CRITICAL PATH INC
ADVISORY SERVICES AGREEMENT
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<TYPE>EX-10.3
<SEQUENCE>6
<FILENAME>f74608ex10-3.txt
<DESCRIPTION>ADVISORY SERVICES AGREEMENT
<TEXT>
<PAGE>   1
                                                                    EXHIBIT 10.3

May 30, 2001

Mr. David H. Hayden
Executive Chairman and Founder
Critical Path
320 First Street
San Francisco, CA 94105


Re: Advisory Services

Dear David:

This letter agreement (the "Advisory Services Letter Agreement") made and
entered into effective as of April 9, 2001 sets forth the terms pursuant to
which Critical Path, Inc. (the "Company" or "you") has agreed to engage Vectis
Group, LLC and its subsidiaries and affiliates (collectively referred to herein
as "Vectis Group" or "we"), to act as an advisor to the Company with respect to,
among other things, the management and a potential restructuring of the Company
and/or any of its subsidiaries, businesses, operations or divisions.

As part of our engagement, we will, if appropriate and if requested:

        (a) assist you in analyzing and evaluating the business, operations and
financial position of the Company;

        (b) assist you in the preparation and implementation of a business plan
for the Company;

        (c) assist you in a restructuring, and provide advisory services with
respect to the management, of the Company and/or any of its subsidiaries,
businesses, operations or divisions; and

        (d) be available at your request to meet with your Board of Directors to
discuss the proposed business plan and the restructuring and their financial
implications and other management related issues.

In connection with our engagement hereunder, the Company will furnish Vectis
Group with all information concerning the Company which Vectis Group reasonably
deems appropriate and will provide Vectis Group with access to the Company's
officers, directors, employees, accountants, counsel and other representatives
(collectively, the "Representatives"), it being understood that Vectis Group
will rely solely upon such information supplied by the Company and its
Representatives without assuming any responsibility for independent
investigation or verification thereof. All non-public information concerning the
Company, which is given to Vectis Group will be used solely in the course of the
performance of our services hereunder and


<PAGE>   2
Mr. David H. Hayden
May 30, 2001
Page 2

will be treated confidentially by Vectis Group for so long as it remains
non-public. Except as otherwise required by law or judicial or regulatory
process, Vectis Group will not disclose this information to a third party
without the prior written consent of the Company.

As compensation for our services hereunder:

        (a) During the term of this Advisory Services Letter Agreement, the
Company agrees to pay Vectis Group a monthly retainer fee (the "Advisory
Services Retainer Fee") equal to $125,000, payable on the first of every month
beginning the first of the month immediately after the execution of this
Advisory Services Letter Agreement.

        (b) In addition to the payment of the initial Advisory Services Retainer
Fee pursuant to paragraph (a) above, the Company agrees to pay Vectis Group an
amount equal to $216,667.67 for services provided by Vectis Group during April
and May 2001 payable on the first of the month immediately after the execution
of this Advisory Services Letter Agreement.

        (c) The Company agrees to reimburse Vectis Group for all reasonable and
customary out-of-pocket expenses incurred during the term of this engagement
with respect to or arising from the services rendered by Vectis Group hereunder,
including, without limitation, the professional fees and disbursements of its
advisors, including its legal counsel (it being understood that the retention of
any advisor by Vectis Group shall only be made with the prior approval of the
Company).

All fees and expenses payable hereunder are net of all applicable withholding
and similar taxes.

No advice rendered by Vectis Group, whether formal or informal, may be
disclosed, in whole or in part, or summarized, excerpted from or otherwise
referred to without our prior written consent. In addition, Vectis Group may not
be otherwise referred to without its prior written consent.

Since Vectis Group will be acting on behalf of the Company in connection with
its engagement hereunder, the Company and Vectis Group have entered into a
separate letter agreement (the "Indemnification Agreement"), dated as of the
date hereof, providing for the indemnification by the Company of Vectis Group
and certain related persons and entities.

Vectis Group's engagement hereunder may be terminated at any time, with or
without cause, by either Vectis Group or the Company upon sixty days' prior
written notice thereof to the other party; provided, however, that no
termination of Vectis Group's engagement hereunder shall affect the Company's
obligations to pay any other fees and expenses or to indemnify Vectis Group and
certain related persons and entities as provided in the Indemnification
Agreement.

In connection with this engagement, Vectis Group is acting as an independent
contractor and not in any other capacity with duties owing solely to the
Company. All aspects of the relationship created by this Advisory Services
Letter Agreement shall be governed by and construed in


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Mr. David H. Hayden
May 30, 2001
Page 3


accordance with the laws of the State of California, applicable to contracts
made and to be performed therein (excluding the conflicts of laws rules).

The Company has all requisite power and authority to enter into this Advisory
Services Letter Agreement and the transactions contemplated hereby. This
Advisory Services Letter Agreement has been duly and validly authorized by all
necessary action on the part of the Company and has been duly executed and
delivered by the Company and constitutes a legal, valid and binding agreement of
the Company, enforceable in accordance with its terms.

Please note that this Advisory Services Letter Agreement supersedes any prior
agreements, representations or promises of any kind, whether written, oral,
express or implied between the parties hereto with respect to the subject
matters herein. This Advisory Services Letter Agreement, together with the
Strategic Analysis Letter Agreement dated as of March 29, 2001, the Finder
Letter Agreement dated as of March 29, 2001, and each of the indemnification
letter agreements constitutes the full, complete and exclusive agreement between
you and Critical Path with respect to the subject matters herein. This Advisory
Services Letter Agreement cannot be changed unless in writing, signed by an
authorized officer of the Company and Vectis Group.

We are delighted to accept this engagement and look forward to working with you
on this assignment. Please confirm that the foregoing is in accordance with your
understanding by signing and returning to us the enclosed duplicate of this
Advisory Services Letter Agreement.

                               Very truly yours,

                               VECTIS GROUP, LLC


                               By:   /s/ Matthew Hobart
                                   ---------------------------------------------
                                   Matthew T. Hobart
                                   Managing Director and Chief Financial Officer

Accepted and Agreed to as of the date first written above:

CRITICAL PATH, INC.


By:  /s/ David Hayden
     --------------------------------
     David H. Hayden
     Executive Chairman and Founder

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