAT DATE.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Where You Can Find More Information.. 1
The Company.......................... 2
Risk Factors......................... 4
Use of Proceeds...................... 16
Selling Stockholders................. 16
Plan of Distribution................. 28
Legal Matters........................ 29
Experts.............................. 29
</TABLE>

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

CRITICAL PATH, INC.

2,697,650 Shares
of
Common Stock
------------------------

PROSPECTUS
------------------------
May , 2000

- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 34

PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Critical Path, Inc. (the "Company") will bear no expenses in connection
with any sale or other distribution by the Selling Shareholders of the shares
being registered other than the expenses of preparation and filing of this
Registration Statement and the Prospectus included in this Registration
Statement. Such expenses are set forth in the following table. All of the
amounts shown are estimates except the Securities and Exchange Commission
("SEC") registration fee.

<TABLE>
<S> <C>
SEC registration fee........................................ $32,600
Legal fees and expenses..................................... 20,000
Accounting fees and expenses................................ 5,000
Miscellaneous expense....................................... 8,000
-------
Total............................................. $65,600
=======
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 317 of the California Corporations Code provides for the
indemnification of officers, directors and other corporate agents in terms
sufficiently broad to indemnify such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended (the "Act"). Article V, Section B of our
articles of incorporation (Exhibit 3.1 hereto) provides for indemnification of
our directors, officers, employees and other agents to the extent and under the
circumstances permitted by the California Corporations Code. We have also
entered into agreements with our directors and officers that will require us,
among other things, to indemnify them against certain liabilities that may arise
by reason of their status or service as directors or officers to the fullest
extent permitted by law.

The Underwriting Agreement (Exhibit 1.1) provides for indemnification by
ourself, our underwriters and our directors and officers of the underwriters,
for certain liabilities, including liabilities arising under the Act, and
affords certain rights of contribution with respect thereto.

II-1
<PAGE> 35

ITEM 16. EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
2.1 Asset Purchase Agreement, dated May 26, 1999, between the
Registrant and Fabrik Communications, Inc. (Incorporated by
reference to Exhibit 2.1 to the Registrant's Registration on
Form S-1/A (File No. 333-78197))
2.2 Agreement and Plan of Reorganization, dated October 20,
1999, by and among Critical Path, Inc., Initialize
Acquisition Corp. and ISOCOR. (Incorporated by reference to
Annex A to the Registrant's Registration Statement on Form
S-4 (File No. 333-92199))
2.3 Agreement and Plan of Reorganization, dated June 22, 1999,
among Critical Path, Inc., Amplitude Software Corp. and
Apollo Acquisition Corp. (Incorporated by reference to
Exhibit 2.1 to the Registrant's Current Report on Form 8-K
(File No. 000-25331))
2.4 Agreement and Plan of Reorganization, dated July 15, 1999,
among Critical Path, Inc., dotOne Corporation and dotOne
Acquisition Corp. (Incorporated by reference to Exhibit 2.1
to the Registrant's Current Report on Form 8-K (File No.
000-25331))
2.5 Agreement and Plan of Reorganization, dated January 28,
2000, by and among Critical Path, Inc., D.V. Acquisition
Corp. and RemarQ Communities, Inc. (Incorporated by
reference to Exhibit 2.5 to the Registrant's Annual Report
on Form 10-K (File No. 000-25331))
2.6 Agreement and Plan of Reorganization, dated November 3,
1999, by and among Critical Path, Inc., Compass Holding
Corp., Compass Acquisition Corp., 3034996 Nova Scotia
Company, 3034997 Nova Scotia Company and The docSpace
Company. (Incorporated by reference to Exhibit 2.6 to the
Registrant's Annual Report on Form 10-K (File No.
000-25331))
2.7 Agreement and Plan of Reorganization, dated November 2,
1999, by and among Critical Path, Inc., Wellfleet
Acquisition Corp. and FaxNet Corporation. (Incorporated by
reference to Exhibit 2.7 to the Registrant's Annual Report
on Form 10-K (File No. 000-25331))
2.8 Agreement and Plan of Reorganization, dated October 8, 1999,
by and among Critical Path, Inc., Xeti Acquisition Corp. and
Xeti, Inc. (Incorporated by reference to Exhibit 2.8 to the
Registrant's Annual Report on Form 10-K (File No.
000-25331))
3.1 Amended and Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 3(i)(b) to the
Registrant's Registration on Form S-1 (File No. 333-71499))
3.2 Amended and Restated Bylaws. (Incorporated by reference to
Exhibit 3(ii)(b) to the Registrant's Registration Statement
on Form S-1 (File No. 333-71499))
4.1 Form of Common Stock Certificate. (Incorporated by reference
to Exhibit 4.1 to the Registrant's Registration Statement on
Form S-1 (File No. 333-71499))
4.2 Warrant to Purchase Preferred Stock dated September 11, 1998
issued by the Registrant to Hambrecht & Quist LLC.
(Incorporated by reference to Exhibit 4.2 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
4.3 Warrant to Purchase Preferred Stock dated January 13, 1999
issued by the Registrant to Hambrecht & Quist LLC.
(Incorporated by reference to Exhibit 4.3 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
4.4 Warrant to Purchase Common Stock dated January 29, 1999
issued by the Registrant to America Online, Inc.
(Incorporated by reference to Exhibit 4.4 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
10.1 Form of Indemnification Agreement between the Registrant and
each of its directors and officers. (Incorporated by
reference to Exhibit 10.1 to the Registrant's Registration
Statement on Form S-1 (File No. 333-71499))
</TABLE>

II-2
<PAGE> 36

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.2 Employee Stock Purchase Plan. (Incorporated by reference to
Exhibit 10.2 to the Registrant's Registration Statement on
Form S-1 (File No. 333-71499))
10.3 1998 Stock Plan and forms of stock option agreements
thereunder. (Incorporated by reference to Exhibit 10.3 to
the Registrant's Registration Statement on Form S-1 (File
No. 333-71499))
10.4 Series B Preferred Stock Purchase Agreement dated September
11, 1998. (Incorporated by reference to Exhibit 10.4 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.5 Amendment to Series B Preferred Stock Purchase Agreement
dated January 13, 1999. (Incorporated by reference to
Exhibit 10.5 to the Registrant's Registration Statement on
Form S-1 (File No. 333-71499))
10.6 Amended and Restated Investors' Rights Agreement dated
September 11, 1998. (Incorporated by reference to Exhibit
10.6 to the Registrant's Registration Statement on Form S-1
(File No. 333-71499))
10.7 Amendment to the Amended and Restated Investors' Rights
Agreement dated January 13, 1999. (Incorporated by reference
to Exhibit 10.7 to the Registrant's Registration Statement
on Form S-1 (File No. 333-71499))
10.8 Master Equipment Lease Agreement dated April 28, 1998, and
Lease Line Schedule thereto, by and between the Registrant
and Lighthouse Capital Partners II, L.P. (Incorporated by
reference to Exhibit 10.8 to the Registrant's Registration
Statement on Form S-1 (File No. 333-71499))
10.9 Master Lease Agreement dated May 1, 1998, and addendum
thereto, by and between the Registrant and Comdisco, Inc.
(Incorporated by reference to Exhibit 10.9 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.10 Standard Industrial/Multitenant Lease-Gross dated June 20,
1997 by and between the Registrant and 501 Folsom Street
Building. (Incorporated by reference to Exhibit 10.10 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.11 Letter Agreement dated October 1, 1998 by and between the
Registrant and Douglas Hickey. (Incorporated by reference to
Exhibit 10.11 to the Registrant's Registration Statement on
Form S-1 (File No. 333-71499))
10.12 Promissory Note and Security Agreement dated November 2,
1998 by and between the Registrant and Douglas Hickey.
(Incorporated by reference to Exhibit 10.12 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.13 Warrant Agreement dated April 28, 1998 by and between the
Registrant and Lighthouse Capital Partners II, L.P.
(Incorporated by reference to Exhibit 10.13 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.14 Warrant Agreement dated May 1, 1998 by and between the
Registrant and Comdisco, Inc. (Incorporated by reference to
Exhibit 10.14 to the Registrant's Registration Statement on
Form S-1 (File No. 333-71499))
10.15 Master Services Agreement dated December 10, 1998 by and
between the Registrant and US West Communications Services,
Inc. (Incorporated by reference to Exhibit 10.15 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.16 Email Services Agreement dated May 27, 1998 by and between
the Registrant and Network Solutions, Inc. (Incorporated by
reference to Exhibit 10.16 to the Registrant's Registration
Statement on Form S-1 (File No. 333-71499))
10.17 Email Services Agreement dated July 6, 1998 by and between
the Registrant and Starmedia Network, Inc. (Incorporated by
reference to Exhibit 10.17 to the Registrant's Registration
Statement on Form S-1 (File No. 333-71499))
</TABLE>

II-3
<PAGE> 37

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.18 Amendment to email Services Agreement September 30, 1998 by
and between the Registrant and E*TRADE Group, Inc.
(Incorporated by reference to Exhibit 10.18 to the
Registration Statement on Form S-1 (File No. 333-71499))
10.19 Email Services Agreement dated September 14, 1998 by and
between the Registrant and Sprint Communications Company
L.P. (Incorporated by reference to Exhibit 10.19 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.20 Email Services Agreement dated March 19, 1998 by and between
the Registrant and NTX, Inc. dba TABNet, Inc. (Incorporated
by reference to Exhibit 10.20 to the Registrant's
Registration Statement on Form S-1 (File No. 333-71499))
10.21 QuickStart Loan and Security Agreement dated May 12, 1998 by
and between the Registrant and Silicon Valley Bank.
(Incorporated by reference to Exhibit 10.21 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.22 Email Services Agreement dated January 29, 1999 by and
between the Registrant and ICQ, Inc. (Incorporated by
reference to Exhibit 10.22 to the Registrant's Registration
Statement on Form S-1 (File No. 333-71499))
10.23 Sublease dated February 8, 1999 by and between Times Direct
Marketing, Inc. and the Registrant (Incorporated by
reference to Exhibit 10.23 to the Registrant's Registration
Statement on Form S-1 (File No. 333-71499))
10.24 Promissory Note and Security Agreement dated January 26,
1999 by and between the Registrant and Bill Rinehart.
(Incorporated by reference to Exhibit 10.24 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.25 Office lease dated December 1999 by and between Ecker-Folsom
Properties, LLC and the Registrant (Incorporated by
reference to Exhibit 10.25 to the Registrant's Annual Report
on Form 10-K (File No. 000-25331))
10.26 Office lease dated December 1999 by and between
Ecker-FolsomProperties, LLC and the Registrant (Incorporated
by reference to Exhibit 10.26 to the Registrant's Annual
Report on Form 10-K (File No. 000-25331))
21.1 List of Subsidiaries (Incorporated by reference to Exhibit
21.1 to the Registrant's Annual Report on Form 10-K (File
No. 000-25331))
23.1 Consent of Independent Accountants.
23.2 Consent of Counsel (included in Exhibit 5.1).
24.1 Power of Attorney (included on page II-4).
</TABLE>

ITEM 17. UNDERTAKINGS.

A. UNDERTAKING PURSUANT TO RULE 415.

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:

(i) to include any prospectus required by Section 10(a)(3)
Securities Act of 1933 (the "Securities Act");

(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated

II-4
<PAGE> 38

maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement.

(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;

provided, however, that paragraphs A(l)(i) and A(l)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 (the "Exchange Act") that are incorporated by reference in the
Registration Statement;

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of this offering.

B. UNDERTAKING REGARDING FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS
BY REFERENCE.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

C. UNDERTAKING IN RESPECT OF INDEMNIFICATION.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

II-5
<PAGE> 39

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Francisco, State of California, on this 5th day
of May, 2000.

CRITICAL PATH, INC.

By: /s/ DOUGLAS T. HICKEY
------------------------------------
Douglas T. Hickey
Chief Executive Officer and Director

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Douglas
T. Hickey and David A. Thatcher and each of them, as attorneys-in-fact, each
with the power of substitution, for him or her in any and all capacities, to
sign any amendment to this Registration Statement and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting to said attorneys-in-fact, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or either of them, or their or
his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons on the 5th
day of May, 2000 in the capacities indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ DOUGLAS T. HICKEY Chief Executive Officer and May 5, 2000
- ----------------------------------------------------- Director (Principal Executive
Douglas T. Hickey Officer)

/s/ MARK J. RUBASH Executive Vice President, Chief May 5, 2000
- ----------------------------------------------------- Financial Officer (Principal
Mark J. Rubash Financial and Accounting
Officer)

/s/ DAVID C. HAYDEN Chairman of the Board May 5, 2000
- -----------------------------------------------------
David C. Hayden

/s/ CHRISTOS M. COTSAKOS Director May 5, 2000
- -----------------------------------------------------
Christos M. Cotsakos

/s/ LISA A. GANSKY Director May 5, 2000
- -----------------------------------------------------
Lisa A. Gansky

/s/ KEVIN R. HARVEY Director May 5, 2000
- -----------------------------------------------------
Kevin R. Harvey
</TABLE>

II-6
<PAGE> 40

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JAMES A. SMITH Director May 5, 2000
- -----------------------------------------------------
James A. Smith

/s/ GEORGE ZACHARY Director May 5, 2000
- -----------------------------------------------------
George Zachary
</TABLE>

II-7
<PAGE> 41

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.1 Form of Indemnification Agreement between the Registrant and
each of its directors and officers. (Incorporated by
reference to Exhibit 10.1 to the Registrant's Registration
Statement on Form S-1 (File No. 333-71499))
10.2 Employee Stock Purchase Plan. (Incorporated by reference to
Exhibit 10.2 to the Registrant's Registration Statement on
Form S-1 (File No. 333-71499))
10.3 1998 Stock Plan and forms of stock option agreements
thereunder. (Incorporated by reference to Exhibit 10.3 to
the Registrant's Registration Statement on Form S-1 (File
No. 333-71499))
10.4 Series B Preferred Stock Purchase Agreement dated September
11, 1998. (Incorporated by reference to Exhibit 10.4 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.5 Amendment to Series B Preferred Stock Purchase Agreement
dated January 13, 1999. (Incorporated by reference to
Exhibit 10.5 to the Registrant's Registration Statement on
Form S-1 (File No. 333-71499))
10.6 Amended and Restated Investors' Rights Agreement dated
September 11, 1998. (Incorporated by reference to Exhibit
10.6 to the Registrant's Registration Statement on Form S-1
(File No. 333-71499))
10.7 Amendment to the Amended and Restated Investors' Rights
Agreement dated January 13, 1999. (Incorporated by reference
to Exhibit 10.7 to the Registrant's Registration Statement
on Form S-1 (File No. 333-71499))
10.8 Master Equipment Lease Agreement dated April 28, 1998, and
Lease Line Schedule thereto, by and between the Registrant
and Lighthouse Capital Partners II, L.P. (Incorporated by
reference to Exhibit 10.8 to the Registrant's Registration
Statement on Form S-1 (File No. 333-71499))
10.9 Master Lease Agreement dated May 1, 1998, and addendum
thereto, by and between the Registrant and Comdisco, Inc.
(Incorporated by reference to Exhibit 10.9 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.10 Standard Industrial/Multitenant Lease-Gross dated June 20,
1997 by and between the Registrant and 501 Folsom Street
Building. (Incorporated by reference to Exhibit 10.10 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.11 Letter Agreement dated October 1, 1998 by and between the
Registrant and Douglas Hickey. (Incorporated by reference to
Exhibit 10.11 to the Registrant's Registration Statement on
Form S-1 (File No. 333-71499))
10.12 Promissory Note and Security Agreement dated November 2,
1998 by and between the Registrant and Douglas Hickey.
(Incorporated by reference to Exhibit 10.12 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.13 Warrant Agreement dated April 28, 1998 by and between the
Registrant and Lighthouse Capital Partners II, L.P.
(Incorporated by reference to Exhibit 10.13 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.14 Warrant Agreement dated May 1, 1998 by and between the
Registrant and Comdisco, Inc. (Incorporated by reference to
Exhibit 10.14 to the Registrant's Registration Statement on
Form S-1 (File No. 333-71499))
10.15 Master Services Agreement dated December 10, 1998 by and
between the Registrant and US West Communications Services,
Inc. (Incorporated by reference to Exhibit 10.15 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.16 Email Services Agreement dated May 27, 1998 by and between
the Registrant and Network Solutions, Inc. (Incorporated by
reference to Exhibit 10.16 to the Registrant's Registration
Statement on Form S-1 (File No. 333-71499))
</TABLE>
<PAGE> 43

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.17 Email Services Agreement dated July 6, 1998 by and between
the Registrant and Starmedia Network, Inc. (Incorporated by
reference to Exhibit 10.17 to the Registrant's Registration
Statement on Form S-1 (File No. 333-71499))
10.18 Amendment to email Services Agreement September 30, 1998 by
and between the Registrant and E*TRADE Group, Inc.
(Incorporated by reference to Exhibit 10.18 to the
Registration Statement on Form S-1 (File No. 333-71499))
10.19 Email Services Agreement dated September 14, 1998 by and
between the Registrant and Sprint Communications Company
L.P. (Incorporated by reference to Exhibit 10.19 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.20 Email Services Agreement dated March 19, 1998 by and between
the Registrant and NTX, Inc. dba TABNet, Inc. (Incorporated
by reference to Exhibit 10.20 to the Registrant's
Registration Statement on Form S-1 (File No. 333-71499))
10.21 QuickStart Loan and Security Agreement dated May 12, 1998 by
and between the Registrant and Silicon Valley Bank.
(Incorporated by reference to Exhibit 10.21 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.22 Email Services Agreement dated January 29, 1999 by and
between the Registrant and ICQ, Inc. (Incorporated by
reference to Exhibit 10.22 to the Registrant's Registration
Statement on Form S-1 (File No. 333-71499))
10.23 Sublease dated February 8, 1999 by and between Times Direct
Marketing, Inc. and the Registrant (Incorporated by
reference to Exhibit 10.23 to the Registrant's Registration
Statement on Form S-1 (File No. 333-71499))
10.24 Promissory Note and Security Agreement dated January 26,
1999 by and between the Registrant and Bill Rinehart.
(Incorporated by reference to Exhibit 10.24 to the
Registrant's Registration Statement on Form S-1 (File No.
333-71499))
10.25 Office lease dated December 1999 by and between Ecker-Folsom
Properties, LLC and the Registrant (Incorporated by
reference to Exhibit 10.25 to the Registrant's Annual Report
on Form 10-K (File No. 000-25331))
10.26 Office lease dated December 1999 by and between
Ecker-FolsomProperties, LLC and the Registrant (Incorporated
by reference to Exhibit 10.26 to the Registrant's Annual
Report on Form 10-K (File No. 000-25331))
21.1 List of Subsidiaries (Incorporated by reference to Exhibit
21.1 to the Registrant's Annual Report on Form 10-K (File
No. 000-25331))
23.1 Consent of Independent Accountants.
23.2 Consent of Counsel (included in Exhibit 5.1).
24.1 Power of Attorney (included on page II-4).
</TABLE>

<PAGE> 1
EXHIBIT 5.1

May 5, 2000

Critical Path, Inc.
320 First Street
San Francisco, California 94105

Re: Registration Statement on Form S-3

Ladies and Gentlemen:

We have examined the Registration Statement on Form S-3 (the "Registration
Statement") to be filed by you with the Securities and Exchange Commission on or
about the date hereof in connection with the registration for resale under the
Securities Act of 1933, as amended, of up to 2,717,044 previously issued and
outstanding shares of your Common Stock (the "Shares"). As your legal counsel,
we have also reviewed the proceedings taken by you in connection with the
issuance of the Shares.

It is our opinion that the Shares are validly issued, fully-paid and
non-assessable.

We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including the Prospectus constituting a part thereof,
and any amendments thereto.

Very truly yours,

/s/ WILSON SONSINI GOODRICH & ROSATI
Professional Corporation

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated March 17, 2000 relating to the
consolidated financial statements of Critical Path, Inc., which appears in
Critical Path, Inc.'s Annual Report on Form 10-K/A for the year ended December
31, 1999. We also consent to the references to us under the heading "Experts" in
such Registration Statement.

/s/ PRICEWATERHOUSECOOPERS LLP

San Francisco, California
May 3, 2000