
<PAGE>
 
                                                                   EXHIBIT 10.19

--------------------------------------------------------------------------------
Sprint and Critical Path                                      August 21, 1998
General Business Terms for Proposed Referral Agreement for e-mail hosting.

For discussion only-This document is in draft form and does not represent a
commitment by either party to the contents or terms outlined herein.  All terms
and conditions set forth in this document are subject to change and until such
time the parties have reached a final and executed agreement, neither party
shall have any obligations to the other party.
--------------------------------------------------------------------------------
                               CRITICAL PATH INC.
                               ------------------

                           E-MAIL SERVICES AGREEMENT
                           -------------------------
                                        
     THIS E-MAIL SERVICES AGREEMENT ("Agreement") is entered into as of the
14th day of September, 1998 ("Effective Date"), by and between Critical Path
Inc. whose address is 320 First Street, San Francisco, CA 94105 (hereinafter
referred to as "Company"), and Sprint Communications Company L.P., a Delaware
Limited Partnership ("Sprint") whose address is 2330 Shawnee Mission Parkway,
Westwood, Kansas 66205.  The term of this Agreement shall consist of a Referral
Period and a Resale Period (with each term as defined below).  Section 1 of this
Agreement shall apply only to the Referral Period.  Sections 2 and 3 and all of
the Exhibits shall apply only to the Resale Period.  All remaining provisions of
this Agreement shall apply to both periods.

1.  Provision of Services During Referral Period.
    --------------------------------------------

    1.1. Referral Period.  Sprint may within its sole discretion, refer 
         ---------------
         authorized Sprint Customers ("Referred Customers") to Company as a
         source for e-mail hosting services from the Effective Date of this
         Agreement until Sprint and Company implement the transition of their
         relationship to a resale arrangement ("Referral Period") set forth in
         Section 2. During the Referral Period, Company will negotiate the
         pricing and all other details related to e-mail hosting and related
         services ("Referral Services") directly with the Referred Customers.
         The Referral Services to be provided to Referred Customers shall
         include e-mail hosting, server and network maintenance and second-level
         (telephone and web-basedl) support to Referred Customers during
         Company's then-current hours of support, set up and web-based e-mail
         client. The parties agree that additional Referral Services may be
         provided by Company to Referred Customers provided such services are
         not in conflict with this Agreement. Company will make reasonable
         efforts to refer its customers to Sprint for their data and voice
         communication needs. Company will provide Referral Services directly to
         Referred Customers and, during the Referral Period, Sprint will not be
         liable for any charges incurred for such services. Company will provide
         invoicing of Referred Customers on Sprint approved co-branded forms if
         Sprint requests such an option. Sprint will incur the expense of
         providing such co-branded forms to Company for use in billing Referred
         Customers. Nothing in this Agreement requires Sprint to refer any
         Customers to Company during the Referral Period.

    1.2. Compensation: Each month during the Referral Period, Company 
         shall pay Sprint a one-time Referral fee of [**] Live Mailbox (as
         defined below): (i) which has been Live for at least three (3) months,
         and (ii) for which no Referral fee has yet been paid by Company to
         Sprint. As used in this paragraph, "Live Mailbox" means each mailbox
         (or group of mailboxes) made available for use by the Referred Customer
         during the Referral Period. Such amounts shall be payable by Company to
         Sprint within thirty (30) days of the last day of the month during the
         Referral Period. 
 
                                 Confidential                       Page 1

[**]  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO CERTAIN
      INFORMATION CONTAINED IN THIS EXHIBIT. THROUGHOUT THIS EXHIBIT
      CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THE PUBLIC FILING AND HAVE
      BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>
 
         Sprint shall not pay financial compensation for Customers referred to
         Sprint by Company.

    1.3. Sprint Contact: During the Referral Period Company agrees to work in 
         good faith with those Customers who may be referred by Sprint pursuant
         to this Agreement. Company agrees during the term of this Agreement
         that it shall not propose Internet services (including but not limited
         to web hosting, Internet access, or other IP services) available from
         Sprint ("Internet Services") from companies other than Sprint when
         working with Referred Customers. In the event that this Agreement is
         terminated during the Referral Period, Company agrees that it shall not
         solicit Referred Customers for Internet Services business for a period
         of one year after termination.

    1.4. Customer Ownership:  Company understands that it is Sprint's 
         intention to transition all Referred Customers acquired during the
         Referral Period as described in Section 2 of this Agreement. Therefore,
         Company shall track and report monthly those Referred Customers
         contacted and activating Referral Services as a result of Sprint
         references. Company also agrees that any agreements that it enters into
         with Referred Customers will allow assignment to Sprint at the time
         that the parties transition to the Resale Period. Additionally, Company
         will acquire two (2) toll free numbers from Sprint at Company's expense
         for Referral Sales and Customer Service use during the Referral Period.

    1.5. Company Information: Company agrees that Sprint may make public to
         potential customers written information obtained from Company during
         the Request For Information ("RFI") process utilized by Sprint in
         setting up this program. Such information from the RFI responses may be
         made available by Sprint to potential customers to inform them of the
         capabilities of Company in connection with making referrals to Company
         under this Section 1 ("Permitted Use"). Before Sprint makes any such
         disclosure of Company information, Sprint shall submit to Company a
         complete copy of the information Sprint intends to use for the
         Permitted Use, and Company shall approve such information and may add
         to or redact portions as Company deems necessary to protect its
         confidential or proprietary information. Sprint agrees to use only the
         information approved by Company for the Permitted Use. Company may
         request from time to time a copy of such RFI information used by Sprint
         under this Section.

    1.6. Conflict of Interest: Company agrees to advise Sprint of any conflict
         of interest that may arise during the course of this Agreement. Sprint
         acknowledges and agrees that any e-mail hosting services agreement
         which does not include referral services by Company that Company may
         enter into with another telecommunications provider or other competitor
         of Sprint shall not be deemed a conflict of interest under this
         Section.

2.  Provision of Services During Resale Period.
    ------------------------------------------ 

    2.1. Services to be Provided During Resale Period.  Within 30 days of 
         --------------------------------------------       
         Sprint's notice of intent to transition from referral relationship set
         forth in Section 1 ("Transition Notice"), Company shall provide, and
         Sprint hereby accepts, e-mail outsourcing services described in Exhibit
         A ("Services") which Sprint may resell to authorized Sprint Customers
         ("Customer(s)"). Sprint hereby agrees that it will access, re-sell and
         make the Services available to Customers only pursuant to Exhibit B-
         Terms of Use attached to this Agreement, as may be modified by either
         party from time to time upon notice to the 

                                 Confidential                       Page 2
<PAGE>
 
         other party, or under similar terms and conditions as agreed to in
         advance by both parties. Sprint agrees to notify, and to obtain binding
         consent from, Customer(s) of the Terms of Use prior to such Customer(s)
         initial use of the Services. Company shall make all services available
         and ready for resale by Sprint within thirty (30) days of Sprint's
         Transition Notice, excluding billing system integration requirements
         set forth by Sprint.

    2.2. Set-Up Of Services For Customers Acquired During Resale Period.  Sprint
         --------------------------------------------------------------         
         shall provide to Company Customer(s) information and materials, such as
         the domain name, e-mail addresses and passwords, ("Customer
         Information") necessary for Company to transition Customer(s) current 
         e-mail system to Company's e-mail messaging system through which 
         Company provides the Services ("Company System"). Upon receipt of
         Customer Information, Company shall perform the set-up and other
         initial services before such Customer(s) will have access to the
         Company System. The parties agree to work together to achieve a
         transition to the Company System, including branding the Web Mail Page
         as provided in Exhibit A, so that to the Customer(s) it is not apparent
         that the Services are being outsourced by Sprint to Company.

    2.3. Transition of Referred Customers.   Company shall also transition all
         --------------------------------                                     
         Referred Customers acquired during the term of the Referral Period to
         Sprint under the terms and conditions of this Agreement within thirty
         (30) days of Sprint's written request for transition of Referred
         Customers. Company agrees to take all reasonable steps to accomplish
         said transition of Referred Customers to Sprint, including assigning to
         Sprint any agreements for Services that Company has entered into with
         Referred Customers.

    2.4. Privacy.  Company has a corporate policy to respect the privacy of
         -------                                                           
         Customer(s) and their e-mail messages that are transmitted through the
         Company System or by means of the Services. Company will only access
         and disclose information as necessary to comply with applicable laws
         and government orders or requests, to provide the Services, to operate
         or maintain its systems or to protect itself or its clients. Company
         will maintain and adhere to industry accepted practices with respect to
         processes and procedures for maintaining the privacy of all Customer
         Information and e-mail provided to Company through the Services or
         otherwise under this Agreement and for compliance with all applicable
         privacy protection laws.

    2.5. Compliance with Laws. Each party agrees to comply with all applicable
         -------------------- 
         laws, rules and regulations, including any Internet regulations or
         policies, privacy laws and applicable export laws, in its performance
         under this Agreement.

    2.6. Suspension or Termination.  If Company becomes aware of or suspects any
         -------------------------                                              
         violation of Exhibit C-Terms of Use by Sprint or any Customer, Company
         first shall attempt to notify Sprint and provide reasonable detail of
         such violation. The parties shall use best efforts to promptly resolve
         the matter. However, Company reserves the right to immediately suspend
         the provision of Services to Sprint or to such Customer as reasonably
         necessary to protect Company's interests.

    2.7. Modification of Services.  Company reserves the right to modify its 
         ------------------------  
         network connectivity or peering arrangements to the Internet
         ("Connectivity") or modify or discontinue certain features or
         functionality of the Company System from time to time. However, if
         Company intends to modify the Company System in any way that, in
         Company's

                                 Confidential                       Page 3
<PAGE>
 
         opinion, would significantly affect Customers' use of or ability to use
         the Services, then Company shall provide reasonable prior notice to
         Sprint of any such modification, no less than sixty (60) days prior to
         such modifications. If Company intends to modify the Connectivity of
         the Company System to the Internet for any reason, then Company shall
         provide prior notice to Sprint no less than thirty (30) days prior to
         such modification.

    2.8. Advertisements and Commercial Use.  Sprint and Company may solicit 
         --------------------------------- 
         third parties for advertisements; however, Sprint shall maintain sole
         discretion over third party advertisements to be included for display
         on Sprint's "Web Mail Page" to Customer(s). Customer(s) shall have the
         option to receive ads or not. Customer(s) shall have the option to
         solicit and sell ad space for display to their user base only pursuant
         to the terms and conditions of Exhibit A, Section E.1.c. All parties
         shall share in the Advertising Revenue resulting therefrom as provided
         in Exhibit A. Each party shall be solely responsible for all
         obligations, liabilities and duties under any and all agreements with
         third parties with regard to such advertisements, unless otherwise
         expressly agreed in writing by the other party. Sprint agrees that it
         will resell the Services only bundled with other products and services
         and not as a stand-alone service or product offering. Sprint and
         Customer(s) agree that they will not make commercial use of, obtain
         advertising to be included on its Web Mail Page or otherwise generate
         income from, the Services or the Company System, other than as provided
         in Exhibit A or as permitted under the terms and conditions of this
         Agreement.

    2.9. Year 2000 Compliance.  Company warrants that Company's provision of
         ---------------------                                              
         Services to Sprint, and any related deliverables provided to Sprint
         under this Agreement, will not be adversely affected by the occurrence
         or use of dates before, on, or after January 1, 2000 A.D., including
         dates and leap years between the twentieth and twenty-first centuries
         ("Millennial Dates"). Any deliverables (including any software,
         hardware or firmware product(s) delivered by Company to Sprint) will
         without error or omission, create, receive, store, process and output
         (collectively, "Compute") information related to Millennial Dates. This
         warranty includes, without limitation, that the deliverables will
         accurately, and without performance degradation, Compute Millennial
         Dates, date-dependent data, date-related interfaces, or other date-
         related functions (including, without limitation, calculating,
         comparing, and sequencing such functions). At Sprint's request, Company
         will provide written evidence sufficient to demonstrate adequate
         testing and conversion of the deliverable to meet the foregoing
         requirements.

3.  Pricing and Payment During the Resale Period.
    -------------------------------------------- 

    3.1.  Pricing and Payment.  Exhibit A specifies Company's charges for the
          -------------------                                                
         Services to Sprint and other payment provisions. Sprint and/or
         Customer(s) shall be responsible for payment of any and all taxes
         (excluding taxes based on Company's net income) based upon the use or
         resale of the Services under this Agreement, to the appropriate taxing
         authority or jurisdiction.

    3.2  Current Prices. Subject to Section 3.2.1, Exhibit A sets forth 
         --------------
         Company's current matrix of prices for the Services to be performed
         hereunder for the period commencing on the Effective Date and ending on
         the last day of the month containing the twelve month anniversary of
         the Effective Date ("Initial Pricing Period").

         3.1.1. Adjustments to Prices.

                                 Confidential                       Page 4
<PAGE>
 
         3.1.1.1. If Company and Sprint mutually agree that Company shall 
                  provide additional Services to Sprint or perform Services not
                  then covered by the price matrix, Company shall revise Exhibit
                  A accordingly, to add the applicable prices for such Services.

         3.1.1.2. In the event Sprint requests variations of any of the Services
                  provided by Company hereunder as set forth in Exhibit A and,
                  in Company's reasonable judgement such variation or variations
                  (either individually or in the aggregate) have a material
                  effect on the prices set forth in Exhibit A for the Services
                  to be performed, Company and Sprint shall agree to revise
                  Exhibit A to set forth prices for such Services which reflect
                  such variation(s).

         3.1.1.3. Subject to the provisions of Section 3.3, Company shall amend
                  Exhibit A to adjust the Service prices set forth thereon for
                  the twelve month period following the Initial Pricing Period
                  and for each twelve month period thereafter during the term of
                  this Agreement upon written notice to Sprint in each case not
                  less than ninety (90) days prior to commencement of such
                  twelve month period.

    3.2. Market Testing. Sprint shall be entitled to market test Company
         --------------                                                 
         prices for Services set forth in Exhibit A hereto on a quarterly basis
         during the term of this Agreement and, in addition, at any time that
         such prices are adjusted by Company in accordance with Section 3.2. The
         determination of Company price competitiveness is to be based upon the
         overall charges to Sprint by Company for Services being provided as
         described in Exhibit A. Such market testing is intended to confirm
         whether Company prices are competitive with the lowest end of the
         market consisting of quality, full turnkey E-mail Service providers
         with comparable volume, features, functionality and support. If prices
         are not competitive as reasonably shown by such market test and as
         agreed by Company, and Company has not remedied in thirty (30) days,
         Sprint may terminate this Agreement pursuant to Section 7.

    3.3. Reports and Audit. Each party shall submit with each of its payments
         -----------------
         to the other party a detailed report of the calculation of each such
         payment. Each party will retain records relevant to its calculations of
         the payments made to the other party during the term of this Agreement
         and for a two (2) year period thereafter. Each party shall have the
         right, at its expense, acting through a certified public accountant, to
         examine and audit such records at all reasonable times, on at least ten
         (10) days notice to the other party, but no more than once every six
         (6) months.

4.  Disclaimer of Warranties.
    ------------------------ 

    4.1. THE SERVICES ARE PROVIDED, AND THE COMPANY SYSTEM IS MADE AVAILABLE, BY
         COMPANY TO SPRINT AND CUSTOMERS "AS IS." COMPANY AND ITS SUPPLIERS MAKE
         NO WARRANTY OF ANY KIND, WHETHER EXPRESS OR IMPLIED, REGARDING THE
         SERVICES OR THE COMPANY SYSTEM AND SPECIFICALLY DISCLAIM THE WARRANTIES
         OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND AGAINST
         INFRINGEMENT, TO THE MAXIMUM EXTENT POSSIBLE BY LAW.

                                 Confidential                       Page 5
<PAGE>
 
    4.2. Other than the services, processes and procedures to be followed by 
         Company pursuant to EXHIBIT C - Service Level Agreement, Company and
         its suppliers make no warranties regarding the quality, reliability,
         timeliness or security of the Services or the Company System or that
         the Services or the Company System will be uninterrupted or error free.
         Company and its suppliers assume no responsibility or liability for the
         deletion or failure to store, or to store properly, e-mail messages.
         Sprint and Customers assume the entire risk in downloading or otherwise
         accessing any data, files or other materials obtained from third
         parties as part of the Services or by means of the Company System, even
         if Sprint or Customer has paid for virus protection services from
         Company. 

    4.3. Sprint shall be solely responsible for any warranties provided to 
         Customers with respect to the Services or the Company System.

5.  Limitation of Liability.
    ----------------------- 

    5.1. IN NO EVENT SHALL EITHER PARTY, OR ITS SUPPLIERS, BE LIABLE TO THE 
         OTHER PARTY FOR CONSEQUENTIAL, EXEMPLARY, INDIRECT, SPECIAL OR
         INCIDENTAL DAMAGES, INCLUDING, WITHOUT LIMITATION, LOST REVENUES OR
         PROFITS, EVEN IF THE PARTY OTHERWISE LIABLE HAS BEEN ADVISED OF THE
         POSSIBILITY OF SUCH DAMAGES.

    5.2. Company shall not be responsible for any delays, errors, failures to
         perform, interruptions or disruptions in the Services or the Company
         Systems caused by or resulting from any act, omission or condition
         beyond Company's reasonable control, whether or not foreseeable or
         identified, including without limitation acts of God, strikes,
         lockouts, riots, acts of war, governmental regulations, fire, power
         failure, earthquakes, severe weather, floods or other natural disease
         or Customer's or any Customer's third party's hardware, software or
         communications equipment or facilities.

    5.3. In the event of disruption of the Services or availability of the 
         Company System for a continuous period longer than twenty-four (24)
         hours, Sprint's sole remedy shall be refund of a pro rata portion of
         the price paid for the affected Services during such period of
         disruption. Company's entire liability, and Sprint's and Customer's
         entire and exclusive remedy, under this Agreement for any damages from
         any cause whatsoever, regardless of form or action, whether in
         contract, negligence or otherwise, shall in no event exceed an amount
         equal to the price paid for the Services out of which the claim arose.

6.  Confidential Information.  Each party agrees to keep confidential and to
    -------------------------                                               
    use only for purposes of performing under this Agreement, any proprietary or
    confidential information of the other party disclosed pursuant to this
    Agreement which is appropriately marked as confidential or which would
    reasonably be considered of a confidential nature, and, except as otherwise
    permitted by Section 9 of this Agreement, the terms of this Agreement and
    all negotiations relating thereto. The obligation of confidentiality shall
    not apply to information which is publicly available through authorized
    disclosure, is known by the receiving party at the time of disclosure as
    evidenced in writing, is rightfully obtained from a third party who has the
    right to disclose it, or which is required by law to be disclosed. Upon any
    termination of 

                                 Confidential                       Page 6
<PAGE>
 
    this Agreement, each party shall return to the other party all confidential
    information of the other party, and all copies thereof, in the possession,
    custody or control of the party.

7.  Indemnification.  Each party (the "Indemnitor") shall defend, indemnify, and
    ---------------                                                             
    hold the other party (the "Indemnitee") harmless from and against any
    claims, losses, actions, demands or damages, including reasonable attorney's
    fees, resulting from any act, omission, negligence, or performance under
    this Agreement by the Indemnitor, its Customers, agents or representatives.
    This indemnity shall not apply to the extent the portion of such claim,
    liability, loss, cost, damage or expense is the result of the negligence or
    willful misconduct of the Indemnitee, its clients, agents or
    representatives, or to the extent liability is disclaimed or limited by
    either party under this Agreement. The indemnity obligations set forth in
    this Section are contingent upon: (a) the Indemnitee giving prompt written
    notice to the Indemnitor of any such claim(s); (b) the Indemnitor having
    sole control of the defense or settlement of the claim; and (c) at the
    Indemnitor's request and expense, the Indemnitee cooperating in the
    investigation and defense of such claim(s).

8.  Term and Termination.
    -------------------- 

    8.1. Term.  This Agreement shall continue in effect from the Effective 
         ---- 
         Date for [**] period, and thereafter shall renew automatically
         for successive [**] year periods unless either party gives the other
         party at least sixty (60) days prior written notice of its intent not
         to renew the Agreement.

    8.2. Termination for Convenience.  Notwithstanding the foregoing, either 
         --------------------------- 
         party may terminate this Agreement at any time, without cause, upon one
         hundred-twenty (120) days prior written notice to the other party.

    8.3. Termination for Breach. Notwithstanding the foregoing, either party may
         ----------------------                                                 
         terminate this Agreement by giving to the other party written notice of
         such termination and an opportunity to cure within thirty (30) days
         after receipt of such notice, upon the occurrence of any of the
         following events: (i) the other party materially breaches or defaults
         in any of the material terms or conditions of this Agreement, (ii) the
         other party makes any assignment for the benefit of creditors, is
         insolvent or unable to pay its debts as they mature in the ordinary
         course of business, or (iii) any proceedings are instituted by or
         against the other party in bankruptcy or under any insolvency laws or
         for reorganization, receivership or dissolution.

    8.4. Effect of Termination.  Upon any termination of this Agreement, Company
         ---------------------                                                  
         shall immediately cease providing all Services, and Sprint and
         Customers shall no longer have access to the Company System. Except in
         the event of termination for Sprint's breach, Company shall work with
         Sprint in the migration of its e-mail system back to its setup in
         existence immediately before the Effective Date of this Agreement.
         Thereafter, Company shall delete all stored e-mail messages of Sprint
         and Customers on the Company System. Within sixty (60) days of any
         termination of this Agreement, each party shall pay to the other all
         unpaid fees accrued prior to termination.

                                 Confidential                       Page 7


[**]  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO CERTAIN
      INFORMATION CONTAINED IN THIS EXHIBIT. THROUGHOUT THIS EXHIBIT
      CONFIDENTIAL PORTIONS HAVE BEEN OMMITTED FROM THE PUBLIC FILING AND HAVE
      BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>
 
    8.5. Survival.  Sections 3.1, 3.4, 4, 5, 6, 7, 8.4, 8.5 and 10 and Exhibit
         -------- 
         A (as to amounts accrued but unpaid and paragraph B.4) shall survive
         any expiration or termination of this Agreement.

9.  Publicity and Demo Accounts.
    --------------------------- 

    9.1  Publicity.  During the term of this Agreement, upon prior written 
         --------- 
         consent of the other party, either party may promote its relationship
         in press releases, sales presentations, sales collateral, sales
         training and its web site. Neither party may without the other party's
         prior written consent issue any news releases, or any public
         announcement, denials or confirmations with respect to this Agreement
         or its subject matter.

    9.2  Demo Accounts.  During the term of this Agreement, Company shall
         -------------                                                   
         provide Sprint with access to a mutually-agreeable number of email
         accounts ("Demo Accounts"), at no additional charge, for use by Sprint
         in demonstrating the administrative and end user features of the
         Services to Sprint's sales personnel and to Customers and potential
         Customers. Such Demo Accounts shall be available at the domain
         "sprint.cp.net" and shall include the features and functionality of the
         Services as generally available and in beta testing (which may be
         subject to a beta testing or evaluation agreement) by Company.

10. Miscellaneous.
    ------------- 
  
    10.1 Entire Agreement.  This Agreement, together with all Exhibits and any
         ----------------
         Schedules accepted by Company, constitutes the entire agreement of the
         parties with respect to the subject matter of this Agreement. This
         Agreement supersedes any and all agreements, either oral or written,
         between the parties to this Agreement with respect to the subject of
         this Agreement. Except as otherwise expressly provided herein, this
         Agreement may be modified only by a writing signed by an authorized
         representative of each party.

    10.2 Notices.  Notices under this Agreement shall be in writing and shall be
         -------                                                                
         deemed given when delivered personally, or by e-mail (with confirmation
         of receipt) or conventional mail (registered or certified, postage
         prepaid with return receipt requested). Notices shall be addressed to
         the parties at the addresses appearing in the introductory paragraph of
         this Agreement, but each party may change the address by written notice
         in accordance with this paragraph.

    10.3 Assignment.  This Agreement shall be binding upon and inure to the 
         ----------
         benefit of the subsidiaries, affiliates, successors and permitted
         assigns of the parties to this Agreement. Neither party may transfer,
         sublicense or otherwise assign this Agreement or any of its rights or
         obligations hereunder without the other party's prior written consent,
         which consent will not be unreasonably withheld. Notwithstanding the
         foregoing, either party may assign this Agreement to (i) any entity in
         which the party has a greater than fifty-percent (50%) equity ownership
         interest or of which the party has voting control, or (ii) to person or
         entity that buys fifty percent (50%) or more of that party's stock or
         all or substantially all of that party's assets.

                                 Confidential                       Page 8
<PAGE>
 
    10.4 General Provisions. Nothing contained in this Agreement is intended or
         ------------------
         is to be construed to constitute Company and Sprint as partners or
         joint ventures or either party as an agent of the other. If any
         provision of this Agreement shall be declared invalid, illegal or
         unenforceable, such provision shall be reformed only to the extent
         necessary to effect the original intention of the parties, and all
         remaining provisions shall continue in full force and effect. No waiver
         of any rights hereunder shall be deemed to be a waiver of the same or
         other right on any other occasion. 

    10.5 Dispute Resolution. Any dispute, controversy or claim concerning or
         ------------------
         relating to this Agreement shall be resolved in the following manner:

         10.5.1  The parties agree to use all reasonable efforts to resolve the
                 dispute through direct discussions. To that end, either party
                 may give the other party written notice of any dispute not
                 resolved in the normal course of business. Upon such notice,
                 the parties shall attempt in good faith to resolve the dispute
                 promptly by negotiation between executives who have authority
                 to settle the controversy and who are at a higher level of
                 management than the persons with direct responsibility for
                 administration of this Agreement.
         10.5.2  If the parties are unable to resolve the dispute by such means
                 within thirty (30) days of the notice date, or such other time
                 period as mutually agreed, then either party may commence
                 arbitration pursuant to the Rules of Commercial Arbitration of
                 the American Arbitration Association ("AAA"), as modified or
                 supplemented under this Section 10.5. The arbitration shall be
                 governed by the United States Arbitration Act, 9 U.S.C. Sec. 1,
                 et. Seq., and judgment upon the award rendered by the
                 arbitrator(s) may be entered by any court with jurisdiction or
                 application may be made to such a court for judicial
                 recognition and acceptance of the award and any appropriate
                 order including enforcement. The arbitration proceedings will
                 be held in San Francisco, California, if initiated by Sprint,
                 or in Kansas City, Missouri, if initiated by Company, or at
                 such other location as the parties may agree.
         10.5.3  The arbitration proceedings contemplated by this Section shall
                 be as confidential and private as permitted by law. To that
                 end, the parties shall not disclose the existence, contents or
                 results of any proceedings conducted in accordance with this
                 Section, and materials submitted in connection with such
                 proceedings shall not be admissible in any other proceedings,
                 provided, however, that this confidentiality pro vision shall
                 not prevent a petition to vacate or enforce an arbitral award,
                 and shall not bar disclosures required by law. The parties
                 agree that any decision or award results from proceedings in
                 accordance with this Section shall have no preclusive effect in
                 any other matter involving third parties.
         10.5.4  Notwithstanding any of the foregoing, either party may request
                 injunctive and equitable relief either from the arbitrators or
                 from a court in order to protect the intellectual property
                 rights or trade secrets of the party, pending the resolution of
                 the dispute by arbitration as provided hereunder.

   10.1. Relationship of the Parties. This Agreement does not constitute or
         ---------------------------                                       
         create a joint venture, pooling arrangement, partnership, agency or
         formal business organization of any kind. The Parties shall be
         independent contractors for all purposes at all times and neither Party
         shall act as or hold itself out as agent for the other or create or
         attempt to create liabilities for the other Party.

IN WITNESS WHEREOF, the parties to this Agreement have executed and delivered
this Agreement as of the date first above written.

CRITICAL PATH INC.                   SPRINT COMMUNICATIONS COMPANY L.P.

                                 Confidential                       Page 9 
 
 
<PAGE>
 

By_______________________________    By_________________________________
 
Its_______________________________   Its________________________________

                                 Confidential                            Page 10

<PAGE>
 
                                 Confidential
 
                                   EXHIBIT A
                                   ---------
                     SERVICES, CHARGES AND PAYMENT SCHEDULE
                     --------------------------------------

This Services and Charges Schedule is attached to and made a part of the E-mail
Services Agreement between Sprint and Company (the "Agreement") and is subject
to the terms and conditions of the Agreement.  This Exhibit A shall apply to
Services provided to Sprint during the Resale Period.

A.   Services Charges - Sprint agrees to pay Company the following amounts for
     the following Services during the Initial Pricing Period :

     1)   POP3 e-mail hosting:  Sprint will pay to Company a basic monthly POP 
          -------------------
          email hosting fee per active mailbox - in accordance with the
          following tiered volume schedule:

          [**]                            [**]/mailbox/month
                    1,001 -  20,000       [**]/mailbox/month
                   20,001 -  75,000       [**]/mailbox/month
                   75,001 - 150,000       [**]/mailbox/month
                  150,001 +               [**]mailbox/month

          [**]                               

                TOTAL INVOICE = [**] 

     Each POP3 mailbox includes the following features:
             .   Automated account administration via an Account Provisioning
                 Protocol(APP), and a secure (SSL-based) Web interface for easy,
                 instant individual account provisioning
             .   Company's state-of-the-art, Web-based email interface, branded
                 to match Sprint's and/or Customer(s) look and feel
             .   [**] MB of disk space
             .   Multiple domain hosting
             .   Segmentable, LDAP accessible directory services (to be 
                 available October 1, 1998)
             .   Domain administrator ability to send email to all users at a 
                 domain
             .   Search-the-Web capability
             .   Live, 24 x 7 Tier 2 support, and the assignment of a Company 
                 relationship manager to oversee Sprint's ongoing support needs
             .   A team of software developers dedicated to the continuing 
                 enhancement of email performance and functionality
             .   Seamless and ongoing introduction of new features, with 
                 minimal need for existing users or administrators to upgrade
                 software or equipment
             .   Additional features in advance of or simultaneous with 
                 general availability from Company
             .   Send and receive attachments up to 4 MB
             .   Spam blocking

     Company's Web-based email Interface includes all POP3 features plus the
     following features:

                                 Confidential                       Page 11

[**] CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO CERTAIN
     INFORMATION CONTAINED IN THIS EXHIBIT. THROUGHOUT THIS EXHIBIT CONFIDENTIAL
     PORTIONS HAVE BEEN OMITTED FROM THE PUBLIC FILING AND HAVE BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>
 
             .   Company's customizable Web Mail interface offers Sprint and 
                 Customer(s) the opportunity to share in advertising revenue, as
                 well as a chance to extend Sprint's brand.
             .   Send, receive, forward, and reply to email messages
             .   Create and manage folders and filters
             .   Customize preferences (signatures, return address, expandable 
                 email window, etc.)
             .   Change passwords
             .   Set up auto-forwarding and auto-response
             .   Use spell-check (general availability planned for 10/15/98) 
                 and create an address book 
             .   Send and receive HTML formatted messages
             .   Additional features in advance of or simultaneous with 
                 general availability from Company

     2)   Premium features: Sprint agrees to pay Company the following amounts
          ----------------                                                    
          for the following premium features: [TO BE REVISED]
<TABLE>
<S>                                                            <C> 
     Virus Protection                                          $TBD / Month / Mailbox
-----------------------------------------------------------------------------------------------------
     Certified mail                                            TBD
-----------------------------------------------------------------------------------------------------
     Return Receipt Delivery                                   TBD
-----------------------------------------------------------------------------------------------------
     Archiving (storage > 5 MB)                                [**] / 5 extra MBs / Month / Mailbox
-----------------------------------------------------------------------------------------------------
     IMAP                                                      [**]
-----------------------------------------------------------------------------------------------------
     Permanent Archiving                                       [**]
-----------------------------------------------------------------------------------------------------
     Mailing List Management                                   [**]
-----------------------------------------------------------------------------------------------------
     Groupware: calendaring, electronic forms                  [**]
-----------------------------------------------------------------------------------------------------
     Unified Messaging                                         [**]
-----------------------------------------------------------------------------------------------------
</TABLE>

       Company will attempt to provide reasonable advance notice to Sprint of
       additional premium features and their expected availability.  Charges to
       Sprint for listed features not yet available and any additional features
       not listed that become available will be negotiated in good faith by both
       parties in advance of general availability if Sprint notifies Company
       that it wishes to order such features.

   2)  IMAP:  [**]

   3)  Billing Cycle: The billing cycle for computing all billable items of all
       --------------                                                          
       Company services shall, for the purposes of this Agreement, be for the
       period commencing on the first day of each month and ending on the last
       day of each month. As used in this Exhibit, "Live Mailboxes" means
       mailboxes (or group(s) of mailboxes) that have been tested, accepted and
       signed off by the Sprint Customer and available for use by such Customer
       under this Agreement. During the Resale Period, only Live Mailboxes that
       have been Live for at least five (5) calendar days of the first month in
       which such Mailboxes became Live shall be billable. Live Mailboxes will
       not include any mailboxes of Referred Customers that are transitioned
       during the Resale Period.

B.     Branding of Web Mail Page

            1.  Fees - Sprint will pay to Company a one-time fee of [**] for 
                ----
                branding Sprint's Web Mail Page. In addition, if Company
                performs branding of any Customer's Web Mail Page, Sprint will
                pay to Company a one-time fee of [**] for Company's branding of
                each such Web Mail Page to Customer's 

                                 Confidential                       Page 12

[**] CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO CERTAIN
     INFORMATION CONTAINED IN THIS EXHIBIT. THROUGHOUT THIS EXHIBIT CONFIDENTIAL
     PORTIONS HAVE BEEN OMITTED FROM THE PUBLIC FILING AND HAVE BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


<PAGE>
 
                specifications. Any additional services or any customization
                above and beyond the basic branding and development of the Web
                Mail Page, automatic sign-up page, and signatures will be billed
                at $75 per hour, with a minimum of one hour per request.

            2.  Provision, Development and Approval - Sprint shall provide 
                -----------------------------------
                Company with all text and images ("Branding Materials")
                necessary for Company to brand Sprint's or Customer's Web Mail
                Page. Sprint will ensure that Sprint and Customer(s) have full
                power and authority to provide to Company, and to authorize
                Company's use of, the Branding Materials provided by Sprint for
                branding the Web Mail Page, and Sprint agrees to defend and
                indemnify Company with respect to any claims arising from
                Company's use of such Branding Materials. Company shall develop
                the branded Web Mail Page using such Branding Materials and
                shall provide, or otherwise make available to Sprint and
                Customer, such developed Web Mail Page for review and approval,
                which approval shall not be unreasonably withheld, delayed or
                conditioned. Customer(s) approval shall be deemed given if
                Sprint does not provide to Company notice of its rejection of
                the branded Web Mail Page within seventy-two (72) hours of
                Company's provision of it.

            3.  Modifications - Once approved, Company shall only be obligated 
                -------------
                to make one change to the look and feel of the branded Web Mail
                Page and the automatic sign-up page at no additional charge. Any
                further requested changes will be chargeable at the rate of $50
                per hour with a minimum of one hour per request.

            4.  Proprietary Rights - Sprint hereby grants, and Sprint will 
                ------------------
                ensure Customer(s) grants, to Company a non-exclusive,
                nontransferable, worldwide, royalty-free, irrevocable (during
                the term of the Agreement) license to reproduce, display,
                perform, modify, prepare derivative works of and otherwise use
                the Branding Materials for the purpose of branding Sprint's or
                Customer's Web Mail Page and making such Web Mail Page available
                through the Company Services to Customer(s) and Sprint.
                Customer(s) shall retain all other proprietary right it may have
                in and to the Branding Materials. Company shall retain all
                proprietary rights in and to the Company Services (not including
                the Branding Materials as incorporated into Customer(s) Web Mail
                Page) and all development tools, routines, subroutines,
                applications, software and other materials (not including the
                Branding Materials) that Company may use in connection with
                branding the Web Mail Page.

C.     Support -Company shall provide 2nd tier telephone support to Sprint
       twenty-four (24) hours a day, seven (7) days a week. Company shall use
       reasonable efforts to respond to such requests for support. Sprint shall
       be responsible for first-level telephone support to Customers and for all
       other support not otherwise specified herein to Customers.

D.     Payment by Sprint to Company - All fees for Company Services shall be
       applicable for any month, or portion thereof as defined in Section A of
       this Exhibit, in which such Services are rendered. All fees are payable
       by Sprint within thirty (30) days of the end of each month in accordance
       with this Schedule and the Agreement. In addition, if during the previous
       month, Company performed any work on the branding of the Web Mail Page as
       provided herein, Sprint shall include the applicable fees for such work
       in the next month's payment. Payments postmarked after the due date shall
       be subject to a late fee of one and one-half percent (1.5%) per month,
       or, if less, the maximum amount allowed by applicable law.

                                 Confidential                       Page 13
<PAGE>
 
            1.  Invoicing - Invoices shall be prepared in one (1) original and 
                ---------    
                two (2) copies submitted in accordance with the following
                instruction and shall reference Contract No. __________________
                and Cost Center __________________.

                        Original Invoice:  Sprint
                        Accounts Payable - MOKCMD0401
                        Post OffIce Box 5409
                        Kansas City, Missouri 64131-5409
 
                        One Copy:  Sprint
                        Mark Dalton - MOKCMY0405
                        Partner Management
                        8330 Ward Parkway
                        Kansas City, Missouri 64105

                        One Copy:  Sprint
                        Tad Jones - MOKCMY0405
                        Product Manager
                        8330 Ward Parkway
                        Kansas City, Missouri 64105

E.     Advertising Revenues

            1.  Sharing of Advertising Revenues - Sprint has the option of 
                -------------------------------
                soliciting third parties for advertising on the Web Mail Page.
                If Sprint chooses this option, the parties shall share in the
                Advertising Revenues as follows :

                a)  If Sprint obtains the advertising:
                        [**] Sprint
                        [**] Company

                b)  If Company obtains the advertising and its use is approved
                    by Sprint:
                        [**] Company
                        [**] Sprint

                c)  If either party obtains the advertising through a third
                    party, the parties will share [**] of the net advertising
                    revenue.

            2.  Payment - Sprint shall pay to Company its share of Advertising 
                -------
                Revenues received by Sprint during the preceding month within
                ninety (90) days of the end of each month. Company shall pay
                Sprint its share of Advertising Revenues received by Company
                during the preceding month within ninety (90) days after the end
                of each month during the term of this Agreement. If, in prior
                remittances, the paying party included revenues in the
                calculation of Advertising Revenues, as to which during the
                preceding month the party granted credits or refunds, then the
                party may reduce the Advertising Revenues paid to the other
                party by the amount of any such credits or refunds.

            3.  Definitions - As used in this Exhibits A and B, if either party 
                -----------         
                obtains Advertising Revenue through a third party, "Advertising
                Revenues" shall mean the revenue received from third party
                ("Advertisers") by either party 

                                 Confidential                       Page 14

[**] CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO CERTAIN
     INFORMATION CONTAINED IN THIS EXHIBIT. THROUGHOUT THIS EXHIBIT CONFIDENTIAL
     PORTIONS HAVE BEEN OMITTED FROM THE PUBLIC FILING AND HAVE BEEN FILED
     SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>
 
 
                from advertisements included on the Web Mail Page, less any
                commissions, credits, or refunds paid to Advertisers with
                respect to such revenues.

F.     Storage Capacity - Each basic mailbox provided hereunder shall have a
       maximum storage capacity of [**] MBytes. Sprint may purchase from Company
       additional storage space for resale at then-current fees as defined in
       this Exhibit. Company shall notify Customer(s) and Sprint that
       Customer(s) mailbox is approaching or exceeds the maximum limit.
       Thereafter, if such Customer exceeds the maximum storage capacity for
       more than thirty (30) days beyond date of notification, Company may
       delete e-mail messages from the affected mailboxes, at Company's
       discretion.

                                 Confidential                       Page 15

[**]   CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO CERTAIN
       INFORMATION CONTAINED IN THIS EXHIBIT. THROUGHOUT THIS EXHIBIT
       CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THE PUBLIC FILING AND HAVE
       BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
<PAGE>
 
                                   EXHIBIT B
                                   ---------
                                  TERMS OF USE
                                  ------------

Sprint's e-mail service ("Sprint Service") is provided to registered users
(each, a "User") under these Terms of Use. BY COMPLETING THE REGISTRATION
PROCESS, YOU ARE INDICATING YOUR AGREEMENT TO BE BOUND BY THESE TERMS OF USE.

Sprint's Acceptable Conduct Policy for Sprint INTERNET Products and Services

Sprint's Acceptable Conduct Policy (the "Policy") for Sprint IP Products and
Services is designed to help protect Sprint, Sprint's customers and the Internet
community in general from irresponsible or, in some cases, illegal activities.


Sprint IP customers shall not, nor shall they permit or assist others to abuse
or fraudulently use Sprint IP Products and Services, including but not limited
to the following:

1)  Sending unsolicited e-mail that causes complaints from the recipients of
    such unsolicited e-mail; or,
2)  Mailbombing (sending large quantities of unwanted or unsolicited e-mail to
    individual e-mail accounts); or,
3)  Sending advertising, chain letters, spam, junk mail or any other type of
    unsolicited e-mailing (whether commercial or informational) to persons or
    entities that have not agreed to be part of such mailings; or,
4)  Sending harassing, libelous, abusive, threatening, obscene or otherwise
    objectionable materials or materials which infringe or violate any third
    party's copyright, trademark, trade secret, privacy or other proprietary or
    property right, or that could constitute a criminal offense, give rise to
    civil liability or otherwise violate any applicable law or regulation; or,
5)  Sending viruses or other harmful, disruptive or destructive files; or,
6)  Unauthorized attempts by a user to gain access to any account or computer
    resource not belonging to that user (e.g., "spoofing"); or,
7)  Obtaining or attempting to obtain service by any means or device with intent
    to avoid payment; or,
8)  Unauthorized access, alteration, destruction, or any attempt thereof, of any
    information of any Sprint customers or end-users by any means or device; or,
9)  Knowingly engage in any activities that will cause a denial-of-service
    (e.g., synchronized number sequence attacks) to any Sprint customers or end-
    users; or,
10) Using Sprint's Products and Services to interfere with the use of the Sprint
    network by other customers or authorized users, or in violation of the law
    or in aid of any unlawful act.

It is Sprint's policy to respect the privacy of its Users.  Sprint does not, and
cannot, monitor, censor or edit the contents of User's e-mail messages. User
alone is responsible for the contents of User's messages, and the consequences
of any such messages.

User agrees that it will not use or attempt to use another person's or entity's
account, service or system without authorization from the owner, nor will User
interfere with the security of, or otherwise abuse, the Sprint Service, system
resources or accounts, or any network or another user's use or enjoyment of the
mail services.  User may not forge header or address information.  Sprint will
only access and disclose information as necessary to comply with applicable laws
and government orders or requests, to provide the services, to operate or
maintain its systems or to protect itself or its suppliers.  Sprint reserves the
right to terminate User's account if it becomes aware and determines, in
Sprint's sole discretion, that User is violating any of these Terms of Use.

                                 Confidential                       Page 16
<PAGE>
 
Each Sprint IP customer is responsible for the activities of its customer base
or end-users and, by accepting service from Sprint, is agreeing to ensure that
its customers abide by this Policy. Complaints about customers or end-users of a
Sprint IP customer will be forwarded to the Sprint IP customer's hostmaster for
action. If irresponsible or illegal activity continues, then the Sprint IP
customer's Products and Services may be subject to termination or other action
as Sprint deems appropriate without notice.

As stated in the terms and conditions for Sprint IP Products and Services,
Sprint has the right to terminate the account of an offending customer or take
other action as Sprint deems appropriate without notice (e.g., address
filtering).

Account and Password
  User is responsible for maintaining the confidentiality of its account number
  and password.  User shall be responsible for all uses of its account, whether
  or not authorized by User.  User agrees to immediately notify Sprint of any
  unauthorized use of its account.

Disclaimer of Warranties
  USER EXPRESSLY AGREES THAT USE OF THE SPRINT SERVICE IS AT USER'S SOLE RISK.
  THE SPRINT SERVICE IS PROVIDED ON AN "AS IS" AND "AS AVAILABLE" BASIS.

  SPRINT DISCLAIMS ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING
  WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
  PURPOSE OR NON-INFRINGEMENT.

  SPRINT DOES NOT MAKE ANY WARRANTY THAT THE SPRINT SERVICE WILL MEET USER'S
  REQUIREMENTS, OR THAT THE SPRINT SERVICE WILL BE UNINTERRUPTED, TIMELY,
  SECURE, OR ERROR FREE; NOR DOES SPRINT MAKE ANY WARRANTY AS TO THE RESULTS
  THAT MAY BE OBTAINED FROM THE USE OF THE SPRINT SERVICE OR AS TO THE ACCURACY
  OR RELIABILITY OF ANY INFORMATION OBTAINED THROUGH THE SPRINT SERVICE.

  USER UNDERSTANDS AND AGREES THAT ANY MATERIAL AND/OR DATA DOWNLOADED OR
  OTHERWISE OBTAINED THROUGH THE USE OF THE SPRINT SERVICE IS AT USER'S OWN
  DISCRETION AND RISK AND THAT USER WILL BE SOLELY RESPONSIBLE FOR ANY DAMAGE TO
  USER'S COMPUTER SYSTEM OR LOSS OF DATA THAT RESULTS FROM THE DOWNLOAD OF SUCH
  MATERIAL AND/OR DATA.

  SPRINT DOES NOT MAKE ANY WARRANTY REGARDING ANY GOODS OR SERVICES PURCHASED OR
  OBTAINED THROUGH THE SPRINT SERVICE OR ANY TRANSACTIONS ENTERED INTO BY USE OF
  OR THROUGH THE SPRINT SERVICE.

  NO ADVICE OR INFORMATION, WHETHER ORAL OR WRITTEN, OBTAINED BY USER FROM
  SPRINT OR THROUGH THE SPRINT SERVICE SHALL CREATE ANY WARRANTY NOT EXPRESSLY
  MADE HEREIN.

Limitation of Liability
  SPRINT AND ITS SUPPLIERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT,
  INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, RESULTING FROM THE USE OR THE
  INABILITY TO USE THE SPRINT SERVICE OR FOR THE COST OF PROCUREMENT OF
  SUBSTITUTE GOODS AND SERVICES OR RESULTING FROM ANY GOODS OR SERVICES
  PURCHASED OR OBTAINED OR MESSAGES RECEIVED OR TRANSACTIONS ENTERED INTO BY
  MEANS OF OR THROUGH THE SPRINT SERVICE OR RESULTING FROM UNAUTHORIZED ACCESS
  TO OR ALTERATION OF USER'S TRANSMISSIONS OR DATA, INCLUDING BUT NOT LIMITED
  TO, DAMAGES FOR LOSS OF PROFITS, USE, DATA OR OTHER INTANGIBLE, EVEN IF SPRINT
  OR ITS SUPPLIER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

                                 Confidential                       Page 17
<PAGE>
 
                                   
E-mail Message Storage
  Sprint does not assume any responsibility for the deletion or failure to store
  e-mail messages. If User exceeds the maximum permitted storage space, Sprint
  reserves the right to delete e-mail messages from the affected mailboxes, at
  its discretion.

Promotional Messages
  Sprint and/or third parties may, from time to time, send e-mail messages to
  User containing advertisements, promotions, etc. Sprint does not make any
  representation or warranty with respect to any such e-mail messages or any
  goods or services which may be obtained from such third parties, and User
  agrees that Sprint shall have no liability with respect thereto.

Indemnification
  User agrees to indemnify and hold Sprint, its suppliers and their respective
  affiliates, officers, directors, employees and agents, harmless from any
  claim, action or demand, including reasonable attorneys' fees, made by any
  third party due to, arising out of or related to User's use of the Sprint
  Service or the violation of these Terms of Use by User, including without
  limitation the infringement by User, or any other user of User's account, of
  any intellectual property or other right of any person or entity.

Applicable Law
  These Terms of Use shall be governed by and construed in accordance with the
  laws of the State of Kansas, without giving effect to its conflict of laws
  provisions.

Sprint reserves the right to modify these terms of use at any time.

                                 Confidential                       Page 18
<PAGE>
 
                                   EXHIBIT C
                                   ---------
                                        
                            SERVICE LEVEL AGREEMENT
                                        
     This Exhibit C Service Level Agreement is attached to and made a part of
the E-mail Services Agreement between Sprint and Company (the "Agreement") and
is subject to the terms and conditions of the Agreement.  This Exhibit C shall
apply to Services provided to Sprint during the Resale Period.

1.  Performance

    Definition:  As used in this Exhibit, "system outage" means any unplanned
    ----------                                                               
    interruption in the provision of Company Services during which Customers are
    unable to access or use the Company Services and which is caused by a
    problem in the Company System and confirmed by Company. "System outage" does
    not include any interruptions in the Company Services caused by act,
    omission or condition beyond Company's reasonable control, such as acts of
    nature or any third party.

    Processing E-mails:  Monthly average server response time of less than 5
    ------------------                                                      
    seconds for 90% of requests. Measurement does not include network
    transmission time or delays. This average does not include any period of
    unforeseen, unsolicited bulk email messages that degrade service.

    Availability: Company will make all commercially reasonable attempts to
    ------------                                                           
    maintain 99.5% availability of all system services (not including regular
    maintenance intervals) at the following performance levels:

        .   SMTP accepting connections within [**] seconds
        .   POP accepting connections within [**] seconds
        .   Web-based email available and online [**]
        .   Account Provisioning System (APS) available and online [**]

    Maintenance Intervals:  Current maintenance intervals are Monday mornings 
    ----------------------
    from 12:00 AM to 3:00 AM Pacific Standard Time. Company will notify Sprint a
    minimum of fourteen (14) days in advance of changing this maintenance
    interval.

    Procedures for System Outages:  In the event of a Customer-affecting 
    -----------------------------          
    scheduled outage (in which Customers will not be able to access and use the
    Company Services) is required, Company will send notification to Customers
    via e-mail no less than forty eight (48) hours in advance of the scheduled
    outage unless it is an emergency requiring immediate attention.

2.  Monitoring/Reporting

    Company shall include in all Customer records a Sprint Customer
    Identification code provided by Sprint.

    Company shall provide on a monthly basis customer reports sorted by Sprint
    Customer Identification code that includes the following information for
    each account:

        .   Number of mailboxes
        .   Number and type of premium services (as premium services are
            available)
        .   Number of messages sent/received per mailbox (Q1 '99)
        .   Number of Kbytes sent/received per mailbox (Q1 '99)
        .   Peak amount of storage used per mailbox (Q1 '99)
        .   Distribution of message sizes by Sprint Customer Identification (Q2
            '99)

                                 Confidential                       Page 19

[**]  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO CERTAIN
      INFORMATION CONTAINED IN THIS EXHIBIT. THROUGHOUT THIS EXHIBIT 
      CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THE PUBLIC FILING AND HAVE 
      BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


<PAGE>
 
    Company shall provide a monthly Stewardship report that will track the
    performance metrics stated in Section 1 of this Exhibit.

    Company shall provide Sprint with monthly reports which document all Company
    System outages or enhancements made during such month. Each report shall
    have capacity planning information outlined [above] and include, at a
    minimum, the following additional information:

    Utilization and Performance:
        .   Company System uptime
        .   Number of new Sprint mailboxes
        .   Number of deleted Sprint mailboxes
        .   Total number of Sprint mailboxes
        .   Mean storage used for mailboxes
        .   Number of Company System outages
        .   Company System total downtime and average daily and monthly
            downtimes

    Specific Outage Report:
        .   Time of outage
        .   Length of outage
        .   Affected areas
        .   Reason for outage
        .   Long term remedy
        .   Person notified

    Enhancement:
        .   Reason for change
        .   Areas affected

    This information will be emailed to Sprint by the third working day of the
    month following the reported month. Upon mutual agreement, the parties may
    add to or delete from this list of reports as appropriate.

3.  Escalation Procedures

Company shall notify Sprint or a Sprint designated agent in the event of a
system outage. Company will send an email notice whenever possible. In the event
that email is not working, or Company is otherwise unable to send an email
message, then Company will notify Sprint by telephone within 30 minutes of the
time that Company first learns of the outage.

        .   Sprint Notification:    Tad Jones
                                    PHONE:  816-854-2471
                                    FAX:  816-854-2623
                                    EMAIL:  tad.jones@mail.sprint.com

Status information, if known by Company, to include:
        .   reason for the outage; and
        .   estimated time for service restoration.

     If Customer experiences a system outage and has not been notified by
     Company, Sprint will contact the Technical Support staff at Company by
     pager at 415/764-6203 (or such other telephone number as provided by
     Company) for the latest status.

     Company will periodically notify Sprint with updated status for the
     duration of the outage.  Company will attempt to so update Sprint every two
     (2) hours.

                                 Confidential                       Page 20
<PAGE>
 
      Company will provide a post-incident summary that will include:
      cause of the problem; method used to correct the problem; and measures
      Company will take to prevent similar occurrences in the future.

    Company shall furnish necessary staff to provide the Services. Company shall
    use commercially reasonable efforts to provide Sprint with telephone access
    to an engineering staff member 24 hours a day 365 days a year. Upon
    notification of a problem with the Company System or the Services, Company
    shall evaluate and verify the problem and provide Sprint with a mutually
    agreeable time estimate for resolution of the problem. Company shall
    promptly commence remedial activities and use commercially reasonable
    efforts to complete the system outage resolution within the mutually agreed
    upon time estimate.

4.  Business Resumption

    In the event of a system outage, Company System will automatically switch
    processing from the primary server to a hot backup server in such a way as
    to not cause Customer(s) noticeable performance degradation as specified in
    Section 1 of this Exhibit.

5.  Sprint System Modifications

    Sprint agrees to notify Company no less than 72 hours in advance of any
    modifications and/or network configuration changes (including system
    maintenance) to, as well as upgrades and removal of devices that impact the
    production and network connectivity from, Sprint's system through which the
    Company Services are provided if they are outside of the scheduled Monday
    maintenance windows. If any such change will or could, in either party's
    opinion, result in incompatibility between the parties' respective systems
    or interruptions in the Company Services, then the parties shall work
    together to resolve any such issue before Sprint makes the change.

6.  Performance Review

    Company agrees to participate in periodic service performance reviews on a
    mutually agreed upon period or at either party's request. Each time cycle
    will be evaluated and proper personnel will be contacted if service levels
    are out of bounds. Some potential "triggers" currently include:

    .   Service response time is longer than a threshold
    .   Sudden spike in in/out-bound mail volume
    .   Load average sustained above a threshold
    .   Available disk space below a threshold
    .   Failed or interrupted tape backup
    .   Delivery logs showing an unusual pattern

7.  Backup Site

        Company shall provide a backup site for its primary message center which
    will be deployed in the event of a system outage with the primary message
    center and which will operate in accordance with Section 4 of this Exhibit.
    In the event of a West Coast disaster, Critical Path moves IP addresses to
    its East Coast Data Center. All protocols continue to work under a failover
    scenario, including but not limited to, POP, SMTP, IMAP, LDAP and webmail.
    Customers will not have access to stored messages in event of failover until
    primary service is restored. Such backup site is currently located in a
    facility of, Colocation Inc., 

                                 Confidential                       Page 21
<PAGE>
 

    located on the east coast in Laurel, Maryland. Colocation Inc. is a carrier-
    neutral co-location facility with facilities on par with our primary
    interconnection point, DIGITAL's Palo Alto Internet Exchange (PAIX) located
    in Palo Alto California.

--------------------------------------------------------------------------------
This is not intended as a final binding agreement on the part of the parties.
Both Sprint and Critical Path acknowledge that all terms set forth in this
document are preliminary and subject to modification and addition.  Neither
party shall have any liability to the other party in the event Sprint and
Critical Path do not reach a final definitive Agreement.  Both parties shall be
responsible for any of their costs associated with development of a definitive
agreement and any work performed prior to execution of a definitive Agreement.
--------------------------------------------------------------------------------

                                 Confidential                       Page 22
