<SUBMISSION>
<ACCESSION-NUMBER>0000950149-02-000597
<TYPE>10-K
<PUBLIC-DOCUMENT-COUNT>23
<PERIOD>20011231
<FILING-DATE>20020401
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>CRITICAL PATH INC
<CIK>0001060801
<ASSIGNED-SIC>7389
<IRS-NUMBER>911788300
<STATE-OF-INCORPORATION>CA
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-K
<ACT>34
<FILE-NUMBER>000-25331
<FILM-NUMBER>02595351
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>320 FIRST STREET
<CITY>SAN FRANCISCO
<STATE>CA
<ZIP>94105
<PHONE>4158088800
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>320 FIRST STREET
<CITY>SAN FRNACISCO
<STATE>CA
<ZIP>94105
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>f80193e10-k.htm
<DESCRIPTION>FORM 10-K
<TEXT>
<HTML>
<HEAD>
<TITLE>FORM 10-K</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">________________________________________________________________________________
<HR size="1" width="100%" align="left" noshade>
</FONT>
</DIV>

<P align="center">
<B><FONT size="5">SECURITIES AND EXCHANGE COMMISSION</FONT></B>

<DIV align="center">
<B><FONT size="2">Washington, D.C. 20549</FONT></B>
</DIV>

<P align="center">
<HR size="1" width="30%" align="center" noshade>

<P align="center">
<B><FONT size="5">FORM 10-K</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="83%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">(Mark One)</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2"><FONT face="wingdings">&#120;</FONT></FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<B><FONT size="2">ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE<BR>
	SECURITIES EXCHANGE ACT OF 1934</FONT></B></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="83%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="center" valign="top">
	<B><FONT size="2">For the fiscal year ended: December&nbsp;31,
	2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<B><FONT size="2">OR</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2"><FONT face="wingdings">&#111;</FONT></FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<B><FONT size="2">TRANSITION REPORT PURSUANT TO SECTION 13 OR
	15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</FONT></B></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">For the transition period
from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.</FONT></B>

<P align="center">
<B><FONT size="2">Commission File Number: 000-25331</FONT></B>

<P align="center">
<HR size="1" width="30%" align="center" noshade>

<P align="center">
<B><FONT size="6">CRITICAL PATH, INC.</FONT></B>

<DIV align="center">
<B><FONT size="2">(Exact name of Registrant as specified in its
charter)</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">California<BR>
	(State or other jurisdiction of<BR>
	incorporation or organization)</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<B><FONT size="2">911788300<BR>
	(I.R.S. Employer<BR>
	Identification Number)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">350, The Embarcadero<BR>
	San Francisco, California<BR>
	(address of principal executive offices)</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<B><FONT size="2">94105<BR>
	(zip code)</FONT></B></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">Registrant&#146;s telephone number, including
area code: (415)&nbsp;541-2500</FONT></B>

<P align="center">
<B><FONT size="2">Securities registered pursuant to
Section&nbsp;12(b) of the Act: None</FONT></B>

<P align="center">
<B><FONT size="2">Securities registered pursuant to
Section&nbsp;12(g) of the Act: Common Stock,
Series&nbsp;C</FONT></B>

<DIV align="center">
<B><FONT size="2">Participating Preferred Stock Purchase
Rights</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Title of Class)</FONT></B>
</DIV>

<P align="center">
<HR size="1" width="30%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Indicate by check mark whether the registrant
(1)&nbsp;has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12&nbsp;months (or for such shorter period
that the registrant was required to file such reports), and
(2)&nbsp;has been subject to such filing requirements for the
past
90&nbsp;days.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;<FONT face="wingdings">&#120;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Indicate by check mark if disclosure of
delinquent filers pursuant to item&nbsp;405 of
Regulation&nbsp;S-K is not contained herein, and will not be
contained, to the best of registrant&#146;s knowledge, in
definitive proxy or information statements incorporated by
reference in Part&nbsp;III of this Form&nbsp;10-K or any
amendment to this
Form&nbsp;10-K.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The aggregate market value of voting stock held
by non-affiliates of the Registrant was approximately
$185,776,193 as of March&nbsp;25, 2002, based on the closing
price of the Common Stock as reported on the Nasdaq National
Market for that date. There were 77,406,747 shares of the
Registrant&#146;s Common Stock issued and outstanding on
March&nbsp;25, 2002.
</FONT>

<P align="center">
<B><FONT size="2">DOCUMENTS INCORPORATED BY REFERENCE</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Items 10 (as to Section&nbsp;16(a) Beneficial
Ownership Reporting Compliance), 11, 12 and 13 of Part&nbsp;III
incorporate by reference information from Critical
Path,&nbsp;Inc.&#146;s definitive Proxy Statement, to be filed
with the Securities and Exchange Commission, in connection with
the solicitation of proxies for the 2002 Annual Meeting of
Shareholders scheduled to be held on June&nbsp;5,&nbsp;2002.
</FONT>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>

<P align="center">
<B><FONT size="2">INDEX</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="77%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="7" align="center" valign="top">
	<B><FONT size="2">PART I</FONT></B></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;1.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Business
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;2.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Properties
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;3.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Legal
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;4.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Submission of Matters to a Vote of Security
	Holders
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="7" align="center" valign="top">
	<B><FONT size="2">PART II</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;5.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Market for Registrant&#146;s Common Equity and
	Related Stockholder Matters
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;6
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Selected Financial Data
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;7.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Management&#146;s Discussion and Analysis of
	Financial Condition and Results of Operations
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;7A.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Quantitative and Qualitative Disclosures About
	Market Risk
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;8.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Financial Statements and Supplemental Data
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">53</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;9.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Changes in and Disagreements with Accountants on
	Accounting and Financial Disclosure
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="7" align="center" valign="top">
	<B><FONT size="2">PART III</FONT></B></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;10.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Directors and Executive Officers of the Registrant
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;11.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Executive Compensation
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">57</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;12.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Security Ownership of Certain Beneficial Owners
	and Management
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">57</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;13.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Certain Relationships and Related Party
	Transactions
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">57</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="7" align="center" valign="top">
	<B><FONT size="2">PART IV</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Item&nbsp;14.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Exhibits, Financial Statement Schedules and
	Reports on Form 8-K
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link1 "<FONT size="2">PART I</FONT>" -->

<P align="center">
<B><FONT size="2">PART I</FONT></B>

<P align="left">
<B><FONT size="2">Item&nbsp;1. <I>Business</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">This Annual Report and the following
disclosure contain forward-looking statements within the meaning
of the &#147;safe harbor&#148; provisions of the Private
Securities Litigation Reform Act of 1995, as amended and in
effect from time to time. The words &#147;anticipates,&#148;
&#147;expects,&#148; &#147;intends,&#148; &#147;plans,&#148;
&#147;believes,&#148; &#147;seek,&#148; and &#147;estimate&#148;
and similar expressions are intended to identify forward-looking
statements. These are statements that relate to future periods
and include statements regarding our future strategic,
operational and financial plans, anticipated or projected
revenues, expenses and operational growth, markets and potential
customers for our products and services, plans related to sales
strategies and global sales efforts, the anticipated benefits of
our relationships with strategic partners, growth of our
competition, our ability to compete, investments in product
development, the adequacy of our current facilities and our
ability to obtain additional space, our litigation strategy, use
of future earnings, the feature, benefits and performance of our
current and future products and services, plans to reduce
operating costs through continued expense reduction, anticipated
effects of restructuring and retirement of debt, and our belief
as to our ability to successfully emerge from the restructuring
and refocusing of our operations, are subject to risks and
uncertainties that could cause actual results to differ
materially from those projected. Factors that might cause future
results to differ materially from those projected in the
forward-looking statements include, but are not limited to,
difficulties of forecasting future results due to our limited
operating history, failure to meet sales and revenue forecasts,
evolving business strategy and the emerging nature of the market
for our products and services, finalization of pending
litigation and the settlement of the SEC investigation, turnover
within and integration of senior management, board of directors
members and other key personnel, difficulties in our strategic
plans to exit certain products and services offerings, failure
to expand our sales and marketing activities, potential
difficulties associated with strategic relationships,
investments and uncollected bills, general economic conditions
in markets in which the Company does business, risks associated
with our international operations, foreign currency
fluctuations, unplanned system interruptions and capacity
constraints, software defects, and failure to expand our sales
and marketing activities, potential difficulties associated with
strategic relationships, investments and uncollected bills,
risks associated with an inability to maintain continued
compliance with the Nasdaq National Market listing requirements,
risks associated with our international operations, unplanned
system interruptions and capacity constraints, software defects,
and those discussed in &#147;Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations&#148;
and &#147;Additional Factors That May Affect Future Operating
Results&#148; and elsewhere in this report. Readers are
cautioned not to place undue reliance on these forward-looking
statements. The forward-looking statements speak only as of the
date hereof. We expressly disclaim any obligation to publicly
release the results of any revisions to these forward-looking
statements to reflect events or circumstances after the date of
this filing.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">All references to &#147;Critical Path,&#148;
&#147;we,&#148; &#147;our,&#148; or the &#147;Company&#148; mean
Critical Path, Inc. and its subsidiaries, except where it is
clear from the context that such terms means only the parent
company and excludes subsidiaries.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">This Annual Report on Form&nbsp;10-K includes
numerous trademarks and registered trademarks of Critical Path.
Products or service names of other companies mentioned in this
Annual Report on Form&nbsp;10-K may be trademarks or registered
trademarks of their respective owners.</FONT></I>

<P align="left">
<B><FONT size="2">Company Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Critical Path, Inc., a global leader in Internet
communications, delivers software and services that are designed
to maximize the value of Internet communications. We provide
messaging and collaboration solutions&nbsp;&#151; from wireless,
secure and unified messaging to basic email and personal
information management&nbsp;&#151; as well as identity
management solutions that simplify user profile management and
strengthen information security. The standards-based Critical
Path Communications Platform<SUP>TM</SUP>, built to perform
reliably at the scale of public networks, delivers the
industry&#146;s lowest total cost of ownership for messaging
solutions, as noted by industry experts, and lays a solid
foundation for next-generation communications services. As of
December&nbsp;31, 2001, our customers include more than
700&nbsp;enterprises, 180&nbsp;carriers and service providers,
eight
</FONT>

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<FONT size="2">national postal authorities and
40&nbsp;government agencies. Critical Path is headquartered in
San Francisco, with offices throughout North America, Europe,
Asia and Latin America.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We were incorporated as a California corporation
in 1997. Our principal executive offices are located at
350,&nbsp;The Embarcadero, San Francisco, California 94105-1204.
Our telephone number is (415)&nbsp;541-2500 and our website is
located at <I>www.cp.net.</I> The information contained in our
website does not form any part of this Annual Report on
Form&nbsp;10-K.
</FONT>

<P align="left">
<B><FONT size="2">Recent Developments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Financing
Transaction.</FONT></I><FONT size="2"> In November 2001, the
Company announced that it had entered into a financing
transaction with a group of investors that resulted in gross
cash proceeds to the Company of approximately $30&nbsp;million
as well as the retirement of $65&nbsp;million in face value of
our 5&nbsp;3/4% Convertible Subordinated Notes. In connection
with this transaction, the Company issued and sold four million
shares of convertible preferred stock (convertible into
approximately 52.4&nbsp;million shares of our common stock) and
warrants to purchase 2.5&nbsp;million shares of our common
stock. The financing transaction was led by General Atlantic
Partners LLC and its affiliates, and also included Cheung Kong
Limited and affiliates, Hutchison Whampoa Limited and
affiliates, and Vectis Group LLC and affiliates. In connection
with this financing, a representative of General Atlantic
Partners, as well as an additional independent director, also
joined the Board of Directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Management Changes.
</FONT></I><FONT size="2">Throughout 2001, we underwent several
series of changes in our management, including the replacement
of virtually all of the senior management of the Company in the
first half of 2001. In May 2001, after joining the Board,
William E. McGlashan, Jr. was appointed Interim President and
Chief Operating Officer. In August 2001, Mr.&nbsp;McGlashan was
named Interim Chief Executive Officer and later in the year he
accepted the appointment as Chief Executive Officer and Vice
Chairman of the Board. The Company also added a number of senior
executive officers between April and September 2001 replacing
the executives who departed during that period. Specifically,
Laureen DeBuono joined the Company as Interim Chief Financial
Officer in September 2001 and Pierre Van Beneden joined the
Company as President in October 2001. In January 2002,
Ms.&nbsp;DeBuono was named Executive Vice President and Chief
Financial Officer.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Strategic and Operational
Restructuring.</FONT></I><FONT size="2"> In April 2001, the
Company announced a broad strategic restructuring initiative
that involved organizing the Company&#146;s product and service
offerings around a group of core communication solutions and an
operational restructuring effort related to its business
infrastructure and overhead. The Company implemented an
aggressive expense management program designed to further reduce
operating costs, including the divestiture of many non-core
products, a significant reduction in headcount, the closing of
numerous facilities around the world and the termination of
consulting and other service contracts. The Company incurred
significant charges related to the restructuring including
employee severance and benefits payments associated with
terminations and costs associated with the buy out of existing
property and equipment leases. As a result of those strategic
and operational initiatives, the Company expects to reduce
future quarterly costs, excluding special charges, by nearly
$30.0&nbsp;million as compared to the first quarter of 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Class&nbsp;Action and Shareholder Derivative
Litigation. </FONT></I><FONT size="2">Beginning on February 2,
2001, a number of securities class action complaints were filed
against us, certain of our current and former officers and
directors, in the United States District Court for the Northern
District of California. Additionally, beginning on
February&nbsp;5, 2001, we were named as a nominal defendant in a
number of derivative actions, purportedly brought on our behalf,
filed in the Superior Court of the State of California. In
November 2001, the Company announced that it had reached an
agreement in principle to settle these cases. In February 2002,
the Court gave preliminary approval to the settlement of the
class action litigation. The Court also set the final hearing
date for approval of the Court of the settlement agreement for
May&nbsp;23, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">SEC Investigation.</FONT></I><FONT size="2">
In February 2001, the Securities and Exchange Commission issued
a formal order of investigation of our company and certain
unidentified individuals associated with us with respect to
non-specified accounting matters, financial reports, other
public disclosures and trading activity in our securities. The
Company fully cooperated with the SEC in its investigation. The
SEC investigation was concluded as
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<FONT size="2">against the Company in January 2002 with no
imposition of fines or penalties against the Company. The
Company consented, without admitting or denying liability, to an
administrative order stating that the Company violated certain
non-fraud provisions of the federal securities laws and to a
cease and desist order. We understand that the investigation
with respect to former officers and directors of the Company is
continuing. The Company is fully cooperating with such
investigation, however, the status of the investigation of the
former officers and directors is not known at this time.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Critical Path&#146;s Business</FONT></B>

<P align="left">
<B><FONT size="2">Market Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The growth and pervasiveness of global public
networks (the Internet and wireless networks) has fueled
dramatic growth in electronic communications. Experts predict
that soon more people will access the Internet with a wireless
device than with wireline personal computers. Already, industry
experts believe that 400&nbsp;million people use cellular phones
and 300&nbsp;million people are online. Those same experts
estimate that in 2002, more than one third of the global
document delivery market will be moved electronically. As a
result, today&#146;s corporations and service providers face an
increasing number of technological challenges, as well as new
business imperatives, that demand a new breed of communications
solutions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In today&#146;s market, communications solutions
for corporations and service providers must serve a much larger
user base than in the past. In the corporate environment,
employees are receiving company communications in electronic
form, and Internet messaging services are increasingly used to
streamline communications with customers, partners and
suppliers. Furthermore, service providers are expanding beyond
consumer markets as an increasing number of small- to
medium-sized businesses turn to Internet Service Providers
(ISPs), telecommunications companies and mobile operators for
turn-key communications solutions. Today&#146;s communications
solutions must not only meet the varying needs of different
types of users, they must also provide efficient ways for
organizations to manage growing and diverse user populations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the evolving area of Internet communication,
corporations and service providers must provide richer
communications applications. As the complexity of digital media
expands, users need not only basic email, but services such as
secure messaging for online business transactions, wireless
messaging for mobile commerce, and multimedia messaging for new
media content and entertainment. Communications solutions must
support a wide array of content from text messages to encrypted
and digitally signed documents, to audio, video and other
multimedia.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Today&#146;s users demand ubiquitous access to
communications services. Users expect to access email and other
communications services through multiple devices&nbsp;&#151;
from laptops and cellular phones to wireless handhelds, palm
devices and pagers. As a result, communications services must
support a growing range of devices, protocols and technologies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Along with today&#146;s technological challenges,
corporations and service providers also face new business
imperatives. To stay competitive, mobile operators,
telecommunications companies and other service providers must
expand and differentiate their service offerings, moving beyond
basic connectivity services and email to offer value-added
services that increase average revenue per user and reduce
churn. Furthermore, corporations must support a growing number
of e-business initiatives and deploy innovative Web services
that make information and communications readily accessible to
employees, partners and customers around the globe. Our
solutions allow corporations and service providers to provide
these communications services to their employees, customers and
partners.
</FONT>

<P align="left">
<B><FONT size="2">Critical Path&#146;s Solutions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Critical Path&#146;s Communications Platform
provides a complete range of solutions that help corporations
and service providers tackle technological challenges and
respond to new business imperatives and opportunities. Through
the Critical Path Communications Platform, corporations and
service providers can deliver a broad spectrum of wireless and
wireline communications services&nbsp;&#151; from mobile, secure
and unified messaging to basic email and personal information
management. In addition, Critical Path&#146;s platform provides
</FONT>

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<FONT size="2">a solid infrastructure for user management,
streamlining the costs and complexities of deploying
communications services, providing security and enabling the
customization of services at the end-user level.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our platform allows us to provide Messaging and
Collaboration solutions, as well as Identity Management
solutions.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Messaging
and Collaboration Solutions</FONT></I></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Core
Messaging</FONT></B>

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<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">With more than 145&nbsp;million licensed
	electronic mailboxes as of December&nbsp;31, 2001, our Core
	Messaging solution provides highly reliable email services that
	users can access via the Web, with standards-based email clients
	and with wireless devices. For corporations, the Core Messaging
	solution presents a cost-effective alternative to groupware,
	providing only the functionality that typical users need. For
	service providers, Core Messaging provides essential email
	services at the industry rated lowest cost of ownership and very
	large scalability.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Personal
Information Management (PIM)</FONT></B>

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<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Critical Path&#146;s PIM solution provides users
	with a personal calendar, personal address book, task lists and
	notes. Users can access these services via the Web and wireless
	devices and also use them offline with Personal Digital
	Assistant and PIM clients. With Critical Path&#146;s PIM
	solution, service providers can easily offer value-added
	services in addition to email.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Business
Communications Suite</FONT></B>

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	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Most users today need messaging and collaborative
	applications without the added functionality and expense of full
	groupware solutions. Critical Path&#146;s Business
	Communications Suite combines our Core Messaging and PIM
	solutions to provide users with business email, calendaring,
	personal address books and secure online file storage in one
	suite. Built-in features enhance collaboration and allow users
	to share schedules, personal contacts and files with other
	users. In addition, the Business Communications Suite supports
	Web, wireless, voice and client-based access. The Suite
	integrates easily with third-party applications and existing
	infrastructure and helps minimize corporations&#146; costs by
	eliminating costly groupware where those features are not
	required. The Suite is also ideal for service providers seeking
	to penetrate the lucrative small- to medium-sized business
	market with a cost-effective service offering.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Secure
Messaging</FONT></B>

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<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Critical Path&#146;s Secure Messaging solution
	provides a secure way to send and receive messages and files
	through the Internet. It enables secure and auditable delivery,
	online file collaboration and Public Key Infrastructure
	(PKI)-enabled messaging that allows users to digitally sign
	documents and conduct legally binding online transactions. For
	corporations, Secure Messaging provides a cost-effective and
	efficient alternative to physical mail, courier services and
	paper contracts, and for service providers, it offers yet
	another way to offer value-added services that generate more
	revenue per user.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mobile
Messaging</FONT></B>

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</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Our Mobile Messaging enables Short Message
	Services (SMS)&nbsp;for more than 44&nbsp;telecommunications
	carriers around the globe. Our Mobile Messaging solution, with
	an interface that bridges the gap between SMS and Internet
	email, enables users to send and receive simple text messages
	via any SMS-enabled device. Additionally, our Mobile Messaging
	solution supports the emerging multimedia messaging market.
	Critical Path provides message album and smart message filtering
	to protect, store, access and route complex file types, combined
	with strategic partners&#146; solutions that provide [MMSC]s and
	media converter technology to provide a complete multimedia
	messaging solution that enables users to send and receive rich,
	integrated content (including digital video, audio, color images
	and animations) over wireless devices.
	</FONT></TD>
</TR>

</TABLE>

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<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unified
Communications</FONT></B>

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	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Critical Path helps service providers capitalize
	on this very large market with a Unified Communications solution
	that offers centralized access to voice, fax and email messages.
	Our Core Messaging solution provides the central message store,
	while partner technologies are readily integrated to enable
	voice and fax capabilities.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Identity
Management Solutions</I></FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Core
Directory</FONT></B>

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</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Critical Path&#146;s Core Directory solution
	provides a central repository for user profile data. Consisting
	of a standard Lightweight Directory Access Protocol, or LDAP,
	directory with superior fault tolerance and business continuity
	assurance, Critical Path&#146;s Core Directory solution provides
	single-point user management, simplifying user authentication
	and administration and laying a solid foundation for extranet,
	e-commerce and distributed application services.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unified
User Management</FONT></B>

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	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Critical Path&#146;s Unified User Management
	solution enables organizations to unify user profiles across
	distributed applications, realizing an immediate return on
	investment through the elimination of manual, redundant and
	scattered user administration tasks. Accurate and consistent
	user profiles are shared by heterogeneous systems, strengthening
	information security, improving information access and
	streamlining services provisioning. The Unified User Management
	solution eliminates information silos and is essential for
	next-generation, directory-enabled services, such as Web
	services, single sign-on and access management.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Single
Sign-On</FONT></B>

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<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Critical Path&#146;s directory and meta-directory
	technology is combined with strategic partner solutions to
	provide centralized access management, Web single sign-on,
	policy-based delegated administration and user self-service.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Public
Key Infrastructure (PKI)</FONT></B>

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	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Critical Path&#146;s PKI solution facilitates
	successful PKI deployments by leveraging the reliability,
	scalability and high performance of Critical Path&#146;s
	directory and meta-directory technology. The CP<SUP>TM</SUP>
	Directory Server stores user digital certificates, enabling fast
	search access and supporting user authentication, while the
	CP<SUP>TM</SUP> Meta-Directory Server keeps user profiles
	up-to-date and ensures the data consistency and accuracy
	necessary for secure communications.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">The Critical Path Communications
Platform</FONT></B>

<DIV align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of the components of our Messaging and
Collaboration and Identity Management solutions are delivered
through a common Internet communications platform. The Critical
Path Communications Platform is designed for expanding Internet
communications, offering:
</FONT>
</DIV>
<P>

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	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Support for 24&nbsp;hour, 7&nbsp;day a week
	high-availability environments.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Scalability designed to adjust from just a few
	thousand users to tens of millions of users.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Standards-based technology, enabling rapid
	deployment of communications services.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The industry rated lowest total cost of ownership.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">With its foundation centered on our messaging and
directory technology, the Critical Path Communications Platform
consists of three product layers: Access, Services and
Management.
</FONT>

<P align="center"><FONT size="2">7
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">The Access Layer.
</FONT></I></B><FONT size="2">The Access layer provides
universal wireless/ wireline access to communications services,
making services accessible from PCs, telephones and mobile
devices, on Web browsers and standard clients. The Access layer
includes:
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CP<SUP>TM</SUP>
Presentation Server</FONT></B>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">The CP&nbsp;Presentation Server is a
	standards-based, carrier-class application server that enables
	the delivery of tightly integrated collaborative applications
	into a highly customized and personalized workspace. The
	CP&nbsp;Presentation Server provides single sign-on, an
	integrated user interface, Web, wireless and voice access, and
	out-of-the-box integration with Critical Path servers.
	Additionally, the CP&nbsp;Presentation Server enables the
	integration of third-party applications, providing a common
	interface to virtually any communications service that can be
	presented on a Web (HTML) or wireless (WML) device.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CP<SUP>TM</SUP>
SMS Access Server</FONT></B>

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<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">The CP SMS Access Server provides a
	network-independent, feature-rich gateway between SMS (Short
	Message Service) and the Internet mail protocol, SMTP (Simple
	Mail Transfer Protocol), bridging the gap between numerous
	applications and wireless technologies.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CP<SUP>TM</SUP>
Digital Certification Services</FONT></B>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">CP<SUP>TM</SUP> Digital Certification Services
	provide the added security and functionality of client-side
	digital signatures, encryption and digital receipts to messages
	and documents transferred through the CP&nbsp;Messaging Server
	and CP&nbsp;Registered Mail Server.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">The Services Layer.
</FONT></I></B><FONT size="2">The Services layer powers a broad
range of communications services, including email, personal
information management, mobile messaging, multimedia messaging,
secure messaging and unified communications.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CP<SUP>TM</SUP>
Messaging Server</FONT></B>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">At the core of the Services layer is the CP
	Messaging Server&nbsp;&#151; a scalable and robust messaging
	solution, enabling standards-based email (Web, SMTP, POP3 and
	IMAP4). The CP&nbsp;Messaging Server offers high levels of
	performance, reliability and scalability.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CP<SUP>TM</SUP>
Calendar Server</FONT></B>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">The CP Calendar Server is a powerful Web-based
	solution that fully integrates personal and group calendaring.
	Ease of use and a diverse range of features make the
	CP&nbsp;Calendar Server a valuable solution for both
	corporations and service providers who want to offer value-added
	calendaring services to generate more revenue per user.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CP<SUP>TM</SUP>
Personal Address Book Server</FONT></B>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">The CP<SUP>TM</SUP> Personal Address Book Server
	stores contact information in a central location, giving end
	users always available access to personal address books from any
	device or application. A standards-based, Web- and
	wireless-accessible product, the CP Personal Address Book Server
	allows end users to easily access important phone numbers or
	email addresses from a Web browser, PC client or mobile phone.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CP<SUP>TM</SUP>
Registered Mail Server</FONT></B>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">The CP Registered Mail Server enables users to
	efficiently send and receive documents through the Internet
	without compromising security. End-to-end encryption and
	real-time tracking information protect messages and file
	deliveries.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">8
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">The Management Layer.
</FONT></I></B><FONT size="2">The Management layer unifies user
profiles, simplifying user management, enabling customization at
the user level and increasing security across communications
services.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CP<SUP>TM</SUP>
Directory Server</FONT></B>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">The CP Directory Server provides a central
	repository for user profile information and other data shared by
	multiple systems and applications. This state-of-the-art LDAP
	directory is currently deployed in primarily mission-critical
	environments, including corporate intranets/ extranets, online
	banking services, Internet postal services and government
	services.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CP<SUP>TM</SUP>
Meta-Directory Server</FONT></B>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">The CP Meta-Directory Server enables more
	effective communication and streamlines business processes by
	ensuring that user profiles throughout an organization are both
	consistent and current, and by allowing administrators to
	maintain strict access controls for sensitive information. The
	CP Meta-Directory Server automatically propagates data from one
	application, database or directory to others across the entire
	enterprise, and it automates the tedious tasks of transferring
	data from one system to another. The CP Meta-Directory Server
	technology integrates multiple data sources into an LDAP
	directory, such as the CP&nbsp;Directory Server, and a powerful
	set of connectors exchange the information between the
	CP&nbsp;Meta-Directory Server and various data stores.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Target Markets, Customers and Strategic
Partners</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customers and
Target Markets</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our customers and target customers are corporate
enterprises, wireless and telecommunications providers,
broadband and service providers, governments and postal
authority markets.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<I><FONT size="2">Corporate Enterprises.
	</FONT></I><FONT size="2">Communications infrastructure products
	and services are an increasingly important concern for
	businesses. Enterprises need to control costs of messaging in
	the face of tightening budgets and expanding message volume.
	With the globalization of the workforce, enterprises have become
	increasingly reliant upon digital communication. With such
	globalization, critical business information is leveraged across
	an enterprise in eBusiness applications and the need for
	reliable messaging and security access controls expands
	significantly. Additionally, such enterprises require identity
	management solutions to ensure security and to enable portals,
	extranets and Web-based services.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<I><FONT size="2">Wireless and Telecommunications Providers.
	</FONT></I><FONT size="2">Wireless users require access to the
	Internet and the ability to send and receive messages through
	chosen platforms and devices. Wireless and telecommunications
	providers are challenged with meeting ever evolving customer
	needs, decreasing voice revenues and heightened global
	competition. We provide the necessary access and messaging
	capability to provide wireless service providers with a low
	total cost of ownership, increased scalability, improved
	reliability and an open, easily integrated standards based
	platform. Additionally, to increase the value of their own
	service, and to grow the value of and retain their customers,
	telecommunications providers often add our advanced Internet
	messaging solutions to their connectivity and data management
	offerings.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<I><FONT size="2">Broadband and Service Providers.
	</FONT></I><FONT size="2">Broadband providers, such as cable,
	ISDN and DSL operators, face increasing messaging and identity
	management complexity as their businesses grow and evolve. Large
	bandwidth providers offer increased multimedia capabilities and
	services. These services require highly scalable and reliable
	infrastructure to handle the increasing user numbers and message
	volume for both individual message size and message quantity.
	Critical Path provides reliable and scalable messaging
	infrastructure to handle this growth. Additionally, broadband
	service providers&#146; (XSPs) basic connection services have
	become increasingly commoditized. XSPs are aggressively
	expanding value-added services, including wireless messaging,
	unified messaging and mobile commerce. Application service
	providers (ASPs) offer application hosting services and custom
	application development for corporate customers. Many ASPs offer
	email messaging as one of their core applications and can
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">9
</FONT>

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<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="left">
	<FONT size="2">take advantage of our outsourced offering and
	&#147;brand-behind-the-brand&#148; strategy to reduce costs and
	provide high-quality service.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<I><FONT size="2">Governments and Postal Authorities.
	</FONT></I><FONT size="2">Governments and postal authorities are
	increasingly entering into digital services. Their challenges
	are to provide services at a national level that can support
	large volume, very large scale and complex applications. Postal
	authorities worldwide use our email solutions to provide
	country-wide &#147;email for life&#148; and our directory and
	meta-directory products to serve as central repositories of user
	profile information that provide security and access control
	over trusted third party services for hundreds of millions of
	postal customers. Government agencies use our directories to
	help identify users and the services they should be allowed to
	access. By leveraging our highly scalable directory products,
	countries are able to build eBusiness infrastructures that
	enable such authorities to reduce business costs, create new
	revenue streams, and deliver the trackability, security, and
	reliability needed for information exchange with national
	agencies.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Strategic
Partners</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A key element of Critical Path&#146;s sales
strategy is to expand distribution channels through strategic
reseller or joint sales relationships. Our current strategic
partners fall into two primary categories:
i)&nbsp;telecommunications, Internet and wireless infrastructure
service providers, and ii)&nbsp;Internet security and privilege
management infrastructure partners. The following are examples
of existing strategic relationships that we believe will
position us to increase market presence and penetration:
</FONT>
<P>

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<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<I><FONT size="2">Telecommunications, Internet and Wireless
	Infrastructure Service Providers. </FONT></I><FONT size="2">Our
	technology supports one-way and two-way messaging services to
	millions of wireless devices and we are one of only a few
	companies able to provide end-users with the means to send and
	receive messages to and from mobile phones, pagers and other
	wireless devices. We have relationships with leading
	telecommunications and Internet infrastructure providers as a
	means to develop the growing market for messaging. We believe
	these relationships provide vital, value-added services that
	enable our strategic partners to retain customers, grow into new
	business areas, and increase revenue from their installed
	customer bases. Strategic partners include: Mediagate, Nokia
	Networks&nbsp;OY and Logica UK&nbsp;Limited, among others.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<I><FONT size="2">Internet Security and Privilege Management
	Infrastructure Partners.</FONT></I><FONT size="2"> Critical Path
	has established relationships with major public key
	infrastructure and Internet security vendors. Our InJoin
	Directory Server is included in several of our customers&#146;
	security solutions. Additionally, our InJoin Meta-Directory
	plays a growing role in large corporations&#146; efforts to
	develop comprehensive privilege management systems. By working
	with leading public key infrastructure, secure relationship
	management, and provisioning vendors as well as systems
	integrators that specialize in this area, we are expanding our
	channel of large corporations and enterprises. Strategic
	partners include Netegrity, Inc., EDS and Entrust Technologies
	Limited, among others.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Information regarding customers and sales by
geographic area is included in Note&nbsp;19 of Notes to the
Consolidated Financial Statements&nbsp;&#151; Product and
Geographic Information.
</FONT>

<P align="left">
<B><FONT size="2">Sales and Marketing</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales
Strategies</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Direct Sales. </FONT></I><FONT size="2">In
addition to our channel relationships, we maintain our own
direct sales force to introduce prospective customers and
partners to our products and services and to work in tandem with
our business partners. Our worldwide direct sales team is
organized in each of our key geographic regions around our
target markets. Currently, we have sales staff located in
domestic offices in San Francisco, Los Angeles, Austin, Chicago,
Milwaukee, Boston, Pensacola, New York and other cities
throughout the United States. Internationally we have members of
our sales organization located in Australia, Brazil, Canada,
France, Germany, Hong Kong, India, Ireland, Italy, Malaysia,
Netherlands, Spain, Switzerland and the United Kingdom.
</FONT>

<P align="center"><FONT size="2">10
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Channel Partner Sales.
</FONT></I><FONT size="2">The Company embraces and integrates
partners and alternative channels with the goal of gaining
market presence and share in its target markets. Our flexible
solutions are well suited for partner and channel execution.
Critical Path teams with Global System Integrators&nbsp;(GSIs),
Independent Software Vendors&nbsp;(ISVs), Original Equipment
Manufacturers&nbsp;(OEMs) and Hardware vendors that have strong
industry backgrounds and market presence in their respective
markets and geographic regions. These partners include Nokia
Networks&nbsp;OY, Logica UK Limited, Hewlett-Packard, Bull,
Entrust Technologies Limited, EDS and Ernst &#38; Young Cap
Gemini. In addition, Critical Path maintains partner
relationships to resell its products and services throughout
most of Asia and Latin America.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Marketing
Strategies</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are focused on industry marketing, media
relations and public relations to educate our key markets about
the business value of Internet communications, and to reinforce
Critical Path&#146;s reputation as a leading solutions provider.
The Company intends to continue to focus on industry events,
trade-show participation and solutions seminars to promote our
brand presence and acquire customers. Additionally, joint
programs with strategic partners promote focused offerings for
specific market segments.
</FONT>

<P align="left">
<B><FONT size="2">Competition</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Because we have numerous Internet communications
solutions and services, we are not aware of a single company
that competes across all of our products and services. However,
we encounter different competitors at each level of our
solutions. For customers seeking messaging solutions, we compete
with Sun Microsystems&#146; iPlanet division, OpenWave Systems,
Inc., Mirapoint Inc., Oracle Corporation, Microsoft Corporation
and IBM Corporation&#146;s Lotus division. For secure delivery
services, competitors include Tumbleweed Communications Corp.,
Slam Dunk Networks, Atabok Inc. and Zix&nbsp;it Corporation. In
the identity management market, we encounter primarily Sun
Microsystems&#146; iPlanet division, Microsoft and Novell
Corporation in the enterprise/eBusiness directory category; and
Sun Microsystems&#146; iPlanet division, Microsoft, Novell and
Siemens Corporation are among our competitors in the
meta-directory market. In the market for outsourced hosted email
services, we compete with such corporations as EasyLink Services
Corporation (formerly Mail.com), CommTouch Corporation, USA.net
and other smaller application service providers offering hosted
exchange services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">While these competitors and others exist in each
of our individual product markets, we believe our complete
solution of products and services serves as a competitive
advantage, because our customers can easily integrate their
infrastructure with our broad product line, selecting multiple
products and services from Critical Path as their requirements
demand.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that competitive factors affecting the
market for our Internet communications solutions include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Breadth of platform features and functionality;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Ease of integration into customers&#146; existing
	systems;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Scalability, reliability, performance and ease of
	expansion and upgrade;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Flexibility to enable customers to manage certain
	aspects of their systems internally and leverage outsourced
	services in other cases when resources, costs and time to market
	reasons favor an outsourced offering; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Total cost of ownership and operation.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The relative importance of each of these factors
depends upon the specific customer environment. Although we
believe that our products and services currently compete
favorably with respect to such factors, we may not be able to
maintain our competitive position against current and potential
competitors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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
</FONT>

<P align="center"><FONT size="2">11
</FONT>

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<DIV align="left">
<FONT size="2">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. Any delay in the development or
introduction of products or services or updates, would also
allow competitors additional time to improve their service or
product offerings, and provide time for new competitors to
develop Internet messaging infrastructure products and services
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.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Technology</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">CP Communications Platform</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our core expertise is in messaging and directory
technology. This allows us to deliver highly scalable digital
communications software, services and solutions with our
Critical Path Communications Platform.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The CP Communications Platform is divided into
three&nbsp;layers: Access, Services and Management. Each layer
contains a number of server software components that together
can provide a broad range of digital communications solutions
like email, mobile messaging, personal information management,
unified messaging, multimedia messaging and the integration
necessary to enable and provision communications solutions to
large populations of users in the corporate enterprise and the
service provider.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All CP Communications Platform components are
designed to support mission critical environments. Our high
performance, scalable and reliable servers operate in
installations ranging from hundreds of thousands to tens of
millions of users. Our components are all designed to deliver
custom solutions and thus include a range of tools including
software development kits (SDKs). They can be used alone or
together, in many combinations. They are often used with third
party components and therefore are developed to support
interoperability with many best of breed technologies. All of
our Communications Platform components operate on Sun
Microsystems&#146; Solaris and Microsoft&#146;s Windows NT/2000
operating systems and a subset of our components also operate on
Hewlett Packard HPUX, IBM&nbsp;AIX and Linux operating systems.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Access
Layer</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Access Layer is anchored by our CP
Presentation Server, a powerful application framework that is
integrated with all CP Platform components. The CP Presentation
Server allows for the creation of customized, personalized
application user interfaces to Communications Platform
components and third party technologies using a powerful SDK. It
enables mixed mode communications, so that services can be
accessed from a multitude of devices ranging from the desktop,
laptop, PDA, mobile handset or telephone using text, voice, and
video. The CP Presentation Server is based on Java&nbsp;2
Enterprise Edition (J2EE) and Java Server Pages (JSP)
technologies, and supports Hypertext Markup Language (HTML),
Wireless Markup Language (WML), VoiceXML and a range of other
interface markup languages.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Alongside our CP Presentation Server is our CP
Short Message Service Access Server, a powerful application
framework that enables the development of applications which
send Short Message Service (SMS) messages. CP SMS Access Server
includes an application development SDK (SMASI) that
applications can use to drive SMS traffic to a number of
SMS-C&#146;s. To date, support is provided for a number of
SMS-Cs through protocols like SMPP. The CP&nbsp;SMS Access
Server also includes WAP-Push support to enable next generation
wireless applications like Multimedia Messaging Service (MMS).
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Services
Layer</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Services Layer is anchored by our CP
Messaging Server, a highly scalable, standards-based, messaging
server. The CP Messaging Server enables services from Core Email
to Unified Messaging and next generation Multimedia Messaging
Services through its powerful native IMAP mail store and SMTP
relay. It has a scalable architecture, allowing single or
multiple domains to be split over multiple servers,
geographically distributed and setup as clusters. It also has
support for security features including secure-socket-layer
(SSL), anti-virus and anti-spam.
</FONT>

<P align="center"><FONT size="2">12
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Alongside our CP Messaging Server, our CP
Personal Address Book Server, CP Calendar Server, CP&nbsp;File
Storage Server and CP Registered Mail Server provide access to
personal and group information such as contacts, calendars,
files and secure, trackable messages. These servers can be
combined to provide a Personal Information Management Suite, a
Business Messaging Suite, an Electronic Bill Presentment
Service, a Multimedia Messaging Service and many other
solutions, reliably and on a large scale.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Management
Layer</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Management Layer is anchored by our CP Meta
Directory Server and CP&nbsp;Directory Server. Our CP&nbsp;Meta
Directory software enables user/ resource provisioning, keeping
information consistent between disparate messaging and business
systems, and is designed to improve security, data integrity and
reduce overall administration cost. At the core of our
technology is the join engine, with plug-ins that connect to
various business systems, including CP Platform components. CP
Meta Directory includes wide support for connected systems
including SQL Server, Sybase, Oracle, Microsoft Exchange, Lotus
Notes, Peoplesoft, Siebel and mainframe applications. It also
includes wide interoperability with directory software including
CP&nbsp;Directory Server, Microsoft Active Directory, Novell
eDirectory and iPlanet Directory Server. The CP&nbsp;Meta
Directory includes a powerful SDK that enables the development
of custom connectors using Perl, Java and XML.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The CP Directory Server is useful in providing a
common store of user or resource information that can be
accessed via standard LDAP and X.500 protocols. The
CP&nbsp;Directory Server can be used to store user profiles,
digital certificates from PKI, PKI software and eBusiness
information. The CP&nbsp;Directory Server is a distributed
database, meaning that it can be partitioned both logically and
physically, in order to provide improved performance and ease of
replication and updates. Both CP&nbsp;Directory Server and
CP&nbsp;Meta Directory Server incorporate security technology
like SSL for secure transport and authentication.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Alongside CP Directory and CP&nbsp;Meta
Directory, our CP&nbsp;System Console provides systems
management functionality to the CP Platform. This includes
system start/stop, systems monitoring, and configuration.
CP&nbsp;Systems Console uses Sun JDMK technology and is designed
to be interoperable with SNMP standards-based systems like
Hewlett Packard&nbsp;OpenView.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Hosted
Messaging</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We also provide a hosted messaging service that
offers standards-based email service for Internet service
providers, telecommunications providers, Web hosting companies,
Web portals and corporate enterprises providing accounts to
their end-users for activities such as trading securities,
shopping or participating in online communities. We have
developed proprietary load-balancing and messaging software that
uses Oracle databases for account provisioning and management.
Our hosted messaging service is comprised of multiple groups of
servers and routers acting as a single, virtual point of contact
to customers for messaging services. Our hosted messaging
service hardware and software consists of Sun Microsystems
servers running Solaris, Cisco routers, EMC redundant storage
arrays, Veritas software and rack-mounted Intel processor-based
servers. All aspects of our hosted messaging service are
deployed in a redundant configuration with the goal that if any
process or system goes down, another will be available to handle
customer traffic seamlessly. This behavior is called
&#147;transparent failover&#148; and is designed to increase the
availability of messaging services to the customer. Our hosted
messaging service also includes a dynamic load-balancing system
that acts as proxy servers for firewall safety. The load
balancers are configured in parallel so that if one goes down,
the load is transferred to the remaining systems. We have
created a proprietary account provisioning protocol for account
creation and maintenance. This enables account transitioning
from other services or legacy systems to be bulk-loaded, tested,
replicated and deployed on our service automatically. This
protocol addresses a critical time to market issue by enabling
organizations to quickly transition to the new standards-based
email service with minimal down-time and degradation to their
existing internal systems. In addition, it can be used by
customers and partners to facilitate automatic account sign-ups
from web sites, typically in less than three minutes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Data Centers. </FONT></I><FONT size="2">Our
hardware for operating production services currently is located
throughout in two data centers. With multiple high-speed
connections to diverse backbone providers and a robust network
</FONT>

<P align="center"><FONT size="2">13
</FONT>

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<DIV align="left">
<FONT size="2">architecture, we aim to eliminate single points
of failure, thus reducing the likelihood that our customers will
suffer downtime as a result of network outages. Our backbone
architecture and interconnect strategy consists of multiple
clear channel OC-3 and DS-3 circuits. We currently have
bilateral peering arrangements in place with over 35 networks.
Our data centers feature redundant systems for power, raised
floors, HVAC temperature control systems, seismically braced
racks, fire protection, and physical security and surveillance
24 hours a day, seven days a week.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Security. </FONT></I><FONT size="2">We have a
diverse set of firewall solutions that are specifically tailored
for each of our hosted services, reducing the likelihood of
security breaches. To enhance security for our network, our
staff members monitor the network hardware 24 hours a day, seven
days a week. Suspicious activity is reported and investigated
immediately.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Spam and Viruses.
</FONT></I><FONT size="2">Our messaging services include Spam
Blocking to guard against unsolicited commercial email and Virus
Scanning to prevent the spread of Internet viruses and worms.
Our message filtering technology has been enhanced with
partnerships with Brightmail and Symantec, allowing our hosted
messaging customers to benefit from new spam and virus filters
as they are created in response to attacks worldwide.
</FONT>

<P align="left">
<B><FONT size="2">Research and Development</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our products and services are mostly based on
systems which were internally developed or acquired through
acquisitions. We must continually improve these systems to
accommodate the level of use of our products and services. In
addition, we may add new features and functionality to our
products and services that could result in the need to develop,
license or integrate additional technologies. Our inability to
add additional software and hardware or to upgrade our
technology or network infrastructure could have adverse
consequences, which include service interruptions, impaired
quality of the users&#146; experience and the diversion of
development resources. Our failure to provide new features or
functionality to our products and services also could result in
these consequences. We may not be able to effectively upgrade
and expand our systems in a timely manner or to integrate
smoothly any newly developed or purchased technologies with our
existing systems. These difficulties could harm or limit our
ability to improve our business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We invested $7.7&nbsp;million in research and
development in 1999, $31.0&nbsp;million in 2000 and
$30.7&nbsp;million in 2001. Additionally, we incurred
$3.7&nbsp;million of in-process research and development expense
in 2000 related to technologies acquired through two of our
acquisitions. We anticipate that we will continue to devote
significant resources to product development in the future as we
add new features and functionality to our products and services.
The market in which we compete is characterized by rapidly
changing technology, evolving industry standards, frequent new
service and product announcements, introductions and
enhancements and changing customer demands. Accordingly, our
future success will depend on our ability to adapt to rapidly
changing technologies, to adapt our services to evolving
industry standards and to continually improve the performance,
features and reliability of our products and services. The
failure to adapt to such changes would harm our business. In
addition, the widespread adoption of new Internet, networking or
telecommunications technologies or other technological changes
could require us to undertake substantial expenditures to modify
or adapt our services or infrastructure.
</FONT>

<P align="left">
<B><FONT size="2">Intellectual Property</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We regard the protection of our trade secrets,
patents, patent applications, copyrights and trademarks as
critical to our success. We rely on a combination of statute,
common law and contractual restrictions to establish and protect
our proprietary rights and developed intellectual property in
our product and service offerings. We have entered into
proprietary information and invention assignment agreements with
our employees, contractors and consultants, and nondisclosure
agreements with customers, partners and third parties to whom we
disclose confidential and proprietary information. Despite our
efforts in this regard, former employees or third parties may
infringe or misappropriate our proprietary rights which could
harm our business. The validity, enforceability and scope of
protection of our intellectual property can be tested and in
some areas is still evolving.
</FONT>

<P align="center"><FONT size="2">14
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have registered and/or used as a trademark
&#147;Critical Path&#148; in the United States. We have also
registered and used &#147;Critical Path&#148; in a variety of
foreign countries where we have operations or do business. We
plan to continue to enforce that mark and other trademarks in
both the United States and internationally, although protection
of the marks cannot be assured.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We license our software and proprietary service
offerings and despite all efforts to protect that property and
ensure the quality of our brand and patented or copyrighted
products or processes, current or future licensees could take
actions that might harm the value of our intellectual property
portfolio, our brand or reputation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have been involved in claims by third parties
of patent, copyright and trademark infringement against us in
the past. Any claim like this, regardless of the merits, could
be time consuming to defend, result in costly and distracting
litigation, cause delays in rollouts of services, products or
updates or require us to enter into licensing agreements with
third parties. Such licensing agreements may include payment of
large royalties or may not be available to us on commercially
reasonable terms. Additionally, enforcing our intellectual
property rights could entail significant expense, with such
costs also potentially harming our results of operations.
</FONT>

<P align="left">
<B><FONT size="2">Employees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2001, we had 562 employees,
including 192 in operations, 131&nbsp;in sales and marketing,
148 in research and development and 91&nbsp;in general corporate
and administration. Our future success depends, in significant
part, upon the continued service of our key technical and senior
management personnel and our continuing ability to attract and
retain highly qualified and experienced technical, sales and
managerial personnel. Competition for such personnel is intense,
and we cannot guarantee that we can retain our key technical and
managerial employees or that we will be able to attract,
assimilate or retain other highly qualified technical, sales and
managerial personnel in the future. None of our employees are
represented by a labor union. We have not experienced any work
stoppages and consider our relations with our employees to be
good.
</FONT>

<P align="left">
<B><FONT size="2">Government Regulation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although there are currently a limited number of
laws and regulations directly applicable to the Internet and the
operation of commercial messaging services, it is probable that
laws and regulations will continue to be adopted with respect to
the Internet or commercial email services covering issues such
as user privacy, pricing, content, copyrights, distribution,
antitrust and characteristics and quality of products and
services. Further, the growth and development of the market for
online email may prompt calls for more stringent consumer and
copyright protection and privacy 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, in turn, decrease the demand for our products and
services and increase our cost of doing business, or otherwise
harm our business, operating results and financial condition.
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. Any such new
legislation or regulation, the application of laws and
regulations from jurisdictions whose laws do not currently apply
to our business or the application of existing laws and
regulations to the Internet could harm our business, operating
results and financial condition.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain of our service offerings include
operations subject to the Digital Millenium Copyright Act of
1998. The Company has expended resources and implemented
processes and controls in order to remain in compliance with
DMCA, but there can be no assurance that our efforts will be
sufficient and/ or new legislation and case law will not affect
the operation of and liability associated with a portion of our
services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, the applicability of laws and
regulations directly applicable to the businesses of our
customers, particularly customers in the fields of banking and
health care, will continue to affect us. The security of
information about our customers&#146; end-users continues to be
an area where a variety of laws and regulations with respect to
privacy and confidentiality are enacted. As our customers
implement the protections and prohibitions with respect to the
transmission of end-user data, our customers will look to us to
</FONT>

<P align="center"><FONT size="2">15
</FONT>

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<DIV align="left">
<FONT size="2">assist them in remaining in compliance with this
evolving area of regulation. In particular the
Gramm-Leach-Blilely Act contains restrictions with respect to
the use and protection of banking records for end-users whose
information may pass through our system.
</FONT>
</DIV>

<!-- link2 "<FONT size="2">Item 2.Properties</FONT>" -->

<P align="left">
<B><FONT size="2">Item&nbsp;2.&nbsp;<I>Properties</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our current corporate headquarters and primary
operations and development facilities are located in two office
buildings in San Francisco, California. We have several leases
that relate to our San Francisco locations, including one that
expires on March&nbsp;31, 2002, another that expires on
June&nbsp;30, 2002 and the lease for our new office space that
expires on March&nbsp;25, 2012. The Company took occupancy of a
total of 45,467 square feet of that new leased space on
March&nbsp;25, 2002. We are in the process of consolidating all
of our San Francisco-based operations into our new headquarters.
In addition to this principal location, we currently occupy a
24,300&nbsp;square foot building in Dublin, Ireland under a
lease expiring on July&nbsp;14, 2014. We lease additional
facilities in Brazil, Canada, France, Germany, Ireland, Italy,
Malaysia, Spain, Sweden, Switzerland, the United Kingdom and
several cities throughout the United States. We continually
evaluate the adequacy of our existing facilities, and we believe
that the current facilities will be suitable for our needs for
at least the next 12&nbsp;months, or that additional space will
be available on commercially reasonable terms, if necessary.
</FONT>

<!-- link2 "<FONT size="2">Item 3.Legal</FONT>" -->

<P align="left">
<B><FONT size="2">Item&nbsp;3.&nbsp;<I>Legal</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a party to lawsuits in the normal course
of our business. Litigation in general, and securities and
intellectual property litigation in particular, can be expensive
and disruptive to normal business operations. Moreover, the
results of complex legal proceedings are difficult to predict.
Other than as described below, we are not a party to any other
material legal proceedings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Securities Class&nbsp;Actions in Northern
District of California. </FONT></I><FONT size="2">Beginning on
February&nbsp;2, 2001, a number of securities class action
complaints were filed against the Company and certain of our
current and former officers and directors in the United States
District Court for the Northern District of California. The
complaints were filed as purported class actions by individuals
who allege that they purchased the Company&#146;s common stock
during a purported class period and sought an unspecified amount
in damages; the alleged class periods vary among the complaints.
The complaints were consolidated into a single action which
alleged that, during the period from September&nbsp;26, 2000 to
February&nbsp;1, 2001, the Company and certain of its former
officers made false or misleading statements of material fact
about the Company&#146;s financial statements, including its
revenues, revenue recognition policies, business operations and
prospects for the year 2000 and beyond. In addition, on
September&nbsp;24, 2001, certain former shareholders of
PeerLogic, Inc. filed a putative class action in the Superior
Court of the State of California alleging that Critical Path
breached representations and warranties made in connection with
the acquisition of PeerLogic. The complaint sought an
unspecified amount in damages. We subsequently removed the
PeerLogic action to the United States District Court for the
Northern District of California. On November&nbsp;8, 2001,
Critical Path announced that it had reached an agreement in
principle to settle these cases. In February&nbsp;2002, the
Court gave preliminary approval to the settlement of the class
action litigation. The Court also set the hearing date for final
approval of the settlement agreement for May&nbsp;23, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Derivative Actions in Northern District of
California. </FONT></I><FONT size="2">Beginning on
February&nbsp;5, 2001, Critical Path was named as a nominal
defendant in a number of derivative actions, purportedly brought
on the Company&#146;s behalf, filed in the Superior Court of the
State of California and in the United States District Court for
the Northern District of California. The derivative complaints
alleged that certain of Critical Path&#146;s current and former
officers and directors breached their fiduciary duties to the
Company, engaged in abuses of their control of the Company, were
unjustly enriched by their sales of the Company&#146;s common
stock, engaged in insider trading in violation of California law
or published false financial information in violation of
California law. The plaintiffs sought unspecified damages on the
Company&#146;s behalf from each of the defendants. Because of
the nature of derivative litigation, any recovery in the action
would inure to the Company&#146;s benefit. Contemporaneously
with settlement of the securities class action described above,
an agreement in principle has been reached to settle the
derivative action.
</FONT>

<P align="center"><FONT size="2">16
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Securities and Exchange Commission
Investigation. </FONT></I><FONT size="2">In February 2001, the
Securities and Exchange Commission (the &#147;SEC&#148;) issued
a formal order of investigation of the Company and certain of
the Company&#146;s current and former officers and directors
associated with the Company with respect to non-specified
accounting matters, financial reports, other public disclosures
and trading activity in the Company&#146;s securities. The
Company fully cooperated with the SEC in its investigation. The
SEC&#146;s investigation was concluded against the Company in
January&nbsp;2002 with no imposition of fines or penalties
against the Company. The Company consented, without admitting or
denying liability, to an administrative order that the Company
violated certain non-fraud provisions of the federal securities
laws and to a cease and desist order.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Securities Class&nbsp;Action in Southern
District of New York. </FONT></I><FONT size="2">Beginning on
July&nbsp;18, 2001, a number of securities class action
complaints were filed against the Company, and certain of our
current and former officers and directors and underwriters
connected with our initial public offering of common stock in
the United States District Court for the Southern District of
New&nbsp;York. The purported class action complaints were filed
by individuals who allege that they purchased common stock at
the initial public offering of common stock between
March&nbsp;26, 1999 and December&nbsp;6, 2000. The complaints
allege generally that the Prospectus under which such securities
were sold contained false and misleading statements with respect
to discounts and commissions received by the underwriters. The
complaints have been consolidated into a single action. The
complaints seek an unspecified amount in damages on behalf of
persons who purchased Critical Path stock during the specified
period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Breach of Contract Action.
</FONT></I><FONT size="2">On January&nbsp;18, 2001, we entered
into a non-exclusive licensing agreement with Comverse Network
Systems, Inc. (&#147;Comverse&#148;) with respect to our CP
Messaging and Directory software, with rights of distribution to
Comverse&#146;s customers. On October&nbsp;9, 2001, we notified
Comverse that we were terminating the Software License Agreement
based on our belief that Comverse materially breached the
contract. On or about October&nbsp;15, 2001, Comverse filed a
complaint in the United States District Court for the Southern
District of New&nbsp;York against the Company, challenging the
Company&#146;s right to terminate the agreement. Comverse
asserted causes of action for specific performance, requesting
that the Company be required to perform and to recognize
Comverse&#146;s alleged rights under the Agreement, and
injunctive relief, prohibiting the Company from taking action to
suspend, terminate or interfere with Comverse&#146;s alleged
rights, remedies or privileges. Concurrently with the filing of
the Complaint, Comverse also filed a Demand for Arbitration with
the American Arbitration Association, seeking a determination
that Critical Path did not have the right to terminate the
agreement. Comverse does not seek money damages in either the
Complaint or the Demand for Arbitration. In December 2001, the
District Court issued a preliminary injunction prohibiting us
from taking various actions relative to the termination,
including demanding the return of the licensed software or
publicly indicating that Comverse&#146;s rights under the
license agreement were terminated. The Company has appealed the
preliminary injunction and has also succeeded in having the
arbitration moved to San Francisco. No date has yet been set for
the arbitration or hearing of the appeal. While it is difficult
to determine what the eventual outcome of this matter will be,
the Company intends to defend its rights vigorously.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Securities Class&nbsp;Action in Northern
District of California. </FONT></I><FONT size="2">Beginning on
February&nbsp;1, 2002, a number of securities class action
complaints were filed against the Company, and certain of our
former officers. The purported class action complaints allege
that during a period from April&nbsp;21, 2000 through
September&nbsp;25, 2000 and in same cases April&nbsp;31 (sic),
2000 through October&nbsp;19, 2000, the Company reported
materially misleading financial statements and made materially
misleading statements about the Company&#146;s ability to
collect on recognized revenue from our customers based on the
current economic climate and uncertainty about continued
viability of many Internet based businesses as well as in
recognition of changes in accounting regulations. The suit
further alleges that the Company knew these issues would
severely impair future revenue growth and the ability to make
future stock sales and extract future bonuses tied to the
Company&#146;s performance. The complaints seek an unspecified
amount in damages. The Company believes that these allegations
are without merit and intends to vigorously defend such suits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The uncertainty associated with these and other
unresolved or threatened lawsuits could seriously harm the
Company&#146;s business and financial condition. In particular,
the lawsuits or the continued effects of the SEC investigation
could harm our relationships with existing customers and our
ability to obtain new customers.
</FONT>

<P align="center"><FONT size="2">17
</FONT>

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<DIV align="left">
<FONT size="2">The continued defense of the lawsuits could also
result in the diversion of management&#146;s time and attention
away from business operations, which could harm the
Company&#146;s business. Although some of the named lawsuits are
in the final stages of settlement, there can be no assurance
that the applicable courts will accept the final settlement as
executed, or at all. Negative developments with respect to the
settlements or the lawsuits could cause the Company&#146;s stock
price to decline significantly. In addition, although the
Company is unable to determine the amount, if any, that it may
be required to pay in connection with the resolution of these
lawsuits or the investigation by settlement or otherwise, the
size of any such payments could seriously harm the
Company&#146;s financial condition.
</FONT>
</DIV>

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<P align="left">
<B><FONT size="2">Item&nbsp;4.&nbsp;<I>Submission of Matters to
a Vote of Security Holders</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">None.
</FONT>

<P align="center"><FONT size="2">18
</FONT>

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<P align="center">
<B><FONT size="2">PART II</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD><B><FONT size="2">Item&nbsp;5.&nbsp;</FONT></B></TD>
	<TD>
	<B><I><FONT size="2">Market for Registrant&#146;s Common Equity
	and Related Stockholder Matters</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our common stock has been quoted on the Nasdaq
National Market under the symbol &#147;CPTH&#148; since
March&nbsp;29, 1999. The following table presents, for the
periods indicated, the high and low sales prices per share of
our common stock as reported on the Nasdaq National Market.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Year Ended December&nbsp;31, 2000</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">First Quarter (from January&nbsp;1, 2000 to
	March&nbsp;31,&nbsp;2000)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">119.50</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Second Quarter (from April&nbsp;1, 2000 to
	June&nbsp;30,&nbsp;2000)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">87.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Third Quarter (from July&nbsp;1, 2000 to
	September&nbsp;30,&nbsp;2000)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">79.38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46.13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Fourth Quarter (from October&nbsp;1, 2000 to
	December&nbsp;31,&nbsp;2000)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59.75</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19.38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="10"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Year Ended December&nbsp;31, 2001</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">First Quarter (from January&nbsp;1, 2001 to
	March&nbsp;31,&nbsp;2001)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26.13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.56</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Second Quarter (from April&nbsp;1, 2001 to
	June&nbsp;30,&nbsp;2001)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.84</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Third Quarter (from July&nbsp;1, 2001 to
	September&nbsp;30,&nbsp;2001)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.26</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Fourth Quarter (from October&nbsp;1, 2001 to
	December&nbsp;31,&nbsp;2001)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.83</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.51</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of March&nbsp;25, 2002, there were
approximately 1,461 holders of record of our common stock. Most
shares of our common stock are held by brokers and other
institutions on behalf of shareholders.
</FONT>

<P align="left">
<B><FONT size="2">Dividend Policy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have never declared or paid any dividends on
our common stock. We do not anticipate paying any cash dividends
in the foreseeable future. We currently intend to retain future
earnings, if any, to finance operations and the expansion of our
business. Any future determination to pay cash dividends will be
at the discretion of the board of directors and will depend upon
our financial condition, operating results, capital requirements
and other factors the board of directors deems relevant.
</FONT>

<P align="left">
<B><FONT size="2">Recent Sales of Unregistered
Securities</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="2%"></TD>
	<TD width="98%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">1.</FONT></TD>
	<TD align="left">
	<FONT size="2">On July&nbsp;20, 2001 and December&nbsp;7, 2001,
	respectively, we issued an aggregate of 9,000 shares and 15,000
	shares of common stock in connection with the settlement of two
	separate lawsuits against the Company by former employees
	alleging wrongful termination. The shares of common stock were
	issued at fair market value, as determined by the closing price
	listed on the Nasdaq National Market, on the date of issuance
	which was the settlement date as indicated. These securities
	were issued in reliance on the exemption from the registration
	requirements of the Securities Act provided in Section&nbsp;4(2)
	thereof.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">2.</FONT></TD>
	<TD align="left">
	<FONT size="2">On November&nbsp;8, 2001, we issued 4,000,000
	shares of Series&nbsp;D Cumulative Redeemable Convertible
	Participating Preferred Stock and warrants to purchase common
	stock of the Company, to a group of investors that included
	General Atlantic Partners&nbsp;LLC and its affiliates, Cheung
	Kong Limited and affiliates, Hutchison Whampoa Limited and
	affiliates and Vectis Group LLC and its affiliated entities. The
	Preferred Stock will accrue and cumulate dividends at eight
	percent (8%) and is convertible into shares of the
	Company&#146;s common stock at the option of the holder. The
	warrants are exercisable at any time from November&nbsp;8, 2002
	until November&nbsp;8, 2006. The exercise price of the common
	stock underlying the warrants is $1.05. The securities were
	issued in reliance upon the exemption from registration
	requirements from the Securities Act provided in
	Section&nbsp;4(2) thereof.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">19
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link2 "<FONT size="2">Item 6.Selected Financial Data</FONT>" -->

<P align="left">
<B><FONT size="2">Item&nbsp;6.&nbsp;<I>Selected Financial
Data</I></FONT></B>

<P align="center">
<B><FONT size="2">SELECTED CONSOLIDATED FINANCIAL
INFORMATION</FONT></B>

<DIV align="center">
<B><FONT size="2">(in thousands, except per share data and
footnotes)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The selected consolidated statement of operations
data for the period from February&nbsp;19, 1997 (our inception)
to December&nbsp;31, 1997, and during the years ended
December&nbsp;31, 1998, 1999, 2000 and 2001, and selected
consolidated balance sheet data as of December&nbsp;31, 1997,
1998, 1999, 2000 and 2001, have been derived from our
Consolidated Financial Statements. The data set forth below
should be read in conjunction with the Consolidated Financial
Statements and the Notes thereto included elsewhere in this
document.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="45%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">Year Ended December 31,</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000(1)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001(2)</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Consolidated Statement of Operations
	Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">897</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,157</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">135,653</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">104,173</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross profit (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,449</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,400</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,732</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(18,868</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,056</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,999</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(117,850</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,831,449</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(222,830</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss from operations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,056</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,448</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(123,250</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,817,717</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(241,698</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Non-operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(18</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(13</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,309</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(28,235</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,442</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss before extraordinary item and income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,074</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,461</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,845,952</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(253,140</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,513</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,606</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss before extraordinary item
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,074</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,461</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,852,465</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(258,746</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gain on retirement of convertible subordinated
	notes, net(3)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">179,282</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,074</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,461</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,852,465</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,464</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accretion on redeemable convertible preferred
	shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(356</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss attributable to common shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,074</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,461</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,852,465</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,820</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss per common share&nbsp;&#151; basic and
	diluted:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss before extraordinary item
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.54</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.94</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.93</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(30.67</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.50</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss per common share
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.54</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.94</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.93</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(30.67</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.08</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average shares&nbsp;&#151; basic and
	diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,994</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,899</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29,770</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60,399</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">73,981</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">At December 31,</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Consolidated Balance Sheet Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash, cash equivalents and short-term investments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,791</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75,932</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">216,542</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">69,165</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Working capital (deficit)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,524</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,524</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">76,060</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">186,777</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">57,983</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">550</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,663</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">673,805</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">497,610</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">199,952</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Convertible subordinated notes payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">300,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38,360</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Capital lease obligations, long-term portion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,454</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,669</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,687</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,149</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Mandatorily redeemable preferred stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,373</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Shareholders&#146; equity (deficit)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,021</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,358</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">616,992</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">113,104</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">109,155</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Operating expenses for the year ended
	December&nbsp;31, 2000, include a $1.31&nbsp;billion charge
	related to impairment of intangible assets including the
	deferred costs associated with our ICQ and Qwest
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">20
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD align="left">
	<FONT size="2">relationships. See also Note&nbsp;16 to the Notes
	to Consolidated Financial Statements&nbsp;&#151; Impairment of
	Long-Lived Assets.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Operating expenses for the year ended
	December&nbsp;31, 2001, include a $26.6&nbsp;million charge
	related to impairment of certain long lived assets and an
	$18.3&nbsp;million charge related to costs incurred as a result
	of our strategic restructuring. See also Note&nbsp;4 to the
	Notes to Consolidated Financial Statements&nbsp;&#151; Strategic
	Restructuring and Employee Severance and Note&nbsp;16 to the
	Notes to Consolidated Financial Statements&nbsp;&#151;
	Impairment of Long-Lived Assets.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Extraordinary gains of $179.3&nbsp;million, net
	of applicable taxes and write downs of related debt issuance
	costs, were recorded for the year ended December&nbsp;31, 2001
	related to gains recognized on the retirement of
	$261.4&nbsp;million of face value of Critical Path&#146;s
	convertible subordinated notes. See also Note&nbsp;10 to the
	Notes to Consolidated Financial Statements&nbsp;&#151;
	Convertible Subordinated Notes.
	</FONT></TD>
</TR>

</TABLE>

<!-- link2 "<FONT size="2">Item 7.Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</FONT>" -->

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD><B><FONT size="2">Item&nbsp;7.&nbsp;</FONT></B></TD>
	<TD>
	<B><I><FONT size="2">Management&#146;s Discussion and Analysis
	of Financial Condition and Results of Operations</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">The following discussion contains
forward-looking statements within the meaning of the &#147;safe
harbor&#148; provisions of the Private Securities Litigation
Reform Act of 1995, as amended and in effect from time to time.
The words &#147;anticipate,&#148; &#147;expect,&#148;
&#147;intend,&#148; &#147;plan,&#148; &#147;believe,&#148;
&#147;seek,&#148; and &#147;estimate&#148; and similar
expressions are intended to identify forward-looking statements.
These are statements, which include statements as to the
Company&#146;s future strategic, operational and financial
plans, anticipated or projected revenues, sources of revenues,
net losses, expenses and operational growth, future revenues
derived from non-core product and services, investments in sales
and marketing, operating losses, the need for additional
financing, competition in and competitive factors affecting our
markets, historical trends for revenue, expenses and personnel
as indicative of future results, our critical accounting
policies, changes in the price of our common stock, the impact
of stock-based expenses, period-to-period comparisons of our
operating results as an indicator of future performance, markets
and potential customers for Critical Path products and services,
plans related to sales strategies and global sales efforts,
plans to reduce operating costs through continued expense
reduction, anticipated effects of restructuring and retirement
of debt, anticipated charges and cost savings as a result of
these plans, our belief as to our ability to successfully emerge
from the restructuring and refocusing of our operations and our
intellectual property strategy are subject to risks and
uncertainties that could cause actual results to differ
materially from those projected. Factors that might cause future
results to differ materially from those projected in the
forward-looking statements include, but are not limited to,
difficulties of forecasting future results due to our limited
operating history, failure to meet sales and revenue forecasts,
evolving business strategy and the emerging nature of the market
for our product and service, finalization of pending litigation
and the settlement of the SEC investigation, turnover within and
integration of senior management, board of directors members and
other key personnel, difficulties in our strategic plans to exit
certain products and services offerings, failure to expand our
sales and marketing activities, potential difficulties
associated with strategic relationships, investments and
uncollected bills, general economic conditions in markets in
which the Company does business, risks associated with our
international operations, foreign currency fluctuations,
unplanned system interruptions and capacity constraints,
software defects, failure to expand our sales and marketing
activities, potential difficulties associated with strategic
relationships, investments and uncollected bills, risks
associated with an inability to maintain continued compliance
with the Nasdaq National Market listing requirements, risks
associated with our international operations, unplanned system
interruptions and capacity constraints, software defects, and
those discussed in &#147;Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations&#148;
and &#147;Additional Factors That May Affect Future Operating
Results&#148; and elsewhere in this report. Readers are
cautioned not to place undue reliance on these forward-looking
statements. The forward-looking statements speak only as of the
date hereof. We expressly disclaim any obligation to publicly
release the results of any revisions to these forward-looking
statements to reflect events or circumstances after the date of
this filing.</FONT></I>

<P align="center"><FONT size="2">21
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">Change Over Prior Year</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Historical Amounts</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">$</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">$</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="27"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="27" align="center" nowrap><B><FONT size="1">(in thousands, except percentages)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Period Ended December 31</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Software license
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">51,607</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,960</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">51,607</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(20,647</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(40</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hosted messaging
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,157</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58,553</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43,821</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,396</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">262</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(14,732</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(25</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Professional services
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,527</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,573</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,527</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,954</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(13</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Maintenance and support
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,966</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,819</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,966</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,853</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">53</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,157</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">135,653</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">104,173</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">119,496</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">740</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(31,480</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cost of net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Software license
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,731</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,533</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,731</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,198</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(44</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hosted messaging
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,505</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59,104</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59,124</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,599</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">258</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Professional services
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,945</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,315</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,945</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,370</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">74</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Maintenance and support
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,060</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,081</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,060</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,021</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Amortization of purchased technology
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,140</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,284</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,140</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,144</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Acquisition-related retention bonuses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">520</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,040</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">520</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,040</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock-based expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,532</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,586</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,050</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,946</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(65</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,464</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">155</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Impairment of long-lived assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25,315</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,654</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25,315</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,661</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total cost of net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,557</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">121,921</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">123,041</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100,364</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">466</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,120</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross profit (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,400</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,732</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(18,868</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,132</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(32,600</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(237</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales and marketing
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,811</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66,125</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">53,356</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">52,314</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">379</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(12,769</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(19</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Research and development
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,682</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31,022</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,744</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,340</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">304</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(278</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">General and administrative
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,051</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,444</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,260</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,393</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">117</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,816</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">39</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Amortization of intangible assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,259</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">355,868</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,216</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">323,609</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1003</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(342,652</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(96</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Acquisition-related retention bonuses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,587</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,294</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,381</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,707</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">131</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,913</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(83</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock-based expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46,460</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">50,598</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">53,615</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,138</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,017</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Acquired in-process research and development
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,700</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,700</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,700</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restructuring and other expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,248</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,267</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,248</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,019</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">462</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Impairment of long-lived assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,282,150</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,991</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,282,150</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,272,159</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(99</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">117,850</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,831,449</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">222,830</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,713,599</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1454</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,608,619</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(88</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss from operations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(123,250</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,817,717</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(241,698</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,694,467</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,576,019</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest and other income (expense), net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,061</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,970</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,840</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,909</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">84</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,130</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(55</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(752</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(15,948</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(14,714</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(15,196</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2021</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,234</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Equity in net loss of joint venture
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,019</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,866</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,019</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(847</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">83</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Minority interest in net income of consolidated
	subsidiary
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(649</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(649</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">649</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss on investments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23,589</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(702</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23,589</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,887</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(97</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss before extraordinary item and income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,845,952</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(253,140</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,729,011</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1479</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,592,812</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(86</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,513</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,606</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,513</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">907</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(14</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss before extraordinary item
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,852,465</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(258,746</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,735,524</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1484</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,593,719</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(86</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gain on retirement of convertible subordinated
	notes, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">179,282</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">-</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">179,282</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,852,465</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,464</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,735,524</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1484</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,773,001</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(96</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accretion on redeemable convertible preferred
	shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(356</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(356</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss attributable to common shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,852,465</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,820</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,735,524</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1484</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,772,645</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(96</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<P align="left">
<FONT size="2">(1)&nbsp;Non-material percentage.
</FONT>

<P align="left">
<B><FONT size="2">Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Critical Path, Inc. is a global leader in
Internet communications that delivers software and services that
are designed to maximize the value of Internet communications.
We provide messaging and collaboration solutions from wireless,
secure and unified messaging to basic email and personal
information management, as well as identity management solutions
that simplify user profile management and strengthen information
</FONT>

<P align="center"><FONT size="2">22
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">security. Our standards-based Critical Path
Communications Platform, built to perform reliably at the scale
of public networks, delivers the industry&#146;s lowest total
cost of ownership for messaging solutions and lays a solid
foundation for next-generation communications services. Critical
Path&#146;s customers are corporate enterprises, carriers and
service providers, postal authorities and government agencies.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Critical Path was founded in 1997 and is
headquartered in San Francisco, California with offices
throughout North America, Europe, Asia and Latin America. From
inception through 1999, our primary source of revenue came from
service fees related to hosted messaging. Through a series of
acquisitions during 1999 and 2000, we expanded our product
offerings to include a wide range of messaging and collaboration
licensed software and solutions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001 we evaluated our various products,
services, facilities and the business plan under which we were
operating. As part of this evaluation, we reviewed the products
and services we sell to customers, the locations in which we
operate, and the manner in which we go to market with our core
product and service offerings. In connection with this review,
we implemented and completed a three part strategic
restructuring plan that involved reorganizing Critical
Path&#146;s product and service offerings around a group of core
communication solutions. The three primary elements of the plan
included:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Focusing on core communication solutions;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Workforce reduction; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Facilities and operations consolidation.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additionally, we implemented an aggressive
expense management plan to further reduce operating costs while
maintaining strong customer service for our core solutions. As
of December&nbsp;31, 2001 we had divested all of our non-core
products and services, reduced headcount by 44%, reduced
facilities and operations by 65% and implemented other cost
cutting measures, resulting in a significant reduction in
overall operating expenses. The non-core products and services
which were divested during 2001, comprised approximately 26% and
21% of total revenues in the years ended December&nbsp;31, 2000
and 2001 and were insignificant in 1999. These products and
services are expected to be an insignificant part of Critical
Path&#146;s revenue stream going forward. Additionally as of
December&nbsp;31, 2001, we had substantially completed an
extensive assessment of our core hosted messaging services,
which resulted in a $12.4&nbsp;million impairment charge during
the fourth quarter of 2001 associated with excess capacity and
equipment. As a result of these strategic initiatives, we have
significantly reduced our overall operating expenses and we
expect to realize significant future annual cost savings, as our
quarterly operating cost structure, excluding special charges,
has been reduced by nearly $30&nbsp;million since the first
quarter of 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the fourth quarter of 2001, we closed a
financing transaction with a group of investors led by General
Atlantic Partners&nbsp;LLC and its affiliates, and other
investors including Hutchison Whampoa Limited and affiliates and
Vectis Group&nbsp;LLC. Vectis Group had previously been retained
by the Company to provide advice with respect to strategic
alternatives and other management related services.
Mr.&nbsp;McGlashan, our Chief Executive Officer, is a principal
in the Vectis Group. The financing transaction consisted of
approximately $30&nbsp;million in gross cash proceeds and the
retirement of $65&nbsp;million in face value of our 5&nbsp;3/4
Convertible Subordinated Notes. In connection with this
transaction, we issued and sold four million shares of
convertible preferred stock to several investors and warrants to
purchase 2.5&nbsp;million shares of common stock to General
Atlantic and its affiliates. The related proceeds will be used
for working capital and general corporate purposes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have incurred significant losses since our
inception, and as of December&nbsp;31, 2001, we had an
accumulated deficit of approximately $2.06&nbsp;billion,
inclusive of a $1.31&nbsp;billion charge for impairment of
long-lived assets recorded in the fourth quarter of 2000. We
intend to continue to invest in sales and marketing, development
of our technology and solution offerings, and related
enhancements. We expect to continue to incur operating losses
through the end of 2002, however we do not anticipate the need
for additional financing prior to December&nbsp;31, 2002.
</FONT>

<P align="center"><FONT size="2">23
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In view of the rapidly evolving nature of our
business, acquisitions, recent restructuring and limited
operating history, we believe that period-to-period comparisons
of revenues and operating results, including gross profit margin
and operating expenses as a percentage of total net revenues,
are not meaningful and should not be relied upon as indications
of future performance. At December&nbsp;31, 2001, we had
562&nbsp;employees, in comparison with 1,041 employees at
December&nbsp;31, 2000 and 488 employees at December&nbsp;31,
1999. We do not believe that our historical trends for revenues,
expenses, or personnel are indicative of future results.
</FONT>

<P align="left">
<B><FONT size="2">Critical Accounting Policies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following discussion and analysis of Critical
Path&#146;s financial condition and results of operations is
based on its consolidated financial statements and results of
operations, which have been prepared in accordance with
accounting principles generally accepted in the United States.
Critical Path believes the following are the most critical
accounting policies underlying Critical Path&#146;s presentation
of its financial condition and related operating results:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Revenue recognition
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Valuation and impairment of long-lived assets and
	identifiable intangible assets; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Estimating allowance for doubtful accounts and
	contingencies.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue
recognition</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenues are recognized once the related products
or services have been delivered and collection of all fees is
considered probable. We recognize revenues related to the sale
of our licensed software products, hosted messaging and
communication services, professional services and post-contract
customer support.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Software license. </FONT></I><FONT size="2">We
derive software license revenues from perpetual and term
licenses for our messaging, collaboration and identity
management solutions. Software license revenues are recognized
when persuasive evidence of an arrangement exists, delivery of
the licensed software to the customer has occurred and the
collection of a fixed or determinable license fee is considered
probable. Our revenue recognition policies require that revenues
recognized from software arrangements be allocated to each
element of the arrangement based on the fair values of the
elements, such as software products, upgrades and enhancements,
post contract customer support, installation, training or other
services. License software sales that involve multiple elements,
including software license and undelivered maintenance and
support and professional services, are recognized such that we
allocate revenues to each component of the arrangement using the
residual value method based on evidence of the fair value of the
undelivered elements. The vendor specific objective evidence of
fair values for the ongoing maintenance obligations are based
upon the prices paid for the separate renewal of these services
by the customer or upon substantive renewal rates stated in the
contractual arrangements. Vendor specific objective evidence of
the fair value of other services, primarily professional
services, is based upon substantive rates stated in the
contractual arrangements or upon separate sales of these
services at substantive rates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a multiple element arrangement includes
services that are deemed essential to the functionality of a
delivered element, we recognize the entire arrangement fee using
the percentage of completion method. Under this method,
individual contract revenues are recorded based on the
percentage relationship of the contract costs incurred as
compared to management&#146;s estimate of the total cost to
complete the contract. If fair value cannot be determined for
more than one individual element of a multiple element
arrangement, revenues are recognized ratably over the term of
the agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We also receive license fees from resellers under
arrangements that do not provide product return or exchange
rights. Revenues from reseller agreements may include a
nonrefundable, advance royalty which is payable upon the signing
of the contract and license fees based on the contracted value
of our products purchased by the reseller. Guaranteed license
fees from resellers, where no right of return exists, are
recognized when persuasive evidence of an arrangement exists,
delivery of the licensed software has occurred and the
collection of a fixed or determinable license fee is considered
probable. Non-guaranteed per-copy
</FONT>

<P align="center"><FONT size="2">24
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">license fees from resellers are initially
deferred and are recognized when they are reported as sold to
end-users by the reseller.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Hosted messaging services.
</FONT></I><FONT size="2">We derive hosted messaging revenues
related to fees for hosting services we offer related to our
messaging and collaboration solutions. These are primarily based
upon monthly contractual per unit rates for the services
involved, which are recognized on a monthly basis over the term
of the contract beginning with the month in which service
delivery starts. Amounts billed or received in advance of
service delivery, including but not limited to branding and
set-up fees, are initially deferred and subsequently recognized
on a ratable basis over the expected term of the relationship
beginning with the month in which service delivery starts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Professional services.
</FONT></I><FONT size="2">We derive professional service
revenues from fees primarily related to training, installation
and configuration services. The associated revenues are
recognized in the period in which the services are performed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Maintenance and support.
</FONT></I><FONT size="2">We derive maintenance and support
service revenues from fees for post-contract customer support
agreements associated with product licenses. Such services
typically include rights to future update and upgrade product
releases and dial-up phone services. Fees are deferred and
recognized ratably over the term of the support contract, which
is generally one year.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<I><FONT size="2">Valuation and impairment of long-lived assets
	and identifiable intangible assets</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We periodically evaluate the carrying value of
long-lived assets and identifiable intangible assets for
impairment, when events and circumstances indicate that the
carrying amount of an asset may not be recoverable. An
impairment loss is recognized whenever the evaluation
demonstrates that the carrying amount of a long-lived asset is
not recoverable. In connection with the impairment analysis
performed in the fourth quarter of 2000, the estimates of fair
values were based upon the discounted estimated cash flows of
Critical Path for the succeeding three years using a discount
rate of 25% and an estimated terminal value. The assumptions
supporting the estimated cash flows, including the discount rate
and an estimated terminal value, reflect management&#146;s best
estimates. The discount rate was primarily based upon the
weighted average cost of capital for comparable companies.
During 2001 and in connection with our strategic restructuring
effort, an additional assessment of impairment was performed on
certain of our remaining long-lived assets. The restructuring
plan identified and formulated a plan to exit certain products
and services that were determined to be non-core to Critical
Path&#146;s business strategy. We reviewed the intangible assets
related to these non-core products and services and, as a result
of the assessment, recorded an impairment charge in the second
quarter to these assets. Additionally during the fourth quarter
of 2001, we performed an evaluation of long-lived assets within
our core business. As a result of this assessment we recorded a
further impairment charge. This charge resulted from an
impairment of assets associated with our core business,
primarily the hosted messaging services, as we determined that
we had excess capacity and equipment related to certain core
products and services.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<I><FONT size="2">Estimating allowance for doubtful accounts and
	contingencies</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
contingencies at the date of the financial statements and
reported amounts of revenues and expenses during the reporting
period. For this reason, actual results could differ from those
estimates. Management must make estimates surrounding
collectibility of our revenues and related accounts receivable.
Management specifically analyzes accounts receivable, historical
and current economic trends, previous bad debts, customer
concentrations, credit worthiness of customers, and payment
terms of customer accounts, when evaluating adequacy of the
allowance for doubtful accounts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Management estimates liabilities and
contingencies at the end of each period. The current financial
statement presentation reflects management&#146;s best estimates
of liabilities and pending litigation which are probable and
where the amount and range of loss can be estimated. We record
the minimum liability related to those claims where there is a
range of loss. Because of the uncertainties related to the
probability of loss and
</FONT>

<P align="center"><FONT size="2">25
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">the amount and range of loss on the pending
litigation, management may not be able to make an accurate
estimate of the liability that could result from an unfavorable
outcome. As additional information becomes available, we will
continue to assess the potential exposure related to our pending
litigation and update our estimates and related disclosures.
Such future revisions in our estimates could materially impact
the financial results of Critical Path.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Results of Operations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents Critical Path&#146;s
net revenue and selected cost of net revenue data during 1999,
2000 and 2001 and the relative composition of net revenues and
the selected cost of net revenue data as a percentage of net
revenues during 1999, 2000 and 2001.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="28%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Historical Amounts</FONT></B></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Percentage of Total Net Revenues</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Period Ended December 31,</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Software license
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">51,607</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,960</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hosted messaging
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,157</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58,553</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43,821</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Professional services
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,527</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,573</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Maintenance and support
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,966</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,819</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,157</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">135,653</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">104,173</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Percentage of Related Net Revenues</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cost of net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Software license
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,731</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,533</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hosted messaging
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,505</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59,104</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59,124</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">102</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">101</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">135</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Professional services
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,945</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,315</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">82</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Maintenance and support
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,060</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,081</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">73</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total cost of net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,505</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75,840</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">81,053</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">102</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">78</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross profit (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(348</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59,813</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,120</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">44</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Net Revenues</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Software License. </FONT></I><FONT size="2">We
recognized $30.1&nbsp;million in software license revenues
during 2001, as compared to $51.6&nbsp;million in 2000 and none
in 1999. The significant decrease in software license revenues
between 2001 and 2000 was attributed to several factors that
impacted our operating results during 2001. Delays in
information technology spending were experienced across many
industries due to unfavorable macroeconomic conditions and these
delays were exacerbated by circumstances at the Company. Many
potential customers who were evaluating our products delayed
making decisions until they could gain a level of comfort in us
as we emerged from our management transition and restructuring
initiatives. Additionally, our sales organization was distracted
by the termination and resignation of much of its leadership in
the first quarter of 2001 and its focus on rebuilding also has
caused a reduction in effectiveness. The decrease in software
license revenues was further exacerbated as a result of the
terrorist attacks of September&nbsp;11, 2001. These tragic
events significantly impacted the world economic markets and
delayed some of our licensed software sales with enterprise
customers who operated in the affected areas or whose operations
were disrupted by these events. Additionally, in connection with
our restructuring initiative, we identified certain non-core
software license products, of which all have either been exited
or sold to third parties. Software license revenues related to
these non-core products were approximately $2.5 million in 2001,
down from $4.5&nbsp;million in 2000. We anticipate non-core
product revenues will be insignificant during 2002. Software
license revenues increased in 2000 as compared to 1999 as a
result of the introduction of our software license product
offerings related to messaging, directory and meta-directory
through our acquisitions of Amplitude Software Corporation,
ISOCOR Corporation, and PeerLogic, Inc.
</FONT>

<P align="center"><FONT size="2">26
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Hosted Messaging. </FONT></I><FONT size="2">We
recognized $43.8&nbsp;million in hosted messaging revenue during
2001, as compared to $58.6&nbsp;million in 2000 and
$16.2&nbsp;million in 1999. This decrease in 2001 as compared
with 2000 resulted from our restructuring initiative, as we
identified certain non-core hosted messaging services, of which
all have either been exited or sold to third parties. Hosted
messaging revenues related to these non-core services was
approximately $13.6&nbsp;million in 2001, down from
$27.0&nbsp;million in 2000. We anticipate non-core service
revenues will be insignificant during 2002. Hosted messaging
revenues increased in 2000 as compared to 1999 as a result of
the introduction of new product offerings, primarily
attributable to our acquisitions of FaxNet Corporation and
RemarQ Communities, Inc. Additionally, we experienced
penetration into the hosted messaging services market, and
significantly increased the number of email boxes hosted.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Professional Services.
</FONT></I><FONT size="2">We recognized $12.6&nbsp;million in
professional services revenues during 2001, as compared to
$14.5&nbsp;million in 2000. This decrease in 2001 as compared
with 2000 resulted primarily from our restructuring initiative,
as we identified certain non-core products and services, of
which all have either been exited or sold to third parties.
Professional services revenues related to these non-core
products and services was approximately $1.7&nbsp;million in
2001, down from $3.0&nbsp;million in 2000. We anticipate
non-core service revenues will be insignificant during 2002.
Additionally, as a result of the reduction in software license
sales during 2001, we experienced a similar decline in
professional services revenues. There were no professional
services revenues in 1999. Professional services revenues
increased in 2000 as compared to 1999 as a result of the
introduction of our software license product and professional
services offerings related to messaging, directory and
meta-directory software products added through our acquisitions
of Amplitude Software Corporation, ISOCOR Corporation, and
PeerLogic, Inc.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Maintenance and Support.
</FONT></I><FONT size="2">We recognized $16.8&nbsp;million in
maintenance and support revenues during 2001, as compared to
$11.0&nbsp;million in 2000. Maintenance and support revenues
increased as a result of the completion of several acquisitions
during 2000 and additional sales of software license products
during 2000 and 2001. However, these increases were offset by
the effects of our restructuring, as we identified certain
non-core products and services, of which all have either been
exited or sold to third parties. Maintenance and support
revenues related to these non-core products and services was
approximately $3.8&nbsp;million in 2001, as compared to
$1.1&nbsp;million in 2000. We anticipate non-core service
revenues will be insignificant during 2002. There were no
maintenance and support revenues in 1999. Maintenance and
support revenues increased in 2000 as compared to 1999 as a
result of the introduction of our software license product and
maintenance and support service offerings related to messaging,
directory and meta-directory software products added through our
acquisitions of Amplitude Software Corporation, ISOCOR
Corporation, and PeerLogic, Inc.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Critical Path&#146;s international operations
accounted for approximately 40% and 38% of net revenues during
2001 and 2000, respectively. Revenues from international
operations were insignificant in 1999. This significant increase
in international revenues from 1999 to 2000 related primarily to
the acquisition of ISOCOR Corporation.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Cost of Net Revenues</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Software License.
</FONT></I><FONT size="2">Cost of net software license revenues
consists primarily of product media duplication, manuals and
packaging materials, personnel and facilities costs, and
third-party royalties. The overall decrease in 2001 from 2000
was directly related to the reduction in software license
revenues between these two periods. In 2000, cost of net
software license revenues increased significantly from 1999
levels as a result of the introduction of our software license
product offerings related to messaging, directory and
meta-directory through our acquisitions of Amplitude Software
Corporation, ISOCOR Corporation, and PeerLogic, Inc.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Hosted Messaging.
</FONT></I><FONT size="2">Cost of net hosted messaging revenues
consists primarily of costs incurred in the delivery and support
of messaging services, including depreciation of capital
equipment used in network infrastructure, amortization of
purchased technology, Internet connection charges, accretion of
acquisition-related retention bonuses, personnel costs incurred
in operations, and other direct and allocated indirect costs.
These costs remained flat in 2001 as compared to 2000. Costs
associated with hosted messaging increased significantly during
the end of 2000 and the first quarter of 2001 as a result of
adding 15&nbsp;new hosted messaging clusters to our data centers
during 2000, expanding the capacity of our hosting network to
manage current
</FONT>

<P align="center"><FONT size="2">27
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">customer requirements and future growth.
Additionally, costs were incurred to add technology platforms
for new service offerings. As a result of these initiatives we
acquired equipment and increased related support and
professional services resources, causing depreciation and other
costs to increase substantially in comparison with 1999.
However, these increases were offset in the second half of 2001
by the effects of our restructuring initiative and the exiting
of certain non-core products and services. As a result of the
sale and divestiture of several non-core services, the
termination of employees through our restructuring initiative
and the implementation of other cost cutting measures, we
significantly reduced the cost of net hosted messaging revenues
in 2001.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Professional Services.
</FONT></I><FONT size="2">Cost of professional services revenues
consists primarily of personnel costs including custom
engineering, installation and training services for both hosted
and licensed solutions, and other direct and allocated indirect
costs. As a result of the acquisitions completed in 2000,
additional costs, primarily related to personnel costs, were
incurred on professional services resources resulting in a 74%
increase in 2001 from 2000. There were no professional services
revenues or related costs in 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Maintenance and Support.
</FONT></I><FONT size="2">Cost of maintenance and support
revenues consists primarily of personnel costs related to the
customer support functions for both hosted and licensed
solutions, and other direct and allocated indirect costs. As a
result of the acquisitions completed in 2000, additional costs,
primarily related to personnel costs, were incurred on
maintenance and support resources resulting in an increase in
2001 from 2000. There were no maintenance and support revenues
or related costs in 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Operations, customer support, and professional
services staff decreased to 192&nbsp;employees at
December&nbsp;31, 2001 from 340&nbsp;employees at
December&nbsp;31, 2000, but increased from 174&nbsp;employees at
December&nbsp;31, 1999. Headcount decreased in 2001 as a result
of our strategic restructuring initiative and increased in 2000
as a result of our numerous acquisitions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents selected operating
expenses of Critical Path during 1999, 2000 and 2001.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Historical Amounts</FONT></B></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Percentage of Total Net Revenues</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Period Ended December 31,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales and marketing
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,811</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66,125</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">53,356</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">85</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">49</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">51</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Research and development
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,682</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31,022</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,744</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">General and administrative
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,051</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,444</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,260</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">87</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,544</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">127,591</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">126,360</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">220</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">94</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">121</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Operating Expenses</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Sales and Marketing.
</FONT></I><FONT size="2">Sales and marketing expenses consist
primarily of compensation for sales and marketing personnel,
advertising, public relations, other promotional costs, and, to
a lesser extent, related overhead. These costs decreased in 2001
from 2000 primarily due to the termination and resignation of
several employees in our sales organization during the first
quarter of 2001, the termination of certain strategic marketing
relationships related to non-core services and other cost
cutting measures in connection with our restructuring plan,
primarily a reduction in headcount. The significant increase in
2000 from 1999 related to marketing and promotional expenses,
incentive compensation payments to sales personnel, and
increases in compensation associated with additional headcount
added through our ten acquisitions completed during 1999 and
2000. Sales and marketing staff decreased to 131&nbsp;employees
at December&nbsp;31, 2001 from 305&nbsp;employees at
December&nbsp;31, 2000, but increased from 168 employees at
December&nbsp;31, 1999. Headcount decreased in 2001 as a result
of our strategic restructuring initiative and increased in 2000
primarily as a result of our numerous acquisitions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Research and Development.
</FONT></I><FONT size="2">Research and development expenses
consist primarily of compensation for technical staff, payments
to outside contractors, depreciation of capital equipment
associated with research and development activities, and, to a
lesser extent, related overhead. These costs decreased in 2001
from 2000 as a result of our restructuring initiative, including
the termination of several employees as well as certain
</FONT>

<P align="center"><FONT size="2">28
</FONT>

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<DIV align="left">
<FONT size="2">contracts with outside consultants, and the
implementation of other cost cutting measures. The significant
increase in 2000 from 1999 resulted primarily from increased
compensation and other personnel costs from the additional
headcount added through our ten acquisitions completed during
1999 and 2000. Additionally, during 1999 and 2000 we increased
headcount to continue to develop and enhance our portfolio of
messaging, directory and security solutions. Research and
development staff decreased to 148&nbsp;employees at
December&nbsp;31, 2001, from 252 employees at December&nbsp;31,
2000, but increased from 94&nbsp;employees at December&nbsp;31,
1999. Headcount decreased in 2001 as a result of our strategic
restructuring initiative and increased in 2000 primarily as a
result of our numerous acquisitions.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">General and Administrative.
</FONT></I><FONT size="2">General and administrative expenses
consist primarily of compensation for personnel, fees for
outside professional services, occupancy costs and, to a lesser
extent, related overhead. General and administrative expenses
increased in 2001 from 2000 primarily as a result of increased
compensation and other personnel costs from the additional
headcount added through the acquisitions completed during 2000.
Additionally, we incurred higher fees for outside professional
services in 2001, in particular significantly higher legal and
accounting fees related to the SEC investigation and shareholder
litigation which included legal fees reimbursed with respect to
indemnification obligations to former officers and directors.
These increases in general and administrative expenses were
partially offset by the termination of several employees in
connection with our restructuring initiative and the
implementation of other cost cutting measures. The significant
increase in 2000 from 1999 resulted primarily from increased
compensation and other personnel costs associated with
additional headcount added through our ten acquisitions
completed during 1999 and 2000, and higher fees for outside
professional services. General and administrative staff
decreased to 91&nbsp;employees at December&nbsp;31, 2001, from
144&nbsp;employees at December&nbsp;31, 2000, but increased from
52&nbsp;employees at December&nbsp;31, 1999. Headcount decreased
in 2001 as a result of our strategic restructuring initiative
and increased in 2000 primarily as a result of our numerous
acquisitions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Management expects operating expenses to
moderately increase during 2002, primarily related to higher
personnel costs associated with adding to the Company&#146;s
sales and marketing organization.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible
Assets</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Amortization of Intangible
Assets.</FONT></I><FONT size="2"> In connection with our 1999
and 2000 acquisitions, which were all accounted for using the
purchase method of accounting, we recorded goodwill and other
intangible assets, primarily including assembled workforce,
customer base, and existing technology. Based on the types of
identifiable intangibles acquired, during 2000 and 2001
amortization expense of $18.1&nbsp;million and
$21.3&nbsp;million was allocated to the cost of net revenues and
amortization expense of $355.9&nbsp;million and
$13.2&nbsp;million was allocated to operating expenses,
respectively. All amortization expense was allocated to
operating expenses in 1999. Additionally, during 2000 and 2001,
we recorded charges of $1.3&nbsp;billion and $26.6&nbsp;million,
respectively, related to the impairment of certain long-lived
assets, including intangible assets. This was the primary cause
of the significant reduction in amortization expense in 2001
from 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Acquired In-Process Research And
Development.</FONT></I><FONT size="2"> In connection with the
acquisitions of ISOCOR and PeerLogic during 2000, we recognized
$3.7&nbsp;million representing the value attributable to
acquired in-process research and development that had not yet
reached technological feasibility and had no alternative future
use. These values were determined by estimating the future net
cash flows of the acquired in-process research and development
over their respective estimated useful lives and discounting the
net cash flows back to their present value. At December&nbsp;31,
2001, actual results were consistent, in all material respects,
with our assumptions at the time of the acquisitions. All
acquired in-process research and development was expensed at the
date of acquisition. No amounts were recognized resulting from
acquired in-process research and development during 1999 or 2001.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisition-Related
Retention Bonuses</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the acquisitions of dotOne,
Amplitude, Xeti, FaxNet, ISOCOR, and docSpace, we established
various retention bonus programs that in the aggregate amounted
to approximately $20.7&nbsp;million in incentives for certain
former employees of these companies to encourage their continued
employment with
</FONT>

<P align="center"><FONT size="2">29
</FONT>

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<DIV align="left">
<FONT size="2">Critical Path. Based on the employees
participating in these programs, during 1999 and 2000 expenses
of $520,000 and $1.0&nbsp;million were allocated to cost of net
revenues and expenses of $3.6&nbsp;million and $8.3&nbsp;million
were allocated to operating expenses, respectively. During 2001,
expenses of $1.4&nbsp;million were allocated to operating
expenses related to these retention bonus programs. The
significant decrease in acquisition-related retention bonus
expense from 2000 to 2001 resulted from the completion, during
2000, of all but one of these bonus programs. The remaining
program is expected to conclude in April&nbsp;2002.
</FONT>
</DIV>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Stock-Based Expenses</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Stock-based expenses totaled $51.0&nbsp;million,
$52.2&nbsp;million, $57.7&nbsp;million in 1999, 2000 and 2001,
respectively. These amounts were comprised of stock-based
charges related to stock options granted and warrants issued.
Stock-based expenses related to stock options granted to
employees, directors and consultants amounted to
$19.9&nbsp;million, $25.1&nbsp;million and $37.5&nbsp;million
during 1999, 2000, and 2001, respectively. Stock-based expenses
related to warrants issued to strategic partners and consultants
amounted to $31.1&nbsp;million, $27.1&nbsp;million and
$20.2&nbsp;million during 1999, 2000, and 2001, respectively.
The consecutive increases in stock-based expense from 1999
through 2001 was primarily caused by the increase in stock
option grants with exercise prices below fair market value in
each of these successive fiscal years and issuance of warrants.
We expect that future changes in the trading price of our common
stock at the end of each quarter, and if certain milestones are
ever achieved, will cause additional substantial changes in the
ultimate amount of the related stock-based charges.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Stock Options. </FONT></I><FONT size="2">We
granted certain stock options with exercise prices below market
value on the date of grant and issued certain common stock to
employees, directors and advisors during 1999 and 1998. As a
result, we recorded unearned compensation totaling
$22.3&nbsp;million in 1999 and $19.9&nbsp;million in 1998. These
amounts are being amortized over the vesting periods of the
related options. In March&nbsp;2001, in connection with an
employee retention program, we granted options with exercise
prices below market value on the date of grant to certain
employees. As a result of this program, we recorded unearned
compensation totaling approximately $21.4&nbsp;million. During
2001 certain of these unearned compensation balances were
significantly reduced as a result of employee terminations
throughout the year, affecting a reduction in future stock-based
expenses of $8.2&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additionally, during 2001, we incurred
stock-based charges of approximately $1.7&nbsp;million in
connection with certain severance agreements for terminated
employees and consulting arrangements. These charges were
included in operating expenses based on the functions of the
related employees and consultants. During 2000, we incurred
stock-based charges of approximately $5.7&nbsp;million in
connection with certain severance agreements for terminated
employees. Approximately $3.4&nbsp;million of this charge was
included in employee severance expense in connection with our
plan to reduce worldwide headcount and the remaining
$2.3&nbsp;million was included in stock-based expenses. During
1999, we incurred a stock-based charge of approximately
$2.0&nbsp;million in connection with a severance agreement for a
terminated employee. This charge was included in cost of net
revenues based on the employee&#146;s function.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Warrants. </FONT></I><FONT size="2">During
1999 and 2000, we issued warrants to purchase shares of our
preferred and common stock pursuant to certain strategic
agreements. See also Note&nbsp;8 of Notes to Consolidated
Financial Statements&nbsp;&#151; Intangible Assets and
Note&nbsp;16&nbsp;&#151; Impairment of Long-Lived Assets. We
believe that these warrants could have a significant current and
potential future impact on our results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 1999, we entered into an agreement
with ICQ, Inc., a subsidiary of AOL Time Warner, pursuant to
which we agreed to provide email hosting services that are
integrated with ICQ&#146;s instant messaging service provided to
ICQ&#146;s customers. As part of the agreement, ICQ agreed to
provide sub-branded advertising for Critical Path in exchange
for a warrant to purchase 2,442,766 shares of Series&nbsp;B
Preferred Stock, issuable upon attainment of each of five
milestones. As of April&nbsp;9, 2000, all five milestones had
been attained and the final revised aggregate fair value of all
vested warrants was $93.8&nbsp;million, which is being amortized
to advertising expense using the straight-line method over four
years. During the fourth quarter of 2000, we recorded an
impairment charge of $16.8&nbsp;million bringing the adjusted
fair value to approximately $30.1&nbsp;million, which will be
amortized over the remaining benefit period.
</FONT>

<P align="center"><FONT size="2">30
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In October 1999, we entered into an agreement
with Qwest Communications Corporation, a telecommunications
company, pursuant to which we agreed to provide email hosting
services to Qwest&#146;s customers. As part of the agreement,
Qwest agreed to provide sub-branded advertising for us in
exchange for warrants to purchase up to a maximum of 3,534,540
shares of common stock upon attainment of each of six
milestones. In October 1999, the first of the six milestones had
been attained and the final revised aggregate fair value of the
vested warrants associated with the first milestone approximated
$22.2&nbsp;million, which is being amortized to advertising
expense using the straight-line method over three years. None of
the remaining milestones are considered probable and as a
result, the fair value of the warrants relating to the shares
underlying the second through sixth milestones has not been
recognized. During the fourth quarter of 2000, we recorded an
impairment charge of $4.8&nbsp;million bringing the adjusted
fair value to approximately $8.6&nbsp;million, which will be
amortized over the remaining benefit period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1999, we entered into an agreement
with Worldsport Network Ltd., the sole and exclusive provider of
Internet solutions for the General Association of International
Sports Federations or GAISF and a majority of the international
federations it recognizes. Under the terms of the agreement,
Worldsport offered Critical Path&#146;s web-based email and
calendaring services to the GAISF network and its members. As
part of the agreement, Worldsport agreed to provide sub-branded
advertising for Critical Path in exchange for warrants to
purchase up to a 1.25% equity interest in Critical Path on a
fully diluted basis upon attainment of each of five milestones
based on the number of email boxes for which Worldsport
registers and provides sub-branding. The warrants are
exercisable for five years after becoming vested. Any warrants
not vested within five years of the date of the agreement will
be cancelled. Worldsport ceased operations and filed for
bankruptcy during 2000 and none of the milestones are considered
probable. Accordingly, no deferred compensation associated with
these warrants has been recognized.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1999, we entered into an agreement
with one of our lessors, in connection with an office lease,
pursuant to which the lessor was issued warrants to purchase up
to a maximum of 25,000 shares of our common stock. The warrants
may be exercised beginning January&nbsp;1, 2000 through
December&nbsp;20, 2006 at a price of $90.00 per share. The
warrants vest at the beginning of each month on a straight-line
basis in the amount of 521 shares per month. The fair value of
approximately $2.0&nbsp;million is being amortized to general
and administrative expenses using the straight-line method over
10&nbsp;years.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2000, The docSpace Company entered
into an agreement with a major telecommunications company
(&#147;Telco&#148;) pursuant to which docSpace would provide
secure messaging services to the Telco&#146;s customers. As part
of the agreement, Telco agreed to provide marketing, publicity,
and promotional services to docSpace. As a result of the
completion of our acquisition of docSpace, Critical Path assumed
warrants that allowed Telco to purchase up to a maximum of
349,123 shares of Critical Path common stock upon attainment of
each of three milestones. Subsequent to the acquisition, we
entered into discussions with Telco to modify our relationship.
Accordingly, we believe the vesting provisions of the proposed
agreement will be modified to reflect the requirements of the
new relationship. As of December&nbsp;31, 2001, none of the
vesting milestones of the original agreement had been attained
and none of the milestones are considered probable. Accordingly,
no deferred compensation associated with the warrants has been
recognized.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Strategic
Restructuring and Employee Severance</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 2000, we announced a plan to reduce our
worldwide employee headcount by approximately 113&nbsp;employees
or 11%. This employee reduction plan was executed with the
intent to realize various synergies gained through the nine
acquisitions we completed in 1999 and the first half of 2000.
During 2000, we recognized a charge for severance-related costs
totaling $6.7&nbsp;million, composed of $3.3&nbsp;million in
cash charges and $3.4&nbsp;million in stock-based compensation
expense, which resulted from the acceleration of certain
employee stock options in connection with the headcount
reduction plan. During 2000, the Company paid all amounts
related to employee severance.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 2001, we announced a three part
strategic restructuring plan that involved reorganizing Critical
Path&#146;s product and service offerings around a group of core
communication solutions. The three elements of the plan
included: (i)&nbsp;focusing on core communication solutions;
(ii)&nbsp;workforce reduction; and (iii)&nbsp;facilities
</FONT>

<P align="center"><FONT size="2">31
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">and operations consolidation. Additionally, we
have implemented an aggressive expense management plan designed
to further reduce operating costs while maintaining strong
customer service for our core solutions. We completed the
restructuring plan in 2001, including the divestiture of all of
our non-core products and services, a 44% reduction in
headcount, a 65% reduction in facilities and the implementation
of other cost cutting measures, resulting in a significant
reduction in overall operating expenses. As a result of these
strategic initiatives, we anticipate that we will realize
significant future annual cost savings. The non-core products
and services comprised approximately 26% and 21% of total
revenues in the years ended December&nbsp;31, 2000 and 2001.
These products and services will be an insignificant part of
Critical Path&#146;s revenue stream going forward.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Refocusing on Core Communications Solutions.
</FONT></I><FONT size="2">We consider our core communication
solutions to be our messaging, collaboration and identity
management solutions, including mail, calendar, address book,
file storage, secure delivery, directory and meta-directory, and
access services supporting wireline and wireless users.
Restructuring charges associated with this refocusing of our
products and services consisted primarily of contract
termination fees, gains and losses related to asset sales and
dispositions, and lease termination fees. During 2001, Critical
Path sold or discontinued all of its non-core products and
services. As a result of these transactions, a net gain of
$1.0&nbsp;million was recorded for the year ended
December&nbsp;31, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Reduction of Workforce, Facility and Other
Expenses.</FONT></I><FONT size="2"> Critical Path reduced its
headcount from 1,011 at March&nbsp;31, 2001 to 562 employees at
December&nbsp;31, 2001, and consolidated its facilities from 77
at December&nbsp;31, 2000 to 27 at December&nbsp;31, 2001.
Charges related to the headcount reduction consisted primarily
of the payment of severance and fringe benefits, and aggregated
approximately $10.3&nbsp;million during 2001. Included in this
charge was approximately $1.5&nbsp;million related to the
forgiveness of a note receivable to one of the Company&#146;s
former executives. Facilities and other expenses consisted
primarily of costs associated with lease terminations, future
lease payments and related fees, and aggregated approximately
$9.0&nbsp;million during 2001.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Summary of
Year-To-Date Restructuring Costs</FONT></I>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Cash</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Noncash</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Payments/</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Liabilities at</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Charge</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Charges</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Receipts)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">December 31, 2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">(in millions)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Workforce reduction
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Facility and operations consolidation and other
	charges
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Non-core product and service sales and
	divestitures
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Revenues
Related to Our Core Communication Solutions</FONT></I>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="63%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Fiscal Year Ended December 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">(in millions)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Core Net Revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Software licensing
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">28.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hosted messaging
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Professional services
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Maintenance &#38; support
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total core revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">82.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Non-Core Net Revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total Net Revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">135.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">104.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">32
</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment of
Long-Lived Assets</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We recorded a $1.3&nbsp;billion impairment charge
to reduce goodwill, other intangible assets and deferred costs
associated with our ICQ and Qwest relationships to their
estimated fair values in the fourth quarter of 2000. In
connection with the impairment analysis, the estimates of fair
values were based upon the discounted estimated cash flows of
Critical Path for the succeeding three years using a discount
rate of 25% and an estimated terminal value. The assumptions
supporting the estimated cash flows, including the discount rate
and an estimated terminal value, reflect management&#146;s best
estimates. The discount rate was primarily based upon the
weighted average cost of capital for comparable companies.
During 2001 and in connection with our strategic restructuring
effort an additional assessment was performed on certain of our
remaining long-lived assets. The restructuring plan identified
and formulated a plan to exit certain products and services that
were determined to be non-core to the Company&#146;s business
strategy. The Company reviewed the intangible assets related to
these non-core products and services and, as a result of its
assessment, recorded a $14.2&nbsp;million impairment charge in
the second quarter of 2001 to eliminate these assets. During the
fourth quarter of 2001, the Company recorded a further
impairment charge of $12.4&nbsp;million related to long-lived
assets within its core business.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Interest and Other Income
(Expense)</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest and other income consists primarily of
interest earnings on cash and cash equivalents as well as net
gains (losses)&nbsp;on foreign exchange transactions. We
completed private placements of equity securities in
April&nbsp;1998, September&nbsp;1998, and January&nbsp;1999, and
we completed public offerings of common stock in April&nbsp;1999
and June&nbsp;1999. In addition, on March&nbsp;30, 2000, we
issued $300.0&nbsp;million of five-year, 5&nbsp;3/4% Convertible
Subordinated Notes due April&nbsp;1, 2005. As a result, interest
income increased significantly during the latter half of 1999
and into 2000, in comparison with early 1999, due to higher cash
balances available for investing. During 2001 we used
$53.1&nbsp;million to retire a substantial portion of our
convertible subordinated notes and as well as a significant
amount of cash to fund our operating activities. As a result of
this reduction in cash, interest income significantly decreased
in 2001 from 2000. During 2000, we recognized a net loss from
foreign currency transactions associated with our international
operations in the amount of $280,000 and a net gain of $947,000
in 2001. Foreign currency transaction gains or losses were
insignificant during 1999.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest
Expense</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest expense consists primarily of interest
and the amortization of issuance costs related to our
5&nbsp;3/4% Convertible Subordinated Notes we issued in March
2000, and interest on certain capital leases. We incurred
approximately $13.0&nbsp;million and $12.1&nbsp;million in
interest expense on the Convertible Subordinated Notes, and
approximately $1.6&nbsp;million and $1.5&nbsp;million related to
amortization of debt issuance costs in 2000 and 2001,
respectively. Interest on capital leases and other long-term
obligations amounted to approximately $1.3 million during 2001,
$1.3&nbsp;million during 2000 and $688,000 during 1999.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation
Expense</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depreciation expense primarily relates to the
expensing, over the estimated useful lives, of capital equipment
used in network infrastructure and for our hosted messaging
services, leasehold improvements and equipment used in our
general operations. Depreciation expense totaled
$8.1&nbsp;million, $34.4&nbsp;million and $43.0&nbsp;million
during 1999, 2000 and 2001, respectively. Included in these
amounts was depreciation expense related to cost of net hosted
messaging revenues, which totaled $5.2&nbsp;million,
$23.9&nbsp;million and $26.3&nbsp;million during 1999, 2000 and
2001, respectively. The remaining depreciation expense related
to capital expenditures incurred for general operations of our
business and has been allocated to cost of net revenue and
operating expense, as appropriate.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on
Investments</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2000 and 2001, we determined that certain
of our investments were permanently impaired and recorded write
downs of $23.6&nbsp;million and $702,000, respectively. During
2001, these adjustments reduced the carrying value by
$2.6&nbsp;million in investments in marketable securities and
$21.0&nbsp;million in investments in non-
</FONT>

<P align="center"><FONT size="2">33
</FONT>

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<DIV align="left">
<FONT size="2">marketable securities. During 2001, investments
in non-marketable securities were written-down by $702,000. See
also Note&nbsp;6 to the Notes to Consolidated Financial
Statements&nbsp;&#151; Investments.
</FONT>
</DIV>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity in Net
Loss of Critical Path Pacific</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2000, we established a joint venture,
Critical Path Pacific, Inc. with Mitsui and Co., Ltd., NTT
Communications Corporation and NEC Corporation to deliver
advanced Internet messaging solutions to businesses in Asia. We
invested $7.5&nbsp;million and hold a 40% ownership interest in
the joint venture. This investment is being accounted for using
the equity method. During 2000 and 2001, we recorded equity in
net loss of joint venture of approximately $1.0&nbsp;million and
$1.9&nbsp;million, respectively. Management does not expect to
provide any additional cash funding for into this joint venture
and, as of December&nbsp;31, 2001, Critical Path Pacific&#146;s
liabilities were insignificant.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Minority Interest in Net Income of
Consolidated Subsidiary</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2000, we owned a 72.87%
interest in CP Italia, a consolidated subsidiary, which was
acquired in connection with the acquisition of ISOCOR. The
minority interest in net income of CP&nbsp;Italia amounted to
$649,000 in 2000 and was insignificant in 2001. In March 2001,
in connection with our agreement to purchase the remaining
minority interest, we acquired the outstanding 27.13% interest
in CP&nbsp;Italia for approximately $4.2&nbsp;million.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Provision for Income
Taxes</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No current provision or benefit for
U.S.&nbsp;federal or state income taxes has been recorded as we
have incurred net operating losses for income tax purposes since
our inception. No deferred provision or benefit for federal or
state income taxes has been recorded as we are in a net deferred
tax asset position for which a full valuation allowance has been
provided due to uncertainty of realization. We recognized a
provision for foreign income taxes during 2000 and 2001 as
certain of our European operations generated income taxable in
certain European jurisdictions.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Convertible Subordinated
Notes</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We issued $300.0&nbsp;million of five-year,
5&nbsp;3/4% Convertible Subordinated Notes due April 2005, to
qualified institutional buyers in reliance on Rule&nbsp;144A
under the Securities Act of 1933 in March 2000. We incurred
approximately $10.8&nbsp;million in debt issuance costs,
consisting primarily of underwriting discount and legal and
other professional fees. These costs have been capitalized and
will be recognized as a component of interest expense on a
straight-line basis, which approximates the effective interest
method, over the five-year term of the Notes. Interest is
payable on April&nbsp;1 and October&nbsp;1 of each year. As of
December&nbsp;31, 2000 and 2001, there was approximately
$4.3&nbsp;million and $600,000 in interest payable,
respectively. These Notes are subordinated in right of payment
to all senior debt of Critical Path and effectively subordinated
to all existing and future debt and other liabilities of
Critical Path&#146;s subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001, we retired $261.4&nbsp;million of
face value of these notes, which resulted in an extraordinary
gain on retirement of $179.3&nbsp;million, inclusive of
$6.8&nbsp;million in write downs of related debt issuance costs.
We used cash of $48.7&nbsp;million as well as a portion was
retired through the issuance of the preferred stock in the
financing transaction completed in December 2001. See also Note
14 to the Notes to Consolidated Financial Statements&nbsp;&#151;
Financing Transaction. As of December&nbsp;31, 2000 and 2001,
the total balance outstanding was $300.0&nbsp;million and
$38.4&nbsp;million, respectively. These Notes are carried at
cost and had an approximate fair value at December&nbsp;31, 2001
of $21.5&nbsp;million.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Accretion on redeemable
convertible preferred shares</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the financing transaction
Critical Path completed during December 2001, we received gross
cash proceeds of approximately $30&nbsp;million and retired
approximately $65&nbsp;million in face value of our outstanding
convertible subordinated notes in exchange for shares of our
Series&nbsp;D Convertible Preferred Stock. See also Note&nbsp;14
of Notes to the Financial Statements&nbsp;&#151; Financing
Transaction. The fair value
</FONT>

<P align="center"><FONT size="2">34
</FONT>

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<DIV align="left">
<FONT size="2">ascribed to the shares of Series&nbsp;D Preferred
Stock was based on actual cash paid by independent investors and
the approximate fair value of the Notes retired in connection
with the offering. The principal terms of the Series&nbsp;D
Preferred Stock include an automatic redemption on
November&nbsp;8, 2006, cumulative dividends at a rate of 8% per
year, compounded on a semi-annual basis and payable in cash or
additional shares of Series&nbsp;D Preferred Stock, conversion
into shares of common stock calculated based on the Accreted
Value, as defined, divided by $1.05, and preference in the
return of equity in any liquidation or change of control. At
issuance, the total amount of these costs was recorded as a
reduction of the carrying amount of the Series&nbsp;D Preferred
Stock and will accrete over the term of the Series&nbsp;D
Preferred Stock. Additionally, at issuance, the Series&nbsp;D
Preferred Stock was deemed to have an embedded beneficial
conversion feature which was limited to the net proceeds
allocable to preferred stock of approximately $42&nbsp;million.
The value of the beneficial conversion feature, at issuance, was
initially recorded as a reduction of the carrying amount of the
Series&nbsp;D Preferred Stock and will accrete over the term of
the Series&nbsp;D Preferred Stock.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Related Party Transactions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Vectis Group, LLC.</FONT></I><FONT size="2">
In March 2001, the Company entered into certain agreements with
Vectis Group, LLC (&#147;Vectis Group&#148;) to engage Vectis
Group to act as an advisor to the Company with respect to
various strategic alternatives the Company was exploring and to
assist with other management related services. As part of the
agreement, Vectis Group agreed to provide consulting services to
the Company in exchange for a monthly retainer fee, potential
transaction-based fees associated with certain strategic asset
sales and investments in Critical Path and immediately
exercisable warrants to purchase 500,000 shares of the
Company&#146;s Common Stock with an exercise price of $2.00 per
share, issuable upon execution of the agreement. Using the
Black-Scholes option-pricing model and assuming a term of three
years, the life of the warrants, and expected volatility of
215%, the fair value of the warrant on the effective date of the
agreement approximated $732,000, which was recognized upon the
execution of the agreement in March 2001, as the relationship is
terminable at any time. During the term of the agreements, we
paid Vectis Group an aggregate of approximately
$1.1&nbsp;million in retainer fees and expenses and
approximately $3.1&nbsp;million in transactional fees, including
approximately $2.75&nbsp;million in connection with our recent
preferred stock financing transaction. Vectis Group was also one
of three investors (and their affiliates) that participated in
this transaction led by General Atlantic Partners. See also
Note&nbsp;14 to the Notes to Consolidated Financial
Statements&nbsp;&#151; Financing Transaction. William McGlashan,
Jr., a principal in Vectis Group, and a member of the Board of
Directors of the Company, was appointed interim President and
Chief Operating Officer in April, 2001 and was later appointed
Vice Chairman and Chief Executive Officer. Effective
September&nbsp;30, 2001, the Company terminated its agreements
with Vectis Group for consulting and other transactional
services. In connection with the termination of the agreements,
certain other employees of Vectis Group have become employees of
Critical Path. Although the agreements terminated, certain
obligations under the agreements survived, including payment of
the transaction fee in connection with the Company&#146;s recent
financing transaction and related indemnification obligations.
The total potential remaining fees aggregate between zero and
$135,000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loans to Officers and Employees.
</FONT></I><FONT size="2">During 1998, Critical Path issued
notes receivable to shareholder and former Chief Executive
Officer, Douglas Hickey, equal to $1.06&nbsp;million in full
recourse and $500,000 in non-recourse notes. Hickey&#146;s notes
accrue interest at the rate of 4.51% per annum. In February
2001, Mr.&nbsp;Hickey terminated his employment with the
Company. In connection with the termination, the repayment of
the $1.06&nbsp;million note and accrued interest was extended to
May&nbsp;9, 2002 and the repayment of the $500,000 note and
accrued interest was extended to March&nbsp;9, 2002. As of
December&nbsp;31, 2000 and 2001, accrued interest totaled
$160,000 and $231,000, respectively. Mr.&nbsp;Hickey repaid both
notes in full with interest in March 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2000, Critical Path issued a full recourse
note to its then Chief Financial Officer, Lawrence Reinhold,
equal to $1.7&nbsp;million. Reinhold&#146;s full recourse note
accrued interest at the rate of 6.0% per annum and both
principal and interest were scheduled to be forgiven over a
specified period. During Reinhold&#146;s employment with
Critical Path approximately $270,000 of principal and interest
was forgiven, consistent with the terms of the note. The
repayment of the outstanding loan was subject to certain change
of control and employment termination criteria. In August 2001,
Mr.&nbsp;Reinhold&#146;s employment with Critical Path
terminated. In connection with his termination all outstanding
principal and interest, totalling of $1.5&nbsp;million, was
forgiven.
</FONT>

<P align="center"><FONT size="2">35
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001 and in connection with each of their
respective employment agreements, the Company made loans and
held notes receivable from David&nbsp;C. Hayden, Executive
Chairman, and Pierre Van Beneden, President, totaling
$1.5&nbsp;million and $350,000, respectively. Hayden&#146;s full
recourse note accrues interest at the rate of 6.75% per annum
and shall be repaid by the achievement of performance-based
milestones described in Mr.&nbsp;Hayden&#146;s employment
agreement and performance loan agreement. As of
December&nbsp;31, 2001, accrued interest totaled $40,000
pursuant to the note to Mr.&nbsp;Hayden. Mr.&nbsp;Van
Beneden&#146;s loan shall be interest free for the first year
and shall be forgiven in monthly installments over the first
year of Van Beneden&#146;s employment, resulting in a
compensation charge to operating expense ratably over the first
twelve months of his employment. In the event of Mr.&nbsp;Van
Beneden&#146;s departure prior to one year from employment, the
note shall be repayable and interest due in accordance with the
terms of his employment agreement. Mr.&nbsp;Van Beneden&#146;s
employment agreement and loan were not effective until
October&nbsp;8, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2001, the Board approved a full
recourse loan to William&nbsp;E. McGlashan,&nbsp;Jr. of up to
$4.0&nbsp;million in connection with the purchase of a principal
residence in the San Francisco Bay Area. The loan is to be
collateralized by the residence, and to the extent necessary
should an appraisal of the property equal less than 120% of the
loan&#146;s value, be secured by Mr.&nbsp;McGlashan&#146;s
personal shareholdings pledged to the Company, such that the
amount outstanding shall be at all times fully collateralized or
secured by at least 120% of the principal outstanding. Interest
on the loan is accrued at the Applicable Prime Rate, deferred
until principal is due, over a 10&nbsp;year term. The loan shall
be forgiven upon a defined Change of Control event. In the event
Mr.&nbsp;McGlashan terminates employment either by voluntary
resignation or for Cause, the loan shall be due and payable,
with interest, no later than 12&nbsp;months following such
termination. In the event Mr.&nbsp;McGlashan is terminated for
any reason other than Cause, the loan shall remain outstanding
for the remainder of its terms. The Company has not yet funded
the loan and as such no accrued interest was outstanding as of
December&nbsp;31, 2001.
</FONT>

<P align="left">
<B><FONT size="2">Acquisitions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a summary of the ten
acquisitions Critical Path completed during 1999 and 2000. There
were no acquisitions completed during 2001. All acquisitions
were accounted for using the purchase method of accounting.
Results of operations of the acquired businesses are included in
the Company&#146;s financial results from the date of the
acquisition. Net assets of the companies acquired are recorded
at their fair value at the acquisition date and the excess of
the purchase price over the fair value of separately identified
net assets acquired is included in intangible assets in the
accompanying consolidated balance sheet. The fair value of
separately identified intangible assets was determined based
upon independent valuations using various valuation
methodologies. See also Note&nbsp;2 to the Notes to Consolidated
Financial Statements&nbsp;&#151; Acquisitions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">1999 Acquisitions.
</FONT></I><FONT size="2">On May&nbsp;26, 1999, we acquired
substantially all the operating assets of the <I>Connect Service
business of Fabrik Communications,</I> including the ongoing
business operations as well as nearly 500&nbsp;customer
relationships for a total purchase price of approximately
$20.1&nbsp;million. On July&nbsp;21, 1999, we acquired <I>dotOne
Corporation,</I> a corporate email messaging service provider
for a total purchase price of approximately $57.0&nbsp;million.
On August&nbsp;31, 1999, we acquired <I>Amplitude Software
Corporation,</I> a provider of business-to-business Internet
calendaring and resource scheduling solutions for a total
purchase price of approximately $214.4&nbsp;million. On
November&nbsp;24, 1999, we acquired <I>Xeti, Inc.</I>, a
developer of standards-based public key infrastructure solutions
for a total purchase price of approximately $23.8&nbsp;million.
On December&nbsp;6, 1999, we acquired <I>FaxNet Corporation,</I>
a outsource supplier of carrier-class enhanced fax and
integrated messaging solutions for a total purchase price of
approximately $187.6&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">2000 Acquisitions </FONT></I><FONT size="2">On
January&nbsp;19, 2000, we acquired <I>ISOCOR Corporation,</I> a
supplier of Internet messaging, directory and meta-directory
software solutions for a total purchase price of approximately
$277.4&nbsp;million. On March&nbsp;8, 2000, we acquired <I>The
docSpace Company,</I> a provider of web-based services for
secure file delivery, storage and collaboration for a total
purchase price of approximately $258.0&nbsp;million. On
March&nbsp;30, 2000, we acquired <I>RemarQ Communities,
Inc.</I>, a provider of Internet collaboration services for
corporations, web portals and Internet service providers for a
total purchase price of approximately $267.6&nbsp;million. On
June&nbsp;26, 2000, we acquired <I>Netmosphere, Inc.</I>, a
provider of e-Business solutions for project collaboration and
communications for a total purchase price of approximately
$41.3&nbsp;million. On
</FONT>

<P align="center"><FONT size="2">36
</FONT>

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<DIV align="left">
<FONT size="2">September&nbsp;26, 2000, we acquired
<I>PeerLogic, Inc.</I>, a provider of directory and enterprise
application integration software for a total purchase price of
approximately $445.1&nbsp;million.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Liquidity and Capital Resources</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Working capital declined to $58.0&nbsp;million at
December&nbsp;31, 2001 from $186.8&nbsp;million at
December&nbsp;31, 2000 due primarily to the use of cash to fund
the Company&#146;s net loss for 2001, adjusted for non-cash
charges, and cash utilized to retire a significant portion of
the Company&#146;s convertible debt obligations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cash, cash equivalents and short-term investments
were $69.2&nbsp;million at December&nbsp;31, 2001 and
$216.5&nbsp;million at December&nbsp;31, 2000. The Company
primarily invests its excess cash in money market funds and
other highly liquid securities with maturities of less than
90&nbsp;days with the intent to make such funds readily
available for operating purposes. During 2001, we also began
investing a portion of our cash in high-grade, low risk
investments with an average maturity of three- to twelve-months.
As of December&nbsp;31, 2001, these short-term investments
totaled approximately $9.7&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cash and cash equivalents decreased by
$156.5&nbsp;million during 2001 after having increased by
$140.6&nbsp;million in the prior year. The Company used cash to
fund operating activities of $91.2&nbsp;million during 2001 and
$80.5&nbsp;million in 2000, primarily due to our net loss,
adjusted for non-cash charges, as operating costs, primarily
employee and employee related costs, significantly exceeded the
related sales of our software products and services. A more
detailed discussion of our 2000 and 2001 operating results can
be found in the Results of Operations section of this document.
Also contributing to the use of cash in operating activities in
2001 were net cash outlays totaling $8.2&nbsp;million related to
employee and facilities reduction costs and the divestiture of
non-core products and services, associated with the
Company&#146;s 2001 strategic restructuring activities. In 2000,
the payment of $11.6&nbsp;million in acquisition-related
retention bonuses contributed to the net use of cash in
operating activities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001, we used cash in investing activities
of $34.9&nbsp;million to purchase property and equipment,
primarily for the acquisition of additional network
infrastructure equipment for our data centers, for certain
strategic investments and short-term investments in high-grade,
low risk instruments. In 2001, we acquired the outstanding
27.13% interest in our Italian subsidiary, CP&nbsp;Italia, for
approximately $4.2&nbsp;million, and paid an investment banking
fee associated with our ISOCOR acquisition.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2000, we used cash in investing activities
totaling $90.4&nbsp;million primarily to purchase property,
equipment and other capital assets and to fund certain strategic
acquisitions and investments. The significant outlay in capital
expenditures during 2000 was primarily related to installation
of additional network infrastructure equipment in our data
centers, licenses of new software platforms, and purchases of
furniture and equipment for new employees. During 2000, we
completed our acquisitions of ISOCOR, docSpace, RemarQ,
Netmosphere, and PeerLogic, and as a result, expended a
significant amount of capital. In addition, we made several
strategic investments in private entities and an initial capital
contribution to fund our interest in Critical Path Pacific, Inc.
These uses of cash were offset by the repayment of a previous
advance made to a private company pursuant to a promissory note
and certain of the employee notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001, the Company used cash in financing
activities of $30.3&nbsp;million as funds were used to retire a
significant portion of the Company&#146;s convertible debt and
to payoff capital lease obligations. These cash outlays were
partially offset by proceeds raised in a financing transaction
closed in the fourth quarter of 2001 (detailed below) and from
the exercise of stock options.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001, the Company retired
$261.4&nbsp;million of face value of convertible debt, which
resulted in an extraordinary gain on retirement of
$179.3&nbsp;million, inclusive of $6.8&nbsp;million in write
downs of related debt issuance costs. The Company used cash of
$53.1&nbsp;million, as well as a significant portion of the
proceeds raised from the issuance of preferred stock, in order
to retire this debt. See also Note&nbsp;14 to the Notes to the
Consolidated Financial Statements&nbsp;&#151; Financing
Transaction. As of December&nbsp;31, 2000 and 2001 the total
balance outstanding was $300.0&nbsp;million and
$38.4&nbsp;million, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the fourth quarter of 2001, we closed a
financing transaction with a group of investors led by General
Atlantic Partners, LLC and its affiliates. The financing
transaction consisted of approximately
</FONT>

<P align="center"><FONT size="2">37
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">$30&nbsp;million in gross cash proceeds and the
retirement of $65&nbsp;million in face value of our 5&nbsp;3/4%
Convertible Subordinated Notes in the form of shares of
mandatorily redeemable convertible preferred stock, and the
issuance to General Atlantic and its affiliates of warrants to
purchase 2.5&nbsp;million shares of common stock. The related
proceeds will be used for working capital and general corporate
purposes. The cash proceeds to the Company, net of transaction
costs, totaled $26.8 million. The related proceeds will be used
for working capital and general corporate purposes.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We received net cash proceeds from financing
activities during 2000 of $311.5&nbsp;million due to the sale of
$300.0&nbsp;million in 5&nbsp;3/4% Convertible Subordinated
Notes, as well as from the exercise of employee stock options
and the purchase of stock under our employee stock purchase
plan. These cash proceeds were partially offset by a payment to
retire a note payable assumed in the PeerLogic acquisition and
payments to retire principal on capital lease obligations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our primary sources of capital have come from
both debt and equity financings, that have been completed by
Critical Path over the past three years. Revenues generated from
the sale of our products and services may not increase to a
level that exceeds our operating expenses or could fluctuate
significantly as a result of changes in customer demand or
acceptance of future products. We also expect to experience
increased operating expenses, including moderate increases in
strategic areas, such as sales and marketing, and we anticipate
that operating expenses and capital expenditures will constitute
a material use of our cash. Accordingly, our cash flow from
operations may continue to be negatively impacted. We believe
that our cash, cash equivalents and anticipated cash from
operations will be sufficient to maintain current and planned
operations for at least the next twelve months.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additionally, we have no present understandings,
commitments or agreements for any material acquisitions of, or
investments in, other complementary businesses, products or
technologies. We continually evaluate potential acquisitions of,
or investments in, other businesses, products and technologies,
and may in the future utilize our cash resources or may require
additional equity or debt financing to accomplish any
acquisitions or investments. Currently, we are considering
several alternatives to expand our presence in the Asian markets
and potentially other international markets. These alternatives
could increase liquidity through the infusion of investment
capital by third-party investors or decrease our liquidity as a
result of Critical Path seeking to fund expansion into these
markets. Such expansions might also cause an increase in capital
expenditures and operating expenses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Contractual Obligations and Commitments Table
below sets forth our significant obligations and commitments as
of December&nbsp;31, 2001.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="44%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="13"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="13" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="13" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="9"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2006</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">and beyond</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="13"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="13" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Contractual Cash Obligations:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Convertible subordinated notes, including
	interest(1)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">$45,898
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">$2,206
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">$2,206
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">$2,206
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">$39,280
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating lease obligations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">42,192
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">5,819
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">5,290
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">5,028
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">4,514
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,541</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Capital lease obligations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">2,081
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">1,232
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">536
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">313
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other purchase obligations(2)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">4,905
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">4,635
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">270
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total Contractual Cash Obligations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">$95,076
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">$13,892
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">$8,302
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">$7,547
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom">
	<FONT size="2">$43,794
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,541</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represent the Critical Path 5&nbsp;3/4%
	Convertible Subordinated Notes due April 2005.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represent certain contractual obligations related
	to licensed software, maintenance contracts and network
	infrastructure storage costs.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">38
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
<B><FONT size="2">ADDITIONAL FACTORS THAT MAY AFFECT FUTURE
OPERATING RESULTS</FONT></B>

<P align="left">
<B><FONT size="2">Due to our limited operating history, evolving
business strategy and the nature of the messaging and directory
infrastructure market, our future revenues are unpredictable,
and our quarterly operating results may fluctuate.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We cannot accurately forecast our revenues as a
result of our limited operating history, evolving business
strategy and the emerging nature of the Internet messaging
infrastructure market. Forecasting is further complicated by
rapid changes in our business due to integration of acquisitions
we completed in 1999 and 2000, our recent strategic and
operational restructuring, as well as significant fluctuations
in license revenues as a percentage of total revenues from an
insignificant percentage in 1999, to 38% in 2000 and to 30% in
2001. Our revenues have in some quarters and could continue to
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:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the demand for outsourced messaging services
	generally and the use of messaging and directory infrastructure
	products and services in particular;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the demand for licensed solutions for messaging,
	directory, and other products;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">our ability to attract and retain customers and
	maintain customer satisfaction;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">our ability to attract and retain qualified
	personnel with industry expertise, particularly sales personnel;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the ability to upgrade, develop and maintain our
	systems and infrastructure and to effectively respond to the
	rapid technology change of the messaging and directory
	infrastructure market;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the budgeting cycles of our customers and
	potential customers;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the amount and timing of operating costs and
	capital expenditures relating to expansion of business and
	infrastructure;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">our ability to quickly handle and alleviate
	technical difficulties or system outages;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the announcement or introduction of new or
	enhanced services by competitors; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">general economic and market conditions and their
	affect on our operations and that of our customers.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the factors set forth above,
operating results have been and will continue to 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 stock
options to employees and non-employees and the grant of warrants
to customers, investors and other parties with which we have
business relationships. These grants of options and warrants
also may be dilutive to existing shareholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although we have largely exited non-core product
lines, our operating results have been and could continue to be
impacted by decisions to eliminate product or service offerings
through termination, sale or other disposition or to sustain
certain products and services at a minimum level where customer
commitments prevent us from eliminating the offering altogether.
Decisions to eliminate or limit any other offerings of a product
or service would involve other factors affecting operational
results including the expenditure of capital, the realization of
losses, further reductions in our workforce, facility
consolidation or the elimination of revenues along with the
associated costs, any of which could harm our financial
condition and operating results.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the foregoing, we do not believe
that period-to-period comparisons of operating results are 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 prove volatile and/or decline.
</FONT>

<P align="center"><FONT size="2">39
</FONT>

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<P align="left">
<B><FONT size="2">We depend on strategic relationships as well
as other sales channels and the loss of any key strategic
relationships could harm our business and negatively affect our
revenues.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 aggressively marketing our services through new and
existing strategic relationships. We depend on a broad
acceptance of our software and outsourced messaging services on
the part of potential resellers and partners and our acceptance
as a supplier of outsourced messaging solutions. We also depend
on joint marketing and product development through strategic
relationships to achieve further market acceptance and brand
recognition. 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&nbsp;-&nbsp;120&nbsp;days&#146; 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. In addition to
strategic relationships, we also depend on the ability of our
customers to aggressively sell and market our services to their
end-users. If we lose any strategic relationships, fail to renew
these agreements or relationships, fail to fully exploit our
relationships, or fail to develop new strategic relationships,
our business and financial results will suffer. The loss of any
key strategic relationships would have an adverse impact on our
current and future revenues.
</FONT>

<P align="left">
<B><FONT size="2">We have experienced turnover of senior
management and our current management team has been together for
a limited time, which could harm our business and
operations.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the first quarter of 2001, in response to the
restatement of our financial results, we announced a series of
changes in our management that included the departure of many
senior executives. In the second quarter of 2001, we announced a
series of additional changes in our management and board of
directors that also included the departures of senior executives
and board members. A majority of the current senior executives
of the Company joined us in the second and third quarters of
2001. Because of these recent changes and their recent
recruitment, our management team has not worked together for a
significant length of time and may not be able to work together
effectively to successfully implement our strategy. If our
management team is unable to accomplish our business objectives,
our ability to grow our business and successfully meet
operational challenges could be severely impaired. We do not
have long-term employment agreements with any of our executive
officers. It is possible this high turnover at our senior
management levels may also continue for a variety of reasons.
The loss of the services of one or more of our current senior
executive officers could harm our business and affect our
ability to successfully implement our business objectives.
</FONT>

<P align="left">
<B><FONT size="2">We have a history of losses, expect continuing
losses and may never achieve profitability.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, we had an
accumulated deficit, including other comprehensive income, of
approximately $2.1&nbsp;billion. We have not achieved
profitability in any period and expect to continue to incur net
losses in accordance with generally accepted accounting
principles for the foreseeable future. We do expect that our
operating expenses will continue to decrease as a result of our
strategic and operational restructuring and other cost-cutting
efforts. However, we will continue to spend resources on
maintaining and strengthening our business, and this may, in the
near term, have a negative effect on our operating results and
our financial condition.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In past quarters, we have spent heavily on
technology and infrastructure development. We may continue to
spend substantial financial and other resources to develop and
introduce new end-to-end messaging and directory infrastructure
solutions, and to improve our sales and marketing organizations,
strategic relationships and operating infrastructure. In
addition, in future periods we will continue to incur
significant non-cash charges related to the ten acquisitions we
completed in 1999 and 2000 and related stock-based compensation.
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 could continue to
</FONT>

<P align="center"><FONT size="2">40
</FONT>

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<DIV align="left">
<FONT size="2">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
harmed. If we continue to incur net losses in future periods, we
may not be able to retain employees, or fund investments in
capital equipment, sales and marketing programs, and research
and development to successfully compete against our competitors.
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 also,
in turn, cause the price of our common stock to demonstrate
volatility and/or to decline.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">If we fail to improve our sales and marketing
results, we may be unable to grow our business affecting our
operating results.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our ability to increase revenues will depend on
our ability to successfully recruit, train and retain
experienced and effective sales and marketing personnel.
Competition for qualified personnel is intense and we may not be
able to hire and retain personnel with relevant experience. The
complexity and implementation of our messaging and directory
infrastructure products and 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. Any delays or difficulties encountered in our
staffing efforts would impair our ability to attract new
customers and enhance our relationships with existing customers,
and ultimately, grow revenues. This would also adversely impact
the timing and extent of our revenues. Because we have
experienced turnover in our sales force and the majority of our
current 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 sales and marketing organizations of our
competitors. If we do not successfully operate and grow our
sales and marketing activities, our business could suffer and
the price of our common stock could decline.
</FONT>

<P align="left">
<B><FONT size="2">A limited number of customers account for a
high percentage of our revenues and if we lose a major customer
or are unable to attract new customers, revenues could
decline.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We expect that sales of our services to a limited
number of customers will continue to account for a high
percentage of our revenue for the foreseeable future. Our future
success depends on our ability to retain our current customers,
and to attract new customers, in our target markets. The loss of
a major customer could harm our business. Our agreements with
our customers typically have terms of one to three years often
with automatic one year renewals and can be terminated without
cause upon 30&nbsp;-&nbsp;120&nbsp;days notice. In addition, a
number of our technology industry customers have also suffered
from falling revenue, job losses, restructuring and decreased
technology spending in the recent economic downturn. If our
customers terminate their agreements for any reason before the
end of the contract term, the loss of the customer could have an
adverse impact on our current and future revenues. Also, if we
are unable to enter into agreements with new customers, our
business will not grow and we will not generate additional
revenues.
</FONT>

<P align="left">
<B><FONT size="2">If we are unable to successfully compete in
our product market, our operating results could be
harmed.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Because we have a variety of messaging and
directory infrastructure products and services, we encounter
different competitors at each level of our products and
services. Our competitors for corporate customers seeking
outsourced hosted messaging solutions are email service
providers, such as Commtouch, Easylink, USA.NET and application
service providers who offer hosted exchange services. Our
primary competitors for service providers seeking insourced or
outsourced product-based solutions are iPlanet and OpenWave. For
secure delivery services, our competitors include Tumbleweed for
product-based solutions and SlamDunk for service-based
solutions. In the enterprise/eBusiness directory category, we
compete primarily with iPlanet, Microsoft and Novell, and our
competitors in the meta-directory market are iPlanet, Microsoft,
Novell and Siemens.
</FONT>

<P align="center"><FONT size="2">41
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that competitive factors affecting the
market for messaging and directory infrastructure solutions
include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">breadth of platform features and functionality;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">ease of integration into customers&#146; existing
	systems;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">scalability, reliability and performance, and
	ease of expansion and upgrade;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">flexibility to enable customers to manage certain
	aspects of their systems internally and leverage outsourced
	services in other cases when resources, costs and time to market
	reasons favor an outsourced offering; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">total cost of ownership and operation.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe competition will continue to be fierce
and further increase as current competitors increase the
sophistication of their offerings and as new participants enter
the market. Many of our 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. Any delay in our development and
delivery of new services or enhancement of existing services
would allow our competitors additional time to improve their
service or product offerings, and provide time for new
competitors to develop and market messaging and directory
infrastructure products and services 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.
</FONT>

<P align="left">
<B><FONT size="2">Our sales cycle is lengthy and our results
could be harmed by delays or cancellations in orders.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Because we sell complex and sophisticated
technology, our sales cycle can long and unpredictable often
between two to twelve months. Because of the nature of our
product and service offerings it can take many months of
customer education and product evaluation before a purchase
decision is made. In addition, many factors can influence the
decision to purchase our product and service offerings including
budgetary restraints and decreases in capital expenditures,
quarterly fluctuations in operating results of customers and
potential customers, the emerging and evolving nature of the
internet-based services and wireless services markets.
Furthermore, general global economic conditions, and a slowdown
in technology spending in particular, have further lengthened
and affected our sales cycle, leading to delays and
postponements in purchasing decisions. Any delay or cancellation
in sales of our products or services could cause our operating
results to differ from those projected and cause our stock price
to decline.
</FONT>

<P align="left">
<B><FONT size="2">We may need to raise additional capital and to
initiate other operational strategies that may dilute existing
shareholders.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that existing capital resources will
enable us to maintain current and planned operations through
December&nbsp;31, 2002. However, additional capital may be
required to continue operations and achieve profitability. In
addition, we may be required to raise additional funds due to
unforeseen circumstances. If our capital requirements vary
materially from those currently 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. Additionally,
we face a number of challenges in operating our business,
including but not limited to the resources to maintain worldwide
operations, our leveraged capital structure and significant
contingent liabilities associated with litigation. In the event
that resolution of these or other operational matters involve
issuance of stock or other derivative instruments, our existing
shareholders may experience significant dilution.
</FONT>

<P align="center"><FONT size="2">42
</FONT>

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<P align="left">
<B><FONT size="2">Pending litigation could harm relationships
with existing or potential strategic partners and customers, and
divert management&#146;s attention either of which could harm
our business.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have had filed in recent years, a number of
lawsuits against us, including securities class action and
shareholder derivative litigation filed in February and August
2001 and February 2002, and certain of our current and former
officers and directors and some of our subsidiaries, as well as
other lawsuits related to acquisitions, employee terminations
and copyright infringement. While these lawsuits vary greatly in
the materiality of potential liability associated with them, the
uncertainty associated with substantial unresolved lawsuits
could seriously harm our business, financial condition and
reputation, whether material individually or in the aggregate.
In particular, this uncertainty could harm our relationships
with existing customers, our ability to obtain new customers and
our ability to operate certain aspects of our business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The continued defense of the lawsuits also could
result in continued diversion of our management&#146;s time and
attention away from business operations, which could harm our
business. Negative developments with respect to the lawsuits
could cause the price of our common stock to decline
significantly. In addition, although we are unable to determine
the amount, if any, that we may be required to pay in connection
with the resolution of these lawsuits by settlement or
otherwise, the size of any such payments, individually or in the
aggregate, could seriously harm our financial condition. Many of
the complaints associated with these lawsuits do not specify the
amount of damages that plaintiffs seek. As a result, we are
unable to estimate the possible range of damages that might be
incurred as a result of the lawsuits. While we maintain
customary business insurance coverage, we have not set aside any
financial reserves relating to potential damages associated with
any of these lawsuits.
</FONT>

<P align="left">
<B><FONT size="2">Failure to complete the settlement of pending
securities class action and shareholder derivative action could
materially harm our business.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although the Company has reached settlement
agreements in connection with the securities class action
pending in the U.S. District Court for the Northern District of
California, we cannot provide assurance that a final settlement
shall be approved in accordance with the settlement agreement,
or at all. The approval of the definitive settlement agreements
between the parties is subject to other factors, such as court
review and approval, before the subject actions are dismissed.
In addition, the definitive settlement agreements entered into
between the parties are also subject to notice to the putative
class and of the shareholders of the Company, as well as review
and approval by the court. There can be no assurance that the
court will approve the settlement. If the settlement were not
given final approval, it could have a number of materially
detrimental effects on the Company&#146;s financial condition
and business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Should the Court fail to approve the settlement,
and the litigation continue, there can be no assurance that fees
and expenses, and any ultimate resolution associated with such
litigation, shall be within the coverage limits of our insurance
and/or our ability to pay such amounts. Although the terms of
the settlement agreement are within the coverage limits of the
Company&#146;s directors and officers insurance, should the
current agreement in principle fail to be approved by the court,
there can be no assurance that the Company will be able to
conclude such litigation on terms that coincide with the
coverage limits of our insurance and/or ability to pay upon any
final determination. A failure to complete the settlement could
also cast doubt as to the prospects of the Company in the eyes
of our customers, potential customers and investors, and cause
the Company&#146;s stock price to decline.
</FONT>

<P align="left">
<B><FONT size="2">Although concluded without penalty to the
Company, lingering effects of the recent SEC investigation could
harm our business.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In February 2001, the Securities and Exchange
Commission, or SEC, issued a formal order of investigation of us
and certain current and former officers associated with us. The
investigation relates to non-specified accounting matters,
financial reports, other public disclosures and trading activity
in our stock. In February 2002, the SEC announced the conclusion
of the investigation as to the Company. Although the SEC did not
impose any penalties against the Company, we consented without
admitting or denying liability, to an administrative order that
the Company violated certain non-fraud provisions of the federal
securities laws
</FONT>

<P align="center"><FONT size="2">43
</FONT>

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<DIV align="left">
<FONT size="2">and to a cease and desist order. In addition, the
SEC and the Department of Justice charged two former employees
of the Company with various violations of the securities laws.
Despite the conclusion of the investigation of the Company,
lingering concerns about the actions leading up to the
restatement of financials for the third and fourth quarters of
2000 has nevertheless cast doubt on the future of the Company in
the eyes of customers and investors and could continue to harm
our business and cause the price of our common stock to continue
to fluctuate and/or decline significantly.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">We may not be able to maintain our listing on
The Nasdaq National Market and if we fail to do so, the price
and liquidity of our common stock may decline.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Nasdaq Stock Market has quantitative
maintenance criteria for the continued listing of common stock
on the Nasdaq National Market. The current requirements
affecting us include (i)&nbsp;having net tangible assets of at
least $4&nbsp;million and (ii)&nbsp;maintaining a minimum bid
price per share of $1. As of December&nbsp;31, 2001 we were in
compliance with all Nasdaq National Market listing requirements.
However, there were periods in the second and third quarters of
2001 when the closing bid price per share for our common stock
was well below $1. Although our bid price has been above $1 per
share since November&nbsp;1, 2001, if the bid price of our
common stock price again slips below $1 per share for more than
60&nbsp;days, our common stock may not remain listed on The
Nasdaq National Market. Also effective November&nbsp;1, 2002, we
will also need to comply with the Nasdaq National Market&#146;s
revised quantitative maintenance criteria including a new
minimum requirement of $10.0&nbsp;million in stockholders&#146;
equity. The Nasdaq National Market&#146;s Audit Committee Rules
require that our audit committee be comprised of at least three
independent members. We believe that we currently comply with
this requirement. However, there can be no assurance that we
will be able to comply with the quantitative maintenance
criteria or any of the Nasdaq National Market&#146;s rules in
the future. If we fail to maintain continued listing on the
Nasdaq National Market and must move to a market with less
liquidity, our financial condition could be harmed and our stock
price would likely decline. If we are delisted, it could have a
material adverse effect on the market price of, and the
liquidity of the trading market for, our common stock.
</FONT>

<P align="left">
<B><FONT size="2">Our stock price has demonstrated volatility
during recent quarters and continued volatility in the stock
market may cause further fluctuations and/or decline in our
stock price.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The trading price of our common stock has been
and may continue to experience volatility and wide fluctuations.
For example, during the fourth quarter of 2001, the closing sale
prices of our common stock on the Nasdaq National Market ranged
from $0.51 on October&nbsp;1, 2001 to $2.83 on November&nbsp;21,
2001, and the closing sale price of our common stock on
December&nbsp;31, 2001 was $2.74. Our stock price may further
fluctuate or decline in response to any number of factors and
events, such as announcements related to litigation,
technological innovations, strategic and sales relationships,
new product and service offerings by us or our competitors,
changes in senior management, changes in financial estimates and
recommendations of securities analysts, the operating and stock
price performance of other companies that investors may deem
comparable, news reports relating to trends in our markets and
overall market conditions. In addition, the stock market in
general, particularly with respect to technology stocks, has
experienced extreme volatility and a significant cumulative
decline in recent quarters. This volatility and decline has
affected many companies, including our company, irrespective of
the specific operating performance of such companies. These
broad market influences and fluctuations may adversely affect
the price of our stock, and our ability to remain listed on the
Nasdaq National Market, regardless of our operating performance
or other factors.
</FONT>

<P align="left">
<B><FONT size="2">Limitations of our director and officer
liability insurance may harm our business.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our liability insurance for actions taken by
officers and directors during the period from March 1999 to
March 2001, the period during which events related to securities
class action lawsuits against us and certain of our current and
former executive officers are alleged to have occurred, provides
only limited liability protection. If these policies do not
adequately cover our expenses related to those lawsuits, our
business and financial condition could be seriously harmed. Our
director and officer liability insurance, that was in place
</FONT>

<P align="center"><FONT size="2">44
</FONT>

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<DIV align="left">
<FONT size="2">through March 2002, and our current insurance
that was renewed through March&nbsp;2003, contain similar
provisions.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under California law, in connection with our
charter documents and indemnification agreements we entered into
with our executive officers and directors, we must indemnify our
current and former officers and directors to the fullest extent
permitted by law. The indemnification covers any expenses and
liabilities reasonably incurred in connection with the
investigation, defense, settlement or appeal of legal
proceedings. The Company has made payments in connection with
the indemnification of officers and directors in connection with
currently pending lawsuits and has reserved for estimated future
amounts to be paid in connection with legal expenses and others
costs of defense of pending lawsuits.
</FONT>

<P align="left">
<B><FONT size="2">We may experience difficulty in attracting and
retaining key personnel, which may negatively affect our ability
to develop new services or retain and attract
customers.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The loss of the services of key personnel could
harm our business results. Our success also depends on our
ability to recruit, retain and motivate highly skilled sales and
marketing, operational, technical and managerial personnel.
Competition for these people is intense and we may not be able
to successfully recruit, train or retain qualified personnel. If
we fail to do so, we may be unable to develop new services or
continue to provide a high level of customer service, which
could result in the loss of customers and revenues.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We do not have long-term employment agreements
with any of our key personnel. In addition, we do not maintain
key person life insurance on our employees and have no plans to
do so. The loss of the services of one or more of our current
key personnel could harm our business and affect our ability to
successfully implement our business objectives.
</FONT>

<P align="left">
<B><FONT size="2">Our failure to carefully manage expenses and
growth could cause our operating results to suffer.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the past, our management of operational
expenses and the growth of our business have contributed to our
history of losses. In addition, the expansion of our operations
placed a significant strain on managerial, operational and
financial resources. To manage any future growth, we may 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 hire
additional personnel including sales personnel. 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 and
expenses effectively, our business and operating results could
suffer.
</FONT>

<P align="left">
<B><FONT size="2">If we are not successful in finalizing our
strategic plan, including the exit of certain non-core products
and services, our business could be negatively
impacted.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the first quarter of 2001, we developed a
strategic plan that involved reorganizing our product and
service offerings around a group of core products deemed most
imperative to our ability to serve the messaging and directory
infrastructure market. In the second and third quarters of 2001,
implementation of the plan occurred and, accordingly, products
and services determined to be non-core to our strategy were
strategically exited. Our strategic plan also included
initiatives aimed at reducing operating costs through headcount
reduction and consolidation of approximately two-thirds of our
office space and related contracts and leases, all in keeping
with our increased focus on core messaging products and
services. During the fourth quarter of 2001 we incurred some
addition charges in connection previously announced reductions
in force and were able to finalize the consolidation of
additional facilities and related contracts and expenses
associated with those facilities. The non-core products and
services comprised approximately 37% of total revenues in the
first quarter of 2001, approximately 24% of total revenues in
the second quarter of 2001, approximately 18% of total revenues
in the third quarter of 2001, and 3% of total revenues in the
fourth quarter of 2001. We expect that any further charges
associated with the strategic restructuring will be minimal in
future quarters.
</FONT>

<P align="center"><FONT size="2">45
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<P align="left">
<B><FONT size="2">We may face continued technical, operational
and strategic challenges preventing us from successfully
continuing the integration or divestiture of acquired
businesses.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Acquisitions involve risks related to the
integration and management of acquired technology, operations
and personnel. In addition, in connection with our strategic
restructuring, the Company elected to divest or discontinue many
of the acquired businesses. Both the integration and divestiture
of acquired businesses have been and will continue to be
complex, time consuming and expensive processes, which may
disrupt and distract our management from its core business. With
respect to integration, we must operate as a combined
organization utilizing common information and communication
systems, operating procedures, financial controls and human
resources practices to be successful. In particular, we are
currently evaluating, upgrading or replacing our financial
information systems and establishing uniformity among the
systems of the acquired businesses. With divestitures, the
timing and transition of those businesses and their customers to
other entities has required and will continue to require
resources from our legal, finance and corporate development
teams as well as expenses associated with the conclusion of
those transactions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Consequently, we may not be successful or
efficient in integrating or divesting acquired businesses or
technologies and may not achieve anticipated revenues and
benefit and/or cost reductions. We also cannot guarantee that
these acquisitions will result in sufficient revenues or
earnings to justify our investment in, or expenses related to,
these acquisitions or that any synergies will be realized. In
addition, if we are not successful in divesting non-core
acquired businesses, we will incur costs associated with the
cessation of operations or wind up of acquired businesses. In
either event, we will likely further incur significant expenses
as well as non-cash charges to write-off acquired assets, which
could seriously harm our financial condition and operating
results.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Further, due in part to the significant
underperformance of some of our acquisitions relative to
expectations, we have reviewed the products and services we sell
to customers, the locations in which we operate and the manner
in which we go to market with our core product and service
offerings. As a result of this review, in 2001, we eliminated
certain acquired product or service offerings through
termination, sale or other disposition or to sustain certain
products and services at a minimum level where customer
commitments prevent us from eliminating the offering altogether.
Such decisions to eliminate or limit our offering of an acquired
product or service involved and could continue to include the
expenditure of capital, the realization of losses, further
reduction in workforce, facility consolidation, and/or the
elimination of revenues along with the associated costs, any of
which could harm our financial condition and operating results.
</FONT>

<P align="left">
<B><FONT size="2">We currently license many third-party
technologies and may need to license further technologies and we
face risks in doing so that could cause our operating results to
suffer.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We intend to continue to license certain
technologies from third parties and incorporate such
technologies into our products and services, including web
server technology, virus and anti-spam solutions 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. To the extent we cannot license needed
technologies or solutions, we may have to devote Company
resources to the development of such technologies which could
materially harm our business and operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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,
potential patent and copyright infringement issues, 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. In addition, an inability to obtain needed
licenses could delay product and service development until
equivalent technology can be identified, licensed and
integrated. Any delays in services or integration problems could
cause our business and operating results to suffer.
</FONT>

<P align="left">
<B><FONT size="2">If our system security is breached, our
business and reputation could suffer.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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
</FONT>

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<DIV align="left">
<FONT size="2">these attempts are successful, customers&#146;
confidential information, including customers&#146; 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 remain 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 harm our business and operating results.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Changes in the regulatory environment for the
operation of our business or those of our customers could pose
risks.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Few laws currently apply directly to activity on
the Internet and the messaging business, however new laws are
proposed and other laws made applicable to Internet
communications every year. In particular, the Company faces
risks associated with privacy, confidentiality of user data and
communications, consumer protection, taxation, content,
copyright, trade secrets, trademarks, antitrust, defamation and
other legal issues. In particular, legal concerns with respect
to communication of confidential data have affected our
financial services and health care customers due to newly
enacted federal legislation. The growth of the industry and the
proliferation of Internet-based messaging devices and services
may prompt further legislative attention to our industry and
thus invite more regulatory control of our business. The
imposition of more stringent protections and/or new regulations
and application of laws to our business could burden our company
and those with which we do business. Further, the adoption of
additional laws and regulations could limit the growth of our
business and that of our business partners and customers. Any
decreased generalized demand for our service or the loss of or
decrease in business by a key partner due to regulation or the
expense of compliance with any regulation, could either increase
the costs associated with our business or affect revenue, either
of which could harm our financial condition or operating
results. Certain of our service offerings include operations
subject to the Digital Millenium Copyright Act of 1998. The
Company has expended resources and implemented processes and
controls in order to remain in compliance with DMCA but there
can be no assurance that our efforts will be sufficient and/or
new legislation and case law will not affect the operation of
certain services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, the applicability of laws and
regulations directly applicable to the businesses of our
customers, particularly customers in the fields of banking and
health care, will continue to affect us. The security of
information about our customers&#146; end-users continues to be
an area where a variety of laws and regulations with respect to
privacy and confidentiality are enacted. As our customers
implement the protections and prohibitions with respect to the
transmission of end user data, our customers will look to us to
assist them in remaining in compliance with this evolving area
of regulation. In particular the Gramm-Leach-Blilely Act
contains restrictions with respect to the use and protection of
banking records for end-users whose information may pass through
our system.
</FONT>

<P align="left">
<B><FONT size="2">Unknown software defects could disrupt our
services and harm our business and reputation.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our software products are inherently complex.
Additionally, 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 in our products or 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 our
business to suffer.
</FONT>

<P align="left">
<B><FONT size="2">We may have liability for Internet content and
we may not have adequate liability insurance.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a provider of messaging and directory
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
</FONT>

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<DIV align="left">
<FONT size="2">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. In some instances, we may be subject
to criminal liability in connection with Internet content
transmission.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 also is a risk
that a 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 shareholders might 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 harm our reputation and business and operating
results, or could result in the imposition of criminal penalties.
</FONT>

<P align="left">
<B><FONT size="2">Unplanned system interruptions and capacity
constraints could reduce our ability to provide messaging
services and could harm our business reputation.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 &#147;spam,&#148; attacks and operating system
failures. 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 degradation in levels of
customer service. If this were to continue to happen, our
business and reputation could suffer dramatically.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have entered into messaging 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.
</FONT>

<P align="left">
<B><FONT size="2">We rely on trademark, copyright, trade secret
laws, contractual restrictions and patents to protect our
proprietary rights, and if these rights are not sufficiently
protected, our ability to compete and generate revenue could be
harmed.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We rely on a combination of trademark, copyright
and trade secret laws, contractual restrictions, such as
confidentiality agreements and licenses, and patents to
establish and protect our proprietary rights, which we view as
critical to our success. Our ability to compete and grow our
business could suffer if these rights are not adequately
protected. We seek to protect our source code for our software,
documentation and other written materials under trade secret and
copyright laws. We license our software pursuant to agreements
that impose certain restrictions on the licensee&#146;s ability
to utilize the software. 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, which could harm our competitive position and
market share. We also seek to avoid disclosure of our
intellectual property by requiring employees and consultants
with access to our proprietary information to execute
confidentiality agreements. In addition, we have several patents
pending in the United States and may seek additional patents in
the future. However, 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 do not know if our patent applications or any of our
future patent applications will be issued with the scope of the
claims sought, if at all, or whether any patents we have
received or will receive will be challenged or invalidated.
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our proprietary rights may not be adequately
protected because:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">laws and contractual restrictions may not prevent
	misappropriation of our technologies or deter others from
	developing similar technologies;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">policing unauthorized use of our products and
	trademarks is difficult, expensive and time-consuming, and we
	may be unable to determine the extent of this unauthorized use;
	and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">end user license provisions in our contracts that
	protect us against unauthorized use, copying, transfer and
	disclosure of the licensed program may be unenforceable.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, the laws of some foreign countries
may not protect proprietary rights to the same extent as do the
laws of the United&nbsp;States. Our means of protecting
proprietary rights in the United States or abroad may not be
adequate and competitors may independently develop similar
technology. Additionally, although no claims of alleged patent
infringement are currently pending, 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.
</FONT>

<P align="left">
<B><FONT size="2">We may not be able to respond to the rapid
technological change of the messaging and directory
infrastructure industry.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The messaging directory infrastructure 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 do not properly identify the
feature preferences of prospective customers, or if we fail to
deliver email features that 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
entails significant technical and business risks and requires
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.
</FONT>

<P align="left">
<B><FONT size="2">Our reserves may be insufficient to cover
bills we are unable to collect.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We assume a certain level of credit risk with our
customers in order to do business. Conditions affecting any of
our customers could cause them to become unable or unwilling to
pay us in a timely manner, or at all, for products or services
we have already provided them. For example, if the current
economic conditions continue to decline or if new or
unanticipated government regulations are enacted which affect
our customers, they may be unable to pay their bills. In the
past, we have experienced significant collection delays from
certain customers, and we cannot predict whether we will
continue to experience similar or more severe delays in the
future. In particular, some of our customers are suffering from
the general weakness in the economy and among technology
companies in particular. Although we have established reserves
that we believe are sufficient to cover losses due to delays in
or inability to pay, there can be no assurance that such
reserves will be sufficient to cover our losses. If losses due
to delays or inability to pay are greater than our reserves, it
could harm our business, operating results and financial
condition.
</FONT>

<P align="left">
<B><FONT size="2">If we do not successfully address the risks
inherent in the expansion of our international operations, our
business could suffer.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We derived 40% of our revenues from international
sales in the fiscal year ended December&nbsp;31, 2001 and 38% of
our revenues from international sales in 2000. We intend to
continue to operate in 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
</FONT>

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<FONT size="2">condition and operating results will suffer. We
have limited experience in international operations and may not
be able to compete or operate effectively in international
markets. We face certain risks inherent in conducting business
internationally, including:
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">difficulties and costs of staffing and managing
	international operations;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">fluctuations in currency exchange rates and
	imposition of currency exchange controls;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">differing technology standards;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">difficulties in collecting accounts receivable
	and longer collection periods;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">changes in regulatory requirements, including
	U.S. export restrictions on encryption technologies;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">political and economic instability;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">potential adverse tax consequences; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reduced protection for intellectual property
	rights in some countries.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any of these factors could harm our international
operations and, consequently, our business and consolidated
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.
</FONT>

<P align="left">
<B><FONT size="2">We rely on a continuous power supply to
conduct our operations, and any significance disruption in
California&#146;s energy supply could harm our operations and
increase our expenses.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2000 and 2001 California experienced a
serious energy crisis that could have and may in the future
disrupt our operations and increase our expenses. In the event
of an acute power shortage, that is, when power reserves for the
State of California fall below 1.5%, California has on some
occasions implemented, and may in the future continue to
implement, rolling blackouts throughout the state. If blackouts
interrupt our power supply or the power supply of any of our
customers, we, or our customers, may be temporarily unable to
operate. Any interruption in our ability to continue operations
could delay the development of or interfere with the sales of
our products. Future interruptions could damage our reputation,
harm our ability to retain existing customers and to obtain new
customers, and could result in lost revenue, any of which could
substantially harm our business and results of operations. Any
interruption in the ability of our customers to continue their
operations, could harm their business, and ultimately could also
harm our business if they were to terminate or fail to renew
contracts. We do not carry sufficient business interruption
insurance to compensate us for losses that may occur as a result
of blackouts, and any losses or damages we incur could harm our
business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Furthermore, the deregulation of the energy
industry instituted in 1996 by the California government and
shortages in wholesale electricity supplies have caused power
prices to increase. If wholesale prices continue to increase,
our operating expenses will likely increase, as our headquarters
and many employees are based in California.
</FONT>

<P align="left">
<B><FONT size="2">Our articles of incorporation and bylaws
contain provisions that could delay or prevent a change in
control.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">authorize the issuance of preferred stock that
	can be created and issued by our board of directors without
	prior shareholder approval, commonly referred to as &#147;blank
	check&#148; preferred stock, with rights senior to those of our
	common stock;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">prohibit shareholder action by written consent;
	and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">establish advance notice requirements for
	submitting nominations for election to our board of directors
	and for proposing matters that can be acted upon by shareholders
	at a meeting.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2001, we adopted a shareholder rights
plan or &#147;poison pill.&#148; This plan could cause the
acquisition of our company by a party not approved by our board
of directors to be prohibitively expensive.
</FONT>

<P align="center"><FONT size="2">50
</FONT>

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<P align="center">
<B><FONT size="2">SUPPLEMENTAL ALTERNATIVE MEASUREMENT FINANCIAL
DATA</FONT></B>

<DIV align="center">
<B><FONT size="2">(in thousands)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following supplemental alternative
measurement financial information presents Critical Path&#146;s
condensed consolidated results of operations during 1999, 2000
and 2001, excluding the impact of certain special charges
consisting of (i)&nbsp;amortization of intangible assets
associated with purchase business combinations,
(ii)&nbsp;accruals for employee retention bonuses associated
with purchase business combinations, (iii)&nbsp;stock-based
compensation associated with outstanding options and warrants,
(iv)&nbsp;one-time charges related to our restructuring
initiative, (v)&nbsp;impairment of long-lived assets,
(vi)&nbsp;write-down of investments, (vii)&nbsp;gain on the
retirement of convertible subordinated debt, and
(viii)&nbsp;accretion on redeemable convertible preferred
shares. This supplemental presentation is for informational
purposes only, and attempts to depict the financial results of
Critical Path excluding certain non-cash and extraordinary
one-time charges and gains. It is not intended to replace the
consolidated operating results prepared and presented in
accordance with generally accepted accounting principles.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="53%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Consolidated Statement of Operations
	Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Software license
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">51,607</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,960</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hosted messaging
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,157</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58,553</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43,821</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Professional services
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,527</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,573</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Maintenance and support
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,966</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,819</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,157</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">135,653</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">104,173</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cost of net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Software license
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,731</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,533</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hosted messaging
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,505</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59,104</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59,124</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Professional services
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,945</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,315</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Maintenance and support
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,060</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,081</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total cost of net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,505</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75,840</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">81,053</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross profit (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(348</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59,813</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,120</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales and marketing
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,811</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66,125</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">53,356</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Research and development
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,682</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31,022</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,744</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">General and administrative
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,051</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,444</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,260</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,544</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">127,591</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">126,360</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss from operations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(35,892</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(67,778</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(103,240</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest and other income (expense), net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,061</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,970</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,840</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(752</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(15,948</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(14,714</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Equity in net loss of joint venture
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,019</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,866</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Minority interest in net income of consolidated
	subsidiary
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(649</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss before income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(29,583</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(72,424</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(113,980</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,513</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,606</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(29,583</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(78,937</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(119,586</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss per share&nbsp;&#151; basic and diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.99</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.31</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.62</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average shares&nbsp;&#151; basic and
	diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29,770</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60,399</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">73,981</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">EBITDA(1)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(27,829</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(31,798</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(58,343</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Earnings before interest, taxes, depreciation and
	amortization (excluding equity in net loss, minority interest in
	net income, one-time charges identified in the table below).
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">51
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table reconciles the alternative
measurement financial data presented above to the consolidated
operating results prepared and presented in accordance with
generally accepted accounting principles (&#147;GAAP&#148;).
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="53%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December 31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Supplemental pro forma net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(29,583</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(78,937</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(119,586</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Add back cost of revenue, operating and
	non-operating expense amounts excluded from the calculation of
	pro forma net loss:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Amortization of purchased technology
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(18,140</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(21,284</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Amortization of intangible assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(32,259</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(355,868</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(13,216</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Acquisition-related retention bonuses in cost of
	net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(520</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,040</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Acquisition-related retention bonuses in
	operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,587</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,294</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,381</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock-based expense in cost of revenue
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,532</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,586</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,050</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock-based expense in operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(46,460</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(50,598</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(53,615</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Impairment of long-lived assets in cost of net
	revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(25,315</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(16,654</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Impairment of long-lived assets in operating
	expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,282,150</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,991</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Acquired in-process research and development
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,700</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restructuring and other expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,248</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(18,267</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss on investments reported as a non-operating
	expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23,589</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(702</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Subtotal of amounts excluded from pro forma net
	loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(87,358</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,773,528</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(139,160</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">GAAP loss before extraordinary item
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,852,465</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(258,746</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gain on retirement of convertible subordinated
	notes, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">179,282</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">GAAP net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,852,465</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,464</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accretion on redeemable convertible preferred
	shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(356</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">GAAP net loss attributable to common shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,852,465</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,820</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Item&nbsp;7A.&nbsp;<I>Quantitative and
Qualitative Disclosures About Market Risk</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, the Company&#146;s
short-term investments consisted of available-for-sale
securities, excluding those classified as cash equivalents, of
$9.7&nbsp;million. These investments are primarily comprised of
low risk government securities and corporate bonds. See also
Note&nbsp;6 to the Notes to Consolidated Financial
Statements&nbsp;&#151; Investments).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These securities are subject to equity price
risk. The Company has not attempted to reduce or eliminate its
market exposure on these equity securities. At December&nbsp;31,
2001 the Company carried long-term investments totaling
$7.2&nbsp;million, comprised of $1.0&nbsp;million in investments
in marketable securities and $6.2&nbsp;million in investments in
non-marketable securities. These securities represent strategic
equity investments in corporate partners, certain of which are
publicly traded and marketable and certain of which are
privately held. For each 10% decline in market value of its
available-for-sale equity securities from December&nbsp;31,
2001, the Company&#146;s marketable securities would be
insignificantly impacted.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We do not attempt to reduce or eliminate our
market exposure on these securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s long-term obligations consist
of the Company&#146;s $38.4&nbsp;million five-year, 5&nbsp;3/4%
Convertible Subordinated Notes due April 2005, and certain fixed
rate capital leases. Accordingly, an immediate 10%&nbsp;change
in interest rates would not affect the Company&#146;s long-term
obligations or the Company&#146;s results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A significant portion of our international
operations has a functional currency other than the United
States dollar. Accordingly, we are exposed to foreign currency
exchange rate risk inherent in our sales commitments,
anticipated sales, and assets and liabilities of these
operations. Fluctuations in exchange rates may harm our results
of operations and could also result in exchange losses. The
impact of future exchange rate fluctuations cannot be predicted
with any certainty, however our exposure to foreign currency
rate risk is
</FONT>

<P align="center"><FONT size="2">52
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">primarily associated with fluctuations in the
Euro, Italian Lire and Irish Punt. We realized a net loss on
foreign exchange equal to $280,000 during 2000 and a net gain of
$947,000 in 2001. To date, we have not sought to hedge the risks
associated with fluctuations in exchange rates.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Information relating to quantitative and
qualitative disclosure about market risk is set forth in
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Item&nbsp;8.&nbsp;<I>Financial Statements and
Supplemental Data</I></FONT></B>

<P align="left">
<B><FONT size="2">Financial Statements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Reference is made to the Index of Consolidated
Financial Statements that appears on page&nbsp;F-1 of this
report. The Report of Independent Accountants, Consolidated
Financial Statements, Notes to Consolidated Financial Statements
and Financial Statement Schedule which are listed in the Index
of Consolidated Financial Statements and which appear beginning
on page&nbsp;F-2 of this report are incorporated into this
Item&nbsp;8.
</FONT>

<P align="left">
<B><FONT size="2">Supplemental Data</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth certain unaudited
quarterly statements of operations data for each of Critical
Path&#146;s quarters during the 2000 and 2001 fiscal years. This
information has been derived from Critical Path&#146;s
consolidated unaudited financial statements, which, in
management&#146;s opinion, have been prepared on the same basis
as the audited consolidated financial statements, and include
all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the
information for the quarters presented. This information should
be read in conjunction with the audited consolidated financial
statements of Critical Path and the notes thereto included
elsewhere in this document. The operating results for any
quarter are not necessarily indicative of the operating results
for any future period.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="25%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">First</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Second</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Third</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fourth</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">First</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Second</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Third</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fourth</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="31"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="31" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Consolidated Statement of Operations
	Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Software license
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,070</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,897</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,365</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,275</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,550</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,913</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,724</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,773</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hosted messaging
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,095</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,220</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,759</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,479</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,439</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,141</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,241</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Professional services
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,493</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,030</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,609</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,395</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,417</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,900</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,206</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,050</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Maintenance and support
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,895</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,348</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,609</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,114</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,737</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,131</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,857</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,094</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,553</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">33,495</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,342</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,263</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27,143</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27,085</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,787</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,158</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cost of net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Software license
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,007</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">737</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">634</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">353</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">291</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">126</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">517</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">599</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hosted messaging
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,880</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,538</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,552</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,134</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,938</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,440</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,982</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,764</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Professional services
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,056</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,388</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,317</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,184</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,966</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,594</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,565</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,190</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Maintenance and support
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,404</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,812</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,207</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,637</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,586</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,414</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,837</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,244</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Amortization of purchased technology
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,114</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,421</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,434</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,171</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,672</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,672</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,970</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,970</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Acquisition-related retention bonuses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">390</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">390</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">260</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock-based expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">493</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">383</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">381</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">329</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,303</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,469</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">631</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">647</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Impairment of long-lived assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25,315</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,207</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,447</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total cost of net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,344</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,669</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,785</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">56,123</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,756</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">33,922</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25,502</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,861</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross profit (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,209</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,826</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,557</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(13,860</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,613</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,837</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,285</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,703</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">53
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="25%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">First</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Second</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Third</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fourth</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">First</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Second</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Third</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fourth</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="31"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="31" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales and marketing
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,605</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,342</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,128</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,050</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,712</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,694</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,018</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,932</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Research and development
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,323</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,213</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,853</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,633</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,934</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,333</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,322</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,155</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">General and administrative
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,766</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,332</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,568</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,778</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,293</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,745</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,447</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,775</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Amortization of intangible assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47,499</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">88,986</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">94,160</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">125,223</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,133</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,112</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,485</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,486</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Acquisition-related retention bonuses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,679</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,693</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,028</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">894</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">170</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">793</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">92</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">326</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock-based expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,703</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,942</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,835</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,118</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,430</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,244</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,286</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,655</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restructuring and other expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,248</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,481</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,779</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,007</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Acquired in-process research and development
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">200</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,500</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Impairment of long-lived assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,282,150</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,991</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">83,775</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">138,508</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">146,320</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,462,846</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">62,672</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">73,393</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">45,429</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41,336</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss from operations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(77,566</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(127,682</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(135,763</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,476,706</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(66,285</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(80,230</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(44,144</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(51,039</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest and other income (expense), net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,258</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,697</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,905</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,110</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,425</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,895</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">178</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">342</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(274</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,260</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,214</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,200</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,067</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,315</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,829</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(503</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Equity in net loss of joint venture
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(640</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(379</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(776</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(397</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(346</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(347</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Minority interest in net income of consolidated
	subsidiary
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(325</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(201</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(123</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss on investments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23,589</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(702</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss before extraordinary item and income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(76,582</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(128,570</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(136,913</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,503,887</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(69,703</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(83,749</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(48,141</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(51,547</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(360</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,439</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,534</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,180</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(343</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,150</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,180</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,933</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss before extraordinary item
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(76,942</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(130,009</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(139,447</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,506,067</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(70,046</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(84,899</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(50,321</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(53,480</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gain on retirement of convertible subordinated
	notes, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,818</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">137,222</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38,242</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net profit (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(76,942</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(130,009</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(139,447</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,506,067</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(70,046</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(81,081</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86,901</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(15,238</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accretion on redeemable convertible preferred
	shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(356</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss attributable to common shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(76,942</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(130,009</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(139,447</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,506,067</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(70,046</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(81,081</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86,901</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(15,594</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">54
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link2 "<FONT size="2">Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure</FONT>" -->

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD><B><FONT size="2">Item&nbsp;9.&nbsp;</FONT></B></TD>
	<TD>
	<B><I><FONT size="2">Changes in and Disagreements with
	Accountants on Accounting and Financial Disclosure</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">None.
</FONT>

<!-- link1 "<FONT size="2">PART III</FONT>" -->

<P align="center">
<B><FONT size="2">PART III</FONT></B>

<DIV>&nbsp;</DIV>

<!-- link2 "<FONT size="2">Item 10.Directors and Executive Officers of the Registrant</FONT>" -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="7%"></TD>
	<TD width="93%"></TD>
</TR>

<TR valign="top">
	<TD><B><FONT size="2">Item&nbsp;10.&nbsp;</FONT></B></TD>
	<TD>
	<B><I><FONT size="2">Directors and Executive Officers of the
	Registrant</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Directors and Executive Officers</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The executive officers, directors and key
employees of Critical Path and their ages as of March&nbsp;15,
2002 are as follows:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Age</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Position</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">David C. Hayden
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">46</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Chairman of the Board
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">William E. McGlashan, Jr.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Vice Chairman of the Board and Chief Executive
	Officer
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Pierre Van Beneden
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">54</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">President
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Laureen DeBuono
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">44</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Vice President and Chief Financial
	Officer
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Bernard Harguindeguy
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">44</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Vice President and Chief Marketing
	Officer
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Laurie Priddy
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">39</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Vice President, Operations and General
	Manager of Hosted Operations
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Michael J. Zukerman
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">42</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Senior Vice President, General Counsel and
	Secretary
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Menelaos (Michael) Serbinis
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Vice President, Engineering and Chief Technology
	Officer
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Raul Fernandez(1)(2)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Director
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">William E. Ford(1)(2)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Director
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Jeffrey Webber(2)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Director
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Member of the Compensation Committee of the Board
	of Directors.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Member of the Audit Committee of the Board of
	Directors.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">David C. Hayden
</FONT></I><FONT size="2">founded Critical Path and served as
Director, Chairman, President, Chief Executive Officer and
Secretary from its inception in February 1997 to October 1998.
Mr.&nbsp;Hayden has served as Chairman of the Board of Directors
of Critical Path since October 1998 and was appointed Executive
Chairman of the Board in February 2001. From February 1993 to
August 1996, Mr.&nbsp;Hayden served as chairman, chief executive
officer, and co-founder of The McKinley Group,&nbsp;Inc.,
creators of Magellan, an Internet search engine. Mr.&nbsp;Hayden
is also a member of the Board of Directors of E*Trade, Inc.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">William McGlashan
</FONT></I><FONT size="2">has served as our Vice Chairman and
Chief Executive Officer since December of 2001.
Mr.&nbsp;McGlashan joined the Company in April 2001 as our
Interim President and Chief Operating Officer. He was appointed
Interim Chief Executive Officer in August 2001. Prior to joining
the Company, Mr.&nbsp;McGlashan served as the chief executive
officer and founder of the Vectis Group LLC, an investment
company, from 2000 to 2001. Prior to his tenure at Vectis, he
was a venture partner at Whitney and Co., a venture capital
firm, and was also the co-founder and president of Pharmanex, a
phyto-pharmaceutical company from 1995 to 2000. He co-founded
and served as chief executive officer of Generation Ventures, a
firm funded by Whitney&nbsp;&#38; Co., from 1993 to 1995 and
also co-founded and served as president for TRADE, Inc. from
1991 to 1993. Prior to that, Mr.&nbsp;McGlashan was a senior
associate at Bain Capital from 1990 to 1991.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Pierre Van Beneden
</FONT></I><FONT size="2">has served as our President since
October 2001. Mr.&nbsp;Van Beneden joined Critical Path as
President in October 2001. Prior to joining Critical Path,
Mr.&nbsp;Van Beneden was executive vice-president, worldwide
field operations at the Lotus unit of IBM Corp. from 2000 to
2001 and from 1995 to 2000, Mr.&nbsp;Van Beneden served in
various senior positions at Lotus and IBM Corp., including vice
president of software sales for the IBM Software Brands, IBM
EMEA and general manager and senior vice president, Lotus EMEA.
</FONT>

<P align="center"><FONT size="2">55
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Laureen DeBuono </FONT></I><FONT size="2">has
served as of Executive Vice President and Chief Financial
Officer since January 2002. Ms.&nbsp;DeBuono joined Critical
Path in September 2001 as Senior Vice President and Interim
Chief Financial Officer. Prior to joining the Company,
Ms.&nbsp;DeBuono served as chief financial officer and chief
operating officer for More.com, Inc. from 1999 to 2000. Prior to
that, Ms.&nbsp;DeBuono was executive vice President, chief
operating officer and chief financial officer at ReSound
Corporation from 1998 to 1999. Prior to that, Ms.&nbsp;DeBuono
held several executive management positions with Nellcor Puritan
Bennett Inc. from 1992 to 1998.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Bernard Harguindeguy
</FONT></I><FONT size="2">has served as of Executive Vice
President and Chief Marketing Officer since December 2001.
Before joining Critical Path, Mr.&nbsp;Harguindeguy was a
consultant serving various technology companies. Prior to that,
he served as chief executive officer of Worldtalk Communications
Corporation, from 1996 to 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Laurie Priddy </FONT></I><FONT size="2">has
served as of Executive Vice President, Operations and General
Manager, Hosted Operations since February 2002. Ms.&nbsp;Priddy
joined Critical Path from Exodus Communications, where she last
served as executive vice president of operations from 2001 to
2002. Ms.&nbsp;Priddy came to Exodus as part of the acquisition
of GlobalCenter, Inc. where she was co-chief operating officer
from 2000 to 2001. Prior to that, Ms.&nbsp;Priddy served as
president and chief executive officer of NDTC, AT&#38;T
Broadband and Internet Services, from 1999 to 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Michael J. Zukerman
</FONT></I><FONT size="2">has served as our Senior Vice
President, General Counsel and Secretary since June 2001. From
1999 to 2001, Mr.&nbsp;Zukerman served as vice president of
business development for Driveway Corporation. Prior to that,
Mr.&nbsp;Zukerman was general counsel and vice president of
business development at SegaSoft Networks, a subsidiary of Sega
Networks, from 1996 to 1999. Prior to that, from 1989 to 1996,
Mr.&nbsp;Zukerman worked at Netopia, Inc. (formerly Farallon
Communications), where he last served as vice president and
general counsel.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Menelaos (Michael) Serbinis
</FONT></I><FONT size="2">has served as our Vice President and
Chief Technology Officer since February 2001. Mr.&nbsp;Serbinis
joined Critical Path as its Chief Security Officer in March 2000
and served in this capacity until February 2001. From November
1997 to March 2000, Mr.&nbsp;Serbinis was the chief technology
officer of The docSpace Company, which he co-founded in November
1997. From September 1996 to October 1997, Mr.&nbsp;Serbinis was
a software engineer for Total Control, a subsidiary of General
Electric. From April 1996 to August 1996, Mr.&nbsp;Serbinis was
responsible for search engine engineering at Zip2 Corporation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Raul J. Fernandez
</FONT></I><FONT size="2">has served as a director of the
Company since December 2001. Mr.&nbsp;Fernandez is the Chief
Executive Officer of Dimension Data North America and was
appointed to the board of directors of Dimension Data Holdings
in 2001 following the Group&#146;s acquisition of Proxicom
Corporation. Mr Fernandez was the founder and chief executive
officer of Proxicom. Mr. Fernandez is also a member of the Board
of Directors of Liz Claiborne, Inc.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">William E. Ford </FONT></I><FONT size="2">has
served as a director of the Company since December 2001.
Mr.&nbsp;Ford is a general partner at General Atlantic Partners
LLC, a worldwide private equity firm, where he has worked since
1991. From 1987 to 1991, Mr.&nbsp;Ford worked at Morgan Stanley
&#38; Co. as an investment banker, where he was a member of the
merger and acquisition and corporate finance departments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Jeffrey Webber </FONT></I><FONT size="2">has
served as a director of the Company since July of 2001. He is
the founder and partner in the R.B.Webber &#38; Company, a
technology management consulting firm where he was worked since
1991.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additional information required by this item is
incorporated by reference to the information set forth in the
section entitled &#147;Information About the Board of Directors
and Committees of the Board&#148; in the Proxy Statement in
connection with the solicitation of proxies for our 2002 Annual
Meeting of Shareholders (&#147;Proxy Statement&#148;) to be
filed with the Securities and Exchange Commission within
120&nbsp;days of the end of our fiscal year ended
December&nbsp;31, 2001. This information is contained in the
Section entitled &#147;Information about the Board of Directors
and Committees of the Board&nbsp;&#151; Section&nbsp;16(a)
Beneficial Ownership Reporting Compliance&#148; in the Proxy
Statement and is incorporated by reference.
</FONT>

<P align="center"><FONT size="2">56
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link2 "<FONT size="2">Item 11.Executive Compensation</FONT>" -->

<P align="left">
<B><FONT size="2">Item&nbsp;11. <I>Executive
Compensation</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The information required by this item is
incorporated by reference to the information set forth in the
sections entitled &#147;Compensation of Executive Officers&#148;
and &#147;Election of Directors&#148; contained in the Proxy
Statement for our 2002 Annual Meeting of Shareholders.
</FONT>

<!-- link2 "<FONT size="2">Item 12.Security Ownership of Certain Beneficial Owners and Management</FONT>" -->

<P align="left">
<B><FONT size="2">Item&nbsp;12. <I>Security Ownership of Certain
Beneficial Owners and Management</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The information required by this item is
incorporated by reference to the information set forth in the
section entitled &#147;Common Stock Ownership of Certain
Beneficial Owners and Management&#148; contained in the Proxy
Statement for our 2002 Annual Meeting of Shareholders.
</FONT>

<!-- link2 "<FONT size="2">Item 13.Certain Relationships and Related Party Transactions</FONT>" -->

<P align="left">
<B><FONT size="2">Item&nbsp;13. <I>Certain Relationships and
Related Party Transactions</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The information required by this item is
incorporated by reference to the information set forth in the
section entitled &#147;Transactions with Related Parties&#148;
contained in the Proxy Statement for our 2002 Annual Meeting of
Shareholders.
</FONT>

<P align="center"><FONT size="2">57
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link1 "<FONT size="2">PART IV</FONT>" -->

<P align="center">
<B><FONT size="2">PART IV</FONT></B>

<!-- link2 "<FONT size="2">Item 14.Exhibits, Financial Statement Schedules and Reports on Form 8-K</FONT>" -->

<P align="left">
<B><FONT size="2">Item&nbsp;14. <I>Exhibits, Financial Statement
Schedules and Reports on Form&nbsp;8-K</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)(1)&nbsp;<I>Index to Consolidated Financial
Statements</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Please see the accompanying Index to Consolidated
Financial Statements that appears on page F-1 of this report.
The Report of Independent Accountants, Consolidated Financial
Statements and Notes to Consolidated Financial Statements which
are listed in the Index to Consolidated Financial Statements and
which appear beginning on page&nbsp;F-2 of this report are
incorporated by reference into Item&nbsp;8 above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)(2)&nbsp;<I>Financial Statement Schedule</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Schedule&nbsp;II&nbsp;&#151; Valuation and
Qualifying Accounts for the years ended December&nbsp;31, 1998,
1999 and 2000 appears on page&nbsp;S-1 of this report and should
be read in conjunction with the consolidated financial
statements and related notes thereto and report of independent
accountants filed herewith.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Schedules not mentioned above have been omitted
because the information required to be set forth therein is not
applicable or the information is otherwise included in the
Financial Statements or notes thereto.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;<I>Reports on Form&nbsp;8-K</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the quarter ended December&nbsp;31, 2001, we
filed the following reports on Form&nbsp;8-K:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(1)&nbsp;On October&nbsp;15, 2001, we filed a
	current report on Form&nbsp;8-K dated October&nbsp;9, 2001,
	reporting under Item&nbsp;5 and Item&nbsp;7 our balance sheet
	restructuring by repurchasing approximately $192&nbsp;million of
	face value of our outstanding 5&nbsp;3/4% Convertible
	Subordinated Notes due April&nbsp;1, 2005. As part of this
	report, we filed our Pro Forma Balance Sheet as of June&nbsp;30,
	2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(2)&nbsp;On November&nbsp;7, 2001, we filed a
	current report on Form&nbsp;8-K dated October&nbsp;23, 2001,
	reporting under Item&nbsp;5 the appointment of Pierre Van
	Beneden as President and William McGlashan, Jr. as Interim Chief
	Executive Officer.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(3)&nbsp;On November&nbsp;13, 2001, we filed a
	current report on Form&nbsp;8-K dated November&nbsp;8, 2001,
	reporting under Item&nbsp;5 that we entered into binding
	memoranda of understanding with respect to the settlement of
	securities class action and shareholder derivative litigation
	pending against us in the U.S. District Court for the Northern
	District of California and that we had announced the closing of
	a $95 million financing transaction from a group of investors
	and their affiliate entities.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(4)&nbsp;On December&nbsp;17, 2001, we filed a
	current report on Form&nbsp;8-K dated December&nbsp;11, 2001,
	reporting under Item&nbsp;5 the appointments of William&nbsp;E.
	Ford and Raul&nbsp;J. Fernandez to our board of directors and
	the resignations of Larry Weber and Stephen&nbsp;J. Richards
	from our board of directors.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;<I>Exhibits</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following exhibits are filed as part of, or
are incorporated by reference into, this Annual Report on
Form&nbsp;10-K:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&nbsp;3(i).1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amended and Restated Articles of Incorporation
	(Incorporated by reference to Exhibit&nbsp;3(i)(b) to the
	Registrant&#146;s Registration on Form&nbsp;S-1 (File
	No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&nbsp;3(i).2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amendment to the Articles of Incorporation, dated
	January&nbsp;5, 2001 (Incorporated by reference to
	Exhibit&nbsp;3.2 to the Registrant&#146;s Annual Report on
	Form&nbsp;10-K for the fiscal year ended December&nbsp;31, 2000).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&nbsp;3(i).3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Certificate of the Powers, Designations,
	Preferences and Rights of the Series&nbsp;D Cumulative
	Redeemable Convertible Participating Preferred Stock dated
	November&nbsp;6, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&nbsp;3(ii)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amended and Restated Bylaws. (Incorporated by
	reference to Exhibit&nbsp;3(ii)(b) to the Registrant&#146;s
	Registration Statement on Form&nbsp;S-1 (File
	No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&nbsp;4.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Common Stock Certificate. (Incorporated
	by reference to Exhibit&nbsp;4.1 to the Registrant&#146;s
	Registration Statement on Form&nbsp;S-1 (File
	No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">58
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&nbsp;4.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Preferred Stock Rights Agreement dated as of
	March&nbsp;19, 2001 between Registrant and ComputerShare Trust
	Company, Inc., including the Certificate of Determination, the
	form of Rights Certificate and the Summary of Rights attached
	thereto as Exhibits&nbsp;A, B and C respectively (Incorporated
	by reference to Exhibit&nbsp;4.5 of Registrant&#146;s
	Form&nbsp;8-A filed on May&nbsp;7, 2001).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&nbsp;4.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Indenture, dated March&nbsp;31, 2000, by and
	between Registrant and State Street Bank and Trust Company of
	California, N.A., Trustee, relating to the $300&nbsp;million
	five-year, 5.75% Convertible Subordinated Notes due
	April&nbsp;1, 2005 (Incorporated by reference to
	Exhibit&nbsp;4.5 to the Registrant&#146;s Quarterly Report on
	Form&nbsp;10-Q for the quarter ended March&nbsp;31, 2000).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Warrant to Purchase Common Stock dated
	March&nbsp;29, 2001 issued by the Registrant to Vectis Group LLC
	(Incorporated by reference to Exhibit&nbsp;4.3 to
	Registrant&#146;s Quarterly Report on Form&nbsp;10-Q for the
	quarter ended September&nbsp;30, 2001).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Warrant to Purchase Common Stock dated
	January&nbsp;29, 1999 issued by the Registrant to America
	Online, Inc. (Incorporated by reference to Exhibit&nbsp;4.4 to
	the Registrant&#146;s Registration Statement on Form&nbsp;S-1
	(File No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Warrant to Purchase up to 25,000 Shares of Common
	Stock dated as of December&nbsp;29, 1999 by and between Ecker
	Folsom Properties, LLC.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Warrant to Purchase up to 834,000 shares of
	Common Stock dated as of June&nbsp;2000 by and between
	Worldsport Networks Europe Ltd.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Stock and Warrant Purchase and Exchange Agreement
	dated as of November&nbsp;8, 2001 by and among Registrant and
	General Atlantic Partners 74, LP, GAP Coinvestment
	Partners&nbsp;II, LP, Gapstar, LLC, Vectis CP Holdings, LLC,
	Cenwell Limited, Campina Enterprises Limited.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Stockholders Agreement dated as of
	November&nbsp;8, 2001 by and among Registrant and General
	Atlantic Partners 74, L.P., GAP Coninvestment Partners II, LP,
	Gapstar, LLC, Vectis CP Holdings, LLC, Cenwell Limited, Campina
	Enterprises Limited.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Registration Rights Agreement dated as of
	November&nbsp;8, 2001 by and among Registrant and General
	Atlantic Partners 74, L.P., GAP Coninvestment Partners II, LP,
	Gapstar, LLC, Vectis CP Holdings, LLC, Cenwell Limited, Campina
	Enterprises Limited.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Escrow Agreement dated as of November&nbsp;8,
	2001 by and among Registrant and General Atlantic Partners 74,
	L.P., GAP Coninvestment Partners&nbsp;II, LP, Gapstar, LLC,
	Vectis CP Holdings, LLC, Cenwell Limited, Campina Enterprises
	Limited.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Employee Stock Purchase Plan. (Incorporated by
	reference to Exhibit&nbsp;4.3 to the Registrant&#146;s
	Registration Statement on Form&nbsp;S-8 filed on June&nbsp;15,
	2001 (File No.&nbsp;333-63080)).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amended and Restated 1998 Stock Plan.
	(Incorporated by reference to Exhibit&nbsp;4.1 to the
	Registrant&#146;s Registration Statement on Form&nbsp;S-8 filed
	on June&nbsp;15, 2001 (File No.&nbsp;333-63080)).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">1999 Stock Option Plan and forms of agreements
	thereunder (Incorporated by reference to Exhibit&nbsp;10.5 to
	the Registrant&#146;s Registration Statement on Form&nbsp;S-8
	filed on September&nbsp;22, 1999 (File No.&nbsp;333-87553)).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Master Services Agreement dated December&nbsp;10,
	1998 by and between the Registrant and US West Communications
	Services, Inc. (Incorporated by reference to Exhibit&nbsp;10.15
	to the Registrant&#146;s Registration Statement on Form&nbsp;S-1
	(File No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amendment to Email Services Agreement
	September&nbsp;30, 1998 by and between the Registrant and
	E*TRADE Group, Inc. (Incorporated by reference to
	Exhibit&nbsp;10.18 to the Registrant&#146;s Registration
	Statement on Form&nbsp;S-1 (File No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Email Services Agreement dated January&nbsp;29,
	1999 by and between the Registrant and ICQ, Inc. (Incorporated
	by reference to Exhibit&nbsp;10.22 to the Registrant&#146;s
	Registration Statement on Form&nbsp;S-1 (File
	No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Hills Plaza I Office Lease dated as of
	November&nbsp;16, 2001 by and between Registrant and SPI Hills
	Plaza Venture, LLC.
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">59
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Standard Industrial/ Multitenant Lease-Gross
	dated June&nbsp;20, 1997 by and between the Registrant and
	501&nbsp;Folsom Street Building. (Incorporated by reference to
	Exhibit&nbsp;10.10 to the Registrant&#146;s Registration
	Statement on Form&nbsp;S-1 (File No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Office lease dated December 1999 by and between
	Ecker-Folsom Properties, LLC and the Registrant. (Incorporated
	by reference to Exhibit&nbsp;10.25 to the Registrant&#146;s
	Annual Report on Form&nbsp;10-K for the year ended
	December&nbsp;31, 1999).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Office lease dated December 1999 by and between
	Ecker-Folsom Properties, LLC and the Registrant. (Incorporated
	by reference to Exhibit&nbsp;10.26 to the Registrant&#146;s
	Annual Report on Form&nbsp;10-K for the year ended
	December&nbsp;31, 1999).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Agreement dated as August&nbsp;13, 2001 by and
	between Registrant and David Hayden (Incorporated by reference
	to Exhibit&nbsp;10.3 to the Registrant&#146;s Quarterly Report
	on Form&nbsp;10-Q for the quarter and nine months ended
	September&nbsp;30, 2001).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	November&nbsp;8, 2001 by and between Registrant and David Hayden.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Agreement dated as of August&nbsp;1, 2001 by and
	between Registrant and William&nbsp;E. McGlashan, Jr.
	(Incorporated by reference to Exhibit&nbsp;10.4 to the
	Registrant&#146;s Quarterly Report for the quarter and nine
	months ended September&nbsp;30, 2001).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	August&nbsp;1, 2001 by and between Registrant and
	William&nbsp;E. McGlashan, Jr.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	November&nbsp;8, 2001 by and between Registrant and
	William&nbsp;E. McGlashan, Jr.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">First Amended and Restated Employment Agreement
	dated as of January&nbsp;7, 2002 by and between Registrant and
	William&nbsp;E. McGlashan, Jr.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	December&nbsp;21, 2001 by and between Registrant and William E.
	McGlashan, Jr.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Agreement dated as of October&nbsp;8, 2001 by and
	between Registrant and Pierre Van Beneden (Incorporated by
	reference to Exhibit&nbsp;10.5 to the Registrant&#146;s
	Quarterly Report for the quarter and nine months ended
	September&nbsp;30, 2001).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	October&nbsp;8, 2001 by and between Registrant and Pierre Van
	Beneden.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	November&nbsp;8, 2001 by and between Registrant and Pierre Van
	Beneden.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consulting Agreement dated as of August&nbsp;16,
	2001 by and between Registrant and Laureen DeBuono.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	September&nbsp;5, 2001 by and between Registrant and Laureen
	DeBuono.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Addendum to Consulting Agreement dated as of
	October&nbsp;31, 2001 by and between Registrant and Laureen
	DeBuono.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	October&nbsp;31, 2001 by and between Registrant and Laureen
	DeBuono.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	November&nbsp;8, 2001 by and between Registrant and Laureen
	DeBuono.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Employment Agreement dated as of January&nbsp;14,
	2002 by and between Registrant and Bernard Harguindeguy.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.24</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Agreement, dated as of May&nbsp;15, 2001, by and
	between the Registrant and Lawrence P. Reinhold (Incorporated by
	reference to Exhibit&nbsp;10.2 to the Registrant&#146;s
	quarterly report on Form&nbsp;10-Q for the quarter ended
	September&nbsp;30, 2001).
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">60
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Agreement and Release, dated February&nbsp;9,
	2001, by and between the Registrant and Douglas Hickey
	(Incorporated by reference to Exhibit&nbsp;10.31 to the
	Registrant&#146;s Annual Report on Form&nbsp;10-K for the year
	ended December&nbsp;31, 2000.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.26</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Promissory Note and Security Agreement dated
	November&nbsp;2, 1998 by and between the Registrant and Douglas
	Hickey. (Incorporated by reference to Exhibit&nbsp;10.12 to the
	Registrant&#146;s Registration Statement on Form&nbsp;S-1 (File
	No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.27</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Indemnification Agreement by and between
	the Registrant and each of its directors and officers.
	(Incorporated by reference to Exhibit&nbsp;10.32 to the
	Registrant&#146;s Annual Report on Form&nbsp;10-K for the year
	ended December&nbsp;31, 2000).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">21.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">List of Subsidiaries (Incorporated by reference
	to Exhibit&nbsp;21.1 of the Registrant&#146;s Annual Report on
	Form&nbsp;10-K for the year ended December&nbsp;31, 2000).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of PricewaterhouseCoopers LLP,
	Independent Accountants.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">24.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Power of Attorney (see the signature page of this
	report).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5" align="left" valign="top">
	<FONT size="2">(d)&nbsp;<I>Financial Statements and Schedules</I>
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Please see Item&nbsp;14(a)(2).
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">61
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>

<P align="center">
<B><FONT size="2">INDEX TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="90%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Report of Independent Accountants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Consolidated Balance Sheet
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Consolidated Statement of Operations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Consolidated Statement of Shareholders&#146;
	Equity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Consolidated Statement of Cash Flows
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Notes to Consolidated Financial Statements
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Schedule&nbsp;II&nbsp;&#151; Valuation and
	Qualifying Accounts
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">S-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-1
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">Report of Independent Accountants</FONT></B>

<P align="left">
<FONT size="2">To the Board of Directors and Shareholders
</FONT>

<DIV align="left">
<FONT size="2">of Critical Path, Inc.:
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In our opinion, the consolidated financial
statements listed in the accompanying index present fairly, in
all material respects, the financial position of Critical Path,
Inc. and its subsidiaries at December&nbsp;31, 2000 and 2001,
and the results of their operations and their cash flows for
each of the three years in the period ended December&nbsp;31,
2001 in conformity with accounting principles generally accepted
in the United States of America. In addition, in our opinion,
the financial statement schedule listed in the accompanying
index presents fairly, in all material respects, the information
set forth therein when read in conjunction with the related
consolidated financial statements. These financial statements
and the financial statement schedule are the responsibility of
the Company&#146;s management; our responsibility is to express
an opinion on these financial statements and the financial
statement schedule based on our audits. We conducted our audits
of these statements in accordance with auditing standards
generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used
and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
</FONT>

<P align="left">
<FONT size="2">/s/ PRICEWATERHOUSECOOPERS LLP
</FONT>

<P align="left">
<FONT size="2">San Jose, CA
</FONT>

<DIV align="left">
<FONT size="2">February&nbsp;5, 2002
</FONT>
</DIV>

<P align="center"><FONT size="2">F-2
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link3 "<FONT size="2">CRITICAL PATH, INC.</FONT>" -->

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">CONSOLIDATED BALANCE SHEET</FONT></B>

<DIV align="left">
<B><FONT size="2">(In thousands, except per share
amounts)</FONT></B>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="59%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="4" align="center" nowrap><B><FONT size="1">December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="12" align="left" valign="top">
	<FONT size="2">ASSETS
	</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Current assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash and cash equivalents
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">216,542</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59,463</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Short-term investments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,702</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts receivable, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38,938</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,692</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other current assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,252</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,367</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total current assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">265,732</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">101,224</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Investments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,610</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,215</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Property and equipment, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">85,304</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">36,285</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Intangible assets, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">124,094</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">48,641</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restricted cash
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">215</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,674</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,655</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,913</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">497,610</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">199,952</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="12" align="left" valign="top">
	<FONT size="2">LIABILITIES AND SHAREHOLDERS&#146; EQUITY
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Current liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43,710</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25,955</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,377</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,232</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Deferred revenue
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,720</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,297</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Capital lease and other obligations, current
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,363</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,431</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total current liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">79,170</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">45,915</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Convertible subordinated notes payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">300,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38,360</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Capital lease and other obligations, long-term
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,687</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,149</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">383,857</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">85,424</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Commitments and contingencies (Note 12)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Minority interest in consolidated subsidiary
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">649</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Mandatorily redeemable preferred stock (Note 14)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,373</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Shareholders&#146; equity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Preferred Stock and paid-in-capital, $0.001 par
	value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Shares authorized: 5,000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Shares issued and outstanding: none
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Common Stock and paid-in-capital, $0.001 par value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Shares authorized: 150,000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Shares issued and outstanding: 74,135 and 76,581
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,130,329</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,176,370</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Common stock warrants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,250</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Notes receivable from shareholders
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,205</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,222</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Unearned compensation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34,005</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,050</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accumulated deficit, including other
	comprehensive income
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,982,015</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,064,193</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total shareholders&#146; equity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">113,104</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">109,155</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total liabilities and shareholders&#146; equity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">497,610</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">199,952</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<!-- link3 "<FONT size="2">CONSOLIDATED STATEMENT OF OPERATIONS</FONT>" -->

<DIV align="left">
<B><FONT size="2">CONSOLIDATED STATEMENT OF OPERATIONS</FONT></B>
</DIV>

<DIV align="left">
<B><FONT size="2">(In thousands, except per share
amounts)</FONT></B>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="53%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Year Ended December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Software license
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">51,607</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,960</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hosted messaging
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,157</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58,553</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43,821</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Professional services
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,527</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,573</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Maintenance and support
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,966</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,819</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,157</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">135,653</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">104,173</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cost of net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Software license
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,731</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,533</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hosted messaging
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,505</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59,104</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59,124</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Professional services
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,945</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,315</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Maintenance and support
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,060</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,081</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Amortization of purchased technology
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,140</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,284</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Acquisition-related retention bonuses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">520</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,040</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock-based expense&nbsp;&#151; Hosted messaging
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,532</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,586</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,520</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock-based expense&nbsp;&#151; Professional
	services
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,347</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock-based expense&nbsp;&#151; Maintenance and
	support
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,183</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Impairment of long-lived assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25,315</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,654</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total cost of net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,557</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">121,921</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">123,041</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross profit (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,400</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,732</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(18,868</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales and marketing
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,811</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66,125</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">53,356</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Research and development
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,682</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31,022</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,744</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">General and administrative
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,051</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,444</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,260</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Amortization of intangible assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,259</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">355,868</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,216</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Acquisition-related retention bonuses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,587</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,294</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,381</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock-based expense&nbsp;&#151; Sales and
	marketing
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">37,521</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,948</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,704</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock-based expense&nbsp;&#151; Research and
	development
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,161</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,449</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,691</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock-based expense&nbsp;&#151; General and
	administrative
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,778</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,754</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25,220</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock-based expense&nbsp;&#151; Restructuring
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,447</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Acquired in-process research and development
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,700</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restructuring and other expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,248</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,267</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Impairment of long-lived assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,282,150</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,991</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total operating expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">117,850</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,831,449</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">222,830</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss from operations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(123,250</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,817,717</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(241,698</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest and other income (expense), net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,061</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,970</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,840</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(752</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(15,948</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(14,714</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Equity in net loss of joint venture
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,019</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,866</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Minority interest in net income of consolidated
	subsidiary
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(649</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss on investments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23,589</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(702</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss before extraordinary item and income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,845,952</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(253,140</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,513</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,606</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss before extraordinary item
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,852,465</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(258,746</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gain on retirement of convertible subordinated
	notes, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">179,282</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,852,465</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,464</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accretion on redeemable convertible preferred
	shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(356</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss attributable to common shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,852,465</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,820</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss per common share&nbsp;&#151; basic and
	diluted:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss per common share
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.93</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(30.67</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.08</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average shares&nbsp;&#151; basic and
	diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29,770</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60,399</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">73,981</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<!-- link3 "<FONT size="2">CONSOLIDATED STATEMENT OF SHAREHOLDERS&#146; EQUITY</FONT>" -->

<DIV align="left">
<B><FONT size="2">CONSOLIDATED STATEMENT OF SHAREHOLDERS&#146;
EQUITY</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">(In thousands)</FONT></B>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="5" align="center" nowrap><B><FONT size="1">Year Ended December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Convertible Preferred Stock and paid-in-capital
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balance, beginning of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,565</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of Series&nbsp;A Preferred Stock, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of Series&nbsp;B Preferred Stock, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,749</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exercise of stock purchase rights and warrants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,747</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Conversion of Preferred Stock, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(37,061</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balance, end of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Common Stock and paid-in-capital
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balance, beginning of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,850</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">864,699</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,130,329</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of Common Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">645,828</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,204,022</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">431</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Series&nbsp;D Preferred Stock conversion feature
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41,428</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exercise of stock options and warrants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,648</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,246</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,138</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of warrants to purchase common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,250</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Unearned compensation related to stock options
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">158,541</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29,608</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,632</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Conversion of Preferred Stock, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">37,061</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Purchase of Common Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(229</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(246</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(67</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Purchase of remaining minority interest
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,521</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balance, end of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">864,699</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,130,329</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,181,620</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Notes receivable from shareholders
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balance, beginning of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,151</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,154</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,205</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of Common Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exercise of stock options
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(30</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest on shareholder notes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(58</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(51</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(50</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Repayment of shareholder notes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">85</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">33</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balance, end of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,154</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,205</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,222</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Unearned compensation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balance, beginning of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17,371</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(19,658</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34,005</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Unearned compensation related to stock options
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(24,393</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(39,630</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,210</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Amortization of unearned compensation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,106</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25,283</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38,165</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balance, end of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(19,658</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34,005</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,050</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accumulated deficit, including other
	comprehensive income
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balance, beginning of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(12,535</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(121,647</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,982,015</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,852,465</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,464</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="4" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other comprehensive income:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Unrealized investment gains (losses)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,926</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,926</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(790</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Foreign currency translation adjustments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(97</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,924</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Comprehensive loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(109,112</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,860,368</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(82,178</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Balance, end of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(121,647</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,982,015</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,064,193</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total shareholders&#146; equity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">722,240</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">113,104</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">109,155</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<!-- link3 "<FONT size="2">CONSOLIDATED STATEMENT OF CASH FLOWS</FONT>" -->

<DIV align="left">
<B><FONT size="2">CONSOLIDATED STATEMENT OF CASH FLOWS</FONT></B>
</DIV>

<DIV align="left">
<B><FONT size="2">(In thousands)</FONT></B>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="54%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Year Ended December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Operating
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,852,465</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,464</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for doubtful accounts
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">573</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,190</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,142</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Depreciation and amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,063</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,980</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">44,897</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Amortization of intangible assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,259</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">374,008</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">34,499</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock-based costs and expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">51,162</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">52,184</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">57,665</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Acquired in-process research and development
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,700</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Impairment of long-lived assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,307,465</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,645</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Minority interest in net income of consolidated
	subsidiary
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">649</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">33</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Equity in net loss of joint venture
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,019</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,866</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss on investments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,589</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">702</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gain on retirement of convertible debt
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(179,282</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for restructured operations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,905</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts receivable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,708</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(14,422</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,329</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(25,612</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,603</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,522</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25,916</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,699</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(12,557</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,633</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,380</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,793</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Deferred revenue
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(163</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(711</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,340</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net cash used in operating activities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(23,818</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(80,496</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(91,231</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Investing
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Notes receivable from officers
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(169</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,966</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,699</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Property and equipment purchases
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(41,819</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(54,461</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,189</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Purchase of short-term investments, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,702</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Investments in unconsolidated entities, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(10,500</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(28,492</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,212</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Payments for acquisitions, net of cash acquired
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,359</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(15,618</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,686</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Promissory note receivable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(15,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Restricted cash
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">110</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,459</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net cash used in investing activities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(183,847</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(90,427</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34,947</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Financing
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Proceeds from issuance of Preferred Stock, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,496</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,786</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Proceeds from issuance of Common Stock, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">259,803</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,368</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,569</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Proceeds from convertible debt offering, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">289,181</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Retirement of convertible debt
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(48,734</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Repayment of note payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Proceeds from payments of shareholder notes
	receivable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Principal payments on lease obligations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,193</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,816</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(10,899</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Purchase of common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(229</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(246</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(67</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net cash provided by financing activities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">268,903</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">311,487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(30,324</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net change in cash and cash equivalents
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">61,238</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">140,564</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(156,502</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Effect of exchange rates on cash and cash
	equivalents
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(97</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(577</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash and cash equivalents at beginning of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,791</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75,932</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">216,542</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash and cash equivalents at end of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75,932</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">216,542</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59,463</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Supplemental cash flow disclosure:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash paid for interest
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">688</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,598</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,633</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash paid for foreign income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">335</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,914</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Non-cash investing and financing activities:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Property and equipment leases
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,863</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,413</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Property and equipment purchases payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,796</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,470</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Common Stock issued for notes receivable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Retirement of notes payable through issuance of
	Preferred Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">64,630</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Unrealized gain (loss)&nbsp;on investments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,926</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,926</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(790</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Common Stock and options issued for acquisitions
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">387,651</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,229,728</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-6
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<P align="left">
<B><FONT size="2">Note 1&nbsp;&#151; The Company and Summary of
Significant Accounting Policies</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">The
Company</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Critical Path, Inc. was incorporated in
California on February&nbsp;19, 1997. Management intends to
solicit shareholder approval at its 2002 Annual Meeting to
reincorporate in Delaware. Assuming receipt of shareholder
approval, management intends to complete the re-incorporation
process during 2002. Critical Path, along with its subsidiaries
(collectively referred to herein as the &#147;Company&#148;),
provides messaging and collaboration solutions, from wireless,
secure and unified messaging to basic email and personal
information management, as well as identity management solutions
that simplify user profile management and strengthen information
security. The Company&#146;s customers are corporate
enterprises, carriers and service providers, postal authorities
and government agencies.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Basis
of Presentation</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements include the
accounts of the Company, and its wholly-owned and majority-owned
subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation. The equity
method is used to account for investments in unconsolidated
entities if the Company has the ability to exercise significant
influence over financial and operating matters, but does not
have the ability to control such entities. The cost method is
used to account for equity investments in unconsolidated
entities where the Company does not have the ability to exercise
significant influence over financial and operating matters.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Use
of Estimates</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could
differ from those estimates.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Acquisitions</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has accounted for all business
combinations using the purchase method of accounting. Results of
operations of the acquired businesses are included in the
Company&#146;s financial results from the date of the
acquisition. Net assets of the companies acquired are recorded
at their fair value at the acquisition date. The excess of the
purchase price over the fair value of separately identified net
assets acquired is included in intangible assets in the
accompanying consolidated balance sheet. The fair value of
separately identified intangible assets was determined based
upon independent valuations using various valuation
methodologies.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Cash
Equivalents and Restricted Cash</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company considers all highly liquid
investments with an original maturity of three months or less to
be cash equivalents. Cash equivalents consist primarily of
deposits in money market funds. Restricted cash is composed of
amounts held on deposit that are required as collateral related
to certain lease and other obligations of the Company.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Investments</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Short-term and long-term investments are
accounted for in accordance with Statement of Financial
Accounting Standards (&#147;SFAS&#148;) No.&nbsp;115
&#147;Accounting for Certain Investments in Debt and Equity
Securities.&#148; This statement requires that securities be
classified as &#147;held to maturity,&#148;
&#147;available-for-sale&#148; or &#147;trading,&#148; and the
securities in each classification be accounted for at either
amortized cost or fair market value, depending upon their
classification. The Company currently holds short-term
investments of approxi-
</FONT>

<P align="center"><FONT size="2">F-7
</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<FONT size="2">mately $9.7&nbsp;million in low risk government
securities, agency and corporate bonds and classifies these
investments as available-for-sale. Available-for-sale securities
are carried at fair market value, with the unrealized gains and
losses, net of tax, reported as other comprehensive income, a
separate component of stockholders&#146; equity. At the time of
sale, any gains or losses will be recognized as a component of
operating results.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Marketable securities are classified as
available-for-sale as of each balance sheet date and are
reported at fair value, with unrealized gains and losses, net of
tax, recorded in shareholders&#146; equity. Realized gains or
losses and charges for other than temporary declines in value,
if any, on available-for-sale securities are reported in other
income or expense as incurred. The Company periodically
evaluates these investments for other-than-temporary impairment.
See also Note&nbsp;6&nbsp;&#151; Investments.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Concentration
of Credit Risk</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Financial instruments that potentially subject
the Company to a concentration of credit risk consist of cash
and cash equivalents, restricted cash, investments and accounts
receivable. Cash and cash equivalents, restricted cash and
investments are deposited with financial institutions that
management believes are creditworthy. While the Company&#146;s
accounts receivable are derived from product and service
transactions with geographically dispersed companies that
operate in a number of horizontal markets, certain customers may
be negatively impacted as a result of an economic downturn or
other industry or market related conditions. The Company
performs ongoing credit evaluations of its customers and
maintains allowances for potential credit losses. During 1999
one of the Company&#146;s customers individually comprised 15%
of net revenue. This customer has comprised an insignificant
portion of the Company&#146;s net revenues during 2000 and 2001.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Fair
Value of Financial Instruments</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s financial instruments,
including cash and cash equivalents, restricted cash,
investments, accounts and notes receivable and accounts payable,
are carried at cost, which approximates fair value due to the
short maturity of these instruments.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Derivative
Instruments</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company accounts for derivative instruments
in accordance with the provisions of SFAS No.&nbsp;133,
&#147;Accounting for Derivative Instruments and Hedging
Activities&#148; and its related interpretations and complies
with SFAS No.&nbsp;138, &#147;Accounting for Certain Derivative
Instruments and Hedging Activities&nbsp;&#151; an amendment of
FASB Statement No.&nbsp;133.&#148; SFAS&nbsp;133 and
SFAS&nbsp;138 establish accounting and reporting standards for
derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as
derivatives), and for hedging activities. The Company records
derivatives on the balance sheet at their fair value in
compliance with the standards set forth in SFAS&nbsp;133.
Currently the Company has a non-hedged derivative and
accordingly, changes in its fair value are adjusted through the
statement of operations. The Company issued derivative financial
instruments during the fourth quarter of 2001 in connection with
its issuance of Series&nbsp;D Convertible Preferred Shares. See
also Note&nbsp;14&nbsp;&#151; Financing Transaction.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Property
and Equipment</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Property and equipment are stated at cost less
accumulated depreciation. Depreciation is computed using the
straight-line method over the shorter of the estimated useful
lives of the assets, generally three to five years, or the lease
term, if applicable. Gains and losses on disposals are included
in results of operations at amounts equal to the difference
between the net book value of the disposed assets and the
proceeds received upon disposal. Expenditures for replacements
and improvements are capitalized, while expenditures for
maintenance and repairs are charged to operations as incurred.
</FONT>

<P align="center"><FONT size="2">F-8
</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Software
Costs for Internal Use</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company capitalizes costs related to software
for internal use. These costs primarily include purchased
software and qualifying external consulting fees and the
amortization of these costs is included in general and
administrative expenses. During 2000 and 2001, approximately
$2.1&nbsp;million and $1.5&nbsp;million of cost, respectively,
related to internal use software was capitalized, and
amortization of $283,000 and $1.0&nbsp;million, respectively,
was charged to expense. There were no amounts capitalized or
charged to amortization expense during 1999.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Software
Costs for Products</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Development costs related to software products
are expensed as incurred, as research and development costs,
until technological feasibility of the product has been
established. The Company has defined the establishment of
technological feasibility as the completion of a working model.
There is typically a relatively short time period between
technological feasibility and product release, and the amount of
costs incurred during such period is insignificant; as a result,
capitalization of software development costs has been infrequent
and insignificant. During 2000, approximately $800,000 was
capitalized related to software development costs. These costs
are being amortized over three years, with amortization of
$267,000 recorded in 2001. There were no amounts capitalized
during 1999 and 2001 and there was no amortization expense
during 1999 and 2000.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Intangible
Assets</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Identifiable intangible assets result from the
application of the purchase method of accounting for the
Company&#146;s acquisitions and are composed of the amounts
allocated as of the acquisition date based on the fair value of
assembled workforce, customer base and acquired technology. The
excess of the purchase price paid over the fair value of
tangible and identifiable intangible net assets acquired is
recorded as goodwill. The Company also capitalizes, as
intangible assets, the value of deferred advertising costs
incurred in connection with warrants to purchase stock issued to
strategic partners. Intangible assets are stated net of
accumulated amortization and were amortized on a straight-line
basis over their expected useful lives ranging from two to eight
years. The Company periodically evaluates the reasonableness of
the remaining useful lives of intangible assets based upon an
analysis of current operating contributions and business plans.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Valuation
of Long-Lived Assets</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company periodically evaluates the carrying
value of long-lived assets and certain identifiable intangibles
for impairment, when events and circumstances indicate that the
carrying amount of an asset may not be recoverable. An
impairment loss is recognized whenever the evaluation
demonstrates that the carrying amount of a long-lived asset is
not recoverable. The Company measures an impairment loss based
upon a projected discounted cash flow method using a discount
rate primarily based upon its weighted average cost of capital
and that of comparable companies. See also
Note&nbsp;7&nbsp;&#151; Property and Equipment,
Note&nbsp;8&nbsp;&#151; Intangible Assets and
Note&nbsp;16&nbsp;&#151; Impairment of Long-Lived Assets.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Revenue
Recognition</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company recognizes revenue related to the
sale of the Company&#146;s licensed software products, hosted
messaging and communication services, professional services and
post-contract customer maintenance and support services. Revenue
is recognized once the related products on services have been
delivered and collection of all fees is considered probable.
</FONT>

<P align="center"><FONT size="2">F-9
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">License
Revenues</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Software license.</FONT></I><FONT size="2">
The Company derives software license revenues from perpetual and
term licenses for our messaging, collaboration and identity
management solutions. License revenues are recognized when
persuasive evidence of an arrangement exists, delivery of the
licensed software to the customer has occurred and the
collection of a fixed or determinable license fee is considered
probable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s revenue recognition policies
require that revenue recognized from software arrangements be
allocated to each element of the arrangement based on the fair
values of the elements, such as software products, upgrades and
enhancements, post contract customer support, installation,
training or other services. License software sales that involve
multiple elements, including software license and undelivered
maintenance and support and professional services, are
recognized such that we allocate revenue to each component of
the arrangement using the residual value method based on
evidence of the fair value of the undelivered elements. The
vendor specific objective evidence of fair values for the
ongoing maintenance obligations are based upon the prices paid
for the separate renewal of these services by the customer or
upon substantive renewal rates stated in the contractual
arrangements. Vendor specific objective evidence of the fair
value of other services, primarily professional services, is
based upon substantive rates stated in the contractual
arrangements or upon separate sales of these services at
substantive rates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a multiple element arrangement includes
services that are deemed essential to the functionality of a
delivered element, we recognize the entire arrangement fee using
the percentage of completion method. Under this method,
individual contract revenues are recorded based on the
percentage relationship of the contract costs incurred as
compared to management&#146;s estimate of the total cost to
complete the contract. If fair value cannot be determined for
more than one individual element of a multiple element
arrangement, revenue is recognized ratably over the term of the
agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">License fees are also received from resellers
under arrangements that do not provide product return or
exchange rights. Revenues from reseller agreements may include a
nonrefundable, advance royalty which is payable upon the signing
of the contract and license fees based on the contracted value
of our products purchased by the reseller. Guaranteed license
fees from resellers, where no right of return exists, are
recognized when persuasive evidence of an arrangement exists,
delivery of the licensed software has occurred and the
collection of a fixed or determinable license fee is considered
probable. Non-guaranteed per-copy license fees from resellers
are initially deferred and are recognized when they are reported
as sold to end-users by the reseller.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Service
Revenues</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Hosted messaging
services.</FONT></I><FONT size="2"> The Company derives hosted
messaging revenues from fees for hosting services it offers
related to its messaging and collaboration solutions. These are
primarily based upon monthly contractual per unit rates for the
services involved, which are recognized on a monthly basis over
the term of the contract beginning with the month in which
service delivery starts. Amounts billed or received in advance
of service delivery, including but not limited to branding and
set-up fees, are initially deferred and subsequently recognized
on a ratable basis over the expected term of the relationship
beginning with the month in which service delivery starts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Professional
services.</FONT></I><FONT size="2"> The Company derives
professional service revenues from fees primarily related to
training, installation and configuration services. The
associated revenues are recognized in the period in which the
services are performed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Maintenance and
support.</FONT></I><FONT size="2"> The Company derives
maintenance and support service revenues for fees from
post-contract customer support agreements associated with
product licenses. Such services typically include rights to
future update and upgrade product releases and dial-up phone
services. Fees are deferred and recognized ratably over the term
of the support contract, generally one year.
</FONT>

<P align="center"><FONT size="2">F-10
</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Advertising
Expense</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Advertising and promotion costs are generally
expensed as incurred. Costs associated with the development of
print or other media campaigns are deferred until the period
that includes the first commercial use of the media campaign.
Costs associated with industry trade shows and customer
conferences are deferred until the period that includes the
applicable trade show or conference. Advertising costs totaled
$414,000, $1,300,000 and $648,000 during 1999, 2000 and 2001,
respectively.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Research
and Development</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Research and development costs include expenses
incurred by the Company to develop and enhance its portfolio of
messaging, collaboration and identity management solutions.
Research and development costs, including acquired in-process
research and development costs, are recognized as expense, as
incurred.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Stock-Based
Compensation</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company accounts for stock-based employee
compensation arrangements in accordance with the provisions of
Accounting Principles Board (&#147;APB&#148;) Opinion
No.&nbsp;25, &#147;Accounting for Stock Issued to
Employees&#148; and its related interpretations and complies
with the disclosure provisions of SFAS No.&nbsp;123,
&#147;Accounting for Stock-Based Compensation.&#148; Under APB
No.&nbsp;25, compensation expense for fixed options is based on
the difference, if any, on the date of the grant, between the
fair value of the Company&#146;s stock and the exercise price of
the option. The Company accounts for equity instruments issued
to non-employees in accordance with the provisions of SFAS
No.&nbsp;123 and EITF&nbsp;096-18. The shares underlying
warrants for which vesting is considered probable are remeasured
at each reporting date until a measurement date occurs, at which
time the fair value of the warrant is fixed. The related charge
is amortized over the estimated term of the relationship. In the
event such remeasurement results in increases or decreases from
the initial fair value, which could be substantial, these
increases or decreases will be recognized immediately, if the
fair value of the shares underlying the milestone has been
previously recognized, or over the remaining term, if not.
Currently, all related amortization has been recognized as
advertising expense over the term of the estimated benefit
period. See also Note&nbsp;8&nbsp;&#151; Intangible Assets.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Income
Taxes</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Income taxes are computed using an asset and
liability approach, which requires the recognition of taxes
payable or refundable for the current year and deferred tax
assets and liabilities for the future tax consequences of events
that have been recognized in the Company&#146;s consolidated
financial statements or tax returns. The measurement of current
and deferred tax assets and liabilities are based on provisions
of the enacted tax law; the effects of future changes in tax
laws or rates are not anticipated. Deferred tax assets are
reduced, if necessary, by the amount of any tax benefits that,
based on available evidence, are more likely than not to be
realized.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Net
Loss per Share</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Basic net loss per share is computed by dividing
the net loss available to common shareholders for the period by
the weighted average number of common shares outstanding during
the period. Shares subject to repurchase by the Company and
shares held in escrow in connection with certain acquisition
agreements are excluded from the basic calculation. Diluted net
loss per share is computed by dividing the net loss available to
common shareholders for the period by the weighted average
number of common and potential common shares outstanding during
the period if the effect of each class of potential common
shares is dilutive. Potential common shares include restricted
Common Stock, shares held in escrow, and incremental Common and
Preferred shares issuable upon the exercise of stock options and
warrants and upon conversion of Series&nbsp;A,
</FONT>

<P align="center"><FONT size="2">F-11
</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<FONT size="2">Series&nbsp;B and Series&nbsp;D Preferred Shares,
Mandatorily Redeemable Preferred Shares and the
5&nbsp;3/4%&nbsp;Convertible Subordinated Notes.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Comprehensive
Income</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company accounts for and reports
comprehensive income or loss and its components in its financial
statements. Comprehensive income or loss, as defined, includes
the Company&#146;s net income or loss and all other changes in
equity (net assets) during the period from non-owner sources.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Foreign
Currency</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company considers the local currencies of
each of its foreign operations to be the functional currency in
those operations. Assets and liabilities recorded in foreign
currencies are translated at the exchange rate on the balance
sheet date. Revenue and expenses are translated at average rates
of exchange prevailing during the period. Translation
adjustments are charged or credited to other comprehensive
income, a component of shareholders&#146; equity. Gains and
losses on foreign currency transactions are included in
non-operating income and expense.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Segment
and Geographic Information</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company does not currently manage its
business in a manner that requires it to report financial
results on a segment basis. The Company currently operates in
one segment: Internet messaging and communication products and
services and management uses one measure of profitability. See
also Note&nbsp;19&nbsp;&#151; Product and Geographic Information.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Reclassifications</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain amounts previously reported have been
reclassified to conform to the current period presentation.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liquidity</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since inception, the Company has incurred
aggregate consolidated net losses of approximately
$2.1&nbsp;billion, which includes $1.3&nbsp;billion related to
the impairment of long-lived assets, $444.5&nbsp;million related
to non-cash charges associated with the Company&#146;s ten
acquisitions and $163.5&nbsp;million related to non-cash
stock-based compensation expenses. During 2001, the Company
completed a three-part restructuring plan that included
(i)&nbsp;the termination of non-core products and services;
(ii)&nbsp;a reduction in headcount; and (iii)&nbsp;a
consolidation of facilities. In addition, the Company completed
a financing transaction that resulted in net cash proceeds of
approximately $27&nbsp;million and the retirement of
approximately $65&nbsp;million of face value of our 5&nbsp;3/4
Convertible Subordinated Notes. Also, during 2001 the Company
retired an additional $197&nbsp;million of face value of our
5&nbsp;3/4 Convertible Subordinated Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s revenues generated from the
sale of our products and services may not increase to a level
that exceeds our operating expenses or could fluctuate
significantly as a result of changes in customer demand or
acceptance of future products. Accordingly, our cash flow from
operations may continue to be negatively impacted. We believe
that our cash, cash equivalents and anticipated cash from
operations will be sufficient to maintain current and planned
operations for at least the next twelve months. Failure to
generate sufficient revenues, raise additional capital or reduce
discretionary spending could have a material adverse effect on
the Company&#146;s ability to achieve its intended business
objectives.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Recent
accounting pronouncements</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In October 2001, the Financial Accounting
Standards Board (&#147;FASB&#148;) issued Statement of Financial
Accounting Standards (&#147;SFAS&#148;) No.&nbsp;144, Accounting
for the Impairment or Disposal of Long-Lived Assets.
</FONT>

<P align="center"><FONT size="2">F-12
</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<FONT size="2">This Statement supersedes SFAS&nbsp;121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of. This Statement applies to
all long-lived assets (including discontinued operations) and
consequently amends APB Opinion No.&nbsp;30, Reporting the
Results of Operations&nbsp;&#151; Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions. This
Statement develops one accounting model for long-lived assets
that are to be disposed of by sale. This Statement requires that
long-lived assets that are to be disposed of by sale be measured
at the lower of book value or fair value less cost to sell.
Additionally, this Statement expands the scope of discontinued
operations to include all components of an entity with
operations that can be distinguished from the rest of the entity
and will be eliminated from the ongoing operations of the entity
in a disposal transaction. This Statement is effective for
financial statements issued for fiscal years beginning after
December&nbsp;15, 2001. The Company does not expect the adoption
of this Statement to have a significant impact on its financial
statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2001, the FASB also issued SFAS
No.&nbsp;142, Goodwill and Other Intangible Assets. This
Statement addresses financial accounting and reporting for
intangible assets acquired individually or with a group of other
assets (but not those acquired in a business combination) at
acquisition and goodwill and other intangible assets subsequent
to their acquisition. This Statement supersedes APB Opinion
No.&nbsp;17, Intangible Assets. Under the provisions of this
Statement, if an intangible asset is determined to have an
indefinite useful life, it shall not be amortized until its
useful life is determined to be no longer indefinite. An
intangible asset that is not subject to amortization shall be
tested for impairment annually, or more frequently if events or
changes in circumstances indicate that the asset might be
impaired. Goodwill shall not be amortized. Goodwill shall be
tested for impairment on an annual basis and between annual
tests in certain circumstances at a level of reporting referred
to as a reporting unit. This Statement is required to be applied
starting with fiscal years beginning after December&nbsp;15,
2001. Goodwill and intangible assets acquired after
June&nbsp;30, 2001 will be subject immediately to the
nonamortization and amortization provisions of this Statement.
Upon adoption, approximately $5.5&nbsp;million related to
acquired workforce and goodwill will no longer be amortized,
however we will annually test them for impairment, if not on a
more frequent basis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2001, the FASB issued SFAS No.&nbsp;141,
Business Combinations. This Statement addresses financial
accounting and reporting for business combinations and
supersedes Accounting Principles Board (&#147;APB&#148;) Opinion
No.&nbsp;16, Business Combinations, and SFAS No.&nbsp;38,
Accounting for Preacquisition Contingencies of Purchased
Enterprises. All business combinations in the scope of this
Statement are to be accounted for using one method, the purchase
method. The provisions of this Statement apply to all business
combinations initiated after June&nbsp;30, 2001 and all business
combinations accounted for under the purchase method for which
the date of acquisition is July&nbsp;1, 2001, or later. We have
engaged in significant acquisition activity in the past,
including business combinations. The provisions of this
Statement would require all future business combinations to be
accounted for using the purchase method.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In May 2000, the Emerging Issues Task Force
(&#147;EITF&#148;) issued EITF Issue No.&nbsp;00-14, Accounting
for Certain Sales Incentives. EITF Issue No.&nbsp;00-14
addresses the recognition, measurement, and income statement
classification for sales incentives that a vendor voluntarily
offers to customers, without charge, which the customer can use
in, or exercise as a result of, a single exchange transaction.
The EITF changed the transition date for Issue&nbsp;00-14,
concluding that a company should apply this consensus no later
than the company&#146;s annual or interim financial statements
for the periods beginning after December&nbsp;15, 2001. In June
2001, the EITF issued EITF Issue No.&nbsp;00-25, Vendor Income
Statement Characterization of Consideration Paid to a Reseller
of the Vendor&#146;s Products, effective for periods beginning
after December&nbsp;15, 2001. EITF Issue No.&nbsp;00-25
addresses whether consideration from a vendor to a reseller is
an adjustment to the selling prices of the vendor&#146;s
products and, therefore, should be deducted from revenue when
recognized in the vendor&#146;s results of operations, or, a
cost incurred by the vendor for assets or services received from
the reseller and, therefore, should be included as a cost of
expense when recognized in the vendor&#146;s results of
operations. In September of 2001, the EITF issued EITF Issue
No.&nbsp;01-09, Accounting for Consideration Given by a
</FONT>

<P align="center"><FONT size="2">F-13
</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<FONT size="2">Vendor to a Customer or a Reseller of the
Vendor&#146;s Products, which is a codification of EITF Issues
No.&nbsp;00-14, No.&nbsp;00-25 and No.&nbsp;00-22, Accounting
for Points and Certain Other Time-or Volume-Based Sales
Incentive Offers and Offers for Free Products or Services to be
Delivered in the Future. The Company does not expect the
adoption of these issues to have a significant impact on its
financial statements.
</FONT>

<P align="left">
<B><FONT size="2">Note 2&nbsp;&#151; Acquisitions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 1999 and 2000, the Company completed ten
acquisitions. There were no acquisitions completed during 2001.
These acquisitions have been accounted for using the purchase
method of accounting and were as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Operating assets of the Connect Service business
	of Fabrik Communications, including the ongoing business
	operations and customer relationships;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">dotOne Corporation, a corporate email messaging
	service provider;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Amplitude Software Corporation, a provider of
	business-to-business Internet calendaring and resource
	scheduling solutions;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Xeti, Inc., a developer of standards-based public
	key infrastructure solutions;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">FaxNet Corporation, a outsource supplier of
	carrier-class enhanced fax and integrated messaging solutions;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">ISOCOR Corporation, a supplier of Internet
	messaging, directory and meta-directory software solutions;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The docSpace Company, a provider of web-based
	services for secure file delivery, storage and collaboration;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">RemarQ Communities, Inc., a provider of Internet
	collaboration services for corporations, web portals and
	Internet service providers;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Netmosphere, Inc., a provider of e-Business
	solutions for project collaboration and communications;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">PeerLogic, Inc., a provider of directory and
	enterprise application integration software.
	</FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="22%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="39"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="39" align="center" nowrap><B><FONT size="1">Acquired Company</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="39" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fabrik</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">dotOne</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Amplitude</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Xeti</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">FaxNet</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">ISOCOR</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">docSpace</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">RemarQ</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Netmosphere</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">PeerLogic</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="39"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="39" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Acquisition date
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">5/26/99</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7/12/99</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">8/31/99</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">11/24/99</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">12/6/99</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1/19/00</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3/8/00</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3/30/00</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">6/26/00</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">9/26/00</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Shares issued
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">109</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">641</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">4,107</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">274</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2,845</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">5,030</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,806</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,868</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,008</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">6,120</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Purchase price:
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Value of shares issued
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">8,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">35,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">141,300</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">18,500</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">152,400</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">226,700</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">218,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">259,300</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">33,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">374,700</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Value of options assumed
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,200</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">22,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,100</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7,300</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">37,200</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7,700</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">6,700</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">63,400</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Cash
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">12,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">17,500</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">45,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">20,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">30,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Transaction costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">100</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,300</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">6,100</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">200</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7,900</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">13,500</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">10,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">600</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,600</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">4,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Total purchase price
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">20,100</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">57,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">214,400</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">23,800</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">187,600</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">277,400</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">258,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">267,600</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">41,300</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">445,100</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Purchase price allocation:
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Property and equipment
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">500</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Customer base
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2,100</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">4,600</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">600</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">5,500</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">9,800</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">5,900</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">9,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">5,500</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Assembled workforce
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">400</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,500</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,800</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">360</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">900</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,400</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">500</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,300</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,400</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7,400</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">In-process technology
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">200</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,500</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Existing technology
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">600</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">4,100</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">540</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">6,100</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">18,300</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">21,500</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">4,500</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,600</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">30,300</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Unvested/assumed options
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">28,300</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Assets/(Liabilities)
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(1,700</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">4,400</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">200</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(10,100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">18,700</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(7,100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">7,800</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(1,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">(18,650</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Goodwill
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">17,100</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">52,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">201,500</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">22,700</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">185,200</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">227,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">243,100</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">246,100</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">28,300</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">388,750</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Total purchase price
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">20,100</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">57,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">214,400</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">23,800</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">187,600</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">277,400</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">258,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">267,600</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">41,300</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">445,100</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-14
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Acquired
In-Process Research and Development</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2"> In connection with the acquisitions of ISOCOR
and PeerLogic during 2000, the Company recognized
$3.7&nbsp;million representing the value attributable to
acquired in-process research and development that had not yet
reached technological feasibility and had no alternative future
use. These values were determined by estimating the future net
cash flows of the acquired in-process research and development
over their respective estimated useful lives and discounting the
net cash flows back to their present value. At December&nbsp;31,
2001, actual results were consistent, in all material respects,
with our assumptions at the time of the acquisitions. All
acquired in-process research and development was expensed at the
date of acquisition. No amounts were recognized resulting from
acquired in-process research and development during 1999 or 2001.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Pro
Forma Results (Unaudited)</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following unaudited pro forma summary
presents the Company&#146;s consolidated results of operations
for 1999 and 2000 as if the acquisitions had been consummated at
January&nbsp;1, 1999. The pro forma consolidated results of
operations include certain pro forma adjustments, including the
amortization of intangible assets and the accretion of the
acquisition-related retention bonuses.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="67%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Year Ended December 31
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">(in thousands, except per share amounts)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">97,466</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">154,382</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(705,114</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,532,958</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss per share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic and diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(14.79</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(20.91</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The pro forma results are not necessarily
indicative of those that would have actually occurred had the
acquisitions taken place at the beginning of the periods
presented.
</FONT>

<P align="left">
<B><FONT size="2">Note 3&nbsp;&#151; Retention Related
Bonuses</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the acquisitions of dotOne,
Amplitude, Xeti, FaxNet, ISOCOR, and docSpace, the Company
established a retention bonus program in the aggregate amount of
$20.7&nbsp;million to provide incentives for certain former
employees of these companies to continue their employment with
the Company. Payments of bonuses to designated employees occurs
on the six-month, twelve-month or eighteen-month anniversary
date of the acquisition, depending on the program, unless the
designated employee voluntarily terminates employment with the
Company prior to the respective acquisition&#146;s applicable
anniversary. A ratable share of the adjusted eligible bonus
amount has been accrued and charged to compensation expense over
the respective six, twelve or eighteen month period commencing
on the date the bonuses were granted. There were no
acquisition-related retention bonuses granted during 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 1999, the aggregate,
adjusted eligible bonus amount was $11.6&nbsp;million and the
ratable charge to compensation expense for the year then ended
was $4.1&nbsp;million. Based on the functions of the employees
scheduled to receive acquisition bonuses in 1999, $520,000 of
the compensation charge was allocated to cost of net revenues
and the remaining $3.6&nbsp;million was allocated to operating
expenses. No bonuses were paid in 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2000, the aggregate,
adjusted eligible bonus amount was $4.9&nbsp;million and the
ratable charge to compensation expense for the year then ended
was $9.3&nbsp;million. Based on the functions of the employees
scheduled to receive acquisition bonuses in 2000,
$1.0&nbsp;million of the compensation charge was allocated to
cost of net revenues and the remaining $8.3&nbsp;million was
allocated to operating expenses. Additionally, during 2000,
approximately $790,000 was recognized as employee severance
expense, resulting
</FONT>

<P align="center"><FONT size="2">F-15
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<FONT size="2">from acceleration of the required one year
vesting period in the third quarter of 2000. See also
Note&nbsp;4&nbsp;&#151; Strategic Restructuring and Employee
Severance. During 2000, $11.6&nbsp;million was paid in
acquisition-related retention bonuses and $2.5&nbsp;million was
accrued as of the year then ended.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, the aggregate,
adjusted eligible bonus amount was $1.9&nbsp;million and the
ratable charge to compensation expense for the year then ended
was $1.4&nbsp;million. Based on the functions of the employees
scheduled to receive acquisition bonuses in 2001, this amount
was charged to operating expenses. In March&nbsp;2001, the
Company announced an employee retention bonus program designed
to provide incentives for current employees of Critical Path to
continue their employment with the Company. The Company did not
incur or pay any cost related to this program, as none of the
financial metrics were achieved.
</FONT>

<P align="left">
<B><FONT size="2">Note 4&nbsp;&#151; Strategic Restructuring and
Employee Severance</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 2000, the Company announced a plan to
reduce its worldwide employee headcount by approximately
113&nbsp;employees or 11%. This employee reduction plan was
executed with the intent to realize various synergies gained
through the nine acquisitions the Company completed in 1999 and
the first half of 2000. During 2000, the Company recognized a
charge for severance-related costs totaling $6.7&nbsp;million,
composed of $3.3&nbsp;million in cash charges and
$3.4&nbsp;million in stock-based compensation expense, which
resulted from the acceleration of certain employee stock options
in connection with the Company&#146;s employee reduction plan.
During 2000, the Company paid all amounts related to employee
severance.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 2001, the Company announced a three part
strategic restructuring plan that involved reorganizing Critical
Path&#146;s product and service offerings around a group of core
communication solutions. The three elements of the plan include:
(i)&nbsp;focusing on core communication solutions;
(ii)&nbsp;workforce reduction; and (iii)&nbsp;facilities and
operations consolidation. Additionally, the Company has
implemented an aggressive expense management plan to further
reduce operating costs while maintaining strong customer service
for its core solutions. The Company completed its restructuring
plan in 2001, including the divestiture of all of its non-core
products and services, a 44% reduction in headcount, a 65%
reduction in facilities and the implementation of other cost
cutting measures, resulting in a significant reduction in
overall operating expenses. The non-core products and services
comprised approximately 26% and 21% of total revenues in the
years ended December&nbsp;31, 2000 and 2001. These products and
services will be an insignificant part of the Company&#146;s
revenue stream going forward.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Refocusing on
Core Communications Solutions</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company considers its core communication
solutions to be its messaging, collaboration and identity
management solutions, including mail, calendar, address book,
file storage, secure delivery, directory and meta-directory, and
access services supporting wireline and wireless users.
Restructuring charges associated with this refocusing of our
products and services consisted primarily of contract
termination fees, gains and losses related to asset sales and
dispositions, and lease termination fees. During 2001, the
Company sold or discontinued all of its non-core products and
services. As a result of these transactions a net gain of
$1.0&nbsp;million was recorded for the year ended
December&nbsp;31, 2001.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reduction of
Workforce, Facility and Other Expenses</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company reduced its headcount from 1,011
employees at March&nbsp;31, 2001 to 562 employees at
December&nbsp;31, 2001, and consolidated our facilities from 77
at December&nbsp;31, 2001 to 27 at December&nbsp;31, 2001.
Charges related to the headcount reduction consisted primarily
of the payment of severance and fringe benefits, and aggregated
approximately $10.3&nbsp;million during 2001. Included in this
charge was approximately $1.5&nbsp;million related to the
forgiveness of a note receivable from one of the Company&#146;s
former executives. Lease terminations and facility consolidation
related charges consisted primarily of lease termination costs,
future lease payments and related fees, and aggregated
approximately $9.0&nbsp;million during 2001.
</FONT>

<P align="center"><FONT size="2">F-16
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Summary of
Fiscal Year 2001 Restructuring Costs</FONT></I>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="52%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Cash</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Liabilities at</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Noncash</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Payments</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Charge</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Charges</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Receipts)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001(1)</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">(in millions)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Workforce reduction
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Facility and operations consolidation and other
	charges
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Non-core product and service sales and
	divestitures
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">These restructuring obligations are expected to
	be paid during the first quarter of 2002
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Note 5&nbsp;&#151; Accounts
Receivable</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts receivable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,463</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27,874</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Allowance for doubtful accounts
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,525</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,182</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts receivable, net
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38,938</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,692</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The provision for doubtful accounts was $446,000,
$3.2&nbsp;million and $5.1&nbsp;million in 1999, 2000 and 2001,
respectively.
</FONT>

<P align="left">
<B><FONT size="2">Note 6&nbsp;&#151; Investments</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Net</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(1)Net</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Cost</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Unrealized</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Realized</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Estimated</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">December 31, 2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Basis</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Gain&nbsp;(Loss)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Gain(Loss)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fair Value</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Long-term investments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Marketable securities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,510</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,601</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">909</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Non-marketable securities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,200</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(20,988</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,212</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Investment in Critical Path Pacific, equity method
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,508</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,019</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,489</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,218</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(24,608</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,610</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Short-term investments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Marketable securities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,702</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">96</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,798</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Long-term investments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Marketable securities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,883</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(790</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,093</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Non-marketable securities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,202</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(702</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,500</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Investment in Critical Path Pacific, equity method
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,508</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,886</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,622</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,593</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(790</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,588</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,215</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes write-downs related to
	other-than-temporary impairment of $23.6&nbsp;million and
	$702,000 during 2000 and 2001, respectively.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s investments consist of both
short-term and long-term investments. Short-term investments are
primarily comprised of low risk government securities and
corporate bonds. Long-term investments are primarily comprised
of strategic equity investments in corporate partners, certain
of which are publicly traded and marketable and certain of which
are privately held and non-marketable. The Company&#146;s
investments in marketable securities are stated at fair value,
which is based on quoted market prices.
</FONT>

<P align="center"><FONT size="2">F-17
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<FONT size="2">Investments in non-marketable securities are
stated at fair value, based on initial cost of the investment
and periodic review for impairment. Adjustments to the fair
value of these investments are recorded as a component of other
comprehensive income. All investments are periodically evaluated
for other-than-temporary impairment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2000, the Company established a joint
venture, Critical Path Pacific, Inc. (&#147;CP Pacific&#148;),
with Mitsui and Co.,&nbsp;Ltd., NTT Communications Corporation
and NEC Corporation to deliver advanced Internet messaging
solutions to businesses in Asia. The Company invested
$7.5&nbsp;million and holds a 40% ownership interest in the
joint venture. This investment is being accounted for using the
equity method. During 2000 and 2001, the Company recorded equity
in net loss of joint venture of approximately $1.0&nbsp;million
and $1.9&nbsp;million, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2000, the Company determined that the
impairment of certain of these investments was deemed to be
other-than-temporary and recorded a write down of
$23.6&nbsp;million, consisting of $2.6&nbsp;million in
investments in marketable securities and $21.0&nbsp;million in
investments in non-marketable securities. Additionally, during
2001 the Company recorded write-downs of $702,000 related to
additional other-than-temporary impairments of certain
non-marketable securities.
</FONT>

<P align="left">
<B><FONT size="2">Note 7&nbsp;&#151; Property and
Equipment</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Computer equipment and software
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">124,413</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">109,543</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Furniture and fixtures
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,245</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,822</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Leasehold improvements
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,002</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,180</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">134,660</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">121,545</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Less: Accumulated depreciation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(49,356</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(85,260</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">85,304</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">36,285</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2000 and 2001, property and
equipment included $21.5&nbsp;million and $2.9&nbsp;million of
assets under capital leases, respectively, and accumulated
depreciation totaled $13.6&nbsp;million and $1.4&nbsp;million at
December&nbsp;31, 2000 and 2001, respectively. All assets under
capital lease relate to computer equipment and software.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depreciation expense totaled $8.1&nbsp;million,
$34.4&nbsp;million and $43.0&nbsp;million during 1999, 2000, and
2001, respectively.
</FONT>

<P align="left">
<B><FONT size="2">Note 8&nbsp;&#151; Intangible Assets</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Strategic Relationships&nbsp;&#151; Warrants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46,755</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38,660</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Existing technology
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">45,372</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">39,748</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Customer base
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,971</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,493</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Assembled workforce
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,270</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,930</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Patent license
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">726</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">726</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Goodwill
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,983</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">124,094</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">102,540</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Less: Accumulated amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(53,899</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">124,094</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">48,641</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-18
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Amortization expense was $32.3&nbsp;million,
$374.0&nbsp;million and $34.5&nbsp;million in 1999, 2000 and
2001. Based on the types of identifiable intangibles acquired,
during 2000 and 2001 amortization expense of $18.1&nbsp;million
and $21.3&nbsp;million was allocated to cost of net revenues,
respectively, and during 1999, 2000 and 2001 amortization
expense of $32.3&nbsp;million, $355.9&nbsp;million and
$13.2&nbsp;million was allocated to operating expenses,
respectively. During 2000, the Company also recognized
$3.7&nbsp;million of acquired in-process research and
development costs in the period the transaction was consummated.
Additionally, a $1.3&nbsp;billion impairment charge to reduce
goodwill and other intangible assets was recognized in 2000. The
remaining identifiable intangible assets primarily relate to
existing technology for some of the Company&#146;s licensed
products, which were acquired in 2000, and certain amounts
related to assembled work forces, which were acquired in 1999
and 2000. Intangible assets amounted to approximately
$124.1&nbsp;million and $48.6&nbsp;million as of
December&nbsp;31, 2000 and 2001, respectively. Intangible assets
are expected to be fully amortized by the end of the fourth
quarter of 2002. See also Note 16 &#151; Impairment of
Long-Lived Assets.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Warrants</FONT></I>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ICQ</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 1999, the Company entered into an
agreement with ICQ, Inc., a subsidiary of AOL Time Warner,
pursuant to which the Company provides email hosting services
that are integrated with ICQ&#146;s instant messaging service
provided to ICQ&#146;s customers. As part of the agreement, ICQ
agreed to provide sub-branded advertising for the Company in
exchange for warrants to purchase 2,442,766 shares of
Series&nbsp;B Preferred Stock, issuable upon attainment of each
of five milestones.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of April&nbsp;9, 2000, all five milestones had
been attained and all related warrants were exercised during
2000 in two net exercises of 766,674 and 1,441,067 shares. Using
the Black-Scholes option-pricing model and assuming a term of
seven years and expected volatility of 90%, the final revised
aggregate fair value of all vested warrants was
$93.8&nbsp;million, which was being amortized to advertising
expense using the straight-line method over four years.
Aggregate charges to stock-based expenses of $27.4&nbsp;million,
$19.5&nbsp;million and $14.7&nbsp;million were recorded during
1999, 2000 and 2001, respectively, related to these warrants.
During the fourth quarter of 2000, the Company recorded an
impairment charge of $16.8&nbsp;million bringing the adjusted
fair value to approximately $30.1&nbsp;million to be amortized
over the remaining benefit period. See also
Note&nbsp;16&nbsp;&#151; Impairment of Long-Lived Assets.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Qwest
Communications Corporation</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In October 1999, the Company entered into an
agreement with Qwest Communications Corporation, a
telecommunications company, pursuant to which the Company agreed
to provide email hosting services to Qwest&#146;s customers. As
part of the agreement, Qwest agreed to provide sub-branded
advertising for Critical Path in exchange for warrants to
purchase up to a maximum of 3,534,540 shares of Common Stock
upon attainment of each of six milestones.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The shares underlying the milestones for which
achievement is considered probable are remeasured at each
subsequent reporting date, beginning at December&nbsp;31, 1999,
until each sub-branded Qwest mailbox registration threshold is
achieved and the related warrant shares vest, at which time the
fair value attributable to that tranche of the warrant is fixed.
In the event such remeasurement results in increases or
decreases from the initial fair value, which could be
substantial, these increases or decreases will be recognized
immediately, if the fair value of the shares underlying the
milestone has been previously recognized, or over the remaining
term, if not.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In October 1999, the first of the six milestones
had been attained. Using the Black-Scholes option-pricing model
and assuming a term of 5&nbsp;years and expected volatility of
90%, the final revised aggregate fair value of the vested
warrants associated with the first milestone approximated $22.2
million, which is being amortized
</FONT>

<P align="center"><FONT size="2">F-19
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<FONT size="2">to advertising expense using the straight-line
method over three years. The Company expects that future changes
in the trading price of the Company&#146;s Common Stock at the
end of each quarter, and at the time certain milestones are
considered probable and achieved, may cause additional
substantial changes in the ultimate amount of the related
stock-based charges.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, only the first of
the six milestones had been attained. None of the remaining
milestones are considered probable and as a result, the fair
value of the warrants relating to the shares underlying the
second through sixth milestones has not been recognized. During
1999, 2000 and 2001, $1.5&nbsp;million, $7.4&nbsp;million and
$4.6&nbsp;million, respectively, was charged to stock-based
expense related to the vested warrants. During the fourth
quarter of 2000, the Company recorded an impairment charge of
$4.8&nbsp;million. See also Note 16&nbsp;&#151; Impairment of
Long-Lived Assets. The fair value at December&nbsp;31, 2000 and
2001, was approximately $8.6&nbsp;million and $4.6&nbsp;million
and will be fully amortized by the end of the fourth quarter of
2002.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Worldsport
Network Ltd.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1999, the Company entered into an
agreement with Worldsport Network Ltd., the sole and exclusive
provider of Internet solutions for the General Association of
International Sports Federations (&#147;GAISF&#148;) and a
majority of the international federations it recognizes. Under
the terms of the agreement, Worldsport offers the Company&#146;s
web-based email and calendaring services to the GAISF network
and its members. As part of the agreement, Worldsport agreed to
provide sub-branded advertising for the Company in exchange for
warrants to purchase up to a 1.25% equity interest in the
Company on a fully diluted basis upon attainment of each of five
milestones based on the number of email boxes for which
Worldsport registers and provides sub-branding. The warrants are
exercisable for five years after becoming vested. Any warrants
not vested within five years of the date of the agreement will
be cancelled. The Company believes that this agreement could
have a significant current and potential future impact on the
Company&#146;s results of operations. However, Worldsport ceased
operations and filed for bankruptcy during 2000 and the Company
continues to believe the warrants will ultimately expire
unvested and unexercised.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lessor
Warrants</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1999, the Company entered into an
agreement with one of its lessors, in connection with an office
lease, pursuant to which the lessor was issued warrants to
purchase up to a maximum of 25,000 shares of the Company&#146;s
Common Stock. The warrants may be exercised beginning
January&nbsp;1, 2000 through December&nbsp;20, 2006 at a price
of $90.00 per share. The warrants vest at the beginning of each
month on a straight-line basis in the amount of 521 shares per
month.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Using the Black-Scholes option pricing model and
assuming a term of six years and expected volatility of 90%, the
fair value of the warrants on the effective date of the
agreement approximated $2.0&nbsp;million, which is being
amortized to general and administrative expenses using the
straight-line method over ten years beginning January 2000.
During 2000 and 2001, approximately $200,000 was charged to
stock-based expense related to the vested warrants, respectively.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Telco</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2000, docSpace entered into an
agreement with a major telecommunications company
(&#147;Telco&#148;) pursuant to which docSpace would provide
secure messaging services to the Telco&#146;s customers. As part
of the agreement, Telco agreed to provide marketing, publicity,
and promotional services to docSpace. As a result of the
completion of the Company&#146;s acquisition of docSpace, the
Company assumed warrants that allowed Telco to purchase up to a
maximum of 349,123 shares of the Company&#146;s Common Stock
upon attainment of each of three milestones.
</FONT>

<P align="center"><FONT size="2">F-20
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subsequent to the acquisition, the Company
entered into discussions with Telco to modify their
relationship. Accordingly, the vesting provisions of the
proposed agreement were modified to reflect the requirements of
the new relationship.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, none of the vesting
milestones of the original agreement had been attained and none
of the milestones are considered probable of issuance.
Accordingly no deferred compensation associated with the
warrants has been recognized.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company expects that future changes in the
trading price of the Company&#146;s Common Stock at the end of
each quarter, and at the time certain milestones are achieved,
will cause additional substantial changes in the ultimate amount
of the related stock-based charges.
</FONT>

<P align="left">
<B><FONT size="2">Note 9&nbsp;&#151; Related Party
Transactions</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vectis Group,
LLC</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2001, the Company entered into certain
agreements with Vectis Group, LLC (&#147;Vectis Group&#148;) to
engage Vectis Group to act as an advisor to the Company with
respect to various strategic alternatives the Company was
exploring and to assist with other management related services.
As part of the agreement, Vectis Group agreed to provide
consulting services to the Company in exchange for a monthly
retainer fee, potential transaction&nbsp;&#151; based fees
associated with certain strategic asset sales and investments in
Critical Path and immediately exercisable warrants to purchase
500,000 shares of the Company&#146;s Common Stock with an
exercise price of $2.00 per share, issuable upon execution of
the agreement. Using the Black-Scholes option-pricing model and
assuming a term of three years, the term of the agreement, and
expected volatility of 215%, the initial and final fair value of
the warrant on the effective date of the agreement approximated
$732,000, which was recognized upon the execution of the
agreement in March&nbsp;2001, because the relationship is
terminable at any time. During the term of the agreement, we
paid Vectis Group an aggregate of approximately
$1.1&nbsp;million in monthly retainer fees and expenses and
approximately $3.1&nbsp;million in transactional fees, including
approximately $2.75&nbsp;million in connection with our recent
preferred stock financing transaction, in which Vectis Group
participated as one of several investors in this transaction led
by General Atlantic Partners and its affiliates. See also Note
14&nbsp;&#151; Financing Transaction. William McGlashan, Jr., a
principal in Vectis Group, and a member of the Board of
Directors of the Company, was appointed interim President and
Chief Operating Officer in April 2001 and was later appointed
Vice Chairman and Chief Executive Officer. Effective
September&nbsp;30, 2001, the Company terminated its agreements
with Vectis Group for consulting and other transactional
services. In connection with the termination of the agreements,
certain other employees of Vectis Group have become employees of
Critical Path. Although the agreements were terminated, certain
obligations under the agreement survived, including the
transaction fee paid in connection with the Company&#146;s
recent financing transaction and related indemnification
obligations. The total potential remaining fees payable
aggregate between zero and $135,000.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Notes receivable from
shareholders</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 1998, the Company issued a full recourse
note to a shareholder and former Chief Executive Officer,
Douglas Hickey, equal to $1.06&nbsp;million.
Mr.&nbsp;Hickey&#146;s full recourse note accrues interest at
the rate of 4.51% per annum and is secured by shares of the
Company&#146;s Common Stock owned by Mr.&nbsp;Hickey. In
February 2001, Mr.&nbsp;Hickey terminated his employment with
the Company. In connection with the termination, the repayment
of the $1.06&nbsp;million note receivable and accrued interest
was extended to May&nbsp;9, 2002. As of December&nbsp;31, 2000
and 2001, accrued interest totaled $109,000 and $158,000,
respectively. Mr.&nbsp;Hickey repaid this note in full with
interest in March 2002.
</FONT>

<P align="center"><FONT size="2">F-21
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Notes receivable from
officers</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 1998, the Company issued a note receivable
to a shareholder and former Chief Executive Officer, Douglas
Hickey, equal to $500,000. Mr.&nbsp;Hickey&#146;s non-recourse
note accrues interest at the rate of 4.51% per annum. In
February 2001, Mr.&nbsp;Hickey terminated his employment with
the Company. In connection with the termination, the repayment
of the $500,000 note receivable and accrued interest was
extended to March&nbsp;9, 2002. As of December&nbsp;31, 2000 and
2001, accrued interest totaled $51,000 and $73,000,
respectively. Mr.&nbsp;Hickey repaid this note in full with
interest in March 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2000, the Company issued a note receivable
to a former Chief Financial Officer, Lawrence Reinhold, equal to
$1.7&nbsp;million. Reinhold&#146;s full recourse note accrued
interest at the rate of 6.0% per annum and both principal and
interest were scheduled to be forgiven over a specified period.
During Mr.&nbsp;Reinhold&#146;s employment with Critical Path
approximately $270,000 of principal and interest was forgiven,
consistent with the terms of the note. The repayment of the
outstanding loan was subject to certain change of control and
employment termination criteria. In August 2001,
Mr.&nbsp;Reinhold terminated his employment with the Company. In
connection with the termination all outstanding principal and
interest of $1.5&nbsp;million was forgiven by the Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001 and in connection with each of their
respective employment agreements, the Company made loans and
held notes receivable from David&nbsp;C. Hayden, Executive
Chairman, and Pierre Van Beneden, President, totaling
$1.5&nbsp;million and $350,000, respectively. Hayden&#146;s full
recourse note accrues interest at the rate of 6.75% per annum
and shall be repaid by the achievement of performance-based
milestones described in Mr.&nbsp;Hayden&#146;s employment
agreement and performance loan agreement. Mr.&nbsp;Van
Beneden&#146;s loan is interest free for the first year and will
be forgiven in monthly installments over the first year of Van
Beneden&#146;s employment, resulting in a compensation charge to
operating expense ratably over the first twelve months of his
employment. In the event of Mr.&nbsp;Van Beneden&#146;s
departure prior to one year from the date of employment, the
note shall be repayable and interest due in accordance with the
terms of his employment agreement. Mr.&nbsp;Van Beneden&#146;s
employment agreement and loan was not effective until
October&nbsp;8, 2001. As of December&nbsp;31, 2001, accrued
interest totaled $40,000 related to the note to Mr.&nbsp;Hayden.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2001, the Board approved a full
recourse loan to William&nbsp;E. McGlashan, Jr. Board of up to
$4.0&nbsp;million in connection with the purchase of a principal
residence in the San Francisco Bay Area. The loan is to be
secured by the residence, and to the extent necessary should an
appraisal of the property equal less than 120% of the
loan&#146;s value, by Mr.&nbsp;McGlashan&#146;s personal
shareholdings pledged to the Company, such that the amount
outstanding shall be at all times secured by at least 120% of
the principal outstanding. Interest on the loan is Applicable
Prime Rate deferred until principal is due, over a 10&nbsp;year
term. The loan shall be forgiven upon a defined Change of
Control event. In the event Mr.&nbsp;McGlashan terminates
employment either by voluntary resignation or for Cause, the
loan shall be due and payable, with interest, no later than
12&nbsp;months following such termination. In the event
Mr.&nbsp;McGlashan is terminated for any reason other than
Cause, the loan shall remain outstanding for the remainder of
its terms. The Company has not yet funded the loan and as such
no accrued interest was outstanding as of December&nbsp;31, 2001.
</FONT>

<P align="center"><FONT size="2">F-22
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Revenues</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a summary of revenues and
receivables associated with related parties:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="42%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Receivables</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Year Ended December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="23"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="23" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">E*TRADE
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,423</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">395</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,724</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,055</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,591</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">US West
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">460</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,806</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,647</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">426</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">460</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">ICQ
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">267</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">240</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">237</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">267</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">105</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,150</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,441</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,608</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,748</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">607</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,672</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Expenses</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2000, the Company leased an aircraft, for
use by certain officers of the Company, from D Squared LLC, in
which Douglas Hickey and David&nbsp;Thatcher, the Company&#146;s
former Chief Executive Officer and former President,
respectively, had a direct investment. The aggregate amount
billed to the Company for the use of the aircraft or other
aircraft arranged through D Squared LLC aggregated approximately
$337,000. There were no amounts in 1999 and 2001.
</FONT>

<P align="left">
<B><FONT size="2">Note 10&nbsp;&#151; Convertible Subordinated
Notes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2000, the Company issued
$300.0&nbsp;million of five-year, 5&nbsp;3/4% Convertible
Subordinated Notes (&#147;Notes&#148;) due April 2005, to
qualified institutional buyers in reliance on Rule&nbsp;144A
under the Securities Act of 1933. Holders may convert the Notes
into shares of Common Stock at any time before their maturity or
the business day before their redemption or repurchase by the
Company. The conversion rate is 9.8546 shares per $1,000
principal amount of Notes subject to adjustment in certain
circumstances. This rate is equivalent to a conversion price of
approximately $101.48 per share. On or after the third business
day after April&nbsp;1, 2003, through March&nbsp;31, 2004, the
Company has the option to redeem all or a portion of the Notes
that have not been previously converted at the redemption price
equal to 102.30% of the principal amount. During the period from
April&nbsp;1, 2004 through March&nbsp;31, 2005, the Company has
the option to redeem all or a portion of the Notes that have
been previously converted at the redemption price equal to
101.15% of the principal amount. Thereafter the redemption price
is equal to 100% of the principal amount. The Notes are
non-callable for three years. In the event of a &#147;Change in
Control,&#148; as defined in Notes&#146; Offering Circular, the
Notes 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company incurred approximately
$10.8&nbsp;million in debt issuance costs, consisting primarily
of underwriting discount and legal and other professional fees.
These costs have been capitalized and will be recognized as a
component of interest expense on a straight-line basis, which
approximates the effective interest method, over the five-year
term of the Notes. During 2000 and 2001, the Company recorded
interest expense related to these debt issuance costs of
$1.6&nbsp;million and $1.5&nbsp;million, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest is payable on April 1 and October 1 of
each year. As of December&nbsp;31, 2000 and 2001, there was
approximately $4.3&nbsp;million and $600,000 in interest
payable, respectively. During 2000 and 2001, the Company
recorded interest expense related to the Notes of
$13.0&nbsp;million and $12.1&nbsp;million, respectively. The
Notes are subordinated in right of payment to all senior debt of
the Company and effectively subordinated to all existing and
future debt and other liabilities of the Company&#146;s
subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001, the Company retired
$261.4&nbsp;million of face value of the Notes, which resulted
in an extraordinary gain on retirement of $179.3&nbsp;million,
inclusive of $6.8&nbsp;million in write downs of related debt
issuance costs. The Company used cash of $53.1&nbsp;million and
equity in order to retire the Notes, inclusive of
</FONT>

<P align="center"><FONT size="2">F-23
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<FONT size="2">approximately $4.4&nbsp;million in accrued
interest. See also Note&nbsp;14&nbsp;&#151; Financing
Transaction. As of December&nbsp;31, 2000 and 2001 the total
balance outstanding was $300.0&nbsp;million and
$38.4&nbsp;million, respectively. These Notes are carried at
cost and had an approximate fair value at December&nbsp;31, 2001
of $21.5 million.
</FONT>

<P align="left">
<B><FONT size="2">Note 11&nbsp;&#151; Income Taxes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company did not provide any deferred federal
or state income tax benefit for any of the periods presented
because it has experienced operating losses since inception. The
Company has provided a full valuation allowance on the deferred
net tax asset, consisting primarily of net operating loss
carryforwards, because of uncertainty regarding its
realizability.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company experienced extraordinary gains of
$179.3&nbsp;million relating to the retirement of the
Company&#146;s convertible subordinated notes. These gains are
reported net of any tax consequences. The extraordinary gain
recognition gave rise to alternative minimum tax of
$1.6&nbsp;million for federal and state purposes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2001, the Company had
approximately $239&nbsp;million of federal and $107&nbsp;million
state net operating loss carryforwards available to offset
future taxable income. Federal and state net operating loss
carryforwards expire in varying amounts through 2021 for federal
and 2008 for state purposes. Under the Tax Reform Act of 1986,
the amounts of and benefits from net operating loss
carryforwards may be impaired or limited in certain
circumstances. Events which cause limitations in the amount of
net operating losses that the Company may utilize in any one
year include, but are not limited to, a cumulative ownership
change of more than 50%, as defined, over a three year period.
These carryforwards will begin to expire at various times
starting in 2013 and 2006 for federal and state tax purposes,
respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since inception, the Company has incurred several
ownership changes which has limited the Company&#146;s ability
to utilize loss carryforwards as defined in IRC
Section&nbsp;382. Based on the most current change, the losses
are subject to a limitation of $324&nbsp;billion per year. The
Company believes the limitation should not have a material
effect on the future utilization of the losses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2001, the Company also had
research and development credit carryforwards of approximately
$7.2&nbsp;million for federal and state purposes. The research
and development credit carryforwards expire through 2021 for
federal purposes, and do not expire for state purposes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The components of the provision for income taxes
are as follows (in thousands):
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="72%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Current:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Federal
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">State
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Foreign
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,513</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,606</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Extraordinary Item&nbsp;Income Tax
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,600</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,513</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,206</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-24
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Deferred tax assets (liabilities)&nbsp;consist of
the following (in thousands):
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Deferred Tax Assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net Operating Loss Carryforwards
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">98,254</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">87,381</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Tax Credits
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,442</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,321</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Fixed Assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,085</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,043</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accrued Liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,490</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,828</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total Deferred Tax Assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">121,271</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">112,573</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Deferred Tax Liability
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Intangible Assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(26,917</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,758</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(26,917</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,758</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross Deferred Tax Asset
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">94,354</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">103,815</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Valuation Allowance
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(94,354</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(103,815</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net Deferred Tax Assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Reconciliation of the statutory federal income
tax to the Company&#146;s effective tax:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Tax at federal statutory rate
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(34</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">State, net of federal benefit
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock based expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Goodwill amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Intangible asset write off
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Research and development credits
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Change in valuation allowance
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Foreign Taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Warrant Amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for Taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Note 12&nbsp;&#151; Commitments and
Contingencies</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Leases</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company leases office space and equipment
under noncancelable operating and capital leases with various
expiration dates through 2011. Rent expense during 1999, 2000
and 2001, totaled $1.3&nbsp;million, $5.8&nbsp;million and
$5.4&nbsp;million, respectively.
</FONT>

<P align="center"><FONT size="2">F-25
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Future minimum lease payments under noncancelable
operating and capital leases are as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Capital</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Operating</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Leases</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Leases</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Year Ending December&nbsp;31</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2002
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,232</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,819</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2003
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">536</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,290</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2004
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">313</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,028</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2005
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,514</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2006 and beyond
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,541</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total minimum lease payments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,081</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,192</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Less: Amount representing interest
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(224</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Unamortized discount
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Present value of capital lease obligations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,857</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Less: Current portion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,043</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Long-term portion of capital lease obligations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">814</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Equipment Lease Lines</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1998, the Company entered into three separate
financing agreements that provided for the acquisition of up to
$6.5&nbsp;million in equipment and $1.5&nbsp;million in software
and tenant improvements. The first of these agreements provided
for acquisitions of up to $2.0&nbsp;million in equipment through
April&nbsp;30, 1999; the second agreement for acquisitions of up
to $3.5&nbsp;million in equipment and $1.5&nbsp;million in
software and tenant improvements through May&nbsp;1, 1999; and
the third agreement for acquisitions of up to $1.0&nbsp;million
in equipment through March&nbsp;31, 2001. Amounts financed under
these agreements were payable over three-year periods, in
monthly installments of principal and interest, with interest
accruing at rates between 6.30% and 7.00% per annum.
Approximately $1.0&nbsp;million was collateralized by the
related equipment acquired. In connection with two of the
agreements, the Company issued warrants to purchase a total of
339,522 shares of Series&nbsp;A Preferred Stock at a purchase
price of $0.72 per share. The Company estimated fair value of
these warrants at date of issuance of $186,000 was amortized to
interest expense over the term of the related lease obligation.
The obligation payable by the Company under these financing
agreements of $2.4&nbsp;million at December&nbsp;31, 2001 was
paid in full in January 2002.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Service Level Agreements</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net revenues are derived from contractual
relationships that typically have one to three year terms.
Certain agreements require minimum performance standards
regarding the availability and response time of email services.
If these standards are not met, such contracts are subject to
termination and the Company could be subject to monetary
penalties.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Litigation and
Investigations</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a party to lawsuits in the normal course
of our business. Litigation in general, and securities and
intellectual property litigation in particular, can be expensive
and disruptive to normal business operations. Moreover, the
results of complex legal proceedings are difficult to predict.
Other than as described below, we are not a party to any other
material legal proceedings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Securities Class&nbsp;Actions in Northern
District of California. </FONT></I><FONT size="2">Beginning on
February&nbsp;2, 2001, a number of securities class action
complaints were filed against the Company, and certain of our
current and former officers and directors in the United States
District Court for the Northern District of California. The
</FONT>

<P align="center"><FONT size="2">F-26
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<FONT size="2">complaints were filed as purported class actions
by individuals who allege that they purchased the Company&#146;s
common stock during a purported class period and sought an
unspecified amount in damages; the alleged class periods vary
among the complaints. The complaints were consolidated into a
single action which alleged that, during the period from
September&nbsp;26, 2000 to February&nbsp;1, 2001, the Company
and certain of its former officers made false or misleading
statements of material fact about the Company&#146;s financial
statements, including its revenues, revenue recognition
policies, business operations and prospects for the year 2000
and beyond. In addition, on September&nbsp;24, 2001, certain
former shareholders of PeerLogic, Inc. filed a putative class
action in the Superior Court of the State of California alleging
that Critical Path breached representations and warranties made
in connection with the acquisition of PeerLogic. The complaint
sought an unspecified amount in damages. We subsequently removed
the PeerLogic action to the United States District Court for the
Northern District of California. On November&nbsp;8, 2001,
Critical Path announced that it had reached an agreement in
principle to settle these cases. In February 2002, the Court
gave preliminary approval to the settlement of the class action
litigation. The Court also set the hearing date for final
approval of the settlement agreement for May&nbsp;23, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Derivative Actions in Northern District of
California. </FONT></I><FONT size="2">Beginning on
February&nbsp;5, 2001, Critical Path was named as a nominal
defendant in a number of derivative actions, purportedly brought
on the Company&#146;s behalf, filed in the Superior Court of the
State of California and in the United States District Court for
the Northern District of California. The derivative complaints
alleged that certain of Critical Path&#146;s current and former
officers and directors breached their fiduciary duties to the
Company, engaged in abuses of their control of the Company, were
unjustly enriched by their sales of the Company&#146;s common
stock, engaged in insider trading in violation of California law
or published false financial information in violation of
California law. The plaintiffs sought unspecified damages on the
Company&#146;s behalf from each of the defendants. Because of
the nature of derivative litigation, any recovery in the action
would inure to the Company&#146;s benefit. Contemporaneously
with settlement of the securities class action described above,
an agreement in principle has been reached to settle the
derivative action.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Securities and Exchange Commission
Investigation. </FONT></I><FONT size="2">In February 2001, the
Securities and Exchange Commission (the &#147;SEC&#148;) issued
a formal order of investigation of the Company and certain of
the Company&#146;s current and former officers and directors
associated with the Company with respect to non-specified
accounting matters, financial reports, other public disclosures
and trading activity in the Company&#146;s securities. The
Company fully cooperated with the SEC in its investigation. The
SEC&#146;s investigation was concluded against the Company in
January 2002 with no imposition of fines or penalties against
the Company. The Company consented without admitting or denying
liability, to an administrative order that the Company violated
certain non-fraud provisions of the federal securities laws and
to a cease and desist order.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Securities Class&nbsp;Action in Southern
District of New York. </FONT></I><FONT size="2">Beginning on
July&nbsp;18, 2001, a number of securities class action
complaints were filed against the Company, and certain of our
current and former officers and directors and underwriters
connected with our initial public offering of common stock in
the United States District Court for the Southern District of
New&nbsp;York. The purported class action complaints were filed
by individuals who allege that they purchased common stock at
the initial public offering of common stock between
March&nbsp;26, 1999 and December&nbsp;6, 2000. The complaints
allege generally that the Prospectus under which such securities
were sold contained false and misleading statements with respect
to discounts and commissions received by the underwriters. The
complaints have been consolidated into a single action. The
complaints seek an unspecified amount in damages on behalf of
persons who purchased Critical Path stock during the specified
period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Breach of Contract Action.
</FONT></I><FONT size="2">On January&nbsp;18, 2001, we entered
into a non-exclusive licensing agreement with Comverse Network
Systems, Inc. (&#147;Comverse&#148;) with respect to our CP
Messaging and Directory software, with rights of distribution to
Comverse&#146;s customers, both in the form of
&#147;standalone&#148; licenses, and &#147;bundled&#148; with
Comverse&#146;s unified messaging products. On October&nbsp;9,
2001, we notified Comverse that we
</FONT>

<P align="center"><FONT size="2">F-27
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<FONT size="2">were terminating the Software License Agreement
based on our belief that Comverse materially breached the
contract. On or about October&nbsp;15, 2001, Comverse filed a
complaint in the United States District Court for the Southern
District of New&nbsp;York against the Company, challenging the
Company&#146;s right to terminate the agreement entered into by
Comverse. Comverse asserted causes of action for specific
performance, requesting that the Company be required to perform
and to recognize Comverse&#146;s alleged rights under the
Agreement, and injunctive relief, prohibiting the Company from
taking action to suspend, terminate or interfere with
Comverse&#146;s alleged rights, remedies or privileges.
Concurrently with the filing of the Complaint, Comverse also
filed a Demand for Arbitration with the American Arbitration
Association, seeking a determination that Critical Path did not
have the right to terminate the agreement. Comverse does not
seek money damages in either the Complaint or the Demand for
Arbitration. In December&nbsp;2001, the District Court issued a
preliminary injunction against Critical Path prohibiting us from
taking various actions in connection with the termination,
including demanding the return of the licensed software or
publicly announcing that Comverse&#146;s rights under the
license agreement were terminated. The Company has appealed the
preliminary injunction and has also succeeded in having the
arbitration moved to San Francisco. While it is difficult to
determine what the eventual outcome of this matter will be, the
Company intends to defend its rights vigorously.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Securities Class&nbsp;Action in Northern
District of California. </FONT></I><FONT size="2">Beginning on
February&nbsp;1, 2002, a number of securities class action
complaints were filed against the Company, and certain of our
former officers. The purported class action complaints allege
that during a period from April&nbsp;21, 2000 through
September&nbsp;25, 2000 and in same cases April&nbsp;31 (sic),
2000 through October&nbsp;19, 2000, the Company reported
materially misleading financial statements and made materially
misleading statements about the Company&#146;s ability to
collect on recognized revenue from our customers based on the
current economic climate and uncertainty about continued
viability of many Internet based businesses as well as in
recognition of changes in accounting regulations. The suit
further alleges that the Company knew these issues would
severely impair future revenue growth and the ability to make
future stock sales and extract future bonuses tied to the
Company&#146;s performance. The complaints seek an unspecified
amount in damages. The Company believes that these suits are
without merit and intends to vigorously defend such allegations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The uncertainty associated with these and other
unresolved or threatened lawsuits could seriously harm the
Company&#146;s business and financial condition. In particular,
the lawsuits or the continued effects of the investigation could
harm its relationships with existing customers and its ability
to obtain new customers. The continued defense of the lawsuits
and conduct of the SEC investigation could also result in the
diversion of management&#146;s time and attention away from
business operations, which could harm the Company&#146;s
business. Although some of the named lawsuits are in the final
stages of settlement, there can be no assurance that the
applicable courts will accept the final settlement as executed,
or at all. Negative developments with respect to the settlements
or the lawsuits could cause the Company&#146;s stock price to
decline significantly. In addition, although the Company is
unable to determine the amount, if any, that it may be required
to pay in connection with the resolution of these lawsuits or
the investigation by settlement or otherwise, the size of any
such payments could seriously harm the Company&#146;s financial
condition.
</FONT>

<P align="left">
<B><FONT size="2">Note 13&nbsp;&#151; Minority Interest in
Subsidiary</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2000, the Company owned a
72.87% interest in CP Italia, a consolidated subsidiary, which
was acquired in connection with the acquisition of ISOCOR. In
March 2001, the outstanding 27.13% interest in CP&nbsp;Italia
was acquired for approximately $4.2&nbsp;million. For the year
ended December&nbsp;31, 2000, the minority interest in net
income of CP&nbsp;Italia amounted to $649,000. Minority interest
in net income of CP&nbsp;Italia was insignificant during 2001.
</FONT>

<P align="center"><FONT size="2">F-28
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<B><FONT size="2">Note 14&nbsp;&#151; Financing
Transaction</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2001, the Company completed a
financing transaction with a group of investors and their
affiliated entities (&#147;Investors&#148;). In connection with
this financing transaction the Company issued 4&nbsp;million
shares of its Series&nbsp;D Cumulative Redeemable Convertible
Participating Preferred Stock (&#147;Series&nbsp;D Preferred
Stock&#148;), in a private offering, resulting in gross cash
proceeds to the Company of approximately $30&nbsp;million, and
the simultaneous retirement of approximately $65&nbsp;million in
face value of outstanding Notes. The Investors were led by
General Atlantic Partners LLC and affiliates and included
Hutchison Whampoa Limited and affiliates and Vectis Group LLC
and affiliates. In addition, General Atlantic LLC was granted
warrants to purchase 2.5&nbsp;million of the Company&#146;s
Common Stock in connection with this offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Series&nbsp;D Preferred Stock ranks senior to
all preferred and common stock of the Company in priority of
dividends, rights of redemption and payment upon liquidation.
The fair value ascribed to the Series&nbsp;D Preferred Stock was
based on actual cash paid by independent investors and the
approximate fair value of the Notes retired in connection with
the offering. The principle terms of the Series&nbsp;D Preferred
Stock include an automatic redemption on November&nbsp;8, 2006,
cumulative dividends at a rate of 8% per year, compounded on a
semi-annual basis and payable in cash or additional shares of
Series&nbsp;D Preferred Stock, conversion into shares of common
stock calculated based on the Accreted Value, as defined,
divided by $1.05, and preference in the return of equity in any
liquidation or change of control.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company received net cash proceeds associated
with the issuance of the Series&nbsp;D Preferred Stock of
approximately $27&nbsp;million, which was net of a
$2.75&nbsp;million transaction fee paid to Vectis Group LLC and
approximately $200,000 in related legal and accounting fees. At
issuance, the total amount of these costs was recorded as a
reduction of the carrying amount of the Series&nbsp;D Preferred
Stock and will accrete over the term of the Series&nbsp;D
Preferred Stock. Additionally, at issuance, the Series&nbsp;D
Preferred Stock was deemed to have an embedded beneficial
conversion feature which was limited to the net proceeds
allocable to preferred stock of approximately $42&nbsp;million.
The value of the beneficial conversion feature, at issuance, was
initially recorded as a reduction of the carrying amount of the
Series&nbsp;D Preferred Stock and will accrete over the term of
the Series&nbsp;D Preferred Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The purchase agreement provides for a
preferential return of equity to the Series&nbsp;D Preferred
stockholders, before any return of equity to the common
stockholders, and also provides for the Series&nbsp;D Preferred
stockholders to participate on a pro rata basis with the common
stockholders, in any remaining equity, once the preferential
return has been satisfied. Under the terms of this provision,
the preferential return of equity is equal to the purchase price
of the Series&nbsp;D Preferred Stock plus all dividends that
would have accrued during the term of the preferred stock, even
if a change in control occurs prior to the redemption date. The
right to receive a preferential return lapses if either:
(i)&nbsp;the Company is sold for a price per share of
Series&nbsp;D Preferred Stock, had each such share been
converted into common stock prior to change in control equal to,
or at least, four times the Accreted Value of Series&nbsp;D
Preferred Stock, which at December&nbsp;31, 2001 was $4.20, or
(ii)&nbsp;the Company&#146;s stock trades on NASDAQ for
60&nbsp;days prior to the change-in-control at an average price
of not less than four times the Accreted Value. At
December&nbsp;31, 2001, the estimated fair value of the
liquidation preference was $5.2&nbsp;million and was allocated
to that feature and recorded as a separate component of the
Series&nbsp;D Preferred Stock. In accordance with the provisions
of SFAS No.&nbsp;133, Accounting for Derivative Instruments, the
Company is required to adjust the carrying value of the
preference to its fair value at each balance sheet date and
recognize any change since the prior balance sheet date as a
component of operating income.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The warrants are exercisable at any time after
November&nbsp;8, 2002 and until November&nbsp;8, 2006, at an
exercise price of $1.05, and convert into one share of the
Company&#146;s Common Stock. Consistent with the provisions set
forth in APB Opinion No.&nbsp;14, &#147;Accounting for
Convertible Debt and Debt Issued with Stock Purchase
Warrants&#148;, a portion of the proceeds received for the
Series&nbsp;D Preferred Stock was allocated to the warrants and
the preferred stock, based upon their relative fair market
values. As a result of this allocation,
</FONT>

<P align="center"><FONT size="2">F-29
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<FONT size="2">approximately $5.25&nbsp;million of the proceeds
were allocated to the warrants, which was recorded as a
reduction of the carrying value of the Series&nbsp;D Preferred
Stock. Using the Black-Scholes option pricing model, assuming a
four-year term, 200% volatility, a risk-free rate of 6.0% and no
dividend yield, the fair market value of the warrants was
$6.2&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The carrying value of the Series&nbsp;D Preferred
Stock at December&nbsp;31, 2001 was determined as follows:
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="83%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Series D Preferred Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">55,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Less: Issuance costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,950</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Series D Preferred Stock, net of issuance costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">52,050</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Less amounts allocated to:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Common stock warrants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,250</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Beneficial conversion feature
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(41,800</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Add amortization and accretion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">373</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Carrying value of Series&nbsp;D Preferred Stock
	and embedded change-in-control feature at December&nbsp;31, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,373</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Note 15&nbsp;&#151; Shareholders&#146;
Equity</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Changes in equity security shares outstanding
were:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="63%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Year Ended December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Common Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Shares outstanding, beginning of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,294</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46,937</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">74,135</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Issuance of Common Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,285</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,958</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">514</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exercise of stock options and warrants
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,580</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,313</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,967</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Conversion of Preferred Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,912</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Purchase of Common Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(134</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(73</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(35</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Shares outstanding, end of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46,937</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">74,135</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">76,581</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Incorporation and Authorized
Capital</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s Articles of Incorporation, as
amended, authorize the Company to issue 500&nbsp;million shares
of Common Stock at $0.001 par value, and 5&nbsp;million shares
of Preferred Stock, at $0.001 par value. The holders of
Preferred Stock have various voting and dividend rights as well
as preferences in the event of liquidation.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Preferred Stock</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 1999, the Company completed the second
round of the Series&nbsp;B Preferred Stock financing through the
issuance of 2,772,708 shares at $4.26 per share for net proceeds
of approximately $10,749,000. In connection with this financing,
the Company issued warrants to purchase 51,364 shares of
Series&nbsp;B Preferred Stock at $4.26 per share to the
placement agent. Prior to the closing of the Company&#146;s
initial public offering, the Series&nbsp;B Preferred Stock
placement agent sold back to the Company at $4.26 per share an
aggregate of 53,293&nbsp;shares held by the placement agent or
its affiliates. As of the closing of the Company&#146;s initial
public offering, all of the Series&nbsp;B Preferred Stock
outstanding was converted into an aggregate of 19,912,000 shares
of Common Stock at a conversion ratio of 1:1.
</FONT>

<P align="center"><FONT size="2">F-30
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Common Stock</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 1999, the Company sold 1,090,909
shares of Common Stock at a price of $2.20 per share to a
customer that also agreed to provide marketing related services.
In connection with the transactions, the Company recognized a
charge totaling $2.2&nbsp;million that was attributed to sales
and marketing expense over the one-year term of the agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;29, 1999, the Company completed its
initial public offering of 5,175,000 shares of Common Stock
(including the exercise of the underwriters over allotment
option) and realized net proceeds of $114.1&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;2, 1999, the Company completed a
follow-on public offering of 3,000,000 shares of Common Stock
and realized net proceeds of $140.7&nbsp;million.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Stock Purchase Rights</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In February 1998, the Company entered into stock
purchase agreements with three founders and sold 3,863,635
shares of the Company&#146;s Common Stock at $0.02 per share.
Under the terms of the stock purchase agreements, the Company
has the right to purchase the shares of Common Stock at the
original issue price in the event any one of the founders ceases
to be an employee of the Company. These repurchase rights lapse
by 25% on the first anniversary of the vesting start date and
ratably each month thereafter for 36&nbsp;months. On
September&nbsp;1, 1999, 80,508 shares were repurchased in
connection with the early termination of one of the founders. At
December&nbsp;31, 2000 and 2001, there were no shares of Common
Stock subject to repurchase rights. In connection with the
issuance of these shares, the Company recorded unearned
compensation of $1,306,000 that is being recognized over the
periods in which the Company&#146;s repurchase rights lapse.
During 1999, 2000 and 2001 $428,000, $428,000 and $106,000,
respectively, were recognized related compensation expense.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In October 1998, an officer exercised stock
options to purchase 1,274,687 shares of the Company&#146;s
Common Stock at a price of $0.84 per share. Under the terms of
the option, the Company has the right to purchase the unvested
shares of Common Stock at the original issue price in the event
the officer ceases to be an employee of the Company. The
repurchase rights lapse ratably each month for 48&nbsp;months.
In connection with the option grant preceding this transaction,
the Company recognized unearned compensation totaling
$3.8&nbsp;million that is included in the aggregate unearned
compensation charges discussed below. In February 2001, this
officer&#146;s employment was terminated and the unvested
portion of these stock options was accelerated, and resulted in
a $732,000 charge to stock-based expenses in the first quarter
of 2001. At December&nbsp;31, 2001, no shares of Common Stock
were subject to repurchase rights.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Employee Stock Purchase
Plan</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 1999, the Board of Directors adopted and
the shareholders approved the 1999 Employee Stock Purchase Plan
(&#147;ESPP&#148;). The Company has authorized
600,000&nbsp;shares for issuance. The number of shares of Common
Stock reserved under the ESPP increases annually on
January&nbsp;1 of each year beginning in 2000 by an amount equal
to 1% of the Company&#146;s issued and outstanding Common Stock.
However, such increases are limited to 1,000,000 additional
shares each year. Employees generally will be eligible to
participate in the ESPP if the Company customarily employs them
for more than 20 hours per week and more than five months in a
calendar year and are not 5% or greater shareholders. Under the
ESPP, eligible employees may select a rate of payroll deduction
up to 15% of their compensation subject to certain maximum
purchase limitations per period and other statutory limitations.
The ESPP was implemented in a series of overlapping twenty-four
month offering periods beginning on the effective date of the
Company&#146;s initial public offering with subsequent offering
periods beginning on the first trading day on or after
May&nbsp;1 and November&nbsp;1 of each year. Purchases will
occur on each April&nbsp;30 and October&nbsp;31 (the
&#147;Purchase Dates&#148;) during each participation period.
Under
</FONT>

<P align="center"><FONT size="2">F-31
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<FONT size="2">the ESPP, eligible employees have the opportunity
to purchase shares of Common Stock at a purchase price equal to
85% of the fair market value per share of Common Stock on either
the start date of the offering period or the Purchase Date of
the related purchase period, whichever is less. Stock purchases
under the ESPP in 1999, 2000 and 2001 were 42,495, 112,665 and
489,096, respectively, at a price of $20.40 in 1999, $20.40 and
$40.27 per share in 2000 and $1.28 and $0.78 per share in 2001.
As of December&nbsp;31, 2001, 955,763 shares were available
under the ESPP for future issuance.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Stock Options</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 1998 and 1999, the Company&#146;s Board of
Directors adopted the 1998 Stock Option Plan and the 1999
Nonstatutory Stock Option Plan, respectively (together, the
&#147;Option Plans&#148; and each a &#147;Plan&#148;). The 1998
Plan provides for the granting of options to purchase up to
30,788,741 shares of common stock to employees, officers,
directors and consultants, with an increase annually on
January&nbsp;1 of each year by an amount equal to 2% of the
Company&#146;s issued and outstanding common stock, and the 1999
Plan provides for the granting of up to 28,000,000 shares of
common stock to non-executive officer employees or the initial
employment grant for executive officers. In November 2001, the
Board approved an increase of 11,250,000 to the number of option
shares reserved for grant to non-executive officer employees
under the 1999 Plan. The 1998 Plan is a shareholder approved
plan and allows for options to be granted as either incentive
stock options (&#147;ISOs&#148;) or nonqualified stock options
(&#147;NSOs&#148;). Options granted under the 1999 Plan may only
be nonqualified stock options (&#147;NSOs&#148;). ISOs may be
granted only to Company employees, including officers and
employee directors. NSOs may be granted to Company employees,
non-employee directors and consultants. At December&nbsp;31,
2001 the total number of shares of common stock available for
option grants was 2,548,817 and 9,650,469 under the 1998 Plan
and the 1999 Plan, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has, in connection with the
acquisition of various companies, assumed the stock option plans
of each acquired company. At December&nbsp;31, 2000 and 2001, a
total of 1,598,793 and 481,229 shares, respectively, of the
Company&#146;s Common Stock were reserved for issuance upon
exercise of outstanding options issued under the assumed plans,
and the related options are included in the table below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Options under the 1998 Plan may be granted at
prices no less than 85% of the estimated fair market value of
the shares on the date of grant as determined by the Board of
Directors, provided, however, that (i)&nbsp;the exercise price
of an ISO may not be less than 100% of the fair market value of
the shares on the date of grant, and (ii)&nbsp;the exercise
price of an ISO granted to a 10% shareholder may not be less
than 110% of the fair market value of the shares on the date of
grant. Option grants under the Company&#146;s Option Plans
generally vest 25% per year and are generally exercisable for a
maximum period of ten years from the date of grant.
</FONT>

<P align="center"><FONT size="2">F-32
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A summary of the status of the Company&#146;s
stock option plans as of December 31, 2000, and 2001, and
changes during the periods ending on those dates is presented
below:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">Year Ended December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Options outstanding, beginning of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,787,959</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,107,213</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42.03</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Granted and assumed
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,634,167</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">51.30</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40,542,946</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.93</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exercised
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,001,418</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.44</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,967,350</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.07</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Canceled
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,313,495</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41.78</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(22,309,880</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27.93</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Options outstanding, end of year
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,107,213</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42.03</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38,372,929</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">At December 31</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Options exercisable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,587,894</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">28.93</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,423,461</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22.64</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted-average fair value of options granted
	during the period
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">56.65</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes information about
stock options outstanding at December&nbsp;31, 2001:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="19%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Options Outstanding</FONT></B></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Options Exercisable</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Range of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Remaining</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Exercise Prices</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Outstanding</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Contractual Life</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise Price</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise Price</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$&nbsp;0.020&nbsp;&#150;&nbsp;$&nbsp;0.3
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">50 882,852</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.30</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">272,295</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.27</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$&nbsp;0.360&nbsp;&#150;&nbsp;$&nbsp;0.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">530 9,130,219</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.59</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.37</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">185,635</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.36</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$&nbsp;0.550&nbsp;&#150;&nbsp;$&nbsp;0.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">980 3,397,271</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.74</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.71</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">151,824</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.94</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$&nbsp;1.000&nbsp;&#150;&nbsp;$&nbsp;1.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">120 8,046,654</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.96</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.01</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,647,368</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.01</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$&nbsp;1.130&nbsp;&#150;&nbsp;$&nbsp;1.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">740 9,003,261</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.80</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">222,496</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.34</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$&nbsp;2.030&nbsp;&#150;&nbsp;$&nbsp;9.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">450 2,174,853</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.26</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.77</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">363,968</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.56</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$10.060&nbsp;&#150;&nbsp;$49.94
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0 2,310,122</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40.73</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,120,044</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">39.65</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$50.500&nbsp;&#150;&nbsp;$75.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0 3,402,704</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66.07</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,450,974</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">65.98</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$77.250&nbsp;&#150;&nbsp;$87.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0 24,993</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.72</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">82.46</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,857</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">80.74</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38,372,929</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42.03</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,423,461</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22.64</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The compensation cost associated with the
Company&#146;s stock-based compensation plans, determined using
the minimum value method prescribed by SFAS No.&nbsp;123,
resulted in a material difference from the reported net loss
during the three years ended 2001. Had compensation cost been
recognized based on the fair value at the date of grant for
options granted during 1999, 2000 and 2001, the pro forma
amounts of the Company&#146;s net loss and net loss per share
would have been as follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="55%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Year Ended December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">(In thousands, except per share amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss attributable to common
	shares&nbsp;&#151; as reported
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,852,232</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,820</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss attributable to common
	shares&nbsp;&#151; pro forma
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(118,947</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,198,973</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(395,187</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic and diluted net loss per share&nbsp;&#151;
	as reported
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.93</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(30.67</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.08</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic and diluted net loss per share&nbsp;&#151;
	pro forma
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4.00</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(36.41</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5.34</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-33
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company calculated the minimum value and the
fair value of each option grant on the date of grant during
1999, 2000 and 2001 using the Black-Scholes option pricing model
as prescribed by SFAS No.&nbsp;123 using the following
assumptions:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Risk-free interest rate
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Expected lives (in years)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Dividend yield
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Expected volatility
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">90.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">128.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">250.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;Preferred Stock Rights
Agreement</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;19, 2001 pursuant to a Preferred
Stock Rights Agreement (the &#147;Rights Agreement&#148;)
between the Company and Computershare Trust Company, Inc., as
Rights Agent (the &#147;Rights Agent&#148;), the Company&#146;s
Board of Directors (i)&nbsp;declared a dividend of one right (a
&#147;Right&#148;) to purchase one one-thousandth share of the
Company&#146;s Series&nbsp;C Participating Preferred Stock
(&#147;Series&nbsp;C Preferred&#148;) for each outstanding share
of Common Stock, par value $0.001 per share (&#147;Common
Shares&#148;), of the Company, and (ii)&nbsp;authorized the
issuance to each holder of Exchangeable Shares (as defined
below) of one Right for each exchangeable Share held. An
&#147;Exchangeable Share&#148; is a share of Class&nbsp;A
Non-Voting Preferred Shares of Critical Path Messaging Co., an
unlimited liability company existing under the laws of the
Province of Nova Scotia and a wholly-owned subsidiary of the
Company. Each Exchangeable Share is exchangeable for one Common
Share. The Rights shall be issued on May&nbsp;15, 2001 (the
&#147;Record Date&#148;), to shareholders of record as of the
close of business on that date. Each Right entitles the
registered holder to purchase from the Company one
one-thousandth of a share of Series&nbsp;C Preferred at an
exercise price of $25.00 (the &#147;Purchase Price&#148;),
subject to adjustment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Rights will become exercisable following the
tenth day after a person or group announces the acquisition of
15% or more of the Company&#146;s common stock or announces
commencement of a tender or exchange offer, the consummation of
which would result in ownership by the person or group of 15% or
more of the common stock of the Company. The Company will be
entitled to redeem the Rights at $0.01 per Right at any time on
or before the fifth day following acquisition by a person or
group of 15% or more of the Company&#146;s common stock. The
Rights will expire on the earlier of May&nbsp;15, 2011 or
exchange or redemption of the Rights.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Unearned
stock-based compensation</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with certain stock option grants
and Common Stock issuances to employees, directors and advisors
during 1998 and 1999, the Company recognized unearned
compensation totaling $19.9&nbsp;million and $22.3&nbsp;million,
respectively, which is being amortized over the vesting periods
of the related options. In March 2001, the Company granted
employee stock options with exercise prices below market value
on the date of grant in connection with a program designed to
provide incentives for current employees of the Company to
continue their employment. The Company issued stock options
representing an aggregate of 12.9&nbsp;million shares, vesting
monthly over a 2-year period, and recognized unearned
compensation related to the program totaling $21.4&nbsp;million,
which were subsequently reduced as a result of employee
terminations throughout 2001 by approximately $8.2&nbsp;million.
Amortization expense recognized during 1999, 2000 and 2001
totaled approximately $19.4&nbsp;million, $19.0&nbsp;million and
$35.6&nbsp;million, respectively. The Company periodically
assesses unearned compensation and adjusts the remaining
unamortized balance for employee terminations and resignations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additionally, during 1999, the Company incurred a
stock-based charge of approximately $2.0&nbsp;million in
connection with a severance agreement for a terminated employee.
This charge was included in cost of net
</FONT>

<P align="center"><FONT size="2">F-34
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<FONT size="2">revenues based on the function of the related
employee. During 2000, the Company incurred stock-based charges
of approximately $5.7&nbsp;million in connection with certain
severance agreements for terminated employees. Approximately
$3.4&nbsp;million of this charge was included in employee
severance expense in connection with the Company&#146;s plan to
reduce worldwide headcount and the remaining $2.3&nbsp;million
was included in stock-based expenses. See also
Note&nbsp;4&nbsp;&#151; Strategic Restructuring and Employee
Severance. During 2001, we incurred stock-based charges of
approximately $1.7&nbsp;million in connection with certain
severance agreements for terminated employees and consulting
arrangements. These charges were included in operating expenses
based on the functions of the related employees and consultants.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Other
Comprehensive Income( Loss)</FONT></I>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Unrealized investment gains(losses)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,926</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(790</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Foreign currency translation adjustments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(97</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(74</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,998</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other comprehensive income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,829</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(74</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,788</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There were no tax effects allocated to any
components of other comprehensive income during 1999, 2000 or
2001. See also Note&nbsp;11&nbsp;&#151; Income Taxes.
</FONT>

<P align="left">
<B><FONT size="2">Note 16&nbsp;&#151; Impairment of Long-Lived
Assets</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2000, the Company recorded a
$1.3&nbsp;billion impairment charge to reduce goodwill, other
intangible assets and deferred costs associated with its ICQ and
Qwest relationships to their estimated fair values. In
connection with the impairment analysis, the estimates of fair
values were based upon the discounted estimated cash flows of
the Company for the succeeding three years using a discount rate
of 25% and an estimated terminal value. The assumptions
supporting the estimated cash flows, including the discount rate
and an estimated terminal value, reflects management&#146;s best
estimates. The discount rate was primarily based upon the
weighted average cost of capital for comparable companies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001 and in connection the Company&#146;s
strategic restructuring effort an additional assessment was
performed on certain of its remaining long-lived assets. The
restructuring plan identified and formulated a plan to exit
certain products and services that were determined to be
non-core to the Company&#146;s business strategy. The Company
reviewed the intangible assets related to these non-core
products and services and, as a result of its assessment,
recorded a $14.2&nbsp;million impairment charge in the second
quarter to eliminate these assets. During the fourth quarter of
2001 the Company recorded a further impairment charge of
$12.4&nbsp;million related to long-lived assets within its core
business.
</FONT>

<P align="left">
<B><FONT size="2">Note 17&nbsp;&#151; Defined Contribution
Plan</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company maintains a defined contribution
plan, the Critical Path 401(k) Plan, under which its employees
are eligible to participate. Participants may make voluntary
contributions based on a percentage of their compensation,
within certain limitations. Under the plan, discretionary
contributions may be made by the Company. Participants are fully
vested in the Company&#146;s contributions after a specified
number of years of service, as defined under the plan. No
contributions have been made by the Company since its inception.
</FONT>

<P align="center"><FONT size="2">F-35
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">
<B><FONT size="2">Note&nbsp;18&nbsp;&#151; Loss Per
Share</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net loss per share is calculated as follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">(in thousands, except per share amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Net loss</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss before extraordinary item
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,855,232</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(258,746</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gain on retirement of convertible subordinated
	notes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">179,282</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,855,232</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,464</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accretion on redeemable convertible preferred
	shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(356</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss attributable to common shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,941</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,855,232</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,820</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Weighted average shares outstanding</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average shares outstanding
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,860</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">63,379</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75,148</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average shares subject to repurchase
	agreements
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,830</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,493</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(188</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average shares held in escrow related to
	acquisitions
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(260</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,487</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(979</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Shares used in computation of basic and diluted
	net loss per share
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29,770</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60,399</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">73,981</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Basic and diluted net loss per share</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss before extraordinary item
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.93</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(30.72</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.49</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gain on retirement of convertible subordinated
	notes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.42</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.93</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(30.72</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.07</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accretion on redeemable convertible preferred
	shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.01</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss attributable to common shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.93</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(30.72</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.08</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 1999, 2000 and 2001, there were
19,164,493, 7,907,018 and 89,206,120, respectively, potential
common shares that were excluded from the determination of
diluted net loss per share, as the effect of such shares on a
weighted average basis is anti-dilutive.
</FONT>

<P align="left">
<B><FONT size="2">Note 19&nbsp;&#151; Product and Geographic
Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenue information on a product basis is as
follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="60%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Year Ended December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">License
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Messaging solutions
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27,853</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,822</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Identity management solutions
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,060</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,822</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,694</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,316</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Service
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hosted messaging
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,057</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">44,666</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">37,467</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Fax messaging(1)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,100</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,887</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,354</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Maintenance
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,966</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,819</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Professional services
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,527</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,573</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,157</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">135,653</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">104,173</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Fax messaging was discontinued in connection with
	the 2001 restructuring. See also Note&nbsp;4&nbsp;&#151;
	Strategic Restructuring and Employee Severance.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">F-36
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Information regarding revenues and long-lived
assets attributable to the Company&#146;s primary geographic
regions is as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">Year Ended December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">United States
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,157</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">83,864</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">62,928</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Europe
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47,974</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">37,415</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,815</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,830</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,157</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">135,653</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">104,173</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">December 31</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Long-lived assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">United States
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">522,973</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">202,897</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">79,255</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,841</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,501</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,671</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">526,814</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">209,398</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">84,926</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Note&nbsp;20&nbsp;&#151; Quarterly Financial
Data (Unaudited)</FONT></B>

<P align="left">
<B><FONT size="2">Quarterly Results of Operations</FONT></B>

<DIV align="left">
<B><FONT size="2">(in thousands)</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">First</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Second</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Third(1)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fourth(2)</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(As Restated)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,553</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">33,495</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,342</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,263</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross profit
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,209</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,826</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,557</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,455</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss from operations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(77,566</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(127,682</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(135,763</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,479,468</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net Loss
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(76,942</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(130,009</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(139,447</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,508,834</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss per share&nbsp;&#151; basic and diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.51</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.22</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.26</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(21.31</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">First</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Second(3)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Third(4)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fourth(5)</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27,143</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27,085</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,787</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,158</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross profit (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,613</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,837</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,285</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,703</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Loss from operations
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(66,285</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(80,230</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(44,144</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(51,039</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss before extraordinary item
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(70,046</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(84,899</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(50,321</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(53,480</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(70,046</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(81,081</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86,901</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(15,238</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss) attributable to common shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(70,046</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(81,081</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">86,901</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(15,594</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net loss before extraordinary item per
	share&nbsp;&#151; basic and diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.97</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.15</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.68</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.71</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss) per share&nbsp;&#151; basic and
	diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.97</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.10</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.21</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes a $6.7&nbsp;million charge related
	employee severance expense. See also Note&nbsp;4&nbsp;&#151;
	Strategic Restructuring and Employee Severance.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes a $1.31&nbsp;billion charge related to
	impairment of intangible assets including the deferred costs
	associated with our ICQ and Qwest relationships. See also
	Note&nbsp;16&nbsp;&#151; Impairment of Long-Lived Assets.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">F-37
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes a $14.2&nbsp;million charge related to
	impairment of certain long-lived assets and an $8.5&nbsp;million
	charge related to costs incurred as a result of our strategic
	restructuring initiative. See also Note&nbsp;4&nbsp;&#151;
	Strategic Restructuring and Employee Severance and
	Note&nbsp;16&nbsp;&#151; Impairment of Long-Lived Assets.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes a $3.8&nbsp;million charge related to
	costs incurred as a result of our strategic restructuring
	initiative. See also Note&nbsp;4&nbsp;&#151; Strategic
	Restructuring and Employee Severance and
	Note&nbsp;16&nbsp;&#151; Impairment of Long-Lived Assets.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes a $12.4&nbsp;million charge related to
	impairment of certain long-lived assets, primarily network
	infrastructure and equipment, and a $6.0&nbsp;million charge
	related to costs incurred as a result of our strategic
	restructuring initiative. See also Note&nbsp;4&nbsp;&#151;
	Strategic Restructuring and Employee Severance and
	Note&nbsp;16&nbsp;&#151; Impairment of Long-Lived Assets.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">F-38
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="right">
<B><FONT size="2">SCHEDULE II</FONT></B>

<P align="center">
<B><FONT size="2">CRITICAL PATH, INC.</FONT></B>

<DIV>&nbsp;</DIV>

<!-- link3 "<FONT size="2">VALUATION AND QUALIFYING ACCOUNTS</FONT>" -->

<P align="center">
<B><FONT size="2">VALUATION AND QUALIFYING ACCOUNTS</FONT></B>

<DIV align="center">
<B><FONT size="2">(in thousands)</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Additions</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Balance at</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Charged to</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Balance</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Beginning of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Costs and</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Deductions-</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">at End of</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Year Ended December 31,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Period</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Expenses</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Write-offs</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Period</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,525</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,242</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,585</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,182</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">623</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,492</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,590</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,525</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1999
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">817</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(244</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">623</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The above balances include the Company&#146;s
allowance for doubtful accounts.
</FONT>

<P align="center"><FONT size="2">S-1
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link1 "<FONT size="2">SIGNATURES</FONT>" -->

<P align="center">
<B><FONT size="2">SIGNATURES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused
this Annual Report on Form&nbsp;10-K to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of
San Francisco, State of California, on the 29th day of March,
2002.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="38%"></TD>
	<TD width="62%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Critical Path, Inc.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="38%"></TD>
	<TD width="2%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">By:&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">/s/ LAUREEN DEBUONO
	</FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="38%"></TD>
	<TD width="62%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	<FONT size="2">Laureen DeBuono
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	<I><FONT size="2">Executive Vice President and</FONT></I></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	<I><FONT size="2">Chief Financial Officer</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each person whose signature appears below
constitutes and appoints William&nbsp;E. McGlashan,&nbsp;Jr. and
Laureen DeBuono 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 Report 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Exchange Act of 1934, this amendment to its Annual Report on
Form&nbsp;10-K has been signed below by the following persons in
the capacities and on the dates indicated.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="44%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="center" valign="top">
	<FONT size="2">/s/ DAVID C. HAYDEN<BR>
	<HR size="1" noshade>David&nbsp;C. Hayden
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Executive Chairman of the Board
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">March&nbsp;29, 2002
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ WILLIAM E. MCGLASHAN, JR.<BR>
	<HR size="1" noshade>William&nbsp;E. McGlashan, Jr.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Vice Chairman of the Board and<BR>
	Chief Executive Officer<BR>
	(Principal Executive Officer)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">March&nbsp;29, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="center" valign="top">
	<FONT size="2">/s/ LAUREEN DEBUONO<BR>
	<HR size="1" noshade>Laureen DeBuono
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Executive Vice President and<BR>
	Chief Financial Officer<BR>
	(Principal Financial and<BR>
	Accounting Officer)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">March&nbsp;29, 2002
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ RAUL&nbsp;J. FERNANDEZ<BR>
	<HR size="1" noshade>Raul&nbsp;J. Fernandez
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">March&nbsp;29, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="center" valign="top">
	<FONT size="2">/s/ WILLIAM E. FORD<BR>
	<HR size="1" noshade>William&nbsp;E. Ford
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">March&nbsp;29, 2002
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ JEFFREY WEBBER<BR>
	<HR size="1" noshade>Jeffrey Webber
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">March&nbsp;29, 2002
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">EXHIBIT INDEX</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="83%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3(i).1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amended and Restated Articles of Incorporation
	(Incorporated by reference to Exhibit&nbsp;3(i)(b) to the
	Registrant&#146;s Registration on Form&nbsp;S-1 (File
	No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3(i).2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amendment to the Articles of Incorporation, dated
	January&nbsp;5, 2001 (Incorporated by reference to
	Exhibit&nbsp;3.2 to the Registrant&#146;s Annual Report on
	Form&nbsp;10-K for the year ended December&nbsp;31, 2000).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3(i).3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Certificate of the Powers, Designations,
	Preferences and Rights of the Series&nbsp;D Cumulative
	Redeemable Convertible Participating Preferred Stock dated
	November&nbsp;6, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3(ii)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amended and Restated Bylaws. (Incorporated by
	reference to Exhibit&nbsp;3(ii)(b) to the Registrant&#146;s
	Registration Statement on Form&nbsp;S-1 (File No. 333-71499)).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Common Stock Certificate. (Incorporated
	by reference to Exhibit&nbsp;4.1 to the Registrant&#146;s
	Registration on Form&nbsp;S-1 (File No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Preferred Stock Rights Agreement dated as of
	March&nbsp;19, 2001 between Registrant and ComputerShare Trust
	Company, Inc., including the Certificate of Determination, the
	form of Rights Certificate and the Summary of Rights attached
	thereto as Exhibits&nbsp;A, B and C respectively (Incorporated
	by reference to Exhibit&nbsp;4.5 of Registrant&#146;s
	Form&nbsp;8-A filed on May&nbsp;7, 2001).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Indenture, dated March&nbsp;31, 2000, by and
	between Registrant and State Street Bank and Trust Company of
	California, N.A., Trustee, relating to the $300&nbsp;million
	five-year, 5.75% Convertible Subordinated Notes due
	April&nbsp;1, 2005 (Incorporated by reference to
	Exhibit&nbsp;4.5 to the Registrant&#146;s Quarterly Report on
	Form&nbsp;10-Q for the quarter ended March&nbsp;31, 2000).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Warrant to Purchase Common Stock dated
	March&nbsp;29, 2001 issued by the Registrant to Vectis Group LLC
	(Incorporated by reference to Exhibit&nbsp;4.3 to
	Registrant&#146;s Quarterly Report on Form&nbsp;10-Q for the
	quarter ended September&nbsp;30, 2001).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Warrant to Purchase Common Stock dated
	January&nbsp;29, 1999 issued by the Registrant to America
	Online, Inc. (Incorporated by reference to Exhibit&nbsp;4.4 to
	the Registrant&#146;s Registration Statement on Form&nbsp;S-1
	(File No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Warrant to Purchase up to 25,000 Shares of Common
	Stock dated as of December&nbsp;29, 1999 by and between Ecker
	Folsom Properties, LLC.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Warrant to Purchase up to 834,000 shares of
	Common Stock dated as of June 2000 by and between Worldsport
	Networks Europe Ltd.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Stock and Warrant Purchase and Exchange Agreement
	dated as of November&nbsp;8, 2001 by and among Registrant and
	General Atlantic Partners 74, LP, GAP Coinvestment
	Partners&nbsp;II, LP, Gapstar, LLC, Vectis CP Holdings, LLC,
	Cenwell Limited, Campina Enterprises Limited.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Stockholders Agreement dated as of
	November&nbsp;8, 2001 by and among Registrant and General
	Atlantic Partners 74, L.P., GAP Coninvestment Partners II, LP,
	Gapstar, LLC, Vectis CP Holdings, LLC, Cenwell Limited, Campina
	Enterprises Limited.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Registration Rights Agreement dated as of
	November&nbsp;8, 2001 by and among Registrant and General
	Atlantic Partners 74, L.P., GAP Coninvestment Partners II, LP,
	Gapstar, LLC, Vectis CP Holdings, LLC, Cenwell Limited, Campina
	Enterprises Limited.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Escrow Agreement dated as of November&nbsp;8,
	2001 by and among Registrant and General Atlantic Partners 74,
	L.P., GAP Coninvestment Partners&nbsp;II, LP, Gapstar, LLC,
	Vectis CP Holdings, LLC, Cenwell Limited, Campina Enterprises
	Limited.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Employee Stock Purchase Plan. (Incorporated by
	reference to Exhibit&nbsp;4.3 to the Registrant&#146;s
	Registration Statement on Form&nbsp;S-8 filed on June&nbsp;15,
	2001 (File No.&nbsp;333-63080)).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amended and Restated 1998 Stock Plan.
	(Incorporated by reference to Exhibit&nbsp;4.1 to the
	Registrant&#146;s Registration Statement on Form&nbsp;S-8 filed
	on June&nbsp;15, 2001 (File No.&nbsp;333-63080)).
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="83%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">1999 Stock Option Plan and forms of agreements
	thereunder (Incorporated by reference to Exhibit&nbsp;10.5 to
	the Registrant&#146;s Registration Statement on Form&nbsp;S-8
	filed on September&nbsp;22, 1999 (File No.&nbsp;333-87553)).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Master Services Agreement dated December&nbsp;10,
	1998 by and between the Registrant and US West Communications
	Services, Inc. (Incorporated by reference to Exhibit&nbsp;10.15
	to the Registrant&#146;s Registration Statement on Form&nbsp;S-1
	(File No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amendment to Email Services Agreement
	September&nbsp;30, 1998 by and between the Registrant and
	E*TRADE Group, Inc. (Incorporated by reference to
	Exhibit&nbsp;10.18 to the Registrant&#146;s Registration
	Statement on Form&nbsp;S-1 (File No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Email Services Agreement dated January&nbsp;29,
	1999 by and between the Registrant and ICQ, Inc. (Incorporated
	by reference to Exhibit&nbsp;10.22 to the Registrant&#146;s
	Registration Statement on Form&nbsp;S-1 (File
	No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Hills Plaza I Office Lease dated as of
	November&nbsp;16, 2001 by and between Registrant and SPI Hills
	Plaza Venture, LLC.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Standard Industrial/ Multitenant Lease-Gross
	dated June&nbsp;20, 1997 by and between the Registrant and
	501&nbsp;Folsom Street Building. (Incorporated by reference to
	Exhibit&nbsp;10.10 to the Registrant&#146;s Registration
	Statement on Form&nbsp;S-1 (File No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Office lease dated December 1999 by and between
	Ecker-Folsom Properties, LLC and the Registrant. (Incorporated
	by reference to Exhibit&nbsp;10.25 to the Registrant&#146;s
	Annual Report on Form&nbsp;10-K for the year ended
	December&nbsp;31, 1999).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Office lease dated December 1999 by and between
	Ecker-Folsom Properties, LLC and the Registrant. (Incorporated
	by reference to Exhibit&nbsp;10.26 to the Registrant&#146;s
	Annual Report on Form&nbsp;10-K for the year ended
	December&nbsp;31, 1999).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Agreement dated as August&nbsp;13, 2001 by and
	between Registrant and David Hayden (Incorporated by reference
	to Exhibit&nbsp;10.3 to the Registrant&#146;s Quarterly Report
	on Form&nbsp;10-Q for the quarter and nine months ended
	September&nbsp;30, 2001).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	November&nbsp;8, 2001 by and between Registrant and David Hayden.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Agreement dated as of August&nbsp;1, 2001 by and
	between Registrant and William&nbsp;E. McGlashan, Jr.
	(Incorporated by reference to Exhibit&nbsp;10.4 to the
	Registrant&#146;s Quarterly Report for the quarter and nine
	months ended September&nbsp;30, 2001).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as
	August&nbsp;1, 2001 by and between Registrant and
	William&nbsp;E. McGlashan, Jr.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	November&nbsp;8, 2001 by and between Registrant and
	William&nbsp;E. McGlashan, Jr.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">First Amended and Restated Employment Agreement
	dated as of January&nbsp;7, 2002 by and between Registrant and
	William&nbsp;E. McGlashan, Jr.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	December&nbsp;21, 2001 by and between Registrant and William E.
	McGlashan, Jr.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Agreement dated as of October&nbsp;8, 2001 by and
	between Registrant and Pierre Van Beneden (Incorporated by
	reference to Exhibit&nbsp;10.5 to the Registrant&#146;s
	Quarterly Report for the quarter and nine months ended
	September&nbsp;30, 2001).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	October&nbsp;8, 2001 by and between Registrant and Pierre Van
	Beneden.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	November&nbsp;8, 2001 by and between Registrant and Pierre Van
	Beneden.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consulting Agreement dated as of August&nbsp;16,
	2001 by and between Registrant and Laureen DeBuono.
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="83%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	September&nbsp;5, 2001 by and between Registrant and Laureen
	DeBuono.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Addendum to Consulting Agreement dated as of
	October&nbsp;31, 2001 by and between Registrant and Laureen
	DeBuono.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	October&nbsp;31, 2001 by and between Registrant and Laureen
	DeBuono.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Nonstatutory Stock Option Agreement dated as of
	November&nbsp;8, 2001 by and between Registrant and Laureen
	DeBuono.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Employment Agreement dated as of January&nbsp;14,
	2002 by and between Registrant and Bernard Harguindeguy.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.24</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Agreement, dated as of May&nbsp;15, 2001, by and
	between the Registrant and Lawrence P. Reinhold (Incorporated by
	reference to Exhibit&nbsp;10.2 Registrant&#146;s quarterly
	report on Form&nbsp;10-Q for the quarter ended
	September&nbsp;30, 2001).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Agreement and Release, dated February&nbsp;9,
	2001, by and between the Registrant and Douglas Hickey
	(Incorporated by reference to Exhibit&nbsp;10.31 to the
	Registrant&#146;s Annual Report on Form&nbsp;10-K for the year
	ended December&nbsp;31, 2000).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.26</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Promissory Note and Security Agreement dated
	November&nbsp;2, 1998 by and between the Registrant and Douglas
	Hickey. (Incorporated by reference to Exhibit&nbsp;10.12 to the
	Registrant&#146;s Registration Statement on Form&nbsp;S-1 (File
	No.&nbsp;333-71499)).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.27</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Indemnification Agreement by and between
	the Registrant and each of its directors and officers.
	(Incorporated by reference to Exhibit&nbsp;10.32 to the
	Registrant&#146;s Annual Report on Form&nbsp;10-K for the year
	ended December&nbsp;31, 2000).
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">21.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">List of Subsidiaries (Incorporated by reference
	to Exhibit&nbsp;21.1 of the Registrant&#146;s Annual Report on
	Form&nbsp;10-K for the year ended December&nbsp;31, 2000).
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of PricewaterhouseCoopers LLP,
	Independent Accountants.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">24.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Power of Attorney (see the signature page of this
	report).
	</FONT></TD>
</TR>

</TABLE>
</CENTER>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(I)3
<SEQUENCE>3
<FILENAME>f80193ex3-i3.txt
<DESCRIPTION>EXHIBIT 3(I).3
<TEXT>
<PAGE>
                                                                  EXHIBIT 3.(i)3

                              CRITICAL PATH, INC.

                    CERTIFICATE OF THE POWERS, DESIGNATIONS,

                          PREFERENCES AND RIGHTS OF THE

                   SERIES D CUMULATIVE REDEEMABLE CONVERTIBLE
                         PARTICIPATING PREFERRED STOCK,

                           PAR VALUE $0.001 PER SHARE

        Pursuant to Section 400 of the California General Corporation Law

                The undersigned, Michael Zuckerman, Vice President and Secretary
of Critical Path, Inc., a California corporation (the "Corporation"), DOES
HEREBY CERTIFY that the following resolution, creating a series of 4,000,000
shares of Preferred Stock was duly adopted by the Board of Directors, on
November 6, 2001.

                WHEREAS, the Board of Directors is authorized, within the
limitations and restrictions stated in the Articles of Incorporation of the
Corporation, to provide by resolution or resolutions for the issuance of shares
of Preferred Stock, par value $0.001 per share, of the Corporation, in one or
more classes or series with such voting powers, full or limited, or no voting
powers, and such designations, preferences and relative, participating, optional
or other special rights, and qualifications, limitations or restrictions as
shall be stated and expressed in the resolution or resolutions providing for the
issuance thereof adopted by the Board of Directors, and as are not stated and
expressed in the Articles of Incorporation, or any amendment thereto, including
(but without limiting the generality of the foregoing) such provisions as may be
desired concerning voting, redemption, dividends, dissolution or the
distribution of assets and such other subjects or matters as may be fixed by
resolution or resolutions of the Board of Directors under the General
Corporation Law of the State of California; and

                WHEREAS, it is the desire of the Board of Directors, pursuant to
its authority as aforesaid, to authorize and fix the terms of a series of
Preferred Stock and the number of shares constituting such series.

                NOW, THEREFORE, BE IT RESOLVED:

                1. Designation and Number of Shares. There shall be hereby
created and established a series of Preferred Stock designated as "Series D
Cumulative Redeemable Convertible Participating Preferred Stock" (the "Series D
Preferred Stock"). The authorized number of shares of Series D Preferred Stock
shall be 4,000,000. Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in Section 10 below.


<PAGE>
                                                                               2


                2. Rank.

                        (a) The Series D Preferred Stock shall with respect to
the payment of the Liquidation Payment in the event of Liquidation or Change of
Control rank senior to (i) all classes of common stock of the Corporation
(including, without limitation, the Common Stock, par value $0.001 per share, of
the Corporation (the "Common Stock")), (ii) all classes of preferred stock of
the Corporation (including, without limitation, the Series C Participating
Preferred Stock, par value $0.001 per share) and (iii) each other class or
series of Capital Stock of the Corporation hereafter created which does not
expressly rank pari passu with or senior to the Series D Preferred Stock
(clauses (i), (ii) and (iii), together, the "Junior Stock").

                        (b) Notwithstanding anything to the contrary contained
in the Articles of Incorporation of the Corporation, the vote of the holders of
a majority of the Series D Preferred Stock shall be a prerequisite to the
designation or issuance of any shares of Capital Stock of the Corporation
ranking pari passu with or senior to the Series D Preferred Stock in the event
of a Liquidation or with respect to the payment of the Liquidation Payment.

                3. Dividends.

                        (a) Dividend Rate. The holders of shares of Series D
Preferred Stock shall receive, out of funds legally available therefor,
dividends at an annual rate equal to eight percent (8%) of the Accreted Value,
calculated on the basis of a 360-day year, consisting of twelve 30-day months,
and shall accrue on a daily basis from the date of issuance thereof, whether or
not declared by the Board of Directors. Accrued and unpaid dividends shall
compound to the Accreted Value on a semi-annual basis on December 31st and June
30th of each year (each such date, the "Compounding Date") whether or not
declared by the Board of Directors.

                        (b) Change of Control; Optional Redemption. In the event
of the occurrence of a Change of Control or an optional redemption of the shares
of Series D Preferred Stock pursuant to Section 5(a) below, the sum of (i) any
dividends accrued at the rate and in the manner specified in Section 3(a) since
the previous Compounding Date and prior to the date of the occurrence of a
Change of Control or the Optional Redemption Date plus (ii) any and all
dividends that would have accrued and compounded at the rate and in the manner
specified in Section 3(a) from the closing date of such Change of Control or the
Optional Redemption Date through and until the Automatic Redemption Date shall
be added to the Accreted Value on the closing date of such Change of Control or
the Optional Redemption Date, as the case may be.

                        (c) Other Dividends. The Corporation shall not declare
or pay any dividends on, or make any other distributions with respect to or
redeem, purchase or otherwise acquire for consideration, any other shares of
Capital Stock unless and until all accrued and unpaid dividends on the Series D
Preferred Stock have been paid in full.


<PAGE>
                                                                               3


                4. Liquidation and Change of Control.

                        (a) Priority Payment. Upon the occurrence of a
Liquidation, the holders of shares of Series D Preferred Stock shall be paid in
cash for each share of Series D Preferred Stock held thereby, out of, but only
to the extent of, the assets of the Corporation legally available for
distribution to its stockholders, an amount equal to the sum of (i) the Accreted
Value of such share of Series D Preferred Stock (the "Liquidation Payment") on
the date of such Liquidation plus (ii) all dividends accrued since the previous
Compounding Date. If the assets of the Corporation available for distribution to
the holders of shares of Series D Preferred Stock shall be insufficient to
permit payment in full to such holders of the sums which such holders are
entitled to receive in such case, then all of the assets available for
distribution to holders of shares of Series D Preferred Stock shall be
distributed among and paid to such holders ratably in proportion to the amounts
that would be payable to such holders if such assets were sufficient to permit
payment in full.

                        (b) Change of Control. In the event of a Change of
Control, the holders of shares of Series D Preferred Stock shall be paid for
each share of Series D Preferred Stock held thereby, an amount equal to the sum
of (x) the Liquidation Payment plus (y) all dividends that accrue and compound
pursuant to Section 3(b). Such amount shall be paid in the form of consideration
paid in such Change of Control on the closing date of such Change of Control.

                        (c) Participating Payment.

                                (i) Upon the completion of the distribution
required by Section 4(a) or Section 4(b) above, and any other distribution to
any other class or series of Capital Stock of the Corporation ranking senior to
the Common Stock, if assets remain in the Corporation, the remaining assets of
the Corporation available for distribution to stockholders shall be distributed
among the holders of shares of Series D Preferred Stock, the holders of shares
of any series of preferred stock entitled to a participating payment and the
holders of Common Stock pro rata based on the number of shares of the Common
Stock held by each (assuming conversion of all such Series D Preferred Stock in
accordance with Section 7(a) below).

                                (ii) Notwithstanding anything to the contrary
set forth in subsection (b) above, no Liquidation Payment shall be paid pursuant
to clause (x) of subsection (b) above and no accrued dividends shall be paid
pursuant to clause (y) of subsection (b) above if either (A) the price per share
paid for each share of Series D Preferred Stock in such Change of Control (had
each share of Series D Preferred Stock converted into Common Stock immediately
prior to the consummation of such Change of Control) equals not less than the
product of (i) four multiplied by (ii) the Accreted Value or (B) the average
closing price per share of the Common Stock as reported on NASDAQ or other
nationally recognized securities exchange on which the shares of Common Stock
principally trade is, for at least sixty (60) consecutive trading days, not less
than the product of (i) four multiplied by (ii) the Accreted Value.


<PAGE>
                                                                               4


                        (d) Notice. Written notice of a Liquidation or Change of
Control stating a payment or payments and the place where such payment or
payments shall be payable, shall be delivered in person, mailed by certified
mail, return receipt requested, mailed by overnight mail or sent by telecopier,
not less than ten (10) days prior to the earliest payment date stated therein,
to the holders of record of shares of Series D Preferred Stock, such notice to
be addressed to each such holder at its address as shown by the records of the
Corporation.

                5. Redemption.

                   (a) Optional Redemption.

                        (i) Optional Redemption Period. The Corporation shall
not have any right to redeem any shares of the Series D Preferred Stock on or
prior to the fourth anniversary of the Closing Date. If on any date after the
fourth anniversary of the Closing Date but prior to the Automatic Redemption
Date, the average closing price per share of the Common Stock, as reported on
NASDAQ or other nationally recognized securities exchange on which the shares of
Common Stock trade, for any sixty (60) consecutive trading days after such
fourth anniversary date, equals or exceeds four hundred percent (400%) of the
Accreted Value (the "Optional Redemption Measurement Window"), the Corporation
shall have the right, at its sole option and election, to redeem (unless
otherwise prevented by law) within thirty (30) days following such Optional
Redemption Measurement Window (the "Optional Redemption Period"), all, but not
less than all, of the outstanding shares of Series D Preferred Stock in cash, at
a price per share (the "Optional Redemption Price") equal to the sum of the
Accreted Value plus all dividends that accrue, compound and are payable pursuant
to Section 3(b).

                        (ii) Optional Redemption Payment. Written notice of any
election by the Corporation to redeem the shares of Series D Preferred Stock
pursuant to Section 5(a) and the closing date prior to the expiration of the
Optional Redemption Period selected for such redemption (the "Optional
Redemption Date") shall be delivered in person, mailed by certified mail, return
receipt requested, mailed by overnight mail or sent by telecopier not less than
ten (10), nor more than thirty (30), days prior to such Optional Redemption Date
to the holders of record of the shares of Series D Preferred Stock, such notice
to be addressed to each such holder at its address as shown in the records of
the Corporation. The Optional Redemption Price shall be made with respect to
each share of Series D Preferred Stock by wire transfer of immediately available
funds as promptly as practicable and, in any event, within seven (7) days after
receipt by the Corporation of the Series D Preferred Stock certificates to
accounts designated in writing by the holders of such shares of Series D
Preferred Stock after surrender of the Series D Preferred Stock certificates
pursuant to the following sentence. Upon notice from the Corporation, each
holder of shares of Series D Preferred Stock so redeemed shall promptly
surrender to the Corporation, at any place where the Corporation shall maintain
a transfer agent for its shares of Series D Preferred Stock, certificates
representing the shares so redeemed, duly endorsed in blank or accompanied by
proper instruments of transfer. Notwithstanding anything to the contrary set
forth in this Certificate of Designation, any holder of Series D Preferred Stock
may convert its


<PAGE>
                                                                               5


shares of Series D Preferred Stock pursuant to Section 7(a) until the Optional
Redemption Price has been paid in full by the Corporation to such holder.

                                (iii) Termination of Rights. If shares of Series
D Preferred Stock are redeemed in full on the Optional Redemption Date, then
after the Optional Redemption Date, all rights of any holder of shares of Series
D Preferred Stock shall cease and terminate, and such shares of Series D
Preferred Stock shall no longer be deemed to be outstanding; provided, however,
that, if the Corporation defaults in the payment in full of the Optional
Redemption Price, then, subject to Section 5(b), the Corporation may not redeem
the shares of Series D Preferred Stock until the next Optional Redemption
Measurement Window.

                        (b) Automatic Redemption.

                                (i) Automatic Redemption Date and Payment. On
the fifth anniversary of the Closing Date (the "Automatic Redemption Date"), all
of the shares of Series D Preferred Stock shall automatically, with no further
action required to be taken by the Corporation or the holder thereof, be
redeemed (unless otherwise prevented by law) in cash, at a redemption price per
share (the "Redemption Price") equal to the sum of the Accreted Value plus, all
dividends accrued since the previous Compounding Date. Written notice of the
Automatic Redemption Date shall be delivered in person, mailed by certified
mail, return receipt requested, mailed by overnight mail or sent by telecopier
not less than thirty (30), nor more than sixty (60), days prior to the Automatic
Redemption Date to the holders of record of the shares of Series D Preferred
Stock, such notice to be addressed to each such holder at its address as shown
in the records of the Corporation. The Redemption Price shall be made with
respect to each share of Series D Preferred Stock by wire transfer of
immediately available funds as promptly as practicable and, in any event, within
seven (7) days after receipt by the Corporation of the Series D Preferred Stock
certificates to accounts designated in writing by the holders of such shares of
Series D Preferred Stock after surrender of the Series D Preferred Stock
certificates pursuant to the following sentence. Upon notice from the
Corporation, each holder of such shares of Series D Preferred Stock so redeemed
shall promptly surrender to the Corporation, at any place where the Corporation
shall maintain a transfer agent for its shares of Series D Preferred Stock,
certificates representing the shares so redeemed, duly endorsed in blank or
accompanied by proper instruments of transfer. Notwithstanding anything to the
contrary set forth in this Certificate of Designation, any holder of Series D
Preferred Stock may convert its shares of Series D Preferred Stock pursuant to
Section 7(a) hereof until the Redemption Price has been paid in full by the
Corporation to any such holder.

                                (ii) Termination of Rights. If the shares of
Series D Preferred Stock are redeemed in full on the Automatic Redemption Date,
then after the Automatic Redemption Date, all rights of any holder of such
shares of Series D Preferred Stock shall cease and terminate, and such shares of
Series D Preferred Stock shall no longer be deemed to be outstanding, whether or
not the certificates representing such shares have been received by the
Corporation; provided, however, that, if the Corporation


<PAGE>
                                                                               6


defaults in the payment in full of the Redemption Price, the rights of the
holders of shares of Series D Preferred Stock shall continue until the
Corporation cures such default.

                                (iii) Insufficient Funds for Redemption. If the
funds of the Corporation available for redemption of the shares of Series D
Preferred Stock on the Automatic Redemption Date are insufficient to redeem in
full the shares of Series D Preferred Stock, the holders of shares of Series D
Preferred Stock shall share ratably in any funds available by law for redemption
of such shares according to the respective amounts which would be payable with
respect to the number of shares owned by them if the shares to be so redeemed on
such Automatic Redemption Date were redeemed in full. Any shares of Series D
Preferred Stock that the Corporation does not redeem on the Automatic Redemption
Date due to insufficient funds shall continue to be outstanding until redeemed
and dividends on such shares shall continue to accrue and cumulate until
redeemed. The Corporation shall in good faith use all commercially reasonable
efforts as expeditiously as possible to eliminate, or obtain an exception,
waiver or exemption from, any and all restrictions that prevented the
Corporation from paying the Redemption Price and redeeming all of the shares of
Series D Preferred Stock. At any time thereafter when additional funds of the
Corporation are available by law for the redemption of the shares of Series D
Preferred Stock, such funds shall be used as promptly as practicable to redeem
the balance of such shares, or such portion thereof for which funds are
available, on the basis set forth above.

                6. Voting Rights; Election of Directors.

                        (a) General. In addition to the voting rights to which
the holders of Series D Preferred Stock are entitled under or granted by
California law, the holders of Series D Preferred Stock shall be entitled to
vote, in person or by proxy, at a special or annual meeting of stockholders on
all matters entitled to be voted on by holders of shares of Common Stock voting
together as a single class with the Common Stock (and with other shares entitled
to vote thereon, if any). With respect to any such vote, each share of Series D
Preferred Stock shall entitle the holder thereof to cast that number of votes as
is equal to the number of votes that such holder would be entitled to cast had
such holder converted its shares of Series D Preferred Stock into shares of
Common Stock pursuant to Section 7(a) below on the record date for determining
the stockholders of the Corporation eligible to vote on any such matters.

                        (b) Directors. As long as at least 500,000 shares of
Series D Preferred Stock are outstanding, if General Atlantic Partners 74, L.P.,
GAP Coinvestment Partners II, L.P., GapStar, LLC, GAPCO GmbH & Co. KG and/or any
Affiliate thereof in the aggregate own at least a majority of the outstanding
shares of Series D Preferred Stock, then the holders of shares of Series D
Preferred Stock, voting as a separate class, shall be entitled to elect one (1)
director of the Corporation.

                        (c) Elections. As long as at least 500,000 shares of
Series D Preferred Stock are outstanding, the Series D Preferred Stock shall
vote together as a single class with the Common Stock (and all other classes and
series of stock of the Corporation entitled to vote thereon, if any) with
respect to the election of all of the other


<PAGE>
                                                                               7


directors of the Corporation. If the conditions set forth in Section 6(b)
necessary for the holders of shares of Series D Preferred Stock to vote as a
separate class for the election of one director are not satisfied, then the
Series D Preferred Stock shall vote together as a single class with the Common
Stock (and all other classes and series of stock of the Corporation entitled to
vote thereon, if any) with respect to the election of all of the directors of
the Corporation. At any meeting held for the purpose of electing directors
pursuant to Section 6(b) at a time when the holders of shares of Series D
Preferred Stock are entitled to vote as a separate class for the election of one
director, the presence in person or by proxy of the holders of a majority of the
shares of Series D Preferred Stock then outstanding shall constitute a quorum of
the Series D Preferred Stock for the election of the director to be elected
solely by the holders of shares of Series D Preferred Stock; the holders of
shares of Series D Preferred Stock shall be entitled to cast one vote per share
of Series D Preferred Stock in any such election; and the director to be elected
exclusively by the holders of shares of Series D Preferred Stock shall be
elected by the affirmative vote of the holders of a majority of the outstanding
shares of Series D Preferred Stock. A vacancy in a directorship filled by the
holders of the Series D Preferred Stock voting as a separate class pursuant to
this Section 6(c) shall be filled only by vote or written consent of the holders
of shares of Series D Preferred Stock. The director elected pursuant to Section
6(b) may not be removed without the consent of a majority of the holders of
shares of Series D Preferred Stock.

                        (d) Major Actions. Notwithstanding anything to the
contrary set forth in the Articles of Incorporation or the By-laws of the
Corporation, the affirmative vote of the holders of a majority of the
outstanding shares of Series D Preferred Stock voting as a separate class shall
be a prerequisite to:

                                (i) any amendment, modification or restatement
of the Articles of Incorporation or the By-laws of the Corporation;

                                (ii) the issuance, reservation for issuance or
authorization of any Capital Stock of the Corporation or any right or option to
acquire shares of Capital Stock ranking senior to the shares of Series D
Preferred Stock or any increase or decrease in the authorized number of shares
of Series D Preferred Stock, provided that the Corporation may issue options or
shares pursuant to the Stock Option Plans;

                                (iii) the redemption of any Junior Stock other
than the repurchase of unvested stock options or restricted stock from
employees, officers, directors, or consultants of the Corporation upon
termination of service;

                                (iv) any declaration, distribution or payment of
any dividend or other distribution to any Junior Stock;

                                (v) the issuance, incurrence, assumption or
guarantee by the Corporation or any Subsidiary of the Corporation of any funded
Indebtedness in excess of $25 million (excluding capital leases incurred in the
ordinary course of business); and


<PAGE>
                                                                               8


                                (vi) any amendment to this Section 6(d).

                7. Conversion.

                        (a) Optional Conversion. Any holder of shares of Series
D Preferred Stock shall have the right, at its option, at any time and from time
to time, to convert, subject to the terms and provisions of this Section 7, any
or all of such holder's shares of Series D Preferred Stock into such number of
fully paid and non-assessable shares of Common Stock as is equal to the product
of (i) the number of shares of Series D Preferred Stock being so converted
multiplied by (ii) the quotient of (x) the sum of the Accreted Value plus all
dividends accrued since the previous Compounding Date divided by (y) the
Conversion Price, subject to adjustment as provided in Section 7(c) below. Such
conversion right shall be exercised by the surrender of certificate(s)
representing the shares of Series D Preferred Stock to be converted to the
Corporation at any time during usual business hours at its principal place of
business maintained by it (or such other office or agency of the Corporation as
the Corporation may designate by notice in writing to the holders of shares of
Series D Preferred Stock), accompanied by written notice that the holder elects
to convert such shares of Series D Preferred Stock and specifying the name or
names (with address) in which a certificate or certificates for shares of Common
Stock are to be issued and (if so required by the Corporation) by a written
instrument or instruments of transfer in form reasonably satisfactory to the
Corporation duly executed by the holder or its duly authorized legal
representative and transfer tax stamps or funds therefor, if required pursuant
to Section 7(i) below. All certificates representing shares of Series D
Preferred Stock surrendered for conversion shall be delivered to the Corporation
for cancellation and canceled by it. As promptly as practicable after the
surrender of any shares of Series D Preferred Stock, in any event within 7 days
of the receipt of such certificates, the Corporation shall (subject to
compliance with the applicable provisions of federal and state securities laws)
deliver to the holder of such shares so surrendered certificate(s) representing
the number of fully paid and nonassessable shares of Common Stock into which
such shares are entitled to be converted. At the time of the surrender of such
certificate(s), the Person in whose name any certificate(s) for shares of Common
Stock shall be issuable upon such conversion shall be deemed to be the holder of
record of such shares of Common Stock on such date, notwithstanding that the
share register of the Corporation shall then be closed or that the certificates
representing such Common Stock shall not then be actually delivered to such
Person.

                        (b) Termination of Rights. On the date of such optional
conversion pursuant to Section 7(a) above all rights with respect to the shares
of Series D Preferred Stock so converted, including the rights, if any, to
receive notices and vote, shall terminate, except only the rights of holders
thereof to (i) receive certificates for the number of shares of Common Stock
into which such shares of Series D Preferred Stock have been converted and (ii)
exercise the rights to which they are entitled as holders of Common Stock.

                        (c) (i) Dividend, Subdivision, Combination or
Reclassification of Common Stock. In the event that the Corporation shall at any
time or from time to time, prior to conversion of shares of Series D Preferred
Stock (w) pay a


<PAGE>
                                                                               9


dividend or make a distribution on the outstanding shares of Common Stock
payable in Capital Stock of the Corporation, (x) subdivide the outstanding
shares of Common Stock into a larger number of shares, (y) combine the
outstanding shares of Common Stock into a smaller number of shares or (z) issue
any shares of its Capital Stock in a reclassification of the Common Stock (other
than any such event for which an adjustment is made pursuant to another clause
of this Section 7(c)), then, and in each such case, the Conversion Price in
effect immediately prior to such event shall be adjusted (and any other
appropriate actions shall be taken by the Corporation) so that the holder of any
share of Series D Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock or other securities of
the Corporation that such holder would have owned or would have been entitled to
receive upon or by reason of any of the events described above, had such share
of Series D Preferred Stock been converted immediately prior to the occurrence
of such event. An adjustment made pursuant to this Section 7(c)(i) shall become
effective retroactively (x) in the case of any such dividend or distribution, to
a date immediately following the close of business on the record date for the
determination of holders of Common Stock entitled to receive such dividend or
distribution or (y) in the case of any such subdivision, combination or
reclassification, to the close of business on the day upon which such corporate
action becomes effective.

                                (ii) Certain Distributions. In case the
Corporation shall at any time or from time to time, prior to conversion of
shares of Series D Preferred Stock, distribute to all holders of shares of the
Common Stock (including any such distribution made in connection with a merger
or consolidation in which the Corporation is the resulting or surviving Person
and the Common Stock is not changed or exchanged) cash, evidences of
indebtedness of the Corporation or another issuer, securities of the Corporation
or another issuer or other assets (excluding cash dividends in which holders of
shares of Series D Preferred Stock participate, in the manner provided in
Section 3(c), dividends payable in shares of Common Stock for which adjustment
is made under another paragraph of this Section 7(c) and any distribution in
connection with an Excluded Transaction) or rights or warrants to subscribe for
or purchase of any of the foregoing, then, and in each such case, the Conversion
Price then in effect shall be adjusted (and any other appropriate actions shall
be taken by the Corporation) by multiplying the Conversion Price in effect
immediately prior to the date of such distribution by a fraction (x) the
numerator of which shall be the Current Market Price of the Common Stock
immediately prior to the date of distribution less the then fair market value
(as determined by the Board of Directors in the exercise of their fiduciary
duties) of the portion of the cash, evidences of indebtedness, securities or
other assets so distributed or of such rights or warrants applicable to one
share of Common Stock and (y) the denominator of which shall be the Current
Market Price of the Common Stock immediately prior to the date of distribution
(but such fraction shall not be greater than one); provided, however, that no
adjustment shall be made with respect to any distribution of rights or warrants
to subscribe for or purchase securities of the Corporation if the holder of
shares of Series D Preferred Stock would otherwise be entitled to receive such
rights or warrants upon conversion at any time of shares of Series D Preferred
Stock into Common Stock. Such adjustment shall be made whenever any such
distribution is made and shall become effective retroactively to a date


<PAGE>
                                                                              10


immediately following the close of business on the record date for the
determination of stockholders entitled to receive such distribution.

                                (iii) Other Changes. In case the Corporation at
any time or from time to time, prior to the conversion of shares of Series D
Preferred Stock, shall take any action affecting its Common Stock similar to or
having an effect similar to any of the actions described in Sections 7(c)(i) or
(ii) above or Section 7(f) below (but not including any action described in any
such Section) and the Board of Directors in good faith determines that it would
be equitable in the circumstances to adjust the Conversion Price as a result of
such action, then, and in each such case, the Conversion Price shall be adjusted
in such manner and at such time as the Board of Directors in good faith
determines would be equitable in the circumstances (such determination to be
evidenced in a resolution, a certified copy of which shall be mailed to the
holders of shares of Series D Preferred Stock).

                                (iv) No Adjustment. Notwithstanding anything
herein to the contrary, no adjustment under this Section 7(c) need be made to
the Conversion Price if the Corporation receives written notice from holders of
a majority of the outstanding shares of Series D Preferred Stock that no such
adjustment is required.

                        (d) Abandonment. If the Corporation shall take a record
of the holders of its Common Stock for the purpose of entitling them to receive
a dividend or other distribution, and shall thereafter and before the
distribution to stockholders thereof legally abandon its plan to pay or deliver
such dividend or distribution, then no adjustment in the Conversion Price shall
be required by reason of the taking of such record.

                        (e) Certificate as to Adjustments. Upon any adjustment
in the Conversion Price, the Corporation shall within a reasonable period (not
to exceed ten (10) Business Days) following any of the foregoing transactions
deliver to each registered holder of shares of Series D Preferred Stock a
certificate, signed by (i) the Chief Executive Officer of the Corporation and
(ii) the Chief Financial Officer of the Corporation, setting forth in reasonable
detail the event requiring the adjustment and the method by which such
adjustment was calculated and specifying the increased or decreased Conversion
Price then in effect following such adjustment.

                        (f) Reorganization, Reclassification. In case of any
merger or consolidation of the Corporation (other than a Change of Control) or
any capital reorganization, reclassification or other change of outstanding
shares of Common Stock (other than a change in par value, or from par value to
no par value, or from no par value to par value) (each, a "Transaction"), the
Corporation shall execute and deliver to each holder of shares of Series D
Preferred Stock at least ten (10) Business Days prior to effecting such
Transaction a certificate, signed by (i) the Chief Executive Officer of the
Corporation and (ii) the Chief Financial Officer of the Corporation, stating
that the holder of each share of Series D Preferred Stock shall have the right
to receive in such Transaction, in exchange for each share of Series D Preferred
Stock, a security identical to (and not less favorable than) the Series D
Preferred Stock, and provision shall be made


<PAGE>
                                                                              11


therefor in the agreement, if any, relating to such Transaction. Any certificate
delivered pursuant to this Section 7(f) shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 7. The provisions of this Section 7(f) and any equivalent
thereof in any such certificate similarly shall apply to successive
transactions.

                        (g) Notices. In case at any time or from time to time:

                                (w) the Corporation shall declare a dividend (or
any other distribution) on its shares of Common Stock;

                                (x) the Corporation shall authorize the granting
to the holders of its Common Stock rights or warrants to subscribe for or
purchase any shares of Capital Stock of any class or of any other rights or
warrants; or

                                (y) there shall be any Transaction; or

then the Corporation shall mail to each holder of shares of Series D Preferred
Stock at such holder's address as it appears on the transfer books of the
Corporation, as promptly as possible but in any event at least ten (10) days
prior to the applicable date hereinafter specified, a notice stating (A) the
date on which a record is to be taken for the purpose of such dividend,
distribution or granting of rights or warrants or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or granting of rights or warrants are to be
determined, or (B) the date on which such Transaction is expected to become
effective and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their Common Stock for shares of stock
or other securities or property or cash deliverable upon such Transaction.
Notwithstanding the foregoing, in the case of any event to which Section 7(f)
above is applicable, the Corporation shall also deliver the certificate
described in Section 7(f) above to each holder of shares of Series D Preferred
Stock at least ten (10) Business Days' prior to effecting such reorganization or
reclassification as aforesaid.

                        (h) Reservation of Common Stock. The Corporation shall
at all times reserve and keep available for issuance upon the conversion of
shares of Series D Preferred Stock, such number of its authorized but unissued
shares of Common Stock as will from time to time be sufficient to permit the
conversion of all outstanding shares of Series D Preferred Stock, and shall take
all action to increase the authorized number of shares of Common Stock if at any
time there shall be insufficient authorized but unissued shares of Common Stock
to permit such reservation or to permit the conversion of all outstanding shares
of Series D Preferred Stock; provided that (x) the holders of shares of Series D
Preferred Stock shall vote such shares in favor of any such action that requires
a vote of stockholders and (y) such holders shall cause any directors elected by
them pursuant to Section 6(b) above to vote in favor of any such action that
requires a vote of the Board of Directors.


<PAGE>
                                                                              12


                        (i) No Conversion Tax or Charge. The issuance or
delivery of certificates for Common Stock upon the conversion of shares of
Series D Preferred Stock shall be made without charge to the converting holder
of shares of Series D Preferred Stock for such certificates or for any tax in
respect of the issuance or delivery of such certificates or the securities
represented thereby, and such certificates shall be issued or delivered in the
respective names of, or (subject to compliance with the applicable provisions of
federal and state securities laws) in such names as may be directed by, the
holders of the shares of Series D Preferred Stock converted; provided, however,
that the Corporation shall not be required to pay any tax which may be payable
in respect of any transfer involved in the issuance and delivery of any such
certificate in a name other than that of the holder of the shares of Series D
Preferred Stock converted, and the Corporation shall not be required to issue or
deliver such certificate unless or until the Person or Persons requesting the
issuance or delivery thereof shall have paid to the Corporation the amount of
such tax or shall have established to the reasonable satisfaction of the
Corporation that such tax has been paid.

                        (j) Limitations on Conversions. Each holder of the
Series D Preferred Stock's right to convert its shares of Series D Preferred
Stock into shares of Common Stock shall not be limited by any notice delivered
by the Corporation of any proposed redemption, Change of Control or any other
event that notwithstanding this subsection (j) shall purport to limit such
conversion right.

                8. Certain Remedies. Any registered holder of shares of Series D
Preferred Stock shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Certificate of Designation and to enforce
specifically the terms and provisions of this Certificate of Designation in any
court of the United States or any state thereof having jurisdiction, this being
in addition to any other remedy to which such holder may be entitled at law or
in equity.

                9. Business Day. If any payment shall be required by the terms
hereof to be made on a day that is not a Business Day, such payment shall be
made on the immediately succeeding Business Day.

                10. Definitions. As used in this Certificate of Designation, the
following terms shall have the following meanings (with terms defined in the
singular having comparable meanings when used in the plural and vice versa),
unless the context otherwise requires:

                "Accreted Value" shall mean as of any date, with respect to each
share of Series D Preferred Stock, the Price Per Share plus the amount of
dividends that have accrued and compounded to such date pursuant to Section 3(a)
of this Certificate of Designation.

                "Affiliate" shall mean any Person who is an "affiliate" as
defined in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act.


<PAGE>
                                                                              13


                "Automatic Redemption Date" shall have the meaning ascribed to
it in Section 5(b) hereof.

                "Board of Directors" means the Board of Directors of the
Corporation.

                "Business Day" means any day except a Saturday, a Sunday, or
other day on which commercial banks in the State of New York or the State of
California are authorized or required by law or executive order to close.

                "Capital Stock" means, with respect to any Person, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting or non-voting) of, such Person's capital stock
(including, without limitation, common stock and preferred stock) and any and
all rights, warrants or options exchangeable for or convertible into such
capital stock.

                "Change of Control" means (i) any merger, consolidation or other
business combination transaction (or series of related transactions) in which
the stockholders owning a majority of the voting securities of the Corporation
prior to such transaction do not own a majority of the voting securities of the
surviving entity, (ii) any tender offer, exchange offer or other transaction
whereby any person or "group" other than the Investors obtains a majority of the
outstanding shares of Common Stock, (iii) any proxy contest in which a majority
of the Board of Directors of the Corporation (or persons appointed by such Board
of Directors) prior to such contest do not constitute a majority of the
Corporation's Board of Directors after such contest or (iv) any other
transaction described in any stockholder rights agreement or "poison pill", if
any, to which the Corporation is party, which may permit the holders of any
rights or similar certificates to exercise the rights evidenced thereby.

                "Closing Date" means November 8, 2001.

                "Commission" means the United States Securities and Exchange
Commission.

                "Common Stock" shall have the meaning ascribed to it in Section
2(a) hereof.

                "Common Stock Equivalent" shall mean any security or obligation
which is by its terms convertible, exchangeable or exercisable into or for
shares of Common Stock, including, without limitation, the Series D Preferred
Stock, and any option, warrant or other subscription or purchase right with
respect to Common Stock or any Common Stock Equivalent.

                "Contingent Obligation" means, as applied to any Person, any
direct or indirect liability of that Person with respect to any Indebtedness,
lease, dividend, guaranty, letter of credit or other obligation, contractual or
otherwise the "primary obligation") of another Person (the "primary obligor"),
whether or not contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any property


<PAGE>
                                                                              14


constituting direct or indirect security therefor, (b) to advance or provide
funds (i) for the payment or discharge or any such primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet item, level of income
or financial condition of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, or (d) otherwise to assure or hold harmless the owner
of any such primary obligation against loss or failure or inability to perform
in respect thereof. The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof.

                "Conversion Price" shall mean $1.05, as adjusted pursuant to
Section 7(c).

                "Corporation" shall have the meaning ascribed to it in the first
paragraph of this Certificate of Designation.

                "Current Market Price" per share of Capital Stock of any Person
shall mean, as of the date of determination, (a) the average of the daily Market
Price under clause (a), (b) or (c) of the definition thereof of such Capital
Stock during the immediately preceding thirty (30) trading days ending on such
date, and (b) if such Capital Stock is not then listed or admitted to trading on
any national securities exchange or quoted in the over-the-counter market, then
the Market Price under clause (d) of the definition thereof on such date.

                "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.

                "Excluded Transaction" means (a) any issuance of shares of stock
or options to purchase shares of Common Stock pursuant to the Stock Option Plans
and (b) any issuance of Common Stock (i) upon the conversion of shares of Series
D Preferred Stock, (ii) as a dividend on shares of Series D Preferred Stock or
(iii) upon conversion or exercise of any Common Stock Equivalents, or (c) any
issuance of Common Stock in connection with any Liquidation Payment, (d) Capital
Stock issued in consideration of an acquisition, approved by the Board of
Directors, by the Company of another Person and (e) shares of Common Stock and
Common Stock Equivalents issued in strategic transactions (which may not be
private equity or venture capital financing transactions) approved by the Board
of Directors to Persons that are not principally engaged in financial investing.

                "GAAP" means United States generally accepted accounting
principles in effect from time to time.

                "Governmental Authority" means the government of any nation,
state, city, locality or other political subdivision thereof.


<PAGE>
                                                                              15


                "Indebtedness" means, as to any Person, (a) all obligations of
such Person for borrowed money (including, without limitation, reimbursement and
all other obligations with respect to surety bonds, letters of credit and
bankers' acceptances, whether or not matured), (b) all obligations of such
Person to pay the deferred purchase price of property or services, except trade
accounts payable and accrued commercial or trade liabilities arising in the
ordinary course of business, (c) all interest rate and currency swaps, caps,
collars and similar agreements or hedging devices under which payments are
obligated to be made by such Person, whether periodically or upon the happening
of a contingency, (d) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property acquired by
such Person (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of
such property), (e) all obligations of such Person under leases which have been
or should be, in accordance with GAAP, recorded as capital leases, (f) all
indebtedness secured by any Lien (other than Liens in favor of lessors under
leases other than leases included in clause (e)) on any property or asset owned
or held by that Person regardless of whether the indebtedness secured thereby
shall have been assumed by that Person or is non-recourse to the credit of that
Person, and (g) any Contingent Obligation of such Person.

                "Junior Stock" shall have the meaning ascribed to it in Section
2(a) hereof.

                "Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or preference, priority,
right or other security interest or preferential arrangement of any kind or
nature whatsoever (excluding preferred stock and equity related preferences).

                "Liquidation" shall mean the voluntary or involuntary
liquidation under applicable bankruptcy or reorganization legislation, or the
dissolution or winding up of the Corporation.

                "Liquidation Payment" shall have the meaning ascribed to it in
Section 4(a) hereof.

                "Market Price" shall mean, with respect to the Capital Stock of
any Person, as of the date of determination, (a) if such Capital Stock is listed
on a national securities exchange, the closing price per share of such Capital
Stock on such date published in The Wall Street Journal (National Edition) or,
if no such closing price on such date is published in The Wall Street Journal
(National Edition), the average of the closing bid and asked prices on such
date, as officially reported on the principal national securities exchange on
which such Capital Stock is then listed or admitted to trading; or (b) if such
Capital Stock is not then listed or admitted to trading on any national
securities exchange but is designated as a national market system security by
the National Association of Securities Dealers, Inc., the last trading price of
such Capital Stock on such date; or (c) if there shall have been no trading on
such date or if such Capital Stock is not designated as a national market system
security by the National Association of Securities Dealers, Inc., the average of
the reported closing bid and asked prices of such Capital Stock on such date as
shown by the National Market System of the National


<PAGE>
                                                                              16


Association of Securities Dealers, Inc. Automated Quotations System and reported
by any member firm of the New York Stock Exchange selected by the Corporation;
or (d) if none of (a), (b) or (c) is applicable, a market price per share
determined mutually by the Board of Directors and the holders of a majority of
the shares of Series D Preferred Stock or, if the Board of Directors and the
holders of a majority of the shares of Series D Preferred Stock shall fail to
agree, at the Corporation's expense by an appraiser chosen by the Board of
Directors and reasonably acceptable to the holders of a majority of the shares
of Series D Preferred Stock. Any determination of the Market Price by an
appraiser shall be based on a valuation of the Corporation as an entirety
without regard to any discount for minority interests or disparate voting rights
among classes of Capital Stock.

                "Nasdaq" shall mean The Nasdaq Stock Market, Inc.

                "Optional Redemption Date" shall have the meaning ascribed to it
in Section 5(a)(ii) hereof.

                "Optional Redemption Measurement Window" shall have the meaning
ascribed to it in Section 5(a)(i) hereof.

                "Optional Redemption Period" shall have the meaning ascribed to
it in Section 5(a)(i) hereof.

                "Optional Redemption Price" shall have the meaning ascribed to
it in Section 5(a)(i) hereof.

                "Person" means any individual, firm, corporation, partnership,
limited liability company, trust, incorporated or unincorporated association,
joint venture, joint stock company, governmental body or other entity of any
kind.

                "Price Per Share" means $13.75.

                "Redemption Price" shall have the meaning ascribed to it in
Section 5(b) hereof.

                "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.

                "Series D Preferred Stock" shall have the meaning ascribed to it
in Section 1 hereof.

                "Stock Option Plans" means the Company's stock option plans and
employee purchase plans approved by the Board of Directors, pursuant to which
shares of restricted stock and options to purchase shares of Common Stock are
reserved and available for grant to officers, directors, employees and
consultants of the Corporation.


<PAGE>
                                                                              17


                "Transaction" shall have the meaning ascribed to it in Section
7(f) hereof.

                  [Remainder of page intentionally left blank]



<PAGE>
                                                                              18


                IN WITNESS WHEREOF, the undersigned has executed and subscribed
this certificate this 6th day of November, 2001.
                                            /s/ Michael Zuckerman
                                            ---------------------------------
                                            Senior Vice President and Secretary

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.6
<SEQUENCE>4
<FILENAME>f80193ex4-6.txt
<DESCRIPTION>EXHIBIT 4.6
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.6

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE
SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER
SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED.

                               CRITICAL PATH, INC.

             WARRANT TO PURCHASE UP TO 25,000 SHARES OF COMMON STOCK

Issue date: December 29, 1999

        1. General. THIS CERTIFIES THAT, Ecker-Folsom Properties, LLC (the
"HOLDER") is entitled to subscribe for and purchase up to twenty-five thousand
(25,000) fully paid and nonassessable shares of common stock of Critical Path,
Inc., a California corporation (the "COMPANY"), at a price of $90 per share (the
"EXERCISE PRICE") subject to the provisions and upon the terms and conditions
hereinafter set forth. This warrant (this "WARRANT") is being issued to the
Holder in connection with the lease of certain office space located at 530
Folsom Street and 33 Clementina in San Francisco, California between the Company
and the Holder of even date herewith.

        2. Exercise Period; Vesting This Warrant may be exercised by the Holder
at any time and from time to time (but no more than four (4) times) from the
issue date above until December 20, 2006. The number of shares that shall be
issuable upon exercise of this Warrant shall initially be zero (0), and shall
increase by 521 shares each calendar month (the "VESTING RATE") on the first day
of each month, beginning January 1, 2000, until this Warrant is exercisable for
the entire amount hereunder or until it terminates. In the event that the lease
for 530 Folsom Street terminates for any reason other than due to the default of
the Company thereunder, the Vesting Rate shall be reduced by 347 shares per
month; in the event that the lease for 33 Clementina terminates for any reason
other than due to the default of the Company thereunder, the Vesting Rate shall
be reduced by 174 shares per month.

        3. Method of Exercise; Payment

               a. Cash Exercise. The Holder may exercise this Warrant in whole
or in part, by surrendering this Warrant (with the notice of exercise form
attached hereto as Exhibit A duly executed) at the principal office of the
Company and by the payment to the Company, by certified, cashier's or other
check acceptable to the Company, of an amount equal to the aggregate purchase
price of the shares of common stock being purchased.


<PAGE>

               b. Net Issue Exercise. In lieu of exercising this Warrant with
cash, the Holder may elect to receive shares equal to the value of this Warrant
(or the portion thereof being canceled) by surrendering this Warrant at the
principal office of the Company together with notice of such election, in which
event the Company shall issue to the Holder a number of shares of common stock
computed using the following formula:

             X = Y (A-B)
                 -------
                    A

        where:

              X    =     the number of shares of common stock to be issued to
                         the Holder;

              Y    =     the number of shares of common stock purchasable under
                         this Warrant or, if only a portion of this Warrant is
                         being exercised, the portion of this Warrant being
                         canceled (at the date of such calculation);

              A    =     the Fair Market Value (as defined below) of a share of
                         common stock (at the date of such calculation); and

              B    =     the Exercise Price (on the date of such calculation).

               c. Fair Market Value. The fair market value of a share of common
stock of the Company shall equal the market price as quoted on the NASDAQ
National Market (the "FAIR MARKET VALUE").

               d. Stock Certificates. In the event the Holder exercises any of
the rights represented by this Warrant to purchase shares of common stock, the
Company shall deliver to the Holder certificates representing such shares within
a reasonable time and, unless the Holder has fully exercised this Warrant or the
Warrant has expired, a new warrant representing the remaining shares underlying
this Warrant.

        4. Reservation of Shares. The Company covenants and agrees that all
shares of common stock which may be issued upon the exercise of this Warrant
will, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable, free from all preemptive rights of any stockholder and free from
all taxes, liens and charges created by the Company with respect to the issue
thereof. During the period within which the Holder may exercise this Warrant,
the Company will at all times have authorized, and reserved for the purpose of
issuance upon exercise of this Warrant, a sufficient number of shares of common
stock to provide for the exercise of the rights represented by this Warrant.

        5. Adjustment of Exercise Price and Number of Shares. The number and
kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to


<PAGE>

adjustment from time to time upon the occurrence of certain events as follows:

               a. Reclassification or Merger. In case of any reclassification,
change or conversion of securities of the class issuable upon exercise of this
Warrant (other than a change in par value or as a result of a subdivision or
combination), or in case of any merger of the Company with or into another
company (other than (i) a merger effected solely for the purpose of changing the
Company's jurisdiction of incorporation or (ii) a merger with another company in
which the Company is the acquiring and surviving corporation and which does not
result in any reclassification or change of outstanding securities issuable upon
exercise of this Warrant), or in case of any sale of all or substantially all of
the assets of the Company, the Company, or such successor or purchasing company,
as the case may be, shall duly execute and deliver to the Holder a new warrant,
so that the Holder shall have the right to receive, at a total purchase price
not to exceed that payable upon the exercise of the unexercised portion of this
Warrant, and in lieu of the shares of common stock theretofore issuable upon
exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification, change or
merger by a holder of the number of shares of common stock under this Warrant.
Such new warrant shall provide for adjustments as nearly equivalent as may be
practicable to the adjustments provided for in this section. The provisions of
this subparagraph (a) shall similarly apply to successive reclassifications,
changes, mergers, consolidations and transfers.

               b. Combination or Subdivision of Shares. If the Company at any
time while this Warrant remains outstanding and unexpired shall combine its
outstanding shares of common stock, the number of shares purchasable shall be
proportionally decreased and the Exercise Price proportionally increased
effective concurrently with such combination. In the case of a subdivision, the
number of shares purchasable shall be proportionally increased and the Exercise
Price proportionally decreased effective concurrently with such subdivision.

               c. Stock Dividends. If the Company at any time while this Warrant
is outstanding and unexpired shall pay a dividend with respect to shares of
common stock in shares of common stock, then the Exercise Price shall be
adjusted, from and after the date of determination of stockholders entitled to
receive such dividend or distribution, to that price determined by multiplying
the Exercise Price in effect immediately prior to such date of determination by
a fraction (i) the numerator of which shall be the total number of shares of
common stock outstanding immediately prior to such dividend or distribution and
(ii) the denominator of which shall be the total number of shares of common
stock outstanding immediately after such dividend or distribution.

        6. Fractional Shares. No fractional shares will be issued in connection
with any exercise hereunder, but in lieu of such fractional shares the Company
shall make a cash payment therefor upon the basis of the Exercise Price then in
effect.

        7. Compliance with Securities Law. The Holder, by acceptance hereof,
agrees that the Holder is acquiring this Warrant, and the shares of common stock
to be issued upon exercise hereof, for investment and will not offer, sell or
otherwise dispose of this Warrant, or any shares of common stock to be issued
upon exercise hereof, except under circumstances which will not result in a


<PAGE>

violation of the Securities Act of 1933 (the "SECURITIES ACT"). Upon exercise of
this Warrant, unless the shares being acquired are registered under the
Securities Act or an exemption from such registration is available, the Holder
hereof shall confirm in writing, by executing the form attached as Schedule 1 to
Exhibit A hereto, that the shares of common stock so acquired are being acquired
for investment and not with a view towards distribution or resale. All shares of
common stock issued upon exercise of this Warrant shall be stamped or imprinted
with a legend in substantially the following form:

"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

        8. Transferability. This Warrant and all rights hereunder are not
transferable without the prior written consent of the Company. In the event that
the Company agrees to any such transfer, such transfer shall be effected,
without charge to the Holder hereof (except for transfer taxes), upon surrender
of this Warrant properly endorsed.

        9. Rights as Stockholder. No Holder, solely as such, shall be entitled
to vote or receive dividends or be deemed a stockholder of the Company.

        10. Modification and Waiver. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.

        11. Notices of Change.

               a. Promptly upon any adjustment in the number or class of shares
subject to this Warrant and of the Exercise Price, the Company shall give
written notice thereof to the Holder, setting forth in reasonable detail and
certifying the calculation of such adjustment.

               b. The Company shall give written notice to the Holder at least
ten (10) business days prior to the date on which the Company closes its books
or takes a record for determining rights to receive any dividends or
distributions.

        12. Transfer Books. The Company will at no time close its transfer books
against the transfer of this Warrant or of any shares of common stock issued or
issuable upon the exercise of this Warrant in any manner which interferes with
the timely exercise of this Warrant.

        13. Loss, Theft, Destruction, or Mutilation. The Company represents and
warrants to the Holder that, upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction, or mutilation of this Warrant and,
in the case of any such loss, theft or destruction, upon


<PAGE>

receipt of an indemnity reasonably satisfactory to the Company, or in the case
of any such mutilation upon surrender and cancellation of this Warrant, the
Company, at the Holder's expense, will make and deliver a new warrant of like
tenor in lieu of the lost, stolen, destroyed or mutilated Warrant.

        14. Notices. Any notice, request, communication or other document
required or permitted to be given or delivered to the Holder or the Company
shall be delivered via overnight courier by certified or registered mail,
postage prepaid, to the Holder's address as shown on the books of the Company or
to the Company at the address indicated on the signature page of this Warrant.

        15. Binding Effect on Successors. Except as otherwise set forth herein,
this Warrant shall be binding upon any company succeeding the Company by merger,
consolidation or acquisition of all or substantially all of the Company's
assets.

        16. Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.

        17. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of California.

        18. Acceptance. Receipt of this Warrant by the holder hereof shall
constitute acceptance of and agreement to the foregoing terms and conditions.



                                        CRITICAL PATH, INC.
                                        320 First Street
                                        San Francisco, California 94105


                                        By:     /s/ DAVID THATCHER
                                                -------------------------------

                                        Name:   DAVID THATCHER
                                                -------------------------------

                                        Title:  EVP/CFO
                                                -------------------------------



<PAGE>

                                    EXHIBIT A

                               NOTICE OF EXERCISE

TO:    Critical Path, Inc.

        1. The undersigned hereby elects to purchase ___________ shares of
common stock of Critical Path, Inc. pursuant to the terms of the attached
Warrant.

        2. Method of Exercise (Please initial the applicable blank.):

        ______ The undersigned elects to exercise the attached Warrant by means
of a cash payment, and tenders herewith payment in full for the purchase price
of the shares being purchased, together with all applicable transfer taxes, if
any.

        ______ The undersigned elects to exercise the attached Warrant by means
of the net exercise provisions of the Warrant.

        3. Please issue a certificate or certificates representing said shares
of common stock in the name of the undersigned or in such other name as is
specified below:


               ____________________________________
               (Name)

               ____________________________________

               ____________________________________

               ____________________________________
               (Address)


        4. The undersigned hereby represents and warrants that the aforesaid
shares of common stock are being acquired for the account of the undersigned for
investment and not with a view to or for resale in connection with the
distribution thereof, and that the undersigned has no present intention of
distributing or reselling such shares. The undersigned hereby delivers an
Investment Representation Statement in the form attached to the Warrant as
Schedule I to Exhibit A.

Date: _____________________                  By:    ___________________________

                                             Name:  ___________________________

                                             Title: ___________________________
                                                    (if applicable)



<PAGE>

                                   Schedule I

                      INVESTMENT REPRESENTATION STATEMENT

Purchaser:     _________________________________

Security:      Shares of Common Stock

Amount:        _________________________________

Date:          _________________________________

        In connection with the purchase of the above-listed shares of common
stock (the "SECURITIES"), the undersigned (the "PURCHASER") represents to
Critical Path, Inc. (the "COMPANY") as follows:

        (a) The Purchaser is aware of the Company's business affairs and
financial condition, and has acquired sufficient information about the Company
to reach an informed and knowledgeable decision to acquire the Securities. The
Purchaser is purchasing the Securities for its own account for investment
purposes only and not with a view to, or for the resale in connection with, any
"distribution" thereof for purposes of the Securities Act of 1933, as amended
(the "SECURITIES ACT").

        (b) The Purchaser understands that the Securities have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of the Purchaser's investment intent as expressed herein. In this
connection, the Purchaser understands that, in the view of the Securities and
Exchange Commission (the "SEC"), the statutory basis for such exemption may be
unavailable if the Purchaser's representation was predicated solely upon a
present intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one year or
any other fixed period in the future.

        (c) The Purchaser further understands that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. Moreover, the Purchaser
understands that the Company is under no obligation to register the Securities.
In addition, the Purchaser understands that the certificate evidencing the
Securities will be imprinted with the legend referred to in the Warrant under
which the Securities are being purchased.

        (d) The Purchaser is aware of the provisions of Rule 144, promulgated
under the Securities Act, which, in substance, permit limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject
to the satisfaction of certain conditions, if applicable, including, among other
things:


<PAGE>

The availability of certain public information about the Company, the resale
occurring not less than one year after the party has purchased and paid for the
securities to be sold; the sale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934, as amended) and the
amount of securities being sold during any three-month period not exceeding the
specified limitations stated therein.

        (c) The Purchaser further understands that at the time it wishes to sell
the Securities there may be no public market upon which to make such a sale, and
that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144 and that, in
such event, the Purchaser may be precluded from selling the Securities under
Rule 144 even if the one-year minimum holding period had been satisfied.

        (f) The Purchaser further understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the Securities
Act, compliance with Regulation A, or some other registration exemption will be
required, and that, notwithstanding the fact that Rule 144 is not exclusive, the
SEC has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rule 144 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk.


                                             PURCHASER


                                             By:    ___________________________

                                             Name:  ___________________________

                                             Title: ___________________________
                                             (if applicable)




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.7
<SEQUENCE>5
<FILENAME>f80193ex4-7.txt
<DESCRIPTION>EXHIBIT 4.7
<TEXT>
<PAGE>
                                                                    EXHIBIT 4.7

                                    WARRANTS

Critical Path hereby agrees to grant Worldsport within 10 business days of the
execution of the Critical Path Master Service Agreement (the "Agreement"),
warrants entitling Worldsport to purchase up to a 1.25% equity interest in CP on
a fully diluted basis as of the date of the Agreement.

The warrants will become exercisable in five equal installments of .25%, upon
registration of each group of Worldsport service email boxes, provided that all
such Worldsport service email boxes shall be CP sub-branded (as defined below).

The initial warrant installment shall vest upon the registration by Worldsport
of two million (2,000,000) sub-branded email boxes; the second warrant
installment shall vest upon the registration of 4 million (4,000,000) mailboxes
that are CP sub-branded; the third warrant installment shall vest upon the
registration of 8 million (8,000,000) mailboxes that are CP sub-branded; the
fourth warrant installment shall vest upon the registration of 12 million
(12,000,000) mailboxes that are CP sub-branded; and the fifth warrant
installment shall vest upon registration of 20 million (20,000,000) mailboxes
that are CP sub-branded.

The warrant installments which have become exercisable pursuant to the terms set
forth above shall be exercisable for a period of five (5) years after each first
became exercisable.

Any of the warrants which shall not have become exercisable (in accordance with
the formula set forth above) within five years from the date of the Agreement
shall be cancelled.

The Initial Exercise Price for the first warrant installment (representing .25%
of the fully diluted equity of CP) shall be the average of the closing price of
CP's Common Stock as quoted on the NASDAQ National Market System for the fifteen
(15) trading days prior to the day in question. The pricing of the additional
warrant installments shall be (i) for the second warrant installment, the
Initial Exercise Price plus $5.00, (ii) for the third warrant installment shall
be the Initial Exercise Price plus $10.00, (iii) for the fourth warrant
installment shall be the Initial Exercise Price plus $15.00, and (iiii) for the
fifth warrant installment shall be the Initial Exercise Price plus $20.00.

A mailbox shall be deemed to be sub-branded, provided that one of the following
occurs: Worldsport shall cause the CP emblem or logo, or a variation thereof
approved by CP in its reasonable discretion, to appear (i) on the initial login
screen and main screens of a web-based mailbox, (ii) on the welcome message of a
POP or IMAP session or (iii) in the initial email message received at the
mailbox.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.8
<SEQUENCE>6
<FILENAME>f80193ex4-8.txt
<DESCRIPTION>EXHIBIT 4.8
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.8
================================================================================



                STOCK AND WARRANT PURCHASE AND EXCHANGE AGREEMENT


                                      among

                               CRITICAL PATH, INC.

                       GENERAL ATLANTIC PARTNERS 74, L.P.,

                       GAP COINVESTMENT PARTNERS II, L.P.,

                                  GAPSTAR, LLC

                                       and

                         THE OTHER PARTIES NAMED HEREIN

                       ----------------------------------
                             Dated: November 8, 2001
                       ----------------------------------



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


<PAGE>

                                Table of Contents

<TABLE>
                                                                                     Page
                                                                                     ----
<S>              <C>                                                                 <C>
ARTICLE I        DEFINITIONS..........................................................2
        1.1      Definitions..........................................................2

ARTICLE II       PURCHASE AND SALE OF SERIES D PREFERRED STOCK; EXCHANGE..............9
        2.1      Purchase and Sale of Series D Preferred Stock........................9
        2.2      Exchange of GAP Sub Notes............................................9
        2.3      Purchase and Sale of Warrants........................................9
        2.4      Certificates of Designation.........................................10
        2.5      Use of Proceeds.....................................................10
        2.6      Closing.............................................................10

ARTICLE III      REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................11
        3.1      Corporate Existence and Power.......................................11
        3.2      Authorization; No Contravention.....................................11
        3.3      Governmental Authorization; Third Party Consents....................12
        3.4      Binding Effect......................................................12
        3.5      Litigation..........................................................12
        3.6      Compliance with Laws................................................12
        3.7      Capitalization......................................................13
        3.8      No Default or Breach; Contractual Obligations.......................14
        3.9      Title to Properties.................................................14
        3.10     Reports; Financial Statements.......................................14
        3.11     Taxes...............................................................15
        3.12     No Material Adverse Change; Ordinary Course of Business.............15
        3.13     Private Offering....................................................16
        3.14     Labor Relations.....................................................16
        3.15     Employee Benefit Plans..............................................16
        3.16     Liabilities.........................................................17
        3.17     Intellectual Property...............................................18
        3.18     Privacy of Customer Information.....................................19
        3.19     Potential Conflicts of Interest.....................................19
        3.20     Trade Relations.....................................................20
        3.21     Outstanding Borrowing...............................................20
        3.22     Broker's, Finder's or Similar Fees..................................20
        3.23     CCC Section.........................................................20

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS..........................20
        4.1      Existence and Power.................................................20
        4.2      Authorization; No Contravention.....................................21
        4.3      Governmental Authorization; Third Party Consents....................21
</TABLE>



                                        i
<PAGE>

<TABLE>
                                                                                     Page
                                                                                     ----
<S>              <C>                                                                 <C>
        4.4      Binding Effect......................................................21
        4.5      Purchase for Own Account............................................21
        4.6      Restricted Securities...............................................22
        4.7      Accredited Investor.................................................22
        4.8      Experience..........................................................22
        4.9      Access to Information...............................................22
        4.10     General Solicitation................................................23
        4.11     Reliance............................................................23

ARTICLE V ACTIONS TO BE TAKEN BY THE COMPANY AT THE CLOSING..........................23
        5.1      Secretary's Certificate.............................................23
        5.2      Subject Shares......................................................23
        5.3      Warrants............................................................24
        5.4      Opinion of Counsel..................................................24
        5.5      MOU.................................................................24
        5.6      Amendment to Shareholder Rights Plan................................24

ARTICLE VI DELIVERIES BY THE PURCHASERS..............................................24
        6.1      Payment for Subject Shares and Warrants.............................24

ARTICLE VII INDEMNIFICATION..........................................................24
        7.1      Indemnification.....................................................24
        7.2      Notification........................................................25
        7.3      Contribution........................................................26

ARTICLE VIII AFFIRMATIVE COVENANTS...................................................26
        8.1      Financial Statements and Other Information..........................26
        8.2      FIRPTA Certificate..................................................27
        8.3      Reservation of Common Stock.........................................27
        8.4      Books and Records...................................................28
        8.5      Inspection..........................................................28
        8.6      Vectis Agreement....................................................28
        8.7      NASDAQ Matters......................................................28

ARTICLE IX TERMINATION OF AGREEMENT..................................................29
        9.1      Termination.........................................................29

ARTICLE X MISCELLANEOUS..............................................................29
        10.1     Survival of Representations and Warranties..........................29
        10.2     Notices.............................................................30
        10.3     Successors and Assigns; Third Party Beneficiaries...................31
        10.4     Amendment and Waiver................................................31
        10.5     Counterparts........................................................32
        10.6     Headings............................................................32
        10.7     GOVERNING LAW.......................................................32
        10.8     Severability........................................................32
</TABLE>



                                       ii
<PAGE>

<TABLE>
                                                                                     Page
                                                                                     ----
<S>              <C>                                                                 <C>
        10.9     Rules of Construction...............................................32
        10.10    Entire Agreement....................................................32
        10.11    Fees................................................................33
        10.12    Publicity; Confidentiality..........................................33
        10.13    Further Assurances..................................................33
        10.14    Legal Representation................................................34
</TABLE>



                                      iii
<PAGE>

EXHIBITS

A-1     Form of Escrow Agreement
A       Form of Warrant
B       Form of Articles of Incorporation
C       Form of By-laws
D       Form of Certificate of Designation
E       Form of Registration Rights Agreement
F       Form of Stockholders Agreement
G       Form of Pillsbury Winthrop LLP Opinion
H       Memorandum of Understanding

SCHEDULES

I       Coinvestors
2.1     Purchased Shares and Purchase Price
2.2     Exchange Shares and Face Amount
2.3     Warrant Shares and Purchase Price
3.5     Litigation
3.19    Potential Conflicts of Interest
3.21    Outstanding Borrowing



                                       iv
<PAGE>

                STOCK AND WARRANT PURCHASE AND EXCHANGE AGREEMENT


                STOCK AND WARRANT PURCHASE AND EXCHANGE AGREEMENT, dated
November 8, 2001 (this "Agreement"), among Critical Path, Inc., a California
corporation (the "Company"), General Atlantic Partners 74, L.P., a Delaware
limited partnership ("GAP LP"), GAP Coinvestment Partners II, L.P., a Delaware
limited partnership ("GAP Coinvestment"), GapStar, LLC, a Delaware limited
liability company ("GapStar" and, collectively with GAP LP and GAP Coinvestment,
the "GAP Purchasers"), and the Persons listed on Schedule I hereto (the
"Coinvestors" and, together with the GAP Purchasers, the "Purchasers").

                WHEREAS, upon the terms and conditions set forth in this
Agreement, the Company proposes to issue and sell to (i) each of the Purchasers,
the aggregate number of shares, par value $0.001 per share, of Series D
Cumulative Redeemable Convertible Participating Preferred Stock of the Company
(the "Series D Preferred Stock") set forth opposite the name of such Purchaser
on Schedule 2.1 hereto, for the aggregate purchase price set forth opposite such
Purchaser's name on Schedule 2.1 hereto, and (ii) each GAP Purchaser, a warrant
to purchase, subject to the terms and conditions thereof, the aggregate number
of shares, par value $0.001 per share, of common stock of the Company (the
"Common Stock") set forth opposite such GAP Purchaser's name on Schedule 2.3
hereto (the "Warrants"), at an exercise price equal to $1.05, containing the
terms and conditions set forth in the form of warrant attached hereto as Exhibit
A, for the purchase price set forth opposite such GAP Purchaser's name on
Schedule 2.3 hereto; and

                WHEREAS, upon the terms and conditions set forth in this
Agreement, the Company proposes to issue to each GAP Purchaser the aggregate
number of shares of Series D Preferred Stock set forth opposite the name of such
GAP Purchaser on Schedule 2.2 hereto in exchange for the surrender to the
Company by such GAP Purchaser of its GAP Sub Notes (as hereinafter defined) in
the face amount set forth opposite such GAP Purchaser's name on Schedule 2.2
hereto; and

                WHEREAS, each share of Series D Preferred Stock is convertible
(subject to adjustment) into one share of Common Stock; and

                WHEREAS, the Company and the Purchasers are simultaneously with
the execution and delivery of this Agreement at the Closing (as defined below)
entering into an Escrow Agreement, dated the date hereof, and attached as
Exhibit A-1 hereto (the "Escrow Agreement") among the Company, the Purchasers
and Pillsbury Winthrop LLP, as Escrow Agent (the "Escrow Agent"), pursuant to
which the parties thereto have agreed to and deposit in escrow all of the
executed Transaction Documents (as defined below), the GAP Sub Notes (as defined
below), the Warrants (as defined below), the Subject Shares (as defined below),
the aggregate cash purchase price payable by the Purchasers pursuant to Section
2.6 of this Agreement and certain ancillary documents in escrow with


<PAGE>
                                                                               2


                the Escrow Agent, to be held and released only in accordance
with the Escrow Agreement.

               NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:

                                    ARTICLE I

                                   DEFINITIONS

                1.1 Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:

                "Affiliate" shall mean any Person who is an "affiliate" as
defined in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act.

                "Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.

                "Articles of Incorporation" means the Articles of Incorporation
of the Company in effect on the Closing Date and attached hereto as Exhibit B.

                "Board of Directors" means the Board of Directors of the
Company.

                "Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in the State of New York or the State of
California are authorized or required by law or executive order to close.

                "By-laws" means the by-laws of the Company in effect on the
Closing Date and attached hereto as Exhibit C.

                "Certificate of Designation" means the Certificate of
Designation with respect to the Series D Preferred Stock adopted by the Board of
Directors and duly filed with the Secretary of State of the State of California
on or before the Closing Date substantially in the form attached hereto as
Exhibit D.

                "Claims" has the meaning set forth in Section 3.5 of this
Agreement.

                "Closing" has the meaning set forth in Section 2.6(a) of this
Agreement.

                "Closing Date" has the meaning set forth in Section 2.6(a) of
this Agreement.

                "Code" means the Internal Revenue Code of 1986, as amended, or
any successor statute thereto.


<PAGE>
                                                                               3


                "Coinvestors" has the meaning set forth in the preamble to this
Agreement.

                "Commission" means the United States Securities and Exchange
Commission or any similar agency then having jurisdiction to enforce the
Securities Act and Exchange Act.

                "Common Stock" has the meaning set forth in the recitals to this
Agreement.

                "Commonly Controlled Entity" means any entity which is under
common control with the Company within the meaning of Code section 414(b), (c),
(m), (o) or (t).

                "Company" has the meaning set forth in the preamble to this
Agreement.

                "Company Plans" has the meaning set forth in Section 3.15 of
this Agreement.

                "Condition of the Company" means the assets, business,
properties, operations or condition (financial or otherwise) of the Company and
its Subsidiaries, taken as a whole.

                "Contingent Obligation" means, as applied to any Person, any
direct or indirect liability of that Person with respect to any Indebtedness,
lease, dividend, guaranty, letter of credit or other obligation, contractual or
otherwise (the "primary obligation") of another Person (the "primary obligor"),
whether or not contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect security
therefor, (b) to advance or provide funds (i) for the payment or discharge of
any such primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation, or
(d) otherwise to assure or hold harmless the owner of any such primary
obligation against loss or failure or inability to perform in respect thereof.
The amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof.

                "Contractual Obligations" means, as to any Person, any provision
of any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument to which such
Person is a party or by which it or any of its property is bound.

                "Copyrights" means any foreign or United States copyright
registrations and applications for registration thereof, and any non-registered
copyrights.


<PAGE>
                                                                               4


                "Environmental Laws" means federal, state, local and foreign
laws, principles of common laws, civil laws, regulations, and codes, as well as
orders, decrees, judgments or injunctions, issued, promulgated, approved or
entered thereunder relating to pollution, protection of the environment or
public health and safety.

                "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.

                "Escrow Agent" has the meaning set forth in the recitals hereto.

                "Escrow Agreement" has the meaning set forth in the recitals
hereto.

                "Escrow Release Date" has the meaning set forth in the Escrow
Agreement.

                "Exchange" has the meaning set forth in Section 2.2 of this
Agreement.

                "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.

                "Exchange Shares" has the meaning set forth in Section 2.2 of
this Agreement.

                "Financial Statements" has the meaning set forth in Section 3.10
of this Agreement.

                "GAAP" means United States generally accepted accounting
principles in effect from time to time.

                "GAP Coinvestment" has the meaning set forth in the preamble to
this Agreement.

                "GAP Coinvestment Warrant" means the Warrant to be issued to GAP
Coinvestment.

                "GAP LLC" means General Atlantic Partners, LLC, a Delaware
limited liability company and the general partner of GAP LP and the managing
member of GapStar, and any successor to such entity.

                "GAP LP" has the meaning set forth in the preamble to this
Agreement.

                "GAP LP Warrant" means the warrant to be issued to GAP LP.

                "GAP Purchasers" has the meaning set forth in the preamble to
this Agreement.

                "GapStar" has the meaning set forth in the preamble to this
Agreement.


<PAGE>
                                                                               5


                "GapStar Warrant" means the warrant to be issued to GapStar.

                "GAP Sub Notes" means the 5 3/4% Convertible Subordinated Notes
due April 1, 2005 issued by the Company pursuant to the Company's Indenture,
dated March 31, 2000, purchased by the GAP Purchasers for the purchase price set
forth on Schedule 2.2 hereto and held by the GAP Purchasers as of the Closing
Date in the face amounts set forth on Schedule 2.2 hereto.

                "Governmental Authority" means the government of any nation,
state, city, locality or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.

                "Indebtedness" means, as to any Person, (a) all obligations of
such Person for borrowed money (including, without limitation, reimbursement and
all other obligations with respect to surety bonds, letters of credit and
bankers' acceptances, whether or not matured), (b) all obligations of such
Person to pay the deferred purchase price of property or services, except trade
accounts payable and accrued commercial or trade liabilities arising in the
ordinary course of business, (c) all interest rate and currency swaps, caps,
collars and similar agreements or hedging devices under which payments are
obligated to be made by such Person, whether periodically or upon the happening
of a contingency, (d) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property acquired by
such Person (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of
such property), (e) all obligations of such Person under leases which have been
or should be, in accordance with GAAP, recorded as capital leases, (f) all
indebtedness secured by any Lien (other than Liens in favor of lessors under
leases other than leases included in clause (e)) on any property or asset owned
or held by that Person regardless of whether the indebtedness secured thereby
shall have been assumed by that Person or is non-recourse to the credit of that
Person, and (g) any Contingent Obligation of such Person.

                "Indemnified Party" has the meaning set forth in Section 7.1 of
this Agreement.

                "Indemnifying Party" has the meaning set forth in Section 7.1 of
this Agreement.

                "Intellectual Property" has the meaning set forth in Section
3.17 of this Agreement.

                "Internet Assets" means any Internet domain names and other
computer user identifiers and any rights in and to sites on the worldwide web,
including rights in and to any text, graphics, audio and video files and html or
other code incorporated in such sites.


<PAGE>
                                                                               6


                "Knowledge" means the knowledge of the Company and David C.
Hayden, Executive Chairman, William E. McGlashan, Jr., President and Chief
Operating Officer, Pierre Van Beneden, President, Laureen De Buono, Chief
Financial Officer, Mike Serbinis, Chief Technology Officer, Sue Barsamian,
Senior Vice President Product Marketing, Kent Bridges, Senior Vice President
United States Sales, Michael Zuckerman, Senior Vice President, General Counsel,
Larry Weber, Director, Jeffrey T. Webber, Director, Steven Richards, Director,
Kevin O'Keefe, Vice President Hosted Business, Ian Goldsmith, Sales Executive
after due inquiry.

                "Liabilities" has the meaning set forth in Section 3.16 of this
Agreement.

                "Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or preference, priority,
right or other security interest or preferential arrangement of any kind or
nature whatsoever (excluding preferred stock and equity related preferences).

                "Losses" has the meaning set forth in Section 7.1 of this
Agreement.

                "Material Contractual Obligations" has the meaning set forth in
Section 3.8 of this Agreement.

                "MOU" means that certain Memorandum of Understanding dated the
date hereof in the form attached as Exhibit H hereto that memorializes the
agreement in principle of the parties therein to settle on the terms set forth
therein the litigations encaptioned In Re Critical Path Inc. Securities
Litigation Case (No. C-01-0551 WHO).

               "Nasdaq" means The Nasdaq Stock Market, Inc.

                "Nasdaq Escrow Approval Condition" has the meaning set forth in
the Escrow Agreement.

                "Orders" has the meaning set forth in Section 3.2 of this
Agreement.

                "Patents" means any foreign or United States patents and patent
applications, including any divisions, continuations, continuations-in-part,
substitutions or reissues thereof, whether or not patents are issued on such
applications and whether or not such applications are modified, withdrawn or
resubmitted.

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

                "Plan" means any employee benefit plan, arrangement, policy,
program, agreement or commitment (whether or not an employee plan within the
meaning of section 3(3) of ERISA), including, without limitation, any
employment, consulting or deferred compensation agreement, executive
compensation, bonus, incentive, pension,


<PAGE>
                                                                               7


profit-sharing, savings, retirement, stock option, stock purchase or severance
pay plan, any life, health, disability or accident insurance plan, whether oral
or written, whether or not subject to ERISA, as to which the Company or any
Commonly Controlled Entity has or in the future could have any direct or
indirect, actual or contingent liability.

                "Proxy Statement" has the meaning set forth in Section 8.7(b).

                "Purchased Shares" has the meaning set forth in Section 2.1 of
this Agreement.

                "Purchasers" has the meaning set forth in the preamble to this
Agreement.

                "Registration Rights Agreement" means the Registration Rights
Agreement substantially in the form attached hereto as Exhibit E.

                "Requirements of Law" means, as to any Person, any law
(including Environmental Laws), statute, treaty, rule, regulation, right,
privilege, qualification, license or franchise or determination of an arbitrator
or a court or other Governmental Authority or stock exchange, in each case
applicable or binding upon such Person or any of its property or to which such
Person or any of its property is subject or pertaining to any or all of the
transactions contemplated or referred to herein.

                "Retiree Welfare Plan" means any welfare plan (as defined in
Section 3(1) of ERISA) that provides benefits to current or former employees
beyond their retirement or other termination of service (other than coverage
mandated by Section 4980A of the Code, commonly referred to as "COBRA," the cost
of which is fully paid by the current or former employee or his or her
dependents).

                "SEC Reports" has the meaning set forth in Section 3.10 of this
Agreement.

                "Securities" has the meaning set forth in Section 4.8 of this
Agreement.

                "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder.

                "Series D Preferred Stock" has the meaning set forth in the
recitals to this Agreement.

                "Shareholder Rights Plan" means the Preferred Rights Agreement,
dated as of March 19, 2001, between the Company and Computershare Trust Company,
Inc., as Rights Agent.

                "Software" means any computer software programs, source code,
object code, data and documentation, including, without limitation, any computer
software programs that incorporate and run the Company's pricing models,
formulae and algorithms.


<PAGE>
                                                                               8


                "Stock Equivalents" means any security or obligation which is by
its terms convertible into or exchangeable or execrable for shares of common
stock or other capital stock of the Company, and any option, warrant or other
subscription or purchase right with respect to common stock or such other
capital stock.

                "Stock Option Plans" means the Company's stock option plans and
employee purchase plans pursuant to which shares of restricted stock and options
to purchase shares of Common Stock are reserved and available for grant to
officers, directors, employees and consultants of the Company.

                "Stockholders Agreement" means the Stockholders Agreement
substantially in the form attached hereto as Exhibit F.

                "Subject Shares" has the meaning set forth in Section 2.2 of
this Agreement.

                "Subsidiaries" means, as of the relevant date of determination,
with respect to any Person, a corporation or other Person of which 50% or more
of the voting power of the outstanding voting equity securities or 50% or more
of the outstanding economic equity interest is held, directly or indirectly, by
such Person. Unless otherwise qualified, or the context otherwise requires, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Company.

                "Taxes" means any federal, state, provincial, county, local,
foreign and other taxes (including, without limitation, income, profits,
windfall profits, alternative, minimum, accumulated earnings, personal holding
company, capital stock, premium, estimated, excise, sales, use, occupancy, gross
receipts, franchise, ad valorem, severance, capital levy, production, transfer,
withholding, employment, unemployment compensation, payroll and property taxes,
import duties and other governmental charges and assessments), whether or not
measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto, and
including expenses associated with contesting any proposed adjustments related
to any of the foregoing.

                "Trade Secrets" means any trade secrets, research records,
processes, procedures, manufacturing formulae, technical know-how, technology,
blue prints, designs, plans, inventions (whether patentable and whether reduced
to practice), invention disclosures and improvements thereto.

                "Trademarks" means any foreign or United States trademarks,
service marks, trade dress, trade names, brand names, designs and logos,
corporate names, product or service identifiers, whether registered or
unregistered, and all registrations and applications for registration thereof.


<PAGE>
                                                                               9


                "Transaction Documents" means, collectively, this Agreement, the
Escrow Agreement, the Stockholders Agreement, the Registration Rights Agreement
and the Warrants.

                "Warrant Shares" has the meaning set forth in Section 2.3 of
this Agreement.

                "Warrants" has the meaning set forth in the recitals to this
Agreement.

                "Vectis Agreement" means the following agreements between the
Company and Vectis Group, LLC: (i) Advisory Services Letter Agreement, dated as
of May 30, 2001, (ii) Strategic Analysis Letter Agreement, dated March 29, 2001
and (iii) Finder and Advisory Letter Agreement, dated as of March 29, 2001.

                                   ARTICLE II

             PURCHASE AND SALE OF SERIES D PREFERRED STOCK; EXCHANGE

                2.1 Purchase and Sale of Series D Preferred Stock. On the
Closing Date, the Company agrees to deposit with the Escrow Agent, to be held in
escrow in accordance with the terms of the Escrow Agreement and to be released
to the Purchasers on the Escrow Release Date, and each Purchaser, severally and
not jointly, agrees to purchase from the Company on the Escrow Release Date
subject only to the terms and provisions of the Escrow Agreement, the aggregate
number of shares of Series D Preferred Stock set forth opposite such Purchaser's
name on Schedule 2.1 hereto, for the aggregate purchase price set forth opposite
such Purchaser's name on Schedule 2.1 hereto which is being deposited by each
such Purchaser with the Escrow Agent not later than 5:00 p.m., New York City
time, on November 9, 2001, to be distributed in accordance with the terms of the
Escrow Agreement (all of the shares of Series D Preferred Stock being purchased
pursuant hereto being referred to herein as the "Purchased Shares").

                2.2 Exchange of GAP Sub Notes. On the Closing Date, the Company
agrees to deposit with the Escrow Agent, to be held in escrow in accordance with
the terms of the Escrow Agreement, and to be released to the Purchasers on the
Escrow Release Date, the number of shares of Series D Preferred Stock set forth
opposite such GAP Purchaser's name on Schedule 2.2 hereto, in exchange for the
deposit with the Escrow Agent not later than 5:00 p.m. New York City time, on
November 9, 2001, to be held in escrow in accordance with the terms of the
Escrow Agreement and to be released to the Company on the Escrow Release Date,
by such GAP Purchaser of its GAP Sub Notes in the face amount set forth opposite
such GAP Purchaser's name on Schedule 2.2 hereto (the "Exchange") (all of the
shares of Series D Preferred Stock being issued pursuant to the Exchange, the
"Exchange Shares" and, together with the Purchased Shares, the "Subject
Shares").

                2.3 Purchase and Sale of Warrants. On the Closing Date, the
Company agrees to deposit with the Escrow Agent, to be held in escrow in
accordance with the terms of the Escrow Agreement and to be released to the
Purchasers on the


<PAGE>
                                                                              10


Escrow Release Date, and each GAP Purchaser, severally and not jointly, agrees
to purchase from the Company on the Escrow Release Date subject only to the
terms and provisions of the Escrow Agreement, the Warrant to purchase the
aggregate number of shares of Common Stock set forth opposite such GAP
Purchaser's name on Schedule 2.3 hereto, for the aggregate purchase price set
forth opposite such GAP Purchaser's name on Schedule 2.3 hereto which is being
deposited by each such Purchaser with the Escrow Agent not later than 5:00 p.m.,
New York City time, on November 9, 2001, to be distributed in accordance with
the terms of the Escrow Agreement (all of the shares of Common Stock issuable
upon the exercise of the Warrants being purchased pursuant hereto being referred
to herein as the "Warrant Shares").

                2.4 Certificates of Designation. The Subject Shares shall have
the preferences and rights set forth in the Certificate of Designation.

                2.5 Use of Proceeds. The Company shall use the proceeds from the
sale of the Purchased Shares and the Warrants to the Purchasers to fund the
Company's working capital.

                2.6 Closing.

                (a) The closing (the "Closing") of the transactions referred to
in Sections 2.1, 2.2 and 2.3 shall take place at the offices of Paul, Weiss,
Rifkind, Wharton & Garrison, at 10:00 a.m., local time, on the date hereof (the
"Closing Date").

                (b) Not later than 5:00 p.m., New York City time, on November 9,
2001, the Company shall deliver to the Escrow Agent, to be held in escrow and
released only in accordance with the terms of the Escrow Agreement, an undated
certificate or certificates in definitive form and registered in the name of
each Purchaser, representing such Purchaser's Purchased Shares.

                (c) Not later than 5:00 p.m., New York City time, on November 9,
2001, each Purchaser shall deliver to the Escrow Agent, to be held in escrow and
released only in accordance with the terms of the Escrow Agreement, of the
aggregate purchase price for such Purchaser's Purchased Shares by wire transfer
of immediately available funds.

                (d) Not later than 5:00 p.m., New York City time, on November 9,
2001, the Company shall deliver to the Escrow Agent to be held in escrow and
released only in accordance with the terms of the Escrow Agreement an undated
certificate or certificates in definitive form and registered in the name of
each GAP Purchaser, representing its Exchange Shares.

                (e) Not later than 5:00 p.m., New York City time, on November 9,
2001, each GAP Purchaser shall deliver to the Escrow Agent to be held in escrow
and released only in accordance with the terms of the Escrow Agreement its GAP
Sub Notes together with duly executed and undated Note Powers for such GAP Sub
Notes.


<PAGE>
                                                                              11


                (f) Not later than 5:00 p.m., New York City time, on November 9,
2001, the Company shall deliver the Warrants to the Escrow Agent, to be held in
escrow and released only in accordance with the terms of the Escrow Agreement.

                (g) Not later than 5:00 p.m., New York City time, on November 9,
2001, each GAP Purchaser shall deliver to the Escrow Agent, to be held in escrow
and released only in accordance with the terms of the Escrow Agreement, the
aggregate purchase price for its Warrants by wire transfer of immediately
available funds.

                (h) In addition, at the Closing, (i) the Company shall execute
and deliver to the Purchasers executed copies of each of this Agreement, the
Escrow Agreement, the Stockholders Agreement and the Registration Rights
Agreement, together with an executed copy of the certificate referred to in
Section 5.1 of this Agreement, an executed copy of the Certificate of
Designations and the executed Opinion referred to in Section 5.4 of this
Agreement and (ii) each Purchaser shall execute and deliver to the Company,
executed copies of each of this Agreement, the Escrow Agreement, the
Stockholders Agreement and the Registration Rights Agreement.

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

                The Company represents and warrants to each of the Purchasers as
follows:

                3.1 Corporate Existence and Power. The Company and each of its
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation; (b) has all
requisite corporate power and authority to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged; (c) is duly qualified as a foreign corporation, licensed
and in good standing under the laws of each jurisdiction in which its ownership,
lease or operation of property or the conduct of its business requires such
qualification, except where the failure to be so qualified could not reasonably
be expected to have a material adverse effect on the Condition of the Company
and (d) has the corporate power and authority to execute, deliver and perform
its obligations under this Agreement and each of the other Transaction
Documents. No jurisdiction, other than those referred to in clause (c) above,
has claimed, in writing or otherwise, that the Company or any of its
Subsidiaries is required to qualify as a foreign corporation or other entity
therein, and the Company or any of its Subsidiaries does not file any franchise,
income or other tax returns in any other jurisdiction based upon the ownership
or use of property therein or the derivation of income therefrom.

                3.2 Authorization; No Contravention. The execution, delivery and
performance by the Company of this Agreement and each of the other Transaction
Documents and the transactions contemplated hereby and thereby (a) have been
duly authorized by all necessary corporate action of the Company; (b) do not
contravene the terms of the Articles of Incorporation or the By-laws; (c) do not
violate, conflict with or


<PAGE>
                                                                              12


result in any breach, default or contravention of (or with due notice or lapse
of time or both would result in any breach, default or contravention of), or the
creation of any Lien under, any Contractual Obligation of the Company or any of
its Subsidiaries or any Requirement of Law applicable to the Company or any of
its Subsidiaries except such violations or conflicts that would not reasonably
be expected to have a material adverse effect on the Condition of the Company;
and (d) do not violate any judgment, injunction, writ, award, decree or order of
any nature (collectively, "Orders") of any Governmental Authority against, or
binding upon, the Company or any of its Subsidiaries.

                3.3 Governmental Authorization; Third Party Consents. No
approval, consent, compliance, exemption, authorization or other action by, or
notice to, or filing with, any Governmental Authority or any other Person, and
no lapse of a waiting period under a Requirement of Law, is necessary or
required in connection with the execution, delivery or performance (including,
without limitation, the sale, issuance and delivery of the Subject Shares) by,
or enforcement against, the Company of this Agreement and the other Transaction
Documents or the transactions contemplated hereby and thereby.

                3.4 Binding Effect. This Agreement has been, and as of the
Closing Date each of the other Transaction Documents will have been, duly
executed and delivered by the Company, and this Agreement constitutes, and as of
the Closing Date each of the other Transaction Documents will constitute, the
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity relating to enforceability
(regardless of whether considered in a proceeding at law or in equity).

                3.5 Litigation. Except as set forth on Schedule 3.5 or as
disclosed in the SEC Reports, there are no actions, suits, proceedings, claims,
complaints, disputes, arbitrations or investigations (collectively, "Claims")
pending or, to the Knowledge of the Company, threatened, at law, in equity, in
arbitration or before any Governmental Authority against the Company or any of
its Subsidiaries that seeks in excess of $50,000 in damages nor is the Company
aware that there is any basis for any of the foregoing. The foregoing includes,
without limitation, Claims pending or, to the Knowledge of the Company,
threatened or any basis therefor known by the Company involving the prior
employment of any employee of the Company or any of its Subsidiaries, their use
in connection with the business of the Company or any of its Subsidiaries of any
information or techniques allegedly proprietary to any of their former employers
or their obligations under any agreements with prior employers. No Order has
been issued by any court or other Governmental Authority against the Company or
any of its Subsidiaries purporting to enjoin or restrain the execution, delivery
or performance of this Agreement or any of the other Transaction Documents.

                3.6 Compliance with Laws. The Company and each of its
Subsidiaries is in compliance in all material respects with all Requirements of
Law and all Orders issued by any court or Governmental Authority against the
Company in all respects. To the Company's Knowledge, there are no Requirements
of Law which could reasonably


<PAGE>
                                                                              13


be expected to prohibit or restrict the Company or any of its Subsidiaries from,
or otherwise materially adversely effect the Company or any of its Subsidiaries
in, conducting its business in any jurisdiction in which it now conducts its
business.

                3.7 Capitalization.

                (a) As of the date hereof, the authorized capital stock of the
Company consists of (x) 500,000,000 shares of Common Stock of which (i)
75,515,871 shares are issued and outstanding and (ii) 49,775,020 shares are
reserved for issuance upon exercise of stock options granted to directors,
officers and other employees of the Company pursuant to the Stock Option Plans;
and (y) 5,000,000 shares of preferred stock, none of which is outstanding.

                (b) On the Closing Date, after giving effect to the transactions
contemplated by this Agreement, the authorized capital stock of the Company
shall consist of (i) 500,000,000 shares of Common Stock, of which 75,515,871
shares are issued and outstanding, (ii) 75,000 shares of Series C Preferred
Stock, par value $.001 per share, of the Company, of which no shares are issued
and outstanding, (iii) assuming the Escrow Release Date has occurred, 4,000,000
shares of Series D Preferred Stock, of which 4,000,000 shares are issued and
outstanding, and (iv) 925,000 shares of undesignated "blank check" preferred
stock. As of the date of this Agreement, the aggregate number of shares of
restricted stock and options to purchase shares of Common Stock which may be
issued under the Stock Option Plans are 49,775,020, of which 31,690,094 have
been granted. The Company has reserved an aggregate of 52,380,952 shares of
Common Stock for issuance upon conversion of the Subject Shares and 2,500,000
shares of Common Stock for issuance upon exercise of the Warrants. Except as set
forth on Schedule 3.7(a) and except for the Warrants, there are no options,
warrants, conversion privileges, subscription or purchase rights or other rights
presently outstanding to purchase or otherwise acquire (i) any authorized but
unissued, unauthorized or treasury shares of the Company's capital stock, (ii)
any Stock Equivalents or (iii) any other securities of the Company and there are
no commitments, contracts, agreements, arrangements or understandings to which
the Company is a party to issue any shares of the Company's capital stock or any
Stock Equivalents or other securities of the Company.

                (c) The Subject Shares and the Warrants are duly authorized, and
when issued and delivered to the Purchasers after payment therefor and the
consummation of the Exchange on the Escrow Release Date, will be validly issued,
fully paid and non-assessable, and assuming the accuracy of the representations
and warranties of the Purchasers set forth in Article IV of this Agreement, will
be issued in compliance with the registration and qualification requirements of
all applicable federal, state and foreign securities laws and will be free and
clear of all other Liens. The shares of Common Stock issuable upon conversion of
the Subject Shares and exercise of the Warrants have been duly reserved for
issuance and, when issued in compliance with the provisions of the Certificate
of Designation and the Warrants (in the case of the Warrant Shares), will be
validly issued, fully paid and non-assessable and not subject to any preemptive
rights or similar rights that have not been satisfied and will be free and clear


<PAGE>
                                                                              14


of all other Liens. None of the issued and outstanding shares of Common Stock
were issued in violation of any preemptive rights.

                3.8 No Default or Breach; Contractual Obligations. All of the
Contractual Obligations to which the Company or any of its Subsidiaries is a
party, whether written or oral, which are required by the Exchange Act to be
disclosed in the SEC Reports (collectively, "Material Contractual Obligations")
are valid, subsisting, in full force and effect and binding upon the Company or
its Subsidiary, as the case may be, and the other parties thereto, and the
Company or its Subsidiary, as the case may be, has paid in full or accrued all
amounts due thereunder and has satisfied in full or provided for all of its
liabilities and obligations thereunder, except for such amounts as are being
contested by the Company in good faith. Neither the Company nor any of its
Subsidiaries has received notice of a default and is not in default under, or
with respect to, any Material Contractual Obligation nor, to the Knowledge of
the Company, does any condition exist that with notice or lapse of time or both
would constitute a default thereunder. To the Knowledge of the Company, no other
party to any such Contractual Obligation is in default thereunder, nor does any
condition exist that with notice or lapse of time or both would constitute a
default by such other party thereunder.

                3.9 Title to Properties. The Company and each of its
Subsidiaries has good, record and marketable title in fee simple to, or holds
interests as lessee under leases in full force and effect in, all real property
used in connection with its business or otherwise owned or leased by it. The
Company and each of its Subsidiaries owns and has good, valid and marketable
title to all of its properties and assets used in its business or reflected as
owned on the Financial Statements, in each case free and clear of all Liens,
except for Liens that would required to be described in the notes to the
Financial Statements.

                3.10 Reports; Financial Statements.

                (a) As of the respective dates of their filing with the
Commission, all reports, registration statements and other filings, together
with any amendments thereto, filed by the Company with the Commission since June
30, 2000 (the "SEC Reports"), complied in all material respects with the
applicable requirements of the Securities Act, the Exchange Act, and the rules
and regulations of the Commission promulgated thereunder, except as disclosed in
the SEC Reports. Except as disclosed in the SEC Reports, the SEC Reports did not
at the time they were filed with the Commission, or will not at the time they
are filed with the Commission, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading. The Company has (i) delivered to the
Purchasers true and complete copies of, or will make available at the
Purchaser's request, (x) all correspondence relating to the Company between the
Commission, Nasdaq and the United States Attorneys Office and the Company or its
legal counsel and, to the Company's Knowledge, accountants since January 1, 2001
(other than routine Commission filing package cover letters) and (y) all
correspondence between the Company or its counsel and the Company's auditors
since January 1, 2001, relating to


<PAGE>
                                                                              15


any audit, financial review or preparation of financial statements of the
Company (other than correspondence which the Company reasonably believes is
subject to a privilege), and (ii) disclosed to the Purchasers the content of all
material discussions between the Commission, Nasdaq and the United States
Attorneys Office on the one hand and the Company or its legal counsel, on the
other hand, and, to the Company's Knowledge, accountants concerning the adequacy
or form of any SEC Report filed with the Commission since January 1, 2001. The
Company is not aware of any issues raised by the Commission with respect to any
of the SEC Reports, other than those disclosed in the SEC Reports.

                (b) Except as disclosed in the SEC Reports, the consolidated
financial statements (including, in each case, any related schedules or notes
thereto) contained in or incorporated by reference in the SEC Reports and any
such reports, registration statements and other filings to be filed by the
Company with the Commission prior to the Closing Date (the "Financial
Statements") (i) have been or will be prepared in accordance with the published
rules and regulations of the Commission and GAAP consistently applied during the
periods involved (except as may be indicated in the notes thereto) and (ii)
fairly present or will fairly present in all material respects the consolidated
financial position of the Company and its Subsidiaries as of the respective
dates thereof and the consolidated results of operations, statements of
stockholders' equity and cash flows for the periods indicated, except that any
unaudited interim financial statements were or will be subject to normal and
recurring year-end adjustments and may omit footnote disclosure as permitted by
regulations of the Commission.

                3.11 Taxes. (a) The Company and each of its Subsidiaries has
paid all Taxes which have come due and are required to be paid by it through the
date hereof, and all deficiencies or other additions to Tax, interest and
penalties owed by it in connection with any such Taxes, other than Taxes being
disputed by the Company in good faith for which adequate reserves have been made
in accordance with GAAP; (b) the Company and each of its Subsidiaries has timely
filed or caused to be filed all returns for Taxes that it is required to file on
and through the date hereof (including all applicable extensions), and all such
Tax returns are accurate and complete in all material respects; (c) with respect
to all Tax returns of the Company and each of its Subsidiaries, (i) there is no
unassessed Tax deficiency proposed or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries and (ii) no audit is
in progress with respect to any return for Taxes, no extension of time is in
force with respect to any date on which any return for Taxes was or is to be
filed and no waiver or agreement is in force for the extension of time for the
assessment or payment of any Tax; (d) all provisions for Tax liabilities of the
Company and each of its Subsidiaries have been disclosed in the Financial
Statements and made in accordance with GAAP consistently applied, and all
liabilities for Taxes of the Company and each of its Subsidiaries attributable
to periods prior to or ending on the Closing Date have been adequately disclosed
in the Financial Statements; and (e) there are no Liens for Taxes on the assets
of the Company or any of its Subsidiaries.

                3.12 No Material Adverse Change; Ordinary Course of Business.
Since December 31, 2000, except as disclosed in or incorporated by reference in
the SEC

<PAGE>
                                                                              16


Reports, (a) there has not been any material adverse change, in the Condition of
the Company, (b) neither the Company nor any of its Subsidiaries has
participated in any transaction material to the Condition of the Company,
including, without limitation, declaring or paying any dividend or declaring or
making any distribution to its stockholders except out of the earnings of the
Company or its Subsidiary, as the case may be, (c) neither the Company nor any
of its subsidiaries has entered into any Material Contractual Obligation, other
than in the ordinary course of business and (d) there has not occurred a
material change in the accounting principles or practice of the Company or any
of its Subsidiaries except as required by reason of a change in GAAP.

                3.13 Private Offering. Neither the Company nor any authorized
Person acting on its behalf has, in connection with the offer, sale, exchange or
issuance of the Subject Shares or the Warrants, engaged in (i) any form of
general solicitation or general advertising (as those terms are used within the
meaning of Rule 502(c) under the Securities Act), (ii) any action involving a
public offering within the meaning of Section 4(2) of the Securities Act, or
(iii) any action that would require the registration under the Securities Act of
the offering, sale, exchange or issuance of the Subject Shares and the Warrants
pursuant to this Agreement or that would violate applicable state securities or
"blue sky" laws. The Company has not made and will not prior to the Closing Date
make, directly or indirectly, any offer or sale of the Subject Shares or
Warrants or of securities of the same or similar class as the Subject Shares or
Warrants if, as a result, the offer and sale contemplated hereby would fail to
be entitled to exemption from the registration requirements of the Securities
Act. As used herein, the terms "offer" and "sale" have the meanings specified in
Section 2(3) of the Securities Act.

                3.14 Labor Relations. Except as could not reasonably be expected
to have a material adverse effect on the Condition of the Company: (a) neither
the Company nor any of its Subsidiaries is engaged in any unfair labor practice;
(b) there is no strike, labor dispute, slowdown or stoppage pending or, to the
Knowledge of the Company, threatened against the Company or any of its
Subsidiaries ; (c) neither the Company nor any of its Subsidiaries is a party to
any collective bargaining agreement or contract; and (d) no union organizing
activities are taking place. To the Knowledge of the Company, no officer or key
employee, or any group of key employees, intends to terminate their employment
with the Company or any of its Subsidiaries. To the Knowledge of the Company,
each of the officers and key employees of the Company and each of its
Subsidiaries spends all, or substantially all, of his business time on the
business of the Company or its Subsidiary, as the case may be. To the Knowledge
of the Company, none of the employees of the Company or any of its Subsidiaries
is resident in the United States in violation of any Requirement of Law.

                3.15 Employee Benefit Plans.

                (a) The SEC Reports list or describe each Plan that the Company
or any of its Subsidiaries maintains or to which the Company or any of its
Subsidiaries contributes (the "Company Plans"). Neither the Company nor any of
its Subsidiaries has any liability under any Plans other than the Company Plans.
Except as described in or incorporated by reference in the SEC Reports, neither
the Company nor any Commonly


<PAGE>
                                                                              17


Controlled Entity maintains or contributes to, or has within the preceding six
years maintained or contributed to, or may have any liability with respect to
any Plan subject to Title IV of ERISA or Section 412 of the Code or any
"multiple employer plan" within the meaning of the Code or ERISA. Each Company
Plan (and related trust, insurance contract or fund) has been established and
administered in accordance with its terms, and complies in form and in operation
with the applicable requirements of ERISA and the Code and other applicable
Requirements of Law. All contributions (including all employer contributions and
employee salary reduction contributions) which are due have been paid to each
Company Plan.

                (b) No Claim with respect to the administration or the
investment of the assets of any Company Plan (other than routine claims for
benefits) is pending.

                (c) Except as could not reasonably be expected to have a
material adverse effect on the Condition of the Company, each Company Plan that
is intended to be qualified under Section 401(a) of the Code is so qualified and
has been so qualified during the period since its adoption; each trust created
under any such Plan is exempt from tax under Section 501(a) of the Code and has
been so exempt since its creation.

                (d) No Company Plan is a Retiree Welfare Plan.

                (e) Neither the consummation of the transactions contemplated by
this Agreement nor any termination of employment following such transactions
will accelerate the time of the payment or vesting of, or increase the amount
of, compensation due to any employee or former employee whether or not such
payment would constitute an "excess parachute payment" under section 280G of the
Code.

                (f) There are no unfunded obligations under any Company Plan
which are not fully reflected in the Financial Statements.

                (g) Except as could not reasonably be expected to have a
material adverse effect on the Condition of the Company, the Company has no
liability, whether absolute or contingent, including any obligations under any
Company Plan, with respect to any misclassification of any person as an
independent contractor rather than as an employee.

                3.16 Liabilities. Neither the Company nor any of its
Subsidiaries has any direct or indirect obligation or liability (the
"Liabilities") which are not fully reflected or reserved against in the
Financial Statements, other than Liabilities not exceeding $1,000,000 in the
aggregate incurred since September 30, 2001 in the ordinary course of business.
The Company has no Knowledge of any circumstance, condition, event or
arrangement that could reasonably be expected to give rise hereafter to any
Liabilities of the Company or any of its Subsidiaries that, individually or in
the aggregate, could have a material adverse effect on the Condition of the
Company.


<PAGE>
                                                                              18


                3.17 Intellectual Property.

                (a) (i) The Company and each of its Subsidiaries is the owner of
all, or has the license or right to use, sell and license all of, the
Copyrights, Patents, Trade Secrets, Trademarks, Internet Assets, Software and
other proprietary rights (collectively, "Intellectual Property") that are used
in connection with its business as presently conducted, free and clear of all
Liens.

                        (i) None of the Intellectual Property is subject to any
outstanding Order, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand is pending or, to the Knowledge of the
Company, threatened, which challenges the validity, enforceability, use or
ownership of the item.

                        (ii) The Company and each of its Subsidiaries has
substantially performed all obligations imposed upon it under all Intellectual
Property licenses, sublicenses, distributor agreements and other agreements
under which the Company or any of its Subsidiaries is either a licensor,
licensee or distributor, except such licenses, sublicenses and other agreements
relating to off-the-shelf software which is commercially available on a retail
basis and used solely on the computers of the Company or its Subsidiaries
(collectively, the "IP Agreements"). The Company and each of its Subsidiaries is
not, nor to the Knowledge of the Company is any other party thereto, in breach
of or default thereunder in any respect, nor is there any event which with
notice or lapse of time or both would constitute a default thereunder. All of
the IP Agreements are valid, enforceable and in full force and effect, and will
continue to be so on identical terms immediately following the Closing except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).

                        (iii) None of the Intellectual Property currently sold
or licensed by the Company or any of its Subsidiaries to any Person or used by
or licensed to the Company or any of its Subsidiaries by any Person infringes
upon or otherwise violates any Intellectual Property rights of others, except as
could not reasonably be expected to have a material adverse effect on the
Condition of the Company.

                (b) No litigation is pending and no Claim has been made against
the Company or any of its Subsidiaries or, to the Knowledge of the Company, is
threatened, contesting the right of the Company or any of its Subsidiaries to
sell or license to any Person or use the Intellectual Property presently sold or
licensed to such Person or used by the Company or any of its Subsidiaries. To
the Knowledge of the Company, no Person is infringing upon or otherwise
violating the Intellectual Property rights of the Company or any of its
Subsidiaries.

                (c) No former employer of any employee of the Company or any of
its Subsidiaries has made a claim against the Company or any of its Subsidiaries
or, to the


<PAGE>
                                                                              19


Knowledge of the Company, against any other Person, that such employee or such
consultant is utilizing Intellectual Property of such former employer.

                (d) To the Knowledge of the Company, none of the Trade Secrets,
wherever located, the value of which is contingent upon maintenance of
confidentiality thereof, has been disclosed to any Person other than employees,
representatives and agents of the Company or any of its Subsidiaries, except as
required pursuant to the filing of a patent application by the Company or any of
its Subsidiaries.

                (e) It is not necessary for the business of the Company or any
of its Subsidiaries to use any Intellectual Property owned by any director,
officer, employee or consultant of the Company or any of its Subsidiaries (or
persons the Company or any of its Subsidiaries presently intends to hire). To
the Company's Knowledge, at no time during the conception or reduction to
practice of any of the Intellectual Property of the Company or any of its
Subsidiaries was any developer, inventor or other contributor to such
Intellectual Property operating under any grants from any Governmental Authority
or subject to any employment agreement, invention assignment, nondisclosure
agreement or other Contractual Obligation with any Person that could materially
adversely affect the rights of the Company or any of its Subsidiaries to its
Intellectual Property.

                3.18 Privacy of Customer Information. Neither the Company nor
any of its Subsidiaries use any of the customer information it receives through
its website or otherwise in an unlawful manner, or in a manner violative of the
privacy policy of the Company or its Subsidiary, as the case may be, or the
privacy rights of its customers. Neither the Company nor any of its Subsidiaries
has collected any customer information through its website in an unlawful manner
or in violation of its privacy policy. The Company and each of its Subsidiaries
has adequate security measures in place to protect the customer information it
receives through its website and which it stores in its computer systems from
illegal use by third parties or use by third parties in a manner violative of
the rights of privacy of its customers. The Company and each of its Subsidiaries
represents to its customers that it assures complete security as to the customer
information it receives through its website.

                3.19 Potential Conflicts of Interest. Except as set forth on
Schedule 3.19 and except for Vectis employees at the Company, no officer,
director or stockholder beneficially owning more than 5% of the outstanding
shares of Common Stock, to the Knowledge of the Company, no spouse of any such
officer, director or stockholder, and, to the Knowledge of the Company, no
Affiliate of any of the foregoing (a) owns, directly or indirectly, any interest
in (excepting less than one percent (1%) stock holdings for investment purposes
in securities of publicly held and traded companies), or is an officer,
director, employee or consultant of, any Person which is, or is engaged in
business as, a competitor, lessor, lessee, supplier, distributor, or customer
of, or lender to or borrower from, the Company or any of its Subsidiaries; (b)
owns, directly or indirectly, in whole or in part, any tangible or intangible
property that the Company or any of its Subsidiaries use, in the conduct of
business; or (c) has any cause of action or other claim whatsoever against, or
owes or has advanced any amount to, the Company or any of its Subsidiaries,
except for claims in the ordinary course of business


<PAGE>
                                                                              20


such as for accrued vacation pay, accrued benefits under employee benefit plans,
and similar matters and agreements existing on the date hereof.

                3.20 Trade Relations. There exists no actual or, to the
Knowledge of the Company, threatened termination, cancellation or limitation of,
or any material adverse modification or change in, the business relationship of
the Company or any of its Subsidiaries, or the business of the Company or any of
its Subsidiaries, with any customer or supplier or any group of customers or
suppliers whose purchases or inventories provided to the business of the Company
or any of its Subsidiaries are individually or in the aggregate material to the
Condition of the Company.

                3.21 Outstanding Borrowing. Schedule 3.21 sets forth the amount
of all Indebtedness of the Company and each of its Subsidiaries as of the date
hereof, the Liens that relate to such Indebtedness and that encumber the Assets
and the name of each lender thereof. No Indebtedness is entitled to any voting
rights in any matters voted upon by the holders of the Common Stock.

                3.22 Broker's, Finder's or Similar Fees. Except for fees payable
to Vectis, there are no brokerage commissions, finder's fees or similar fees or
commissions payable by the Company or any of its Subsidiaries in connection with
the transactions contemplated hereby based on any agreement, arrangement or
understanding with the Company or any of its Subsidiaries or any action taken by
any such Person.

                3.23 CCC Section. The Board of Directors has taken all action
necessary to exempt from the provisions of Section 1203 of the California
Corporations Code, to the extent applicable, this Agreement, any acquisition by
the Purchasers of Subject Shares and Warrants pursuant to this Agreement and the
Certificate of Designation and any conversion by the Purchasers of Subject
Shares into shares of Common Stock and any exercise by the GAP Purchasers of the
Warrants for the Warrant Shares.

                3.24 Disclosure. This Agreement and the documents and
certificates furnished to the Purchasers by the Company do not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained herein or therein, in the light of the
circumstances under which they were made, not misleading.

                                   ARTICLE IV

                REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

                Each of the Purchasers hereby represents and warrants, severally
and not jointly, to the Company as follows:

                4.1 Existence and Power. Such Purchaser (a) is a limited
partnership, corporation, partnership or limited liability company duly
organized and validly existing under the laws of the jurisdiction of its
formation and (b) has the requisite partnership,


<PAGE>
                                                                              21


corporate or limited liability company, as the case may be, power and authority
to execute, deliver and perform its obligations under this Agreement and each of
the other Transaction Documents to which it is a party.

                4.2 Authorization; No Contravention. The execution, delivery and
performance by such Purchaser of this Agreement and each of the other
Transaction Documents to which it is a party and the transactions contemplated
hereby and thereby, (a) have been duly authorized by all necessary partnership,
corporate or limited liability company, as the case may be, action, (b) do not
contravene the terms of such Purchaser's organizational documents, or any
amendment thereof, and (c) do not violate, conflict with or result in any breach
or contravention of, or the creation of any Lien under, any Contractual
Obligation of such Purchaser or any Requirement of Law applicable to such
Purchaser, and (d) do not violate any Orders of any Governmental Authority
against, or binding upon, such Purchaser.

                4.3 Governmental Authorization; Third Party Consents. No
approval, consent, compliance, exemption, authorization or other action by, or
notice to, or filing with, any Governmental Authority or any other Person, and
no lapse of a waiting period under any Requirement of Law, is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, such Purchaser of this Agreement and each of the other
Transaction Documents to which it is a party or the transactions contemplated
hereby and thereby.

                4.4 Binding Effect. This Agreement has been, and as of the
Closing Date each of the other Transaction Documents will have been, duly
executed and delivered by such Purchaser and this Agreement constitutes and, as
of the Closing Date each of the other Transaction Documents will constitute, the
legal, valid and binding obligations of such Purchaser, enforceable against it
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability
(regardless of whether considered in a proceeding at law or in equity).

                4.5 Purchase for Own Account. The Subject Shares and the
Warrants to be acquired by such Purchaser pursuant to this Agreement are being
or will be acquired for its own account and with no intention of distributing or
reselling such Subject Shares or Warrants or any part thereof in any transaction
that would be in violation of the securities laws of the United States of
America, any state of the United States or any foreign jurisdiction, without
prejudice, however, to the rights of such Purchaser at all times to sell or
otherwise dispose of all or any part of such Subject Shares or Warrants under an
effective registration statement under the Securities Act, or under an exemption
from such registration available under the Securities Act, and subject,
nevertheless, to the disposition of such Purchaser's property being at all times
within its control. If such Purchaser should in the future decide to dispose of
any of such Subject Shares, such Purchaser understands and agrees that it may do
so only in compliance with the Securities Act and applicable state and foreign
securities laws, as then in effect. Such Purchaser agrees to the imprinting at
Closing and for so long as required by law, of a


<PAGE>
                                                                              22


legend on certificates representing all of its Subject Shares, shares of Common
Stock issuable upon conversion of its Subject Shares and the Warrant Shares to
the following effect:

                THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
                "ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
                OR ANY FOREIGN JURISDICTION. THE SECURITIES MAY NOT BE
                TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
                STATEMENT UNDER SUCH ACT AND APPLICABLE STATE AND FOREIGN
                SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE
                REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

                4.6 Restricted Securities. Such Purchaser understands that the
Subject Shares and the Warrants will not be registered at the time of their
issuance under the Securities Act for the reason that the sale provided for in
this Agreement is exempt pursuant to Section 4(2) of the Securities Act and that
the reliance of the Company on such exemption is predicated in part on such
Purchaser's representations set forth herein.

                4.7 Accredited Investor. Such Purchaser is an "Accredited
Investor" within the meaning of Rule 501 of Regulation D under the Securities
Act, as presently in effect.

                4.8 Experience. Such Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in its Subject Shares and Warrants (the
"Securities"), and has so evaluated the merits and risks of such investment.
Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such
investment.

                4.9 Access to Information. Such Purchaser acknowledges that it
has reviewed the SEC Reports and has been afforded: (i) the opportunity to ask
such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to publicly available information about the Company and
the Subsidiaries and the Condition of the Company sufficient to enable it to
evaluate its investment; and (iii) the opportunity to obtain such additional
publicly available information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment. Neither such inquiries nor any other
investigation conducted by or on behalf of such Purchaser or its representatives
or


<PAGE>
                                                                              23


counsel shall modify, amend or affect such Purchaser's right to rely on the
truth, accuracy and completeness of the SEC Reports and the Company's
representations and warranties contained in the Transaction Documents.

                4.10 General Solicitation. Such Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.

                4.11 Reliance. Such Purchaser understands and acknowledges that:
(i) the Securities are being offered and sold to it without registration under
the Securities Act in a private placement that is exempt from the registration
provisions of the Securities Act and (ii) the availability of such exemption
depends in part on, and the Company will rely upon the accuracy and truthfulness
of, the foregoing representations and such Purchaser hereby consents to such
reliance.

                                    ARTICLE V

                           ACTIONS TO BE TAKEN BY THE
                             COMPANY AT THE CLOSING

                At the Closing, the Company shall take the actions and deliver
the documents described in Sections 5.1, 5.4, 5.5 and 5.6 and not later than
5:00 p.m., New York City time, on November 9, 2001, the Company shall take the
actions and deliver the documents described in Sections 5.2 and 5.3.

                5.1 Secretary's Certificate. The Company shall have delivered to
the Purchasers a certificate from the Company, in form and substance
satisfactory to the Purchasers, dated as of the Closing Date and signed by the
Secretary or an Assistant Secretary of the Company, certifying (a) that the
Company is in good standing with the Secretary of State of the State of
California, (b) that the attached copies of the Articles of Incorporation, the
By-laws, and resolutions of the Board of Directors of the Company approving this
Agreement and each of the other Transaction Documents and the transactions
contemplated hereby and thereby, are all true, complete and correct and remain
unamended and in full force and effect and (c) that the attached copies of the
resolutions of the Board of Directors electing, subject only to the satisfaction
of the Escrow Release Condition (as defined in the Escrow Agreement), the one
director designated by the holders of a majority of the shares of Series D
Preferred Stock are true, complete and correct and remain unamended and in full
force and effect.

                5.2 Subject Shares. The Company shall have delivered to the
Escrow Agent certificates in definitive form representing the number of
Purchased Shares set forth opposite such Purchaser's name on Schedule 2.1 hereto
and, with respect to the GAP Purchasers, the number of Exchange Shares set forth
opposite such GAP Purchaser's name on Schedule 2.2 hereto, registered in the
name of such Purchaser.


<PAGE>
                                                                              24


                5.3 Warrants. The Company shall have duly executed and delivered
to the Escrow Agent, in substantially the form attached hereto as Exhibit A, and
registered in the name of GAP LP, GAP Coinvestment and GapStar, respectively.

                5.4 Opinion of Counsel. The Company shall have caused the
opinion of Pillsbury Winthrop LLP, dated November 8, 2001, relating to the
transactions contemplated by or referred to herein, substantially in the form
attached hereto as Exhibit G to be delivered to the Purchasers.

                5.5 MOU. The Company shall have delivered to the Purchasers the
fully executed MOU.

                5.6 Amendment to Shareholder Rights Plan. The Company shall have
delivered to the Purchasers evidence that the Shareholder Rights Plan has been
amended, in form and substance satisfactory to the Purchasers, to permit each
Purchaser and its Affiliates to consummate the transactions contemplated by this
Agreement and each of the other Transaction Documents.

                                   ARTICLE VI

                          DELIVERIES BY THE PURCHASERS

                Not later than 5:00 p.m., New York City time, on November 9,
2001, the Purchasers shall take the following actions and deliver the following.

                6.1 Payment for Subject Shares and Warrants. Each Purchaser
shall have deposited with the Escrow Agent the aggregate purchase price for the
Purchased Shares to be purchased by such Purchaser and each GAP Purchaser shall
have deposited with the Escrow Agent (i) its GAP Sub Notes, with duly executed
undated Note Powers attached and (ii) the aggregate purchase price for the
Warrants to be purchased by such Purchaser.

                                   ARTICLE VII

                                 INDEMNIFICATION

                7.1 Indemnification. Except as otherwise provided in this
Article VII, the Company (the "Indemnifying Party") agrees to indemnify, defend
and hold harmless each of the Purchasers and its Affiliates and their respective
officers, directors, agents, employees, subsidiaries, partners, members and
controlling persons (each, an "Indemnified Party") to the fullest extent
permitted by law from and against any and all losses, Claims, or written threats
thereof (including, without limitation, any Claim by a third party), damages,
expenses (including reasonable fees, disbursements and other charges of counsel
incurred by the Indemnified Party in any action between the Indemnifying Party
and the Indemnified Party or between the Indemnified Party and any third party
or otherwise) or other liabilities (collectively, "Losses") resulting from or
arising out of any breach of any representation or warranty, covenant or
agreement by the


<PAGE>
                                                                              25


Company in this Agreement, the Stockholders Agreement, the Escrow Agreement or
the Warrants. The amount of any payment to any Indemnified Party herewith in
respect of any Loss shall be of sufficient amount to make such Indemnified Party
whole for any diminution in value of the Subject Shares directly caused by such
breach. In connection with the obligation of the Indemnifying Party to indemnify
for expenses as set forth above, the Indemnifying Party shall, upon presentation
of appropriate invoices containing reasonable detail, reimburse each Indemnified
Party for all such expenses (including reasonable fees, disbursements and other
charges of counsel incurred by the Indemnified Party in any action between the
Indemnifying Party and the Indemnified Party or between the Indemnified Party
and any third party) as they are incurred by such Indemnified Party; provided,
however, that if an Indemnified Party is reimbursed under this Article VII for
any expenses, such reimbursement of expenses shall be refunded to the extent it
is finally judicially determined that the Losses in question resulted primarily
from the willful misconduct or gross negligence of such Indemnified Party.

                7.2 Notification. Each Indemnified Party under this Article VII
shall, promptly after the receipt of notice of the commencement of any Claim
against such Indemnified Party in respect of which indemnity may be sought from
the Indemnifying Party under this Article VII, notify the Indemnifying Party in
writing of the commencement thereof. The omission of any Indemnified Party to so
notify the Indemnifying Party of any such action shall not relieve the
Indemnifying Party from any liability which it may have to such Indemnified
Party (a) other than pursuant to this Article VII or (b) under this Article VII
unless, and only to the extent that, such omission results in the Indemnifying
Party's forfeiture of substantive rights or defenses. In case any such Claim
shall be brought against any Indemnified Party, and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to assume the defense thereof at its own expense, with counsel
satisfactory to such Indemnified Party in its reasonable judgment; provided,
however, that any Indemnified Party may, at its own expense, retain separate
counsel to participate in such defense at its own expense. Notwithstanding the
foregoing, in any Claim in which both the Indemnifying Party, on the one hand,
and an Indemnified Party, on the other hand, are, or are reasonably likely to
become, a party, such Indemnified Party shall have the right to employ separate
counsel and to control its own defense of such Claim if, in the reasonable
opinion of counsel to such Indemnified Party, either (x) one or more defenses
are available to the Indemnified Party that are not available to the
Indemnifying Party or (y) a conflict or potential conflict exists between the
Indemnifying Party, on the one hand, and such Indemnified Party, on the other
hand, that would make such separate representation advisable; provided, however,
that the Indemnifying Party (i) shall not be liable for the fees and expenses of
more than one counsel to all Indemnified Parties and (ii) shall reimburse the
Indemnified Parties for all of such fees and expenses of such counsel incurred
in any action between the Indemnifying Party and the Indemnified Parties or
between the Indemnified Parties and any third party, as such expenses are
incurred; provided, however, that if an Indemnified Party is reimbursed under
this Article VII for any expenses, such reimbursement of expenses shall be
refunded to the extent it is finally judicially determined that the Losses in
question resulted primarily from the willful misconduct or gross negligence of
such Indemnified Party. The Indemnifying Party agrees that it will not, without
the prior written consent of the Indemnified Party,


<PAGE>
                                                                              26


settle, compromise or consent to the entry of any judgment in any pending or
threatened Claim relating to the matters contemplated hereby (if any Indemnified
Party is a party thereto or has been actually threatened to be made a party
thereto) unless such settlement, compromise or consent includes an unconditional
release of each Indemnified Party from all liability arising or that may arise
out of such Claim. The Indemnifying Party shall not be liable for any settlement
of any Claim effected against an Indemnified Party without the Indemnifying
Party's written consent, which consent shall not be unreasonably withheld. The
rights accorded to an Indemnified Party hereunder shall be in addition to any
rights that any Indemnified Party may have at common law, by separate agreement
or otherwise; provided, however, that notwithstanding the foregoing or anything
to the contrary contained in this Agreement, nothing in this Article VII shall
restrict or limit any rights that any Indemnified Party may have to seek
equitable relief.

                7.3 Contribution. If the indemnification provided for in this
Article VII from the Indemnifying Party is unavailable to an Indemnified Party
hereunder in respect of any Losses referred to herein, then the Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such Losses in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and Indemnified Party in connection with the actions which
resulted in such Losses, as well as any other relevant equitable considerations.
The relative faults of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the Losses referred to above shall be deemed to include, subject to
the limitations set forth in Sections 7.1 and 7.2, any reasonable legal or other
fees, charges or expenses reasonably incurred by such party in connection with
any investigation or proceeding.

                                  ARTICLE VIII

                              AFFIRMATIVE COVENANTS

                The Company hereby covenants and agrees with the Purchasers as
follows:

                8.1 Financial Statements and Other Information. If any time the
Company is not subject to the periodic disclosure obligations of the Exchange
Act, the Company shall deliver to such Purchasers, in form and substance
satisfactory to such Purchaser:

                (a) as soon as available, but not later than ninety (90) days
after the end of each fiscal year of the Company, a copy of the audited
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such fiscal year and the related statements of operations and cash flows for
such fiscal year, setting forth in each case in


<PAGE>
                                                                              27


comparative form the figures for the previous year, all in reasonable detail and
accompanied by a management summary and analysis of the operations of the
Company for such fiscal year and by the opinion of a nationally recognized
independent certified public accounting firm which report shall state without
qualification that such financial statements present fairly the financial
condition as of such date and results of operations and cash flows for the
periods indicated in conformity with GAAP applied on a consistent basis;

                (b) as soon as available, but in any event not later than
forty-five (45) days after the end of each of the first three fiscal quarters of
each fiscal year, the unaudited consolidated balance sheet of the Company and
its Subsidiaries, and the related statements of operations and cash flows for
such quarter and for the period commencing on the first day of the fiscal year
and ending on the last day of such quarter, all certified by an appropriate
officer of the Company as presenting fairly the consolidated financial condition
as of such date and results of operations and cash flows for the periods
indicated in conformity with GAAP applied on a consistent basis, subject to
normal year-end adjustments and the absence of footnotes required by GAAP;

                (c) as soon as available, but in any event not later than ten
(10) days after the end of each month of each fiscal year, the unaudited
consolidated balance sheet of the Company and its Subsidiaries, and the related
statements of operations and cash flows for such month and for the period
commencing on the first day of the fiscal year and ending on the last day of
such month, all certified by an appropriate officer of the Company as presenting
fairly the consolidated financial condition as of such date and results of
operations and cash flows for the periods indicated in conformity with GAAP
applied on a consistent basis, subject to normal year-end adjustments and the
absence of footnotes required by GAAP; and

                8.2 FIRPTA Certificate. If requested by any of the Purchasers,
as promptly as practicable, but not later than five (5) days after the end of
each fiscal year of the Company, the Company shall deliver to each Purchaser, in
form and substance satisfactory to such Purchaser, a certificate signed by the
Chief Executive Officer of the Company in customary form certifying that the
Company is not a "foreign person" within the meaning of Section 1445 of the
Code; and

                8.3 Reservation of Common Stock. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issue or delivery upon conversion of the Subject Shares and
exercise of the Warrants, as provided in the Certificate of Designation and
Warrants respectively, the maximum number of shares of Common Stock that may be
issuable or deliverable upon such conversion or exercise. Such shares of Common
Stock are duly authorized and, when issued or delivered in accordance with the
Certificate of Designation and Warrants, shall be validly issued, fully paid and
non-assessable. The Company shall issue such shares of Common Stock, in
accordance with the terms of the Certificate of Designation and Warrants, and
otherwise comply with the terms hereof and thereof.


<PAGE>
                                                                              28


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

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

                8.6 Vectis Agreement. The Company shall as soon as practicable
after the date hereof, but not later than the date the Escrow Release Condition
is satisfied, terminate the Vectis Agreement.

                8.7 NASDAQ Matters.

                (a) The Company shall take all action required and shall make
all submissions that are reasonably necessary to obtain written confirmation
reasonably satisfactory to the GAP Purchasers from the Nasdaq that the approval
of a majority of the Company's stockholders, present in person or proxy at a
properly convened meeting of the Company's stockholders ("Stockholder Approval")
to the issuance of the shares of Series D Preferred Stock to the GAP Purchasers
is not required under the applicable Nasdaq rules and regulations in order to
satisfy the Nasdaq Escrow Approval Condition. If the Company cannot obtain such
written confirmation by January 31, 2001, it shall take all action required by
the Nasdaq and applicable California law (including the actions referred to in
Section 8.7(b)) to obtain Stockholder Approval for the issuance to the GAP
Purchasers of the portion of the shares of Series D Preferred Stock that
constitute the amount of shares of Series D Preferred Stock (determined assuming
conversion of all of the shares of Series D Preferred Stock) in excess of 19.9%
of the outstanding shares of the Common Stock on the date hereof (the
"Applicable Stockholder Approval"). The Board of Directors shall recommend that
the Company's stockholders vote in favor of the Applicable Stockholder Approval.

                (b) If required pursuant to Section 8.7(a) of this Agreement,
promptly after November 30, 2001, the Company will prepare and file with the
Commission a proxy statement to be distributed to the Company's stockholders in
connection with the solicitation of votes in favor of the Applicable Stockholder
Approval, including any amendments or supplements thereto (the "Proxy
Statement"). The Company will use all reasonable commercial efforts to have or
cause the Proxy Statement to be cleared by the Commission as promptly as
practicable. The Company agrees to provide the Purchasers and their respective
counsel with any written comments the Company or its counsel may receive from
the Commission with respect to the Proxy Statement promptly after the receipt of
such comments. The Company will use all reasonable commercial efforts to cause
the Proxy Statement (i) not to contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make


<PAGE>
                                                                              29


the statements therein, in light of the circumstances under which they are made,
not misleading and (ii) to comply as to form in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations
thereunder. Following clearance by the Commission of the Proxy Statement, the
Company shall promptly distribute the Proxy Statement to its stockholders and
call and arrange for a special meeting of stockholders and take such other
actions as are required or necessary in order to obtain the Applicable
Stockholder Approval as promptly as practicable.

                                   ARTICLE IX

                            TERMINATION OF AGREEMENT

                9.1 Termination. This Agreement shall be terminated and be of no
further force or effect on the Escrow Termination Date (as defined in the Escrow
Agreement).

                If this Agreement so terminates, it shall become null and void
and have no further force or effect.

                                    ARTICLE X

                                  MISCELLANEOUS

                10.1 Survival of Representations and Warranties. All of the
representations and warranties made herein shall survive the execution and
delivery of this Agreement until the date that is ninety (90) days after the
receipt by the Purchasers of audited financial statements of the Company for the
fiscal year ending December 31, 2002 (or, if such fiscal year changes and no
such audited consolidated financial statements are available, then the successor
fiscal year), except for (a) Sections 3.1, 3.2, 3.4, 3.7, 3.13 and 3.22, which
representations and warranties shall survive until the third anniversary of the
Closing Date, and (b) Section 3.11, which shall survive until the later to occur
of (i) the lapse of the statute of limitations with respect to the assessment of
any Tax to which such representation and warranty relates (including any
extensions or waivers thereof) and (ii) sixty (60) days after the final
administrative or judicial determination of the Taxes to which such
representation and warranty relates, and no claim with respect to Section 3.11
may be asserted thereafter with the exception of claims arising out of any fact,
circumstance, action or proceeding to which the party asserting such claim shall
have given notice to the other parties to this Agreement prior to the
termination of such period of reasonable belief that a tax liability will
subsequently arise therefrom.


<PAGE>
                                                                              30


               10.2 Notices. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier,
courier service or personal delivery:

               if to the Company:

               Critical Path, Inc.
               532 Folsom Street
               San Francisco, CA  94105
               Telecopy:  (415) 808-8898
               Attention:  Chief Financial Officer

               with a copy to, which shall not constitute notice to the Company:

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

               if to GAP LP, GAP Coinvestment or GapStar:

               c/o General Atlantic Service Corporation
               3 Pickwick Plaza
               Greenwich, CT 06830
               Telecopy:  (203) 622-8818
               Attention:  Matthew Nimetz

               with a copy to, which shall not constitute notice:

               Paul, Weiss, Rifkind, Wharton & Garrison
               1285 Avenue of the Americas
               New York, NY 10019-6064
               Telecopy:  (212) 757-3990
               Attention:  Douglas A. Cifu, Esq.

               if to Vectis CP Holdings, LLC:

               c/o Vectis Group
               117 Greenwich Street
               San Francisco, CA  94111
               Telecopy:  415-352-5310
               Attention:  Matthew Hobart


<PAGE>
                                                                              31


               with a copy to:

               Kirkland & Ellis
               153 East 53rd Street
               New York, NY 10022-4675
               Telecopy: 212-446-4900
               Attention:  Michael Movsovich, Esq.

               if to Cenwell Limited:

               c/o 7th Floor
               Cheung Kong Center
               2 Queen's Road Central
               Hong Kong
               Telecopy:  (852) 2845-2057
               Attention:  Mr. Edmond lp.

               if to Campina Enterprises Limited

               c/o 22nd Floor
               Hutchison House
               10 Harcourt Road
               Hong Kong
               Telecopy:  (852) 2128-1778
               Attention:  Company Secretary

                All such notices, demands and other communications shall be
deemed to have been duly given when delivered by hand, if personally delivered;
when delivered by courier, if delivered by commercial courier service; five (5)
Business Days after being deposited in the mail, postage prepaid, if mailed; and
when receipt is mechanically acknowledged, if telecopied. Any party may by
notice given in accordance with this Section 10.2 designate another address or
Person for receipt of notices hereunder.

                10.3 Successors and Assigns; Third Party Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties hereto. Subject to applicable securities laws
and the terms and conditions thereof, the Purchasers may assign any of their
rights under this Agreement or the other Transaction Documents to any of their
respective Affiliates. The Company may not assign any of its rights under this
Agreement without the written consent of the GAP Purchasers. Except as provided
in Article VII, no Person other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement.

                10.4 Amendment and Waiver.

                (a) No failure or delay on the part of the Company or the
Purchasers in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor


<PAGE>
                                                                              32


shall any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy. The remedies provided for herein are cumulative and are not exclusive
of any remedies that may be available to the Company or the Purchasers at law,
in equity or otherwise.

                (b) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by the Company or the Purchasers from the terms of
any provision of this Agreement, shall be effective (i) only if it is made or
given in writing and signed by the Company and the Purchasers acquiring a
majority of the Subject Shares, and (ii) only in the specific instance and for
the specific purpose for which made or given; provided; however, that to the
extent any amendment or waiver adversely affects any of the Purchasers, such
amendment or waiver shall require the prior written consent of each Purchaser so
adversely affected. Except where notice is specifically required by this
Agreement, no notice to or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances.

                10.5 Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                10.6 Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

                10.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.

                10.8 Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the
benefits of the remaining provisions hereof.

                10.9 Rules of Construction. Unless the context otherwise
requires, references to sections or subsections refer to sections or subsections
of this Agreement.

                10.10 Entire Agreement. This Agreement, together with the
exhibits and schedules hereto, and the other Transaction Documents are intended
by the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein.
There are no restrictions, promises, representations, warranties or
undertakings, other than those set forth or referred to herein or therein.


<PAGE>
                                                                              33


This Agreement, together with the exhibits and schedules hereto, and the other
Transaction Documents supersede all prior agreements and understandings between
the parties with respect to such subject matter.

                10.11 Fees. Upon the Closing, the Company shall reimburse each
of the Purchasers for their fees, disbursements and other charges of counsel
incurred in connection with the transactions contemplated by this Agreement,
provided that the aggregate amount of all such reimbursements shall not exceed
$75,000 and, provided, further, that each of the Coinvestors hereby acknowledge
and agree that the fees and expenses of the GAP Purchasers shall be reimbursed
first and that the cap of $75,000 applies to the fees and expenses of all of the
Purchasers. If this Agreement terminates pursuant to Article IX, each of the
Company and the Purchasers shall bear its own fees, disbursements and other
charges of counsel incurred in connection with the transactions contemplated by
this Agreement.

                10.12 Publicity; Confidentiality. Except as may be required by
applicable Requirements of Law, none of the parties hereto shall issue a
publicity release or public announcement or otherwise make any disclosure
concerning this Agreement, the transactions contemplated hereby, the Purchasers
or the business, technology and financial affairs of the Company, without prior
approval by the other parties hereto; provided, however, that nothing in this
Agreement shall restrict any of the Purchasers from disclosing information (a)
that is already publicly available, (b) that was known to such Purchaser on a
non-confidential basis prior to its disclosure by the Company, (c) that may be
required or appropriate in response to any summons or subpoena or in connection
with any litigation, provided that such Purchaser will use reasonable efforts to
notify the Company in advance of such disclosure so as to permit the Company to
seek a protective order or otherwise contest such disclosure, and such Purchaser
will use reasonable efforts to cooperate, at the expense of the Company, with
the Company in pursuing any such protective order, (d) to the extent that such
Purchaser reasonably believes it appropriate in order to comply with any
Requirement of Law, (e) to such Purchaser's or the Company's officers,
directors, shareholders, advisors, employees, members, partners, controlling
persons, auditors or counsel or (f) to Persons from whom releases, consents or
approvals are required, or to whom notice is required to be provided, pursuant
to the transactions contemplated by the Transaction Documents; and provided
further, that after the Closing, GAP LLC may disclose on its worldwide web page,
www.gapartners.com, the name of the Company, the name of the Chief Executive
Officer of the Company, a brief description of the business of the Company, the
Company's logo and the aggregate amount of the Purchasers' investment in the
Company. If any announcement is required by any Requirement of Law to be made by
any party hereto, prior to making such announcement such party will deliver a
draft of such announcement to the other parties and shall give the other parties
reasonable opportunity to comment thereon.

                10.13 Further Assurances. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any Governmental Authority or
any other Person) as may be


<PAGE>
                                                                              34


reasonably required or desirable to carry out or to perform the provisions of
this Agreement.

                10.14 Legal Representation. It is acknowledged by each of the
Coinvestors that the GAP Purchasers have retained Paul, Weiss, Rifkind, Wharton
& Garrison to act as their counsel in connection with the transactions
contemplated by the Transaction Documents and that Paul, Weiss, Rifkind, Wharton
& Garrison has not acted as counsel for any of the Coinvestors in connection
with the transaction contemplated by the Transaction Documents and that none of
the Coinvestors has the status of a client of Paul, Weiss, Rifkind, Wharton &
Garrison for conflict of interest or any other purposes as a result thereof.

                  [Remainder of page intentionally left blank]

<PAGE>


                IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Stock and Warrant Purchase and Exchange Agreement on
the date first written above.

                                            CRITICAL PATH, INC.


                                            By: /s/ Laureen DeBuono
                                               ---------------------------------
                                                Name:
                                                Title:


                                            GENERAL ATLANTIC PARTNERS 74, L.P.


                                            By: GENERAL ATLANTIC PARTNERS, LLC,
                                                its General Partner

                                            By: /s/ William Ford
                                               ---------------------------------
                                                Name:
                                                Title:  A Managing Member

                                            GAP COINVESTMENT PARTNERS II, L.P.


                                            By: /s/ William Ford
                                               ---------------------------------
                                                Name:
                                                Title:  A General Partner

                                            GAPSTAR, LLC


                                            By: GENERAL ATLANTIC PARTNERS, LLC,
                                                its Managing Member

                                            By: /s/ William Ford
                                               ---------------------------------
                                                Name:
                                                Title:  A Managing Member



       Signature Page to Stock and Warrant Purchase and Exchange Agreement

<PAGE>

                                            VECTIS CP HOLDINGS, LLC
                                            a Delaware limited liability company

                                            By:    VECTIS GROUP, LLC,
                                                   its Managing Member

                                            By: /s/ Matthew Hobart
                                               ---------------------------------
                                                Name:
                                                Title:



       Signature Page to Stock and Warrant Purchase and Exchange Agreement
<PAGE>

                                            CENWELL LIMITED


                                            By: /s/ Cenwell Limited
                                               ---------------------------------
                                                Name:
                                                Title:


                                            CAMPINA ENTERPRISES LIMITED


                                            By: /s/ Campina Enterprises
                                               ---------------------------------
                                                Name:
                                                Title:



       Signature Page to Stock and Warrant Purchase and Exchange Agreement

<PAGE>

                                                                      Schedule I

                                  Coinvestors

Vectis CP Holdings, LLC

Cenwell Limited

Campina Enterprises Limited


<PAGE>

                                                                    Schedule 2.1

                       Purchased Shares and Purchase Price


<TABLE>
<CAPTION>
          Purchaser                  Purchased Shares              Purchase Price
          ---------                  ----------------              --------------
<S>                                  <C>                           <C>
GAP LP                                    581,688                   $7,998,210.00

GAP Coinvestment                           82,097                   $1,128,833.75

GapStar                                    44,252                     $608,465.00

Vectis CP Holdings, LLC                   581,818                   $7,999,997.50

Cenwell Limited                           436,364                   $5,999,998.13

Campina Enterprises Limited               436,363                   $5,999,998.12

                     Total:              2,162,582                 $29,735,502.50
</TABLE>


<PAGE>

                                                                    Schedule 2.2

         Exchange Shares, Purchase Price of GAP SubNotes and Face Amount

<TABLE>
<CAPTION>
                                                 Purchase Price of           Face Amount of
      GAP Purchaser     Exchange Shares            GAP Sub Notes             GAP Sub Notes
      -------------     ---------------            -------------             -------------
<S>                     <C>                      <C>                       <C>
GAP LP                      1,509,530            $   20,756,133.52         $   53,097,000.00

GAP Coinvestment              213,049            $    2,929,477.46         $    7,494,000.00

GapStar                       114,839            $    1,578,884.37         $    4,039,000.00

Total:                      1,837,418            $   25,264,495.35         $   64,630,000.00
</TABLE>


<PAGE>

                                                                    Schedule 2.3

                        Warrant Shares and Purchase Price


<TABLE>
<CAPTION>
      GAP Purchaser                  Warrant Shares       Purchase Price
      -------------                  --------------       --------------
<S>                                  <C>                  <C>
GAP LP                                  2,053,874           $  821.55

GAP Coinvestment                         289,876            $  115.95

GapStar                                  156,250            $   62.50

                       Total:           2,500,000           $1,000.00
</TABLE>



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.9
<SEQUENCE>7
<FILENAME>f80193ex4-9.txt
<DESCRIPTION>EXHIBIT 4.9
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.9
================================================================================


                             STOCKHOLDERS AGREEMENT

                                      among

                              CRITICAL PATH, INC.,


                       GENERAL ATLANTIC PARTNERS 74, L.P.,


                       GAP COINVESTMENT PARTNERS II, L.P.,


                                  GAPSTAR, LLC

                                       and

                          THE STOCKHOLDERS NAMED HEREIN

                             Dated: November 8, 2001

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


<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                     Page
                                                                                     ----
<S>     <C>                                                                          <C>
1.      Definitions...................................................................1

2.      Future Issuance of Shares; Preemptive Rights..................................5
        2.1    Offering Notice........................................................5
        2.2    Preemptive Rights; Exercise............................................5
        2.3    Closing................................................................6
        2.4    Sale to Subject Purchaser..............................................7

3.      Corporate Governance..........................................................7
        3.1    Board of Directors; Number and Composition.............................7
        3.2    Reimbursement of Expenses; D&O Insurance...............................8
        3.3    Meetings of the Board of Directors.....................................8
        3.4    Annual Budget..........................................................8

4.      Standstill; Nasdaq Matters....................................................8
        4.1    Standstill.............................................................8
        4.2    Nasdaq Matters.........................................................9

5.      Miscellaneous................................................................10
        5.1    Notices...............................................................10
        5.2    Successors and Assigns; Third Party Beneficiary.......................11
        5.3    Amendment and Waiver..................................................12
        5.4    Counterparts..........................................................12
        5.5    Specific Performance..................................................12
        5.6    Headings..............................................................12
        5.7    GOVERNING LAW.........................................................12
        5.8    Severability..........................................................12
        5.9    Rules of Construction.................................................13
        5.10   Entire Agreement......................................................13
        5.11   Term of Agreement.....................................................13
        5.12   Further Assurances....................................................13
</TABLE>


EXHIBITS

A              Articles of Incorporation
B              By-laws


                                       i
<PAGE>

                             STOCKHOLDERS AGREEMENT

                STOCKHOLDERS AGREEMENT (this "Agreement"), dated November 8,
2001, among Critical Path, Inc., a California corporation (the "Company"),
General Atlantic Partners 74, L.P., a Delaware limited partnership ("GAP LP"),
GAP Coinvestment Partners II, L.P., a Delaware limited partnership ("GAP
Coinvestment"), GapStar, LLC, a Delaware limited liability company ("GapStar"),
and the Persons listed on Schedule 1 hereto (the "Coinvestors").

                WHEREAS, pursuant to the Stock and Warrant Purchase and Exchange
Agreement, dated November 8, 2001 (the "Stock Purchase Agreement"), among the
Company, GAP LP, GAP Coinvestment, GapStar and the Coinvestors, the Company has
agreed to (i) issue and sell to GAP LP, GAP Coinvestment, GapStar and the
Coinvestors an aggregate of 708,037 shares of Series D Cumulative Redeemable
Convertible Participating Preferred Stock, par value $0.001 per share, of the
Company (the "Series D Preferred Stock"), (ii) issue and deliver to GAP LP, GAP
Coinvestment and GapStar an aggregate of 1,837,418 shares of Series D Preferred
Stock in exchange for a certain amount of convertible subordinated notes of the
Company and (iii) issue and sell to GAP LP, GAP Coinvestment and GapStar
warrants (the "Warrants") to purchase, at an exercise price of $1.05 per share,
an aggregate of 2,500,000 shares of Common Stock; and

                WHEREAS, pursuant to an Escrow Agreement, dated the date hereof,
among the Company, GAP LP, GAP Coinvestment, GapStar, the Coinvestors and
Pillsbury Winthrop LLP, as Escrow Agent (the "Escrow Agreement"), the parties
have agreed to consummate the transactions contemplated by the Stock Purchase
Agreement in escrow, including the execution and delivery of this Agreement; and

                WHEREAS, the parties hereto wish to provide for, among other
things, preemptive rights, corporate governance rights and standstill
obligations and certain other rights under certain conditions.

                NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:

                1. Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:

                "Affiliate" shall mean any Person who is an "affiliate" as
defined in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act.

                "Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.

                "Board of Directors" means the Board of Directors of the
Company.


<PAGE>
                                                                               2


                "Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in the State of New York or the State of
California are authorized or required by law or executive order to close.

                "Cenwell Stockholders" has the meaning set forth in Section
4.1(c) of this Agreement.

                "Charter Documents" means the Articles of Incorporation and the
By-laws of the Company as in effect on the date hereof after giving effect to
the filing of the Certificate of Designation with respect to the Series D
Preferred Stock with the Secretary of State of the State of California, copies
of which are attached hereto as Exhibits A and B, respectively.

                "Coinvestors" has the meaning set forth in the preamble to this
Agreement.

                "Coinvestor Stockholders" means the Coinvestors and any
Affiliate of a Coinvestor that, after the date hereof, acquires Shares, and the
term "Coinvestor Stockholder" shall mean any such person.

                "Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.

                "Common Stock" means the Common Stock, par value $.001 per
share, of the Company and any other capital stock of the Company into which such
stock is reclassified or reconstituted and any other common stock of the
Company.

                "Common Stock Equivalents" means any security or obligation
which is by its terms convertible, exchangeable or exercisable into or for
shares of Common Stock, including, without limitation the Series D Preferred
Stock, and any option, warrant or other subscription or purchase right with
respect to Common Stock or any Common Stock Equivalent.

                "Company" has the meaning set forth in the preamble to this
Agreement.

                "Escrow Agreement" has the meaning set forth in the recitals to
this Agreement.

                "Excess New Securities" has the meaning set forth in Section
2.2(a) of this Agreement.

                "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.

                "Exempt Issuances" has the meaning set forth in Section 2.1 of
this Agreement.


<PAGE>
                                                                               3


                "GAP Coinvestment" has the meaning set forth in the preamble to
this Agreement.

                "GAP LLC" means General Atlantic Partners, LLC, a Delaware
limited liability company and the general partner of GAP LP and the managing
member of GapStar, and any successor to such entity.

                "GAP LP" has the meaning set forth in the preamble to this
Agreement.

                "GapStar" has the meaning set forth in the preamble to this
Agreement.

                "General Atlantic Director" has the meaning set forth in Section
3.2(a) of this Agreement.

                "General Atlantic Stockholders" means GAP LP, GAP Coinvestment,
GapStar, GmbH Coinvestment and any Affiliate of GAP LLC that, after the date
hereof, acquires Shares, and the term "General Atlantic Stockholder" shall mean
any such Person.

                "GmbH Coinvestment" means GAPCO GmbH & Co. KG, a German limited
partnership.

                "Governmental Authority" means the government of any nation,
state, city, locality or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.

                "Independent Director" means a director of the Company who is
considered an independent director for purposes of the Nasdaq Marketplace Rules
in effect from time to time.

                "Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or preference, priority,
right or other security interest or preferential arrangement of any kind or
nature whatsoever (excluding preferred stock and equity related preferences).

                "Nasdaq" means The Nasdaq Stock Market, Inc.

                "New Issuance Notice" has the meaning set forth in Section 2.1
of this Agreement.

                "New Securities" has the meaning set forth in Section 2.1 of
this Agreement.

                "Person" means any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited


<PAGE>
                                                                               4


liability company, Governmental Authority or other entity of any kind, and shall
include any successor (by merger or otherwise) of such entity.

                "Preemptive Rightholder(s)" has the meaning set forth in Section
2.1 of this Agreement.

                "Proportionate Percentage" has the meaning set forth in Section
2.2(a) of this Agreement.

                "Proposed Price" has the meaning set forth in Section 2.1 of
this Agreement.

                "Requirement of Law" means, as to any Person, any law, statute,
treaty, rule, regulation, right, privilege, qualification, license or franchise
or determination of an arbitrator or a court or other governmental authority or
stock exchange, in each case applicable or binding upon such Person or any of
its property or to which such Person or any of its property is subject or
pertaining to any or all of the transactions contemplated or referred to herein.

                "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.

                "Series D Preferred Stock" has the meaning set forth in the
recitals to this Agreement.

                "Shares" means, with respect to each Stockholder, all shares,
whether now owned or hereafter acquired, of Common Stock and Series D Preferred
Stock, and any other Common Stock Equivalents owned thereby; provided, however,
for the purposes of any computation of the number of Shares pursuant to Sections
2.2 and 5.3, all outstanding Common Stock Equivalents shall be deemed converted,
exercised or exchanged as applicable and the shares of Common Stock issuable
upon such conversion, exercise or exchange shall be deemed outstanding, whether
or not such conversion, exercise or exchange has actually been effected.

                "Standstill Ceiling" has the meaning set forth in Section 4.1(a)
of this Agreement.

                "Standstill Expiration Date" means November 8, 2008.

                "Stock Option Plans" means the Company's stock option plans and
employee purchase plans pursuant to which shares of restricted stock and options
to purchase shares of Common Stock are reserved and available for grant to
officers, directors, employees and consultants of the Company.

                "Stock Purchase Agreement" has the meaning set forth in the
recitals to this Agreement.


<PAGE>
                                                                               5


                "Stockholders" means the General Atlantic Stockholders and the
Coinvestor Stockholders.

                "Stockholders Meeting" has the meaning set forth in Section 4.2
of this Agreement.

                "Subject Purchaser" has the meaning set forth in Section 2.1 of
this Agreement.

                "Vectis Stockholders" has the meaning set forth in Section
4.1(c) of this Agreement.

                "Warrants" has the meaning set forth in the recitals to this
Agreement.

                "Written Consent" has the meaning set forth in Section 4.2 of
this Agreement.

                2. Future Issuance of Shares; Preemptive Rights.

                2.1 Offering Notice. Except for (a) options to purchase Common
Stock or restricted stock which may be issued pursuant to the Stock Option
Plans, (b) a subdivision of the outstanding shares of Common Stock into a larger
number of shares of Common Stock, (c) capital stock issued upon exercise,
conversion or exchange of any Common Stock Equivalent either (x) previously
issued or (y) issued in accordance with the terms of this Agreement, (d) capital
stock of the Company issued in consideration of an acquisition, approved by the
Board of Directors, by the Company of another Person, (e) shares of Common Stock
issued as a dividend on the Series D Preferred Stock and (f) shares of Common
Stock or Common Stock Equivalents issued in strategic transactions (which may
not be private equity or venture capital financing transactions) approved by the
Board of Directors to Persons that are not principally engaged in financial
investing ((a)-(f) being referred to collectively as "Exempt Issuances"), if the
Company wishes to issue any capital stock or any other securities convertible
into or exchangeable for capital stock of the Company pursuant to a private
placement exempt from registration under the Securities Act, other than any such
private placement that is made solely to Qualified Institutional Buyers (as
defined in the Securities Act) in reliance on Rule 144A promulgated under the
Securities Act (collectively, "New Securities") to any Person (the "Subject
Purchaser"), then the Company shall offer such New Securities first to each of
the General Atlantic Stockholders and the Coinvestor Stockholders (each, a
"Preemptive Rightholder" and collectively, the "Preemptive Rightholders") by
sending written notice (the "New Issuance Notice") to the Preemptive
Rightholders, which New Issuance Notice shall state (x) the number of New
Securities proposed to be issued and (y) the proposed purchase price per
security of the New Securities (the "Proposed Price"). Upon delivery of the New
Issuance Notice, such offer shall be irrevocable unless and until the rights
provided for in Section 2.2 shall have been waived or shall have expired.

                        2.2 Preemptive Rights; Exercise.


<PAGE>
                                                                               6


                                (a) For a period of twenty (20) days after the
giving of the New Issuance Notice pursuant to Section 2.1, each of the
Preemptive Rightholders shall have the right to purchase its Proportionate
Percentage (as hereinafter defined) of the New Securities at a purchase price
equal to the Proposed Price and upon the same terms and conditions set forth in
the New Issuance Notice. Each Preemptive Rightholder shall have the right to
purchase that percentage of the New Securities determined by dividing (x) the
total number of Shares then owned by such Preemptive Rightholder by (y) the
total number of Shares owned by all of the Preemptive Rightholders (the
"Proportionate Percentage"). If any Preemptive Rightholder does not fully
subscribe for the number or amount of New Securities that it or he is entitled
to purchase pursuant to the preceding sentence, then each Preemptive Rightholder
which elected to purchase New Securities shall have the right for a five (5) day
period to purchase that percentage of the remaining New Securities not so
subscribed for (for the purposes of this Section 2.2(a), the "Excess New
Securities") determined by dividing (x) the total number of Shares then owned by
such fully participating Preemptive Rightholder by (y) the total number of
Shares then owned by all fully participating Preemptive Rightholders who elected
to purchase Excess New Securities. Each of the Stockholders may transfer all or
any portion of its rights to purchase New Securities under this Section 2 to any
of its Affiliates.

                                (b) The right of each Preemptive Rightholder to
purchase the New Securities or Excess New Securities, as the case may be, under
subsection (a) above shall be exercisable by delivering written notice of the
exercise thereof, prior to the expiration of the 20-day period referred to in
subsection (a) above with respect to New Securities or prior to the expiration
of the 5-day period referred to in subsection (a) above with respect to Excess
New Securities, to the Company, which notice shall state the amount of New
Securities that such Preemptive Rightholder elects to purchase pursuant to
Section 2.2(a). The failure of a Preemptive Rightholder to respond within such
20-day or 5-day period shall be deemed to be a waiver of such Preemptive
Rightholder's rights under Section 2.2(a), provided that each Preemptive
Rightholder may waive its rights under Section 2.2(a) prior to the expiration of
such 20-day or 5-day period by giving written notice to the Company.

                        2.3 Closing. The closing of the purchase of New
Securities or Excess New Securities subscribed for by the Preemptive
Rightholders under Section 2.2 shall be held at the executive office of the
Company at 11:00 a.m., local time, on (a) the 30th day after the giving of the
New Issuance Notice pursuant to Section 2.1, if the Preemptive Rightholders
elect to purchase all of the New Securities under Section 2.2, (b) the date of
the closing of the sale to the Subject Purchaser made pursuant to Section 2.4 if
the Preemptive Rightholders elect to purchase some, but not all, of the New
Securities under Section 2.2 or (c) at such other time and place as the parties
to the transaction may agree. At such closing, the Company shall deliver
certificates representing the New Securities, and such New Securities shall be
issued free and clear of all Liens (other than those attributable to actions by
the purchasers thereof) and the Company shall so represent and warrant, and
further represent and warrant (in addition to other customary representations
and warranties) that such New Securities shall be, upon


<PAGE>
                                                                               7


issuance thereof to the Preemptive Rightholders and after payment therefor, duly
authorized, validly issued, fully paid and non-assessable. Each Preemptive
Rightholder purchasing the New Securities shall deliver at the closing payment
in full in immediately available funds for the New Securities purchased by him
or it. At such closing all of the parties to the transaction shall execute such
additional documents as are customary for transactions of this type.

                        2.4 Sale to Subject Purchaser. The Company may sell to
the Subject Purchaser all of the New Securities not purchased by the Preemptive
Rightholders pursuant to Section 2.2 on terms and conditions that are no more
favorable to the Subject Purchaser than those set forth in the New Issuance
Notice; provided, however, that such sale is bona fide and made pursuant to a
contract entered into within ninety (90) days following the earlier to occur of
(i) the waiver by the Preemptive Rightholders of their option to purchase New
Securities or Excess New Securities pursuant to Section 2.2, or (ii) the
expiration of the 20-day or 5-day period referred to in Section 2.2. If such
sale is not consummated within such 90-day period for any reason, then the
restrictions provided for herein shall again become effective, and no issuance
and sale of New Securities may be made thereafter by the Company without again
offering the same in accordance with this Section 2. The closing of any issuance
and sale pursuant to this Section 2.4 shall be held at a time and place as the
parties to the transaction may agree within such 90-day period.

                3. Corporate Governance.

                        3.1 Board of Directors; Number and Composition.

                                (a) The Company shall take all actions
reasonably necessary to cause the nomination to the Board of Directors of one
(1) individual designated by the General Atlantic Stockholders but only if the
General Atlantic Stockholders are not entitled to elect one director of the
Company by virtue of their rights as the holders of a majority of the shares of
Series D Preferred Stock (the "General Atlantic Director").

                                (b) In addition, the Company shall cause each
committee of the Board of Directors to include at least one General Atlantic
Director, whether elected pursuant to this Agreement or by virtue of the rights
of the General Atlantic Stockholders as holders of Series D Preferred Stock.

                                (c) In addition, the Company shall cause one
additional Independent Director to be appointed to the Board of Directors within
six (6) months of the date hereof. The initial appointment of the Independent
Director shall be approved by a majority of the Board of Directors.

                                (d) In addition, the Company shall cause, as
long as Cenwell Stockholders continues to own at least 750,000 shares of Series
D Preferred Stock (subject to adjustment for stock splits, stock dividends in
similar transactions) one


<PAGE>
                                                                               8


(1) individual designated by the Cenwell Stockholders to serve as a non-voting
observer on the Board of Directors.

                        3.2 Reimbursement of Expenses; D&O Insurance. The
Company shall reimburse the General Atlantic Director for all reasonable travel
and accommodation expenses incurred by him in connection with the performance of
his duties as director of the Company upon presentation of appropriate
documentation therefor. The Company shall use reasonable commercial efforts to
maintain a directors' liability insurance policy that is reasonably acceptable
to the Board of Directors.

                        3.3 Meetings of the Board of Directors. The Company
agrees to take such actions as are necessary to cause the Board of Directors to
meet in person or telephonically not less frequently than once during each
calendar month.

                        3.4 Annual Budget. Not less than thirty (30) days prior
to the end of each fiscal year, the Company shall prepare and submit to the
Board of Directors for its approval an annual operating budget of the Company
for the next succeeding fiscal year in reasonable detail.

                4. Standstill; Nasdaq Matters.

                        4.1 Standstill. Without the approval or written consent
of the Board of Directors, none of the General Atlantic Stockholders or any of
their Affiliates, and none of the Coinvestor Stockholders or any of their
respective Affiliates shall, severally and not jointly, at any time prior to the
Standstill Expiration Date:

                                (a) purchase or otherwise acquire, or propose or
offer to purchase or acquire, any shares of the Company's capital stock, whether
by tender offer, market purchase, privately negotiated purchase, merger or
otherwise, any shares of the Company's capital stock or any Common Stock
Equivalents in excess of the number of shares of the Company's capital stock and
Common Stock Equivalents purchased pursuant to the Stock Purchase Agreement
(subject to adjustments and issuances of additional Common Stock Equivalents
pursuant to the Series D Preferred Stock Certificate of Designation) with
respect to each such Stockholder and its Affiliates considered severally and not
jointly with any other Stockholder and its Affiliates (the "Standstill
Ceiling"); provided, however, that in no event shall any such Stockholder
acquire any Shares in a transaction in such an amount that when aggregated with
the shares of the Company's capital stock already owned by such Stockholder, the
acquisition of such shares of the Company's capital stock would require
stockholder approval under applicable Nasdaq rules and policies; and provided,
further, that the dividends that accrue on the shares of Series D Preferred
Stock pursuant to the terms thereof shall be excluded for purposes of
calculating whether or not a Stockholder and its Affiliates have exceeded the
Standstill Ceiling;

                                (b) except as specified in this Agreement, make,
or in any way participate, directly or indirectly, in any "solicitation" of
"proxy" (as such terms are defined or used in Regulation 14A of the Exchange
Act) to vote, or seek to advise or


<PAGE>
                                                                               9


influence any Person with respect to the voting of, any shares of the Company's
capital stock, or become a "participant" in any "election contest" (as such
terms are used or defined in Regulation 14A of the Exchange Act) relating to the
election of directors of the Company; provided, however, that none of the
General Atlantic Stockholders, the Coinvestor Stockholders or any of their
respective Affiliates shall be deemed to have engaged in a "solicitation" or to
have become a "participant" by reason of the membership of designees of the
General Atlantic Stockholders, the Coinvestor Stockholders or any of their
respective Affiliates on the Board of Directors;

                        (c) form, join or in any way participate in a "group"
(within the meaning of Section 13(d)(3) of the Exchange Act) or otherwise act in
concert with any Person for the purpose of acquiring, holding, voting or
disposing of any shares of the Company's capital stock; provided, however, that
(i) the General Atlantic Stockholders may act as a group for the purpose of
acquiring, holding, voting or disposing of any shares of the Company's capital
stock, (ii) Vectis CP Holdings, LLC and any Affiliate thereof that acquires
shares of the Company's capital stock (the "Vectis Stockholders") may act as a
group for the purpose of acquiring, holding, voting or disposing of any shares
of the Company's capital stock and (iii) Cenwell Limited, Campina Enterprises
Limited and any Affiliate thereof that acquires shares of the Company's capital
stock (the "Cenwell Stockholders") may act as a group for the purpose of
acquiring, holding, voting or disposing of any shares of the Company's capital
stock; and provided further, that, for the avoidance of doubt, the General
Atlantic Stockholders, the Vectis Stockholders and the Cenwell Stockholders may
not together act as a group for all purpose of acquiring, holding, voting or
disposing of any shares of the Company's capital stock; or

                        (d) request the Company (or its directors, officers,
employees or agents), to take any action which would reasonably be expected to
require pursuant to law the Company to make a public announcement or proposal or
offer with respect to (i) any form of business combination or transaction
involving the Company including, without limitation, a merger, consolidation,
tender or exchange offer, sale or purchase of assets, or dissolution or
liquidation of the Company or (ii) instigate, encourage or assist any Person to
do any of the foregoing.

                4.2 Nasdaq Matters. The Company shall use all commercially
reasonable efforts to maintain the quotation and listing on Nasdaq of all of the
shares of Common Stock issuable upon conversion of the Series D Preferred Stock
and all of the shares of Common Stock issuable upon exercise of the Warrants. In
addition, each of the General Atlantic Stockholders agree that as long as it is
required to do so by Nasdaq, at any regular or special meeting of shareholders
of the Company ("Stockholders Meeting") or in any written consent executed in
lieu of such a Stockholders Meeting (a "Written Consent"), it will cause all
voting securities owned in the aggregate by the General Atlantic Stockholders
that would at any such Stockholders Meeting or in connection with any Written
Consent constitute more than 19.99% of the outstanding voting power of the
Company entitled to vote at such Stockholders Meeting or via such Written
Consent to be


<PAGE>
                                                                              10


voted in the same proportion as the other shares of the Company's Common Stock
(other than any held by the General Atlantic Stockholder) are voted.

                5. Miscellaneous.

                5.1 Notices. All notices, demands or other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first class mail, return receipt requested, telecopier,
courier service or personal delivery:

                             (a)    if to the Company:

                                    Critical Path, Inc.
                                    532 Folsom Street
                                    San Francisco, CA  94105
                                    Telecopy:  (415) 808-8898
                                    Attention:  Chief Financial Officer

                                    with a copy to, which shall not constitute
                                    notice:

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

                             (b)    if to any of the General Atlantic
                                    Stockholders:

                                    c/o General Atlantic Service Corporation

                                    3 Pickwick Plaza
                                    Greenwich, CT  06830
                                    Telecopy:  (203) 622-8818
                                    Attention:  Matthew Nimetz

                                    with a copy to, which shall not constitute
                                    notice:

                                    Paul, Weiss, Rifkind, Wharton & Garrison
                                    1285 Avenue of the Americas
                                    New York, NY  10019-6064
                                    Telecopy: (212) 757-3990
                                    Attention: Douglas A. Cifu, Esq.


<PAGE>
                                                                              11


                             (c)    if to the Coinvestor Stockholders:

                                    (i)     if to Vectis CP Holdings, LLC:

                                            c/o Vectis Group, LLC
                                            117 Greenwich Street
                                            San Francisco, CA  94111
                                            Telecopy:  415-352-5310
                                            Attention:  Matthew Hobart

                                            with a copy to, which shall not
                                            constitute notice:

                                            Kirkland & Ellis
                                            153 East 53rd Street
                                            New York, NY  10022-4675
                                            Telecopy: 212-446-4900
                                            Attention:  Michael Movsovich, Esq.

                                    (ii)    if to Cenwell Limited

                                            c/o 7th Floor
                                            Cheung Kong Center
                                            2 Queen's Road Central
                                            Hong Kong
                                            Telecopy:  (852) 2845-2057
                                            Attention:  Mr. Edmond lp

                                     (iii)  if to Campina Enterprises Limited

                                            c/o 22nd Floor
                                            Hutchison House
                                            10 Harcourt Road
                                            Hong Kong
                                            Telecopy:  (852) 2128-1778
                                            Attention:  Company Secretary

All such notices, demands and other communications shall be deemed to have been
duly given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial courier service; five (5) Business Days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is mechanically acknowledged, if telecopied. Any party may by notice given in
accordance with this Section 5.1 designate another address or Person for receipt
of notices hereunder.

                        5.2 Successors and Assigns; Third Party Beneficiary.
This Agreement shall inure to the benefit of and be binding upon successors and
permitted


<PAGE>
                                                                              12


assigns of the parties hereto. No person other than the parties hereto and their
successors and permitted assigns is intended to be a beneficiary of this
Agreement.

                        5.3 Amendment and Waiver.

                                (a) No failure or delay on the part of any party
hereto in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
parties hereto at law, in equity or otherwise.

                                (b) Any amendment, supplement or modification of
or to any provision of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure by any party from the terms of any
provision of this Agreement, shall be effective only if it is made or given in
writing and signed by (i) the Company, (ii) the General Atlantic Stockholders
and (iii) the Coinvestor Stockholders holding a majority of the voting power of
the Shares held by the Coinvestor Stockholders; provided, however, that to the
extent that any such amendment or waiver adversely affects any of the
Stockholders, such amendment or waiver shall require the prior written consent
of each Stockholder so adversely affected; provided further, that any
Stockholder may waive in writing any right that inures to such Stockholder. Any
such amendment, supplement, modification, waiver or consent shall be binding
upon the Company and all of the Stockholders.

                        5.4 Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.

                        5.5 Specific Performance. The parties hereto intend that
each of the parties have the right to seek damages or specific performance in
the event that any other party hereto fails to perform such party's obligations
hereunder. Therefore, if any party shall institute any action or proceeding to
enforce the provisions hereof, any party against whom such action or proceeding
is brought hereby waives any claim or defense therein that the plaintiff party
has an adequate remedy at law.

                        5.6 Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

                        5.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.

                        5.8 Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or


<PAGE>
                                                                              13


unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.

                        5.9 Rules of Construction. Unless the context otherwise
requires, references to sections or subsections refer to sections or subsections
of this Agreement.

                        5.10 Entire Agreement. This Agreement, together with the
exhibits hereto, is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein and therein. There are no restrictions, promises,
representations, warranties or undertakings, other than those set forth herein
or therein or set forth in the Stock Purchase Agreement. This Agreement,
together with the exhibits hereto, supersedes all prior agreements and
understandings among the parties with respect to such subject matter.

                        5.11 Term of Agreement. Unless the Escrow Termination
Date (as defined in the Escrow Agreement) shall have occurred, in which case
this Agreement shall terminate and be void and of no further force or effect,
this Agreement shall become effective upon the Escrow Release Date (as defined
in the Escrow Agreement) and shall thereafter terminate upon the earlier of (a)
with respect to a particular Stockholder, on the date that such Stockholder and
its Affiliates beneficially own less than 5% of the actual outstanding shares of
Common Stock (assuming conversion of the shares of Series D Preferred Stock) or
(b) the twentieth anniversary of the date hereof.

                        5.12 Further Assurances. Each of the parties shall, and
shall cause their respective Affiliates to, execute such documents and perform
such further acts as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement.

                  [Remainder of page intentionally left blank]



<PAGE>

                IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Stockholders Agreement on the date first written
above.

                             CRITICAL PATH, INC.


                             By:    /s/ Laureen DeBuono
                                    -------------------------------
                                    Name:
                                    Title:


                             GENERAL ATLANTIC PARTNERS 74, L.P.

                             By:  GENERAL ATLANTIC PARTNERS, LLC,
                                      its General Partner

                             By:    /s/ William Ford
                                    -------------------------------
                                    Name:
                                    Title:  A Managing Member

                             GAP COINVESTMENT PARTNERS II, L.P.


                             By:    /s/ William Ford
                                    -------------------------------
                                    Name:
                                    Title:  A General Partner

                             GAPSTAR, LLC

                             By:    GENERAL ATLANTIC PARTNERS, LLC,
                                     its Managing Member

                             By:    /s/ William Ford
                                    -------------------------------
                                    Name:
                                    Title:  A Managing Member


<PAGE>

                             VECTIS CP HOLDINGS, LLC,
                             a Delaware limited liability company

                             By:    VECTIS GROUP, LLC,
                                    its Managing Member

                             By:    /s/ Matthew Hobart
                                    -------------------------------
                                    Name:
                                    Title:


<PAGE>

                             CENWELL LIMITED


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


                           CAMPINA ENTERPRISES LIMITED

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


<PAGE>

                                                                      Schedule I

                                   Coinvestors

Vectis CP Holdings, LLC
Cenwell Limited
Campina Enterprises Limited




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.10
<SEQUENCE>8
<FILENAME>f80193ex4-10.txt
<DESCRIPTION>EXHIBIT 4.10
<TEXT>
<PAGE>
                                                                    EXHIBIT 4.10

                          REGISTRATION RIGHTS AGREEMENT

                                      among

                               CRITICAL PATH, INC.

                       GENERAL ATLANTIC PARTNERS 74, L.P.,

                       GAP COINVESTMENT PARTNERS II, L.P.,

                                  GAPSTAR, LLC

                                       and

                         THE OTHER PARTIES LISTED HEREIN

                            ------------------------
                             Dated: November 8, 2001
                            ------------------------



<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                    Page
                                                                                    ----
<S>     <C>                                                                         <C>
1.      Definitions...................................................................1

2.      General; Securities Subject to this Agreement.................................4
        (a)    Grant of Rights........................................................4
        (b)    Registrable Securities.................................................5
        (c)    Holders of Registrable Securities......................................5

3.      Demand Registration...........................................................5
        (a)    Request for Demand Registration........................................5
        (b)    Incidental or "Piggy-Back" Rights with Respect to a Demand
               Registration...........................................................6
        (c)    Effective Demand Registration..........................................6
        (d)    Expenses...............................................................7
        (e)    Underwriting Procedures................................................7
        (f)    Selection of Underwriters..............................................8

4.      Incidental or "Piggy-Back" Registration.......................................8
        (a)    Request for Incidental Registration....................................8
        (b)    Expenses...............................................................8

5.      Holdback Agreements...........................................................9
        (a)    Restrictions on Public Sale by Designated Holders......................9
        (b)    Restrictions on Public Sale by the Company.............................9

6.      Registration Procedures.......................................................9
        (a)    Obligations of the Company.............................................9
        (b)    Seller Information....................................................12
        (c)    Notice to Discontinue.................................................12
        (d)    Registration Expenses.................................................13

7.      Indemnification; Contribution................................................13
        (a)    Indemnification by the Company........................................13
        (b)    Indemnification by Designated Holders.................................14
        (c)    Conduct of Indemnification Proceedings................................14
        (d)    Contribution..........................................................15

8.      Rule 144.....................................................................16

9.      Miscellaneous................................................................16
        (a)    Recapitalizations, Exchanges, etc.....................................16
        (b)    No Inconsistent Agreements............................................16
        (c)    Remedies..............................................................16
        (d)    Amendments and Waivers................................................17
        (e)    Notices...............................................................17
</TABLE>



                                       i
<PAGE>

<TABLE>
<CAPTION>
                                                                                    Page
                                                                                    ----
<S>     <C>                                                                         <C>
        (f)    Successors and Assigns; Third Party Beneficiaries.....................19
        (g)    Counterparts..........................................................19
        (h)    Headings..............................................................19
        (i)    GOVERNING LAW.........................................................19
        (j)    Severability..........................................................19
        (k)    Rules of Construction.................................................20
        (l)    Entire Agreement......................................................20
        (m)    Further Assurances....................................................20
        (n)    Other Agreements......................................................20
</TABLE>


                                       ii
<PAGE>

                         REGISTRATION RIGHTS AGREEMENT

        REGISTRATION RIGHTS AGREEMENT, dated November 8, 2001 (this
"Agreement"), among Critical Path, Inc., a California corporation (the
"Company"), General Atlantic Partners 74, L.P., a Delaware limited partnership
("GAP LP"), GAP Coinvestment Partners II, L.P., a Delaware limited partnership
("GAP Coinvestment"), GapStar, LLC, a Delaware limited liability company
("GapStar"), Cenwell Limited ("Cenwell"), Campina Enterprises Limited
("Campina") and Vectis CP Holdings, LLC, a Delaware limited liability company
("Vectis").

        WHEREAS, pursuant to the Stock and Warrant Purchase Agreement, dated
November 8, 2001 (the "Stock Purchase Agreement"), among the Company, GAP LP,
GAP Coinvestment, GapStar, Cenwell, Campina and Vectis, the Company has agreed
to (i) issue and sell to GAP LP, GAP Coinvestment, GapStar, Cenwell, Campina and
Vectis, an aggregate of 2,162,582 shares of Series D Cumulative Redeemable
Convertible Participating Series D Preferred Stock, par value $0.001 per share,
of the Company (the "Series D Preferred Stock"), (ii) issue and deliver to GAP
LP, GAP Coinvestment and GapStar an aggregate of 1,837,418 shares of Series D
Preferred Stock in exchange for a certain amount of convertible subordinated
notes of the Company and (iii) issue and sell to GAP LP, GAP Coinvestment and
GapStar warrants to purchase, at an exercise price of $1.05 per share, an
aggregate of 2,500,000 shares of Common Stock (as hereinafter defined) (the
"Warrants");

        WHEREAS, pursuant to an Escrow Agreement, dated the date hereof, among
the Company, GAP LP, GAP Coinvestment, GapStar, Cenwell, Campina, Vectis and
Pillsbury Winthrop, LLP, as Escrow Agent (the "Escrow Agreement"), the parties
have agreed to consummate the transaction contemplated by the Stock Purchase
Agreement in escrow, including the execution and delivery of this Agreement; and

        WHEREAS, in order to induce (i) each of GAP LP, GAP Coinvestment,
GapStar, Cenwell, Campina and Vectis to purchase shares of Series D Preferred
Stock and (ii) each of GAP LP, GAP Coinvestment and GapStar to purchase the
Warrants, the Company has agreed to grant registration rights with respect to
the Registrable Securities (as hereinafter defined) as set forth in this
Agreement.

        NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:

        1. Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:

        "Affiliate" shall mean any Person who is an "affiliate" as defined in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

        "Agreement" mean this Agreement as the same may be amended, supplemented
or modified in accordance with the terms hereof.


<PAGE>
                                                                               2


        "Approved Underwriter" has the meaning set forth in Section 3(f) of this
Agreement.

        "Board of Directors" means the Board of Directors of the Company.

        "Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in the State of New York are authorized or required by
law or executive order to close.

        "Campina" has the meaning set forth in the preamble to this Agreement.

        "Cenwell" has the meaning set forth in the preamble to this Agreement.

        "Cenwell Stockholders" means Cenwell, Campina and any Affiliates thereof
that, after the date hereof, acquires Registrable Securities.

        "Commission" means the Securities and Exchange Commission or any similar
agency then having jurisdiction to enforce the Securities Act.

        "Common Stock" means the Common Stock, par value $0.001 per share, of
the Company or any other capital stock of the Company into which such stock is
reclassified or reconstituted and any other common stock of the Company.

        "Company" has the meaning set forth in the preamble to this Agreement.

        "Company Underwriter" has the meaning set forth in Section 4(a) of this
Agreement.

        "Demand Registration" has the meaning set forth in Section 3(a) of this
Agreement.

        "Designated Holder" means each of the General Atlantic Stockholders, the
Cenwell Stockholders, the Vectis Stockholders and any transferee of any of them
to whom Registrable Securities have been transferred in accordance with Section
9(f) of this Agreement, other than a transferee to whom Registrable Securities
have been transferred pursuant to a Registration Statement under the Securities
Act or Rule 144 (or any successor rule thereto).

        "Escrow Agreement" has the meaning set forth in the recitals to this
Agreement.

        "Escrow Release Date" has the meaning set forth in the Escrow Agreement.

        "Escrow Termination Date" has the meaning set forth in the Escrow
Agreement.


<PAGE>
                                                                               3


        "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.

        "GAP Coinvestment" has the meaning set forth in the preamble to this
Agreement.

        "GAP LLC" means General Atlantic Partners, LLC, a Delaware limited
liability company and the general partner of GAP LP and the managing member of
GapStar, and any successor to such entity.

        "GAP LP" has the meaning set forth in the preamble to this Agreement.

        "GapStar" has the meaning set forth in the preamble to this Agreement.

        "General Atlantic Stockholders" means GAP LP, GAP Coinvestment, GapStar,
GmbH Coinvestment and any Affiliate of GAP LLC that, after the date hereof,
acquires Registrable Securities.

        "GmbH Coinvestment" means GAPCO GmbH & Co. KG, a German limited
partnership.

        "Holders' Counsel" has the meaning set forth in Section 6(a)(i) of this
Agreement.

        "Incidental Registration" has the meaning set forth in Section 4(a) of
this Agreement.

        "Indemnified Party" has the meaning set forth in Section 7(c) of this
Agreement.

        "Indemnifying Party" has the meaning set forth in Section 7(c) of this
Agreement.

        "Initiating Holders" has the meaning set forth in Section 3(a) of this
Agreement.

        "Inspector" has the meaning set forth in Section 6(a)(vii) of this
Agreement.

        "Liability" has the meaning set forth in Section 7(a) of this Agreement.

        "NASD" means the National Association of Securities Dealers, Inc.

        "Person" means any individual, firm, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, limited liability company, government (or an
agency or political subdivision thereof) or other entity of any kind, and shall
include any successor (by merger or otherwise) of such entity.


<PAGE>
                                                                               4


        "Public Offering" means any public offering of the shares of Common
Stock of the Company pursuant to an effective Registration Statement filed under
the Securities Act.

        "Records" has the meaning set forth in Section 6(a)(vii) of this
Agreement.

        "Registrable Securities" means each of the following: (a) any and all
shares of Common Stock issued or issuable upon conversion of shares of Series D
Preferred Stock or exercise of the Warrants, (b) any other shares of Common
Stock acquired or owned by any of the Designated Holders after the date hereof
if such Designated Holder is an Affiliate of the Company and (c) any shares of
Common Stock issued or issuable to any of the Designated Holders with respect to
the Registrable Securities by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise and any shares of Common Stock or voting
common stock issuable upon conversion, exercise or exchange thereof.

        "Registration Expenses" has the meaning set forth in Section 6(d) of
this Agreement.

        "Registration Statement" means a Registration Statement filed pursuant
to the Securities Act.

        "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.

        "Series D Preferred Stock" has the meaning set forth in the recitals to
this Agreement.

        "Stock Purchase Agreement" has the meaning set forth in the recitals to
this Agreement.

        "Valid Business Reason" has the meaning set forth in Section 3(a) of
this Agreement.

        "Vectis" has the meaning set forth in the preamble of this Agreement.

        "Vectis Stockholders" means Vectis and any Affiliate thereof that, after
the date hereof, acquires Registrable Securities.

        "Warrants" has the meaning set forth in the recitals to this Agreement.

        2. General; Securities Subject to this Agreement.

                (a) Grant of Rights. Unless the Escrow Termination Date shall
have occurred, in which case this Agreement shall terminate and be void and of
no further force or effect, then effective upon the Escrow Release Date, the
Company hereby


<PAGE>
                                                                               5


grants registration rights to the Designated Holders upon the terms and
conditions set forth in this Agreement.

                (b) Registrable Securities. For the purposes of this Agreement,
Registrable Securities will cease to be Registrable Securities, when (i) a
Registration Statement covering such Registrable Securities has been declared
effective under the Securities Act by the Commission and such Registrable
Securities have been disposed of pursuant to such effective Registration
Statement, (ii) (x) the entire amount of the Registrable Securities owned by a
Designated Holder may be sold in a single sale, in the opinion of counsel
satisfactory to the Company and such Designated Holder, each in their reasonable
judgment, without any limitation as to volume pursuant to Rule 144 (or any
successor provision then in effect) under the Securities Act and (y) such
Designated Holder owning such Registrable Securities owns less than one percent
(1%) of the outstanding shares of Common Stock on a fully diluted basis, or
(iii) the Registrable Securities are proposed to be sold or distributed by a
Person not entitled to the registration rights granted by this Agreement.

                (c) Holders of Registrable Securities. A Person is deemed to be
a holder of Registrable Securities whenever such Person owns of record
Registrable Securities, or holds an option to purchase, or a security
convertible into or exercisable or exchangeable for, Registrable Securities
whether or not such acquisition or conversion has actually been effected. If the
Company receives conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the Company may act
upon the basis of the instructions, notice or election received from the
registered owner of such Registrable Securities. Registrable Securities issuable
upon exercise of an option or upon conversion of another security shall be
deemed outstanding for the purposes of this Agreement.

        3. Demand Registration.

                (a) Request for Demand Registration. At any time commencing one
year after the date hereof, either the General Atlantic Stockholders or the
Cenwell Stockholders (the "Initiating Holders"), may each make a written request
to the Company to register, and the Company shall register, under the Securities
Act and on an appropriate registration statement form as reasonably determined
by the Company and approved by the Initiating Holders (a "Demand Registration"),
the number of Registrable Securities stated in such request; provided, however,
that the Company shall not be obligated to effect more than one such Demand
Registration for the General Atlantic Stockholders (subject to Section 3(e)(ii)
below) and more than one such Demand Registration for the Cenwell Stockholders
(subject to Section 3(e)(ii) below). If following receipt of a written request
for a Demand Registration the Board of Directors, in its good faith judgment,
determines that any registration of Registrable Securities should not be made or
continued because it would materially interfere with any material financing,
acquisition, corporate reorganization or merger or other material transaction
involving the Company (a "Valid Business Reason"), the Company may (x) postpone
filing a Registration Statement relating to a Demand Registration until such
Valid Business Reason no longer exists, but in no event for more than ninety
(90) days, and


<PAGE>
                                                                               6


(y) in case a Registration Statement has been filed relating to a Demand
Registration, if the Valid Business Reason has not resulted from actions taken
by the Company, the Company, upon the approval of a majority of the Board of
Directors, such majority to include at least one Director appointed by the
General Atlantic Stockholders, may cause such Registration Statement to be
withdrawn and its effectiveness terminated or may postpone amending or
supplementing such Registration Statement. The Company shall give written notice
of its determination to postpone or withdraw a Registration Statement and of the
fact that the Valid Business Reason for such postponement or withdrawal no
longer exists, in each case, promptly after the occurrence thereof.
Notwithstanding anything to the contrary contained herein, the Company may not
postpone or withdraw a filing under this Section 3(a) more than once in any
twelve (12) month period. Each request for a Demand Registration by the
Initiating Holders shall state the amount of the Registrable Securities proposed
to be sold and the intended method of disposition thereof.

                (b) Incidental or "Piggy-Back" Rights with Respect to a Demand
Registration. Each of the Designated Holders (other than Initiating Holders
which have requested a registration under Section 3(a)) may offer its or his
Registrable Securities under any Demand Registration pursuant to this Section
3(b). Within five (5) days after the receipt of a request for a Demand
Registration from an Initiating Holder, the Company shall (i) give written
notice thereof to all of the Designated Holders (other than Initiating Holders
which have requested a registration under Section 3(a)) and (ii) subject to
Section 3(e), include in such registration all of the Registrable Securities
held by such Designated Holders from whom the Company has received a written
request for inclusion therein within ten (10) days of the receipt by such
Designated Holders of such written notice referred to in clause (i) above. Each
such request by such Designated Holders shall specify the number of Registrable
Securities proposed to be registered. The failure of any Designated Holder to
respond within such 10 day period referred to in clause (ii) above shall be
deemed to be a waiver of such Designated Holder's rights under this Section 3
with respect to such Demand Registration. Any Designated Holder may waive its
rights under this Section 3 prior to the expiration of such 10-day period by
giving written notice to the Company, with a copy to the Initiating Holders. If
a Designated Holder sends the Company a written request for inclusion of part or
all of such Designated Holder's Registrable Securities in a registration, such
Designated Holder shall not be entitled to withdraw or revoke such request
without the prior written consent of the Company in its sole discretion unless,
as a result of facts or circumstances arising after the date on which such
request was made relating to the Company or to market conditions, such
Designated Holder reasonably determines that participation in such registration
would have a material adverse effect on such Designated Holder.

                (c) Effective Demand Registration. The Company shall use all
commercially reasonable efforts to cause any such Demand Registration to be
filed not later than thirty (30) days after it receives a request under Section
3(a) hereof and to become and remain effective as soon as practicable thereafter
but, in any event, not later than ninety (90) days after such filing. A
registration shall not constitute a Demand Registration until it has become
effective and remains continuously effective for the lesser of (i) the period
during which all Registrable Securities registered in the Demand Registration
are sold and (ii) 120 days; provided, however, that a registration shall not


<PAGE>
                                                                               7


constitute a Demand Registration if (x) after such Demand Registration has
become effective, such registration or the related offer, sale or distribution
of Registrable Securities thereunder is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court for any reason not attributable to the Initiating Holders and
such interference is not thereafter eliminated or (y) the conditions specified
in the underwriting agreement, if any, entered into in connection with such
Demand Registration are not satisfied or waived, other than by reason of a
failure by the Initiating Holder.

                (d) Expenses. The Company shall pay all Registration Expenses in
connection with a Demand Registration, whether or not such Demand Registration
becomes effective.

                (e) Underwriting Procedures.

                        (i) If the Company or the Initiating Holders holding a
majority of the Registrable Securities held by all of the Initiating Holders so
elect, the Company shall use all commercially reasonable efforts to cause such
Demand Registration to be in the form of a firm commitment underwritten offering
and the managing underwriter or underwriters selected for such offering shall be
the Approved Underwriter selected in accordance with Section 3(f). In connection
with any Demand Registration under this Section 3 involving an underwritten
offering, none of the Registrable Securities held by any Designated Holder
making a request for inclusion of such Registrable Securities pursuant to
Section 3(b) hereof shall be included in such underwritten offering unless such
Designated Holder accepts the terms of the offering as agreed upon by the
Company, the Initiating Holders and the Approved Underwriter, and then only in
such quantity as will not, in the opinion of the Approved Underwriter,
jeopardize the success of such offering by the Initiating Holders. If the
Approved Underwriter advises the Company in its reasonable opinion that the
aggregate amount of such Registrable Securities requested to be included in such
offering is sufficiently large to have a material adverse effect on the success
of such offering, then the Company shall include in such registration only the
aggregate amount of Registrable Securities that the Approved Underwriter
believes may be sold without any such material adverse effect and shall reduce
the amount of Registrable Securities to be included in such registration by
removing from such registration securities owned, first by the Company and
second by the Designated Holders (including the Initiating Holders) pro rata
based on the number of Registrable Securities owned by each such Designated
Holder.

                        (ii) If an Initiating Holder makes a request for a
Demand Registration and, pursuant to Section 3(e)(i) above, the Approved
Underwriter advises the Company to reduce the aggregate amount of Registrable
Securities requested to be included in such offering such that less than
seventy-five percent (75%) of the Registrable Securities requested to be
included by any Initiating Holder are ultimately included in and sold pursuant
to such Demand Registration, the Initiating Holder shall have the right to
require the Company to effect an additional Demand Registration; provided,
however, that in no event shall the aggregate number of Demand Registrations to
be effected by the Company for any one Initiating Holder exceed two (2).


<PAGE>
                                                                               8


                (f) Selection of Underwriters. If any Demand Registration of
Registrable Securities is in the form of an underwritten offering, the Company
shall select and obtain an investment banking firm of national reputation to act
as the managing underwriter of the offering (the "Approved Underwriter");
provided, however, that the Approved Underwriter shall, in any case, also be
approved by the Initiating Holders.

        4. Incidental or "Piggy-Back" Registration.

                (a) Request for Incidental Registration. If at any time the
Company proposes to file a Registration Statement under the Securities Act with
respect to an offering by the Company for its own account (other than a
Registration Statement on Form S-4 or S-8 or any successor thereto) or for the
account of any stockholder of the Company other than the Designated Holders,
then the Company shall give written notice of such proposed filing to each of
the Designated Holders at least twenty (20) days before the anticipated filing
date, and such notice shall describe the proposed registration and distribution
and offer such Designated Holders the opportunity to register the number of
Registrable Securities as each such Designated Holder may request (an
"Incidental Registration"). The Company shall use all commercially reasonable
efforts (within twenty (20) days of the notice provided for in the preceding
sentence) to cause the managing underwriter or underwriters in the case of a
proposed underwritten offering (the "Company Underwriter") to permit each of the
Designated Holders who have requested in writing to participate in the
Incidental Registration to include its or his Registrable Securities in such
offering on the same terms and conditions as the securities of the Company or
the account of such other stockholder, as the case may be, included therein. In
connection with any Incidental Registration under this Section 4(a) involving an
underwritten offering, the Company shall not be required to include any
Registrable Securities in such underwritten offering unless the Designated
Holders thereof accept the terms of the underwritten offering as agreed upon
between the Company, such other stockholders, if any, and the Company
Underwriter, and then only in such quantity as the Company Underwriter believes
will not jeopardize the success of the offering by the Company. If the Company
Underwriter determines that the registration of all or part of the Registrable
Securities which the Designated Holders have requested to be included would
materially adversely affect the success of such offering, then the Company shall
be required to include in such Incidental Registration, to the extent of the
amount that the Company Underwriter believes may be sold without causing such
adverse effect, first, all of the securities to be offered for the account of
the Company or on the account of the selling stockholder that caused the
registration statement that has triggered the Incidental Registration to be
filed, as the case may be; second, the Registrable Securities to be offered for
the account of the Designated Holders pursuant to this Section 4, pro rata based
on the number of Registrable Securities owned by each such Designated Holder;
and third, any other securities requested to be included in such offering.

                (b) Expenses. The Company shall bear all Registration Expenses
in connection with any Incidental Registration pursuant to this Section 4,
whether or not such Incidental Registration becomes effective.


<PAGE>
                                                                               9


        5. Holdback Agreements.

                (a) Restrictions on Public Sale by Designated Holders. To the
extent (i) requested (A) by the Company or the Initiating Holders, as the case
may be, in the case of a non-underwritten public offering and (B) by the
Approved Underwriter or the Company Underwriter, as the case may be, in the case
of an underwritten public offering and (ii) all of the Company's officers,
directors and holders in excess of one percent (1%) of its outstanding capital
stock execute agreements identical to those referred to in this Section 5(a),
each Designated Holder agrees (x) not to effect any public sale or distribution
of any Registrable Securities or of any securities convertible into or
exchangeable or exercisable for such Registrable Securities, including a sale
pursuant to Rule 144 under the Securities Act, or offer to sell, contract to
sell (including without limitation any short sale), grant any option to purchase
or enter into any hedging or similar transaction with the same economic effect
as a public sale any Registrable Securities and (y) not to make any request for
a Demand Registration under this Agreement, during the ninety (90) day period or
such shorter period, if any, mutually agreed upon by such Designated Holder and
the requesting party beginning on the effective date of the Registration
Statement (except as part of such registration) for such public offering. No
Designated Holder of Registrable Securities subject to this Section 5(a) shall
be released from any obligation under any agreement, arrangement or
understanding entered into pursuant to this Section 5(a) unless all other
Designated Holders of Registrable Securities subject to the same obligation are
also released. All Designated Holders of Registrable Securities shall be
automatically released from any obligations under any agreement, arrangement or
understanding entered into pursuant to this Section 5(a) immediately upon the
expiration of the 90 day period.

                (b) Restrictions on Public Sale by the Company. The Company
agrees not to effect any public sale or distribution of any of its securities,
or any securities convertible into or exchangeable or exercisable for such
securities (except pursuant to registrations on Form S-4 or S-8 or any successor
thereto), during the period beginning on the effective date of any Registration
Statement in which the Designated Holders of Registrable Securities are
participating and ending on the earlier of (i) the date on which all Registrable
Securities registered on such Registration Statement are sold and (ii) 120 days
after the effective date of such Registration Statement (except as part of such
registration).

        6. Registration Procedures.

                (a) Obligations of the Company. Whenever registration of
Registrable Securities has been requested pursuant to Section 3 or Section 4 of
this Agreement, the Company shall use all commercially reasonable efforts to
effect the registration and sale of such Registrable Securities in accordance
with the intended method of distribution thereof as quickly as practicable, and
in connection with any such request, the Company shall, as expeditiously as
possible:

                        (i) prepare and file with the Commission a Registration
Statement on any form for which the Company then qualifies or which counsel for
the

<PAGE>
                                                                              10


Company shall deem appropriate and which form shall be available for the sale of
such Registrable Securities in accordance with the intended method of
distribution thereof, and cause such Registration Statement to become effective;
provided, however, that (x) before filing a Registration Statement or prospectus
or any amendments or supplements thereto, the Company shall provide counsel
selected by the Designated Holders holding a majority of the Registrable
Securities being registered in such registration ("Holders' Counsel") with an
adequate opportunity to review and comment on such Registration Statement and
each prospectus included therein (and each amendment or supplement thereto) to
be filed with the Commission, subject to such documents being under the
Company's control, and (y) the Company shall notify the Holders' Counsel and
each seller of Registrable Securities of any stop order issued or threatened by
the Commission and take all action required to prevent the entry of such stop
order or to remove it if entered;

                        (ii) prepare and file with the Commission such
amendments and supplements to such Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such Registration
Statement effective for the lesser of (x) 120 days and (y) such shorter period
which will terminate when all Registrable Securities covered by such
Registration Statement have been sold, and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such Registration
Statement;

                        (iii) furnish to each seller of Registrable Securities,
prior to filing a Registration Statement, at least one copy of such Registration
Statement as is proposed to be filed, and thereafter such number of copies of
such Registration Statement, each amendment and supplement thereto (in each case
including all exhibits thereto), and the prospectus included in such
Registration Statement (including each preliminary prospectus) and any
prospectus filed under Rule 424 under the Securities Act as each such seller may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such seller;

                        (iv) register or qualify such Registrable Securities
under such other securities or "blue sky" laws of such jurisdictions as any
seller of Registrable Securities may request, and to continue such qualification
in effect in such jurisdiction for as long as permissible pursuant to the laws
of such jurisdiction, or for as long as any such seller requests or until all of
such Registrable Securities are sold, whichever is shortest, and do any and all
other acts and things which may be reasonably necessary or advisable to enable
any such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller; provided, however, that the Company
shall not be required to (x) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 6(a)(iv), (y) subject itself to taxation in any such jurisdiction or (z)
consent to general service of process in any such jurisdiction;


<PAGE>
                                                                              11


                        (v) notify each seller of Registrable Securities at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such Registration Statement contains
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading and the
Company shall promptly prepare a supplement or amendment to such prospectus and
furnish to each seller of Registrable Securities a reasonable number of copies
of such supplement to or an amendment of such prospectus as may be necessary so
that, after delivery to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;

                        (vi) enter into and perform customary agreements
(including an underwriting agreement containing representations, warranties,
covenants and indemnities for securities law matters and otherwise in customary
form with the Approved Underwriter or Company Underwriter, if any, selected as
provided in Section 3 or Section 4, as the case may be) and take such other
actions as are prudent and reasonably required in order to expedite or
facilitate the disposition of such Registrable Securities, including causing its
officers to participate in "road shows" and other information meetings organized
by the Approved Underwriter or Company Underwriter;

                        (vii) make available at reasonable times for inspection
by any seller of Registrable Securities, any managing underwriter participating
in any disposition of such Registrable Securities pursuant to a Registration
Statement, Holders' Counsel and any attorney, accountant or other agent retained
by any such seller or any managing underwriter (each, an "Inspector" and
collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries
(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's and its
subsidiaries' officers, directors and employees, and the independent public
accountants of the Company, to supply all information reasonably requested by
any such Inspector in connection with such Registration Statement. Records that
the Company determines, in good faith, to be confidential and which it notifies
the Inspectors are confidential shall not be disclosed by the Inspectors (and
the Inspectors shall confirm their agreement in writing in advance to the
Company if the Company shall so request) unless (x) the disclosure of such
Records is necessary, in the Company's judgment, to avoid or correct a
misstatement or omission in the Registration Statement, (y) the release of such
Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction after exhaustion of all appeals therefrom or (z) the
information in such Records was known to the Inspectors on a non-confidential
basis prior to its disclosure by the Company or has been made generally
available to the public. Each seller of Registrable Securities agrees that it
shall, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company, at the
Company's expense, to undertake appropriate action to prevent disclosure of the
Records deemed confidential;



<PAGE>
                                                                              12


                        (viii) if such sale is pursuant to an underwritten
offering, obtain a "cold comfort" letters dated the effective date of the
Registration Statement and the date of the closing under the underwriting
agreement from the Company's independent public accountants in customary form
and covering such matters of the type customarily covered by "cold comfort"
letters as the managing underwriter reasonably requests;

                        (ix) furnish, at the request of any seller of
Registrable Securities on the date such securities are delivered to the
underwriters for sale pursuant to such registration or, if such securities are
not being sold through underwriters, on the date the Registration Statement with
respect to such securities becomes effective, an opinion, if reasonably
available, dated such date, of counsel representing the Company for the purposes
of such registration, addressed to the underwriters, if any, and to the seller
making such request, covering such legal matters with respect to the
registration in respect of which such opinion is being given as the
underwriters, if any, and such seller may reasonably request and are customarily
included in such opinions;

                        (x) comply with all applicable rules and regulations of
the Commission, and make available to its security holders, as soon as
reasonably practicable but no later than fifteen (15) months after the effective
date of the Registration Statement, an earnings statement covering a period of
twelve (12) months beginning after the effective date of the Registration
Statement, in a manner which satisfies the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;

                        (xi) cause all such Registrable Securities to be listed
on each securities exchange on which similar securities issued by the Company
are then listed, provided that the applicable listing requirements are
satisfied;

                        (xii) cooperate with each seller of Registrable
Securities and each underwriter participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with the NASD; and

                        (xiii) take all other steps reasonably necessary to
effect the registration of the Registrable Securities contemplated hereby.

                (b) Seller Information. The Company may require each seller of
Registrable Securities as to which any registration is being effected to
furnish, and such seller shall furnish, to the Company such information
regarding the distribution of such securities as the Company may from time to
time reasonably request in writing.

                (c) Notice to Discontinue. Each Designated Holder agrees that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 6(a)(v), such Designated Holder shall forthwith
discontinue disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until such Designated Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 6(a)(v) and, if so directed


<PAGE>
                                                                              13


by the Company, such Designated Holder shall deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Designated Holder's possession, of the prospectus covering such Registrable
Securities which is current at the time of receipt of such notice. If the
Company shall give any such notice, the Company shall extend the period during
which such Registration Statement shall be maintained effective pursuant to this
Agreement (including, without limitation, the period referred to in Section
6(a)(ii)) by the number of days during the period from and including the date of
the giving of such notice pursuant to Section 6(a)(v) to and including the date
when sellers of such Registrable Securities under such Registration Statement
shall have received the copies of the supplemented or amended prospectus
contemplated by and meeting the requirements of Section 6(a)(v).

                (d) Registration Expenses. The Company shall pay all expenses
arising from or incident to its performance of, or compliance with, this
Agreement, including, without limitation, (i) Commission, stock exchange and
NASD registration and filing fees, (ii) all fees and expenses incurred in
complying with securities or "blue sky" laws (including reasonable fees, charges
and disbursements of counsel to any underwriter incurred in connection with
"blue sky" qualifications of the Registrable Securities as may be set forth in
any underwriting agreement), (iii) all printing, messenger and delivery expenses
and (iv) the fees, charges and expenses of counsel to the Company and of its
independent public accountants and any other accounting fees, charges and
expenses incurred by the Company (including, without limitation, any expenses
arising from any "cold comfort" letters or any special audits incident to or
required by any registration or qualification) and any reasonable legal fees,
charges and expenses incurred by one counsel for the General Atlantic
Stockholders. All of the expenses described in the preceding sentence of this
Section 6(d) are referred to herein as "Registration Expenses." The Designated
Holders of Registrable Securities sold pursuant to a Registration Statement
shall bear the expense of any underwriter's discount or commission relating to
registration and sale of such Designated Holders' Registrable Securities.

        7. Indemnification; Contribution.

                (a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Designated Holder, its partners, directors,
officers, affiliates and each Person who controls (within the meaning of Section
15 of the Securities Act) such Designated Holder from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation) (each, a "Liability" and collectively, "Liabilities"), arising
out of or based upon any untrue, or allegedly untrue, statement of a material
fact contained in any Registration Statement, prospectus or preliminary
prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances under which such statements were made, except insofar as
such Liability arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission contained in such Registration
Statement, preliminary


<PAGE>
                                                                              14


prospectus or final prospectus in reliance and in conformity with information
concerning such Designated Holder furnished in writing to the Company by such
Designated Holder expressly for use therein, including, without limitation, the
information furnished to the Company pursuant to Section 7(b). The Company shall
also provide customary indemnities to any underwriters of the Registrable
Securities, their officers, directors and employees and each Person who controls
such underwriters (within the meaning of Section 15 of the Securities Act) to
the same extent as provided above with respect to the indemnification of the
Designated Holders of Registrable Securities.

                (b) Indemnification by Designated Holders. In connection with
any Registration Statement in which a Designated Holder is participating
pursuant to Section 3 or Section 4 hereof, each such Designated Holder shall
promptly furnish to the Company in writing such information with respect to such
Designated Holder as the Company may reasonably request or as may be required by
law for use in connection with any such Registration Statement or prospectus and
all information required to be disclosed in order to make the information
previously furnished to the Company by such Designated Holder not materially
misleading or necessary to cause such Registration Statement not to omit a
material fact with respect to such Designated Holder necessary in order to make
the statements therein not misleading. Each Designated Holder agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the Registration Statement, any underwriter retained by
the Company and each Person who controls the Company or such underwriter (within
the meaning of Section 15 of the Securities Act) to the same extent as the
foregoing indemnity from the Company to the Designated Holders, but only if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with information with respect to such Designated
Holder furnished in writing to the Company by such Designated Holder expressly
for use in such Registration Statement or prospectus, including, without
limitation, the information furnished to the Company pursuant to this Section
7(b); provided, however, that the total amount to be indemnified by such
Designated Holder pursuant to this Section 7(b) shall be limited to the net
proceeds (after deducting the underwriters' discounts and commissions) received
by such Designated Holder in the offering to which the Registration Statement or
prospectus relates.

                (c) Conduct of Indemnification Proceedings. Any Person entitled
to indemnification hereunder (the "Indemnified Party") agrees to give prompt
written notice to the indemnifying party (the "Indemnifying Party") after the
receipt by the Indemnified Party of any written notice of the commencement of
any action, suit, proceeding or investigation or threat thereof made in writing
for which the Indemnified Party intends to claim indemnification or contribution
pursuant to this Agreement; provided, however, that the failure so to notify the
Indemnifying Party shall not relieve the Indemnifying Party of any Liability
that it may have to the Indemnified Party hereunder (except to the extent that
the Indemnifying Party is materially prejudiced or otherwise forfeits
substantive rights or defenses by reason of such failure). If notice of
commencement of any such action is given to the Indemnifying Party as above
provided, the Indemnifying Party shall be entitled to participate in and, to the
extent it may wish, jointly with any other Indemnifying Party similarly
notified, to assume the defense of


<PAGE>
                                                                              15


such action at its own expense, with counsel chosen by it and reasonably
satisfactory to such Indemnified Party. The Indemnified Party shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be paid by the
Indemnified Party unless (i) the Indemnifying Party agrees to pay the same, (ii)
the Indemnifying Party fails to assume the defense of such action with counsel
reasonably satisfactory to the Indemnified Party or (iii) the named parties to
any such action (including any impleaded parties) include both the Indemnifying
Party and the Indemnified Party and such parties have been advised by such
counsel that either (x) representation of such Indemnified Party and the
Indemnifying Party by the same counsel would be inappropriate under applicable
standards of professional conduct or (y) there may be one or more legal defenses
available to the Indemnified Party which are different from or additional to
those available to the Indemnifying Party. In any of such cases, the
Indemnifying Party shall not have the right to assume the defense of such action
on behalf of such Indemnified Party, it being understood, however, that the
Indemnifying Party shall not be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for all
Indemnified Parties. No Indemnifying Party shall be liable for any settlement
entered into without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the consent of such
Indemnified Party, effect any settlement of any pending or threatened proceeding
in respect of which such Indemnified Party is a party and indemnity has been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability for claims
that are the subject matter of such proceeding.

                (d) Contribution. If the indemnification provided for in this
Section 7 from the Indemnifying Party is unavailable to an Indemnified Party
hereunder in respect of any Liabilities referred to herein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Liabilities in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions which resulted in such Liabilities, as well as any other relevant
equitable considerations. The relative faults of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the Liabilities referred to above shall be
deemed to include, subject to the limitations set forth in Sections 7(a), 7(b)
and 7(c), any legal or other fees, charges or expenses reasonably incurred by
such party in connection with any investigation or proceeding; provided that the
total amount to be contributed by such Designated Holder shall be limited to the
net proceeds (after deducting the underwriters' discounts and commissions)
received by such Designated Holder in the offering.


<PAGE>
                                                                              16


        The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.

        8. Rule 144. The Company covenants that it shall (a) file any reports
required to be filed by it under the Exchange Act and (b) take such further
action as each Designated Holder may reasonably request (including providing any
information necessary to comply with Rule 144 under the Securities Act), all to
the extent required from time to time to enable such Designated Holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144 under the Securities Act,
as such rule may be amended from time to time or (ii) any similar rules or
regulations hereafter adopted by the Commission. The Company shall, upon the
request of any Designated Holder, deliver to such Designated Holder a written
statement as to whether it has complied with such requirements.

        9. Miscellaneous.

                (a) Recapitalizations, Exchanges, etc. The provisions of this
Agreement shall apply to the full extent set forth herein with respect to (i)
the shares of Common Stock, (ii) any and all shares of voting common stock of
the Company into which the shares of Common Stock are converted, exchanged or
substituted in any recapitalization or other capital reorganization by the
Company and (iii) any and all equity securities of the Company or any successor
or assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in conversion of, in exchange for
or in substitution of, the shares of Common Stock and shall be appropriately
adjusted for any stock dividends, splits, reverse splits, combinations,
recapitalizations and the like occurring after the date hereof. The Company
shall use all commercially reasonable efforts to cause any successor or assign
(whether by merger, consolidation, sale of assets or otherwise) to enter into a
new registration rights agreement with the Designated Holders on terms
substantially the same as this Agreement as a condition of any such transaction.

                (b) No Inconsistent Agreements. The Company shall not enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the Designated Holders in this Agreement or grant any
additional registration rights to any Person or with respect to any securities
which are not Registrable Securities which are prior in right to or inconsistent
with the rights granted in this Agreement.

                (c) Remedies. The Designated Holders, in addition to being
entitled to exercise all rights granted by law, including recovery of damages,
shall be entitled to specific performance of their rights under this Agreement.
The Company agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agrees to


<PAGE>
                                                                              17


waive in any action for specific performance the defense that a remedy at law
would be adequate.

                (d) Amendments and Waivers. Except as otherwise provided herein,
the provisions of this Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless consented to in writing by (i) the Company and (ii) the General
Atlantic Stockholders, Cenwell Stockholders and Vectis Stockholders holding
Registrable Securities representing (after giving effect to any adjustments) at
least a majority of the aggregate number of Registrable Securities owned by all
of the General Atlantic Stockholders, Cenwell Stockholders and Vectis
Stockholders; provided, however, that to the extent any amendment or waiver
shall adversely affect any of the Stockholders, such amendment or waiver shall
require the prior written consent of each Stockholder so adversely affected. Any
such written consent shall be binding upon the Company and all of the Designated
Holders.

                (e) Notices. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be made
by registered or certified first-class mail, return receipt requested,
telecopier, courier service or personal delivery:

                             (i)    if to the Company:

                             Critical Path, Inc.
                             532 Folsom Street
                             San Francisco, CA 94105
                             Telecopy: (415) 808-8898
                             Attention:  Chief Financial Officer

                             with a copy to:

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

                             (ii)   if to GAP LP, GapStar or GAP Coinvestment:

                             c/o General Atlantic Service Company
                             3 Pickwick Plaza
                             Greenwich, CT  06830
                             Telecopy: (203) 622-8818
                             Attention: Matthew Nimetz


<PAGE>
                                                                              18


                             with a copy to:

                             Paul, Weiss, Rifkind, Wharton & Garrison
                             1285 Avenue of the Americas
                             New York, NY 10019-6064
                             Telecopy:  (212) 757-3990
                             Attention:  Douglas A. Cifu, Esq.

                             (iii)  if to Cenwell:


                             c/o 7th Floor
                             Cheung Kong Center
                             2 Queens Road Central
                             Hong Kong
                             Telecopy:  (852) 2845-2057
                             Attention:  Mr. Edmond lp

                             (iv)   if to Campina:

                             c/o 22nd Floor
                             Hutchison House
                             10 Harcourt Road
                             Hong Kong
                             Telecopy: (852) 2128-1778
                             Attention: Company Secretary

                             (v)    if to Vectis:

                             c/o Vectis Group, LLC
                             117 Greenwich Street
                             San Francisco, CA 94111
                             Telecopy: 415-352-5310
                             Attention: Matthew Hobart

                             with a copy to:

                             Kirkland & Ellis
                             153 East 53rd Street
                             New York, NY 10022-4675
                             Telecopy: 212-446-4900
                             Attention: Michael Movsovich, Esq.

                             (vi)   if to any other Designated Holder, at its
                                    address as it appears on the record books of
                                    the Company.


<PAGE>
                                                                              19


        All such notices, demands and other communications shall be deemed to
have been duly given when delivered by hand, if personally delivered; when
delivered by courier, if delivered by commercial courier service; five (5)
Business Days after being deposited in the mail, postage prepaid, if mailed; and
when receipt is mechanically acknowledged, if telecopied. Any party may by
notice given in accordance with this Section 9(e) designate another address or
Person for receipt of notices hereunder.

                (f) Successors and Assigns; Third Party Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties hereto as hereinafter provided. The Demand
Registration rights and related rights of the General Atlantic Stockholders or
the Cenwell Stockholders contained in Section 3 hereof shall be (i) with respect
to any Registrable Security that is transferred to an Affiliate of a General
Atlantic Stockholder or a Cenwell Stockholder, automatically transferred to such
Affiliate and (ii) with respect to any Registrable Security that is transferred
in all cases to a non-Affiliate, transferred only with the consent of the
Company which consent shall not be unreasonably withheld, conditioned or
delayed. The incidental or "piggy-back" registration rights of the Designated
Holders contained in Sections 3(b) and 4 hereof and the other rights of each of
the Designated Holders with respect thereto shall be, with respect to any
Registrable Security, automatically transferred to any Person who is the
transferee of such Registrable Security so long as such transferee agrees to be
bound by this Agreement. All of the obligations of the Company hereunder shall
survive any such transfer. Except as provided in Section 7, no Person other than
the parties hereto and their successors and permitted assigns is intended to be
a beneficiary of this Agreement.

                (g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                (h) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

                (i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.

                (j) Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.


<PAGE>
                                                                              20


                (k) Rules of Construction. Unless the context otherwise
requires, references to sections or subsections refer to sections or subsections
of this Agreement.

                (l) Entire Agreement. This Agreement is intended by the parties
as a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto
with respect to the subject matter contained herein. There are no restrictions,
promises, representations, warranties or undertakings with respect to the
subject matter contained herein, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among
the parties with respect to such subject matter.

                (m) Further Assurances. Each of the parties shall execute such
documents and perform such further acts as may be reasonably required or
desirable to carry out or to perform the provisions of this Agreement.

                (n) Other Agreements. Nothing contained in this Agreement shall
be deemed to be a waiver of, or release from, any obligations any party hereto
may have under, or any restrictions on the transfer of Registrable Securities or
other securities of the Company imposed by, any other agreement including, but
not limited to, the Stock Purchase Agreement or the Stockholders Agreement.

                     [Remainder of page intentionally left blank]



<PAGE>


                IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Registration Rights Agreement on the date first
written above.

                             CRITICAL PATH, INC.



                             By:    /s/ Laureen DeBuono
                                    --------------------------------------------
                                    Name:
                                    Title:



                             GENERAL ATLANTIC PARTNERS 74, L.P.

                                    By:     GENERAL ATLANTIC PARTNERS, LLC,
                                            its General Partner

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



                             GAP COINVESTMENT PARTNERS II, L.P.



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



                             GAPSTAR, LLC

                                    By:     GENERAL ATLANTIC PARTNERS, LLC,
                                            its Managing Member

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


<PAGE>

                             VECTIS CP HOLDINGS, LLC,
                             a Delaware limited liability company

                              By:   VECTIS GROUP, LLC

                                    its Managing Member

                             By:    /s/ Matthew Hobart
                                    --------------------------------------------
                                    Name:
                                    Title:



<PAGE>

                             CENWELL LIMITED



                             By:
                                    --------------------------------------------
                                    Name:
                                    Title:



                             CAMPINA ENTERPRISES LIMITED

                             By:
                                    --------------------------------------------
                                    Name:
                                    Title:



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.11
<SEQUENCE>9
<FILENAME>f80193ex4-11.txt
<DESCRIPTION>EXHIBIT 4.11
<TEXT>
<PAGE>
                                                                    EXHIBIT 4.11

                                ESCROW AGREEMENT

        ESCROW AGREEMENT, dated November 8, 2001 (this "Escrow Agreement"), by
and among General Atlantic Partners 74, L.P., a Delaware limited partnership,
GAP Coinvestment Partners II, L.P., a Delaware limited partnership, GapStar,
LLC, a Delaware limited liability company, Vectis CP Holdings, LLC , a Delaware
limited liability company, Cenwell Limited and Campina Enterprises Limited
(collectively, the "Purchasers"), Critical Path, Inc., a California Corporation
("Seller"), and Pillsbury Winthrop, LLP, as Escrow Agent (the "Escrow Agent").

        WHEREAS, the Purchasers and Seller are parties to the Stock and Warrant
Purchase and Exchange Agreement, dated the date hereof (the "Purchase
Agreement"), pursuant to which the (i) Purchasers are acquiring from Seller an
aggregate of 4,000,000 shares of Series D Cumulative Redeemable Convertible
Participating Preferred Stock, par value $0.001 per share, of Seller (the
"Series D Preferred Stock") and (ii) the GAP Purchasers (as defined in the
Purchase Agreement) are acquiring from the Seller warrants (the "Warrants"), to
purchase, at an exercise price of $1.05 per share, an aggregate of 2,500,000
shares of common stock, par value $0.001 per share, of Seller (the "Common
Stock");

        WHEREAS, the Purchase Agreement provides for the escrow hereby
established to be held by the Escrow Agent; and

        WHEREAS, capitalized terms used herein, unless otherwise indicated, have
the respective meanings ascribed to them in the Purchase Agreement.

        Accordingly, the parties agree as follows:

        1. Establishment of Escrow.

                1.1 Escrow Deposit.

                        1.1.1 On November 9, 2001, pursuant to (i) Section 2.1
of the Purchase Agreement, the Purchasers will deposit with the Escrow Agent
$29,735,502.50 representing the entire purchase price payable pursuant to
Section 2.1 for the Purchased Shares, (ii) Section 2.2 of the Purchase
Agreement, the GAP Purchasers will deposit with the Escrow Agent the GAP Sub
Notes in the aggregate face amount of $64,630,000 together with signed and
undated Note Powers for such GAP Sub Notes, and (iii) Section 2.3 of the
Purchase Agreement, the GAP Purchasers will deposit with the Escrow Agent
$1,000.00 representing the entire purchase price for the Warrants and (the items
in clause (i)-(iii) referred to collectively, as the "Purchasers' Deposit") to
be held and disbursed in accordance with the terms hereof.

                        1.1.2 On November 9, 2001, pursuant to Sections 2.1, 2.2
and 2.3 of the Purchase Agreement, Seller is depositing with the Escrow Agent
(i) stock certificates in definitive form representing the number of Purchased
Shares set forth opposite each Purchaser's name on Schedule 2.1 to the Purchase
Agreement, updated, but


<PAGE>
                                                                               2


registered in the name of such Purchasers, (ii) stock certificates in definitive
form representing the number of Exchange Shares set forth opposite each GAP
Purchaser's name on Schedule 2.2 to the Purchase Agreement, undated but
registered in the name of such GAP Purchaser, (iii) the GAP LP Warrant , (iv)
the GAP Coinvestment Warrant, and (v) the GapStar Warrant, (collectively, the
"Seller's Deposit" and, together with the Purchasers' Deposit, the "Deposit").

                        1.1.3 The Escrow Agent acknowledges receipt of and
agrees to accept the Deposit and establish and maintain a separate account for
each Purchaser's cash portion of the Deposit as provided herein (the "Escrow
Account").

                1.2 Escrow Fund. The cash portion of the Deposit, as from time
to time invested and reinvested as herein provided, less any distributions
pursuant hereto, is hereinafter referred to as the "Escrow Fund."

        2. Investment of Escrow Fund.

                2.1 Investment. The Escrow Agent shall invest any or all of the
Escrow Fund and any income or interest earned or accrued with respect thereto
only in time deposits and certificates of deposit of any commercial bank
incorporated in the United States of America of recognized standing having
capital and surplus in excess of $50,000,000. Except as otherwise provided in
Section 5.3, in no event shall the Escrow Agent have any liability for any
investment hereunder, including, without limitation, any loss of the principal
amount of any investment or in connection with the rate of return on any
investment.

                2.2 Distribution of Interest. All interest accrued from the date
hereof to and including the Escrow Release Date (as defined below) on
investments made pursuant to Section 2.1 shall be for the account of each of the
Purchasers. On the Escrow Release Date, the Escrow Agent shall distribute to
each of the Purchasers all interest then accrued for the account of each of the
Purchasers pursuant to this Section 2.2 and not theretofore distributed
hereunder.

        3. Distributions from the Escrow.

                3.1 Distributions.

                        3.1.1 Upon the satisfaction of the Escrow Release
Condition (as hereinafter defined) and the Nasdaq Escrow Approval Condition (as
hereinafter defined), the Purchasers shall execute and deliver to the Escrow
Agent a Certificate directing the Escrow Agent to take the action specified in
Section 3.1.2(a). Upon the satisfaction of the Escrow Release Condition, but not
the Nasdaq Escrow Approval Condition, Purchasers shall execute and deliver to
the Escrow Agent a Certificate directing the Escrow Agent to take the action
specified in Section 3.1.2(b). If subsequent to the delivery of the Certificate
referred to in the previous sentence and on or prior to March 31, 2002, the
Nasdaq Escrow Approval Condition is satisfied, the GAP Purchasers shall execute
and deliver to the Escrow Agent a Certificate directing the Escrow Agent to take
the action specified in Section 3.1.2(c).


<PAGE>
                                                                               3


                        3.1.2 (a) Upon receipt by the Escrow Agent of a
Certificate signed by the GAP Purchasers stating that the Escrow Release
Condition and the Nasdaq Escrow Approval Condition have occurred, the Escrow
Agent shall promptly, but in any case within 24 hours of receipt, (i) distribute
to Seller the Purchasers' Deposit and (ii) deliver to the Purchasers the
Seller's Deposit and the interest on the Escrow Fund payable pursuant to Section
2.2 of this Agreement.

                                (b) Upon receipt by the Escrow Agent of a
Certificate signed by the GAP Purchasers stating that the Escrow Release
Condition has occurred but the Nasdaq Escrow Approval Condition has not
occurred, the Escrow Agent shall promptly, but in any case within 24 hours, (i)
distribute to the Seller the Purchasers' Deposit, less the Consideration
Holdback Amount (as defined below) and (ii) deliver to the Purchasers the
Seller's Deposit, less the Purchased Shares Holdback (as defined below) and the
interest on the Escrow Fund payable pursuant to Section 2.2 of this Agreement.

                                (c) Upon receipt by the Escrow Agent of a
Certificate signed by the GAP Purchasers stating that the Nasdaq Escrow Approval
Condition has occurred, the Escrow Agent shall promptly, but in any case within
24 hours, (i) distribute to the Seller the Consideration Holdback Amount and
(ii) deliver to the GAP Purchasers the Purchased Shares Holdback.

                        3.1.3 For purposes of this Agreement, the "Escrow
Release Condition" shall mean the entry on or before January 31, 2002 of a final
order by District Court Judge William H. Orrick, not subject to further review,
approving an executed, final, Stipulation and Agreement of Settlement in the
litigation entitled In Re Critical Path Inc. Securities Litigation (the
"Actions") and that (A) provides for the certification of the "Class" (as
defined in paragraph 1 of the MOU), (B) contains terms and conditions for the
payment of cash and warrants to purchase the Common Stock to the Class that do
not differ from the amounts set forth in paragraph 2 of the MOU and (C)
dismisses the Action with prejudice as set forth in paragraph 3 of the MOU and
provides for a broad form general release for the Defendants and the other
parties as provided in paragraph 3 of the MOU.

                        3.1.4 "Escrow Release Date" shall mean the date upon
which the notice specified in the first sentence of Section 3.1.1 is delivered
by the GAP Purchasers.

                        3.1.5 "Nasdaq Escrow Approval Condition" means the
earlier to occur of (i) the date upon which the Company obtains written
confirmation from Nasdaq that the approval of a majority of the Company's
stockholders, present in person or proxy at a properly convened meeting of the
Company's stockholders ("Stockholder Approval") to the issuance of the shares of
Preferred Stock to the GAP Purchasers is not required under the applicable
Nasdaq rules and regulations and (ii) the date upon which the Company
consummates all action required by the Nasdaq and applicable California law to
obtain Stockholder Approval for the issuance to the GAP Purchasers of the
portion of the shares of Series D Preferred Stock that constitute the


<PAGE>
                                                                               4


amount of shares of Series D Preferred Stock (determined assuming conversion of
all of the shares of Series D Preferred Stock) in excess of 19.9% of the
outstanding shares of the Common Stock on the date hereof.

                        3.1.6 "Consideration Holdback Amount" shall mean a total
of $19,220,960, consisting of $9,485,464 aggregate purchase price amount (and
$24,265,101 aggregate face amount) of GAP Sub Notes and $9,735,496 of cash.

                        3.1.7 "Purchased Shares Holdback" shall mean a total of
1,397,888 shares of Preferred Stock.

                        3.1.8 On the earlier of (i) receipt of a joint notice
executed by all of the Purchasers and Seller or (ii) January 31, 2002 (the
"Escrow Termination Date"), the Escrow Agent shall return the Purchaser's
Deposit to the Purchasers and the Seller's Deposit to Seller.

                        3.1.9 If the Nasdaq Escrow Approval Condition has not
been satisfied by April 30, 2002, the Escrow Agent shall return the
Consideration Holdback Amount to the GAP Purchasers, together with any remaining
interest in the Escrow Account and return the Purchased Shares Holdback to the
Seller.

                3.2 Tax Reporting. Seller and each of the Purchasers
shall provide the Escrow Agent with its Tax Identification Number (TIN) as
assigned by the Internal Revenue Service. All interest or other income earned
under this Escrow Agreement shall be allocated and paid as provided herein and
reported by the recipient to the Internal Revenue Service as having been so
allocated and paid.

        4. Termination of this Escrow Agreement. This Escrow Agreement shall
terminate upon the distribution or return of all of the Purchasers' Deposit, all
of Seller's Deposit and all other sums and documents held by the Escrow Agent
pursuant to this Escrow Agreement.

        5. Duties of Escrow Agent.

                5.1 Duties Limited. The Escrow Agent shall perform only the
duties expressly set forth herein, and shall not have any liability under, or
duty to inquire into, the terms and provisions of any other agreement, including
but not limited to the Purchase Agreement, except as expressly set forth herein,
in performing its duties hereunder. Except as to the due execution and delivery
of this Escrow Agreement by a duly authorized officer, the Escrow Agent has no
responsibility as to the validity of this Escrow Agreement or any document
related thereto.

                5.2 Reliance. The Escrow Agent may rely upon, and shall incur no
liability for acting or refraining from acting upon, any written notice,
instruction, request, consent, certificate, statement or other document
furnished to it pursuant to this Escrow Agreement and believed by it to be
genuine and to have been signed or presented by the proper party or parties, and
the Escrow Agent shall be under no duty to inquire into or investigate the
validity, accuracy or content of any such document.


<PAGE>
                                                                               5


                5.3 Good Faith. In no event shall the Escrow Agent have any
liability for any error of judgment or for any act done or omitted by it in good
faith, or for any mistake of fact or law, or for anything which it may do or
refrain from doing hereunder, except for its own gross negligence or willful
misconduct arising out of or in connection with this Escrow Agreement. The
Purchasers and Seller agree to indemnify the Escrow Agent for, and defend and
hold it harmless against, any loss, liability or expense arising out of or in
connection with its actions as Escrow Agent hereunder, including the reasonable
costs and expenses incurred in defending any such claim of liability, except
that none of the Purchasers or the Seller shall be liable for any loss,
liability or expense incurred on account of the gross negligence or willful
misconduct on the part of the Escrow Agent. The Escrow Agent may consult with
counsel from time to time and the opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken or omitted
to be taken by the Escrow Agent hereunder or in good faith and in accordance
with the opinion of such counsel. The reasonable fees and disbursements of such
counsel shall be promptly paid one half by the Purchasers and one half by Seller
pursuant to the provisions of Section 7 hereof.

                5.4 Limited Notice. The Escrow Agent shall be deemed to have no
notice of, or duties with respect to, any agreement or agreements (whether or
not a copy thereof is delivered to the Escrow Agent), other than as expressly
set forth herein.

                5.5 Limited Actions. The Escrow Agent shall not take any action
by reason of any notice or instruction given by any of the parties or by any
other person, firm or corporation, except only (i) such notices or instructions
as are herein specifically provided for and (ii) orders or process of any court
entered or issued with competent jurisdiction. In the event that the Escrow
Agent shall be uncertain as to its duties or rights hereunder, it shall be
entitled to refrain from taking any action until it shall be directed otherwise
in writing by each of the Purchasers and Seller or by an order of a court of
competent jurisdiction.

                5.6 Conflicts.

                        5.6.1 In the event that any of the terms and provisions
of any other agreement between any of the parties conflict or are inconsistent
with any of the terms and provisions of this Escrow Agreement, the terms and
provisions of this Escrow Agreement shall govern and control in all respects the
duties and liabilities of the Escrow Agent.

                        5.6.2 In the event that the Escrow Agent shall be
uncertain as to its duties or rights hereunder or shall receive instructions,
claims or demands from any party hereto which, in its opinion, conflict with any
of the provisions of this Agreement, it shall be entitled to refrain from taking
any action and its sole obligation shall be to keep safely all property held in
escrow until it shall be directed otherwise in writing by all of the other
parties hereto or by a final order or judgment of a court of competent
jurisdiction.


<PAGE>
                                                                               6


        6. Resignation; Successor Escrow Agent.

                6.1 Resignation. The Escrow Agent may resign at any time by
giving 30 days' prior written notice of such resignation to the Purchasers and
Seller. On the 30th day following delivery of such notice, the Escrow Agent
shall have no further obligation hereunder except to hold the Escrow Fund and
any other amounts and documents held by it pursuant to this Escrow Agreement as
depositary. After resignation, the Escrow Agent shall have no further obligation
to invest amounts then in the Escrow Fund (absent written instructions with
respect thereto executed by the Seller and the Purchasers) and shall not take
any action until the Purchasers and Seller have jointly designated a successor
escrow agent. If the Purchasers and Seller are unable to agree upon a successor
escrow agent within 30 days of receipt of notice from the Escrow Agent, the
Escrow Agent may designate its successor, and if the Escrow Agent declines to
designate its successor, the Purchasers shall designate the successor escrow
agent. The Escrow Agent shall promptly deliver the Escrow Fund and any other
amounts and documents held by it pursuant to this Escrow Agreement to such
successor escrow agent and shall thereafter have no further obligations
hereunder. Upon receipt of the Escrow Fund and other amounts and documents, the
successor escrow agent shall thereupon be bound by all of the provisions hereof.

                6.2 Termination. The Purchasers and Seller acting jointly may
terminate the appointment of the Escrow Agent hereunder upon notice specifying
the date upon which such termination shall take effect. In the event of such
termination, the Purchasers and Seller shall jointly appoint and designate in
such termination notice a successor escrow agent and the Escrow Agent shall turn
over to such successor escrow agent the Escrow Fund and any other amounts and
documents held by it pursuant to this Escrow Agreement. Upon receipt of the
Escrow Fund and other amounts and documents, the successor escrow agent shall
thereupon be bound by all of the provisions hereof, and the Escrow Agent shall
have no further obligations hereunder.

        7. Fees and Expenses of Escrow Agent. The Purchasers and Seller shall
each pay directly to the Escrow Agent one half of the Escrow Agent's reasonable
fees for the Escrow Agent's services hereunder and all expenses, disbursements
and advances (including reasonable attorneys' fees) incurred in carrying out the
Escrow Agent's duties hereunder (the "Escrow Agent's Fees").

        8. Miscellaneous.

                8.1 Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, sent by facsimile transmission, overnight delivery service or
certified, registered or express mail, postage prepaid. Any such notice shall be
deemed given when so delivered personally, telegraphed or sent by facsimile
transmission, or by overnight delivery service, one day after the date of
deposit to such overnight delivery service or, if mailed, three days after the
date of deposit in the United States mail, as follows:


<PAGE>
                                                                               7


                      if to Seller:

                      Critical Path, Inc.
                      532 Folsom Street
                      San Francisco, CA 94105
                      Attention:  Chief Financial Officer
                      Telecopy:  (415) 808-8898

                      with a copy to:

                      Pillsbury Winthrop LLP
                      P.O. Box 7880
                      San Francisco, CA 94105-7880
                      Attention:  Gregg F. Vignos, Esq.
                      Telecopy:  (415) 983-1200

                      if to the GAP Purchasers:

                      c/o General Atlantic Service Corporation
                      3 Pickwick Plaza
                      Greenwich, CT 06830
                      Telecopy:  (203) 622-8818
                      Attention:  Matthew Nimetz

                      with a copy to:

                      Paul, Weiss, Rifkind, Wharton & Garrison
                      1285 Avenue of the Americas
                      New York, New York  10019-6064
                      Attention: Douglas A. Cifu, Esq.
                      Telecopy:  (212) 757-3990

                      if to Vectis CP Holdings, LLC:

                      c/o Vectis Group
                      117 Greenwich Street
                      San Francisco, CA 94111
                      Telecopy:  (415) 352-5310
                      Attention:  Matthew Hobart

                      with a copy to:

                      Kirkland & Ellis
                      153 East 53rd Street
                      New York, NY 10022-4675
                      Telecopy:  (212) 446-4900
                      Attention:  Michael Movsovich, Esq.


<PAGE>
                                                                               8


                      if to Cenwell Limited:

                      c/o 12th Floor
                      Cheung Kong Center
                      2 Queen's Road Central
                      Hong Kong
                      Telecopy:  852-2485-2057
                      Attention:  Mr. Edmond lp.

                      if to Campina Enterprises Limited:

                      c/o 22nd Floor
                      Hutchison House
                      10 Harcourt Road
                      Hong Kong
                      Telecopy:  852-2128-1778
                      Attention:  Company Secretary

                      if to the Escrow Agent:

                      Pillsbury Winthrop LLP
                      50 Fremont Street
                      San Francisco, CA 94104
                      Attention:  Gregg F. Vignos, Esq.
                      Telecopy:  415-983-1200

Any party may by notice given in accordance with this Section 8.1 to the other
parties designate another address for receipt of notices hereunder. In the event
that the Escrow Agent, in its sole discretion, shall determine that an emergency
exists, the Escrow Agent may use such other means of communication as the Escrow
Agent deems advisable. If any notice is required to be given to both the Escrow
Agent and another party, such notice shall be given in a manner that results in
the same effective date for each such notice.

                        8.1.1 In the event funds transfer instructions are given
(other than in writing at the time of execution of this Escrow Agreement),
whether in writing, by telecopier or otherwise, the Escrow Agent is authorized
to seek confirmation of such instructions by telephone call-back to the person
or persons designated on Schedule II hereto, and the Escrow Agent may rely upon
the confirmations of anyone purporting to be the person or persons so
designated. The persons and telephone numbers for call-backs may be changed only
in a writing actually received and acknowledged by the Escrow Agent. The parties
to this Agreement acknowledge that such security procedure is commercially
reasonable.

                        8.1.2 It is understood that the Escrow Agent and the
beneficiary's bank in any funds transfer may rely solely upon any account
numbers or


<PAGE>
                                                                               9


similar identifying number provided either of the other parties hereto to
identify (i) the beneficiary, (ii) the beneficiary's bank, or (iii) an
intermediary bank. The Escrow Agent may apply any of the escrowed funds for any
payment order it executes using any such identifying number, even where its use
may result in a person other than the beneficiary being paid, or transfer of
funds to a bank other than the beneficiary's bank, or an intermediary bank
designated.

                8.2 Entire Agreement. This Escrow Agreement is entered into and
delivered pursuant to the Purchase Agreement and sets forth the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior agreements, written or oral, with respect thereto.

                8.3 Governing Law. This Escrow Agreement shall be governed and
construed in accordance with the laws of the State of New York without regard to
its principles of conflicts of laws.

                8.4 Jurisdiction; Venue. Each of the parties hereto by its
execution hereof:

                        8.4.1 irrevocably submits to the jurisdiction of the
state courts of the State of New York and to the jurisdiction of the United
States District Court for the Southern District of New York, for the purpose of
any suit, action or other proceeding arising out of or based on this Agreement
or the subject matter hereof; and

                        8.4.2 waives to the extent not prohibited by applicable
law, and agrees not to assert, by way of motion, as a defense or otherwise, in
any such proceeding brought in any of the above-named courts, any claim that it
is not subject personally to the jurisdiction of such courts, that its property
is exempt or immune from attachment or execution, that any such proceeding
brought in an inconvenient forum, that the venue of such proceeding is improper,
or that this Agreement, or the subject matter hereof, may not be enforced in or
by such court.

The parties hereto hereby agree that any action brought under this Agreement
shall be brought in one of the above-mentioned courts.

The parties hereto hereby consent to service of process in any such proceeding
in any manner permitted by the laws of the State of New York, and agree that
service of process by registered or certified mail, return receipt requested, at
its address specified in or pursuant to Section 8.5 is reasonably calculated to
give actual notice.

                8.5 Binding Effect. This Escrow Agreement shall be binding upon
and inure to the benefit of the parties and their respective heirs, legal
representatives, successors and assigns.

                8.6 Waivers and Amendments. This Escrow Agreement may be
amended, modified, superseded, cancelled, renewed or extended, and the terms or
conditions hereof may be waived, only by a written instrument signed by the
parties, or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any


<PAGE>
                                                                              10


party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder.

                8.7 Counterparts. This Escrow Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

                8.8 Further Assurances. Each of the parties shall execute such
documents and other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby.

                8.9 Variations in Pronouns. All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person or persons may require.

                8.10 Headings. The headings in this Escrow Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Escrow Agreement.

                8.11 Conflict Waiver. Each party to this Escrow Agreement
acknowledges that the Escrow Agent is counsel for the Seller and has in the past
and will in the future perform legal services for Seller in matters related to
and unrelated to this Escrow Agreement and the parties hereto hereby (i)
acknowledge that they have had an opportunity to ask for information relevant to
this disclosure; (ii) acknowledge that the Escrow Agent represented the Seller
in the transaction contemplated by this Escrow Agreement and has not represented
any Purchaser in connection with such transaction; and (iii) give its informed
written consent to the representation of the Seller in connection with the
Purchase Agreement; and the transactions contemplated thereby, including
litigation arising thereunder.


<PAGE>
                                                                              11


                IN WITNESS WHEREOF, the parties have caused this Escrow
Agreement to be executed on the date first written above.

                                    GENERAL ATLANTIC PARTNERS 74, L.P.
                                    By: GENERAL ATLANTIC PARTNERS, LLC,
                                            its General Partner

                                    By:    /s/ William Ford
                                        ----------------------------------------
                                    Name:
                                    Title: A Managing Member

                                    Address for Notice to General Atlantic
                                    Partners 74, L.P., GAPp Coinvestment
                                    Partners II, L.P. and GapStar, LLC:

                                    c/o General Atlantic Service Corporation
                                    3 Pickwick Plaza
                                    Greenwich, CT 06830
                                    Attn: Matthew Nimetz
                                    Tel: 203-629-8600
                                    Fax: 203-622-8818

                                    With copies to:

                                    Paul, Weiss, Rifkind, Wharton & Garrison
                                    1285 Avenue of the Americas
                                    New York, NY 10019-60064
                                    Attn: Douglas A. Cifu, Esq.
                                    Tel:  212-373-3426
                                    Fax:  212-757-3990

                                    GAP COINVESTMENT PARTNERS II, L.P.

                                    By:    /s/ William Ford
                                        ----------------------------------------
                                    Name:
                                    Title: A General Partner

                                    GAPSTAR, LLC

                                    By: GENERAL ATLANTIC PARTNERS, LLC,
                                            its Managing Member

                                    By:    /s/ William Ford
                                        ----------------------------------------
                                    Name:
                                    Title: A Managing Member


<PAGE>
                                                                              12


                                    CENWELL LIMITED

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

                                    Address for Notice to Cenwell Limited:

                                    c/o 12th Floor
                                    Cheung Kong Center
                                    2 Queen's Road Central
                                    Hong Kong
                                    Attn:  Mr. Edmond lp.
                                    Fax:  852-2845-2057

                                    CAMPINA ENTERPRISES LIMITED

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

                                    c/o 22nd Floor
                                    Hutchison House
                                    10 Harcourt Road
                                    Hong Kong
                                    Attn:  Company Secretary
                                    Fax:  852-2128-1778

                                    VECTIS CP HOLDINGS, LLC,
                                    a Delaware limited liability company
                                    By: VECTIS GROUP LLC,
                                            its Managing Member

                                    By:     /s/ Matthew Hobart
                                        ----------------------------------------
                                    Name:
                                    Title:

                                    Address for Notice to Vectis CP Holdings,
                                    LLC:

                                    117 Greenwich Street
                                    San Francisco, CA 94111
                                    Attn: Matthew Hobart
                                    Fax: 415-352-5310


<PAGE>
                                                                              13


                                    CRITICAL PATH, INC.


                                    By:     /s/ Laureen DeBuono
                                        ----------------------------------------
                                    Name:
                                    Title:

                                    Address for Notice to Critical Path, Inc.:

                                    532 Folsom Street
                                    San Francisco, CA 94105
                                    Attn:  Chief Financial Officer
                                    Fax: (415) 808-8898

                                    With copies to:

                                    Pillsbury Winthrop LLP
                                    P.O. Box 7880
                                    San Francisco, CA 94120-7880
                                    Attention: Gregg F. Vignos
                                    Tel: 415-983-1000
                                    Fax: 415-983-1200

                                    PILLSBURY WINTHROP LLP,
                                    Escrow Agent

                                    By:     /s/ Gregg Vignos
                                        ----------------------------------------
                                    Name:
                                    Title:

                                    Address for Notice to the Escrow Agent:

                                    Pillsbury Winthrop LLP
                                    P.O. Box 7880
                                    San Francisco, CA 94120-7880
                                    Attention: Gregg F. Vignos
                                    Tel: 415-983-1000
                                    Fax: 415-983-1200



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>10
<FILENAME>f80193ex10-4.txt
<DESCRIPTION>EXHIBIT 10.4
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.4
                                  HILLS PLAZA I

                                  OFFICE LEASE

                         SRI HILLS PLAZA VENTURE, LLC,
                      a Delaware limited liability company,
                                    Landlord

                                       and

                              CRITICAL PATH, INC.,
                            a California corporation,
                                     Tenant

                         DATED AS OF: November 16, 2001



<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Paragraph                                                                                Page
---------                                                                                ----
<S>                                                                                      <C>
        1.    Premises ...................................................................1
        2.    Certain Basic Lease Terms ..................................................1
        3.    Term; Delivery of Possession of Premises ...................................2
        4.    Premises As-Is .............................................................2
        5.    Monthly Rent ...............................................................4
        6.    Letter of Credit ...........................................................5
        7.    Additional Rent: Increases in Operating Expenses and Tax Expenses ..........5
        8.    Use of Premises; Compliance with Law .......................................9
        9.    Alterations and Restoration ................................................10
        10.   Repair .....................................................................12
        11.   Abandonment ................................................................12
        12.   Liens ......................................................................13
        13.   Assignment and Subletting ..................................................13
        14.   Indemnification of Landlord ................................................16
        15.   Insurance ..................................................................17
        16.   Mutual Waiver of Subrogation Rights ........................................18
        17.   Utilities ..................................................................18
        18.   Personal Property and Other Taxes ..........................................20
        19.   Rules and Regulations ......................................................20
        20.   Surrender; Holding Over ....................................................20
        21.   Subordination and Attornment ...............................................21
        22.   Financing Condition ........................................................22
        23.   Entry by Landlord ..........................................................22
        24.   Insolvency or Bankruptcy ...................................................22
        25.   Default and Remedies .......................................................23
        26.   Damage or Destruction ......................................................25
        27.   Eminent Domain .............................................................25
        28.   Landlord's Liability; Sale of Building .....................................26
        29.   Estoppel Certificates ......................................................27
        30.   Right of Landlord to Perform ...............................................27
        31.   Late Charge ................................................................27
        32.   Attorneys' Fees; Waiver of Jury Trial ......................................27
        33.   Waiver .....................................................................28
        34.   Notices ....................................................................28
        35.   Deleted ....................................................................28
        36.   Defined Terms and Marginal Headings ........................................28
        37.   Time and Applicable Law ....................................................28
        38.   Successors .................................................................28
        39.   Entire Agreement; Modifications ............................................28
        40.   Light and Air ..............................................................29
        41.   Name of Building ...........................................................29
        42.   Severability ...............................................................29
        43.   Authority ..................................................................29
        44.   No Offer ...................................................................29
        45.   Real Estate Brokers ........................................................29
        46.   Consents and Approvals .....................................................29
        47.   Reserved Rights ............................................................29
        48.   Financial Statements .......................................................30
        49.   Signage ....................................................................30
        50.   Nondisclosure of Lease Terms ...............................................31
        51.   Hazardous Substance Disclosure .............................................31
        52.   Option to Renew ............................................................31
        53.   Parking ....................................................................32
        54.   First Rights Contingency ...................................................33
        55.   Canine Access ..............................................................33
</TABLE>

EXHIBITS:

A - Outline of Premises
B - Rules and Regulations
C - Form of Letter of Credit


<PAGE>

                                      LEASE

        THIS LEASE is made as of the 16th day of November, 2001, between SRI
HILLS PLAZA VENTURE, LLC, a Delaware limited liability company ("Landlord"), and
CRITICAL PATH, INC., a California corporation ("Tenant").

               1. Premises. Landlord hereby leases to Tenant, and Tenant hereby
leases from Landlord, on the terms and conditions set forth herein, the space
outlined on the attached Exhibit A (the "Premises"). The Premises are located on
the floor(s) specified in Paragraph 2 below of the building (the "Building")
presently known as Hills Plaza Phase I, located at 345 Spear Street, San
Francisco, California. The Building is part of a combined office, retail and
residential condominium project (the "Project") located on the entire block of
Spear Street between Harrison Street and Folsom Street, in San Francisco,
California. The Building, the parcel(s) of land (the "Land") on which the
Building is located and any other improvements on the Land, the common areas of
the Project and the underground garage for the Project are referred to herein as
the "Real Property."

               Tenant's lease of the Premises shall include the right to use, in
common with others and subject to the other provisions of this Lease, the public
lobbies, entrances, stairs, elevators and other public portions of the Building.
All of the windows and outside walls of the Premises and any space in the
Premises used for shafts, stacks, pipes, conduits, ducts, electrical equipment
or other utilities or Building facilities are reserved solely to Landlord and
Landlord shall have rights of access through the Premises for the purpose of
operating, maintaining and repairing the same. Notwithstanding the preceding
sentence, during the term of this Lease Tenant shall have the non-exclusive
license, in common with use by Landlord and other tenants of the Building, to
use the vertical shafts and horizontal raceways and ducts within the Premises
for purposes of installation therein of telephone, data and electrical wires and
cables which are part of the Initial Alterations (as defined in Paragraph 4.a.)
or Alterations (as defined in Paragraph 9) approved by Landlord pursuant to this
Lease, provided that such license is more particularly set forth in an amendment
to this Lease executed by Landlord and Tenant.

               2. Certain Basic Lease Terms. As used herein, the following terms
shall have the meaning specified below:

                a.      Floors on which the Premises are located: Sixth (6th)
                        floor. Landlord and Tenant hereby stipulate for all
                        purposes of this Lease that the Premises contains a
                        total of 63,467 rentable square feet. The parties
                        further hereby stipulate that the portion of the
                        Premises shown on Exhibit A attached hereto as "Parcel
                        A" contains a total of 45,467 rentable square feet, and
                        that the portion of the Premises shown on Exhibit A
                        attached hereto as "Parcel B" contains a total of 18,000
                        rentable square feet. Notwithstanding the foregoing,
                        upon Tenant's notice to Landlord given no later than
                        five (5) days prior to the Parcel A Rent Commencement
                        Date (as defined in Paragraph 2.c. below), Tenant may
                        redesignate the portions of the Premises which comprise
                        Parcel A and Parcel B, respectively, provided that such
                        redesignated Parcel A shall in any event contain 45,467
                        rentable square feet, and such redesignated Parcel B
                        shall in any event contain 18,000 rentable square feet.
                        In the event of such redesignation, the parties shall
                        promptly enter into an amendment to this Lease showing
                        the so redesignated Parcels.

                b.      Lease term: The term of this Lease shall commence on the
                        date (the "Commencement Date") Landlord delivers the
                        Premises to Tenant in the condition required by the
                        first sentence of Paragraph 4.a below. The term of this
                        Lease shall end on the date (the "Expiration Date")
                        which is the last day of the one hundred twentieth
                        (120th) full calendar month following the Parcel A Rent
                        Commencement Date. The scheduled Commencement Date (the
                        "Scheduled Commencement Date") is one (1) Business Day
                        (as defined in Paragraph 17.a. below) following the
                        First Rights Contingency Satisfaction Date (as defined
                        in Paragraph 54 below) is satisfied.

                c.      Monthly Rent: The respective sums set forth as follows:

<TABLE>
<CAPTION>
                        Parcel A:
<S>                                                       <C>
                        Lease Years 1:                    $132,612.08
                        Lease Years 2, 3, 4 & 5:          $143,978.83
                        Lease Years 6, 7 & 8:             $147,767.75
                        Lease Years 9 & 10:               $155,345.58
</TABLE>


                                       1

<PAGE>

<TABLE>
<CAPTION>
                        Parcel B:
<S>                                                       <C>
                        Lease Years 1:                    $52,500.00
                        Lease Years 2, 3, 4 & 5:          $57,000.00
                        Lease Years 6, 7 & 8:             $58,500.00
                        Lease Years 9 & 10:               $61,500.00
</TABLE>

                        Notwithstanding the foregoing, Tenant's obligation to
                        pay Monthly Rent for Parcel A shall not commence until
                        the Parcel A Rent Commencement Date, and Tenant's
                        obligation to pay Monthly Rent for Parcel B shall not
                        commence until the Parcel B Rent Commencement Date.
                        Lease Year 1 shall commence on the Parcel A Rent
                        Commencement Date and end on the last day of the twelfth
                        (12th) full calendar month thereafter, and each
                        subsequent Lease Year shall be the twelve (12) full
                        calendar month period commencing on the day after the
                        expiration of the prior Lease Year. The "Parcel A Rent
                        Commencement Date" shall be the date that is the earlier
                        of (i) the date that is one hundred twenty (120) days
                        following the First Rights Contingency Satisfaction
                        Date, or (ii) the date Tenant commences occupancy of
                        Parcel A or any portion thereof for the conduct of
                        business. The "Parcel B Rent Commencement Date" shall be
                        the date that is the earlier of (i) January 1, 2003, or
                        (ii) the date Tenant commences occupancy of Parcel B or
                        any portion thereof for the conduct of business.

                d.      Letter of Credit: $2,500,000.

                e.      Tenant's Share: 16.38% (11.73% as to Parcel A and 4.65%
                        as to Parcel B).

                f.      Base Year: The calendar year 2002.

                        Base Tax Year: The fiscal tax year ending June 30, 2003.

                g.      Business of Tenant: Software and software related
                        services.

                h.      Real estate brokers: Shorenstein Management, Inc., and
                        Insignia, Esq.

               3. Term; Delivery of Possession of Premises.

                      a. The term of this Lease shall commence as provided in
Paragraph 2.b., and, unless sooner terminated pursuant to the terms hereof or at
law, shall expire on the Expiration Date (defined in Paragraph 2.b.). Upon
either party's request after the Commencement Date has occurred hereunder, the
parties shall execute a written confirmation of the Commencement Date and the
Expiration Date.

                      b. Landlord shall act diligently and in good faith to
deliver the Premises to Tenant on the Scheduled Commencement Date; provided,
however that Landlord shall have no obligation to deliver the Premises to Tenant
prior to Landlord's receipt of the Letter of Credit required of Tenant pursuant
to Paragraph 6 below. If Landlord, for any reason whatsoever, cannot deliver
possession of the Premises to Tenant on the Scheduled Commencement Date, this
Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for
any loss or damage resulting therefrom, nor shall the same amend Tenant's
obligations under this Lease; provided, however, that in the event that Landlord
does not deliver the Premises to Tenant on or prior to the date that is thirty
(30) days after the Scheduled Commencement Date, as such date shall be extended
for delays caused by Force Majeure or Tenant's failure to deliver the Letter of
Credit (such date, as so extended, the "Trigger Date"), then Tenant shall have
the right to terminate this Lease by notice to Landlord given, if at all, within
ten (10) days after the Trigger Date. For purposes of this Lease, "Force
Majeure" shall mean strikes, lock-outs, labor disputes, shortages of material or
labor, fire, earthquake, flood or other casualty, acts of God, or any other
cause (other than financial inability) beyond the reasonable control of
Landlord, except that for purposes of this Paragraph 3.b. a holdover of the
Premises by any tenant or other occupant shall not be considered Force Majeure.

               4. Premises As-Is.

               a. Premises As-Is. Landlord shall deliver the Premises to Tenant,
and Tenant shall accept the Premises from Landlord, broom clean, but otherwise
in their "as is" state and condition as of the delivery date. Except as provided
below in this Paragraph 4, Landlord shall have no obligation to make or pay for
any improvements or renovations in or to the Premises or the Building or to
otherwise prepare the Premises or the Building for Tenant's occupancy. The
parties acknowledge that Tenant intends to make certain alterations and
improvements (the "Initial Alterations") to the Premises after the delivery
thereof to prepare the same for Tenant's initial occupancy. The construction of
the Initial Alterations shall be governed by Paragraph 9 hereof. The general
contractor selected by Tenant in accordance with Paragraph 9 hereof to construct
the Initial Alterations is referred to hereinafter as "Contractor." Landlord
agrees that Tenant shall have the right to utilize any furniture, equipment or
improvements existing in the Premises as of the


                                       2
<PAGE>

Commencement Date, and if Tenant shall remove the same from the Premises in
connection with the construction of the Initial Alterations or subsequently
approved Alterations, any salvage value or proceeds attributable thereto shall
belong solely to Tenant.

               b. Landlord's Allowance. Landlord shall contribute toward the
cost of the design, construction and installation of the Initial Alterations
(including, without limitation, Contractor's fee and, if Tenant does not select
Turner-Shorenstein, L.P. ("TSLP") as Contractor, the Alteration Operations Fee
provided for in Paragraph 9) an amount not to exceed Two Million Six Hundred
Sixty-Five Thousand Six Hundred Fourteen Dollars ($2,665,614.00) (which equals
$42.00 per rentable square foot of the Premises) ("Landlord's Allowance");
provided, however that not more than Two Hundred Fifty-Three Thousand Eight
Hundred Sixty-Eight Dollars ($253,868.00) (which equals $4.00 per rentable
square foot of the Premises) of Landlord's Allowance may be applied to Tenant's
reasonable space planning, architectural and engineering costs for the design of
the Initial Alterations. No portion of Landlord's Allowance may be applied to
the cost of personal property, equipment, trade fixtures, moving expenses,
furniture (including work stations and modular office furniture, regardless of
the method of attachment to walls and/or floors), signage or, except as provided
below, free rent. In the event that after completion of the Initial Alterations
and payment of the total cost thereof (including the Alteration Operations Fee
due pursuant to Paragraph 9.a. below in connection therewith), the entire amount
of Landlord's Allowance has not been utilized, the remaining portion of
Landlord's Allowance, but not to exceed Six Hundred Thirty-Four Thousand Six
Hundred Seventy Dollars ($634,670.00) (which equals $10.00 per rentable square
foot of the Premises), may be applied against the Monthly Rent first due from
Tenant pursuant to this Lease. Tenant acknowledges that Landlord's Allowance is
to be applied to the Initial Alterations (and the associated costs described
above) covering the entire Premises (i.e. all of Parcel A and Parcel B). If
Tenant does not improve the entire Premises, then, without limitation of any
other rights or remedies of Landlord hereunder, Landlord's Contribution shall be
adjusted on a prorata per rentable square foot basis to reflect the number of
rentable square feet actually being improved. For purposes of the preceding
sentence, space shall be conclusively deemed "improved" if it has finished
ceilings, floors and walls, with Building systems furnished thereto (e.g.
lighting, HVAC, sprinklers and other fire and life safety equipment), that
reflects a continuity of design concept to the balance of the Premises, and is
in a condition which would allow for legal occupancy of the space for general
office purposes. Notwithstanding anything to the contrary in this Paragraph
4.b., Landlord's Allowance shall be available for disbursement pursuant to the
terms hereof only for the first twelve (12) months after the Commencement Date.
Accordingly, if any portion of Landlord's Allowance is not utilized prior to the
date that is twelve (12) months from the Commencement Date, such unused portion
shall be forfeited by Tenant.

               Landlord shall disburse Landlord's Allowance directly to
Contractor, or subcontractors, or Tenant's design consultants as provided in
clause (i) above, or to Tenant, as Landlord shall determine, in monthly
installments. Each disbursement shall be conditioned upon Landlord's receipt of
invoices to be furnished by Tenant covering work actually performed,
construction in place and materials delivered to the site (as may be
applicable). To the extent permitted by law, Landlord may withhold the amount of
any and all retention percentages provided for in original contracts or
subcontracts until the earlier of (i) the expiration of the applicable lien
period or (ii) Landlord's receipt of a waiver of lien rights from the general
contractor, subcontractors or suppliers whose invoices are applicable to the
respective disbursement for, and/or on account of, the work or materials covered
by such invoice. In the event the cost of the Initial Alterations exceeds
Landlord's Allowance set forth above, Tenant shall pay all such excess costs
(the "Excess Cost"), after the full amount of Landlord's Allowance has been
disbursed hereunder (other than the retentions described above), directly to
Contractor or the subcontractors or suppliers involved and shall furnish to
Landlord copies of receipted invoices therefor and such waivers of lien rights
as Landlord may reasonably require.

               If the Alteration Operations Fee is applicable, then, at the time
Landlord makes any disbursement of Landlord's Allowance, Landlord shall retain
from Landlord's Allowance, as a partial payment of the Alteration Operations
Fee, a proportionate amount of the Alteration Operations Fee based upon
Landlord's reasonable estimation of the amount required to be withheld from each
disbursement in order to ensure that the entire Alteration Operations Fee is
retained over the course of construction on a prorata basis. At such time as
Landlord's Allowance has been entirely disbursed, Tenant shall, within fifteen
(15) days of written demand, pay to Landlord the remainder, if any, of the
Alteration Operations Fee not yet paid to Landlord.

               In addition to Landlord's Allowance, Landlord shall pay for the
entire cost of the Landlord's Work described in Paragraph 4.c. below.

               c. Landlord's Work. Regardless of whether Tenant selects TSLP or
another general contractor as Contractor, Landlord shall cause TSLP to perform
the following work ("Landlord's Work") at Landlord's cost:

                i.      Perform all work necessary within the finished walls of
                        the existing core area restrooms on the sixth (6th)
                        floor of the Building to cause such restrooms to comply
                        with The Americans With Disabilities Act, to the extent
                        such work is required to cause such restrooms to comply,
                        as of Landlord's Work


                                       3
<PAGE>

                        Completion Date (as defined below), with the provisions
                        of the ADA that are applicable to such restrooms as of
                        such date.

                ii.     Demolish existing stairs connecting the fifth (5th) and
                        sixth (6th) floors of the Building (including rails and
                        perimeter railing). Furnish and install new steel beams
                        and/or reinforce existing beams around stair opening.
                        Furnish and install new metal decking at opening. Pour
                        lightweight concrete on top of metal decking to finished
                        floor. Fireproof deck and beams as required.

                iii.    Perform all work necessary (if any) to cause the common
                        areas of the Building that are reasonably anticipated to
                        be in Tenant's path of travel to the Premises to comply
                        with the ADA, to the extent such work is required to
                        cause such common areas to comply, as of Landlord's Work
                        Completion Date, with the provisions of the ADA that are
                        applicable to such common areas as of such date.

In no event shall Landlord's Work include any work required by reason of or
triggered by (x) the Initial Alterations or any other Alterations of Tenant
(except as required pursuant to Paragraph 8.b. below), (y) Tenant's particular
use of the Premises (as opposed to Tenant's use of the Premises for their
permitted purposes in a normal and customary manner), or (z) Tenant's particular
employees or employment practices or the canine access rights granted to Tenant
pursuant to Paragraph 55 below. Landlord's Work may be performed during the
period of construction of the Initial Alterations, and shall in any event be
substantially completed on or prior to the date ("Landlord's Work Completion
Date") that is the later of February 15, 2002 or the Rent Commencement Date,
subject to extension for delays caused by Force Majeure or by Tenant (including
Tenant's construction of the Initial Alterations). If Tenant does not select
TSLP as Contractor, Landlord and Tenant shall cause their respective contractors
to cooperate with each other in the coordination of the construction of
Landlord's Work and the Initial Alterations. Landlord's Work shall be
"substantially completed" for purposes of the foregoing so long as any remaining
portions of Landlord's Work are so-called "punch list" items which do not
preclude issuance of a certificate of occupancy (or other permit for legal
occupancy) for the Premises which would have otherwise been issued. Landlord
shall promptly complete such punch list items.

        5. Monthly Rent.

               a. Beginning on the Parcel A Rent Commencement Date, and
thereafter on or before the first day of each calendar month during the term
hereof, Tenant shall pay to Landlord, as monthly rent for Parcel A, the Monthly
Rent specified in Paragraph 2 above. Beginning on the Parcel B Rent Commencement
Date, and thereafter on or before the first day of each calendar month during
the term hereof, Tenant shall pay to Landlord, as monthly rent for Parcel B, the
Monthly Rent specified in Paragraph 2 above. If the Parcel A Rent Commencement
Date or the Parcel B Rent Commencement Date is a day other than the first day of
a calendar month, or if the term of this Lease terminates on a day other than
the last day of a calendar month, then the Monthly Rent payable for such partial
month shall be appropriately prorated on the basis of a thirty (30)-day month.
Monthly Rent and the Additional Rent specified in Paragraph 7 shall be paid by
Tenant to Landlord, in advance, without deduction, offset, prior notice or
demand (except as expressly set forth in this Lease), in immediately available
funds of lawful money of the United States of America, or by good check as
described below, at the office of Shorenstein Company, L.P., at 555 California
Street, 49th floor, San Francisco, California 94104, or to such other person or
at such other place as Landlord may from time to time designate in writing.
Payments made by check must be drawn either on a California financial
institution or on a financial institution that is a member of the federal
reserve system. Notwithstanding the foregoing, Tenant shall pay to Landlord
within one (1) Business Day after the First Rights Contingency Satisfaction
Date, the Monthly Rent due for Parcel A for the first full calendar month after
the Parcel A Rent Commencement Date, and such payment shall be applied against
the Monthly Rent first due under this Lease.

               b. All amounts payable by Tenant to Landlord under this Lease, or
otherwise payable in connection with Tenant's occupancy of the Premises, in
addition to the Monthly Rent hereunder and Additional Rent under Paragraph 7,
shall constitute rent owed by Tenant to Landlord hereunder.

               c. Any rent not paid by Tenant to Landlord within five (5) days
after the date due shall bear interest from the date due to the date of payment
by Tenant at an annual rate of interest (the "Interest Rate") equal to the
lesser of (i) the maximum annual interest rate allowed by law on such due date
for business loans (not primarily for personal, family or household purposes)
not exempt from the usury law, or (ii) a rate equal to the sum of four (4)
percentage points over the six-month United States Treasury bill rate (the
"Treasury Rate") in effect from time to time during such delinquency (or if
there is no such publicly announced rate, the rate quoted by the San Francisco
Main Office of Bank of America, N.A., or any successor bank thereto, in pricing
ninety (90)-day commercial loans to substantial commercial borrowers).
Notwithstanding the foregoing, Landlord shall give Tenant notice of non-payment
of rent when due and five (5) days after delivery of such notice to cure such
non-payment once in each calendar year before assessing interest in such
calendar year pursuant to this Paragraph 5.c. Failure by Tenant to pay rent when
due, including any interest accrued under this subparagraph, after the
expiration of any applicable notice and cure


                                       4
<PAGE>

period provided in Paragraph 25.a. below, shall constitute an Event of Default
(as defined in Paragraph 25 below) giving rise to all the remedies afforded
Landlord under this Lease and at law for nonpayment of rent.

               d. No security or guaranty which may now or hereafter be
furnished to Landlord for the payment of rent due hereunder or for the
performance by Tenant of the other terms of this Lease shall in any way be a bar
or defense to any of Landlord's remedies under this Lease or at law.

        6. Letter of Credit.

               a. As security for the performance by Tenant of Tenant's
obligations hereunder, Tenant shall cause to be delivered to Landlord within one
(1) Business Day after the First Rights Contingency Satisfaction Date, an
original irrevocable standby letter of credit (the "Letter of Credit") in the
amount of Two Million Five Hundred Thousand Dollars ($2,500,000.00), naming
Landlord as beneficiary, which Landlord may draw upon to cure any Event of
Default under this Lease (or any default under this Lease where there exist
circumstances under which Landlord is enjoined or otherwise prevented by
operation of law from giving to Tenant a written notice which would be necessary
for such failure of performance to constitute an Event of Default under this
Lease), or to compensate Landlord for any damage Landlord incurs as a result of
Tenant's failure to perform any of its obligations hereunder; provided, however,
that neither the Letter of Credit nor any proceeds therefrom shall be deemed an
advance rent deposit or an advance payment of any other kind, or a measure or
limitation of Landlord's damages or constitute a bar or defense to any of the
Landlord's other remedies under this Lease or at law upon Tenant's default. The
Letter of Credit shall be issued by a major national commercial bank reasonably
acceptable to Landlord, with a service and claim point for the Letter of Credit
in San Francisco, California, have an expiration date not earlier than sixty
(60) days after the Expiration Date (or, in the alternative, have a term of not
less than one (1) year and be automatically renewable for an additional one (1)
year period unless notice of non-renewal is given by the issuer to Landlord not
later than sixty (60) days prior to the expiration thereof) and shall provide
that Landlord may make partial and multiple draws thereunder, up to the face
amount thereof. The Letter of Credit shall be in the form attached hereto as
Exhibit C (as modified to the extent required to comply with any changes after
the date hereof to laws applicable thereto), and shall otherwise be in form and
content satisfactory to Landlord. If the Letter of Credit has an expiration date
earlier than sixtieth (60th) day after the Expiration Date, then throughout
the term hereof (including any renewal or extension of the term) Tenant shall
provide evidence of renewal of the Letter of Credit to Landlord at least
forty-five (45) days prior to the date the Letter of Credit expires. If Landlord
draws on the Letter of Credit pursuant to the terms hereof, Tenant shall
immediately replenish the Letter of Credit or provide Landlord with an
additional letter of credit conforming to the requirement of this paragraph so
that the amount available to Landlord from the Letter(s) of Credit provided
hereunder is the amount specified above. Tenant's failure to deliver any
replacement, additional or extension of the Letter of Credit, or evidence of
renewal of the Letter of Credit, within the time specified under this Lease
shall entitle Landlord to draw upon the Letter of Credit then in effect. If
Landlord liquidates the Letter of Credit as provided in the preceding sentence,
Landlord shall hold the funds received from the Letter of Credit as security for
Tenant's performance under this Lease, and Landlord shall be deemed to hold a
perfected, first priority security interest in such funds (and Tenant does
hereby appoint Landlord its attorney-in-fact for purposes of filing such
financing statements or other instruments as Landlord shall deem advisable to
further evidence and/or perfect such security interest). Landlord shall not be
required to segregate such security deposit from its other funds and no interest
shall accrue or be payable to Tenant with respect thereto. No holder of a
Superior Interest (as defined in Paragraph 21 below), nor any purchaser at any
judicial or private foreclosure sale of the Real Property or any portion
thereof, shall be responsible to Tenant for such security deposit unless and
only to the extent such holder or purchaser shall have actually received the
same. If Landlord transfers such security deposit to the grantee or transferee
of Landlord's interest in the Real Property, Landlord shall be released from any
further responsibility or liability for such security. If Tenant is not in
default at the expiration or termination of this Lease, Landlord shall return to
Tenant the Letter of Credit or the balance of the security deposit then held by
Landlord, as applicable, within sixty (60) days thereafter; provided, however,
that in no event shall any such return be construed as an admission by Landlord
that Tenant has performed all of its covenants and obligations hereunder.

               b. Notwithstanding the foregoing, on the commencement of Lease
Year 6, and on the commencement of each Lease Year thereafter (each such
anniversary, a "Reduction Date"), so long as no Event of Default (as defined in
Paragraph 25 below) by Tenant under this Lease has occurred and is continuing as
of such Reduction Date, and so long as no breach or default by Tenant under this
Lease which, with notice or the passage of time or both could ripen into an
Event of Default (an "Unmatured Default"), shall be continuing as of the
Reduction Date, the amount required under the Letter of Credit shall be reduced
by Five Hundred Thousand Dollars ($500,000.00). Accordingly, if all Reductions
are made as so scheduled, during Lease Year 10 the Letter of Credit will be
reduced to zero and will not be required. If Tenant is entitled to such
reduction, Tenant may replace or amend the then existing Letter of Credit to
reflect such reduced amount on or after the applicable Reduction Date. If
Landlord disallows any such reduction by reason of an Unmatured Default, and if
Tenant cures the Unmatured Default prior to the same becoming an Event of
Default, the date that is five (5) days after the date such Unmatured Default is
cured shall become the new Reduction Date for purposes of making the reduction
which was previously disallowed.

        7. Additional Rent: Increases in Operating Expenses and Tax Expenses.


                                       5
<PAGE>

               a. Operating Expenses. Tenant shall pay to Landlord, at the times
hereinafter set forth, Tenant's Share, as specified in Paragraph 2.e. above, of
any increase in the Operating Expenses (as defined below) incurred by Landlord
in each calendar year subsequent to the Base Year specified in Paragraph 2.f.
above, over the Operating Expenses incurred by Landlord during the Base Year.
The amounts payable under this Paragraph 7.a. and Paragraph 7.b. below are
termed "Additional Rent" herein.

        The term "Operating Expenses" shall mean the total costs and expenses
incurred by Landlord in connection with the management, operation, maintenance,
repair and ownership of the Real Property, including, without limitation, the
following costs: (1) salaries, wages, bonuses and other compensation (including
hospitalization, medical, surgical, retirement plan, pension plan, union dues,
life insurance, including group life insurance, welfare and other fringe
benefits, and vacation, holidays and other paid absence benefits) relating to
employees of Landlord or its agents engaged in the operation, repair, or
maintenance of the Real Property; (2) payroll, social security, workers'
compensation, unemployment and similar taxes with respect to such employees of
Landlord or its agents, and the cost of providing disability or other benefits
imposed by law or otherwise, with respect to such employees; (3) the cost of
uniforms (including the cleaning, replacement and pressing thereof) provided to
such employees; (4) premiums and other charges incurred by Landlord with respect
to fire, other casualty, rent and liability insurance, any other insurance as is
deemed necessary or advisable in the reasonable judgment of Landlord, or any
insurance required by the holder of any Superior Interest (as defined in
Paragraph 21 below), and, after the Base Year, costs of repairing an insured
casualty to the extent of the deductible amount under the applicable insurance
policy; provided that, if Landlord does not carry earthquake insurance during
the Base Year, but obtains earthquake insurance subsequent to the Base Year,
then the initial annual premium for the earthquake insurance shall not be
included in Operating Expenses, and Operating Expenses in any given year
subsequent to the first calendar year in which Landlord obtains earthquake
insurance shall include only the increases in the annual premium over the annual
premium paid for the earthquake insurance for the first calendar year after the
Base Year in which Landlord carries the same; (5) water charges and sewer rents
or fees; (6) license, permit and inspection fees; (7) sales, use and excise
taxes on goods and services purchased by Landlord in connection with the
operation, maintenance or repair of the Real Property and Building systems and
equipment; (8) telephone, telegraph, postage, stationery supplies and other
expenses incurred in connection with the operation, maintenance, or repair of
the Real Property; (9) management fees and expenses; (10) costs of repairs to
and maintenance of the Real Property, including building systems and
appurtenances thereto and normal repair and replacement of worn-out equipment,
facilities and installations, but excluding the replacement of major building
systems (except to the extent provided in (16) and (17) below); (11) fees and
expenses for janitorial, window cleaning, guard, extermination, water treatment,
rubbish removal, plumbing and other services and inspection or service contracts
for elevator, electrical, mechanical and other building equipment and systems or
as may otherwise be necessary or proper for the operation, repair or maintenance
of the Real Property; (12) costs of supplies, tools, materials, and equipment
used in connection with the operation, maintenance or repair of the Real
Property; (13) accounting, legal and other professional fees and expenses; (14)
fees and expenses for painting the exterior or the public or common areas of the
Building and the cost of maintaining the sidewalks, landscaping and other common
areas of the Real Property; (15) costs and expenses for electricity, chilled
water, air conditioning, water for heating, gas, fuel, steam, heat, lights,
power and other energy related utilities required in connection with the
operation, maintenance and repair of the Real Property; (16) the cost of any
capital improvements made by Landlord to the Real Property or capital assets
acquired by Landlord after the Base Year in order to comply with any local,
state or federal law, ordinance, rule, regulation, code or order of any
governmental entity or insurance requirement (collectively, "Legal Requirement")
with which the Real Property was not required to comply during the Base Year, or
to comply with any amendment or other change to the enactment or interpretation
of any Legal Requirement from its enactment or interpretation during the Base
Year; (17) the cost of any capital improvements made by Landlord to the Building
or capital assets acquired by Landlord after the Base Year for the protection of
the health and safety of the occupants of the Real Property or that are designed
to reduce other Operating Expenses; (18) the cost of furniture, draperies,
carpeting, landscaping and other customary and ordinary items of personal
property (excluding paintings, sculptures and other works of art) provided by
Landlord for use in common areas of the Building or in the Building office (to
the extent that such Building office is dedicated to the operation and
management of the Real Property); (19) any expenses and costs resulting from
substitution of work, labor, material or services in lieu of any of the above
itemizations, or for any additional work, labor, services or material resulting
from compliance with any Legal Requirement applicable to the Real Property or
any parts thereof (excluding costs of capital improvements made in order to
comply with Legal Requirements with which the Real Property was required to
comply during the Base Year); (20) Building office rent or rental value, to the
extent that such Building office is dedicated to the operation and management of
the Real Property; and (21) the Building's prorata share of the Project costs
under the Master Declaration (as described in Paragraph 21 below).
Notwithstanding anything to the contrary herein, as to the common areas of the
Project and the garage of the Project, Operating Expenses shall include only the
Building's prorata share (as reasonably determined by Landlord in its good faith
business judgment) of the above described costs and expenses for such common
areas and garage of the Project. Further, Landlord and Tenant acknowledge that
certain of the building systems serving the Building also serve the other office
building in the Project and that certain of the improvements, alterations or
repairs made by Landlord to the Building or the Land that are properly included
in Operating Expenses pursuant to the above may be a part of improvements,
alterations or repairs that also benefit the other office building in the
Project. In light of the foregoing, Landlord shall determine, in its reasonable
and good faith business judgment, the proper allocation


                                       6
<PAGE>

of any such item of Operating Expenses between the Building and any other
building that benefits from the Operating Expense so that Tenant shall be
responsible only for Operating Expenses to the extent they are attributable or
allocable to the Building and the Land. Landlord and Tenant also acknowledge
that certain of the items of Operating Expenses referenced above are applicable
only to the office space within the Building and certain of such items are
applicable to both the office space and the retail space in the Building.
Landlord shall properly allocate the cost of such items to the office space and
to the retail space in accordance with standard accounting principles. With
respect to the costs of items included in Operating Expenses under (16) and
(17), such costs shall be amortized over a reasonable period, as determined by
Landlord, together with interest on the unamortized balance at a rate per annum
equal to three (3) percentage points over the Treasury Rate charged at the time
such item is constructed or acquired, or at such higher rate as may have been
paid by Landlord on funds borrowed for the purpose of constructing or acquiring
such item, but in either case not more than the maximum rate permitted by law at
the time such item is constructed or acquired.

        Operating Expenses shall not include the following: (i) depreciation on
the Building or equipment or systems therein; (ii) debt service; (iii) rental
under any ground or underlying lease; (iv) interest (except as expressly
provided in this Paragraph 7.a.); (v) Tax Expenses (as defined in Paragraph 7.b.
below); (vi) attorneys' and other professional fees and expenses incurred in
connection with lease negotiations with prospective or existing Building tenants
or the enforcement of leases affecting the Real Property; (vii) the cost
(including any amortization thereof) of any improvements or alterations which
would be properly classified as capital expenditures according to generally
accepted property management practices (except to the extent expressly included
in Operating Expenses pursuant to this Paragraph 7.a.); (viii) the cost of
decorating, improving for tenant occupancy, painting or redecorating portions of
the Building to be demised to tenants; (ix) wages, salaries, benefits or other
similar compensation paid to executive employees of Landlord or Landlord's
agents above the rank of Building manager; (x) advertising and promotional
expenditures, and costs of signage identifying any tenant of the Building (other
than Building directory or floor directory signage); (xi) real estate broker's
or other leasing commissions; (xii) penalties or other costs incurred due to a
violation by Landlord, as determined by written admission, stipulation, final
judgment or arbitration award, of any of the terms and conditions of this Lease
or any other lease relating to the Building except to the extent such costs
reflect costs that would have been incurred by Landlord absent such violation;
(xiii) subject to the provisions of item (4) above, repairs and other work
occasioned by fire, windstorm or other casualty, to the extent Landlord is
reimbursed by insurance proceeds, and other work paid from insurance or
condemnation proceeds; (xiv) costs, penalties or fines arising from Landlord's
violation of any applicable governmental rule or authority except to the extent
such costs reflect costs that would have been incurred by Landlord absent such
violation; (xv) overhead and profit increments (including as part of management
fees) paid to subsidiaries or affiliates of Landlord for management or other
services on or to the Building or for supplies or other materials to the extent
that the cost of the services, supplies or materials materially exceed the
amounts normally payable for similar goods and services under similar
circumstances (taking into account the market factors in effect on the date any
relevant contracts were negotiated) in comparable buildings in the San Francisco
financial district; (xvi) charitable and political contributions; (xviii)
rentals and other related expenses incurred in leasing air conditioning systems,
elevators or other equipment ordinarily considered to be of a capital nature
(except equipment that is not affixed to the Building and is used in providing
janitorial services, and except to the extent such costs would otherwise be
includable pursuant to items (16) and (17) as set forth in the immediately
preceding paragraph); (xix) costs directly and solely attributable to the garage
in the Building, including, without limitation, payroll for clerks, attendants,
book-keeping, parking, insurance premiums, parking management fees, parking
tickets, janitorial services, striping and painting of surfaces (provided,
however, that the cost of providing utilities to the garage shall be included in
Operating Expenses); (xx) any expense for which Landlord is actually directly
reimbursed by a tenant or other party (other than through a provision similar to
the first paragraph of this Paragraph 7.a.), including, without limitation,
payments for Excess Services; (xxii) the cost of services made available at no
additional charge to any tenant in the Building but not to Tenant; or (xxiii)
the cost of any Hazardous Materials (as defined in Paragraph 8.c. below)
abatement or removal activities where such activities are not necessitated by
the Handling (as defined in Paragraph 8.c. below) of Hazardous Materials by
Tenant or any other Tenant Party, provided, however, Operating Expenses may
include the costs attributable to those actions taken by Landlord in connection
with the ordinary operation and maintenance of the Building, including costs
incurred in removing limited amounts of Hazardous Materials from the Building
when such removal is directly related to such ordinary maintenance and
operation.

               b. Tax Expenses. Tenant shall pay to Landlord as Additional Rent
under this Lease, at the times hereinafter set forth, Tenant's Share, as
specified in Paragraph 2.e. above, of any increase in Tax Expenses (as defined
below) incurred by Landlord in each calendar year, over Tax Expenses incurred by
Landlord during the Base Tax Year. Notwithstanding the foregoing, if any
reassessment, reduction or recalculation of any item included in Tax Expenses
during the term results in a reduction of Tax Expenses, then for purposes of
calculating Tenant's Share of increases in Tax Expenses from and after the
calendar year in which such adjustment occurs, Tax Expenses for the Base Tax
Year shall be adjusted to reflect such reduction.

        The term "Tax Expenses" shall mean all taxes, assessments (whether
general or special), excises, transit charges, housing fund assessments or other
housing charges, improvement districts, levies or fees, ordinary or
extraordinary, unforeseen as well as foreseen, of any kind, which are assessed,
levied, charged,


                                       7
<PAGE>

confirmed or imposed on the Real Property, on Landlord with respect to the Real
Property, on the act of entering into leases of space in the Real Property, on
the use or occupancy of the Real Property or any part thereof, with respect to
services or utilities consumed in the use, occupancy or operation of the Real
Property, on any improvements, fixtures and equipment and other personal
property of Landlord located in the Real Property and used in connection with
the operation of the Real Property, or on or measured by the rent payable under
this Lease or in connection with the business of renting space in the Real
Property, including, without limitation, any gross income tax or excise tax
levied with respect to the receipt of such rent, by the United States of
America, the State of California, the City and County of San Francisco, any
political subdivision, public corporation, district or other political or public
entity or public authority, and shall also include any other tax, fee or other
excise, however described, which may be levied or assessed in lieu of, as a
substitute (in whole or in part) for, or as an addition to, any other Tax
Expense. Tax Expenses shall include reasonable attorneys' fees, costs and
disbursements incurred in connection with proceedings to contest, determine or
reduce Tax Expenses. If it shall not be lawful for Tenant to reimburse Landlord
for any increase in Tax Expenses as defined herein, the Monthly Rent payable to
Landlord prior to the imposition of such increases in Tax Expenses shall be
increased to net Landlord the same net Monthly Rent after imposition of such
increases in Tax Expenses as would have been received by Landlord prior to the
imposition of such increases in Tax Expenses.

        Tax Expenses shall not include income, franchise, transfer, inheritance
or capital stock taxes, unless, due to a change in the method of taxation, any
of such taxes is levied or assessed against Landlord in lieu of, as a substitute
(in whole or in part) for, or as an addition to, any other charge which would
otherwise constitute a Tax Expense; nor shall Tax Expenses include interest,
fines or other penalties imposed by reason of Landlord's failure to pay Tax
Expenses prior to delinquency, unless such failure occurs during any calendar
year in which Tenant has failed to timely pay any Monthly Rent, Additional Rent
or other amounts payable by Tenant to Landlord pursuant to this Lease. Landlord
and Tenant acknowledge and agree that certain other buildings exist or encroach
upon the Land, that Tenant shall have no liability as to any item of Tax Expense
attributable or allocable to, or assessed against, buildings other than the
Building and that Landlord's good faith determination of the proper allocation
of any item of Tax Expense allocable to buildings other than the Building shall
be binding on Landlord and Tenant.

               c. Adjustment for Occupancy Factor. Notwithstanding any other
provision herein to the contrary, in the event the Building is not fully
occupied during the Base Year or any calendar year during the term after the
Base Year, an adjustment shall be made by Landlord in computing Operating
Expenses for the Base Year and such calendar year so that those Operating
Expenses which vary based on levels of occupancy shall be computed for such year
as though the Building had been fully occupied during such year. In addition, if
any particular work or service includable in Operating Expenses is not furnished
to a tenant who has undertaken to perform such work or service itself, Operating
Expenses shall be deemed to be increased by an amount equal to the additional
Operating Expenses which would have been incurred if Landlord had furnished such
work or service to such tenant. The parties agree that statements in this Lease
to the effect that Landlord is to perform certain of its obligations hereunder
at its own or sole cost and expense shall not be interpreted as excluding any
cost from Operating Expenses or Tax Expenses if such cost is an Operating
Expense or Tax Expense pursuant to the terms of this Lease.

               d. Intention Regarding Expense Pass-Through. It is the intention
of Landlord and Tenant that the Monthly Rent paid to Landlord throughout the
term of this Lease shall be absolutely net of all increases, respectively, in
Tax Expenses and Operating Expenses over, respectively, Tax Expenses for the
Base Tax Year and Operating Expenses for the Base Year, and the foregoing
provisions of this Paragraph 7 are intended to so provide.

               e. Notice and Payment. On or before the first day of each
calendar year during the term hereof subsequent to the Base Year, or as soon as
practicable thereafter, Landlord shall give to Tenant notice of Landlord's
estimate of the Additional Rent, if any, payable by Tenant pursuant to
Paragraphs 7.a. and 7.b. for such calendar year subsequent to the Base Year. On
or before the first day of each month during each such subsequent calendar year,
Tenant shall pay to Landlord one-twelfth (1/12th) of the estimated Additional
Rent; provided, however, that if Landlord's notice is not given prior to the
first day of any calendar year Tenant shall continue to pay Additional Rent on
the basis of the prior year's estimate until the month after Landlord's notice
is given. If at any time it appears to Landlord that the Additional Rent payable
under Paragraphs 7.a. and/or 7.b. will vary from Landlord's estimate by more
than five percent (5%), Landlord may, by written notice to Tenant, revise its
estimate for such year, and subsequent payments by Tenant for such year shall be
based upon the revised estimate. On the first monthly payment date after any new
estimate is delivered to Tenant, Tenant shall also pay any accrued cost
increases, based on such new estimate.

               f. Annual Accounting. Landlord shall maintain true, correct and
complete records of the Operating Expenses and Tax Expenses in accordance with
sound accounting practices. Within ninety (90) days after the close of each
calendar year subsequent to the Base Year, or as soon after such ninety (90) day
period as practicable, but in any event within one hundred eighty (180) days
after the close of each such calendar year, Landlord shall deliver to Tenant a
statement of the Additional Rent payable under Paragraphs 7.a. and 7.b. for such
year. The statement shall be based on the results of an audit of the operations
of the Building prepared for the applicable year by a nationally recognized
certified public accounting firm selected


                                       8
<PAGE>

by Landlord. Upon Tenant's request made no later than ninety (90) days after
receipt of Landlord's annual statement, Landlord shall promptly deliver to
Tenant a copy of the auditor's statement on which Landlord's annual statement is
based, and such other information regarding the annual statement as may be
reasonably requested by Tenant to ascertain Landlord's compliance with this
Paragraph 7. At Landlord's option, Landlord may deliver such auditor's statement
to Tenant together with Landlord's annual statement, or otherwise deliver such
auditor's statement to Tenant prior to Tenant's request therefor. Landlord's
annual statement shall be final and binding upon Landlord and Tenant (except for
revisions to take into account any subsequent reassessment affecting the
calculation of Tax Expenses included in such statement, which revisions shall be
made if at all, within one hundred eighty (180) days after the close of the
calendar year in which Landlord receives the revised tax bill) unless, within
sixty (60) days after Tenant's receipt thereof or Tenant's receipt of any such
revisions due to a reassessment or Tenant's receipt of any correction thereof by
Landlord pursuant to the following provisions, as applicable), Tenant shall
contest or Landlord shall correct any item therein by giving written notice to
the other, specifying each item contested or corrected, respectively, and the
reason therefor. If the annual statement shows that Tenant's payments of
Additional Rent for such calendar year pursuant to Paragraph 7.e. hereof
exceeded Tenant's obligations for the calendar year, Landlord shall at its
option either (1) credit the excess to the next succeeding installments of rent
or (2) pay the excess to Tenant within thirty (30) days after delivery of such
statement. If the annual statement shows that Tenant's payments of Additional
Rent for such calendar year pursuant to Paragraph 7.e. hereof were less than
Tenant's obligation for the calendar year, Tenant shall pay the deficiency to
Landlord within thirty (30) days after delivery of such statement.

               g. Proration for Partial Lease Year. If this Lease terminates on
a day other than the last day of a calendar year, the Additional Rent payable by
Tenant pursuant to this Paragraph 7 applicable to the calendar year in which
this Lease terminates shall be prorated on the basis that the number of days
from the commencement of such calendar year to and including such termination
date bears to three hundred sixty-five (365).

        8. Use of Premises; Compliance with Law.

               a. Use of Premises. The Premises shall be used solely for general
office purposes for the business of Tenant as described in Paragraph 2.g. above
(which includes a server room) or for any other general office use consistent
with the operation of the Building as a first-class high-rise office building in
the San Francisco financial district, and for no other use or purpose. Landlord
represents and warrants to Tenant that the Building is zoned and otherwise
entitled so as to permit the Premises to be used for general office purposes,
provided, however, that the foregoing shall not relieve Tenant from
responsibility for obtaining a building permit and other applicable permits in
connection with Tenant's construction of the Initial Alterations or any
subsequent Alterations.

        Tenant shall not do or suffer or permit anything to be done in or about
the Premises or the Real Property, nor bring or keep anything therein, which
would in any way subject Landlord, Landlord's agents or the holder of any
Superior Interest (as defined in Paragraph 21) to any liability, increase the
premium rate of or affect any fire, casualty, liability, rent or other insurance
relating to the Real Property or any of the contents of the Building, or cause a
cancellation of, or give rise to any defense by the insurer to any claim under,
or conflict with, any policies for such insurance. If any act or omission of
Tenant results in any such increase in premium rates, Tenant shall pay to
Landlord upon demand the amount of such increase. Tenant shall not do or suffer
or permit anything to be done in or about the Premises or the Real Property
which will in any way unreasonably obstruct or interfere with the rights of
other tenants or occupants of the Building or injure or annoy them, or use or
suffer or permit the Premises to be used for any immoral or unlawful purpose,
nor shall Tenant cause, maintain, suffer or permit any nuisance in, on or about
the Premises or the Real Property. Without limiting the foregoing, no
loudspeakers or other similar device which can be heard outside the Premises
shall, without the prior written approval of Landlord, be used in or about the
Premises. Tenant shall not commit or suffer to be committed any waste in, to or
about the Premises.

        Tenant agrees not to employ any person, entity or contractor for any
work in the Premises (including moving Tenant's equipment and furnishings in,
out or around the Premises) whose presence is likely to give rise to a labor or
other disturbance in the Building and, if necessary to prevent such a
disturbance in a particular situation, Landlord may require Tenant to employ
union labor for the work. Landlord will advise Tenant, upon request, as to
whether a given person, entity or contractor, in Landlord's reasonable judgment,
is likely to cause a labor or other disturbance.

               b. Compliance with Law. Tenant shall not do or permit anything to
be done in or about the Premises which will in any way conflict with any Legal
Requirement (as defined in Paragraph 7.a.(16) above) now in force or which may
hereafter be enacted. Tenant, at its sole cost and expense, shall promptly
comply with all such present and future Legal Requirements relating to the
condition, use or occupancy of the Premises, and shall perform all work to the
Premises or other portions of the Real Property required to effect such
compliance (or, as to work to the Base Building (as defined below) or outside of
the Premises, Landlord, at Landlord's election, may perform such work at
Tenant's cost). Notwithstanding the foregoing, however, (I) Tenant shall not be
required to perform any changes to the Base Building unless such changes are
related to or affected or triggered by (i) Tenant's Alterations (as defined in
Paragraph 9 below), other than


                                       9
<PAGE>

the Initial Alterations (which are addressed in clause (II) below), (ii)
Tenant's particular use of the Premises (as opposed to Tenant's use of the
Premises for general office purposes in a normal and customary manner), or (iii)
Tenant's particular employees or employment practices, and (II) Tenant shall not
be required to perform any changes to portions of the Building systems located
outside of the Premises, or to other components of the Base Building located
outside of the Premises, by reason of the Initial Alterations unless such
changes are related to or affected or triggered by (i) Tenant's failure to
design and construct the Initial Alterations in compliance with applicable
building codes and other Legal Requirements, or (ii) inclusion in the Initial
Alterations of improvements which are not normal and customary general office
improvements (such as, without limitation, library, file, computer or meeting
rooms, classroom facilities or kitchens or cafeterias or other areas requiring
floor reinforcement or enhanced systems requirements). Upon Tenant's request
with its submission to Landlord of the plans and specifications for the Initial
Alterations, Landlord will advise Tenant if any of the Initial Alterations are
within the preceding clause (ii). The judgment of any court of competent
jurisdiction or the admission of Tenant in an action against Tenant, whether or
not Landlord is a party thereto, that Tenant has violated any Legal Requirement
shall be conclusive of that fact as between Landlord and Tenant. Tenant shall
immediately furnish Landlord with any notices received from any insurance
company or governmental agency or inspection bureau regarding any unsafe or
unlawful conditions within the Premises or the violation of any Legal
Requirement. In no event shall Tenant's compliance obligations hereunder include
any work required of Landlord as Landlord's Work pursuant to Paragraph 4.c.
above.

               "Base Building" means the structural portions of the Building
(including exterior walls, roof, foundation, floor slabs and core of the
Building), all Building systems, including, without limitation, elevator,
plumbing, heating, electrical, security, life safety and power, except (i) those
special or supplemental systems (including air-conditioning systems), and
equipment used in connection therewith , and non-Building standard lighting and
electrical wiring installed specifically for Tenant or any other tenants and
(ii) the portion of any Building system within the Premises or any other
specific tenant space, the maintenance, repair or compliance of which is the
responsibility of Tenant or such other tenant, respectively.

               c. Hazardous Materials. Tenant shall not cause or permit the
storage, use, generation, release, handling or disposal (collectively,
"Handling") of any Hazardous Materials (as defined below), in, on, or about the
Premises or the Real Property by Tenant or any agents, employees, contractors,
licensees, subtenants, customers, guests or invitees of Tenant (collectively
with Tenant, "Tenant Parties"), except that Tenant shall be permitted to use
normal quantities of office supplies or products (such as copier fluids or
cleaning supplies) customarily used in the conduct of general business office
activities ("Common Office Chemicals"), provided that the Handling of such
Common Office Chemicals shall comply at all times with all Legal Requirements,
including Hazardous Materials Laws (as defined below). Notwithstanding anything
to the contrary contained herein, however, in no event shall Tenant permit any
usage of Common Office Chemicals in a manner that may cause the Premises or the
Real Property to be contaminated by any Hazardous Materials or in violation of
any Hazardous Materials Laws. After obtaining knowledge thereof, Tenant shall
immediately advise Landlord in writing of (a) any and all enforcement, cleanup,
remedial, removal, or other governmental or regulatory actions instituted,
completed, or threatened pursuant to any Hazardous Materials Laws relating to
any Hazardous Materials affecting the Premises; and (b) all claims made or
threatened by any third party against Tenant, Landlord, the Premises or the Real
Property relating to damage, contribution, cost recovery, compensation, loss, or
injury resulting from any Hazardous Materials on or about the Premises. Without
Landlord's prior written consent, Tenant shall not take any remedial action or
enter into any agreements or settlements in response to the presence of any
Hazardous Materials in, on, or about the Premises. Tenant shall be solely
responsible for and shall indemnify, defend and hold Landlord and all other
Indemnitees (as defined in Paragraph 14.b. below), harmless from and against all
Claims (as defined in Paragraph 14.b. below), arising out of or in connection
with, or otherwise relating to (i) any Handling of Hazardous Materials by any
Tenant Party or Tenant's breach of its obligations hereunder, or (ii) any
removal, cleanup, or restoration work and materials necessary to return the Real
Property or any other property of whatever nature located on the Real Property
to their condition existing prior to the Handling of Hazardous Materials in, on
or about the Premises by Tenant or any Tenant Party. Tenant's obligations under
this paragraph shall survive the expiration or other termination of this Lease.
For purposes of this Lease, "Hazardous Materials" means any explosive,
radioactive materials, hazardous wastes, or hazardous substances, including
without limitation asbestos containing materials, PCB's, CFC's, or substances
defined as "hazardous substances" in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601-9657;
the Hazardous Materials Transportation Act of 1975, 49 U.S.C. Section 1801-1812;
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901-
6987; or any other Legal Requirement regulating, relating to, or imposing
liability or standards of conduct concerning any such materials or substances
now or at any time hereafter in effect (collectively, "Hazardous Materials
Laws").

               d. Applicability of Paragraph. The provisions of this Paragraph 8
are for the benefit of Landlord, the holder of any Superior Interest (as defined
in Paragraph 21 below), and the other Indemnitees only and are not nor shall
they be construed to be for the benefit of any tenant or occupant of the
Building.

        9. Alterations and Restoration.


                                       10
<PAGE>

               a. Tenant shall not make or permit to be made any alterations,
modifications, additions, decorations or improvements to the Premises, or any
other work whatsoever that would directly or indirectly involve the penetration
or removal (whether permanent or temporary) of, or require access through, in,
under, or above any floor, wall or ceiling, or surface or covering thereof in
the Premises (collectively, "Alterations"), except as expressly provided in this
Paragraph 9. If Tenant desires any Alteration, except for Cosmetic Alterations
as described in the next paragraph, Tenant must obtain Landlord's prior written
approval of such Alteration, which approval shall not be unreasonably withheld
or delayed, provided, however, that Landlord shall have at least ten (10)
Business Days from Landlord's receipt of Final Plans (as defined below) for any
Alterations in which to grant or reasonably withhold its approval of such
Alterations. "Final Plans" means working plans and specifications (the "Working
Drawings") for all of the work and improvements which Tenant desires to be
included within the Alterations (including any related Alterations), and which
show work and improvements that comply with all applicable Legal Requirements
and the Building Construction Standards (as defined below), and shall be in
sufficient detail as to enable the general contractor for the work to obtain all
necessary governmental permits for construction of all of the Alterations
(including any related Alterations) and to secure complete bids from qualified
contractors to perform the work for all of the Alterations (including any
related Alterations). In the case of the Initial Alterations, the aforesaid ten
(10) Business Day period shall commence on the later of the date of this Lease
or Landlord's receipt of the Final Plans for the Initial Alterations.
Notwithstanding the foregoing, Tenant may submit the Final Plans for the Initial
Alterations in logical stages or trade groupings, in which case the aforesaid
ten (10) Business Day period shall apply to the plans and specifications for
each such stage or grouping after submission thereof; provided, however, that
Landlord reserves the right to modify its approval, conditions or requirements
with respect to the plans and specifications for any such prior stage or
grouping to the extent made necessary by the requirements of the plans and
specifications for any subsequently submitted stage or grouping.

        Notwithstanding the foregoing or anything to the contrary contained
elsewhere in this Paragraph 9, Tenant shall have the right, without Landlord's
consent, to make any Alteration to the Premises that meets all of the following
criteria (a "Cosmetic Alteration"): (a) the Alteration is decorative in nature
(such as paint, carpet or other wall or floor finishes, movable partitions or
other such work), (b) Tenant provides Landlord with ten (10) days' advance
written notice of the commencement of such Alteration, (c) such Alteration does
not affect the Building's electrical, mechanical, life safety, plumbing,
security, or HVAC systems or any other portion of the Base Building or any part
of the Building other than the Premises, (d) the work will not decrease the
value of the Premises, does not require a building permit or other governmental
permit, uses only new materials comparable in quality to those being replaced
and is performed in a workman-like manner and in accordance with all Legal
Requirements, and (e) the cost of such Alteration, when aggregated with the cost
of all other Cosmetic Alterations performed during the previous twelve (12)
month period, does not exceed Sixty-Five Thousand Dollars ($65,000.00) in the
aggregate as to all of the Premises. At the time Tenant notifies Landlord of any
Cosmetic Alteration, Tenant shall give Landlord a copy of Tenant's plans for the
work. If the Cosmetic Alteration is of such a nature that formal plans will not
be prepared for the work, Tenant shall provide Landlord with a reasonably
specific description of the work.

        All Alterations shall be made at Tenant's sole cost and expense,
including the expense of complying with all present and future Legal
Requirements, and the expense of any other work required to be performed in
other areas within or outside the Premises by reason of the Alterations;
provided, however, that as to the Initial Alterations Tenant's duty to perform
compliance work outside of the Premises shall be subject to clause (II) of
Paragraph 8.b. Alterations shall be made, at Tenant's election, by Landlord's
contractor or by a contractor reasonably approved by Landlord. If Tenant, in its
sole discretion, hires Landlord's contractor to perform the Alterations
(including, without limitation, the Initial Alterations), Landlord's contractor
shall be entitled to receive a fee for such work of fifteen percent (15%) of the
first $100,000 of the construction costs of such work, and the fee for any
construction costs over such amount shall be as negotiated by Tenant and
Landlord's contractor. If Landlord's contractor does not perform the Alterations
pursuant to the above, Tenant shall pay Landlord on demand prior to or during
the course of such construction an amount (the "Alteration Operations Fee")
equal to five percent (5%) of the total cost of the Alterations (and for
purposes of calculating the Alteration Operations Fee, such cost shall include
architectural and engineering fees, but shall not include permit fees) as
compensation to Landlord for electrical energy consumed in connection with the
work, freight elevator operation, additional cleaning expenses, additional
security services, review of plans and specifications, and for other
miscellaneous costs incurred by Landlord as result of the work. Notwithstanding
the foregoing, (i) the Alteration Operations Fee shall not be due with respect
to Cosmetic Alterations, and in lieu thereof Tenant shall reimburse Landlord
within thirty (30) days after Landlord's demand for the actual and reasonable
fees paid by Landlord to third party architects, engineers or other consultants
retained by Landlord to review the Cosmetic Alterations and confirm that they
qualify as such, and (ii) the Alteration Operations Fee with respect to the
Initial Alterations shall be an amount equal to Sixty-Three Thousand Four
Hundred Sixty-Seven Dollars ($63,467.00).

        All such work shall be performed diligently and in a first-class
workmanlike manner and in accordance with plans and specifications reasonably
approved by Landlord, and shall comply with all Legal Requirements and
Landlord's reasonable construction procedures and requirements for the Building,
as in effect from time to time (including Landlord's reasonable requirements
relating to insurance and contractor qualifications) (the "Building Construction
Standards"). In no event shall Tenant employ any person, entity


                                       11
<PAGE>

or contractor to perform work in the Premises whose presence may give rise to a
labor or other disturbance in the Building. Default by Tenant in the payment of
any sums agreed to be paid by Tenant for or in connection with an Alteration
(regardless of whether such agreement is pursuant to this Paragraph 9 or
separate instrument) shall entitle Landlord to all the same remedies as for
non-payment of rent hereunder, subject to the expiration of any applicable
notice and cure period under Paragraph 25.a. below. Any Alterations, including,
without limitation, moveable partitions that are affixed to the Premises (but
excluding moveable, free standing partitions) and all carpeting, shall at once
become part of the Building and the property of Landlord. Tenant shall give
Landlord not less than five (5) days prior written notice of the date the
construction of the Alteration is to commence. Landlord may post and record an
appropriate notice of nonresponsibility with respect to any Alteration and
Tenant shall maintain any such notices posted by Landlord in or on the Premises.

               b. Upon Tenant's written request expressly referring to this
Paragraph 9.b., Landlord shall advise Tenant at the time of Landlord's approval
of any Alteration requested by Tenant or, if pursuant to Paragraph 9.a.
Landlord's approval is not required, within five (5) Business Days after such
written request by Tenant, whether Landlord will require the removal of the
Alteration and restoration of the Premises to its previous condition at the
expiration or sooner termination of this Lease. Those Alterations so required by
Landlord to be removed from the Premises at the expiration or sooner termination
of this Lease shall be so removed by Tenant and the Premises shall be restored
by Tenant to their condition prior to the making of the Alterations, ordinary
wear and tear excepted. If Tenant fails to request such determination by
Landlord as set forth above, then at Landlord's sole election exercised at the
expiration or sooner termination of this Lease any or all such Alterations shall
be removed and the Premises so restored. If Tenant requests such determination
by Landlord as set forth above, and Landlord fails to timely respond thereto,
Landlord shall be deemed to have exercised its right to require that Tenant
remove such Alterations at the expiration or sooner termination of this Lease
and restore the Premises as set forth above. Notwithstanding the foregoing,
Tenant shall not be obligated to remove from the Premises any of the Initial
Alterations which are normal and customary general office improvements. The
removal of the Alterations and the restoration of the Premises shall be
performed by a general contractor selected by Tenant and reasonably approved by
Landlord, in which event Tenant shall pay the general contractor's fees and
costs in connection with such work. Any separate work letter or other agreement
which is hereafter entered into between Landlord and Tenant pertaining to
Alterations shall be deemed to automatically incorporate the terms of this Lease
without the necessity for further reference thereto.

        10. Repair.

               a. By taking possession of the Premises, Tenant agrees that the
Premises are in good condition and repair, but the foregoing shall not relieve
Landlord from its obligation to perform Landlord's Work as required by Paragraph
4.c. above, or from its repair obligations pursuant to Paragraphs 10.b. and 26
below. Tenant, at Tenant's sole cost and expense, shall keep the Premises and
every part thereof (including the interior walls and ceilings of the Premises,
those portions of the Building systems located within and exclusively serving
the Premises, and improvements and Alterations) in good condition and repair,
ordinary wear and tear excepted. Tenant waives all rights to make repairs at the
expense of Landlord as provided by any Legal Requirement now or hereafter in
effect. It is specifically understood and agreed that, except as specifically
set forth in this Lease, Landlord has no obligation and has made no promises to
alter, remodel, improve, repair, decorate or paint the Premises or any part
thereof, and that no representations respecting the condition of the Premises or
the Building have been made by Landlord to Tenant. Tenant hereby waives the
provisions of California Civil Code Sections 1932(1), 1941 and 1942 and of any
similar Legal Requirement now or hereafter in effect.

               b. Landlord shall repair and maintain in good condition and
repair the Base Building (other than the portions of Building systems that are
Tenant's responsibility to maintain and repair pursuant to Paragraph 10.a.
above) and common areas of the Real Property; provided, however, that to the
extent repairs which Landlord is required to make pursuant to this Paragraph
10.b. are necessitated by the negligence or willful misconduct of Tenant or
Tenant's agents, employees or contractors, then Tenant shall reimburse Landlord
for the cost of such repair within thirty (30) days after Landlord's demand to
the extent Landlord is not reimbursed therefor by insurance (assuming for such
purpose that Landlord carries the insurance it is required to carry pursuant to
Paragraph 15.d. below). Landlord shall in no event be obligated to repair any
ordinary wear and tear to the Premises. Landlord shall repair and maintain the
Real Property in accordance with the foregoing provisions to the standards of
other first-class high-rise office buildings in the San Francisco financial
district.

        11. Abandonment. Tenant shall not abandon (within the meaning of
California Civil Code Section 1951.2) the Premises or any part thereof at any
time during the term hereof. Tenant understands that if Tenant so abandons the
Premises, the risk of fire, other casualty and vandalism to the Premises and the
Building will be increased. Accordingly, such action by Tenant shall constitute
an Event of Default hereunder. Upon the expiration or earlier termination of
this Lease, or if Tenant abandons or surrenders all or any part of the Premises
or is dispossessed of the Premises by process of law, or otherwise, any movable
furniture, equipment, trade fixtures, or other personal property belonging to
Tenant and left on the Premises shall at the option of Landlord be deemed to be
abandoned and, whether or not the property is deemed


                                       12
<PAGE>

abandoned, Landlord shall have the right to remove such property from the
Premises and charge Tenant for the removal and any restoration of the Premises
as provided in Paragraph 9. Landlord may charge Tenant for the storage of
Tenant's property left on the Premises at such rates as Landlord may from time
to time reasonably determine, or, Landlord may, at its option, store Tenant's
property in a public warehouse at Tenant's expense. Notwithstanding the
foregoing, neither the provisions of this Paragraph 11 nor any other provision
of this Lease shall impose upon Landlord any obligation to care for or preserve
any of Tenant's property left upon the Premises, and Tenant hereby waives and
releases Landlord from any claim or liability in connection with the removal of
such property from the Premises and the storage thereof and specifically waives
the provisions of California Civil Code Section 1542 with respect to such
release. Landlord's action or inaction with regard to the provisions of this
Paragraph 11 shall not be construed as a waiver of Landlord's right to require
Tenant to remove its property, restore any damage to the Premises and the
Building caused by such removal, and make any restoration required pursuant to
Paragraph 9 above.

        12. Liens. Tenant shall not permit any mechanic's, materialman's or
other liens arising out of work performed at the Premises by or on behalf of
Tenant to be filed against the fee of the Real Property nor against Tenant's
interest in the Premises. Landlord shall have the right to post and keep posted
on the Premises any notices which it deems necessary for protection from such
liens. If any such liens are filed, Landlord may, upon twenty (20) days' written
notice to Tenant, without waiving its rights based on such breach by Tenant and
without releasing Tenant from any obligations hereunder, pay and satisfy the
same and in such event the sums so paid by Landlord shall be due and payable by
Tenant immediately without notice or demand, with interest from the date paid by
Landlord through the date Tenant pays Landlord, at the Interest Rate. Tenant
agrees to indemnify, defend and hold Landlord and the other Indemnitees (as
defined in Paragraph 14.b. below) harmless from and against any Claims (as
defined in Paragraph 14.b. below) for mechanics', materialmen's or other liens
in connection with any Alterations, repairs or any work performed, materials
furnished or obligations incurred by or for Tenant, other than Claims due to
Landlord's failure to disburse Landlord's Allowance in accordance with the
requirements of Paragraph 4.b. above.

        13. Assignment and Subletting.

               a. Landlord's Consent. Landlord's and Tenant's agreement with
regard to Tenant's right to transfer all or part of its interest in the Premises
is as expressly set forth in this Paragraph 13. Tenant agrees that, except upon
Landlord's prior written consent, which consent shall not (subject to Landlord's
rights under Paragraph 13.d. below) be unreasonably withheld, neither this Lease
nor all or any part of the leasehold interest created hereby shall, directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise, be
assigned, mortgaged, pledged, encumbered or otherwise transferred by Tenant or
Tenant's legal representatives or successors in interest (collectively an
"assignment") and neither the Premises nor any part thereof shall be sublet or
be used or occupied for any purpose by anyone other than Tenant (collectively, a
"sublease"). Except where Landlord's consent is expressly not required
hereunder, any assignment or subletting without Landlord's prior written consent
shall, at Landlord's option, be void and shall constitute an Event of Default
entitling Landlord to exercise all remedies available to Landlord under this
Lease and at law.

        The parties hereto agree and acknowledge that, among other circumstances
for which Landlord may reasonably withhold its consent to an assignment or
sublease, it shall be reasonable for Landlord to withhold its consent where: (i)
the assignment or subletting would increase the operating costs for the Building
or the burden on the Building services, or generate additional foot traffic,
elevator usage or security concerns in the Building, or create an increased
probability of the comfort and/or safety of Landlord and other tenants in the
Building being compromised or reduced, (ii) the space will be used for a school
or training facility, an entertainment, sports or recreation facility, retail
sales to the public (unless Tenant's permitted use is retail sales), a personnel
or employment agency (other than executive offices of the same not having
substantial dealings with the public), an office or facility of any governmental
or quasi-governmental agency or authority having any on-premises dealings with
the general public, a place of public assembly (including without limitation a
meeting center, theater or public forum), any use by or affiliation with a
foreign government (including without limitation an embassy or consulate or
similar office), or a facility for the provision of social, welfare or clinical
health services or sleeping accommodations (whether temporary, daytime or
overnight); (iii) the proposed assignee or subtenant is a current tenant of the
Building, or is a prospective tenant of the Building with whom Landlord has
entered into a letter of intent (or similar document) or exchanged an offer and
counteroffer, and in either such case, Landlord has or will have, in the
applicable delivery period, available space in the Building that is comparable
to the Premises or the portion thereof subject to such subletting, as
applicable, or that otherwise meets such tenant's or prospective tenant's needs
(including delivery schedule); (iv) Landlord reasonably disapproves of the
proposed assignee or subtenant's reputation or creditworthiness; (v) Landlord
reasonably determines that the character of the business that would be conducted
by the proposed assignee or subtenant at the Premises, or the manner of
conducting such business, would be inconsistent with the character of the
Building as a first-class office building; (vi) the assignment or subletting may
conflict with any exclusive uses granted to other tenants of the Real Property,
or with the terms of any easement, covenant, condition or restriction, or other
agreement affecting the Real Property; (vii) the assignment or subletting would
involve a change in use from that expressly permitted under this Lease; or
(viii) Landlord reasonably determines that there is a material risk that the
proposed assignee may be unable to perform all of Tenant's obligations under
this Lease or the proposed


                                       13
<PAGE>

subtenant may be unable to perform all of its obligations under the proposed
sublease. Landlord's foregoing rights and options shall continue throughout the
entire term of this Lease.

        For purposes of this Paragraph 13, the following events shall be deemed
an assignment or sublease, as appropriate: (i) the issuance of equity interests
(whether stock, partnership interests or otherwise) in Tenant or any subtenant
or assignee, or any entity controlling any of them, to any person or group of
related persons, in a single transaction or a series of related or unrelated
transactions, such that, following such issuance, such person or group shall
have Control (as defined below) of Tenant or any subtenant or assignee; (ii) a
transfer of Control of Tenant or any subtenant or assignee, or any entity
controlling any of them, in a single transaction or a series of related or
unrelated transactions (including, without limitation, by consolidation, merger,
acquisition or reorganization), except that the transfer of outstanding capital
stock or other listed equity interests by persons or parties other than
"insiders" within the meaning of the Securities Exchange Act of 1934, as
amended, through the "over-the-counter" market or any recognized national or
international securities exchange, shall not be included in determining whether
Control has been transferred; (iii) a reduction of Tenant's assets to the point
that this Lease is substantially Tenant's only asset; or (iv) a change or
conversion in the form of entity of Tenant, any subtenant or assignee, or any
entity controlling any of them, which has the effect of limiting the liability
of any of the partners, members or other owners of such entity. "Control" shall
mean direct or indirect ownership of 50% or more of all of the voting stock of a
corporation or 50% or more of the legal or equitable interest in any other
business entity, or the power to direct the operations of any entity (by equity
ownership, contract or otherwise).

        If this Lease is assigned, whether or not in violation of the terms of
this Lease, Landlord may collect rent from the assignee. If the Premises or any
part thereof is sublet, Landlord may, upon an Event of Default by Tenant
hereunder, collect rent from the subtenant. In either event, Landlord may apply
the amount collected from the assignee or subtenant to Tenant's monetary
obligations hereunder.

        The consent by Landlord to an assignment or subletting hereunder shall
not relieve Tenant or any assignee or subtenant from obtaining Landlord's
express prior written consent to any other or further assignment or subletting.
Neither an assignment or subletting nor the collection of rent by Landlord from
any person other than Tenant, nor the application of any such rent as provided
in this Paragraph 13.a. shall be deemed a waiver of any of the provisions of
this Paragraph 13.a. or release Tenant from its obligation to comply with the
provisions of this Lease and Tenant shall remain fully and primarily liable for
all of Tenant's obligations under this Lease.

               b. Processing Expenses. Tenant shall pay to Landlord, as
Landlord's cost of processing each proposed assignment or subletting for which
Landlord's consent is required hereunder, an amount equal to the sum of (i)
Landlord's reasonable attorneys' and other professional fees, plus (ii) the sum
of $750.00 for the cost of Landlord's administrative, accounting and clerical
time (collectively, "Processing Costs"), and the amount of all direct and
indirect costs and expenses incurred by Landlord arising from the assignee or
sublessee moving into the subject space (including, without limitation, costs of
freight elevator operation for moving of furnishings and trade fixtures,
security service, janitorial and cleaning service, and rubbish removal service).
Notwithstanding anything to the contrary herein, Landlord shall not be required
to process any request for Landlord's consent to an assignment or subletting
until Tenant has paid to Landlord the amount of Landlord's estimate of the
Processing Costs and all other direct and indirect costs and expenses of
Landlord and its agents arising from the assignee or subtenant taking occupancy.

               c. Consideration to Landlord. In the event of any assignment or
sublease, except with respect to an assignment or sublease pursuant to Paragraph
13.g., Landlord shall be entitled to receive, as additional rent hereunder,
fifty percent (50%) of any consideration (including, without limitation, payment
for leasehold improvements and any "Leasehold Profit" as defined below) paid by
the assignee or subtenant for the assignment or sublease and, in the case of a
sublease, fifty percent (50%) of the excess of the amount of rent paid for the
sublet space by the subtenant over the amount of Monthly Rent under Paragraph 5
above and Additional Rent under Paragraph 7 above attributable to the sublet
space for the corresponding month; except that Tenant may recapture, on an
amortized basis over the term of the sublease or assignment, together with
interest on the unamortized balance at a rate per annum equal to three (3)
percentage points over the Treasury Rate charged as of the commencement date of
such assignment or sublease (i) any brokerage commissions paid by Tenant in
connection with the subletting or assignment (not to exceed commissions
typically paid in the market at the time of such subletting or assignment), (ii)
reasonable legal fees paid by Tenant in connection with such assignment or
subletting (provided that such legal fees shall not exceed One Thousand Five
Hundred Dollars ($1,500.00) for an assignment of the Lease and shall not exceed
Seven Hundred Fifty Dollars ($750.00) for any single sublease) and (iii) any
improvement allowance or construction costs incurred by Tenant in connection
with the assignment or sublease (collectively the "Assignment or Subletting
Costs"), provided that, as a condition to Tenant recapturing the Assignment or
Subletting Costs, Tenant shall provide to Landlord, within ninety (90) days of
Landlord's execution of Landlord's consent to the assignment or subletting, a
detailed accounting of the Assignment or Subletting Costs theretofore incurred
by Tenant and supporting documents, such as receipts and construction invoices,
and within one-hundred eighty (180) days of Landlord's execution of Landlord's
consent to the assignment or subletting, a detailed accounting of all Assignment
or Subletting Costs to be taken into account hereunder and supporting documents,
such as receipts and construction invoices. To effect the foregoing, Tenant
shall deduct from the


                                       14
<PAGE>

monthly amounts received by Tenant from the subtenant or assignee as rent or
Fconsideration (i) the Monthly Rent and Additional Rent payable by Tenant to
Landlord for the subject space and (ii) the incremental amount, on an amortized
basis, of the Assignment or Subletting Costs, and fifty percent (50%) of the
then remaining sum shall be paid promptly to Landlord. "Leasehold Profit" shall
be the value allocated to the leasehold between the parties to the assignment or
sublease, but in no event less than the excess of the present value of the fair
market rent of the Premises for the remaining term of this Lease after such
assignment or sublease, over the present value of the Monthly Rent payable
hereunder for such remaining term, as reasonably determined by Landlord. Upon
Landlord's request, Tenant shall assign to Landlord all amounts to be paid to
Tenant by any such subtenant or assignee and that belong to Landlord, and shall
direct such subtenant or assignee to pay the same directly to Landlord. If there
is more than one sublease under this Lease, the amounts (if any) to be paid by
Tenant to Landlord pursuant to the preceding sentence shall be separately
calculated for each sublease and amounts due Landlord with regard to any one
sublease may not be offset against rental and other consideration pertaining to
or due under any other sublease.

               d. Procedures. If Tenant desires to assign this Lease or any
interest therein or sublet all or part of the Premises, Tenant shall give
Landlord written notice thereof and the terms proposed (the "Sublease Notice"),
which Sublease Notice, in the case of a proposed sublease, shall designate the
space proposed to be sublet. Landlord shall have the prior right and option (to
be exercised by written notice to Tenant given within thirty (30) days after
receipt of Tenant's notice) (i) to sublet from Tenant the portion of the
Premises proposed by Tenant to be sublet, for the term for which such portion is
proposed to be sublet, but at the lesser of the proposed sublease rent or the
same rent (including Additional Rent as provided for in Paragraph 7 above) as
Tenant is required to pay to Landlord under this Lease for the same space,
computed on a pro rata square footage basis, and during the term of such
sublease Tenant shall be released of its obligations under this Lease with
regard to the subject space, provided, however, that if the portion of the
Premises proposed by Tenant to be sublet consists of space on more than one
floor of the Building, Landlord may exercise (or not exercise) its sublet option
under this clause (i) separately as to the proposed sublet space on each such
floor, (ii) in the case of any proposed assignment of this Lease or any proposed
sublet of all or any portion of the Premises the term of which is greater than
five (5) years or expires during the last fifteen (15) months of the term of
this Lease, to terminate this Lease in its entirety (in the case of any proposed
assignment) or as it pertains to the portion of the Premises so proposed by
Tenant to be sublet (in the case of any such proposed sublet), provided,
however, that if the portion of the Premises proposed by Tenant to be sublet
consists of space on more than one floor of the Building, Landlord may exercise
(or not exercise) its termination option under this clause (ii) separately as to
the proposed sublet space on each such floor, or (iii) to approve Tenant's
proposal to assign or sublet conditional upon Landlord's subsequent written
approval of the specific assignment or sublease obtained by Tenant and the
specific assignee or subtenant named therein. If Landlord exercises its option
in (i) above, then Landlord may, at Landlord's sole cost, construct improvements
in the subject space and, so long as the improvements are suitable for general
office purposes, Landlord shall have no obligation to restore the subject space
to its original condition following the termination of the sublease. If Landlord
exercises its option described in (iii) above, then Tenant shall have six (6)
months thereafter to submit to Landlord, for Landlord's written approval,
Tenant's proposed assignment or sublease agreement (in which the proposed
assignee or subtenant shall be named, and which agreement shall otherwise meet
the requirements of Paragraph 13.e. below), together with a current financial
statement of such proposed assignee or subtenant and any other information
reasonably requested by Landlord. If Tenant fails to submit the specific
assignment or sublease and other required information within such time, or if
the terms of the specific assignment or sublease submitted by Tenant vary from
the terms set forth in the Sublease Notice approved by Landlord pursuant to
(iii) above, then Tenant shall be required to submit a new Sublease Notice for
Landlord's evaluation pursuant to the procedures set forth in this paragraph. If
Landlord fails to exercise any such option to sublet or to terminate, this shall
not be construed as or constitute a waiver of any of the provisions of
Paragraphs 13.a., b., c. or d. herein. If Landlord exercises any option to
sublet or to terminate, any costs of demising the portion of the Premises
affected by such subleasing or termination shall be borne by Tenant. In
addition, Landlord shall have no liability for any real estate brokerage
commission(s) or with respect to any of the costs and expenses that Tenant may
have incurred in connection with its proposed assignment or subletting, and
Tenant agrees to indemnify, defend and hold Landlord and all other Indemnitees
harmless from and against any and all Claims (as defined in Paragraph 14.b.
below), including, without limitation, claims for commissions arising from such
proposed assignment or subletting. Landlord's foregoing rights and options shall
continue throughout the entire term of this Lease.

               e. Documentation. No permitted assignment or subletting by Tenant
shall be effective until there has been delivered to Landlord a fully executed
counterpart of the assignment or sublease which expressly provides that (i) the
assignee or subtenant may not further assign or sublet the assigned or sublet
space without Landlord's prior written consent (which, in the case of a further
assignment proposed by an assignee, shall not be unreasonably withheld, subject
to Landlord's rights under the provisions of this Paragraph 13), subject,
however, to an assignee's right to further assign this Lease without Landlord's
consent pursuant to Paragraph 13.g. below, (ii) the assignee or subtenant will
comply with all of the provisions of this Lease applicable to the Premises (or,
in the case of a sublease, applicable to the portion of the Premises covered by
such sublease), and Landlord may enforce the Lease provisions directly against
such assignee or subtenant (except that, in the case of a sublease, the
subtenant's liability for rent shall not exceed the rent set forth in the
sublease), (iii) in the case of an assignment, the assignee assumes all of
Tenant's obligations under this Lease arising on or after the date of the
assignment, and (iv) in the case of a sublease, the subtenant


                                       15
<PAGE>

agrees to be and remain jointly and severally liable with Tenant for the payment
of rent pertaining to the sublet space in the amount set forth in the sublease,
and for the performance of all of the terms and provisions of this Lease which
are applicable to the sublet space. In addition to the foregoing, no sublease by
Tenant shall be effective until there has been delivered to Landlord a fully
executed counterpart of Landlord's consent to sublease form. The failure or
refusal of a subtenant or assignee to execute any such instrument shall not
release or discharge the subtenant or assignee from its liability as set forth
above. Notwithstanding the foregoing, however, no subtenant or assignee shall be
permitted to occupy the Premises unless and until such subtenant or assignee
provides Landlord with certificates evidencing that such subtenant or assignee
is carrying all insurance coverage required of such subtenant or assignee under
this Lease.

               f. No Merger. Without limiting any of the provisions of this
Paragraph 13, if Tenant has entered into any subleases of any portion of the
Premises, the voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation by Landlord and Tenant, shall not work a merger, and shall, at the
option of Landlord, terminate all or any existing subleases or subtenancies or,
at the option of Landlord, operate as an assignment to Landlord of any or all
such subleases or subtenancies. If Landlord does elect that such surrender or
cancellation operate as an assignment of such subleases or subtenancies,
Landlord shall in no way be liable for any previous act or omission by Tenant
under the subleases or for the return of any deposit(s) under the subleases that
have not been actually delivered to Landlord, nor shall Landlord be bound by any
sublease modification(s) executed without Landlord's consent or for any advance
rental payment by the subtenant in excess of one month's rent.

               g. Affiliates. Notwithstanding anything to the contrary in
Paragraphs 13.a. through 13.d., but subject to Paragraphs 13.e. and 13.f.,
Tenant may assign this Lease or sublet the Premises or any portion thereof,
without Landlord's consent, to any partnership, corporation or other entity
which controls, is controlled by, or is under common control with Tenant or
Tenant's parent (control being defined for such purposes as ownership of at
least 50% of the equity interests in, and the power to direct the management of,
the relevant entity) or to any partnership, corporation or other entity
resulting from a merger or consolidation with Tenant, or to any person or entity
which acquires substantially all the assets of Tenant (whether as a direct
purchase of such assets or a purchase of all or substantially all of Tenant's
stock, partnership or other equity interests) as a going concern (collectively,
an "Affiliate"), provided that (i) Landlord receives at least ten (10) days'
prior written notice of an assignment or subletting, (ii) the Affiliate's net
worth is not less than Tenant's net worth immediately prior to the assignment or
subletting, (iii) except in the case of an assignment by a merger or
consolidation where Tenant is not the surviving entity, or by the acquisition of
substantially all of Tenant's assets, the Affiliate has proven experience in the
operation of a first-class business of a type consistent with the use of the
Building as a first-class office Building in the San Francisco financial
district, (iv) except in the case of an assignment by a merger or consolidation
where Tenant is not the surviving entity, the Affiliate remains an Affiliate for
the duration of the subletting or the balance of the term in the event of an
assignment, (v) the Affiliate assumes (in the event of an assignment) in writing
all of Tenant's obligations under this Lease and agrees (in the event of a
sublease) that such subtenant will, at Landlord's election, attorn directly to
Landlord in the event that this Lease is terminated for any reason, (vi)
Landlord receives a fully executed copy of an assignment or sublease agreement
between Tenant and the Affiliate at least ten (10) days prior to the effective
date of such assignment or sublease, and (vii) in the case of an assignment, the
essential purpose of such assignment is to transfer an active, ongoing business
with substantial assets in addition to this Lease, and in the case of an
assignment or sublease the transaction is for legitimate business purposes
unrelated to this Lease and the transaction is not a subterfuge by Tenant to
avoid it obligations under this Lease or the restrictions on assignment and
subletting contained herein.

        14. Indemnification of Landlord.

               a. Landlord and the holders of any Superior Interests (as defined
in Paragraph 21 below) shall not be liable to Tenant and Tenant hereby waives
all claims against such parties for any loss, injury or other damage to person
or property in or about the Premises or the Real Property from any cause
whatsoever, including without limitation, water leakage of any character from
the roof, walls, basement, fire sprinklers, appliances, air conditioning,
plumbing or other portion of the Premises or the Real Property, or gas, fire,
explosion, falling plaster, steam, electricity, or any malfunction within the
Premises or the Real Property, or acts of other tenants of the Building;
provided, however, that the foregoing waiver shall be inapplicable to any loss,
injury or damage to the extent resulting from Landlord's gross negligence or
willful misconduct. Tenant acknowledges that from time to time throughout the
term of this Lease, construction work may be performed in and about the Building
and the Real Property by Landlord, contractors of Landlord, or other tenants or
their contractors, and that such construction work may result in noise and
disruption to Tenant's business. In addition to and without limiting the
foregoing waiver or any other provision of this Lease, Tenant agrees that
Landlord shall not be liable for, and Tenant expressly waives and releases
Landlord and the other Indemnitees (as defined in Paragraph 14.b. below) from
any Claims (as defined in Paragraph 14.b. below), including without limitation,
any and all Special Claims and Damages (as defined in Paragraph 28 below),
arising or alleged to be arising as a result of any such construction activity;
provided, however, that the foregoing waiver (other than as it applies to
Special Claims and Damages) shall be inapplicable to any loss, injury or damage
to the extent resulting from Landlord's gross negligence or willful misconduct.
Landlord shall use its good faith efforts to minimize such noise and disruption
to Tenant's business, and, without limitation, Landlord shall perform any
extraordinarily noisy or disruptive work after Business Hours


                                       16
<PAGE>

or on weekends to the extent such procedures would be generally followed by
managers of other first class high rise office buildings in the San Francisco
financial district (except to the extent an emergency and/or Legal Requirements
require otherwise, as reasonably determined by Landlord).

               b. Tenant shall hold Landlord and the holders of any Superior
Interest, and the constituent shareholders, partners or other owners thereof,
and all of their agents, contractors, servants, officers, directors, employees
and licensees (collectively with Landlord, the "Indemnitees") harmless from and
indemnify the Indemnitees against any and all claims, liabilities, damages,
costs and expenses, including reasonable attorneys' fees and costs incurred in
defending against the same (collectively, "Claims"), to the extent arising from
(a) the acts or omissions of Tenant or any other Tenant Parties (as defined in
Paragraph 8.c. above) in, on or about the Real Property, or (b) any construction
or other work undertaken by or on behalf of Tenant in, on or about the Premises,
whether prior to or during the term of this Lease (but excluding any
construction work undertaken by or on behalf of Landlord), or (c) any breach or
Event of Default under this Lease by Tenant, or (d) any accident, injury or
damage, howsoever and by whomsoever caused, to any person or property, occurring
in, on or about the Premises (including, without limitation, the balconies
contained within the Premises); except to the extent such Claims have been
released pursuant to Paragraph 16 below or such Clams are caused by the
negligence or willful misconduct of Landlord or its authorized representatives,
by Landlord's breach of its obligations under this Lease, or by the negligence
or willful misconduct of the Indemnitee seeking the benefit of the foregoing
indemnity. In case any action or proceeding be brought against any of the
Indemnitees by reason of any such Claim, Tenant, upon notice from Landlord,
covenants to resist and defend at Tenant's sole expense such action or
proceeding by counsel reasonably satisfactory to Landlord. The provisions of
this Paragraph 14.b. shall survive the expiration or earlier termination of this
Lease with respect to any injury, illness, death or damage occurring prior to
such expiration or termination.

        15. Insurance.

               a. Tenant's Insurance. Tenant shall, at Tenant's expense,
maintain during the term of this Lease (and, if Tenant occupies or conducts
activities in or about the Premises prior to or after the term hereof, then also
during such pre-term or post-term period): (i) commercial general liability
insurance including contractual liability coverage, with minimum coverages of
$1,000,000 per occurrence combined single limit for bodily injury and property
damage, $1,000,000 for products-completed operations coverage, $100,000 fire
legal liability, $1,000,000 for personal and advertising injury (which coverage
shall not be subject to the contractual liability exclusion), with a $2,000,000
general aggregate limit, for injuries to, or illness or death of, persons and
damage to property occurring in or about the Premises or otherwise resulting
from Tenant's operations in the Building, (ii) property insurance protecting
Tenant against loss or damage by fire and such other risks as are insurable
under then-available standard forms of "all risk" insurance policies (excluding
earthquake and flood but including water damage), covering Tenant's personal
property and trade fixtures in or about the Premises or the Real Property, and
any improvements and/or Alterations in the Premises, for the full replacement
value thereof without deduction for depreciation, except that Tenant shall not
be required to insure any of the Initial Alterations or subsequent Alterations
in the Premises which are normal and customary general office improvements;
(iii) workers' compensation insurance in statutory limits; (iv) at least three
months' coverage for loss of business income and continuing expenses, providing
protection against any peril included within the classification "all risk,"
excluding earthquake and flood but including water damage; and (v) if Tenant
operates owned, leased or non-owned vehicles on the Real Property, comprehensive
automobile liability insurance with a minimum coverage of $1,000,000 per
occurrence, combined single limit. The policies described above in clauses (i)
and (v) shall protect Tenant, as named insured, and Landlord and all the other
Indemnitees and any other parties designated by Landlord, as additional
insureds; shall insure Landlord's and such other parties' contingent liability
with regard to acts or omissions of Tenant; and shall specifically include all
liability assumed by Tenant under this Lease (provided, however, that such
contractual liability coverage shall not limit or be deemed to satisfy Tenant's
indemnity obligations under this Lease). The policies described in clause (ii)
above shall protect Tenant, as named insured, and Landlord and all the other
Indemnitees and any other parties designated by Landlord, as additional insureds
and as loss payees, as their respective interests may appear. If any of the
policies described above in this Paragraph 15.a. are subject to deductibles, the
deductible amounts (including by way of a self-insured retention) shall not be
in excess of those approved in advance in writing by Landlord in its reasonable
discretion. Landlord reserves the right to increase the foregoing amount of
liability coverage from time to time as Landlord reasonably determines is
required to adequately protect Landlord and the other parties designated by
Landlord from the matters insured thereby (provided, however, that Landlord
makes no representation that the limits of liability required hereunder from
time to time shall be adequate to protect Tenant), and to require that Tenant
cause any of its contractors, vendors, movers or other parties conducting
activities in or about or occupying the Premises to obtain and maintain
insurance as reasonably determined by Landlord and as to which Landlord and such
other parties reasonably designated by Landlord shall be additional insureds.

               b. Policy Form. Each insurance policy required pursuant to
Paragraph 15.a. above shall be issued by an insurance company licensed in the
State of California and with a general policyholders' rating of "A" or better
and a financial size ranking of "Class VIII" or higher in the most recent
edition of Best's Insurance Guide. Each insurance policy, other than Tenant's
workers' compensation insurance, shall


                                       17
<PAGE>

(i) provide that it may not be materially changed, cancelled or allowed to lapse
unless thirty (30) days' prior written notice to Landlord and any other insureds
designated by Landlord is first given, (ii) provide that no act or omission of
Tenant shall affect or limit the obligations of the insurer with respect to any
other insured, (iii) include all waiver of subrogation rights endorsements
necessary to effect the provisions of Paragraph 16 below, and (iv) provide that
the policy and the coverage provided shall be primary, that Landlord, although
an additional insured, shall nevertheless be entitled to recovery under such
policy for any damage to Landlord or the other Indemnitees by reason of acts or
omissions of Tenant, and that any coverage carried by Landlord shall be
noncontributory with respect to policies carried by Tenant. Each such insurance
policy or, if consistent with then current industry practice, a certificate
thereof, shall be delivered to Landlord by Tenant on or before the effective
date of such policy and thereafter Tenant shall deliver to Landlord renewal
policies or, if consistent with then current industry practice, renewal
certificates, at least thirty (30) days prior to the expiration dates of
expiring policies. If Tenant fails to procure such insurance or to deliver such
policies or certificates, and such failure shall continue for three (3) Business
Days after notice thereof from Landlord to Tenant, Landlord may, at its option,
procure the same for Tenant's account, and the cost thereof shall be paid to
Landlord by Tenant upon demand. Landlord may at any time, and from time to time,
inspect and/or copy any and all insurance policies required by this Lease.

               c. No Implication. Nothing in this Paragraph 15 shall be
construed as creating or implying the existence of (i) any ownership by Tenant
of any fixtures, additions, Alterations, or improvements in or to the Premises
or (ii) any right on Tenant's part to make any addition, Alteration or
improvement in or to the Premises.

               d. Landlord's Insurance. During the term hereof, Landlord shall
keep the Building and all Initial Alterations and subsequent Alterations in the
Premises made pursuant to Paragraph 4 hereof (but excluding any Initial
Alterations or subsequent Alterations which are not normal and customary general
office improvements, and also excluding any personal property, trade fixtures or
other fixtures, office equipment, furniture, artwork and other decorations in
any portion of the Premises not affixed to and a part of the Building) insured
through reputable insurance underwriters against perils covered by a standard
"all risk" insurance policy or policies as such policies are in use from time to
time for comparable first-class high-rise office buildings in the San Francisco
financial district (excluding, at Landlord's option, perils such as earthquake,
flood and other standard "all risk" policy form exclusions), with a deductible
provision, if any, that does not materially exceed that which prudent, efficient
operators of first-class high-rise office buildings in the San Francisco
financial district would carry from time-to-time in the exercise of reasonable
business judgment, in an amount or amounts equal to not less than eighty percent
(80%) of the full replacement value of the Building (excluding the land and the
footings, foundations and installations below the basement level) and such
Initial Alterations and subsequent Alterations (or such greater percentage as
shall be required to preclude Landlord from being deemed a coinsurer) , without
deduction for depreciation, including the costs of demolition and debris
removal, or such other fire and property damage insurance as Landlord shall
reasonably determine to give substantially equal or greater protection. During
the term hereof, Landlord shall keep in force general liability insurance in the
amount and coverage as Landlord deems commercially reasonable.

        16. Mutual Waiver of Subrogation Rights. Each party hereto hereby
releases the other respective party and, in the case of Tenant as the releasing
party, the other Indemnitees, and the respective partners, shareholders, agents,
employees, officers, directors and authorized representatives of such released
party, from any Claims such releasing party may have for damage to the Building,
the Premises or any of such releasing party's fixtures, personal property,
improvements and alterations in or about the Premises, the Building or the Real
Property that is caused by or results from risks insured against under any fire
and extended coverage insurance policies actually carried by such releasing
party or deemed to be carried by such releasing party; provided, however, that
such waiver shall be limited to the extent of the net insurance proceeds payable
by the relevant insurance company with respect to such loss or damage (or in the
case of deemed coverage, the net proceeds that would have been payable). For
purposes of this Paragraph 16, Landlord and Tenant shall be deemed to be
carrying the insurance policies that they are required to carry pursuant to
Paragraph 15 but do not actually carry. Each party hereto shall cause each such
fire and extended coverage insurance policy obtained by it to provide that the
insurance company waives all rights of recovery by way of subrogation against
the other respective party and the other released parties in connection with any
matter covered by such policy.

        17. Utilities.

               a. Basic Services. Landlord shall furnish the following utilities
and services ("Basic Services") for the Premises: (i) during the hours of 8 A.M.
to 6 P.M. ("Business Hours") Monday through Friday (except public holidays)
("Business Days"), electricity for Building standard lighting and power suitable
for the use of the Premises for ordinary general office purposes, (ii) during
Business Hours on Business Days, heat and air conditioning required in
Landlord's reasonable judgment for the comfortable use and occupancy of the
Premises for ordinary general office purposes, (iii) unheated water for the
restroom(s) and drinking fountain(s), if any, in the public areas serving the
Premises, (iv) elevator service to the floor(s) of the Premises by nonattended
automatic elevators for general office pedestrian usage, and (v) on Business
Days, janitorial services limited to emptying and removal of general office
refuse, light vacuuming as needed


                                       18
<PAGE>

and window washing as determined by Landlord. Notwithstanding the above, but
subject to any temporary shutdown for repairs, for security purposes, for
compliance with any Legal Requirements, or due to Force Majeure, (A) Tenant
shall have access to the Premises 24 hours a day, each day of the Lease term,
and (B) the services described in (iii) and (iv) above shall be provided to the
Premises 24 hours a day, each day of the Lease term, without additional charge
to Tenant. In addition, Tenant may use and Landlord shall make available to
Tenant water, heat, air conditioning, electric current, elevator and janitorial
service in excess of that provided in Basic Services ("Excess Services," which
shall include without limitation any power usage other than through existing
standard 110-volt AC outlets; electricity and/or water consumed by Tenant in
connection with any dedicated or supplemental heating, ventilating and/or air
conditioning, computer power, telecommunications and/or other special units or
systems of Tenant; chilled, heated or condenser water; or water used for any
purpose other than ordinary drinking and lavatory purposes), provided that the
Excess Services desired by Tenant are reasonably available to Landlord and to
the Premises (it being understood that in no event shall Landlord be obligated
to make available to the Premises more than the pro rata share of the capacity
of any Excess Service available to the Building or the applicable floor of the
Building, as the case may be), and provided further that Tenant complies with
the non-discriminatory procedures established by Landlord from time to time for
requesting and paying for such Excess Services and with all other provisions of
this Paragraph 17. Landlord reserves the right to install in the Premises or the
Real Property electric current and/or water meters (including, without
limitation, any additional wiring, conduit or panel required therefor) to
measure the electric current or water consumed by Tenant or to cause the usage
to be measured by other reasonable methods (e.g. by temporary "check" meters or
by survey). Subject to Tenant's payment for the same as an Excess Service,
Landlord agrees to make available to Tenant supplemental condenser water
sufficient to provide capacity for an additional thirty (30) tons of cooling for
Tenant's server room.

               b. Payment for Utilities and Services. The cost of Basic Services
shall be included in Operating Expenses. In addition, Tenant shall pay to
Landlord within thirty (30) days after Landlord's demand (i) the cost, at
Landlord's prevailing rate in the Building, of any Excess Services used by
Tenant, (ii) the cost of installing, operating, maintaining or repairing any
meter or other device used to measure Tenant's consumption of utilities, but
only if such meter or other device establishes Tenant's use of Excess Services,
(iii) the cost of installing, operating, maintaining or repairing any
Temperature Balance Equipment (as defined in Paragraph 17.c. below) for the
Premises and/or any equipment required in connection with any Excess Services
requested by Tenant, and (iv) any cost otherwise incurred by Landlord in keeping
account of or determining any Excess Services used by Tenant. Landlord's failure
to bill Tenant for any of the foregoing shall not waive Landlord's right to bill
Tenant for the same at a later time, provided that such bill is delivered to
Tenant no later than hundred eighty (180) days from the end of the calendar year
in which such utilities or services were performed or such costs incurred by
Landlord, as applicable.

               c. Temperature Balance. If the temperature otherwise maintained
in any portion of the Premises by the heating, air conditioning or ventilation
system is affected as a result of (i) the type or quantity of any lights,
machines or equipment (excluding typical office equipment in typical densities
for office use, which typical equipment and densities shall in no event include
dedicated computer rooms) used by Tenant in the Premises, (ii) the occupancy of
such portion of the Premises by more than one person per one hundred
seventy-five (175) square feet of rentable area therein, (iii) an electrical
load for lighting or power in excess of the limits specified in Paragraph 17.d.
below, or (iv) any rearrangement of partitioning or other improvements, then at
Tenant's sole cost, Landlord may install any equipment, or modify any existing
equipment (including the standard air conditioning equipment) Landlord
reasonably determines to be necessary to restore the temperature balance (such
new equipment or modifications to existing equipment termed herein "Temperature
Balance Equipment"). Tenant agrees to keep closed, when necessary, draperies
which, because of the sun's position, must be closed to provide for the
efficient operation of the air conditioning system, and Tenant agrees to
cooperate with Landlord and to abide by the regulations and requirements which
Landlord may prescribe for the proper functioning and protection of the heating,
ventilating and air conditioning system. Landlord makes no representation to
Tenant regarding the adequacy or fitness of the heating, air conditioning or
ventilation equipment in the Building to maintain temperatures that may be
required for, or because of, any computer or communications rooms, machine
rooms, conference rooms or other areas of high concentration of personnel or
electrical usage, or any other uses other than or in excess of the fractional
horsepower normally required for office equipment, and Landlord shall have no
liability for loss or damage suffered by Tenant or others in connection
therewith.

               d. Utility Connections. Tenant shall not connect or use any
apparatus or device in the Premises (i) using current in excess of 110 volts, or
(ii) which would cause Tenant's electrical demand load to exceed 1.0 watt per
rentable square foot for overhead lighting or 2.0 watts per rentable square foot
for convenience outlets, or (iii) which would exceed the capacity of the
existing panel or transformer serving the Premises (unless Tenant pays the cost
of modifying any such panel or transformer to increase its capacity so as to be
sufficient for Tenant's requirements). Tenant shall not connect with electric
current (except through existing outlets in the Premises or such additional
outlets as may be installed in the Premises as part of initial improvements or
Alterations approved by Landlord), or water pipes, any apparatus or device for
the purpose of using electrical current or water. Notwithstanding the foregoing,
Landlord acknowledges that Tenant shall have the right, at Tenant's sole cost
and expense, to install, as part of the Initial Alterations, an additional
electrical panel (400 amp, 277/480 3 phase) to serve the Premises, subject to
Landlord's reasonable approval as to the plans and specifications with respect
thereto and the other procedures and requirements of Paragraph


                                       19
<PAGE>

9 above applicable to the Initial Alterations. Landlord represents and warrants
to Tenant that power for such panel (i.e. 400 amp, 277/480 3 phase power) is
currently available from the existing bus duct on the sixth (6th) floor of the
Building.

        Landlord will not permit additional coring of the floor of the Premises
in order to install new electric outlets in the Premises unless Landlord is
satisfied, on the basis of such information to be supplied by Tenant at Tenant's
expense, that coring of the floor in order to install such additional outlets
will not weaken the structure of the floor.

               e. Interruption of Services. Landlord's obligation to provide
access to and utilities and services for the Premises are subject to the Rules
and Regulations of the Building, applicable Legal Requirements (including the
rules or actions of the public utility company furnishing the utility or
service), and shutdowns for maintenance and repairs, for security purposes, or
due to strikes, lockouts, labor disputes, fire or other casualty, acts of God,
or other causes beyond the reasonable control of Landlord. In the event of an
interruption in, or failure or inability to provide access to or any service or
utility for the Premises for any reason, such interruption, failure or inability
shall not constitute an eviction of Tenant, constructive or otherwise, or impose
upon Landlord any liability whatsoever, including, but not limited to, liability
for consequential damages or loss of business by Tenant. Tenant hereby waives
the provisions of California Civil Code Section 1932(1) or any other applicable
existing or future Legal Requirement permitting the termination of this Lease
due to such interruption, failure or inability. Notwithstanding the foregoing,
if any interruption in, or failure or inability to provide access to the
Premises or any of the services or utilities described in Paragraph 17.a. is
within Landlord's reasonable control and continues for ten (10) or more
consecutive days after Tenant's written notice thereof to Landlord, and Tenant
is unable to conduct and does not conduct any business in a material portion of
the Premises as a result thereof, then Tenant shall be entitled to an abatement
of Monthly Rent under Paragraph 5 hereof and Additional Rent under Paragraph 7
hereof, which abatement shall commence as of the first day after the expiration
of such ten (10) day period and terminate upon the cessation of such
interruption, failure or inability, and which abatement shall be based on the
portion of the Premises rendered inaccessible or unusable for Tenant's business
by such interruption, failure or inability. The abatement provision set forth
above shall be inapplicable to any interruption, failure or inability described
in this Paragraph 17.e. that is caused by (x) damage from fire or other casualty
(it being acknowledged that such situation shall be governed by Paragraph 26),
or (y) the gross negligence or willful misconduct of Tenant or its agents,
employees or contractors, except where Tenant reimburses Landlord for the
deductible required under Landlord's property damage/rental loss insurance.

               f. Governmental Controls. In the event any governmental authority
having jurisdiction over the Real Property or the Building promulgates or
revises any Legal Requirement or building, fire or other code or imposes
mandatory or voluntary controls or guidelines on Landlord or the Real Property
or the Building relating to the use or conservation of energy or utilities or
the reduction of automobile or other emissions (collectively "Controls") or in
the event Landlord is required or elects to make alterations to the Real
Property or the Building in order to comply with such mandatory or voluntary
Controls, Landlord may, in its sole discretion, comply with such Controls or
make such alterations to the Real Property or the Building related thereto. Such
compliance and the making of such alterations shall not constitute an eviction
of Tenant, constructive or otherwise, give rise to an abatement of rent pursuant
to Paragraph 17.e. or otherwise, or impose upon Landlord any liability
whatsoever, including, but not limited to, liability for consequential damages
or loss of business by Tenant. Landlord shall use its good faith efforts to
minimize disruption to Tenant's business caused by any such alterations, and,
without limitation, Landlord shall perform any extraordinarily noisy or
disruptive work after Business Hours or on weekends to the extent such
procedures would be generally followed by managers of other first class high
rise office buildings in the San Francisco financial district (except to the
extent an emergency and/or Legal Requirements require otherwise, as reasonably
determined by Landlord).

        18. Personal Property and Other Taxes. Tenant shall pay, at least ten
(10) days before delinquency, any and all taxes, fees, charges or other
governmental impositions levied or assessed against Landlord or Tenant (a) upon
Tenant's equipment, furniture, fixtures, improvements which are not normal and
customary general office improvements, and other personal property (including
carpeting installed by Tenant) located in the Premises, (b) by virtue of any
Alterations made by Tenant to the Premises, and (c) upon this transaction or any
document to which Tenant is a party creating or transferring an interest or an
estate in the Premises. If any such fee, charge or other governmental imposition
is paid by Landlord, Tenant shall reimburse Landlord for Landlord's payment upon
demand.

        19. Rules and Regulations. Tenant shall comply with the rules and
regulations set forth on Exhibit B attached hereto, as such rules and
regulations may be modified or amended by Landlord from time to time (the "Rules
and Regulations"), provided such amendments or modifications shall be reasonable
and non-discriminatory and shall not materially increase the burdens or
obligations imposed by this Lease upon Tenant and shall not prohibit the conduct
of any business in the Premises which Tenant is permitted to conduct pursuant to
Paragraphs 2.g. and 8 hereof. Landlord shall not be responsible to Tenant for
the nonperformance or noncompliance by any other tenant or occupant of the
Building of or with any of the Rules and Regulations, but Landlord shall not
enforce the Rules and Regulations in a discriminatory manner. In the


                                       20
<PAGE>

event of any conflict between the Rules and Regulations and the balance of this
Lease, the balance of this Lease shall control.

        20. Surrender; Holding Over.

               a. Surrender. Upon the expiration or other termination of this
Lease, Tenant shall surrender the Premises to Landlord vacant and broom-clean,
with all improvements and Alterations (except as provided in Paragraph 9 above)
in their original condition, except for reasonable wear and tear and damage from
casualty or condemnation; provided, however, that prior to the expiration or
termination of this Lease Tenant shall remove from the Premises any Alterations
that Tenant is required by Landlord to remove under the provisions of Paragraph
9, and all of Tenant's equipment and other personal property, trade fixtures,
and furniture. If such removal is not completed at the expiration or other
termination of this Lease, Landlord may remove the same at Tenant's expense. Any
damage to the Premises or the Building caused by such removal shall be repaired
promptly by Tenant (including the patching or repairing of ceilings and walls)
or, if Tenant fails to do so, Landlord may do so at Tenant's expense. The
removal of the Initial Alterations and other Alterations from the Premises shall
be governed by Paragraph 9 above. Tenant's obligations under this paragraph
shall survive the expiration or other termination of this Lease. Upon expiration
or termination of this Lease or of Tenant's possession, Tenant shall surrender
all keys to the Premises or any other part of the Building and shall make known
to Landlord the combination of locks on all safes, cabinets and vaults that may
be located in the Premises.

               b. Holding Over. If Tenant remains in possession of the Premises
after the expiration or earlier termination of this Lease with the express
written consent of Landlord, Tenant's occupancy shall be a month-to-month
tenancy at a rent agreed upon by Landlord and Tenant, but in no event less than
the greater of (i) one hundred fifty percent (150%) of the Monthly Rent and
Additional Rent payable under this Lease during the last full month prior to the
date of the expiration of this Lease or (ii) the then fair market rental (as
reasonably determined by Landlord) for the Premises. Except as provided in the
preceding sentence, the month-to-month tenancy shall be on the terms and
conditions of this Lease, except that any renewal options, expansion options,
rights of first refusal, rights of first negotiation or any other rights or
options pertaining to additional space in the Building contained in this Lease
shall be deemed to have terminated and shall be inapplicable thereto. Landlord's
acceptance of rent after such holding over with Landlord's written consent shall
not result in any other tenancy or in a renewal of the original term of this
Lease. If Tenant remains in possession of the Premises after the expiration or
earlier termination of this Lease without Landlord's consent, Tenant's continued
possession shall be on the basis of a tenancy at sufferance and Tenant shall pay
as Monthly Rent during the holdover period an amount equal to the greater of (i)
one hundred fifty percent (150%) of the fair market rental (as reasonably
determined by Landlord) for the Premises or (ii) two hundred percent (200%) of
the Monthly Rent and Additional Rent payable under this Lease for the last full
month prior to the date of such expiration or termination.

               c. Indemnification. If Tenant remains in possession of the
Premises after the expiration or earlier termination of this Lease without the
express written consent of Landlord, and such occupancy shall continue for more
than ten (10) days Landlord's written demand to Tenant that Tenant surrender
possession of the Premises to Landlord, Tenant shall indemnify, defend and hold
Landlord harmless from and against all Claims incurred by or asserted against
Landlord and arising directly or indirectly from Tenant's failure to timely
surrender the Premises, including but not limited to (i) any rent payable by or
any loss, cost, or damages, including lost profits, claimed by any prospective
tenant of the Premises or any portion thereof, and (ii) Landlord's damages as a
result of such prospective tenant rescinding or terminating a lease of the
Premises or any portion thereof by reason of such failure to timely surrender
the Premises.

        21. Subordination and Attornment.

               a. This Lease is expressly made subject and subordinate to any
mortgage, deed of trust, ground lease, underlying lease or like encumbrance
affecting any part of the Real Property or any interest of Landlord therein
which is now existing or hereafter executed or recorded, any present or future
modification, amendment or supplement to any of the foregoing, and to any
advances made thereunder (any of the foregoing being a "Superior Interest")
without the necessity of any further documentation evidencing such
subordination. Notwithstanding the foregoing, Tenant shall, within ten (10) days
after Landlord's request, execute and deliver to Landlord a document evidencing
the subordination of this Lease to a particular Superior Interest. If the
interest of Landlord in the Real Property or the Building is transferred to any
person ("Purchaser") pursuant to or in lieu of proceedings for enforcement of
any Superior Interest, Tenant shall immediately and automatically attorn to the
Purchaser, and this Lease shall continue in full force and effect as a direct
lease between the Purchaser and Tenant on the terms and conditions set forth
herein. Notwithstanding the foregoing, if a Superior Interest is created
following the execution of this Lease, Landlord's delivery to Tenant of a
non-disturbance agreement with respect thereto as described in Paragraph 21.b.
below and otherwise in such holder's standard institutional form or other
reasonable form shall be a condition to the subordination of this Lease thereto,
provided that Tenant pays any fees or charges required by such holder in order
to obtain such non-disturbance agreement.


                                       21
<PAGE>

               b. Landlord will request that the holders of any Superior
Interests in place as of the date of this Lease execute a written
"non-disturbance agreement" on Tenant's behalf providing that, if Tenant is not
in default under this Lease beyond any applicable grace period, that such party
will recognize this Lease and Tenant's rights hereunder and will not disturb
Tenant's possession hereunder, and if this Lease is by operation of law
terminated in a foreclosure, that a new lease will be entered into on the same
terms as this Lease for the remaining term hereof. The failure of any such
holder of a Superior Interest to execute and deliver such a non-disturbance
agreement upon Landlord's request shall not constitute a default hereunder by
Landlord, it being understood that Landlord's sole obligation is to request in
good faith the execution and delivery of such agreement. Further, if in order to
obtain such non-disturbance agreement from any such holder of a Superior
Interest Landlord is required to expend any sum, Landlord shall so notify Tenant
and Tenant shall either pay such sum or be deemed to have released Landlord from
any further obligation to obtain such non-disturbance agreement. In no event
shall Landlord be required to expend any sums in connection therewith.

        22. Financing Condition. If any lender or ground lessor that intends to
acquire an interest in, or holds a mortgage, ground lease or deed of trust
encumbering any portion of the Real Property should require either the execution
by Tenant of an agreement requiring Tenant to send such lender written notice of
any default by Landlord under this Lease, giving such lender the right to cure
such default within any period afforded to Landlord to cure the same plus an
additional ninety (90) days (with such period afforded to such lender or ground
lessor to commence from the giving of notice to such lender or ground lessor or,
so long as Tenant shall continue to receive all of the material services
Landlord is required to provide under this Lease and such lender or ground
lessor is diligently pursuing appointment of a receiver, foreclosure proceedings
or termination of such ground lease, such period to commence when such lender
has obtained the appointment of a receiver for the Real Property or completed
foreclosure (whichever shall be first) or such ground lessor has terminated such
ground lease), and preventing Tenant from terminating this Lease (to the extent
such right is available to Tenant under this Lease) unless such default remains
uncured after such period as so extended, and/or any modification of the
agreements, covenants, conditions or provisions of this Lease, then Tenant
agrees that it shall, within fifteen (15) days after Landlord's request, execute
and deliver such agreement and modify this Lease as required by such lender or
ground lessor; provided, however, that no such modification shall affect the
length of the term or increase the rent payable by Tenant under Paragraphs 5 and
7 or otherwise increase Tenant's obligations (other than notice requirements and
other similar ministerial obligations). Tenant acknowledges and agrees that its
failure to timely execute any such agreement or modification required by such
lender or ground lessor may cause Landlord serious financial damage by causing
the failure of a financing transaction and giving Landlord all of its rights and
remedies under Paragraph 25 below, including its right to damages caused by the
loss of such financing.

        23. Entry by Landlord. Landlord may, at any and all reasonable times,
and upon reasonable advance notice (provided that no advance notice need be
given if an emergency (as determined by Landlord in its reasonable judgment)
necessitates an immediate entry or prior to entry to provide routine janitorial
services), enter the Premises to (a) inspect the same and to determine whether
Tenant is in compliance with its obligations hereunder, (b) supply janitorial
and any other service Landlord is required to provide hereunder, (c) show the
Premises to prospective lenders, purchasers or tenants, (d) post notices of
nonresponsibility, and (e) alter, improve or repair the Premises or any other
portion of the Real Property. In connection with any such alteration,
improvement or repair, Landlord may erect in the Premises or elsewhere in the
Real Property scaffolding and other structures reasonably required for the work
to be performed. Except as otherwise expressly provided in this Lease, in no
event shall such entry or work entitle Tenant to an abatement of rent,
constitute an eviction of Tenant, constructive or otherwise, or impose upon
Landlord any liability whatsoever, including but not limited to liability for
consequential damages or loss of business or profits by Tenant; provided,
however, that Landlord shall use good faith efforts to cause all such work to be
done in such a manner as to cause as little interference to Tenant as reasonably
possible without incurring additional expense. Landlord shall at all times
retain a key with which to unlock all of the doors in the Premises, except
Tenant's vaults and safes. If an emergency necessitates immediate access to the
Premises, Landlord may use whatever force is necessary to enter the Premises and
any such entry to the Premises shall not constitute a forcible or unlawful entry
into the Premises, a detainer of the Premises, or an eviction of Tenant from the
Premises, or any portion thereof.

        24. Insolvency or Bankruptcy. The occurrence of any of the following
shall constitute an Event of Default under Paragraph 25 below:

               1. Tenant ceases doing business as a going concern, makes an
assignment for the benefit of creditors, is adjudicated an insolvent, files a
petition (or files an answer admitting the material allegations of such
petition) seeking for Tenant any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar arrangement under any state or
federal bankruptcy or other law, or Tenant consents to or acquiesces in the
appointment, pursuant to any state or federal bankruptcy or other law, of a
trustee, receiver or liquidator for the Premises, for Tenant or for all or any
substantial part of Tenant's assets; or

               2. Tenant fails within sixty (60) days after the commencement of
any proceedings against Tenant seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or


                                       22
<PAGE>

similar relief under any state or federal bankruptcy or other Legal Requirement,
to have such proceedings dismissed, or Tenant fails, within sixty (60) days
after an appointment pursuant to any state or federal bankruptcy or other Legal
Requirement without Tenant's consent or acquiescence, of any trustee, receiver
or liquidator for the Premises, for Tenant or for all or any substantial part of
Tenant's assets, to have such appointment vacated; or

               3. Tenant is unable, or admits in writing its inability, to pay
its debts as they mature; or

               4. Tenant gives notice to any governmental body of its insolvency
or pending insolvency, or of its suspension or pending suspension of operations.

        In no event shall this Lease be assigned or assignable by reason of any
voluntary or involuntary bankruptcy, insolvency or reorganization proceedings,
nor shall any rights or privileges hereunder be an asset of Tenant, the trustee,
debtor-in-possession, or the debtor's estate in any bankruptcy, insolvency or
reorganization proceedings.

        25. Default and Remedies.

               a. Events of Default. The occurrence of any of the following
shall constitute an "Event of Default" by Tenant:

                      1. Tenant fails to pay when due Monthly Rent, Additional
Rent or any other rent due hereunder within five (5) days after written notice
from Landlord that such sum is due, except that Landlord shall only be required
to give one such notice in any calendar year, and after any such notice is given
any failure by Tenant in such calendar year to pay Monthly Rent, Additional Rent
or any other rent due hereunder within five (5) days after due shall itself
constitute an Event of Default, without the requirement of notice from Landlord
of such failure; or

                      2. Tenant abandons (within the meaning of California Civil
Code Section 1951.2) the Premises or any portion thereof; or

                      3. Tenant fails to deliver any estoppel certificate
pursuant to Paragraph 29 below, subordination agreement pursuant to Paragraph 21
above, or document required pursuant to Paragraph 22 above, within the
applicable period set forth therein; or

                      4. Tenant violates the bankruptcy and insolvency
provisions of Paragraph 24 above; or

                      5. Tenant makes or has made or furnishes or has furnished
any warranty, representation or statement to Landlord in connection with this
Lease, or any other agreement made by Tenant for the benefit of Landlord, which
is or was false or misleading in any material respect when made or furnished; or

                      6. Tenant assigns this Lease or subleases any portion of
the Premises in violation of Paragraph 13 above; or

                      7. Tenant fails to comply with any other provision of this
Lease in the manner required pursuant to this Lease within thirty (30) days
after written notice from Landlord of such failure (or if the noncompliance
cannot by its nature be cured within the 30-day period, if Tenant fails to
commence to cure such noncompliance within the 30-day period and thereafter
diligently prosecute such cure to completion).

               b. Remedies. Upon the occurrence of an Event of Default Landlord
shall have the following remedies, which shall not be exclusive but shall be
cumulative and shall be in addition to any other remedies now or hereafter
allowed by law:

                      1. Landlord may terminate Tenant's right to possession of
the Premises at any time by written notice to Tenant. Tenant expressly
acknowledges that in the absence of such written notice from Landlord, no other
act of Landlord, including, but not limited to, its re-entry into the Premises,
its efforts to relet the Premises, its reletting of the Premises for Tenant's
account, its storage of Tenant's personal property and trade fixtures, its
acceptance of keys to the Premises from Tenant, its appointment of a receiver,
or its exercise of any other rights and remedies under this Paragraph 25 or
otherwise at law, shall constitute an acceptance of Tenant's surrender of the
Premises or constitute a termination of this Lease or of Tenant's right to
possession of the Premises.

        Upon such termination in writing of Tenant's right to possession of the
Premises, this Lease shall terminate and Landlord shall be entitled to recover
damages from Tenant as provided in California Civil


                                       23
<PAGE>

Code Section 1951.2 or any other applicable existing or future Legal Requirement
providing for recovery of damages for such breach, including but not limited to
the following:

                             (i) The reasonable cost of recovering the Premises;
plus

                             (ii) The reasonable cost of removing Tenant's
Alterations, trade fixtures and improvements; plus

                             (iii) All unpaid rent due or earned hereunder prior
to the date of termination, less the proceeds of any reletting or any rental
received from subtenants prior to the date of termination applied as provided in
Paragraph 25.b.2. below, together with interest at the Interest Rate, on such
sums from the date such rent is due and payable until the date of the award of
damages; plus

                             (iv) The amount by which the rent which would be
payable by Tenant hereunder, including Additional Rent under Paragraph 7 above,
as reasonably estimated by Landlord, from the date of termination until the date
of the award of damages, exceeds the amount of such rental loss as Tenant proves
could have been reasonably avoided, together with interest at the Interest Rate
on such sums from the date such rent is due and payable until the date of the
award of damages; plus

                             (v) The amount by which the rent which would be
payable by Tenant hereunder, including Additional Rent under Paragraph 7 above,
as reasonably estimated by Landlord, for the remainder of the then term, after
the date of the award of damages exceeds the amount such rental loss as Tenant
proves could have been reasonably avoided, discounted at the discount rate
published by the Federal Reserve Bank of San Francisco for member banks at the
time of the award plus one percent (1%); plus

                             (vi) Such other amounts in addition to or in lieu
of the foregoing as may be permitted from time to time by applicable law,
including without limitation any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom.

                      2. Landlord has the remedy described in California Civil
Code Section 1951.4 (a landlord may continue the lease in effect after the
tenant's breach and abandonment and recover rent as it becomes due, if the
tenant has the right to sublet and assign subject only to reasonable
limitations), and may continue this Lease in full force and effect and may
enforce all of its rights and remedies under this Lease, including, but not
limited to, the right to recover rent as it becomes due. After the occurrence of
an Event of Default, Landlord may enter the Premises without terminating this
Lease and sublet all or any part of the Premises for Tenant's account to any
person, for such term (which may be a period beyond the remaining term of this
Lease), at such rents and on such other terms and conditions as Landlord deems
advisable. In the event of any such subletting, rents received by Landlord from
such subletting shall be applied (i) first, to the payment of the costs of
maintaining, preserving, altering and preparing the Premises for subletting, the
other costs of subletting, including but not limited to brokers' commissions,
attorneys' fees and expenses of removal of Tenant's personal property, trade
fixtures and Alterations; (ii) second, to the payment of rent then due and
payable hereunder; (iii) third, to the payment of future rent as the same may
become due and payable hereunder; (iv) fourth, the balance, if any, shall be
paid to Tenant upon (but not before) expiration of the term of this Lease. If
the rents received by Landlord from such subletting, after application as
provided above, are insufficient in any month to pay the rent due and payable
hereunder for such month, Tenant shall pay such deficiency to Landlord monthly
upon demand. Notwithstanding any such subletting for Tenant's account without
termination, Landlord may at any time thereafter, by written notice to Tenant,
elect to terminate this Lease by virtue of a previous Event of Default.

               During the continuance of an Event of Default, for so long as
Landlord does not terminate Tenant's right to possession of the Premises and
subject to Paragraph 13, entitled Assignment and Subletting, and the options
granted to Landlord thereunder, Landlord shall not unreasonably withhold its
consent to an assignment or sublease of Tenant's interest in the Premises or in
this Lease.

                      3. During the continuance of an Event of Default, and
after Tenant's abandonment of the Premises (within the meaning of California
Civil Code Section 1951.2) or Landlord's eviction of Tenant from the Premises by
appropriate legal proceedings, Landlord may enter the Premises without
terminating this Lease and remove all Tenant's personal property, Alterations
and trade fixtures from the Premises and store them at Tenant's risk and
expense. If Landlord removes such property from the Premises and stores it at
Tenant's risk and expense, and if Tenant fails to pay the cost of such removal
and storage after written demand therefor and/or to pay any rent then due, then
after the property has been stored for a period of thirty (30) days or more
Landlord may sell such property at public or private sale, in the manner and at
such times and places as Landlord deems commercially reasonable following
reasonable notice to Tenant of the time and place of such sale. The proceeds of
any such sale shall be applied first to the payment of the expenses for removal
and storage of the property, the preparation for and the conducting of such
sale, and for attorneys' fees and other legal expenses incurred by Landlord in
connection therewith, and the balance shall be applied as provided in Paragraph
25.b.2. above.


                                       24
<PAGE>

        Tenant hereby waives all claims for damages that may be caused by
Landlord's reentering and taking possession of the Premises or removing and
storing Tenant's personal property pursuant to this Paragraph 25, and Tenant
shall indemnify, defend and hold Landlord harmless from and against any and all
Claims resulting from any such act. No reentry by Landlord shall constitute or
be construed as a forcible entry by Landlord.

                      4. Landlord may require Tenant to remove any and all
Alterations from the Premises or, if Tenant fails to do so within ten (10) days
after Landlord's request, Landlord may do so at Tenant's expense.

                      5. Landlord may cure the Event of Default at Tenant's
expense, it being understood that such performance shall not waive or cure the
subject Event of Default. If Landlord pays any sum or incurs any expense in
curing the Event of Default, Tenant shall reimburse Landlord upon demand for the
amount of such payment or expense with interest at the Interest Rate from the
date the sum is paid or the expense is incurred until Landlord is reimbursed by
Tenant. Any amount due Landlord under this subsection shall constitute
additional rent hereunder.

               c. Waiver of Redemption. Tenant hereby waives, for itself and all
persons claiming by and under Tenant, all rights and privileges which it might
have under any present or future Legal Requirement to redeem the Premises or to
continue this Lease after being dispossessed or ejected from the Premises.

        26. Damage or Destruction. If all or a part of the Premises are damaged
by fire or other casualty, or if the Building is so damaged that access to or
use and occupancy of the Premises is materially impaired, within thirty (30)
days of the date of the damage Landlord shall give Tenant notice of Landlord's
reasonable estimate of the time required from the date of the damage to repair
the damage (the "Damage Estimate"). If the Damage Estimate is one hundred fifty
(150) days or less, then Landlord shall repair the damage and this Lease shall
remain in full force and effect. If the Damage Estimate is more than one hundred
fifty (150) days, Landlord, at its option exercised by written notice to Tenant
within sixty (60) days of the date of the damage, shall either (a) repair the
damage, in which event this Lease shall continue in full force and effect, or
(b) terminate this Lease as of the date specified by Landlord in the notice,
which date shall be not less than thirty (30) days nor more than sixty (60) days
after the date such notice is given, and this Lease shall terminate on the date
specified in the notice. If the Damage Estimate is more than one (1) year, and
Landlord does not give notice terminating this Lease, then Tenant may give
notice to Landlord, within thirty (30) calendar days after Tenant receives the
Damage Estimate, terminating this Lease as of the date specified in Tenant's
termination notice, which date shall not be before the date of such notice or
more than thirty (30) days after the date of Tenant's termination notice.

        Notwithstanding anything to contrary contained in this Paragraph 26, if
the initial Damage Estimate is more than ninety (90) days, and the date on which
Landlord reasonably anticipates the repairs of such damage will be completed is
during the last twelve (12) months of the Lease term, Landlord and Tenant shall
each have the option to terminate this Lease by giving written notice to the
other, in the case of Landlord together with the Damage Estimate, or, in the
case of Tenant, within thirty (30) days of Tenant's receipt of the Damage
Estimate, and this Lease shall terminate as of the date specified by the party
in its termination notice, which date shall not be before the date of such
notice or more than thirty (30) days after the date of such notice.
Notwithstanding the foregoing, if Landlord shall purport to exercise its
termination right pursuant to this paragraph, and within fifteen (15) days
thereafter Tenant shall validly exercise any theretofore unexercised renewal
option under Paragraph 52 below, Landlord's exercise of such termination right
shall be deemed void and of no force and effect, but the remaining provisions of
this Paragraph 26 shall fully apply with respect to such fire or other casualty,
and any rights of Landlord (but not Tenant) to terminate this Lease pursuant to
the first paragraph of this Paragraph 26 on account of such fire or other
casualty shall survive and remain exercisable in accordance with the terms of
such first paragraph.

        Notwithstanding anything to the contrary in the Paragraph 26, if damage
which would otherwise lead to a right to terminate this Lease results from the
willful misconduct of Landlord or Tenant, the party from whose misconduct such
damage results shall have no right to terminate this Lease.

        If the fire or other casualty damages the Premises or the common areas
of the Real Property necessary for Tenant's use and occupancy of the Premises,
and Tenant ceases to use any portion of the Premises as a result of such damage,
then during the period the Premises or portion thereof are rendered unusable by
such damage and repair, Tenant's Monthly Rent and Additional Rent under
Paragraphs 5 and 7 above shall be proportionately reduced based upon the extent
to which the damage and repair prevents Tenant from conducting, and Tenant does
not conduct, its business at the Premises; provided, however, if the damage
results from the gross negligence or willful misconduct of Tenant or Tenant's
agents, employees, contractors, licensees or invitees, then Tenant's Monthly
Rent and Additional Rent will not abate unless Tenant reimburses Landlord for
the deductible required under Landlord's property damage/rental loss insurance.
Landlord shall not be obligated to repair or replace any of Tenant's movable
furniture, equipment, trade fixtures, and other personal property, nor any
Alterations installed in the Premises by Tenant which are not normal and
customary general office improvements, and no damage to any of the foregoing
shall entitle Tenant to any


                                       25
<PAGE>

abatement, and Tenant shall, at Tenant's sole cost and expense, repair and
replace such items. All such repair and replacement of Alterations shall be
constructed in accordance with Paragraph 9 above regarding Alterations. Where
Landlord is obligated to repair any damage pursuant to this Paragraph 26,
Landlord's obligation shall include the obligation to repair (or replace, as
applicable) any Alterations installed in the Premises which are normal and
customary general office improvements.

        A total destruction of the Building shall automatically terminate this
Lease. In no event shall Tenant be entitled to any compensation or damages from
Landlord for loss of use of the whole or any part of the Premises or for any
inconvenience occasioned by any such destruction, rebuilding or restoration of
the Premises, the Building or access thereto, except for the rent abatement
expressly provided above. Tenant hereby waives California Civil Code Sections
1932(2) and 1933(4), providing for termination of hiring upon destruction of the
thing hired and Sections 1941 and 1942, providing for repairs to and of
premises.

        27. Eminent Domain.

               a. If all or any part of the Premises are taken by any public or
quasi-public authority under the power of eminent domain, or any agreement in
lieu thereof (a "taking"), this Lease shall terminate as to the portion of the
Premises taken effective as of the date of taking. If only a portion of the
Premises is taken, Landlord or Tenant may terminate this Lease as to the
remainder of the Premises upon written notice to the other party within ninety
(90) days after the taking; provided, however, that Tenant's right to terminate
this Lease is conditioned upon the remaining portion of the Premises being of
such size or configuration that such remaining portion of the Premises is
unusable or uneconomical for Tenant's business. Landlord shall be entitled to
all compensation, damages, income, rent awards and interest thereon whatsoever
which may be paid or made in connection with any taking and Tenant shall have no
claim against Landlord or any governmental authority for the value of any
unexpired term of this Lease or of any of the improvements or Alterations in the
Premises; provided, however, that the foregoing shall not prohibit Tenant from
prosecuting a separate claim against the taking authority for an amount
separately designated for Tenant's relocation expenses or the interruption of or
damage to Tenant's business or as compensation for Tenant's personal property,
trade fixtures, Alterations or other improvements paid for by Tenant so long as
any award to Tenant will not reduce the award to Landlord.

        In the event of a partial taking of the Premises which does not result
in a termination of this Lease, the Monthly Rent and Additional Rent under
Paragraphs 5 and 7 hereunder shall be equitably reduced. If all or any material
part of the Real Property other than the Premises is taken, Landlord may
terminate this Lease upon written notice to Tenant given within ninety (90) days
after the date of taking. If a portion of the Real Property other than the
Premises is taken, and such taking renders Tenant without reasonable access to
the Premises, Tenant may terminate this Lease upon written notice to Landlord
given within thirty (30) days after the date of taking. Any termination pursuant
to this paragraph shall be effective as of the date specified by the party in
its termination notice, which date shall not be before the date of such notice
or more than thirty (30) days after the date of such notice.

               b. Notwithstanding the foregoing, if all or any portion of the
Premises is taken for a period of time not exceeding one (1) year ending prior
to the end of the term of this Lease, this Lease shall remain in full force and
effect and Tenant shall continue to pay all rent and to perform all of its
obligations under this Lease; provided, however, that Tenant shall be entitled
to all compensation, damages, income, rent awards and interest thereon that is
paid or made in connection with such temporary taking of the Premises (or
portion thereof), except that any such compensation in excess of the rent or
other amounts payable to Landlord hereunder shall be promptly paid over to
Landlord as received. Landlord and Tenant each hereby waive the provisions of
California Code of Civil Procedure Section 1265.130 and any other applicable
existing or future Legal Requirement providing for, or allowing either party to
petition the courts of the state in which the Real Property is located for, a
termination of this Lease upon a partial taking of the Premises and/or the
Building.

        28. Landlord's Liability; Sale of Building. The term "Landlord," as used
in this Lease, shall mean only the owner or owners of the Real Property at the
time in question. Notwithstanding any other provision of this Lease, the
liability of Landlord for its obligations under this Lease is limited solely to
Landlord's interest in the Real Property as the same may from time to time be
encumbered, and no personal liability shall at any time be asserted or
enforceable against any other assets of Landlord or against the constituent
shareholders, partners or other owners of Landlord, or the directors, officers,
employees and agents of Landlord or such constituent shareholder, partner or
other owner, on account of any of Landlord's obligations or actions under this
Lease. In addition, in the event of any conveyance of title to the Real
Property, then the grantor or transferor shall be relieved of all liability with
respect to Landlord's obligations to be performed under this Lease after the
date of such conveyance. In no event shall Landlord be deemed to be in default
under this Lease unless Landlord fails to perform its obligations under this
Lease, Tenant delivers to Landlord written notice specifying the nature of
Landlord's alleged default, and Landlord fails to cure such default within
thirty (30) days following receipt of such notice (or, if the default cannot
reasonably be cured within such period, to commence action within such thirty
(30)-day period and proceed diligently thereafter to cure such default). Upon
any conveyance of title to the Real Property, the grantee or transferee shall be
deemed to have assumed Landlord's obligations to be performed under this Lease
from and after the


                                       26
<PAGE>

date of such conveyance, subject to the limitations on liability set forth above
in this Paragraph 28. If Tenant provides Landlord with any security for Tenant's
performance of its obligations hereunder, and Landlord transfers such security
to the grantee or transferee of Landlord's interest in the Real Property,
Landlord shall be released from any further responsibility or liability for such
security. Notwithstanding any other provision of this Lease, but not in
limitation of the provisions of Paragraph 14.a. above, Landlord shall not be
liable for any consequential damages or interruption or loss of business, income
or profits, or claims of constructive eviction, nor shall Landlord be liable for
loss of or damage to artwork, currency, jewelry, bullion, unique or valuable
documents, securities or other valuables, or for other property not in the
nature of ordinary fixtures, furnishings and equipment used in general
administrative and executive office activities and functions (all of the
foregoing damages, losses and claims described in this sentence, collectively,
"Special Claims and Damages"). Wherever in this Lease Tenant (a) releases
Landlord from any claim or liability, (b) waives or limits any right of Tenant
to assert any claim against Landlord or to seek recourse against any property of
Landlord or (c) agrees to indemnify Landlord against any matters, the relevant
release, waiver, limitation or indemnity shall run in favor of and apply to
Landlord, the constituent shareholders, partners or other owners of Landlord,
and the directors, officers, employees and agents of Landlord and each such
constituent shareholder, partner or other owner.

        29. Estoppel Certificates. At any time and from time to time, upon not
less than ten (10) Business Days' prior notice from Landlord, Tenant shall
execute, acknowledge and deliver to Landlord a statement certifying the
commencement date of this Lease, stating that this Lease is unmodified and in
full force and effect (or if there have been modifications, that this Lease is
in full force and effect as modified and the date and nature of each such
modification), that to the best of Tenant's knowledge Landlord is not in default
under this Lease (or, if Landlord is in default, specifying the nature of such
default), that Tenant is not in default under this Lease (or if Tenant is in
default, specifying the nature of such default), the current amounts of and the
dates to which the Monthly Rent and Additional Rent has been paid, and setting
forth such other matters as may be reasonably requested by Landlord. Any such
statement may be conclusively relied upon by a prospective purchaser of the Real
Property or by a lender obtaining a lien on the Real Property as security. If
Tenant fails to deliver such statement within the time required hereunder, such
failure shall be conclusive upon Tenant that (i) this Lease is in full force and
effect, without modification except as may be represented by Landlord, (ii)
there are no uncured defaults in Landlord's performance of its obligations
hereunder, (iii) not more than one month's installment of Monthly Rent has been
paid in advance, and (iv) any other statements of fact included by Landlord in
such statement are correct. Tenant acknowledges and agrees that its failure to
execute such certificate may cause Landlord serious financial damage by causing
the failure of a sale or financing transaction and giving Landlord all of its
rights and remedies under Paragraph 25 above, including its right to damages
caused by the loss of such sale or financing.

        30. Right of Landlord to Perform. If Tenant fails to make any payment
required hereunder (other than Monthly Rent and Additional Rent) or fails to
perform any other of its obligations hereunder, after the expiration of any
applicable grace or cure period (unless waiting for such period to expire would
jeopardize the health, safety or quiet enjoyment of the Building by its tenants
and occupants or cause further damage or loss to Landlord or the Real Property,
as reasonably determined by Landlord, or result in any violation (or continuance
of any violation) of any Legal Requirement), Landlord may, but shall not be
obliged to, and without waiving any default of Tenant or releasing Tenant from
any obligations to Landlord hereunder, make any such payment or perform any
other such obligation on Tenant's behalf. All sums so paid by Landlord and all
necessary incidental costs in connection with the performance by Landlord of an
obligation of Tenant (together with interest thereon from the date of such
payment by Landlord until paid at the Interest Rate) shall be payable by Tenant
to Landlord upon demand, and Tenant's failure to make such payment upon demand
shall entitle Landlord to the same rights and remedies provided Landlord in the
event of non-payment of rent.

        31. Late Charge. Tenant acknowledges that late payment of any
installment of Monthly Rent or Additional Rent or any other amount required
under this Lease will cause Landlord to incur costs not contemplated by this
Lease and that the exact amount of such costs would be extremely difficult and
impracticable to fix. Such costs include, without limitation, processing and
accounting charges, late charges that may be imposed on Landlord by the terms of
any encumbrance or note secured by the Real Property and the loss of the use of
the delinquent funds. Therefore, if any installment of Monthly Rent or
Additional Rent or any other amount due from Tenant is not received within five
(5) days after due, Tenant shall pay to Landlord on demand, on account of the
delinquent payment, an additional sum equal to the greater of (i) five percent
(5%) of the overdue amount, or (ii) $100.00, which additional sum represents a
fair and reasonable estimate of the costs that Landlord will incur by reason of
late payment by Tenant. Notwithstanding the foregoing, Landlord shall give
Tenant notice of non-payment of any amounts required of Tenant under this Lease
and five (5) days after delivery of such notice to cure such non-payment once in
each calendar year before assessing the late charge in such calendar year
pursuant to this Paragraph 31. Acceptance of any late charge shall not
constitute a waiver of Tenant's default with respect to the overdue amount, nor
prevent Landlord from exercising its right to collect interest as provided
above, rent, or any other damages, or from exercising any of the other rights
and remedies available to Landlord.

        32. Attorneys' Fees; Waiver of Jury Trial. In the event of any action or
proceeding between Landlord and Tenant (including an action or proceeding
between Landlord and the trustee or debtor in


                                       27
<PAGE>

possession while Tenant is a debtor in a proceeding under any bankruptcy law) to
enforce any provision of this Lease, the losing party shall pay to the
prevailing party all costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses, incurred in such action and in any
appeal in connection therewith by such prevailing party. The "prevailing party"
will be determined by the court before whom the action or proceeding was brought
based upon an assessment of which party's major arguments or positions taken in
the suit or proceeding could fairly be said to have prevailed over the other
party's major arguments or positions on major disputed issues in the court's
decision. Notwithstanding the foregoing, however, Landlord shall be deemed the
prevailing party in any unlawful detainer or other action or proceeding
instituted by Landlord based upon any default or alleged default of Tenant
hereunder if (i) judgment is entered in favor of Landlord, or (ii) prior to
trial or judgment Tenant pays all or any portion of the rent claimed by
Landlord, vacates the Premises, or otherwise cures the default claimed by
Landlord.

        If Landlord becomes involved in any litigation or dispute, threatened or
actual, by or against anyone not a party to this Lease, but arising by reason of
or related to any act or omission of Tenant or any Tenant Party, Tenant agrees
to pay Landlord's reasonable attorneys' fees and other costs incurred in
connection with the litigation or dispute, regardless of whether a lawsuit is
actually filed.

        IF ANY ACTION OR PROCEEDING BETWEEN LANDLORD AND TENANT TO ENFORCE THE
PROVISIONS OF THIS LEASE (INCLUDING AN ACTION OR PROCEEDING BETWEEN LANDLORD AND
THE TRUSTEE OR DEBTOR IN POSSESSION WHILE TENANT IS A DEBTOR IN A PROCEEDING
UNDER ANY BANKRUPTCY LAW) PROCEEDS TO TRIAL, LANDLORD AND TENANT HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY IN SUCH TRIAL. Landlord and Tenant agree that
this paragraph constitutes a written consent to waiver of trial by jury within
the meaning of California Code of Civil Procedure Section 631(a)(2), and Tenant
does hereby authorize and empower Landlord to file this paragraph and/or this
Lease, as required, with the clerk or judge of any court of competent
jurisdiction as a written consent to waiver of jury trial.

        33. Waiver. No provisions of this Lease shall be deemed waived by
Landlord or Tenant unless such waiver is in a writing signed by the party giving
such waiver. The waiver by either party of any breach of any provision of this
Lease by the other party shall not be deemed a waiver of any subsequent breach
of the same or any other provision of this Lease. No delay or omission in the
exercise of any right or remedy of Landlord upon any default by Tenant, or of
Tenant upon any default of Landlord, shall impair such right or remedy or be
construed as a waiver. Landlord's acceptance of any payments of rent due under
this Lease shall not be deemed a waiver of any default by Tenant under this
Lease (including Tenant's recurrent failure to timely pay rent) other than
Tenant's nonpayment of the accepted sums, and no endorsement or statement on any
check or accompanying any check or payment shall be deemed an accord and
satisfaction. Tenant's payment of rent due and Tenant's continuance in
possession shall not constitute a waiver by Tenant of any default of Landlord.
Landlord's consent to or approval of any act by Tenant requiring Landlord's
consent or approval shall not be deemed to waive or render unnecessary
Landlord's consent to or approval of any subsequent act by Tenant.

        34. Notices. All notices and demands which may or are required to be
given by either party to the other hereunder shall be in writing. All notices
and demands by Landlord to Tenant shall be delivered personally or sent by
United States mail, postage prepaid, or by any reputable overnight or same-day
courier, addressed to Tenant at the Premises, Attention: General Counsel, or to
such other place as Tenant may from time to time designate by notice to Landlord
hereunder, except that prior to the date Tenant shall commence the conduct of
business from the Premises, they shall be addressed to Tenant at 532 Folsom
Street, San Francisco, California 94105, Attention: General Counsel. All notices
and demands by Tenant to Landlord shall be sent by United States mail, postage
prepaid, or by any reputable overnight or same-day courier, addressed to
Landlord in care of Shorenstein Company, L.P., 555 California Street, 49th
floor, San Francisco, California 94104, or to such other place as Landlord may
from time to time designate by notice to Tenant hereunder. Notices delivered
personally or sent same-day courier will be effective immediately upon delivery
to the addressee at the designated address; notices sent by overnight courier
will be effective one (1) Business Day after acceptance by the service for
delivery; notices sent by mail will be effective two (2) Business Days after
mailing. In the event Tenant requests multiple notices hereunder, Tenant will be
bound by such notice from the earlier of the effective times of the multiple
notices.

        35. Deleted.

        36. Defined Terms and Marginal Headings. When required by the context of
this Lease, the singular includes the plural. If more than one person or entity
signs this Lease as Tenant, the obligations hereunder imposed upon Tenant shall
be joint and several, and the act of, written notice to or from, refund to, or
signature of, any Tenant signatory to this Lease (including without limitation
modifications of this Lease made by fewer than all such Tenant signatories)
shall bind every other Tenant signatory as though every other Tenant signatory
had so acted, or received or given the written notice or refund, or signed. The
headings and titles to the paragraphs of this Lease are for convenience only and
are not to be used to interpret or construe this Lease. Wherever the term
"including" or "includes" is used in this Lease it shall be construed as if
followed by the phrase "without limitation." The language in all parts of this
Lease shall in all cases be


                                       28
<PAGE>

construed as a whole and in accordance with its fair meaning and not construed
for or against any party simply because one party was the drafter thereof.

        37. Time and Applicable Law. Time is of the essence of this Lease and of
each and all of its provisions. This Lease shall be governed by and construed in
accordance with the laws of the State of California, and the venue of any action
or proceeding under this Lease shall be the City and County of San Francisco,
California.

        38. Successors. Subject to the provisions of Paragraphs 13 and 28 above,
the covenants and conditions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors, executors, administrators and assigns.

        39. Entire Agreement; Modifications. This Lease (including any exhibit,
rider or attachment hereto) constitutes the entire agreement between Landlord
and Tenant with respect to Tenant's lease of the Premises. No provision of this
Lease may be amended or otherwise modified except by an agreement in writing
signed by the parties hereto. Neither Landlord nor Landlord's agents have made
any representations or warranties with respect to the Premises, the Building,
the Real Property or this Lease except as expressly set forth herein, including
without limitation any representations or warranties as to the suitability or
fitness of the Premises for the conduct of Tenant's business or for any other
purpose, nor has Landlord or its agents agreed to undertake any alterations or
construct any improvements to the Premises except those, if any, expressly
provided in this Lease, and no rights, easements or licenses shall be acquired
by Tenant by implication or otherwise unless expressly set forth herein. Neither
this Lease nor any memorandum hereof shall be recorded by Tenant.

        40. Light and Air. Tenant agrees that no diminution of light, air or
view by any structure which may hereafter be erected (whether or not by
Landlord) shall entitle Tenant to any reduction of rent hereunder, result in any
liability of Landlord to Tenant, or in any other way affect this Lease.

        41. Name of Building. Tenant shall not use the name of the Building for
any purpose other than as the address of the business conducted by Tenant in the
Premises without the written consent of Landlord. Landlord reserves the right to
change the name of the Building at any time in its sole discretion by written
notice to Tenant and Landlord shall not be liable to Tenant for any loss, cost
or expense on account of any such change of name.

        42. Severability. If any provision of this Lease or the application
thereof to any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Lease and the application of such provisions to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.

        43. Authority. If Tenant is a corporation, partnership, trust,
association or other entity, Tenant and each person executing this Lease on
behalf of Tenant, hereby covenants and warrants that (a) Tenant is duly
incorporated or otherwise established or formed and validly existing under the
laws of its state of incorporation, establishment or formation, (b) Tenant has
and is duly qualified to do business in the state in which the Real Property is
located, (c) Tenant has full corporate, partnership, trust, association or other
appropriate power and authority to enter into this Lease and to perform all
Tenant's obligations hereunder, and (d) each person (and all of the persons if
more than one signs) signing this Lease on behalf of Tenant is duly and validly
authorized to do so.

        44. No Offer. Submission of this instrument for examination and
signature by Tenant does not constitute an offer to lease or a reservation of or
option for lease, and is not effective as a lease or otherwise until execution
and delivery by both Landlord and Tenant.

        45. Real Estate Brokers. Tenant represents and warrants that it has
negotiated this Lease directly with the real estate broker(s) identified in
Paragraph 2 and has not authorized or employed, or acted by implication to
authorize or to employ, any other real estate broker or salesman to act for
Tenant in connection with this Lease. Tenant shall indemnify, defend and hold
Landlord harmless from and against any and all Claims by any real estate broker
or salesman other than the real estate broker(s) identified in Paragraph 2 for a
commission, finder's fee or other compensation as a result of Tenant's entering
into this Lease. Landlord shall pay any commission owing to the Real Estate
Brokers identified in Paragraph 2 above pursuant to a separate agreement, and
shall indemnify, defend and hold Tenant harmless from and against any and all
Claims by such real estate brokers.

        46. Consents and Approvals. Wherever the consent, approval, judgment or
determination of Landlord is required or permitted under this Lease, Landlord
may exercise its sole discretion in granting or withholding such consent or
approval or in making such judgment or determination without reference to any
extrinsic standard of reasonableness, unless the provision providing for such
consent, approval, judgment or determination specifies that Landlord's consent
or approval is not to be unreasonably withheld, or that the standard for such
consent, approval, judgment or determination is to be reasonable, or otherwise
specifies the standards under which Landlord may withhold its consent. Whenever
Tenant requests Landlord to take any


                                       29
<PAGE>

action or give any consent or approval, Tenant shall reimburse Landlord for all
of Landlord's reasonable costs incurred in reviewing the proposed action or
consent (whether or not Landlord consents to any such proposed action),
including without limitation reasonable attorneys' or consultants' fees and
expenses, within thirty (30) days after Landlord's delivery to Tenant of a
statement of such costs. The review and/or approval by Landlord of any item
shall not impose upon Landlord any liability for accuracy or sufficiency of any
such item or the quality or suitability of such item for its intended use. Any
such review or approval is for the sole purpose of protecting Landlord's
interest in the Real Property, and neither Tenant nor any Tenant Party nor any
person or entity claiming by, through or under Tenant, nor any other third party
shall have any rights hereunder by virtue of such review and/or approval by
Landlord.

        47. Reserved Rights. Landlord retains and shall have the rights set
forth below, exercisable without notice and without liability to Tenant for
damage or injury to property, person or business and without effecting an
eviction, constructive or actual, or disturbance of Tenant's use or possession
of the Premises or giving rise to any claim for rent abatement (except as set
forth in clause (b) below):

            (a) To grant to anyone the exclusive right to conduct any business
                or render any service in or to the Building and its tenants,
                provided that such exclusive right shall not operate to require
                Tenant to use or patronize such business or service or to
                exclude Tenant from its use of the Premises expressly permitted
                herein.

            (b) Subject to the rent abatement provisions of Paragraph 17.e.
                above, to perform, or cause or permit to be performed, at any
                time and from time to time, including during Business Hours,
                construction in the common areas and facilities or other leased
                areas in the Real Property. Landlord shall use its good faith
                efforts to minimize disruption to Tenant's business caused by
                any such work, and, without limitation, Landlord shall perform
                any extraordinarily noisy or disruptive work after Business
                Hours or on weekends to the extent such procedures would be
                generally followed by managers of other first class high rise
                office buildings in the San Francisco financial district (except
                to the extent an emergency and/or Legal Requirements require
                otherwise, as reasonably determined by Landlord).

            (c) To reduce, increase, enclose or otherwise change at any time and
                from time to time the size, number, location, lay-out and nature
                of the common areas and facilities and other tenancies and
                premises in the Real Property and to create additional rentable
                areas through use or enclosure of common areas, but in no event
                shall Tenant's parking rights pursuant to Paragraph 53 below be
                diminished thereby.

        48. Financial Statements. Within thirty (30) days after Landlord's
request therefor, but not more frequently than three (3) times each calendar
year, Tenant shall furnish to Landlord, and to any lender, prospective lender,
purchaser or prospective purchaser designated by Landlord, copies of Tenant's
most recent audited financial statements reflecting Tenant's financial situation
(including without limitation balance sheets, statements of profit and loss, and
changes in financial condition), and in addition shall cause to be furnished to
Landlord similar financial statements for any guarantor(s) of this Lease. So
long as Tenant or such guarantor shall be a publicly traded entity, it may
satisfy the requirements of this Paragraph 48 by delivery of its most recent
publicly available financial statements. Landlord shall use its good faith
efforts to keep any financial statements delivered to it pursuant to this
Paragraph 48 (other than publicly available financial statements) confidential,
and shall inform any party to whom it delivers such non-public financial
statements of the confidential nature of the same. Landlord shall not deliver
any such non-public financial statements to any party which does not have a
legitimate interest in receiving the same by reason of such party's interest or
prospective interest in Landlord or the Real Property.

        49. Signage.

               a. Entrances; Building Directory. Tenant may, at Tenant's
expense, install a sign identifying Tenant's business in the elevator lobby on
each full floor of the Premises leased by Tenant, provided that the size,
location and installation requirements of the sign shall be subject to
Landlord's prior reasonable approval and all applicable Legal Requirements. Any
change to such signage shall also be subject to such approval by Landlord and
shall be made at Tenant's sole cost and expense. In addition, Tenant shall be
entitled, at no cost to Tenant, to have the name of Tenant's company listed on
(i) the Building directory situated in the lobby of the Building and (ii) the
Tenant directory in the lobby of each multi-tenant floor on which any portion of
the Premises is located. If, subsequent to the time Tenant's name is initially
listed on the directories, Tenant requests a change in Tenant's name as printed
thereon, Tenant shall pay Landlord's standard charge as in effect from time to
time for any such change.

               b. Building Lobby Signage. Tenant may, at Tenant's expense, and
upon at least thirty (30) days' prior written notice to Landlord, install a sign
displaying only the name of the Tenant originally named under this Lease, as
such name exists as of the date of this Lease, on the south wall of the main
lobby of the Embarcadero entrance to the Building and a second such sign on the
south wall of the plaza entrance to the main lobby of the Embarcadero entrance
to the Building (collectively, "Tenant's Lobby Signage").


                                       30
<PAGE>

The size, design, color, material, content, location, installation requirements
and appropriateness for a first-class office building, and conformity with the
overall design and ambiance of the Real Property of such signage, shall be
subject to Landlord's prior written approval, which approval may be withheld in
Landlord's good faith discretion, and to the other requirements of Paragraph 9
above; except that the parties agree that each such sign shall fit
proportionately within two existing adjacent horizontally placed wood panels on
such walls. Prior to installation of such signage, Tenant shall obtain all
governmental approvals and permits required in connection therewith, and Tenant
shall otherwise comply with all Legal Requirements applicable to such signage.
Upon the expiration or earlier termination of this Lease, or within thirty (30)
days after the earlier termination of Tenant's signage rights pursuant to the
following provisions of this Paragraph 49, Tenant shall, at its expense, remove
Tenant's Lobby Signage and repair and restore the affected areas of the Building
to their original condition prior to the installation of Tenant's signage.
Tenant acknowledges that its signage rights pursuant to this Paragraph 49 are
non-exclusive.

        Notwithstanding anything in this Paragraph 49 to the contrary, Tenant's
Lobby Signage rights shall forever terminate upon the date on which the Tenant
originally named under this Lease and/or such Tenant's Affiliates are not in
occupancy of an aggregate of at least forty-five thousand (45,000) rentable
square feet of space in the Building pursuant to this Lease (i.e. such Tenant
has assigned this Lease, or has sublet such portion of the Premises, to other
than its Affiliates, such that such occupancy requirement is not met). In no
event shall Tenant's Lobby Signage rights extend to Tenant's Affiliates,
notwithstanding that such Affiliates' occupancy pursuant to subleases from
Tenant may be taken into account in determining whether Tenant has met the
aforesaid occupancy requirement for Tenant's Lobby Signage rights.

        So long as Tenant's Lobby Signage rights shall remain in effect pursuant
to this Paragraph 49, Landlord shall not allow more than four (4) tenants or
other parties, in addition to Tenant, to place identification signage in the
main lobby of the Embarcadero entrance to the Building or in the plaza entrance
to such main lobby, it being acknowledged, however, that Landlord may grant each
of such four (4) tenants or other parties the right to place a total of two (2)
signs in such areas (i.e. one (1) sign in the main lobby of the Embarcadero
entrance to the Building and one (1) sign in the plaza entrance to such main
lobby).

        Nothing contained in this Paragraph 49 shall preclude any identification
signage of the owner of the Building or the Project, or any affiliate thereof,
and any such signage shall not be taken into account for purposes of determining
the number of signs allowed pursuant to the immediately preceding paragraph,
regardless of whether such owner or affiliate shall also be a tenant of the
Building or Project.

               c. Street Address Signage. At Landlord's sole cost and expense
and subject to applicable Legal Requirements, to the extent not already present
Landlord shall install (and thereafter shall maintain in place) street address
identification signage on or about the Embarcadero entrance to the Building.
Such identification shall be of such size, design, color, material and location
as Landlord shall determine. Landlord shall consult with Tenant as to such
identification and take Tenant's concerns and suggestions with respect thereto
into account, but Tenant shall not have any approval rights with respect to such
street address identification signage.

        50. Nondisclosure of Lease Terms. Tenant agrees that the terms of this
Lease are confidential and constitute proprietary information of Landlord, and
that disclosure of the terms hereof could adversely affect the ability of
Landlord to negotiate with other tenants. Tenant hereby agrees that Tenant shall
use its commercially reasonable efforts to preclude Tenant and its partners,
officers, directors, employees, agents, real estate brokers and sales persons
and attorneys from disclosing the terms of this Lease to any other person
without Landlord's prior written consent, except to any accountants of Tenant in
connection with the preparation of Tenant's financial statements or tax returns,
to an assignee of this Lease or sublessee of the Premises, or to an entity or
person (including Tenant's attorneys and other advisors) to whom disclosure is
required by applicable law or in connection with any action brought to enforce
this Lease or to assist Tenant in the interpretation of any provisions hereof or
the determination of Tenant's rights hereunder.

        51. Hazardous Substance Disclosure. California law requires landlords to
disclose to tenants the existence of certain hazardous substances. Accordingly,
the existence of gasoline and other automotive fluids, maintenance fluids,
copying fluids and other office supplies and equipment, certain construction and
finish materials, tobacco smoke, cosmetics and other personal items must be
disclosed. Gasoline and other automotive fluids are found in the garage area of
the Building. Cleaning, lubricating and hydraulic fluids used in the operation
and maintenance of the Building are found in the utility areas of the Building
not generally accessible to Building occupants or the public. Many Building
occupants use copy machines and printers with associated fluids and toners, and
pens, markers, inks, and office equipment that may contain hazardous substances.
Certain adhesives, paints and other construction materials and finishes used in
portions of the Building may contain hazardous substances. Although smoking is
prohibited in the public areas of the Building, these areas may, from time to
time, be exposed to tobacco smoke. Building occupants and other persons entering
the Building from time-to-time may use or carry prescription and
non-prescription drugs, perfumes, cosmetics and other toiletries, and foods and
beverages, some of which may contain hazardous substances. Landlord has made no
special investigation of the Premises with respect to any hazardous substances.


                                       31
<PAGE>

        52. Option to Renew.

               a. Option to Renew. Tenant shall have the option to renew this
Lease for one (1) additional term of five (5) years, commencing upon the
expiration of the initial term of this Lease. Such renewal option must be
exercised, if at all, by written notice given by Tenant to Landlord not later
than fifteen (15) months prior to the expiration of the initial term of this
Lease. Notwithstanding the foregoing, at Landlord's option this renewal option
shall be null and void and Tenant shall have no right to renew this Lease if (i)
as of the date immediately preceding the commencement of the renewal period
Tenant and/or any Affiliate of Tenant is not in occupancy of at least
sixty-seven percent (67%) of the rentable square footage of the Premises demised
pursuant to this Lease or Tenant and/or any Affiliate of Tenant does not intend
to continue to remain in such occupancy (but intends to assign this Lease or
sublet the space in whole or in part such that such occupancy requirement will
not be met), or (ii) on the date Tenant exercises the option or on the date
immediately preceding the commencement date of the renewal period an Event of
Default (or breach or default which subsequently matures into an Event of
Default) shall have occurred and be continuing under this Lease.

               b. Terms and Conditions. If Tenant exercises a renewal option,
then during the applicable renewal period all of the terms and conditions set
forth in this Lease as applicable to the Premises during the initial term shall
apply during the renewal term, except that (i) Tenant shall have no further
right to renew this Lease, (ii) Tenant shall take the Premises in their then
"as-is" state and condition for the applicable renewal period, (iii) the Base
Year for the Premises shall be the calendar year in which the renewal term
commences and the Base Tax Year for the Premises shall be the fiscal tax year in
which the renewal term commences, and (iv) the Monthly Rent payable by Tenant
for the Premises shall be the then-fair market rent for the Premises based upon
the terms of this Lease, as renewed. Fair market rent shall include the periodic
rental increases, if any, that would be included for space leased for the period
the space will be covered by the Lease. For purposes of this Paragraph 52, the
term "fair market rent" shall mean the rental rate that would be applicable for
a lease term commencing on the commencement date of the renewal term and that
would be payable in any arms length negotiations for the Premises in their then
as-is condition, for the renewal term, which rental rate may be established by
reference to rental terms actually negotiated for comparable space under primary
lease (and not sublease), taking into consideration the Base Year and Base Tax
Year with respect to the Premises as set forth above, the quality, prestige and
location of the Building and such amenities as existing improvements, view,
floors on which the Premises are situated and the like, situated in first class,
reputable, established high-rise office buildings in the San Francisco Financial
District, in sound physical and economic condition, engaged in then-prevailing
ordinary rental market practices with respect to tenant concessions (if any)
(e.g. not offering extraordinary rental, promotional deals and other concessions
to tenants which deviate from then prevailing ordinary practices in an effort to
alleviate cash flow problems, difficulties in meeting loan obligations or other
financial distress, or in response to a greater than average vacancy rate or to
entice an anchor tenant into a newly constructed building). The fair market rent
shall be mutually agreed upon by Landlord and Tenant in writing within the
thirty (30) calendar day period commencing six (6) months prior to commencement
of the renewal period. If Landlord and Tenant are unable to agree upon the fair
market monthly rent within such thirty (30)-day period, then the fair market
rent shall be established by the appraisal procedures set forth in Paragraph
52.c. below.

               c. Appraisal. Within thirty (30) days after the expiration of the
thirty (30)-day period provided in Paragraph 52.b. above for the mutual
agreement of Landlord and Tenant as to the fair market rent, each party hereto,
at its cost, shall engage a California licensed real estate broker to act on its
behalf in determining the fair market monthly rent. The brokers each shall have
at least ten (10) years' experience with leases in first-class high-rise office
buildings in the San Francisco Financial District. If a party does not appoint a
broker within such thirty (30)-day period but a broker is appointed by the other
respective party, the single broker appointed shall be the sole broker and shall
set the fair market rent. If the two brokers are appointed by the parties as
stated in this paragraph, such brokers shall meet promptly and attempt to set
the fair market rent taking into account all of the parameters set forth in
Paragraph 52.b. above. If such brokers are unable to agree within thirty (30)
days after appointment of the second broker, the brokers shall inform Landlord
and Tenant in writing of their respective determinations of the fair market rent
(each an "Initial Fair Market Rent Determination"), and shall elect a third
broker meeting the qualifications stated in this paragraph within ten (10) days
after the last date the two brokers are given to set the fair market rent. If
the two appraisers are unable to agree on a third appraiser, the third appraiser
shall be selected by the office of JAMS/ENDISPUTE located in San Francisco,
California or by such other procedure as the two appraisers shall agree. Each of
the parties hereto shall bear one-half (1/2) the cost of appointing the third
broker and of the third broker's fee. The third broker shall be a person who has
not previously acted in any capacity for either party.

               Neither Landlord nor Tenant shall advise the third broker of the
fair market rent determinations delivered by the first two brokers, and Landlord
and Tenant shall instruct the first two brokers not to advise the third broker
of such determinations. The third broker shall make his own determination of the
fair market rent within thirty (30) days of his appointment, and shall be
instructed not to advise either party or the other two brokers of his
determination except as follows: When the third broker has made his
determination, he shall so advise Landlord and Tenant and shall establish a
date, at least five (5) days after the giving of notice by the third broker to
Landlord and Tenant, on which he shall meet with the parties to


                                       32
<PAGE>

disclose his determination of the fair market rent. Such meeting shall take
place in the third broker's office unless otherwise agreed by the parties.

               If the fair market rent determined by the third broker is the
average of the determinations of the fair market rent delivered by Landlord's
broker and Tenant's broker, the third broker's determination of fair market rent
shall be the fair market rent. If such is not the case, fair market rent shall
be whichever of the Initial Fair Market Rent Determinations is closest to the
determination of fair market rent by the third broker.

               d. Minimum Rental. Notwithstanding the foregoing, in no event
shall the Monthly Rent during the renewal period be less than the aggregate of
the amounts of Monthly Rent and Additional Rent payable by Tenant (for all of
the Premises leased hereunder) under Paragraphs 2.b., 5 and 7 hereof for the
calendar month immediately preceding the commencement of the renewal period
(disregarding, for such purpose, any temporary rental abatements or reductions
then in effect).

        53. Parking. Landlord shall provide Tenant with parking for thirty (30)
automobiles in the garage of the Building, and Tenant shall pay for such parking
at Landlord's regular rate or charge from time to time in effect to tenants of
the Building for parking in the Building. Such parking is currently on an
unreserved self-park basis, but Landlord reserves the right to change such
parking to a valet basis or a reserved self-park basis, and/or return to an
unreserved self-park basis, as Landlord shall determine from time to time.
Tenant shall provide Landlord with written notice of the names of each party to
whom Tenant from time to time distributes Tenant's parking rights hereunder (all
of whom must be employees, partners, members and/or shareholders, as applicable,
of Tenant), and shall cause each such party to execute Landlord's standard
contract and waiver form for garage users. If the parking charge is not paid
when due, and such failure continues for five (5) days after notice thereof to
Tenant, then Landlord may terminate Tenant's rights under this Paragraph 53 as
to the number of spaces as to which the parking charge has not been paid in
full. The parking rights set forth in this Paragraph 53 are personal to the
Tenant originally named in this Lease, any assignee of Tenant's interests under
this Lease, and any subtenant which is an Affiliate of the Tenant originally
named in this Lease, and shall not inure to the benefit of any other party,
except that Tenant may allow approved subtenants of the Premises or any portion
thereof to use Tenant's parking rights for up to an aggregate of fifteen (15)
automobiles. Further, if at any time during the term hereof, Tenant releases to
Landlord any parking space provided for in this paragraph, then Tenant's right
under this paragraph to use such released parking space shall forever terminate.

        54. First Rights Contingency. Tenant acknowledges that Landlord's
ability to enter into this Lease is subject to the contingencies that (i)
certain rights of first offer and first refusal in favor of another tenant of
the Project are not exercised, and (ii) Landlord's lender with respect to the
Project approves this Lease. Promptly after the execution hereof, Landlord shall
send such notices and other documentation (which may include a copy of this
Lease) to such tenant and lender as shall be required to trigger the time period
during which such tenant and lender must exercise or waive its respective
rights. If such tenant shall exercise any such rights, or such lender shall not
approve this Lease, Landlord shall give Tenant prompt notice thereof
("Landlord's Termination Notice") and this Lease shall thereupon be deemed
terminated and of no force or effect. If such Tenant shall waive (or be deemed
to have waived) all such rights, and such lender shall approve (or be deemed to
have approved) this Lease, Landlord shall give Tenant prompt notice thereof
("Landlord's Ratification Notice") and this Lease shall continue in full force
and effect. Landlord's Termination Notice shall be given, if at all, within
fifteen (15) Business Days after the date of this Lease, and if not so given,
regardless of whether Landlord shall have delivered Landlord's Ratification
Notice, this Lease shall continue in full force and effect and Landlord shall
have no right to terminate this Lease pursuant to this Paragraph 54. The earlier
to occur of the date on which Landlord shall deliver Landlord's Ratification
Notice to Tenant, or the expiration of the aforesaid fifteen (15) Business Day
period without Landlord having delivered Landlord's Termination Notice to
Tenant, is referred to in this Lease as the "First Rights Contingency
Satisfaction Date."

        55. Canine Access. Notwithstanding anything to the contrary contained in
this Lease (including the Rules and Regulations), so long as the Tenant
hereunder shall remain the Tenant originally named in this Lease, or any
Affiliate of such Tenant, and such Tenant or its Affiliates shall remain in
occupancy of at least forty-five thousand (45,000) rentable square feet of space
in the Building pursuant to this Lease, Tenant shall have the right to maintain
in the Premises the Golden Retriever dog named "Blaze", owned by Mr. David
Hayden on the date hereof, the Black Labrador dog named "Scout", owned by
Shireen Piramoon on the date hereof, and a third adult dog designated by Tenant
of good temperament and training, subject to the following terms, covenants and
conditions. Tenant shall be solely responsible for such dogs, and without
limitation, Tenant's indemnification and insurance obligations set forth in
Paragraphs 14 and 15 below shall apply with respect to such dogs and any Claims
in connection therewith, and Tenant's right to maintain such dogs in the
Premises shall be subject to the provisions of the second paragraph of Paragraph
8.a. above. In no event shall any such dog be left unattended and without direct
and responsible human supervision. Tenant shall ensure that any dog waste in or
about the Building or Project is promptly picked-up and properly disposed of as
reasonably required by Landlord, all at Tenant's sole cost and expense. In the
event that any dogs permitted in the Premises pursuant to the foregoing are
determined by Landlord, in good faith, to present a risk of personal injury or
property damage to the Building or the Project, or if Landlord's lender,
insurance carriers or other tenants reasonably require that any such dogs be
removed from the


                                       33
<PAGE>

Premises or the Project, Landlord may revoke Tenant's rights pursuant to this
Paragraph 55 and Tenant shall immediately and permanently remove the offending
dog or dogs from the Premises and the Project.

        THIS LEASE IS EXECUTED by Landlord and Tenant as of the date set forth
at the top of page 1 hereof.

Landlord:                                  Tenant:

SRI HILLS PLAZA VENTURE, LLC,              CRITICAL PATH, INC.,
a Delaware limited liability company       a California corporation

By:  /s/ Douglas Shorenstein               By: /s/ William McGlashan
     -------------------------------          ---------------------------------
     Douglas W. Shorenstein
     Chairman and Chief Executive          Name:_______________________________
     Officer
                                           Title:______________________________


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

                                           Name:_______________________________

                                           Title:______________________________




                                       34
<PAGE>

                                    EXHIBIT B

                              RULES AND REGULATIONS

                                   HILLS PLAZA

        1. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside or
inside of the Building or any part of the Premises visible from the exterior of
the Premises without the prior written consent of Landlord, which consent may be
withheld in Landlord's sole discretion. Landlord shall have the right to remove,
at Tenant's expense and without notice to Tenant, any such sign, placard,
picture, advertisement, name or notice that has not been approved by Landlord.

               All approved signs or lettering on doors and walls shall be
printed, painted, affixed or inscribed at the expense of Tenant by a person
approved of by Landlord.

               If Landlord notifies Tenant in writing that Landlord objects to
any curtains, blinds, shades or screens attached to or hung in or used in
connection with any window or door of the Premises, such use of such curtains,
blinds, shades or screens shall be removed immediately by Tenant. No awning
shall be permitted on any part of the Premises.

        2. No ice, drinking water, towel, barbering or bootblacking, shoeshining
or repair services, or other similar services shall be provided to the Premises,
except from persons authorized by Landlord and at the hours and under
regulations fixed by Landlord.

        3. The bulletin board or directory of the Building will be provided
exclusively for the display of the name and location of tenants and permitted
subtenants only and Landlord reserves the right to exclude any other names
therefrom.

        4. The sidewalks, halls, passages, exits, entrances, elevators and
stairways shall not be obstructed by any of the Tenant Parties or used by Tenant
for any purpose other than for ingress to and egress from its Premises. The
halls, passages, exits, entrances, elevators, stairways, balconies and roof are
not for the use of the general public and Landlord shall in all cases retain the
right to control and prevent access thereto by all persons whose presence in the
judgment of Landlord shall be prejudicial to the safety, character, reputation
and interests of the Building and its tenants, except that the foregoing shall
not diminish any rights of Tenant to use any such areas which are contained
within and are part of the Premises, as shown on Exhibit A to the Lease. No
tenant and no employees or invitees of any tenant shall go upon the roof of the
Building.

        5. Tenant shall not alter any lock or install any new or additional
locks or any bolts on any interior or exterior door of the Premises without the
prior written consent of Landlord.

        6. The toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be thrown
therein and the expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the tenant who, or whose employees or
invitees, shall have caused it.

        7. Tenant shall not overload the floor of the Premises or mark, drive
nails, screw or drill into the partitions, woodwork or plaster or in any way
deface the Premises or any part thereof.

        8. No furniture, freight or equipment of any kind shall be brought into
the Building without the consent of Landlord and all moving of the same into or
out of the Building shall be done at such time and in such manner as Landlord
shall designate. Landlord shall have the right to prescribe the weight, size and
position of all safes and other heavy equipment brought into the Building and
also the times and manner of moving the same in and out of the Building. Safes
or other heavy objects shall, if considered necessary by Landlord, stand on a
platform of such thickness as is necessary to properly distribute the weight.
Landlord will not be responsible for loss of or damage to any such safe or
property from any cause, and all damage done to the Building by moving or
maintaining any such safe or other property shall be repaired at the expense of
Tenant. The elevator designated for freight by Landlord shall be available for
use by all tenants in the Building during the hours and pursuant to such
procedures as Landlord may determine from time to time. The persons employed to
move Tenant's equipment, material, furniture or other property in or out of the
Building must be acceptable to Landlord. The moving company must be a locally
recognized professional mover, whose primary business is the performing of
relocation services, and must be bonded and fully insured. In no event shall
Tenant employ any person or company whose presence may give rise to a labor or
other disturbance in the Real Property. A certificate or other verification of
such insurance must be received and approved by Landlord prior to the start of
any moving operations. Insurance must be sufficient in Landlord's sole opinion,
to cover all personal liability, theft or damage to the Project, including, but
not limited to, floor coverings, doors, walls, elevators, stairs, foliage and
landscaping. Special care must be taken to prevent damage to foliage and
landscaping during adverse weather. All moving operations shall be


                                       1
<PAGE>

conducted at such times and in such a manner as Landlord shall direct, and all
moving shall take place during non-business hours unless Landlord agrees in
writing otherwise.

        9. Tenant shall not employ any person or persons other than the janitor
of Landlord for the purpose of cleaning the Premises, unless otherwise agreed to
by Landlord. Except with the written consent of Landlord, no person or persons
other than those approved by Landlord shall be permitted to enter the Building
for the purpose of cleaning the Building or the Premises. Tenant shall not cause
any unnecessary labor by reason of Tenant's carelessness or indifference in the
preservation of good order and cleanliness.

        10. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance in the Premises, or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Building by reason of noise, odors and/or vibrations, or
interfere in any way with other tenants or those having business therein, nor,
except as mandated by applicable law, shall any animals or birds be brought in
or kept in or about the Premises or the Building. In no event shall Tenant keep,
use, or permit to be used in the Premises or the Building any guns, firearm,
explosive devices or ammunition.

Notwithstanding the foregoing, Landlord acknowledges that Tenant may desire to
employ, at its sole cost and expense, a licensed and reputable security service
to supply security services within the Premises, and that Tenant may desire that
such security personnel carry firearms. Landlord will consider any request by
Tenant to allow firearms in the Premises for such purpose, but in no event shall
firearms be allowed in the Premises without Landlord's prior written consent,
which may be withheld in Landlord's good faith discretion and which may be
conditioned, without limitation, upon Tenant's delivery of such further
insurance coverages and indemnifications as Landlord shall require.

        11. No cooking shall be done or permitted by Tenant in the Premises, nor
shall the Premises be used for the storage of merchandise, for washing clothes,
for lodging, or for any improper, objectionable or immoral purposes.

               Notwithstanding the foregoing, Tenant may maintain and use in the
Premises a food preparation area with a refrigerator, microwave oven, toaster,
coffee maker and other small appliances; provided that Tenant shall (i) prevent
the emission of any food or cooking odor from leaving the Premises, (ii) be
solely responsible for cleaning the appliances and food preparation surfaces and
removing food-related waste from the Premises and the Building, or shall pay
Landlord's standard rate for such service as an addition to cleaning services
ordinarily provided, (iii) maintain and use such areas solely for Tenant's
employees and business invitees, not as public facilities, and (iv) keep the
Premises free of vermin and other pest infestation and shall exterminate, as
needed, in a manner and through contractors reasonably approved by Landlord,
preventing any emission of odors, due to extermination, from leaving the
Premises. Notwithstanding clause (ii) above, Landlord shall, without special
charge, on Business Days, empty and remove the contents of one (i) 15 gallon (or
smaller) waste container from the food preparation area so long as such
container is fully lined with, and the contents can be removed in, a waterproof
plastic liner or bag, supplied by Tenant, which will prevent any leakage of food
related waste or odors; provided, however, that if at any time Landlord must pay
a premium or special charge to Landlord's cleaning or scavenger contractors for
the handling of food-related or so-called "wet" refuse, Landlord's obligation to
provide such removal, without special charge, shall cease.

        12. Tenant shall not use or keep in the Premises or the Building any
kerosene, gasoline, or inflammable or combustible fluid or material, or use any
method of heating or air conditioning other than that supplied by Landlord.

        13. Landlord will direct electricians as to where and how telephone and
telegraph wires are to be introduced into the Premises and the Building. No
boring or cutting for wires will be allowed without the prior consent of
Landlord. The location of telephones, call boxes and other office equipment
affixed to the Premises shall be subject to the prior approval of Landlord.

        14. Upon the expiration or earlier termination of the Lease, Tenant
shall deliver to Landlord the keys of offices, rooms and toilet rooms which have
been furnished by Landlord to Tenant and any copies of such keys which Tenant
has made. In the event Tenant has lost any keys furnished by Landlord, Tenant
shall pay Landlord for such keys.

        15. Tenant shall not lay linoleum, tile, carpet or other similar floor
covering so that the same shall be affixed to the floor of the Premises, except
to the extent and in the manner approved in advance by Landlord. The expense of
repairing any damage resulting from a violation of this rule or removal of any
floor covering shall be borne by the tenant by whom, or by whose contractors,
employees or invitees, the damage shall have been caused.

        16. No furniture, packages, supplies, equipment or merchandise will be
received in the Building or carried up or down in the elevators, except between
such hours and in such elevators as shall be designated by Landlord, which
elevator usage shall be subject to the Building's customary charge therefor as
established from time to time by Landlord.


                                       2
<PAGE>

        17. On Saturdays, Sundays and legal holidays, and on other days between
the hours of 6:00 P.M. and 8:00 A.M., access to the Building, or to the halls,
corridors, elevators or stairways in the Building, or to the Premises may be
refused unless the person seeking access is known to the person or employee of
the Building in charge and has a pass or is properly identified. Landlord shall
in no case be liable for damages for any error with regard to the admission to
or exclusion from the Building of any person. In case of invasion, mob, riot,
public excitement, or other commotion, Landlord reserves the right to prevent
access to the Building during the continuance of the same by closing the doors
or otherwise, for the safety of the tenants and protection of property in the
Building.

        18. Tenant shall be responsible for insuring that the doors of the
Premises are closed and securely locked before leaving the Building and must
observe strict care and caution that all water faucets or water apparatus are
entirely shut off before Tenant or Tenant's employees leave the Building, and
that all electricity, gas or air shall likewise be carefully shut off, so as to
prevent waste or damage, and for any default or carelessness Tenant shall make
good all injuries sustained by other tenants or occupants of the Building or
Landlord. Landlord shall not be responsible to Tenant for loss of property on
the Premises, however occurring, or for any damage to the property of Tenant
caused by the employees or independent contractors of Landlord or by any other
person.

        19. Landlord reserves the right to exclude or expel from the Building
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in violation
of any of the rules and regulations of the Building.

        20. The requirements of any tenant will be attended to only upon
application at the office of the Building. Employees of Landlord shall not
perform any work or do anything outside of their regular duties unless under
special instructions from Landlord, and no employee will admit any person
(tenant or otherwise) to any office without specific instructions from Landlord.

        21. No vending machine or machines of any description shall be
installed, maintained or operated upon the Premises without the prior written
consent of Landlord.

        22. Subject to Tenant's right of access to the Premises in accordance
with Building security procedures, Landlord reserves the right to close and keep
locked all entrance and exit doors of the Building on Saturdays, Sundays and
legal holidays and on other days between the hours of 6:00 P.M. and 8:00 A.M.,
and during such further hours as Landlord may deem advisable for the adequate
protection of the Building and the property of its tenants.



                                        3
<PAGE>

                                    EXHIBIT C
                            FORM OF LETTER OF CREDIT

[Date]

SRI HILLS PLAZA VENTURE, LLC ("Beneficiary")
c/o SHORENSTEIN COMPANY, L.P.
555 California Street, 49th Floor
San Francisco, CA  94104
Attn: Legal Department

                IRREVOCABLE STANDBY LETTER OF CREDIT NO.________

We hereby establish our Irrevocable Letter of Credit in your favor available by
your drafts drawn on [BANK], at sight, for any sum or sum(s) not exceeding
______________ Dollars ($__________), for account of [TENANT] ("Applicant").
Draft(s) must be accompanied by supporting documents as described below:

        A written statement to [BANK] stating that "The principal amount [or the
        portion requested] of this Letter of Credit is due and payable in
        accordance with the provisions of that certain Office Lease dated
        _______________________ , between Beneficiary and Applicant."

The written statement shall be accompanied by this Letter of Credit for
surrender; provided, however, that if less than the balance of the Letter of
Credit is drawn, this Letter of Credit need not be surrendered and shall
continue in full force and effect with respect to the unused balance of this
Letter of Credit unless and until we issue to you a replacement Letter of Credit
for such unused balance, the terms of which replacement Letter of Credit shall
be identical to those set forth in this Letter of Credit. We are not required to
inquire as to the accuracy of the matters recited in the written statement or as
to the authority of the person signing the written statement and may take the
act of signing as conclusive evidence of such accuracy and his or her authority
to do so. The obligation of [BANK] under this Letter of Credit is the individual
obligation of [BANK], and is in no way contingent upon reimbursement with
respect thereto.

Each draft must bear upon its face the clause "Drawn under Letter of Credit No.
_____________ , dated ______________, of [BANK]."

This Letter of Credit shall be automatically extended for an additional period
of one year from the present or each future expiration date unless we have
notified you in writing delivered via U.S. registered mail, return receipt
requested, to your address stated above, or to such other address as you shall
have furnished to us for such purpose, not less than sixty (60) days before such
expiration date, that we elect not to renew this Letter of Credit. Upon your
receipt of such notification, you may draw your sight draft on us prior to the
then applicable expiration date for the unused balance of the Letter of Credit,
which shall be accompanied by your signed written statement that you received
notification of our election not to extend.

Except so far as otherwise expressly stated herein, this Letter of Credit is
subject to the "Uniform Customs and Practices for Documentary Credits (1993
Revision), International Chamber of Commerce - Publication No. 500." If this
Letter of Credit expires during an interruption of business as described in
article 17 of Publication 500, we hereby specifically agree to effect payment if
this Letter of Credit is drawn against within 30 days after the resumption of
business.

We hereby agree with you that drafts drawn under and in compliance with the
terms of this Letter of Credit will be duly honored if presented to the
above-mentioned drawee at our offices at [ADDRESS IN SAN FRANCISCO BAY AREA] on
or before ______________ PM [Time Zone] Time on [Initial Expiration Date], or
such later expiration date to which this Letter of Credit is extended pursuant
to the terms hereof.

If at any time Beneficiary or its authorized transferee is not in possession of
the original of this letter of credit (together with all amendments, if any)
because such original has been delivered to us as required hereunder for a draw
thereon or transfer thereof, our obligations as set forth in this letter of
credit shall continue in full force and effect as if Beneficiary or such
authorized transferee still held such original, and any previous delivery to us,
without return by us, of such original shall be deemed to have satisfied any
requirement that such original be delivered to us for a subsequent draw
hereunder or transfer hereof.

This Letter of Credit may be, without charge and without recourse, assigned to,
and shall inure to the benefit of, any successor in interest to [LANDLORD] under
the [TITLE OF DOCUMENT], provided that you deliver to [BANK] your written
request for transfer in form and substance reasonably satisfactory to [BANK].
Transfer charges, if any, are for the account of the applicant.

Sincerely,
[BANK]




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>11
<FILENAME>f80193ex10-9.txt
<DESCRIPTION>EXHIBIT 10.9
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.9

                              CRITICAL PATH, INC.

                   AMENDED AND RESTATED 1998 STOCK OPTION PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

Critical Path, Inc., a California corporation (the "Company"), granted an Option
on November 8, 2001 to purchase shares of its common stock (the "Shares") to the
Optionee named below. The terms and conditions of that Option grant, as amended
and restated, are set forth in this cover sheet, the attachment, the Company's
1998 Stock Option Plan (the "Plan") and in the Optionee's employment agreement
with the Company dated August 13, 2001 as may be amended and in effect from time
to time.

Date of Option Grant: November 8, 2001
                      -------------------

Name of Optionee: David Hayden
                  ----------------------

Optionee's Social Security Number:

Number of Shares Covered by Option: 2,710,000
                                    -----------------

Exercise Price per Share: $1.13
                          -------

Vesting Start Date: November 8, 2001
                    -----------------

        BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY OF WHICH
IS ALSO ENCLOSED.

Optionee:      /s/ David Hayden
                                ---------------------------
                                (Signature)

Company:       /s/  William McGlashan
                                      ---------------------------
                                      (Signature)

Title: Interim Chief Executive Officer
       ------------------------------------------

Attachment


<PAGE>

                               CRITICAL PATH, INC.

                      AMENDED AND RESTATED 1998 STOCK PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

NONSTATUTORY STOCK OPTION       This option is not intended to be an incentive
                                stock option under section 422 of the Internal
                                Revenue Code and will be interpreted
                                accordingly.

VESTING                         The Shares under this option will vest in
                                accordance with the vesting schedule indicated
                                below:

NUMBER OF OPTIONS               VESTING EVENT

     (i)       1,084,000        Vested upon date of option grant.

     (ii)        542,000        Monthly vesting on a pro-rata basis between
                                January 1, 2001 and December 31, 2004 with
                                earlier full vesting if the daily closing sale
                                price of the Company (as reported by NASDAQ)
                                exceeds an average of $5.00 per share (or as
                                adjusted for any future stock splits, stock
                                dividends, recapitalization, or similar events)
                                for at least 22 consecutive trading days
                                provided this goal is completely achieved by
                                July 1, 2002.

     (iii)       542,000        Monthly vesting on a pro-rata basis between
                                January 1, 2001 and December 31, 2004 with
                                earlier full vesting upon the retention of six
                                (6) months employment of the new CEO (as CEO)
                                who was hired by you pursuant to Section 3(a) in
                                your employment agreement with the Company.

     (iv)        542,000        Vested on December 31, 2004 with earlier full
                                vesting upon the Company's attainment of
                                positive Earnings Before Interest Taxes
                                Depreciation and Amortization ("EBITDA") for any
                                fiscal quarter provided such positive EBITDA
                                occurs for a fiscal quarter in or before the end
                                of the second fiscal quarter of 2002. EBITDA
                                will be determined by the Company's independent
                                public accountants using the Company's financial
                                statements as reported in filings with the
                                Securities and Exchange Commission ("SEC").
                                Earnings, for EBITDA determination purposes,
                                will include revenue from only normal business
                                operations and will not include any
                                extraordinary or nonrecurring income or revenue
                                items.


<PAGE>

                                Your option vesting will cease in the event that
                                your employment and service as a Company
                                director both terminate for any reason. Your
                                option vesting will also cease upon your
                                voluntary resignation of employment without Good
                                Reason or upon a termination for Cause (as such
                                terms are defined in your employment agreement
                                with the Company). A leave of absence,
                                regardless of the reason, shall be deemed to
                                constitute the cessation of your employment
                                unless such leave is authorized by the Company,
                                and you return within the time specified in such
                                authorization.

                                The above performance-based acceleration
                                triggers will cease to be applicable upon your
                                prior cessation of employment for any reason.
                                The Compensation Committee of the Board of
                                Directors must certify in writing that the
                                performance goals have been satisfied before any
                                Option vesting will be accelerated pursuant to
                                attainment of performance goals.

                                In the event of a Change in Control of the
                                Company, 50% of your then-unvested Options
                                (meaning 50% of your unvested Options that are
                                otherwise scheduled to vest under (ii), (iii)
                                and (iv) above on each vesting date had a Change
                                in Control not occurred) shall become vested
                                provided that you are employed by the Company on
                                the date the negotiations or communications
                                began (as determined by the Board in good faith)
                                which lead to the Change in Control provided,
                                however, that all of your then-unvested Options
                                shall become vested if the Change in Control
                                consideration received by Company shareholders
                                is at least $10.00 per share (with such share
                                price adjusted for any future stock splits,
                                stock dividends, recapitalization, or similar
                                events).

TERM                            Your option will expire in any event at the
                                close of business at Company headquarters on the
                                day before the 10th anniversary of the Date of
                                Grant, as shown on the cover sheet. It will
                                expire earlier if your employment and your
                                service as a Company director terminate, as
                                described below.

REGULAR TERMINATION             If your employment and your service as a Company
                                director terminate for any reason except Cause,
                                death or Disability, then your option will
                                expire at the close of business at Company
                                headquarters on the 90th day after your
                                termination date.


<PAGE>


CAUSE                           If your employment or service as a Company
                                director terminates on CAUSE account of Cause,
                                then your option will expire immediately.

DEATH                           In the event of your death during the period of
                                your employment or service as a Company
                                director, your option will expire at the close
                                of business at Company headquarters on the date
                                six months after the date of death. During that
                                six-month period, your estate or heirs may
                                exercise your option.

DISABILITY                      If your employment and service as a Company
                                director terminate because of your Disability,
                                then your option will expire at the close of
                                business at Company headquarters on the date six
                                months after your termination date.

                                "Disability" means that you are unable to engage
                                in any substantial gainful activity by reason of
                                any medically determinable physical or mental
                                impairment.

LEAVES OF ABSENCE               For purposes of this option, your employment
                                does not terminate when you go on a bona fide
                                leave of absence, that was approved by the
                                Company in writing, if the terms of the leave
                                provide for continued service crediting, or when
                                continued service crediting is required by
                                applicable law. Your employment terminates in
                                any event when the approved leave ends if you
                                fail or refuse to return to active service.

                                Consistent with the terms of this Agreement and
                                your Employment Agreement, the Company
                                determines which leaves count for this purpose,
                                and when your employment terminates for all
                                purposes under the Plan.

RESTRICTIONS ON EXERCISE        The Company will not permit you to exercise this
                                option if the issuance of Shares at that time
                                would violate any law or regulation.


<PAGE>

NOTICE OF EXERCISE              When you wish to exercise this option, you must
                                notify the Company by filing the proper "Notice
                                of Exercise" form at the address given on the
                                form. Your notice must specify how many Shares
                                you wish to purchase. Your notice must also
                                specify how your Shares should be registered (in
                                your name only or in your and your spouse's
                                names as community property or as joint tenants
                                with right of survivorship). The notice will be
                                effective when received by the Company.

                                If someone else wants to exercise this option
                                after your death, that person must prove to the
                                Company's satisfaction that he or she is
                                entitled to do so.

FORM OF PAYMENT                 When you submit your notice of exercise, you
                                must include payment of the option price for the
                                Shares you are purchasing. Payment may be made
                                in one (or a combination) of the following
                                forms:

                                -       Your personal check, a cashier's check
                                        or a money order.

                                -       By delivery (on a form prescribed by the
                                        Committee) of an irrevocable direction
                                        to a securities broker to sell Shares
                                        and to deliver all or part of the sale
                                        proceeds to the Company in payment of
                                        the aggregate Exercise Price.

                                -       Payment may be made all or in part with
                                        a full recourse promissory note executed
                                        by you. The interest rate and other
                                        terms and conditions of such note shall
                                        be determined in your employment
                                        agreement with the Company. The Company
                                        will require that you pledge your Shares
                                        to the Company for the purpose of
                                        securing the payment of such note.

WITHHOLDING TAXES               You will not be allowed to exercise this option
                                unless you make acceptable arrangements to pay
                                any withholding or other taxes that may be due
                                as a result of the option exercise or the sale
                                of the Shares acquired upon exercise of this
                                option.

RESTRICTIONS ON RESALE          By signing this Agreement, you agree not to sell
                                any option Shares at a time when applicable laws
                                or regulations or Company or underwriter trading
                                policies prohibit a sale.

                                You represent and agree that the Shares to be
                                acquired upon exercising this option will be
                                acquired for investment, and not with a view to
                                the sale or distribution thereof.

                                In the event that the sale of Shares under the
                                Plan is not registered


<PAGE>

                                under the Securities Act but an exemption is
                                available which requires an investment
                                representation or other representation, you
                                shall represent and agree at the time of
                                exercise to make such representations as are
                                deemed necessary or appropriate by the Company
                                and its counsel.

                                Prior to any Change in Control of the Company,
                                the shares acquired under this option can be
                                sold or transferred only pursuant to an SEC Rule
                                10b5-1 trading plan that is pre-approved by the
                                Board of Director's Compensation Committee.

TRANSFER OF OPTION              Prior to your death, only you may exercise this
                                option. You cannot transfer or assign this
                                option. For instance, you may not sell this
                                option or use it as security for a loan. If you
                                attempt to do any of these things, this option
                                will immediately become invalid. You may,
                                however, dispose of this option in your will.

                                Regardless of any marital property settlement
                                agreement, the Company is not obligated to honor
                                a notice of exercise from your spouse or former
                                spouse, nor is the Company obligated to
                                recognize such individual's interest in your
                                option in any other way.

NO RETENTION RIGHTS             Your option or this Agreement do not give you
                                the right to be retained by the Company (or any
                                subsidiaries) in any capacity. The Company (and
                                any subsidiaries) reserves the right to
                                terminate your Service at any time and for any
                                reason.

SHAREHOLDER RIGHTS              You, or your estate or heirs, have no rights as
                                a shareholder of the Company until a certificate
                                for your option Shares has been issued. No
                                adjustments are made for dividends or other
                                rights if the applicable record date occurs
                                before your stock certificate is issued, except
                                as described in the Plan.

ADJUSTMENTS                     In the event of a stock split, a stock dividend
                                or a similar change in the Company stock, the
                                number of Shares covered by this option and the
                                exercise price per share may be adjusted
                                pursuant to the Plan. Your option shall be
                                subject to the terms of the agreement of merger,
                                liquidation or reorganization in the event the
                                Company is subject to such corporate activity,
                                except to the extent the foregoing conflict with
                                or are in any way inconsistent with Section 8 of
                                your employment agreement.


<PAGE>

FORFEITURE                      If, at any time within one year after
                                termination of employment, you engage in either
                                of the following: (i) your commission of a
                                felony, an act involving moral turpitude, or an
                                act constituting common law fraud, in each case
                                having a material adverse effect on the business
                                or affairs of the Company or its affiliates or
                                stockholders; or (ii) your willful or
                                intentional breach of Company confidential
                                information obligations, in each case having a
                                material adverse effect on the business or
                                affairs of the Company or its affiliates or
                                stockholders; or (iii) your unreasonable refusal
                                to comply with lawful requests for cooperation
                                made by the Board of Directors, then (1) this
                                option shall terminate and be forfeited
                                effective the date on which you enter into such
                                activity, unless terminated or forfeited sooner
                                by operation of another term or condition of
                                this option or the Plan, (2) any stock acquired
                                by you pursuant to the exercise of this option
                                during the Forfeiture Period (as defined below)
                                shall be forfeited, and (3) any gain realized by
                                you from the sale of stock acquired through the
                                exercise of this option during the Forfeiture
                                Period shall be paid by you to the Company. The
                                "Forfeiture Period" shall mean the period
                                commencing six months prior to your termination
                                of employment and ending one year from your
                                termination of employment.

RIGHT OF SET OFF                By accepting this Agreement, you consent to a
                                deduction from any amounts the Company owes you
                                from time to time, to the extent of the amounts
                                you owe the Company under the paragraph above.
                                If the Company does not recover by means of
                                set-off the full amount you owe it, calculated
                                as set forth above, you agree to pay immediately
                                the unpaid balance to the Company upon the
                                Company's demand.

LEGENDS                         All certificates representing the Shares issued
                                upon exercise of this option shall have endorsed
                                thereon the applicable legends.

APPLICABLE LAW                  This Agreement will be interpreted and enforced
                                under the laws of the State of California.

THE PLAN AND OTHER AGREEMENTS   The text of the Plan and your employment
                                agreement are incorporated in this Agreement by
                                reference. Certain capitalized terms used in
                                this Agreement are defined in the Plan or your
                                employment agreement.


<PAGE>

                                This Agreement, the Plan and your employment
                                agreement with the Company dated August 1, 2001,
                                as may be amended and in effect from time to
                                time, constitute the entire understanding
                                between you and the Company regarding this
                                option. Any prior agreements, commitments or
                                negotiations concerning this option are
                                superseded.

BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED ABOVE AND IN THE PLAN, EXCEPT TO THE EXTENT MODIFIED BY
YOUR EMPLOYMENT AGREEMENT.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.11
<SEQUENCE>12
<FILENAME>f80193ex10-11.txt
<DESCRIPTION>EXHIBIT 10.11
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.11

                              CRITICAL PATH, INC.

                       1999 NONSTATUTORY STOCK OPTION PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

Critical Path, Inc., a California corporation (the "Company"), granted an Option
on August 1, 2001 to purchase shares of its common stock (the "Shares") to the
Optionee named below. The terms and conditions of that Option grant, as amended
and restated, are set forth in this cover sheet, the attachment, the Company's
1999 Nonstatutory Stock Option Plan (the "Plan") and in the Optionee's
employment agreement with the Company dated August 1, 2001 as may be amended and
in effect from time to time.

Date of Option Grant: August 1, 2001
                      ------------------

Name of Optionee: William McGlashan, Jr.
                  -----------------------

Optionee's Social Security Number:

Number of Shares Covered by Option: 1,500,000
                                    -----------------

Exercise Price per Share: $.40
                          ------

Vesting Start Date: August 1, 2001
                    ---------------

        BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY OF WHICH
IS ALSO ENCLOSED.

Optionee:           /S/ William McGlashan
         --------------------------------------------------
                          (Signature)

Company:               /S/ David Hayden
         --------------------------------------------------
                          (Signature)

Title:
      -----------------------------------


Attachment


<PAGE>

                               CRITICAL PATH, INC.

                       1999 NONSTATUTORY STOCK OPTION PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

NONSTATUTORY STOCK OPTION       This option is not intended to be an incentive
                                stock option under section 422 of the Internal
                                Revenue Code and will be interpreted
                                accordingly.

VESTING                         The Shares under this option will vest in
                                accordance with the vesting schedule indicated
                                below:

NUMBER OF OPTIONS               VESTING EVENT

        (i)    500,000          Vested upon date of option grant.

        (ii)   500,000          Vested on the date twelve (12) months from the
                                date of option grant.

        (iii)  500,000          Vested on December 31, 2004 with earlier full
                                vesting upon the Company's attainment of
                                positive Earnings Before Interest Taxes
                                Depreciation and Amortization ("EBITDA") for any
                                fiscal quarter provided such positive EBITDA
                                occurs for a fiscal quarter in or before the end
                                of the second fiscal quarter of 2002. EBITDA
                                will be determined by the Company's independent
                                public accountants using the Company's financial
                                statements as reported in filings with the
                                Securities and Exchange Commission ("SEC").
                                Earnings, for EBITDA determination purposes,
                                will include revenue from only normal business
                                operations and will not include any
                                extraordinary or nonrecurring income or revenue
                                items.



                                       1
<PAGE>

                                Your option vesting will cease in the event that
                                your employment and service as a Company
                                director both terminate for any reason. Your
                                option vesting will also cease upon your
                                voluntary resignation of employment or upon a
                                termination for Cause (as such terms are defined
                                in your employment agreement with the Company).
                                A leave of absence, regardless of the reason,
                                shall be deemed to constitute the cessation of
                                your employment unless the Company authorizes
                                such leave, and you return within the time
                                specified in such authorization.

                                The above performance-based acceleration
                                triggers will cease to be applicable upon your
                                prior cessation of employment for any reason.
                                The Compensation Committee of the Board of
                                Directors must certify in writing that the
                                performance goals have been satisfied before any
                                Option vesting will be accelerated pursuant to
                                attainment of performance goals.

                                In the event of a Change in Control of the
                                Company, 100% of your then-unvested Options
                                (meaning 100% of your unvested Options that are
                                otherwise scheduled to vest under (ii), and
                                (iii) above on each vesting date had a Change in
                                Control not occurred) shall become vested
                                provided that you are employed by the Company on
                                the date the negotiations or communications
                                began (as determined by the Board in good faith)
                                which lead to the Change in Control.

                                For purposes of this Agreement, a "Change in
                                Control" of the Company shall be defined as the
                                occurrence of any one of the following:

                                (i)     the consummation of a merger or
                                        consolidation of the Company with or
                                        into another entity or any other
                                        corporate reorganization, if more than
                                        50% of the combined voting power of the
                                        continuing or surviving entity's
                                        securities outstanding immediately after
                                        such merger, consolidation or other
                                        reorganization is owned by persons who
                                        were not shareholders of the Company
                                        immediately prior to such merger,
                                        consolidation or other reorganization;

                                (ii)    the sale, transfer or other disposition
                                        of all or substantially all of the
                                        Company's assets;

                                (iii)   the dissolution, liquidation or winding
                                        up of the Company;

                                (iv)    any transaction as a result of which any
                                        person is the "beneficial owner" (as
                                        defined in Rule 13d-3 under the


                                       2
<PAGE>

                                        Securities Exchange Act of 1934),
                                        directly or indirectly, of securities of
                                        the Company representing at least 20% of
                                        the total voting power represented by
                                        the Company's then outstanding voting
                                        securities.

                                For purposes of this section, the term "person"
                                shall have the same meaning as when used in
                                sections 13(d) and 14(d) of the Securities
                                Exchange Act but shall exclude: (A) trustee or
                                other fiduciary holding securities under an
                                employee benefit plan of the Company or a
                                subsidiary of the Company; (B) A corporation
                                owned directly or indirectly by the shareholders
                                of the Company in substantially the same
                                proportions as their ownership of the common
                                stock of the Company; and (C) the Company.

                                A transaction shall not constitute a Change in
                                Control if its sole purpose is to change the
                                state of the Company's incorporation or to
                                create a holding company that will be owned in
                                substantially the same proportions by the
                                persons who held the Company's securities
                                immediately before such transactions.

TERM                            Your option will expire in any event at the
                                close of business at Company headquarters on the
                                day before the 10th anniversary of the Date of
                                Grant, as shown on the cover sheet. It will
                                expire earlier if your employment and your
                                service as a Company director terminate, as
                                described below.

REGULAR TERMINATION             If your employment and your service as a Company
                                director terminate for any reason except Cause,
                                death or Disability, then your option will
                                expire at the close of business at Company
                                headquarters on the 90th day after your
                                termination date.

CAUSE                           If your employment or service as a Company
                                director terminates on account of Cause, then
                                your option will expire immediately.

DEATH                           In the event of your death during the period of
                                your employment or service as a Company
                                director, your option will expire at the close
                                of business at Company headquarters on the date
                                six months after the date of death. During that
                                six-month period, your estate or heirs may
                                exercise your option.



                                       3
<PAGE>

DISABILITY                      If your employment and service as a Company
                                director terminate because of your Disability,
                                then your option will expire at the close of
                                business at Company headquarters on the date six
                                months after your termination date.

                                "Disability" means that you are unable to engage
                                in any substantial gainful activity by reason of
                                any medically determinable physical or mental
                                impairment.

LEAVES OF ABSENCE               For purposes of this option, your employment
                                does not terminate when you go on a bona fide
                                leave of absence, that was approved by the
                                Company in writing, if the terms of the leave
                                provide for continued service crediting, or when
                                continued service crediting is required by
                                applicable law. Your employment terminates in
                                any event when the approved leave ends if you
                                fail or refuse to return to active service.

                                Consistent with the terms of this Agreement and
                                your Employment Agreement, the Company
                                determines which leaves count for this purpose,
                                and when your employment terminates for all
                                purposes under the Plan.

RESTRICTIONS ON EXERCISE        The Company will not permit you to exercise this
                                option if the issuance of Shares at that time
                                would violate any law or regulation.

NOTICE OF EXERCISE              When you wish to exercise this option, you must
                                notify the Company by filing the proper "Notice
                                of Exercise" form at the address given on the
                                form. Your notice must specify how many Shares
                                you wish to purchase. Your notice must also
                                specify how your Shares should be registered (in
                                your name only or in your and your spouse's
                                names as community property or as joint tenants
                                with right of survivorship). The notice will be
                                effective when received by the Company.

                                If someone else wants to exercise this option
                                after your death, that person must prove to the
                                Company's satisfaction that he or she is
                                entitled to do so.

FORM OF PAYMENT                 When you submit your notice of exercise, you
                                must include payment of the option price for the
                                Shares you are purchasing. Payment may be made
                                in one (or a combination) of the following
                                forms:

                                -       Your personal check, a cashier's check
                                        or a money order.

                                -       By delivery (on a form prescribed by the
                                        Committee) of an



                                       4
<PAGE>

                                irrevocable direction to a securities broker to
                                sell Shares and to deliver all or part of the
                                sale proceeds to the Company in payment of the
                                aggregate Exercise Price.

WITHHOLDING TAXES               You will not be allowed to exercise this option
                                unless you make acceptable arrangements to pay
                                any withholding or other taxes that may be due
                                as a result of the option exercise or the sale
                                of the Shares acquired upon exercise of this
                                option.

RESTRICTIONS ON RESALE          By signing this Agreement, you agree not to sell
                                any option Shares at a time when applicable laws
                                or regulations or Company or underwriter trading
                                policies prohibit a sale.

                                You represent and agree that the Shares to be
                                acquired upon exercising this option will be
                                acquired for investment, and not with a view to
                                the sale or distribution thereof.

                                In the event that the sale of Shares under the
                                Plan is not registered under the Securities Act
                                but an exemption is available which requires an
                                investment representation or other
                                representation, you shall represent and agree at
                                the time of exercise to make such
                                representations as are deemed necessary or
                                appropriate by the Company and its counsel.

                                Prior to any Change in Control of the Company,
                                the shares acquired under this option can be
                                sold or transferred only pursuant to an SEC Rule
                                10b5-1 trading plan that is pre-approved by the
                                Board of Director's Compensation Committee.

TRANSFER OF OPTION              Prior to your death, only you may exercise this
                                option. You cannot transfer or assign this
                                option. For instance, you may not sell this
                                option or use it as security for a loan. If you
                                attempt to do any of these things, this option
                                will immediately become invalid. You may,
                                however, dispose of this option in your will.

                                Regardless of any marital property settlement
                                agreement, the Company is not obligated to honor
                                a notice of exercise from your spouse or former
                                spouse, nor is the Company obligated to
                                recognize such individual's interest in your
                                option in any other way.

NO RETENTION RIGHTS             Your option or this Agreement does not give you
                                the right to be retained by the Company (or any
                                subsidiaries) in any capacity. The Company (and
                                any subsidiaries) reserves the right to
                                terminate your Service at any time and for any
                                reason.



                                       5
<PAGE>

SHAREHOLDER RIGHTS              You, or your estate or heirs, have no rights as
                                a shareholder of the Company until a certificate
                                for your option Shares has been issued. No
                                adjustments are made for dividends or other
                                rights if the applicable record date occurs
                                before your stock certificate is issued, except
                                as described in the Plan.

ADJUSTMENTS                     In the event of a stock split, a stock dividend
                                or a similar change in the Company stock, the
                                number of Shares covered by this option and the
                                exercise price per share may be adjusted
                                pursuant to the Plan. Your option shall be
                                subject to the terms of the agreement of merger,
                                liquidation or reorganization in the event the
                                Company is subject to such corporate activity,
                                except to the extent the foregoing conflict with
                                or are in any way inconsistent with Section 8 of
                                your employment agreement.

FORFEITURE                      If, at any time within one year after
                                termination of employment, you engage in either
                                of the following: (i) your commission of a
                                felony or an act constituting common law fraud,
                                in each case having a material adverse effect on
                                the business or affairs of the Company or its
                                affiliates or stockholders; or (ii) your willful
                                or intentional breach of Company confidential
                                information obligations, in each case having a
                                material adverse effect on the business or
                                affairs of the Company or its affiliates or
                                stockholders; then (1) this option shall
                                terminate and be forfeited effective the date on
                                which you enter into such activity, unless
                                terminated or forfeited sooner by operation of
                                another term or condition of this option or the
                                Plan, (2) any stock acquired by you pursuant to
                                the exercise of this option during the
                                Forfeiture Period (as defined below) shall be
                                forfeited, and (3) any gain realized by you from
                                the sale of stock acquired through the exercise
                                of this option during the Forfeiture Period
                                shall be paid by you to the Company. The
                                "Forfeiture Period" shall mean the period
                                commencing six months prior to your termination
                                of employment and ending one year from your
                                termination of employment.

RIGHT OF SET OFF                By accepting this Agreement, you consent to a
                                deduction from any amounts the Company owes you
                                from time to time; to the extent of the amounts
                                you owe the Company under the paragraph above.
                                If the Company does not recover by means of
                                set-off the full amount you owe it, calculated
                                as set forth above, you agree to pay immediately
                                the unpaid balance to the Company upon the
                                Company's demand.

LEGENDS                         All certificates representing the Shares issued
                                upon exercise of this option shall have endorsed
                                thereon the applicable legends.



                                       6
<PAGE>

APPLICABLE LAW                  This Agreement will be interpreted and enforced
                                under the laws of the State of California.

THE PLAN AND OTHER AGREEMENTS   The text of the Plan and your employment
                                agreement are incorporated in this Agreement by
                                reference. Certain capitalized terms used in
                                this Agreement are defined in the Plan or your
                                employment agreement.

                                This Agreement, the Plan and your employment
                                agreement with the Company dated August 1, 2001,
                                as may be amended and in effect from time to
                                time, constitute the entire understanding
                                between you and the Company regarding this
                                option. Any prior agreements, commitments or
                                negotiations concerning this option are
                                superseded.

BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED ABOVE AND IN THE PLAN, EXCEPT TO THE EXTENT MODIFIED BY
YOUR EMPLOYMENT AGREEMENT AND THIS AGREEMENT.



                                       7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>13
<FILENAME>f80193ex10-12.txt
<DESCRIPTION>EXHIBIT 10.12
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.12


                              CRITICAL PATH, INC.

                   AMENDED AND RESTATED 1998 STOCK OPTION PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

Critical Path, Inc., a California corporation (the "Company"), granted an Option
on November 8, 2001 to purchase shares of its common stock (the "Shares") to the
Optionee named below. The terms and conditions of that Option grant, as amended
and restated, are set forth in this cover sheet, the attachment, the Company's
1998 Stock Option Plan (the "Plan") and in the Optionee's employment agreement
with the Company dated August 1, 2001 as may be amended and in effect from time
to time.

Date of Option Grant: November 8, 2001
                      -------------------

Name of Optionee: William McGlashan, Jr.
                  ------------------------

Optionee's Social Security Number:

Number of Shares Covered by Option: 813,000
                                    ---------------

Exercise Price per Share: $1.13
                          -------

Vesting Start Date: November 8, 2001
                    -----------------

        BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY OF WHICH
IS ALSO ENCLOSED.

Optionee: /s/ William McGlashan
         -------------------------------------------------
                           (Signature)

Company:  /s/ David Hayden
         -------------------------------------------------
                           (Signature)

Title:
      ----------------------------------

Attachment


<PAGE>

                               CRITICAL PATH, INC.

                   AMENDED AND RESTATED 1998 STOCK OPTION PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

NONSTATUTORY STOCK OPTION       This option is not intended to be an incentive
                                stock option under section 422 of the Internal
                                Revenue Code and will be interpreted
                                accordingly.

VESTING                         The Shares under this option will vest in
                                accordance with the vesting schedule indicated
                                below:

NUMBER OF OPTIONS               VESTING EVENT

        (i)    271,000          Vested upon date of option grant.

        (ii)   271,000          Vested on August 1, 2002.

        (iii)  271,000          Vested on December 31, 2004 with earlier full
                                vesting upon the Company's attainment of
                                positive Earnings Before Interest Taxes
                                Depreciation and Amortization ("EBITDA") for any
                                fiscal quarter provided such positive EBITDA
                                occurs for a fiscal quarter in or before the end
                                of the second fiscal quarter of 2002. EBITDA
                                will be determined by the Company's independent
                                public accountants using the Company's financial
                                statements as reported in filings with the
                                Securities and Exchange Commission ("SEC").
                                Earnings, for EBITDA determination purposes,
                                will include revenue from only normal business
                                operations and will not include any
                                extraordinary or nonrecurring income or revenue
                                items.



                                       1
<PAGE>

                                Your option vesting will cease in the event that
                                your employment and service as a Company
                                director both terminate for any reason. Your
                                option vesting will also cease upon your
                                voluntary resignation of employment or upon a
                                termination for Cause (as such terms are defined
                                in your employment agreement with the Company).
                                A leave of absence, regardless of the reason,
                                shall be deemed to constitute the cessation of
                                your employment unless the Company authorizes
                                such leave, and you return within the time
                                specified in such authorization.

                                The above performance-based acceleration
                                triggers will cease to be applicable upon your
                                prior cessation of employment for any reason.
                                The Compensation Committee of the Board of
                                Directors must certify in writing that the
                                performance goals have been satisfied before any
                                Option vesting will be accelerated pursuant to
                                attainment of performance goals.

                                In the event of a Change in Control of the
                                Company, 100% of your then-unvested Options
                                (meaning 100% of your unvested Options that are
                                otherwise scheduled to vest under (ii), and
                                (iii) above on each vesting date had a Change in
                                Control not occurred) shall become vested
                                provided that you are employed by the Company on
                                the date the negotiations or communications
                                began (as determined by the Board in good faith)
                                which lead to the Change in Control.

                                For purposes of this Agreement, a "Change in
                                Control" of the Company shall be defined as the
                                occurrence of any one of the following:

                                (i)     the consummation of a merger or
                                        consolidation of the Company with or
                                        into another entity or any other
                                        corporate reorganization, if more than
                                        50% of the combined voting power of the
                                        continuing or surviving entity's
                                        securities outstanding immediately after
                                        such merger, consolidation or other
                                        reorganization is owned by persons who
                                        were not shareholders of the Company
                                        immediately prior to such merger,
                                        consolidation or other reorganization;

                                (ii)    the sale, transfer or other disposition
                                        of all or substantially all of the
                                        Company's assets;

                                (iii)   the dissolution, liquidation or winding
                                        up of the Company;

                                (iv)    any transaction as a result of which any
                                        person is the "beneficial owner" (as
                                        defined in Rule 13d-3 under the


                                       2
<PAGE>

                                        Securities Exchange Act of 1934),
                                        directly or indirectly, of securities of
                                        the Company representing at least 20% of
                                        the total voting power represented by
                                        the Company's then outstanding voting
                                        securities.

                                For purposes of this section, the term "person"
                                shall have the same meaning as when used in
                                sections 13(d) and 14(d) of the Securities
                                Exchange Act but shall exclude: (A) trustee or
                                other fiduciary holding securities under an
                                employee benefit plan of the Company or a
                                subsidiary of the Company; (B) A corporation
                                owned directly or indirectly by the shareholders
                                of the Company in substantially the same
                                proportions as their ownership of the common
                                stock of the Company; and (C) the Company.

                                A transaction shall not constitute a Change in
                                Control if its sole purpose is to change the
                                state of the Company's incorporation or to
                                create a holding company that will be owned in
                                substantially the same proportions by the
                                persons who held the Company's securities
                                immediately before such transactions.

TERM                            Your option will expire in any event at the
                                close of business at Company headquarters on the
                                day before the 10th anniversary of the Date of
                                Grant, as shown on the cover sheet. It will
                                expire earlier if your employment and your
                                service as a Company director terminate, as
                                described below.

REGULAR TERMINATION             If your employment and your service as a Company
                                director terminate for any reason except Cause,
                                death or Disability, then your option will
                                expire at the close of business at Company
                                headquarters on the 90th day after your
                                termination date.

CAUSE                           If your employment or service as a Company
                                director terminates on account of Cause, then
                                your option will expire immediately.

DEATH                           In the event of your death during the period of
                                your employment or service as a Company
                                director, your option will expire at the close
                                of business at Company headquarters on the date
                                six months after the date of death. During that
                                six-month period, your estate or heirs may
                                exercise your option.



                                       3
<PAGE>

DISABILITY                      If your employment and service as a Company
                                director terminate because of your Disability,
                                then your option will expire at the close of
                                business at Company headquarters on the date six
                                months after your termination date.

                                "Disability" means that you are unable to engage
                                in any substantial gainful activity by reason of
                                any medically determinable physical or mental
                                impairment.

LEAVES OF ABSENCE               For purposes of this option, your employment
                                does not terminate when you go on a bona fide
                                leave of absence, that was approved by the
                                Company in writing, if the terms of the leave
                                provide for continued service crediting, or when
                                continued service crediting is required by
                                applicable law. Your employment terminates in
                                any event when the approved leave ends if you
                                fail or refuse to return to active service.

                                Consistent with the terms of this Agreement and
                                your Employment Agreement, the Company
                                determines which leaves count for this purpose,
                                and when your employment terminates for all
                                purposes under the Plan.

RESTRICTIONS ON EXERCISE        The Company will not permit you to exercise this
                                option if the issuance of Shares at that time
                                would violate any law or regulation.

NOTICE OF EXERCISE              When you wish to exercise this option, you must
                                notify the Company by filing the proper "Notice
                                of Exercise" form at the address given on the
                                form. Your notice must specify how many Shares
                                you wish to purchase. Your notice must also
                                specify how your Shares should be registered (in
                                your name only or in your and your spouse's
                                names as community property or as joint tenants
                                with right of survivorship). The notice will be
                                effective when received by the Company.

                                If someone else wants to exercise this option
                                after your death, that person must prove to the
                                Company's satisfaction that he or she is
                                entitled to do so.

FORM OF PAYMENT                 When you submit your notice of exercise, you
                                must include payment of the option price for the
                                Shares you are purchasing. Payment may be made
                                in one (or a combination) of the following
                                forms:

                                -       Your personal check, a cashier's check
                                        or a money order.

                                -       By delivery (on a form prescribed by the
                                        Committee) of an


                                       4
<PAGE>

                                        irrevocable direction to a securities
                                        broker to sell Shares and to deliver all
                                        or part of the sale proceeds to the
                                        Company in payment of the aggregate
                                        Exercise Price.

WITHHOLDING TAXES               You will not be allowed to exercise this option
                                unless you make acceptable arrangements to pay
                                any withholding or other taxes that may be due
                                as a result of the option exercise or the sale
                                of the Shares acquired upon exercise of this
                                option.

RESTRICTIONS ON RESALE          By signing this Agreement, you agree not to sell
                                any option Shares at a time when applicable laws
                                or regulations or Company or underwriter trading
                                policies prohibit a sale.

                                You represent and agree that the Shares to be
                                acquired upon exercising this option will be
                                acquired for investment, and not with a view to
                                the sale or distribution thereof.

                                In the event that the sale of Shares under the
                                Plan is not registered under the Securities Act
                                but an exemption is available which requires an
                                investment representation or other
                                representation, you shall represent and agree at
                                the time of exercise to make such
                                representations as are deemed necessary or
                                appropriate by the Company and its counsel.

                                Prior to any Change in Control of the Company,
                                the shares acquired under this option can be
                                sold or transferred only pursuant to an SEC Rule
                                10b5-1 trading plan that is pre-approved by the
                                Board of Director's Compensation Committee.

TRANSFER OF OPTION              Prior to your death, only you may exercise this
                                option. You cannot transfer or assign this
                                option. For instance, you may not sell this
                                option or use it as security for a loan. If you
                                attempt to do any of these things, this option
                                will immediately become invalid. You may,
                                however, dispose of this option in your will.

                                Regardless of any marital property settlement
                                agreement, the Company is not obligated to honor
                                a notice of exercise from your spouse or former
                                spouse, nor is the Company obligated to
                                recognize such individual's interest in your
                                option in any other way.

NO RETENTION RIGHTS             Your option or this Agreement does not give you
                                the right to be retained by the Company (or any
                                subsidiaries) in any capacity. The Company (and
                                any subsidiaries) reserves the right to
                                terminate your Service at any time and for any
                                reason.



                                       5
<PAGE>

SHAREHOLDER RIGHTS              You, or your estate or heirs, have no rights as
                                a shareholder of the Company until a certificate
                                for your option Shares has been issued. No
                                adjustments are made for dividends or other
                                rights if the applicable record date occurs
                                before your stock certificate is issued, except
                                as described in the Plan.

ADJUSTMENTS                     In the event of a stock split, a stock dividend
                                or a similar change in the Company stock, the
                                number of Shares covered by this option and the
                                exercise price per share may be adjusted
                                pursuant to the Plan. Your option shall be
                                subject to the terms of the agreement of merger,
                                liquidation or reorganization in the event the
                                Company is subject to such corporate activity,
                                except to the extent the foregoing conflict with
                                or are in any way inconsistent with Section 8 of
                                your employment agreement.

FORFEITURE                      If, at any time within one year after
                                termination of employment, you engage in any of
                                the following: (i) your commission of a felony
                                or an act constituting common law fraud, in each
                                case having a material adverse effect on the
                                business or affairs of the Company or its
                                affiliates or stockholders; (ii) your willful or
                                intentional breach of Company confidential
                                information obligations, in each case having a
                                material adverse effect on the business or
                                affairs of the Company or its affiliates or
                                stockholders; then (1) this option shall
                                terminate and be forfeited effective the date on
                                which you enter into such activity, unless
                                terminated or forfeited sooner by operation of
                                another term or condition of this option or the
                                Plan, (2) any stock acquired by you pursuant to
                                the exercise of this option during the
                                Forfeiture Period (as defined below) shall be
                                forfeited, and (3) any gain realized by you from
                                the sale of stock acquired through the exercise
                                of this option during the Forfeiture Period
                                shall be paid by you to the Company. The
                                "Forfeiture Period" shall mean the period
                                commencing six months prior to your termination
                                of employment and ending one year from your
                                termination of employment.

RIGHT OF SET OFF                By accepting this Agreement, you consent to a
                                deduction from any amounts the Company owes you
                                from time to time; to the extent of the amounts
                                you owe the Company under the paragraph above.
                                If the Company does not recover by means of
                                set-off the full amount you owe it, calculated
                                as set forth above, you agree to pay immediately
                                the unpaid balance to the Company upon the
                                Company's demand.

LEGENDS                         All certificates representing the Shares issued
                                upon exercise of this option shall have endorsed
                                thereon the applicable legends.



                                       6
<PAGE>

APPLICABLE LAW                  This Agreement will be interpreted and enforced
                                under the laws of the State of California.

THE PLAN AND OTHER AGREEMENTS   The text of the Plan and your employment
                                agreement are incorporated in this Agreement by
                                reference. Certain capitalized terms used in
                                this Agreement are defined in the Plan or your
                                employment agreement.

                                This Agreement, the Plan and your employment
                                agreement with the Company dated August 1, 2001
                                constitute the entire understanding between you
                                and the Company regarding this option. Any prior
                                agreements, commitments or negotiations
                                concerning this option are superseded.

BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED ABOVE AND IN THE PLAN, EXCEPT TO THE EXTENT MODIFIED BY
YOUR EMPLOYMENT AGREEMENT AND THIS AGREEMENT.



                                       7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.13
<SEQUENCE>14
<FILENAME>f80193ex10-13.txt
<DESCRIPTION>EXHIBIT 10.13
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.13


                           FIRST AMENDED AND RESTATED

                              EMPLOYMENT AGREEMENT

        This First Amended and Restated Employment Agreement (the "Agreement")
is entered into effective as of January 7, 2002 between Critical Path ("Critical
Path" or the "Company") and William McGlashan ("McGlashan") (or collectively
referred to as the "Parties") and supersedes and replaces in all respects all of
the terms of that certain Employment Agreement entered into between the parties
as of August 1, 2001 (the "Former Agreement"). The Company desires to appoint
McGlashan to the position of Chief Executive Officer for an indeterminate term
and to have the benefits of his expertise and knowledge. McGlashan, in turn,
desires to be employed by the Company as its Chief Executive Officer. The
Parties, therefore, enter into this Agreement to establish the terms and
conditions of McGlashan's employment as Chief Executive Officer of the Company.

        In consideration of the mutual covenants and representations contained
in this Agreement, the Company and McGlashan agree as follows:

        1. EMPLOYMENT OF MCGLASHAN; DUTIES. The Company agrees to employ
McGlashan, and McGlashan agrees to be employed by the Company, as the Chief
Executive Officer ("CEO") of the Company and the President of the Company's
subsidiary to be formed, Critical Path International ("CPI"). In his role as CEO
of the Company, McGlashan shall report to the Board of Directors. As the CEO of
the Company and the President of CPI, McGlashan's key duties will include the
normal and customary duties of such positions and such other duties as the
Company shall determine from time to time. McGlashan will use his specialized
expertise, independent judgment and discretion in executing his job duties.
McGlashan shall devote all of his time, interest and efforts reasonably
necessary to the fulfillment of his duties and responsibilities under this
Agreement.

                Consistent with the office of Chief Executive Officer and the
duties typically attendant thereto, the Company reserves the right to change
McGlashan's job duties and responsibilities in its sole discretion at any time
upon reasonable notice, based on the needs of the Company and McGlashan's
expertise and skills, subject to Section 12.4 below.

        2. EMPLOYMENT PERIOD. McGlashan shall serve as CEO of the Company until
discharged by the Board of Directors of the Company or his employment is
otherwise terminated pursuant to Section 12 below.

        3. PLACE OF EMPLOYMENT. McGlashan and the Company agree that during the
Employment Period, his services will be performed at the Company's principal
offices in San Francisco, California, subject to any necessary travel
requirements of his position and duties hereunder.

        4. BASE SALARY. During the Employment Period, the Company shall pay
McGlashan at the rate of Four Hundred Fifty Thousand Dollars ($450,000.00) per
year, to be paid twice per month, subject to applicable withholding.



<PAGE>

        5. BONUS COMPENSATION. McGlashan acknowledges prior receipt of $500,000
as a bonus paid as an inducement to enter into this Agreement. In addition, so
long as McGlashan has not been terminated for Cause, as defined in Section 12.3
below, McGlashan will be eligible for bonus compensation, payable immediately
following completion of the Company's audited financial statements for each full
fiscal year, commencing with the 2002 fiscal year, subject to the following
terms and conditions:

Eligible for annual bonus of 100% of base salary upon achieving 120% of
financial metrics ("Plan"), to be determined by the Board of Directors of the
Company. Such bonus will also be payable on a sliding scale at between 100% and
120% of Plan, as determined by the Board. Achieving substantially in excess of
120% of agreed-upon financial metrics shall result in additional bonus
accelerators as agreed between McGlashan and the Board of Directors up to a
potential bonus of 200% of base salary.

        6. EQUITY COMPENSATION. McGlashan shall be granted an option to purchase
1.7 million shares of the Company's Common Stock at an exercise price of fair
market value as of the date of grant, pursuant to the Critical Path Amended and
Restated 1998 Stock Plan. Subject to McGlashan's continued employment by the
Company at each vesting date, such option shall vest in equal monthly
installments from the date of this Agreement over a three (3) year period. Other
than the vesting schedule, such option shall be granted pursuant to the same
terms and conditions as contained in McGlashan's prior option agreement(s),
including provisions for 100% acceleration of vesting of such option on a change
of control.

        7. EMPLOYEE LOAN. The Company shall provide a full recourse loan to
McGlashan for the purchase of a principal residence in an amount not to exceed
$4 Million (the "Loan"). The Loan will be funded upon, or just prior to, the
close of escrow on the purchase of such principal residence so long as McGlashan
has not voluntarily resigned or been terminated by the Company for cause as
defined in Section 12.3 below. The Loan shall be evidenced by a Promissory Note
and a Loan Agreement, in the form attached hereto as Exhibits A and B,
respectively. The Loan shall be a full recourse 10 year term loan. The Loan
shall at all times be secured by Mr. McGlashan's principal residence (but not
necessarily in first mortgage position) and to the extent necessary shall also
be secured by that percentage of McGlashan's personal shareholdings in the
Company such that at all times all outstanding principal plus accrued interest
is at least 120% secured. The Company may obtain an annual appraisal of the
property at its expense to ensure the Loan is secured as provided herein. If
necessary following such appraisal, McGlashan shall exercise any vested options
and pledge to the Company the number of shares necessary to bring the Company's
security to at least 120% of the Loan amount plus accrued interest. McGlashan
shall pledge such shares to the Company and execute an Assignment Separate from
Certificate in connection with such pledge. Interest on the Loan shall be at the
long term applicable federal rate (AFR) and shall be deferred until principal is
due.

                The Loan Agreement shall provide (i) that the Loan will be
entirely forgiven in the event of a Change of Control (as defined in the Loan
Agreement) in the event that total consideration received by the Company in
connection with such Change of Control is greater than $10 per share; (ii) in
the event McGlashan's employment is terminated by (a) Mr. McGlashan's voluntary
resignation or (b) by the Company for Cause (as defined in Section 11), then the
Loan will become due and payable, with interest, in full no later than twelve
(12)



                                      -2-
<PAGE>

months following such termination; (iii) in the event McGlashan's employment is
terminated other than for Cause (including his Constructive Termination), the
Loan will remain in effect for the remainder of its term.

        8. EMPLOYEE BENEFITS.

                a. For so long as McGlashan is employed by the Company,
McGlashan will be entitled to participate in the same employee benefits plans
generally available to the Company's other executive and managerial employees,
subject to the terms of the applicable plans, including: (i) all health
insurance benefits provided to the Company's exempt employees; (ii) paid
vacation in accordance with the Company's policies and procedures in effect with
respect to the Company's other senior officers (for which the days selected for
McGlashan's vacation shall be scheduled at a mutually agreeable time for the
Company and McGlashan); and (iii) eligibility to participate in any profit
sharing or other retirement plan maintained by the Company for its executive
employees. Company also agrees to pay all fees and expenses in connection with
his membership and participation in the Young Presidents' Organization.

                b. The Company shall obtain coverage for McGlashan under a
director and officer insurance policy during the term of his employment that is
equal to or comparable to the same coverage provided to the Company's other
executive officers.

        9. INDEMNIFICATION BY THE COMPANY. To the fullest extent required by
law, the Company agrees to indemnify and hold McGlashan harmless for any actions
made in good faith while performing his duties as President and Chief Operating
Officer of the Company and President of CPI.

        10. NON-DISCLOSURE OF CONFIDENTIAL AND PROPRIETARY INFORMATION.
McGlashan acknowledges and agrees that during his employment with the Company,
he will have access to, or become acquainted with the Company's "Confidential
and Proprietary Information." "Confidential and Proprietary Information"
includes, but is not limited to:

                a. The Company's trade secrets;

                b. Information developed by or on behalf of the Company such as
financial information, billing information, marketing strategies, price lists,
research, pending products and proposals, and proprietary materials; or

                c. Information of or concerning third parties including
customers, suppliers and business partners, customer lists, supplier lists, as
well as financial and billing information, and information about employees of
the Company, including salaries and personnel data.

                McGlashan agrees that at all times during his employment and
after his employment ends, he will protect the confidentiality of Confidential
and Proprietary Information and will not directly use or disclose any
Confidential and Proprietary Information except as may be necessary in
connection with the services McGlashan provides to the Company.

                McGlashan further agrees that all the Company property and
documents provided to him, including Confidential and Proprietary Information
produced by him or others in



                                      -3-
<PAGE>

connection with his employment with the Company, including copies thereof, shall
remain the sole property of the Company and shall be returned promptly to the
Company upon request or when he leaves the employment of the Company, including
but not limited to, internal, proprietary, financial, technical, employee,
sales, and marketing information.

        11. DEVELOPED INFORMATION. McGlashan agrees to promptly disclose and
assign to the Company, the rights to all ideas, improvements, inventions,
programs, surveys, trade secrets, know-how and data, whether or not patentable
or registrable under copyright or similar statutes that McGlashan makes,
conceives, reduces to practice or learn during McGlashan's employment which (a)
are within the scope of his employment and are related to or useful in the
business of the Company or its actual or demonstrably anticipated activities, or
(b) result from tasks assigned to McGlashan by the Company, or (c) are funded by
the Company, or (d) result from use of premises owned, leased or contracted for
by the Company (hereinafter "Developed Information"). Such disclosure shall
continue for one (1) year after termination of McGlashan's employment with
respect to anything that would be Developed Information if made, conceived,
reduced to practice or learned during the term of this Agreement.

                This Agreement does not require assignment of any invention
which qualifies fully for protection under California Labor Code section 2870
(hereinafter "Section 2870"). McGlashan understand that he bears the full burden
of proving to the Company that Developed Information qualifies fully under
Section 2870.

        12. TERMINATION.

                12.1 AT-WILL EMPLOYMENT. McGlashan's employment pursuant to this
Agreement is "at-will." As such, either the Company or McGlashan shall have
right to terminate McGlashan's employment under this Agreement at any time, for
any reason, with or without notice.

                12.2 SEVERANCE. If McGlashan's employment is terminated other
than for "Cause" or if he resigns as a result of a "Constructive Termination,"
then McGlashan shall be offered, in exchange for a release of all claims, a lump
sum severance payment equal to twelve (12) months salary under this Agreement
plus 50% of his prior year's bonus. In addition, benefits under this Agreement
shall be continued for a period of one (1) year, and McGlashan will receive one
(1) year of accelerated vesting of the options granted to him by the Company as
of the date of termination.

                12.3 For purposes of this Agreement, "Cause" means:

                a. Commission of a felony, an act involving moral turpitude, or
an act constituting common law fraud, and which has a material adverse effect on
the business or affairs of the Company or its affiliates or stockholders;

                b. Intentional or willful misconduct or refusal to follow the
lawful instructions of the Board of Directors; or



                                      -4-
<PAGE>

                c. Intentional breach of company confidential information
obligations which has an adverse effect on the Company or its affiliates or
stockholders.

For these purposes, no act or failure to act shall be considered "intentional or
willful" unless it is done, or omitted to be done, in bad faith without a
reasonable belief that the action or omission is in the best interests of the
Company.

                12.4 RESIGNATION DUE TO "CONSTRUCTIVE TERMINATION". For purposes
of this agreement, resignation as a result of "Constructive Termination" means
that any of the following is undertaken without McGlashan's express written
consent:

                a. A substantial diminution in McGlashan's title, duties, or
compensation;

                b. A substantial increase in McGlashan's duties without a
mutually agreeable increase in compensation;

                c. Any change in ownership or corporate structure which results
in McGlashan no longer being CEO of a stand-alone publicly traded company
through no fault of McGlashan;

                d. Failure of the Company to maintain coverage for McGlashan
under an appropriate director and officer insurance policy;

                e. A relocation of the Company's business office to a location
more than fifty (50) miles from San Francisco, except for reasonably required
travel by McGlashan on the Company's business.

                f. The Company's material breach of this Agreement that remains
uncured for thirty (30) days following McGlashan's written notice of such breach
to the Company's Board of Directors.

                12.5 CONTINUED AFFILIATION WITH THE COMPANY. McGlashan's stock
options granted pursuant to this Agreement shall continue to vest for so long as
McGlashan is affiliated with the Company as an employee or Board member.

                12.6 EFFECT OF TERMINATION FOR "CAUSE." Upon any termination of
this Agreement for Cause, the Company will have no further obligation to make
any payment to McGlashan, under this Agreement or otherwise, except for the
monthly base salary and vacation accrued as of the date of termination. In
addition, McGlashan's entitlement to participate in any Company benefit plans
shall immediately cease as of the date of termination, except as otherwise
required by law.

                12.7 COOPERATION WITH COMPANY AT TERMINATION OF EMPLOYMENT. Upon
termination of this Agreement by either party, McGlashan shall cooperate fully
with Company in providing an orderly transition of all McGlashan's pending work.
Upon the mutual agreement of the Parties, McGlashan also may provide such
full-time or part-time services as Company may reasonably require during all or
any part of the period following any notice of termination given by either
party.



                                      -5-
<PAGE>

                12.8 RETURN OF COMPANY PROPERTY UPON TERMINATION. Upon
termination of McGlashan's employment, McGlashan shall return all originals and
copies of the Company's property in McGlashan's possession or control, including
equipment, devices, vehicles, keys, computers, and including materials,
memoranda, records, reports, recordings, customer lists or other documents, and
specifically including any documents or computer disks or records containing
confidential information, trade secrets or other proprietary information

        13. NATURE OF EMPLOYMENT. McGlashan represents to the Company that he
has no other outstanding commitments inconsistent with any of the terms of this
Agreement or the services to be provided in accordance with this Agreement. In
addition, while employed with the Company, McGlashan shall not, whether for
compensation or otherwise, directly or indirectly perform any services or acts
for any person or entity who is in competition with any business, services or
products being offered for sale or produced by the Company. McGlashan shall not
own an interest in, participate in or be connected as an officer, employee,
agent, independent contractor, partner, shareholder or principal, of any
corporation, partnership, proprietorship, firm, association, person, or other
entity that directly or indirectly compete with the services and business of
Company.

        14. NONSOLICITATION UPON TERMINATION OF EMPLOYMENT.

                14.1 NONSOLICITATION OF CLIENTS. McGlashan agrees all customers
or clients of the Company for which McGlashan provides services during
McGlashan's employment are solely the clients of the Company and not of
McGlashan. McGlashan agrees that both while employed and for a period of one (1)
year after the termination of this Agreement for any reason, McGlashan shall
not, either directly or indirectly, solicit business, as to products or services
competitive with those of the Company, from any of the Company's clients or
prospective clients.

                14.2 NONSOLICITATION OF EMPLOYEES. McGlashan agrees the Company
has invested substantial time and effort and resources in assembling, training
and managing its present staff of personnel, which constitutes a significant
asset of the Company. Accordingly, McGlashan agrees that both while employed and
for a period of one (1) year after the termination of this Agreement for any
reason, McGlashan will not directly or indirectly induce or solicit or encourage
any of the Company's employees to leave their employment with the Company.

        15. NOTICES. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to McGlashan at the last address he has filed in
writing with the Company or, in the case of the Company, to the General Counsel
at the Company's principal executive offices.

        16. BINDING AGREEMENT. This Agreement shall be binding upon McGlashan
and the Company on and after the date of this Agreement. The rights and
obligations of the Company under this Agreement shall inure to the benefit of
the Company and any successor of the Company.



                                      -6-
<PAGE>

        17. INTEGRATION. This Agreement, the Promissory Note and Loan Agreement
attached hereto as Exhibits A and B, and the Nonstatutory Stock Option Agreement
entered into pursuant to Section 6 above constitute the entire understanding of
McGlashan and the Company with respect to the subject matter herein and
supersedes and voids any and all prior agreements or understandings, written or
oral, regarding the subject matter hereof. To the extent any of the referenced
agreements are inconsistent with this Employment Agreement, the terms of the
Employment Agreement shall control. This Agreement may not be changed, modified,
or discharged orally, but only by an instrument in writing signed by the
Parties.

        18. CONSTRUCTION. Each party has reviewed this Agreement. Therefore the
normal rule of construction that any ambiguity or uncertainty in any writing
shall be interpreted against the party drafting the writing shall not apply to
any action on this Agreement.

        19. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of California, and the invalidity or unenforceability of any provisions
hereof shall in no way affect the validity or enforceability of any other
provision.

        20. SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable by any court of competent jurisdiction will immediately become
null and void, leaving the remainder of this Agreement in full force and effect.
Any such prohibition or unenforceability in any court of competent jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.

        21. MANDATORY ARBITRATION. The Parties agree that any future
controversy, claim or dispute arising out of or related to McGlashan's
employment or the termination of his employment shall be resolved by binding
arbitration, except where the law specifically forbids the use of arbitration as
a final and binding remedy, or where Section 21(e) below specifically allows a
different remedy.

                a. The Parties agree that the dispute shall be resolved by
binding arbitration in San Francisco, California. If the Parties are unable to
jointly select an arbitrator, they will obtain a list from the Federal Mediation
and Conciliation Service and select an arbitrator by striking names from that
list.

                b. The arbitrator shall have the authority to determine whether
the conduct complained of violates the complainant's rights and, if so, to grant
any relief authorized by law; subject to the exclusions of Section 21(e) below.
The arbitrator shall not have the authority to modify, change, or refuse to
enforce the terms of this Employment Agreement.

                c. The Company shall bear the costs of the arbitration, except
that McGlashan may be required to pay costs not to exceed the amount of the
then-current filing fee for a civil action filed in the court of general
jurisdiction in the State of California. The arbitrator shall award the
prevailing party in the arbitration its attorneys' fees.

                d. Arbitration shall be the exclusive final remedy for any
dispute between the Parties including but not limited to any disputes or claims
for discrimination or harassment (such as claims under the Fair Employment and
Housing Act, Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, or the Age Discrimination in Employment Act), wrongful



                                      -7-
<PAGE>

termination, breach of contract, breach of public policy, physical or mental
harm or distress, or any other disputes.

                e. Notwithstanding the arbitration provisions set forth herein,
the Parties reserve their right to seek an injunction or other equitable relief
from a court with applicable authority. McGlashan acknowledges that in the event
of any breach of any provision of Sections 10, 11, or 14 of this Agreement, the
Company would be irreparably and immediately harmed and could not be made whole
by monetary damages. It is accordingly agreed that the Company shall be entitled
to seek an injunction to prevent breach of this Agreement and to compel specific
performance of this Agreement, in addition to any other remedy to which it may
be entitled in law or equity. To the extent any portion of Sections 10, 11 or 14
of this Agreement is deemed by the court to be overly restrictive as to time,
scope or geographical area, the Parties agree that the court shall have the
authority to reform the unlawful provision to be in conformance with the law,
with the Parties' agreement that Sections 10, 11 and 14 are to be given the
fullest force and effect permissible by law.

                f. The arbitrator shall issue a written arbitration decision
stating the arbitrator's essential findings and conclusions upon which any award
is based. A party's right to review of the decision is limited to the grounds
provided under applicable law. The Parties agree that the arbitration award
shall be enforceable in any court having jurisdiction to enforce this Agreement.

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

                                            CRITICAL PATH, INC.

Dated: 3/18/02                              By: /s/ David Hayden
      -----------------------                   --------------------------------
                                                DAVID HAYDEN, Executive Chairman



Dated: 3/18/02                              By: /s/ William McGlashan
      -----------------------                   --------------------------------
                                                William McGlashan, Personally



                                      -8-
<PAGE>

1/31/02 -- cb
2/26/02 - cb
02/27/02 -- cl




                                      -9-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.14
<SEQUENCE>15
<FILENAME>f80193ex10-14.txt
<DESCRIPTION>EXHIBIT 10.14
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.14


                              CRITICAL PATH, INC.

                   AMENDED AND RESTATED 1998 STOCK OPTION PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

Critical Path, Inc., a California corporation (the "Company"), granted an Option
on December 21, 2001 to purchase shares of its common stock (the "Shares") to
the Optionee named below. The terms and conditions of that Option grant, as
amended and restated, are set forth in this cover sheet, the attachment, the
Company's 1998 Stock Option Plan (the "Plan") and in the Optionee's employment
agreement with the Company dated August 1, 2001 as may be amended and in effect
from time to time.

Date of Option Grant: December 21, 2001
                      --------------------

Name of Optionee: William McGlashan, Jr.
                  -----------------------

Optionee's Social Security Number:

Number of Shares Covered by Option: 1,700,000
                                    -----------------

Exercise Price per Share: $2.56
                          -------

Vesting Start Date: December 21, 2001
                    ------------------

        BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY OF WHICH
IS ALSO ENCLOSED.

Optionee: /s/ William McGlashan
         -----------------------------------------------
                          (Signature)

Company:  /s/ David Hayden
         -----------------------------------------------
                          (Signature)

Title:
      ---------------------------------

Attachment


<PAGE>

                               CRITICAL PATH, INC.

                   AMENDED AND RESTATED 1998 STOCK OPTION PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

NONSTATUTORY STOCK OPTION       This option is not intended to be an incentive
                                stock option under section 422 of the Internal
                                Revenue Code and will be interpreted
                                accordingly.

VESTING                         The Shares under this option will vest in
                                accordance with the vesting schedule indicated
                                below:

NUMBER OF OPTIONS               VESTING EVENT

 1,700,000                      Vesting in equal monthly installments from
                                Vesting Start Date listed on the cover sheet to
                                this Agreement, for a period of three (3) years
                                from such Vesting Start Date subject to
                                continued employment with the Company during
                                that period and all other terms and conditions
                                as described herein.



                                       1
<PAGE>

                                Your option vesting will cease in the event that
                                your employment and service as a Company
                                director both terminate for any reason. Your
                                option vesting will also cease upon your
                                voluntary resignation of employment or upon a
                                termination for Cause (as such terms are defined
                                in your employment agreement with the Company).
                                A leave of absence, regardless of the reason,
                                shall be deemed to constitute the cessation of
                                your employment unless the Company authorizes
                                such leave, and you return within the time
                                specified in such authorization.

                                The above performance-based acceleration
                                triggers will cease to be applicable upon your
                                prior cessation of employment for any reason.
                                The Compensation Committee of the Board of
                                Directors must certify in writing that the
                                performance goals have been satisfied before any
                                Option vesting will be accelerated pursuant to
                                attainment of performance goals.

                                In the event of a Change in Control of the
                                Company, 100% of your then-unvested Options
                                (meaning 100% of your unvested Options that are
                                otherwise scheduled to vest under (ii), and
                                (iii) above on each vesting date had a Change in
                                Control not occurred) shall become vested
                                provided that you are employed by the Company on
                                the date the negotiations or communications
                                began (as determined by the Board in good faith)
                                which lead to the Change in Control.

                                For purposes of this Agreement, a "Change in
                                Control" of the Company shall be defined as the
                                occurrence of any one of the following:

                                (i)     the consummation of a merger or
                                        consolidation of the Company with or
                                        into another entity or any other
                                        corporate reorganization, if more than
                                        50% of the combined voting power of the
                                        continuing or surviving entity's
                                        securities outstanding immediately after
                                        such merger, consolidation or other
                                        reorganization is owned by persons who
                                        were not shareholders of the Company
                                        immediately prior to such merger,
                                        consolidation or other reorganization;

                                (ii)    the sale, transfer or other disposition
                                        of all or substantially all of the
                                        Company's assets;

                                (iii)   the dissolution, liquidation or winding
                                        up of the Company;

                                (iv)    any transaction as a result of which any
                                        person is the "beneficial owner" (as
                                        defined in Rule 13d-3 under the


                                       2
<PAGE>

                                        Securities Exchange Act of 1934),
                                        directly or indirectly, of securities of
                                        the Company representing at least 20% of
                                        the total voting power represented by
                                        the Company's then outstanding voting
                                        securities.

                                For purposes of this section, the term "person"
                                shall have the same meaning as when used in
                                sections 13(d) and 14(d) of the Securities
                                Exchange Act but shall exclude: (A) trustee or
                                other fiduciary holding securities under an
                                employee benefit plan of the Company or a
                                subsidiary of the Company; (B) A corporation
                                owned directly or indirectly by the shareholders
                                of the Company in substantially the same
                                proportions as their ownership of the common
                                stock of the Company; and (C) the Company.

                                A transaction shall not constitute a Change in
                                Control if its sole purpose is to change the
                                state of the Company's incorporation or to
                                create a holding company that will be owned in
                                substantially the same proportions by the
                                persons who held the Company's securities
                                immediately before such transactions.

TERM                            Your option will expire in any event at the
                                close of business at Company headquarters on the
                                day before the 10th anniversary of the Date of
                                Grant, as shown on the cover sheet. It will
                                expire earlier if your employment and your
                                service as a Company director terminate, as
                                described below.

REGULAR TERMINATION             If your employment and your service as a Company
                                director terminate for any reason except Cause,
                                death or Disability, then your option will
                                expire at the close of business at Company
                                headquarters on the 90th day after your
                                termination date.

CAUSE                           If your employment or service as a Company
                                director terminates on account of Cause, then
                                your option will expire immediately.

DEATH                           In the event of your death during the period of
                                your employment or service as a Company
                                director, your option will expire at the close
                                of business at Company headquarters on the date
                                six months after the date of death. During that
                                six-month period, your estate or heirs may
                                exercise your option.



                                       3
<PAGE>

DISABILITY                      If your employment and service as a Company
                                director terminate because of your Disability,
                                then your option will expire at the close of
                                business at Company headquarters on the date six
                                months after your termination date.

                                "Disability" means that you are unable to engage
                                in any substantial gainful activity by reason of
                                any medically determinable physical or mental
                                impairment.

LEAVES OF ABSENCE               For purposes of this option, your employment
                                does not terminate when you go on a bona fide
                                leave of absence, that was approved by the
                                Company in writing, if the terms of the leave
                                provide for continued service crediting, or when
                                continued service crediting is required by
                                applicable law. Your employment terminates in
                                any event when the approved leave ends if you
                                fail or refuse to return to active service.

                                Consistent with the terms of this Agreement and
                                your Employment Agreement, the Company
                                determines which leaves count for this purpose,
                                and when your employment terminates for all
                                purposes under the Plan.

RESTRICTIONS ON EXERCISE        The Company will not permit you to exercise this
                                option if the issuance of Shares at that time
                                would violate any law or regulation.

NOTICE OF EXERCISE              When you wish to exercise this option, you must
                                notify the Company by filing the proper "Notice
                                of Exercise" form at the address given on the
                                form. Your notice must specify how many Shares
                                you wish to purchase. Your notice must also
                                specify how your Shares should be registered (in
                                your name only or in your and your spouse's
                                names as community property or as joint tenants
                                with right of survivorship). The notice will be
                                effective when received by the Company.

                                If someone else wants to exercise this option
                                after your death, that person must prove to the
                                Company's satisfaction that he or she is
                                entitled to do so.

FORM OF PAYMENT                 When you submit your notice of exercise, you
                                must include payment of the option price for the
                                Shares you are purchasing. Payment may be made
                                in one (or a combination) of the following
                                forms:

                                -       Your personal check, a cashier's check
                                        or a money order.

                                -       By delivery (on a form prescribed by the
                                        Committee) of an



                                       4
<PAGE>

                                        irrevocable direction to a securities
                                        broker to sell Shares and to deliver all
                                        or part of the sale proceeds to the
                                        Company in payment of the aggregate
                                        Exercise Price.

WITHHOLDING TAXES               You will not be allowed to exercise this option
                                unless you make acceptable arrangements to pay
                                any withholding or other taxes that may be due
                                as a result of the option exercise or the sale
                                of the Shares acquired upon exercise of this
                                option.

RESTRICTIONS ON RESALE          By signing this Agreement, you agree not to sell
                                any option Shares at a time when applicable laws
                                or regulations or Company or underwriter trading
                                policies prohibit a sale.

                                You represent and agree that the Shares to be
                                acquired upon exercising this option will be
                                acquired for investment, and not with a view to
                                the sale or distribution thereof.

                                In the event that the sale of Shares under the
                                Plan is not registered under the Securities Act
                                but an exemption is available which requires an
                                investment representation or other
                                representation, you shall represent and agree at
                                the time of exercise to make such
                                representations as are deemed necessary or
                                appropriate by the Company and its counsel.

                                Prior to any Change in Control of the Company,
                                the shares acquired under this option can be
                                sold or transferred only pursuant to an SEC Rule
                                10b5-1 trading plan that is pre-approved by the
                                Board of Director's Compensation Committee.

TRANSFER OF OPTION              Prior to your death, only you may exercise this
                                option. You cannot transfer or assign this
                                option. For instance, you may not sell this
                                option or use it as security for a loan. If you
                                attempt to do any of these things, this option
                                will immediately become invalid. You may,
                                however, dispose of this option in your will.

                                Regardless of any marital property settlement
                                agreement, the Company is not obligated to honor
                                a notice of exercise from your spouse or former
                                spouse, nor is the Company obligated to
                                recognize such individual's interest in your
                                option in any other way.

NO RETENTION RIGHTS             Your option or this Agreement does not give you
                                the right to be retained by the Company (or any
                                subsidiaries) in any capacity. The Company (and
                                any subsidiaries) reserves the right to
                                terminate your Service at any time and for any
                                reason.



                                       5
<PAGE>

SHAREHOLDER RIGHTS              You, or your estate or heirs, have no rights as
                                a shareholder of the Company until a certificate
                                for your option Shares has been issued. No
                                adjustments are made for dividends or other
                                rights if the applicable record date occurs
                                before your stock certificate is issued, except
                                as described in the Plan.

ADJUSTMENTS                     In the event of a stock split, a stock dividend
                                or a similar change in the Company stock, the
                                number of Shares covered by this option and the
                                exercise price per share may be adjusted
                                pursuant to the Plan. Your option shall be
                                subject to the terms of the agreement of merger,
                                liquidation or reorganization in the event the
                                Company is subject to such corporate activity,
                                except to the extent the foregoing conflict with
                                or are in any way inconsistent with Section 8 of
                                your employment agreement.

FORFEITURE                      If, at any time within one year after
                                termination of employment, you engage in either
                                of the following: (i) your commission of a
                                felony or an act constituting common law fraud,
                                in each case having a material adverse effect on
                                the business or affairs of the Company or its
                                affiliates or stockholders; or (ii) your willful
                                or intentional breach of Company confidential
                                information obligations, in each case having a
                                material adverse effect on the business or
                                affairs of the Company or its affiliates or
                                stockholders; then (1) this option shall
                                terminate and be forfeited effective the date on
                                which you enter into such activity, unless
                                terminated or forfeited sooner by operation of
                                another term or condition of this option or the
                                Plan, (2) any stock acquired by you pursuant to
                                the exercise of this option during the
                                Forfeiture Period (as defined below) shall be
                                forfeited, and (3) any gain realized by you from
                                the sale of stock acquired through the exercise
                                of this option during the Forfeiture Period
                                shall be paid by you to the Company. The
                                "Forfeiture Period" shall mean the period
                                commencing six months prior to your termination
                                of employment and ending one year from your
                                termination of employment.

RIGHT OF SET OFF                By accepting this Agreement, you consent to a
                                deduction from any amounts the Company owes you
                                from time to time, to the extent of the amounts
                                you owe the Company under the paragraph above.
                                If the Company does not recover by means of
                                set-off the full amount you owe it, calculated
                                as set forth above, you agree to pay immediately
                                the unpaid balance to the Company upon the
                                Company's demand.

LEGENDS                         All certificates representing the Shares issued
                                upon exercise of this option shall have endorsed
                                thereon the applicable legends.


                                       6
<PAGE>

APPLICABLE LAW                  This Agreement will be interpreted and enforced
                                under the laws of the State of California.

THE PLAN AND OTHER AGREEMENTS   The text of the Plan and your employment
                                agreement are incorporated in this Agreement by
                                reference. Certain capitalized terms used in
                                this Agreement are defined in the Plan or your
                                employment agreement.

                                This Agreement, the Plan and your employment
                                agreement with the Company dated August 1, 2001,
                                as may be amended and in effect from time to
                                time, constitute the entire understanding
                                between you and the Company regarding this
                                option. Any prior agreements, commitments or
                                negotiations concerning this option are
                                superseded.

BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED ABOVE AND IN THE PLAN, EXCEPT TO THE EXTENT MODIFIED BY
YOUR EMPLOYMENT AGREEMENT AND THIS AGREEMENT.



                                       7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.16
<SEQUENCE>16
<FILENAME>f80193ex10-16.txt
<DESCRIPTION>EXHIBIT 10.16
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.16

                              CRITICAL PATH, INC.

                       1999 NONSTATUTORY STOCK OPTION PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

Critical Path, Inc., a California corporation (the "Company"), granted an Option
on October 8, 2001 to purchase shares of its common stock (the "Shares") to the
Optionee named below. The terms and conditions of that Option grant, as amended
and restated, are set forth in this cover sheet, the attachment, the Company's
1999 Nonstatutory Stock Option Plan (the "Plan") and in the Optionee's
employment agreement with the Company dated October 8, 2001.

Date of Option Grant: October 8, 2001
                      ---------------

Name of Optionee: Pierre Van Beneden
                  ------------------

Optionee's Social Security Number or Taxpayer ID Number:
                                                        --------------------

Number of Shares Covered by Option: 2,000,000
                                    -----------------

Exercise Price per Share: $1.13
                          -----------------

Vesting Start Date: October 8, 2001
                    ----------------

        BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY OF WHICH
IS ALSO ENCLOSED.

Optionee:      /s/ Pierre Van Beneden
                                       -----------------------------------
                                       (Signature)

Company:       /s/  William McGlashan
                                       -----------------------------------
                                       (Signature)

Title:  Interim Chief Executive Officer
                                       ---------------------------
Attachment


<PAGE>

                               CRITICAL PATH, INC.

                       1999 NONSTATUTORY STOCK OPTION PLAN

                       NONSTATUTORY STOCK OPTION AGREEMENT

NONSTATUTORY STOCK OPTION        This option is not intended to be an incentive
                                 stock option under section 422 of the Internal
                                 Revenue Code and will be interpreted
                                 accordingly.

VESTING COMMENCEMENT DATE        The Vesting Commencement Date on this option
                                 shall be October 9, 2001. Shares under this
                                 option will vest in accordance with the vesting
                                 schedule indicated below:

NUMBER OF OPTIONS                VESTING EVENT

        2,000,000                Monthly vesting beginning on the Vesting
                                 Commencement Date indicated above and continue
                                 all shares subject to this option shall be
                                 vested over the three (3) years following the
                                 issuance of this option.

                                 In the event your employment is terminated
                                 without cause by the Company prior to the one
                                 year anniversary of employment, or in the event
                                 you have not been offered the position of Chief
                                 Executive Officer.


<PAGE>

                                 Your option vesting will cease in the event
                                 that your employment and service as a Company
                                 director both terminate for any reason. Your
                                 option vesting will also cease upon your
                                 voluntary resignation of employment upon a
                                 termination for Cause (as such terms are
                                 defined in your employment agreement with the
                                 Company). A leave of absence, regardless of the
                                 reason, shall be deemed to constitute the
                                 cessation of your employment unless such leave
                                 is authorized by the Company, and you return
                                 within the time specified in such
                                 authorization.

                                 The Compensation Committee of the Board of
                                 Directors must certify in writing that the
                                 performance goals have been satisfied before
                                 any Option vesting will be accelerated pursuant
                                 to attainment of performance goals.

                                 In the event of a Change in Control of the
                                 Company, 50% of your then-unvested Options
                                 (meaning 50% of your unvested Options that are
                                 otherwise scheduled to vest under (ii), (iii)
                                 and (iv) above on each vesting date had a
                                 Change in Control not occurred) shall become
                                 vested provided that you are employed by the
                                 Company on the date the negotiations or
                                 communications began (as determined by the
                                 Board in good faith) which lead to the Change
                                 in Control provided, however, that all of your
                                 then-unvested Options shall become vested if
                                 the Change in Control consideration received by
                                 Company shareholders is at least $10.00 per
                                 share (with such share price adjusted for any
                                 future stock splits, stock dividends,
                                 recapitalization, or similar events).

TERM                             Your option will expire in any event at the
                                 close of business at Company headquarters on
                                 the day before the 10th anniversary of the Date
                                 of Grant, as shown on the cover sheet. It will
                                 expire earlier if your employment and your
                                 service as a Company director terminate, as
                                 described below.

REGULAR TERMINATION              If your employment and your service as a
                                 Company director terminate for any reason
                                 except Cause, death or Disability, then your
                                 option will expire at the close of business at
                                 Company headquarters on the 90th day after your
                                 termination date.

CAUSE                            If your employment or service as a Company
                                 director terminates on account of Cause, then
                                 your option will expire immediately.


<PAGE>

DEATH                            In the event of your death during the period of
                                 your employment or service as a Company
                                 director, your option will expire at the close
                                 of business at Company headquarters on the date
                                 six months after the date of death. During that
                                 six-month period, your estate or heirs may
                                 exercise your option.

DISABILITY                       If your employment and service as a Company
                                 director terminate because of your Disability,
                                 then your option will expire at the close of
                                 business at Company headquarters on the date
                                 six months after your termination date.

                                 "Disability" means that you are unable to
                                 engage in any substantial gainful activity by
                                 reason of any medically determinable physical
                                 or mental impairment.

LEAVES OF ABSENCE                For purposes of this option, your employment
                                 does not terminate when you go on a bona fide
                                 leave of absence, that was approved by the
                                 Company in writing, if the terms of the leave
                                 provide for continued service crediting, or
                                 when continued service crediting is required by
                                 applicable law. Your employment terminates in
                                 any event when the approved leave ends if you
                                 fail or refuse to return to active service.

                                 Consistent with the terms of this Agreement and
                                 your Employment Agreement, the Company
                                 determines which leaves count for this purpose,
                                 and when your employment terminates for all
                                 purposes under the Plan.

RESTRICTIONS ON EXERCISE         The Company will not permit you to exercise
                                 this option if the issuance of Shares at that
                                 time would violate any law or regulation.

NOTICE OF EXERCISE               When you wish to exercise this option, you must
                                 notify the Company by filing the proper "Notice
                                 of Exercise" form at the address given on the
                                 form. Your notice must specify how many Shares
                                 you wish to purchase. Your notice must also
                                 specify how your Shares should be registered
                                 (in your name only or in your and your spouse's
                                 names as community property or as joint tenants
                                 with right of survivorship). The notice will be
                                 effective when received by the Company.

                                 If someone else wants to exercise this option
                                 after your death, that person must prove to the
                                 Company's satisfaction that he or she is
                                 entitled to do so.

FORM OF PAYMENT                  When you submit your notice of exercise, you
                                 must include payment of the option price for
                                 the Shares you are purchasing.


<PAGE>

                                 Payment may be made in one (or a combination)
                                 of the following forms:

                                 -  Your personal check, a cashier's check or
                                    a money order.

                                 -  By delivery (on a form prescribed by the
                                    Committee) of an irrevocable direction to a
                                    securities broker to sell Shares and to
                                    deliver all or part of the sale proceeds to
                                    the Company in payment of the aggregate
                                    Exercise Price.

                                 -  Payment may be made all or in part with a
                                    full recourse promissory note executed by
                                    you. The interest rate and other terms and
                                    conditions of such note shall be determined
                                    in your employment agreement with the
                                    Company. The Company will require that you
                                    pledge your Shares to the Company for the
                                    purpose of securing the payment of such
                                    note.

WITHHOLDING TAXES                You will not be allowed to exercise this option
                                 unless you make acceptable arrangements to pay
                                 any withholding or other taxes that may be due
                                 as a result of the option exercise or the sale
                                 of the Shares acquired upon exercise of this
                                 option.

RESTRICTIONS ON RESALE           By signing this Agreement, you agree not to
                                 sell any option Shares at a time when
                                 applicable laws or regulations or Company or
                                 underwriter trading policies prohibit a sale.

                                 You represent and agree that the Shares to be
                                 acquired upon exercising this option will be
                                 acquired for investment, and not with a view to
                                 the sale or distribution thereof.

                                 In the event that the sale of Shares under the
                                 Plan is not registered under the Securities Act
                                 but an exemption is available which requires an
                                 investment representation or other
                                 representation, you shall represent and agree
                                 at the time of exercise to make such
                                 representations as are deemed necessary or
                                 appropriate by the Company and its counsel.

                                 Prior to any Change in Control of the Company,
                                 the shares acquired under this option can be
                                 sold or transferred only pursuant to an SEC
                                 Rule 10b5-1 trading plan that is pre-approved
                                 by the Board of Director's Compensation
                                 Committee.


<PAGE>

TRANSFER OF OPTION               Prior to your death, only you may exercise this
                                 option. You cannot transfer or assign this
                                 option. For instance, you may not sell this
                                 option or use it as security for a loan. If you
                                 attempt to do any of these things, this option
                                 will immediately become invalid. You may,
                                 however, dispose of this option in your will.

                                 Regardless of any marital property settlement
                                 agreement, the Company is not obligated to
                                 honor a notice of exercise from your spouse or
                                 former spouse, nor is the Company obligated to
                                 recognize such individual's interest in your
                                 option in any other way.

NO RETENTION RIGHTS              Your option or this Agreement do not give you
                                 the right to be retained by the Company (or any
                                 subsidiaries) in any capacity. The Company (and
                                 any subsidiaries) reserves the right to
                                 terminate your Service at any time and for any
                                 reason.

SHAREHOLDER RIGHTS               You, or your estate or heirs, have no rights as
                                 a shareholder of the Company until a
                                 certificate for your option Shares has been
                                 issued. No adjustments are made for dividends
                                 or other rights if the applicable record date
                                 occurs before your stock certificate is issued,
                                 except as described in the Plan.

ADJUSTMENTS                      In the event of a stock split, a stock dividend
                                 or a similar change in the Company stock, the
                                 number of Shares covered by this option and the
                                 exercise price per share may be adjusted
                                 pursuant to the Plan. Your option shall be
                                 subject to the terms of the agreement of
                                 merger, liquidation or reorganization in the
                                 event the Company is subject to such corporate
                                 activity, except to the extent the foregoing
                                 conflict with or are in any way inconsistent
                                 with Section 8 of your employment agreement.


<PAGE>

FORFEITURE                       If, at any time within one year after
                                 termination of employment, you engage in any of
                                 the following: (i) your commission of a felony,
                                 an act involving moral turpitude, or an act
                                 constituting common law fraud, in each case
                                 having a material adverse effect on the
                                 business or affairs of the Company or its
                                 affiliates or stockholders; (ii) your willful
                                 or intentional breach of Company confidential
                                 information obligations, in each case having a
                                 material adverse effect on the business or
                                 affairs of the Company or its affiliates or
                                 stockholders; or (iii) your unreasonable
                                 refusal to comply with lawful requests for
                                 cooperation made by the Board of Directors,
                                 then (1) this option shall terminate and be
                                 forfeited effective the date on which you enter
                                 into such activity, unless terminated or
                                 forfeited sooner by operation of another term
                                 or condition of this option or the Plan, (2)
                                 any stock acquired by you pursuant to the
                                 exercise of this option during the Forfeiture
                                 Period (as defined below) shall be forfeited,
                                 and (3) any gain realized by you from the sale
                                 of stock acquired through the exercise of this
                                 option during the Forfeiture Period shall be
                                 paid by you to the Company. The "Forfeiture
                                 Period" shall mean the period commencing six
                                 months prior to your termination of employment
                                 and ending one year from your termination of
                                 employment.

RIGHT OF SET OFF                 By accepting this Agreement, you consent to a
                                 deduction from any amounts the Company owes you
                                 from time to time, to the extent of the amounts
                                 you owe the Company under the paragraph above.
                                 If the Company does not recover by means of
                                 set-off the full amount you owe it, calculated
                                 as set forth above, you agree to pay
                                 immediately the unpaid balance to the Company
                                 upon the Company's demand.

LEGENDS                          All certificates representing the Shares issued
                                 upon exercise of this option shall have
                                 endorsed thereon the applicable legends.

APPLICABLE LAW                   This Agreement will be interpreted and enforced
                                 under the laws of the State of California.

THE PLAN AND OTHER AGREEMENTS    The text of the Plan and your employment
                                 agreement are incorporated in this Agreement by
                                 reference. Certain capitalized terms used in
                                 this Agreement are defined in the Plan or your
                                 employment agreement.


<PAGE>

                                 This Agreement, the Plan and your employment
                                 agreement with the Company dated October 8,
                                 2001 constitute the entire understanding
                                 between you and the Company regarding this
                                 option. Any prior agreements, commitments or
                                 negotiations concerning this option are
                                 superseded.

BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED ABOVE AND IN THE PLAN, EXCEPT TO THE EXTENT MODIFIED BY
YOUR EMPLOYMENT AGREEMENT WITH THE COMPANY.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.17
<SEQUENCE>17
<FILENAME>f80193ex10-17.txt
<DESCRIPTION>EXHIBIT 10.17
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.17

--------------------------------------------------------------------------------
NOTICE OF GRANT OF STOCK OPTIONS                CRITICAL PATH, INC.
AND OPTION AGREEMENT                            ID: 91-1788-300
                                                532 Folsom Street
                                                San Francisco, CA 94105

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

PIERRE VAN BENEDEN                              OPTION NUMBER:  003438
532 FOLSOM ST.                                  PLAN:           1998
SAN FRANCISCO, CA USA 94105                     ID:

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

Effective 11/09/2001, you have been granted a(n) Non-Qualified Stock Option to
buy 500,000 shares of Critical Path, Inc. (the Company) stock at $1.1300 per
share.

The total option price of the shares granted is $565,000.00.

Shares in each period will become fully vested on the date shown.

                Shares       Vest Type       Full Vest       Expiration
                ------       ---------       ---------       ----------

               500,000       Monthly        11/09/2004       11/09/2011

--------------------------------------------------------------------------------
By your signature and the Company's signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company's Stock Option Plan, as amended and in effect, and the Option
Agreement applicable to such Plan, each of which is attached and made a part of
this document. This option grant may also be governed by the terms and
conditions of any written agreement between you and the Company.

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

/s/ David Hayden
-----------------------------------             --------------------------------
Critical Path, Inc.                             Date

/s/ Pierre Van Beneden
-----------------------------------             --------------------------------
PIERRE VAN BENEDEN                              Date



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.18
<SEQUENCE>18
<FILENAME>f80193ex10-18.txt
<DESCRIPTION>EXHIBIT 10.18
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.18

                              CONSULTING AGREEMENT

        This Agreement is made as of August 16, 2001, by and between Laureen
DeBuono, an individual, located at __________, San Francisco, California ____
("Consultant") and Critical Path, Inc., a company located at 532 Folsom Street,
San Francisco, CA 94105 ("Critical Path").

        1. Engagement of Consultant; Consulting Tasks. Critical Path hereby
engages Consultant, and Consultant hereby agrees, to advise Critical Path on the
following matters, achieve the following objective or deliver the following work
product ("consulting tasks"):

                To lead the Critical Path Finance organization, on an interim
basis, as "Interim CFO", which includes responsibility for financial accounting
and reporting, financial planning, budgeting and analysis, investor relations,
treasury and tax, risk management, travel and facilities. Consultant shall
report directly to the CEO or Interim COO if the former has not been hired, and
shall also have direct and unfettered access to the Board of Directors and its
Audit Committee. Consultant shall be an interim member of the executive
management team, attend executive staff meetings, and participate in the
selection of the new CEO of Critical Path. Consultant shall also lead an
assessment of the Finance team and shall make staffing/hiring decisions
appropriate to the needs of the organization.

                Critical Path understands that the manner and means used by
Consultant to accomplish the consulting tasks is in the sole discretion and
control of Consultant. However, Consultant will utilize the highest degree of
skill and expertise in order to professionally accomplish the consulting tasks
in a timely fashion. It is also noted and agreed to by Critical Path that
Consultant is rendering no legal advice in the performance of her tasks
hereunder.

        2. Term. Consultant shall commence work under this Agreement on
September 5, 2001. The term of this Agreement shall be for a period of six (6)
months through February 29, 2002, unless terminated under the provisions of
Section 9, or extended upon mutual agreement of the parties.

        3. Time Commitment. Except where the nature of the consulting tasks
requires that they be performed at specific times, Consultant is free to choose
the specific times at which work will be performed. However, Consultant and
Critical Path agree that the work performed shall be on a four (4) day per week
basis (Monday through Thursday) through October 1, 2001, and thereafter on a
five (5) day per week basis through February 29, 2002. The work shall be
performed at the Critical Path facilities in San Francisco, with travel on
behalf of Critical Path when needed. Critical Path acknowledges that Consultant
is finishing tasks for other clients during the month of September and, as such,
understands that Consultant will be unavailable to work on Critical Path
projects from Friday through Sunday during this period, including September 24
through 26. Consultant agrees that she shall not take on any new consulting
assignments during the Term of this Agreement. Critical Path also acknowledges
that Consultant shall be unavailable November 20 through 25, 2001, December 24
through January 3, 2002, and February 15 through 24, 2002.

        4. Fees and Expenses. Consultant shall be paid $310,000 for the six (6)
month period ("Term"), which equates to $52,000 per month payable on the 1st of
each month, with the first such payment due on September 5, 2001. Consultant
shall also be reimbursed for business and business-related travel expenses
through the submission of itemized expense reports, and such expenses will be
payable within seven (7) days of submission of such reports. In addition,
Consultant shall be granted, on September 5, 2001, at the market price on that
date, an option to purchase 200,000 shares of Critical Path stock, of which
33,333 options shall fully vest on a monthly basis, beginning on September 5,
2001 and thereafter on the 1st of each month. In addition, during the Term of
the Agreement, in the event other executive officers receive stock options as a
result of a financing, stock split, annual option grant program or other similar
event, then Consultant will receive additional stock options on a "proportional
basis". During the Term of the Agreement, Consultant will be subject to all of
the restrictions imposed on executive officers with regard to trading in
Critical Path stock. After the Term of the Agreement, there will be no such
restrictions imposed on Consultant.

        5. Travel. Upon reasonable request by Critical Path, Consultant shall
travel to appropriate locations to perform the consulting tasks (where the
nature of such tasks so requires) within the Time Commitment noted in Point 3
above. Travel time shall count as time spent on the consulting tasks.

        6. No Conflicts. Consultant represents and warrants that: (a) Consultant
is not bound by, and will not enter into, any oral or written agreement with
another party that conflicts in any way with Consultant's obligations under



                                       1
<PAGE>

this Agreement or any agreement made or to be made in connection herewith and
(b) Consultant's agreements and performance under this Agreement and such
related agreements do not require consent or approval of any person that has not
already been obtained.

        7. Confidentiality of Protected Information.

                (a)     Definition. "Protected Information" consists of:

                        (i)     information that Critical Path considers to be
                                proprietary and/or confidential and which was
                                previously or is hereafter disclosed or made
                                available to Consultant by Critical Path
                                including information relating to Critical Path
                                or its business that becomes available to
                                Consultant due to Consultant's access to
                                Critical Path's property or products; and

                        (ii)    information that has been or is created,
                                developed, conceived, reduced to practice or
                                discovered by Consultant (alone or jointly with
                                others) using any Protected Information or any
                                property or materials supplied to Consultant by
                                Critical Path; and

                        (iii)   information that was or is created, conceived,
                                reduced to practice, discovered, developed by,
                                or made known to, Consultant (either alone or
                                jointly with others) during the period that
                                Consultant is retained as a Consultant by
                                Critical Path and which is within the scope of
                                the consulting tasks.

                        By way of illustration but not limitation, Protected
                        Information includes: inventions, discoveries,
                        developments, improvements, trade secrets, know-how,
                        ideas, techniques, designs, processes, formulae, data
                        and software (collectively, "Inventions"); plans for
                        research, development, new products, marketing and
                        selling; budgeting and financial information; production
                        and sales information including prices, costs,
                        quantities and information about suppliers and
                        customers; information about business relationships; and
                        information about skills and compensation of Critical
                        Path employees and consultants.

                (b)     Non-Disclosure; Restricted Use. At all times during and
                        after Consultant's engagement by Critical Path,
                        Consultant shall: hold Protected Information in
                        strictest confidence; not disclose Protected Information
                        to any third party without written consent of a Critical
                        Path officer; take all reasonable steps to safeguard
                        Protected Information; and not use Protected Information
                        for any purpose other than performing work for Critical
                        Path.

                (c)     Exclusions. This Section 7 shall impose no restrictions
                        on use and disclosure of any information which
                        Consultant can establish by legally sufficient evidence:
                        (i) was otherwise known to Consultant at the time of
                        disclosure; or (ii) becomes known or available to
                        Consultant without restriction from a third party
                        without violation of any confidentiality obligation to
                        Critical Path; or (iii) is or becomes part of the public
                        domain without violation of this Agreement by
                        Consultant.

                (d)     Third Party Information. The use and disclosure
                        restrictions in this Section 7 shall also apply to
                        proprietary or confidential information of a third party
                        received by Critical Path and disclosed to Consultant.

                (e)     Ownership. Critical Path shall be the sole owner of all
                        Protected Information. Consultant hereby assigns to
                        Critical Path any rights it may have or acquire in any
                        Protected Information, all patents issuing therefrom,
                        and all copyrights or any other rights existing therein.

        8. Consultant Not to Disclose Confidential Information of Consultant or
Others. Consultant shall not disclose any information to Critical Path which it
believes to be confidential or proprietary to itself or a third party.



                                       2
<PAGE>

        9. Termination. This Agreement may be terminated by either party on
twenty (20) days' written notice to the other, regardless of whether or not the
consulting tasks have yet been completed. However, in the event Critical Path
terminates this Agreement prior to the end of the Term, for any reason
whatsoever, other than for a fraud or embezzlement perpetrated upon Critical
Path, then Critical Path shall provide to Consultant a "termination payment"
equal to two (2) months of consulting income, or $104,000, payable on the date
of termination. The obligation of Critical Path to pay fully on this Agreement
for consulting services rendered will not terminate and, as such, all amounts
owing to Consultant hereunder, including reimbursement of business and
business-related travel expenses, shall be paid to Consultant immediately upon
termination. On termination, Consultant shall deliver to Critical Path any
supplies or equipment provided by Critical Path for use in performing the
consulting tasks, and all physical property and documents or other media
(including copies) that contain Protected Information.

        10. Independent Contractor; No Employee Benefits. Consultant shall at
all times act as an independent contractor and not as an employee of Critical
Path. Accordingly, Consultant understands that Critical Path will not pay or
withhold from payments to Consultant under this Agreement any FICA (social
security), state unemployment or disability insurance premiums, state or federal
income taxes, or other taxes and that Consultant is responsible for paying his
or her own federal self-employment tax (in lieu of FICA), state and federal
income taxes (including estimated tax payments) and other applicable taxes.
Consultant also understands that he or she will receive no employee benefits of
any kind including, for example, health insurance.

        11. Miscellaneous. Neither party has any authority to bind the other in
any way. This Agreement and the Indemnification Agreement dated August 16, 2001
("Indemnification Agreement") by and between the parties hereto (by which
Critical Path fully indemnifies Consultant for any actions and expenses that may
arise from the action taken or advice rendered by the Consultant in the
performance of her duties hereunder), constitute the entire agreement between
the parties relating to the subject matter hereof. Except as expressly provided
herein, this Agreement and the Indemnification Agreement shall not be amended
except by written agreement between the parties. No oral waiver, amendment or
modification shall be effective under any circumstances. If any term, covenant
or condition of this Agreement shall for any reason be held unenforceable by a
court of competent jurisdiction, the rest of this Agreement shall remain in full
force and shall in no way be affected or impaired. The representations and
warranties herein shall survive termination or expiration of this Agreement.
This Agreement shall be governed and construed under California law, excluding
choice of law rules. In addition, Critical Path agrees to add Consultant's name
as a "named insured" on the current Critical Path D&O Policy (and any future
Critical Path D&O policies that may cover the Term of this Agreement), effective
September 5, 2001.

        12. Taxpayer Identification Number. The information in this Section is
provided in lieu of IRS Form W-9. Consultant's taxpayer identification number
is:


               (a)    Social Security Number: _________________
                      (For individuals or sole proprietorships).

                             OR

               (b)    Employer I.D. Number: __ __ - __ __ __ __ __ __ __
                      (For all other entities).

        IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date set forth above.

CRITICAL PATH, INC.                         LAUREEN DEBUONO

By: /s/ William McGlashan                   By: /s/ Laureen DeBuono
   ---------------------------                  --------------------------------
                                                Laureen DeBuono



                                       3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.19
<SEQUENCE>19
<FILENAME>f80193ex10-19.txt
<DESCRIPTION>EXHIBIT 10.19
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.19

--------------------------------------------------------------------------------
NOTICE OF GRANT OF STOCK OPTIONS                CRITICAL PATH, INC.
AND OPTION AGREEMENT                            ID: 91-1788-300
                                                532 Folsom Street
                                                San Francisco, CA 94105

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

LAUREEN DEBUONO                                 OPTION NUMBER:  004250
                                                PLAN:           1998
                                                ID:

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

Effective 9/5/2001, you have been granted a(n) Non-Qualified Stock Option to buy
200,000 shares of Critical Path, Inc. (the Company) stock at $0.3400 per share.

The total option price of the shares granted is $68,000.00.

Shares in each period will become fully vested on the date shown.

                Shares       Vest Type       Full Vest       Expiration
                ------       ---------       ---------       ----------
                33,332     On Vest Date      9/5/2001         9/5/2011
               166,668          Monthly      2/4/2002         9/5/2011


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

By your signature and the Company's signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company's Stock Option Plan as amended and the Option Agreement, all of
which are attached and made a part of this document.

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

/s/ David Hayden
-----------------------------------             --------------------------------
Critical Path, Inc.                             Date

/s/ Laureen DeBuono
-----------------------------------             --------------------------------
Laureen DeBuono                                 Date



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.20
<SEQUENCE>20
<FILENAME>f80193ex10-20.txt
<DESCRIPTION>EXHIBIT 10.20
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.20


ADDENDUM TO CONSULTING AGREEMENT BETWEEN LAUREEN DEBUONO AND CRITICAL PATH, INC.
DATED AUGUST 16, 2001

This Addendum ("Addendum") is made as of October 31, 2001 by and between Laureen
DeBuono, an individual, located at __________ ("Consultant") and Critical Path,
Inc., a company located at 532 Folsom Street, San Francisco, CA 94105
("Critical Path"), to the original Consulting Agreement dated August 21, 2001
("Consulting Agreement"), between the parties to this Addendum.

The following are changes to the Consulting Agreement; all other terms in the
Consulting Agreement remain the same, apply to the new Term, defined below, and
are in full force and effect:

Section 2 "Term". The Term of the consulting agreement shall be extended through
September 30, 2002, unless terminated under the provisions of Section 9 of the
Consulting Agreement, or extended upon mutual agreement of the parties.

Section 4 "Fees and Expenses". Consultant shall continue to be paid $52,000 per
month payable on the first of each month through September 2002. In addition,
Consultant shall be granted, on October 31, 2001, at the market price on that
date, a fully vested option to purchase 233,333 shares of Critical Path stock.
In addition, as stated in the Consulting Agreement, in the event other executive
officers receive stock options as a result of a financing, stock split, annual
option grant program or other similar event, then the Consultant will receive
additional stock options on a "proportional basis". During the Term of the
Agreement, Consultant will be subject to all the restrictions imposed on
executive officers with regard to trading in Critical Path stock. After the Term
of the Agreement, there will be no such restrictions imposed on Consultant.

Section 9 "Termination". The provisions of this section extend to the Term
through September 30, 2002.

Lastly, the parties agree that Consultant shall have a flexible work schedule
that permits Consultant to work from home on an occasional basis.



BY: /s/ LAUREEN DEBUONO
    ---------------------------------
Laureen DeBuono
"Consultant"

BY: /s/ BILL MCGLASHAN
    ---------------------------------
Bill McGlashan
CEO
Critical Path, Inc.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.21
<SEQUENCE>21
<FILENAME>f80193ex10-21.txt
<DESCRIPTION>EXHIBIT 10.21
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.21

--------------------------------------------------------------------------------
NOTICE OF GRANT OF STOCK OPTIONS                CRITICAL PATH, INC.
AND OPTION AGREEMENT                            ID: 91-1788-300
                                                532 Folsom Street
                                                San Francisco, CA 94105

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

LAUREEN DEBUONO                                 OPTION NUMBER:  003374
                                                PLAN:           1998
                                                ID:

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

Effective 11/1/2001, you have been granted a(n) Non-Qualified Stock Option to
buy 233,333 shares of Critical Path, Inc. (the Company) stock at $0.9100 per
share.

The total option price of the shares granted is $212,333.03.

Shares in each period will become fully vested on the date shown.

                Shares       Vest Type       Full Vest       Expiration
                ------       ---------       ---------       ----------
               233,333     On Vest Date      11/1/2001        11/1/2011

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

By your signature and the Company's signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company's Stock Option Plan as amended and the Option Agreement, all of
which are attached and made a part of this document.

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


-----------------------------------             --------------------------------
Critical Path, Inc.                             Date


-----------------------------------             --------------------------------
Laureen DeBuono                                 Date



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.22
<SEQUENCE>22
<FILENAME>f80193ex10-22.txt
<DESCRIPTION>EXHIBIT 10.22
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.22

--------------------------------------------------------------------------------
NOTICE OF GRANT OF STOCK OPTIONS                CRITICAL PATH, INC.
AND OPTION AGREEMENT                            ID: 91-1788-300
                                                532 Folsom Street
                                                San Francisco, CA 94105

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

LAUREEN DEBUONO                                 OPTION NUMBER:  003432
                                                PLAN:           1998
                                                ID:

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

Effective 11/9/2001, you have been granted a(n) Non-Qualified Stock Option to
buy 234,686 shares of Critical Path, Inc. (the Company) stock at $1.1300 per
share.

The total option price of the shares granted is $265,195.18.

Shares in each period will become fully vested on the date shown.

                Shares       Vest Type       Full Vest       Expiration
                ------       ---------       ---------       ----------
               234,686      On Vest Date     11/9/2001        11/9/2011


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

By your signature and the Company's signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company's Stock Option Plan as amended and the Option Agreement, all of
which are attached and made a part of this document.

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

/s/ David Hayden
-----------------------------------             --------------------------------
Critical Path, Inc.                             Date

/s/ Laureen DeBuono
-----------------------------------             --------------------------------
Laureen DeBuono                                 Date



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.23
<SEQUENCE>23
<FILENAME>f80193ex10-23.txt
<DESCRIPTION>EXHIBIT 10.23
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.23

January 14, 2002


Mr. Bernard Harguindeguy



Dear Bernard:

        On behalf of Critical Path, Inc. (the "Company"), I am pleased to offer
you the position of Executive Vice President, Chief Marketing Officer. The terms
of your new position with the Company are as set forth below:

        1.      POSITION.

                a.      You will be Executive Vice President, Chief Marketing
                        Officer, reporting to William E. McGlashan, Jr., Vice
                        Chairman and Chief Executive Officer. Mr. McGlashan will
                        be responsible for your annual review and compensation.
                        You will have a matrix reporting relationship with
                        Pierre Van Beneden, President, relative to certain
                        Marketing initiatives that will require your expertise.
                        You will be working out of the Company's offices in San
                        Francisco, CA.

                b.      You agree to the best of your ability and experience
                        that you will at all times loyally and conscientiously
                        perform all of the duties and obligations required of
                        and from you pursuant to the express and implicit terms
                        hereof, and to the reasonable satisfaction of the
                        Company. During the term of your employment, you further
                        agree that you will devote all of your business time and
                        attention to the business of the Company.

        2. START DATE. Subject to fulfillment of any conditions imposed by this
letter agreement, you will commence this new position with the Company on
Tuesday, January 22, 2002. On your first day, your orientation will take place
at 9:15 am at 532 Folsom Street in San Francisco. Please bring your employment
eligibility documents with you.

        3. PROOF OF RIGHT TO WORK. For purposes of federal immigration law, you
will be required to provide to the Company documentary evidence of your identity
and eligibility for employment in the United States. A list of acceptable
documents is available for your reference.

        4. COMPENSATION.

                a.      BASE SALARY. You will be paid a monthly salary of
                        $25,000.00, which is equivalent to $300,000.00 on an
                        annualized basis. Your salary will be payable in two
                        equal payments per month pursuant to the Company's
                        regular payroll.

                b.      ADDITIONAL COMPENSATION. You will be eligible to
                        participate in the Company's Executive Incentive
                        Compensation Program. Your incentive earnings will be
                        based 50% on EBITDA attainment and 50% on MBO's to be
                        mutually agreed upon between yourself and Mr. McGlashan.
                        The amount of incentive earnings is $300,000.00
                        annually.

                c.      SIGNING BONUS. Upon signing your employment agreement,
                        the Company will provide you with a signing bonus in the
                        amount of $100,000.00.


<PAGE>

PRIVATE & CONFIDENTIAL                            CRITICAL PATH, INC.


                d.      SEVERANCE PERIOD. In the event your employment is
                        terminated without cause, you will receive one year
                        compensation in the amount of $300,000.00 as severance
                        pay.

                e.      COMMUTING EXPENSE REIMBURSEMENT. The Company will
                        reimburse you for car lease expenses, mileage and
                        parking expenses associated with your commute to/from
                        your home and the San Francisco office.

                f.      REVIEW. Your base salary generally will be reviewed
                        annually every January as part of the Company's salary
                        review process. However, nothing in this provision
                        changes the at-will nature of the employment
                        relationship.

                g.      PAID TIME OFF. You will receive 18 paid days off per
                        year for the first five years of service. This Paid Time
                        Off will accrue at the rate of 12 hours per month.

        5. STOCK OPTIONS. In connection with the commencement of your
employment, the Company will recommend that the Board of Directors grant you an
option to purchase 1,250,000 shares of the Company's Common Stock ("Shares")
with an exercise price equal to the fair market value on the date of the grant.
These option shares will vest over four years, with 25% vesting on your one year
anniversary with Critical Path. Vesting will, of course, depend on your
continued employment with the Company. The option will be subject to the terms
of the applicable Company Stock Option Plan and the Stock Option Agreement
between you and the Company. Your stock option agreement will provide for
acceleration of your options upon the following circumstance: If you are
terminated without cause or by constructive discharge following a change of
control, 100% of your then unvested shares will automatically vest. If you
resign or are terminated for any reason before your one year anniversary, the
Company will accelerate vesting on 25% of the above mentioned options.
Additionally, the Company will recommend that the Board of Directors grant you
an option to purchase 250,000 options if you meet specific first year objectives
which will be mutually agreed upon between Mr. McGlashan and you.

        6. BENEFITS. The Company will provide you and your eligible dependents
with generous Medical, Dental, and Vision benefits. You will also receive
Short-term Disability, Long-term Disability, and Life Insurance. In addition,
the Company offers employees the opportunity to participate in its Flexible
Spending Account, Employee Assistance Program, 401(k), and Employee Stock
Purchase Plans. A complete overview of benefits will be presented to you on your
start date.

        7. PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT. Your acceptance of
this offer and commencement of employment with the Company is contingent upon
the execution and submission of the Company's Proprietary Information and
Inventions Agreement ("Proprietary Agreement"), a copy of which has been
provided to you with this offer letter.

        8. AT-WILL EMPLOYMENT. Notwithstanding the Company's obligation
described herein, your employment with the Company will be on an "at-will"
basis, meaning that either you or the Company may terminate your employment at
any time for any reason or no reason, without further obligation or liability.

        9. DISPUTE RESOLUTION PROCEDURE. You and the Company ("the parties")
agree that any dispute arising out of or related to the employment relationship
between them, including the termination of that relationship and any allegations
of unfair or discriminatory treatment arising under state or federal law or
otherwise, that cannot be resolved through the Company's informal grievance
procedure, shall be resolved by final and binding arbitration, except where the
law specifically forbids the use of arbitration as a final and binding remedy.
The following dispute resolution shall apply:

                (a)     The complainant shall provide the other party with a
                        written statement of the claim identifying any
                        supporting witnesses or documents and the requested
                        relief.

                (b)     The respondent shall furnish a statement of the relief,
                        if any, that it is willing to provide, and identify
                        supporting witnesses or documents. If the matter is not
                        resolved, the parties shall submit the dispute to
                        nonbinding mediation, paid for by the Company, before a
                        mediator to be selected by the parties.

                (c)     If the matter is not resolved through mediation, the
                        parties agree that the dispute shall be resolved by
                        binding arbitration. If the parties are unable to
                        jointly select an arbitrator, they will obtain a list of
                        arbitrators from the Federal Mediation and Conciliation
                        Service and select an arbitrator by striking names from
                        that list.


                                                                               2

<PAGE>

PRIVATE & CONFIDENTIAL                            CRITICAL PATH, INC.


                (d)     The arbitrator shall have the authority to determine
                        whether the conduct complained of in section (a) of this
                        section violates the complainant's rights and, if so, to
                        grant any relief authorized by law; subject the
                        exclusions of section (g) below. The arbitrator shall
                        not have the authority to modify, change or refuse to
                        enforce the terms of any employment agreement between
                        the parties, or change any lawful policy or benefit
                        plan.

                (e)     Critical Path, Inc. shall bear the costs of the
                        arbitration if you prevail. If Critical Path, Inc.
                        prevails, you will pay half the cost of the arbitration
                        or $500, whichever is less. Each party shall pay its own
                        attorneys fees, unless the arbitrator orders otherwise
                        pursuant to applicable law.

                (f)     ARBITRATION SHALL BE THE EXCLUSIVE FINAL REMEDY FOR ANY
                        DISPUTE BETWEEN THE PARTIES, SUCH AS DISPUTES INVOLVING
                        CLAIMS FOR DISCRIMINATION OR HARASSMENT (SUCH AS CLAIMS
                        UNDER THE FAIR EMPLOYMENT AND HOUSING ACT, TITLE VII OF
                        THE CIVIL RIGHTS ACT OF 1964, THE AMERICANS WITH
                        DISABILITIES ACT, OR THE AGE DISCRIMINATION IN
                        EMPLOYMENT ACT), WRONGFUL TERMINATION, BREACH OF
                        CONTRACT, BREACH OF PUBLIC POLICY, PHYSICAL OR MENTAL
                        HARM OR DISTRESS OR ANY OTHER DISPUTES, AND THE PARTIES
                        AGREE THAT NO DISPUTE SHALL BE SUBMITTED TO ARBITRATION
                        WHERE THE COMPLAINANT HAS NOT COMPLIED WITH THE
                        PRELIMINARY STEPS PROVIDED FOR IN SECTIONS (a) AND (b)
                        ABOVE.

                (g)     The parties agree that the arbitration award shall be
                        enforceable in any court having jurisdiction to enforce
                        this Agreement, so long as the arbitrator's findings of
                        fact are supported by substantial evidence on the whole
                        and the arbitrator has not made errors of law; however,
                        either party may bring an action in a court of competent
                        jurisdiction regarding or related to inventions that you
                        may claim to have developed prior to joining the
                        company, pursuant to California Labor Code Section 2870
                        ("Disputes Related to Inventions"). The parties further
                        agree that for Disputes Related to Inventions which the
                        parties have elected to submit to arbitration, each
                        party retains the right to seek preliminary injunctive
                        relief in court in order to preserve the status quo or
                        prevent irreparable injury before the matter can be
                        heard in arbitration.

        10. OFFER CONDITIONS. This offer is null and void if not accepted or
declined by January 16, 2002. This offer is also contingent upon receiving the
successful results of our independent verification of your application.

        We are delighted to be able to extend you this offer and look forward to
working with you. To indicate your acceptance of the Company's offer, please
sign and date this letter in the space provided below and FAX IT TO HR AT (415)
808-8797, along with a signed and dated copy of the Proprietary Agreement. This
letter, together with the Proprietary Agreement constitutes the full, complete
and exclusive agreement between you and the company regarding the matters herein
and supersedes any prior representations or agreements, whether written or oral.
This letter may not be modified or amended except by a written agreement, signed
by the Company and by you.


ACCEPTED AND AGREED:                        CRITICAL PATH, INC.


Name:                                       By:     /s/ William McGlashan
     ---------------------------------         ---------------------------------
                                                 William E. McGlashan, Jr.
      /s/ Bernard Harguindeguy                   Vice Chairman and CEO
--------------------------------------
Signature                        Date



                                                                               3


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>24
<FILENAME>f80193ex23-1.txt
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<PAGE>
                                                                    Exhibit 23.1

                         CONSENT OF INDEPENDENT ACCOUNTANTS
                        ------------------------------------

We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 333-63080, 333-51504, 333-44418, 333-40476,
333-36228, 333-95933, 333-95279, 333-87553) and on From S-3 (Nos. 333-39958,
333-38006, 333-38000, 333-36382) of Critical Path, Inc. of our report dated
February 5, 2002 relating to the financial statements and financial statement
schedule, which appears on this Form 10-K.



San Jose, CA
March 29, 2002


</TEXT>
</DOCUMENT>
</SUBMISSION>
