Critical Path to Acquire Netmosphere; Critical Path Bolsters Allsourcing Strategy with Addition of Industry Leading Project Collaboration Solution.

Business Editors/High-Tech Writers

SAN FRANCISCO--(BUSINESS WIRE)--June 16, 2000

Critical Path Inc. (Nasdaq:CPTH), the dominant global provider of business-to-business Internet messaging and collaboration solutions, today announced a definitive acquisition agreement to acquire Netmosphere, a leading provider of e-business solutions for project collaboration and communications for approximately $40 million in Critical Path stock. The acquisition of Netmosphere will further deepen Critical Path's offering of complete end-to-end Internet messaging and collaboration solutions by offering business applications for managing projects and resources. Headquartered in Palo Alto, Calif., Netmosphere has approximately 35 employees.

Netmosphere's project management solutions, uniquely targeted to Fortune 1000 customers, are designed to provide businesses with easy to use, scalable, and feature-rich solutions for real-time, enterprise project collaboration. Netmosphere helps businesses collaborate on mission-critical projects and increase organizational efficiency through visibility, analysis, communication and knowledge-sharing.

"Critical Path's acquisition of Netmosphere further establishes itself as the only company to offer businesses the complete Internet messaging and collaboration solutions they demand," said Doug Hickey, CEO of Critical Path. "Netmosphere brings to Critical Path flagship products, blue chip customers, and market leadership, which will extend Critical Path's end-to-end product portfolio."

The addition of Netmosphere's project collaboration solutions will enable Critical Path to provide businesses worldwide with additional tools to effectively manage complex projects in real-time. Netmosphere's solutions help companies deal with real-world variables by providing companies with real-time updates on the project status, integrate just in time changes to the plan and focus instant attention on critical components, putting everyone in the organization on the same page at the same time.

The merger transaction will be accounted for using the purchase method of accounting, and is expected to close in late June 2000.

About Critical Path, Inc.

Critical Path, Inc. (Nasdaq:CPTH) is the dominant global provider of complete end-to-end Internet messaging and collaboration solutions for wireless, Internet-centric, telecommunication and corporate businesses. Through its allsourcing strategy, Critical Path is the only advanced messaging provider to offer businesses the flexibility to outsource, midsource or insource all or part of their messaging and collaboration applications. Critical Path has built an industry-leading global infrastructure with data centers connected to key Internet exchange points. Critical Path's technology currently reaches more than 100 million end-users through its customer relationships including more than 25 million wireless devices. Critical Path provides reliable, secure, and scalable e-mail and a flexible suite of enhanced messaging services to partners such as E*TRADE, CompuServe, Network Solutions, U S West, Sprint, France Telecom, British Telecommunications, and ICQ. Critical Path is headquartered in San Francisco, with offices in locations nationwide and in Germany, England, Ireland, France, Italy, Switzerland, Japan, Brazil and Argentina. More information on Critical Path can be found at www.cp.net.

Note to Editors: Critical Path and the Critical Path logo are the trademarks of Critical Path, Inc. All other trademarks are the property of their holders.

This press release contains forward-looking statements regarding the company and its expectations which involve certain risks and uncertainties. Factors that could cause the company's results to differ materially from its expectations include: inability to convert available mailboxes to real revenue; failure of acquisitions to close; failure to expand our sales and marketing activities; unplanned system interruptions and capacity constraints that could reduce our ability to provide email services and harm our business and our reputation; potential difficulties associated with strategic relationships; ability to respond to rapid technological change of the Internet messaging industry; competition; and problems related to managing the company's expected growth, including the ability to maintain or reduce cost efficiencies. These and other risks and uncertainties are described in more detail in the company's Critical Path's most recent 10Q and other filings with the Securities and Exchange Commission (www.sec.gov).