
<PAGE>
 
                                                                   EXHIBIT 10.12

                                PROMISSORY NOTE



$1,065,638.94                                          San Francisco, California
                                                    Dated as of November 6, 1998


     FOR VALUE RECEIVED, the undersigned, Douglas Hickey, promises to pay to the
order of Critical Path, Inc., a California corporation (the "Company"), the
principal sum of one million sixty-five thousand six hundred thirty-eight
dollars and ninety-four cents ($1,065,638.94), with interest from the date
hereof on the unpaid principal at the rate of Four and 51/100 percent (4.51%)
per annum (the applicable federal rate), compounded annually.  The entire unpaid
balance of principal and interest shall be payable on the earlier of (i) five
(5) years from the date hereof or (ii) ninety (90) days following termination of
the undersigned's service to the Company for any reason.

     If payment is not made when due, and if action is instituted on this note,
the undersigned agrees to pay the Company reasonable attorneys' fees and costs
of suit, as fixed by court.

     The undersigned shall have the right to prepay all or any part of the
unpaid principal amount of this note, without premium, at any time prior to the
maturity hereof on ten (10) days' prior written notice.

     This note is a full-recourse note originally secured by a pledge of Common
Stock of the Company pursuant to a Security Agreement of even date herewith,
which is on file with the Secretary of the Company.

     This note shall be governed by and construed in accordance with the laws of
the State of California.

     IN WITNESS WHEREOF, the undersigned has signed, dated and delivered this
note as of the date and year first above written.



                                             /s/ Douglas Hickey
                                             -----------------------------------
                                             Douglas Hickey  
<PAGE>
 
                              SECURITY AGREEMENT


     THIS SECURITY AGREEMENT, entered into as of November 6, 1998, between
                                                                            
CRITICAL PATH, INC., a California corporation (the "Company"), and DOUGLAS
-------------------                                                -------
HICKEY (the "Purchaser"),
------                   

                                W I T N E S S E T H:

     WHEREAS, the Purchaser has purchased from the Company 2,804,313 shares of
                                                           ---------          
the Company's Common Stock; and

     WHEREAS, the Company has loaned to the Purchaser the sum of $1,065,638.94
                                                                  ------------
which the Purchaser has used to pay the purchase price of the Common Stock; and

     WHEREAS, the Purchaser has executed and delivered to the Company a full-
recourse promissory note evidencing such loan (the "Note") and has agreed to
pledge all of the Common Stock to the Company as security for the payment of the
Note:

     NOW, THEREFORE, it is agreed as follows:

     1.  The Purchaser hereby delivers to the Company one or more certificates
representing the Common Stock, together with one Assignment Separate From
Certificate signed by the Purchaser.  The Purchaser hereby pledges and grants a
security interest in the Common Stock, including any shares into which the
Common Stock may be converted and all proceeds of the Common Stock, as security
for the timely payment of all of the Purchaser's obligations under the Note and
for the Purchaser's performance of all of its obligations under this Agreement.
In the event of a default in payment of the Note, the Purchaser hereby appoints
the Company as his true and lawful attorney to take such action as may be
necessary or appropriate to cause the Common Stock to be transferred into the
name of the Company or any assignee of the Company and to take any other action
on behalf of the Purchaser permitted hereunder or under applicable law.

     2.  The Company agrees to hold the Common Stock as security for the timely
payment of all of the Purchaser's obligations under the Note and for the
Purchaser's performance of all of its obligations under this Agreement, as
provided herein.  At no time shall the Company dispose of or encumber the Common
Stock, except as otherwise provided in this Agreement.

     3.  At all times while the Company is holding the Common Stock as security
under this Agreement, the Company shall:

         (a)  Collect any dividends that may be declared on the Common Stock
     and credit such dividends against any accrued interest or unpaid principal
     under the Note, as part payment;

         (b)  Collect and hold any shares that may be issued upon conversion of
     the Common Stock; and

                                      -1-
<PAGE>
 
         (c)  Collect and hold any other securities or other property that may
     be distributed with respect to the Common Stock.

Such shares and other securities or property shall be subject to the security
interest granted in Section 1 of this Agreement and shall be held by the Company
under this Agreement.

     4.  While the Company holds the Common Stock as security under this
Agreement, the Purchaser shall have the right to vote the Common Stock at all
meetings of the Company's shareholders; provided that the Purchaser is not in
default in the performance of any term of this Agreement or in any payment due
under the Note.  In the event of such a default, the Company shall have the
right to the extent permitted by law to vote and to give consents, ratifications
and waivers and take any other action with respect to the Common Stock with the
same force and effect as if the Company were the absolute and sole owner of the
Common Stock.

     5.  Upon payment in full of the outstanding principal balance of the Note
and all interest and other charges due under the Note, the Company shall release
from pledge and redeliver to the Purchaser the certificate(s) representing the
Common Stock and the Assignment Separate From Certificate forms.

     6.  In the event that the Purchaser fails to perform any term of this
Agreement or fails to make any payment when due under the Note, the Company
shall have all of the rights and remedies of a creditor and secured party at law
and in equity, including (without limitation) the rights and remedies provided
under the California Uniform Commercial Code.  Without limiting the foregoing,
the Company may, after giving ten (10) days' prior written notice to the
Purchaser by certified mail at his residence or business address, sell any or
all of the Common Stock in such manner and for such price as the Company may
determine, including (without limitation) through a public or private sale or at
any broker's board or on any securities exchange, for cash, upon credit or for
future delivery.  The Company is authorized at any such sale, if it deems it
advisable to do so, to restrict the prospective bidders or purchasers of any of
the Common Stock to persons who will represent and agree that they are
purchasing for their own account for investment, and not with a view to the
distribution or sale of any of the Common Stock, to restrict the prospective
bidders or purchasers and the use any purchaser may make of the Common Stock and
impose any other restriction or condition that the Company deems necessary or
advisable under the federal and state securities laws.  Upon any such sale the
Company shall have the right to deliver, assign and transfer to the purchaser
thereof the Common Stock so sold.  Each purchaser at any such sale shall hold
the Common Stock so sold absolute, free from any claim or right of any kind.  In
case of any sale of any or all of the Common Stock on credit or for future
delivery, the Common Stock so sold may be retained by the Company until the
selling price is paid by the purchaser thereof, but the Company shall not incur
any liability in case of the failure of such purchaser to take up and pay for
the Common Stock so sold and, in case of any such failure, such Common Stock may
again be sold under the terms of this section.  The Purchaser hereby agrees that
any disposition of any or all of the Common Stock by way of a private placement
or other method which in the opinion of the Company is required or advisable
under Federal and state securities laws is commercially reasonable.  At any
public sale, the Company may (if it is the highest bidder) purchase all or any
part of the Common Stock at such 

                                      -2-
<PAGE>
 
price as the Company deems proper. Out of the proceeds of any sale, the Company
may retain an amount sufficient to pay all amounts then due under the Note,
together with the expenses of the sale and reasonable attorneys' fees. The
Company shall pay the balance of such proceeds, if any, to the Purchaser. The
Purchaser shall be liable for any deficiency that remains after the Company has
exercised its rights under this Agreement.

     7.  This Agreement shall be governed by and construed in accordance with
the laws of the State of California.  This Agreement shall inure to the benefit
of, and be binding upon, the Company and its successors and assigns and be
binding upon the purchaser and the Purchaser's legal representative, heirs,
legatees, distributees, assigns and transferees by operation of law.  This
Agreement contains the entire security agreement between the Company and the
Purchaser.  The Purchaser will execute any additional agreements, assignments or
documents or take any other actions reasonably required by the Company to
preserve and perfect the security interest in the Common Stock granted to the
Company herein and otherwise to effectuate this Agreement.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by its duly authorized officer, and the Purchaser has personally
executed this Agreement.

                             CRITICAL PATH, INC.



                             By  /s/ David Hayden
                                -----------------------------------------
                             Title Chairman
                                   --------------------------------------


                             /s/ Douglas Hickey
                             --------------------------------------------
                             Douglas Hickey

                                      -3-
<PAGE>
 
                     ASSIGNMENT SEPARATE FROM CERTIFICATE

     FOR VALUE RECEIVED and pursuant to that certain ____________ Agreement
dated as of __________, 199_, the undersigned hereby sells, assigns and
transfers unto ______________________________ (__________) shares of the Common
Stock of Critical Path, Inc., a California corporation, standing in the
undersigned's name on the books of said corporation represented by certificate
No. _________ herewith, and does hereby irrevocably constitute and appoint
____________________ attorney-in-fact to transfer the said stock on the books of
the said corporation with full power of substitution in the premises.

     Dated:  __________, 19__.


                                              /s/ Douglas Hickey 
                                              ----------------------------
                                              Signature


                        Spousal Consent (if applicable)
                        -------------------------------

     ________________ (Purchaser's spouse) indicates by the execution of this
Assignment his or her consent to be bound by the terms herein as to his or her
interests, whether as community property or otherwise, if any, in the Shares.


                                                  __________________________ 
                                                  Signature
