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                                                                   EXHIBIT 10.43

THIS SECURED PROMISSORY NOTE AND THE SHARES ISSUABLE UPON CONVERSION HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS (COLLECTIVELY, THE "ACTS"), AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED OR DISPOSED OF EXCEPT PURSUANT TO REGISTRATION
UNDER SUCH ACTS OR UNLESS THE CORPORATION HAS RECEIVED AN OPINION OF COUNSEL, OR
OTHER EVIDENCE REASONABLY SATISFACTORY TO THE CORPORATION, THAT SUCH
REGISTRATION IS NOT REQUIRED.

                       SECURED CONVERTIBLE PROMISSORY NOTE

$7,000,000.00                 Santa Cruz, California             January 8, 2001

                  FOR VALUE RECEIVED, the undersigned, The Santa Cruz Operation,
Inc., a California corporation ("Borrower"), promises to pay to the order of
Caldera Systems, Inc. ("Lender"), the sum of Seven Million Dollars
($7,000,000.00), with interest from the date of advancement on the unpaid
balance hereof from time to time remaining unpaid at a rate of 10% per annum,
compounded annually until maturity, in the form of, at the election of the
Lender, (i) cancellation of the cash purchase price to be paid by Lender to
Borrower pursuant to the terms of that certain Agreement and Plan of
Reorganization, dated August 1, 2000 (the "Reorganization Agreement") at the
Effective Time (as defined in the Reorganization Agreement); (ii) lawful money
of the United States of America; or (iii) equity securities of the Borrower as
provided in numbered paragraph 1, herein below, both principal and interest
being payable at the address designated in numbered paragraph 14 below or at
such other place as Lender may, from time to time, designate in writing. If
Lender shall make no such election prior to the Maturity Date (as hereafter
defined), Borrower shall make such payment in lawful money of the United States
of America. No later than three (3) business days prior to the Maturity Date,
Lender shall notify Borrower of the form of payment as aforesaid other than in
lawful money of the United States of America that it shall elect, and if Lender
shall not so notify Borrower or shall change such election after making it and
prior to the Maturity Date, Borrower may make all payments hereunder without
additional interest or any penalty no later than two business days after
Lender's final election as aforesaid.

                  The principal of this Note shall mature and the principal and
interest shall be due and payable on the earliest to occur of (i) the Effective
Time (as defined in the Reorganization Agreement) or (ii) the date of
termination of the Reorganization Agreement (in either case, the "Maturity
Date"). All accrued and unpaid interest shall be payable at the maturity of the
principal of this Note.

                  Payment of this Note is secured by a Security Agreement
executed on this date by Borrower and covering all of the assets of Borrower. If
action is instituted to collect this note, the Borrower promises to pay all
costs and expenses, including reasonable attorneys' fees,

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incurred in connection with such actions. Payment of this Note is subject to the
terms of an Intercreditor Agreement executed on this date by Borrower, Lender
and The Canopy Group, Inc.

                  All past due principal and accrued interest on this Note shall
bear interest from maturity until paid at the lesser of (i) the rate of 10% per
annum or (ii) the highest rate for which Borrower may legally contract under
applicable law. All payments on past due principal and accrued interest
hereunder shall be payable in lawful money of the United States of America which
shall be legal tender for public and private debts at the time of payments.

1.            Conversion; Right of Offset and Reduction.

              If payment of all amounts due hereunder is not made on or before
the Maturity Date, Lender, at its sole option and upon 30 days notice to
Borrower, may convert all of the outstanding principal and unpaid interest
accrued to that date into Common Stock of the Borrower at a price equal to the
closing price of the Borrower's Common Stock on the day of funding.

              In no event shall Lender convert, in aggregate, amounts owed under
this Note into a number of shares that, when combined with (i) shares converted
by The Canopy Group, Inc. ("Canopy") pursuant to that certain Loan Agreement and
Secured Convertible Promissory Note by and between Canopy and Borrower dated on
even date herewith (collectively, the "Canopy Loan Agreements"), and (ii) shares
purchased pursuant to the warrant granted by Borrower to Canopy dated on even
date herewith, or the Additional Warrants (as defined in the Loan Agreements),
exceeds 19% of the total outstanding shares of Borrower's Common Stock as of the
date of this Note.

2.            Prepayments. This Note may be prepaid by Borrower in whole or in
part without the consent of the holder and without prepayment penalty of any
kind.

3.            Default; Remedies. The entire unpaid balance of this Note shall be
immediately due and payable at the option of the holder hereof upon the
occurrence of an Event of Default. For the purposes of this Agreement, an Event
of Default shall have occurred if (i) the Borrower shall have materially failed
to perform any covenant or other obligation hereunder, and such failure shall
have continued for twenty (20) days after Borrower shall have received notice
thereof, (ii) the Borrower shall commence a voluntary case or other proceeding
seeking liquidation or other reorganization with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or shall
make a general assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due; or (iii) an involuntary case or other
proceeding shall be commenced against the Borrower seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar now or hereafter in effect or seeking
the appointment of a trustee, liquidator, receiver, custodian or other similar
official of it or any substantial part of its property, and such involuntary
case or other proceeding shall remain undismissed and unstayed for a period of
90 consecutive days.

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4.            No Waiver; Cumulative Rights. No delay on the part of the holder
of this Note in the exercise of any power or right under this Note or under any
other instrument executed pursuant hereto shall operate as a waiver thereof, nor
shall a single or partial exercise of any power or right preclude other or
further exercise thereof or the exercise of any other power or right.

5.            Registration Rights. Upon conversion of this Note into Common
Stock of Borrower pursuant to the terms of Section 1 above, Lender shall have
the rights provided in this Section 5 with respect to Registrable Securities, as
defined below.

         5.1 As used in this Note, the following terms shall have the following
meanings:

                           (a)      "Affiliate" shall mean, with respect to any
Person (as defined below), any other Person controlling, controlled by or under
direct or indirect common control with such Person (for the purposes of this
definition "control," when used with respect to any specified Person, shall mean
the power to direct the management and policies of such person, directly or
indirectly, whether through ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing).

                           (b)      "Business Day" shall mean a day Monday
through Friday on which banks are generally open for business in New York.

                           (c)      "Holders" shall mean the Lender or any
person to whom the rights under this Section 5 have been transferred in
accordance with Section 5.9 hereof.

                           (d)      "Person" shall mean any person,  individual,
corporation, limited liability Borrower, partnership, trust or other
nongovernmental entity or any governmental agency, court, authority or other
body (whether foreign, federal, state, local or otherwise).

                           (e)      The terms "register," "registered" and
"registration" refer to the registration effected by preparing and filing a
registration statement in compliance with the Act, and the declaration or
ordering of the effectiveness of such registration statement.

                           (f)      "Registrable Securities" shall mean (i) the
shares of Common Stock issuable upon conversion of this Note pursuant to Section
1 above; (ii) any shares of Common Stock issued as (or issuable upon the
conversion of any warrant, right or other security which is issued as) a
dividend or other distribution with respect to or in replacement of such Common
Stock; provided, however, that securities shall only be treated as Registrable
Securities if and only for so long as they (A) have not been disposed of
pursuant to a registration statement declared effective by the Commission, (B)
have not been sold in a transaction exempt from the registration and prospectus
delivery requirements of the Act so that all transfer restrictions and
restrictive legends with respect thereto are removed upon the consummation of
such sale, (C) are held by a Holder or a permitted transferee pursuant to
Section 5.9, or (D) have not been sold or are not available for sale in
transactions pursuant to Rule 144(k) promulgated under the Act.

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                           (g)      "Registration Expenses" shall mean all
reasonable expenses incurred by the Borrower in complying with Section 5.2
hereof, including, without limitation, all registration, qualification and
filing fees, reasonable printing expenses, fees and expenses of counsel for the
Borrower, blue sky fees and expenses and the reasonable expense of any special
audits incident to or required by any such registration (but excluding the fees
of legal counsel for any Holder).

                           (h)      "Registration Statement" shall have the
meaning ascribed to such term in Section 5.2.

                           (i)      "Registration Period" shall have the
meaning ascribed to such term in Section 5.4.

                           (j)      "Selling Expenses" shall mean all
underwriting discounts and selling commissions applicable to the sale of
Registrable Securities and all fees and expenses of legal counsel for any
Holder.

         5.2 No later than thirty (30) days after the date of conversion as set
forth in numbered paragraph 1, herein above (the "Filing Date"), the Borrower
shall file a "shelf" registration statement on the appropriate form (the
"Registration Statement") with the Commission and use its best efforts to effect
the registration, qualifications or compliances (including, without limitation,
the execution of any required undertaking to file post-effective amendments,
appropriate qualifications or exemptions under applicable blue sky or other
state securities laws and appropriate compliance with applicable securities
laws, requirements or regulations) of the Registrable Securities prior to the
date which as soon as is reasonably practical thereafter.

         5.3 All Registration Expenses incurred in connection with any
registration, qualification, exemption or compliance pursuant to Section 5.2
shall be borne by the Borrower.

         5.4 In the case of the registration, qualification, exemption or
compliance effected by the Borrower pursuant to this Agreement, the Borrower
shall, upon reasonable request, inform each Holder as to the status of such
registration, qualification, exemption and compliance. At its expense the
Borrower shall:

                           (a)      use its commercially reasonable efforts to
keep such registration, and any qualification, exemption or compliance under
state securities laws which the Borrower determines to obtain, continuously
effective until the Holders have completed the distribution described in the
registration statement relating thereto. The period of time during which the
Borrower is required hereunder to keep the Registration Statement effective is
referred to herein as "the Registration Period." Notwithstanding the foregoing,
at the Borrower's election, the Borrower may cease to keep such registration,
qualification, exemption or compliance effective with respect to any Registrable
Securities, and the registration rights of a Holder shall expire, at such time
as they are no longer, by reason of Rule 144 promulgated under the Act (or other
exemption from registration acceptable to the Borrower) required to register for
the sale thereof; and

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                           (b)      advise the Holders:

                                    (i)     when the Registration Statement or
any amendment thereto has been filed with the Commission and when the
Registration Statement or any post-effective amendment thereto has become
effective;

                                    (ii)    of any request by the Commission
for amendments or supplements to the Registration Statement or the prospectus
included therein or for additional information;

                                    (iii)   of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for such purpose;

                                    (iv)    of the receipt by the Borrower of
any notification with respect to the suspension of the qualification of the
Registrable Securities included therein for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and

                                    (v)     of the happening of any event that
requires the making of any changes in the Registration Statement or the
prospectus so that, as of such date, the statements therein are not misleading
and do not omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the prospectus, in the
light of the circumstances under which they were made) not misleading;

                           (c)      make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of any Registration
Statement at the earliest possible time;

                           (d)      furnish to each Holder upon request, without
charge, at least one copy of such Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and, if the
Holder so requests in writing, all exhibits (including those incorporated by
reference) in the form filed with the Commission;

                           (e)      during the Registration Period, deliver to
each Holder, without charge, as many copies of the prospectus included in such
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Borrower consents to the use, consistent with
the provisions hereof, of the prospectus or any amendment or supplement thereto
by each of the selling Holders of Registrable Securities in connection with the
offering and sale of the Registrable Securities covered by the prospectus or any
amendment or supplement thereto;

                           (f)      prior to any public offering of Registrable
Securities pursuant to any Registration Statement, register or qualify or obtain
an exemption for offer and sale under the securities or blue sky laws of such
jurisdictions as any such Holders reasonably request in writing, provided that
the Borrower shall not for any such purpose be required to qualify

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generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any
such jurisdiction, and do any and all other acts or things reasonably necessary
or advisable to enable the offer and sale in such jurisdictions of the
Registrable Securities covered by such Registration Statement;

                           (g)      cooperate with the Holders to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be sold pursuant to any Registration Statement free of any
restrictive legends to the extent not required at such time and in such
denominations and registered in such names as Holders may request at least three
(3) business days prior to sales of Registrable Securities pursuant to such
Registration Statement;

                           (h)      upon the occurrence of any event
contemplated by Section 5.4(b)(v) above, the Borrower shall promptly prepare a
post-effective amendment to the Registration Statement or a supplement to the
related prospectus, or file any other required document so that, as thereafter
delivered to purchasers of the Registrable Securities included therein, the
prospectus will not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

              5.5          The Holders shall have no right to take any action to
restrain, enjoin or otherwise delay any registration pursuant to Section 5.2
hereof as a result of any controversy that may arise with respect to the
interpretation or implementation of this Agreement.

              5.6          (a)      To the extent permitted by law, the Borrower
shall indemnify each Holder and each person controlling such Holder within the
meaning of Section 15 of the Act, with respect to which any registration,
qualification or compliance has been effected pursuant to this Agreement,
against all claims, losses, damages and liabilities (or action in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened (subject to Section 5.6(c) below), arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement, prospectus or offering
circular, or any amendment or supplement thereof, incident to any such
registration, qualification or compliance, or based on 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 light of the
circumstances in which they were made, and will reimburse each Holder and each
person controlling such Holder, for reasonable legal and other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action as incurred; provided that the Borrower
will not be liable in any such case to the extent that any untrue statement or
omission or allegation thereof is made in reliance upon and in conformity with
written information furnished to the Borrower by or on behalf of such Holder and
stated to be specifically for use in preparation of such registration statement,
prospectus or offering circular; and, provided further, that the Borrower will
not be liable in any such case where the claim, loss, damage or liability arises
out of or is related to the failure of the Holder to comply with the covenants
and agreements contained in this Agreement respecting sales of Registrable
Securities, and except that the foregoing indemnity agreement is subject to the
condition that, insofar as it relates to any such untrue statement or alleged
untrue statement or omission or

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alleged omission made in the preliminary prospectus but eliminated or remedied
in the amended prospectus on file with the Commission at the time the
registration statement becomes effective or in the amended prospectus filed with
the Commission pursuant to Rule 424(b) or in the prospectus subject to
completion and term sheet under Rule 434 of the Act, which together meet the
requirements of Section 10(a) of the Act (the "Final Prospectus"), such
indemnity agreement shall not inure to the benefit of any such Holder or any
such controlling person, if a copy of the Final Prospectus furnished by the
Borrower to the Holder for delivery was not furnished to the person or entity
asserting the loss, liability, claim or damage at or prior to the time such
furnishing is required by the Act and the Final Prospectus would have cured the
defect giving rise to such loss, liability, claim or damage.

                           (b)      Each Holder will severally, if Registrable
Securities held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Borrower, each of its directors and officers, each underwriter of the
Registrable Securities and each person who controls the Borrower within the
meaning of Section 15 of the Act, against all claims, losses, damages and
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened (subject to
Section 5.6(c) below), arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any registration
statement, prospectus or offering circular, or any amendment or supplement
thereof, incident to any such registration, qualification or compliance, or
based on 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 light of the circumstances in which they were made, and will
reimburse the Borrower, such directors and officers, each underwriter of the
Registrable Securities and each person controlling the Borrower for reasonable
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action as
incurred, in each case to the extent, but only to the extent, that such untrue
statement or omission or allegation thereof is made in reliance upon and in
conformity with written information furnished to the Borrower by or on behalf of
the Holder and stated to be specifically for use in preparation of such
registration statement, prospectus or offering circular; provided that the
indemnity shall not apply to the extent that such claim, loss, damage or
liability results from the fact that a current copy of the prospectus was not
made available to the Holder and such current copy of the prospectus would have
cured the defect giving rise to such loss, claim, damage or liability.
Notwithstanding the foregoing, in no event shall a Holder be liable for any such
claims, losses, damages or liabilities in excess of the proceeds received by
such Holder in the offering, except in the event of fraud by such Holder.

                           (c)      Each party entitled to indemnification
under this Section 5.6 (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such Indemnified Party's expense, and provided further that the
failure of any Indemnified Party to give notice as provided herein shall

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not relieve the Indemnifying Party of its obligations under this Agreement,
unless such failure is materially prejudicial to the Indemnifying Party in
defending such claim or litigation. An Indemnifying Party shall not be liable
for any settlement of an action or claim effected without its written consent
(which consent will not be unreasonably withheld).

                           (d)      If the indemnification provided for in this
Section 5.6 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or expense
referred to therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party thereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the other
in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

              5.7          (a)      Each Holder agrees that, upon receipt of any
notice from the Borrower of the happening of any event requiring the preparation
of a supplement or amendment to a prospectus relating to Registrable Securities
so that, as thereafter delivered to the Holders, 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
not misleading, each Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement contemplated by
Section 5.2 until its receipt of copies of the supplemented or amended
prospectus from the Borrower and, if so directed by the Borrower, each Holder
shall deliver to the Borrower all copies, other than permanent file copies then
in such Holder's possession, of the prospectus covering such Registrable
Securities current at the time of receipt of such notice.

                           (b)      Each Holder shall suspend, upon request of
the Borrower, any disposition of Registrable Securities pursuant to the
Registration Statement and prospectus contemplated by Section 5.2 during (i) any
period not to exceed two 60-day periods within any one 12-month period the
Borrower requires in connection with a primary underwritten offering of equity
securities and (ii) any period, not to exceed one 45-day period per circumstance
or development, when the Borrower determines in good faith that offers and sales
pursuant thereto should not be made by reason of the presence of material
undisclosed circumstances or developments with respect to which the disclosure
that would be required in such a prospectus is premature, would have an adverse
effect on the Borrower or is otherwise inadvisable.

                           (c)      As a condition to the inclusion of its
Registrable Securities, each Holder shall furnish to the Borrower such
information regarding such Holder and the distribution proposed by such Holder
as the Borrower may request in writing or as shall be required in connection
with any registration, qualification or compliance referred to in this Article
V.

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                           (d)      Each Holder hereby covenants with the
Borrower (i) not to make any sale of the Registrable Securities without
effectively causing the prospectus delivery requirements under the Act to be
satisfied, and (ii) if such Registrable Securities are to be sold by any method
or in any transaction other than on a national securities exchange, Nasdaq
National Market, Nasdaq SmallCap Market or in the over-the-counter market, in
privately negotiated transactions, or in a combination of such methods, to
notify the Borrower at least five (5) business days prior to the date on which
the Holder first offers to sell any such Registrable Securities.

                           (e)      Each Holder acknowledges and agrees that the
Registrable Securities sold pursuant to the Registration Statement described in
this Section are not transferable on the books of the Borrower unless the stock
certificate submitted to the transfer agent evidencing such Registrable
Securities is accompanied by a certificate reasonably satisfactory to the
Borrower to the effect that (i) the Registrable Securities have been sold in
accordance with such Registration Statement and (ii) the requirement of
delivering a current prospectus has been satisfied.

                           (f)      Each Holder agrees not to take any action
with respect to any distribution deemed to be made pursuant to such registration
statement which would constitute a violation of Regulation M under the Exchange
Act or any other applicable rule, regulation or law.

                           (g)      At the end of the period during which the
Borrower is obligated to keep the Registration Statement current and effective
as described above, the Holders of Registrable Securities included in the
Registration Statement shall discontinue sales of shares pursuant to such
Registration Statement upon receipt of notice from the Borrower of its intention
to remove from registration the shares covered by such Registration Statement
which remain unsold, and such Holders shall notify the Borrower of the number of
shares registered which remain unsold immediately upon receipt of such notice
from the Borrower.

              5.8          With a view to making available to the Holders the
benefits of certain rules and regulations of the Commission which at any time
permit the sale of the Registrable Securities to the public without
registration, the Borrower shall use its reasonable best efforts to:

                           (a)      make and keep public information available,
as those terms are understood and defined in Rule 144 under the Act, at all
times;

                           (b)      file with the Commission in a timely manner
all reports and other documents required of the Borrower under the Exchange Act;
and

                           (c)      so long as a Holder owns any unregistered
Registrable Securities, furnish to such Holder, upon any reasonable request, a
written statement by the Borrower as to its compliance with Rule 144 under the
Act, and of the Exchange Act, a copy of the most recent annual or quarterly
report of the Borrower, and such other reports and documents of the

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Borrower as such Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration.

              5.9          The rights to cause the Borrower to register
Registrable Securities granted to the Holders by the Borrower under Section 5.1
may be assigned in full by a Holder in connection with a transfer by such Holder
of at least 250,000 shares of its Registrable Securities, provided, however,
that (i) such transfer may otherwise be effected in accordance with applicable
securities laws; (ii) such Holder gives prior written notice to the Borrower;
and (iii) such transferee agrees to comply with the terms and provisions of this
Note, and such transfer is otherwise in compliance with this Note. Except as
specifically permitted by this Section 5.9, the rights of a Holder with respect
to Registrable Securities as set out herein shall not be transferable to any
other Person, and any attempted transfer shall cause all rights of such Holder
therein to be forfeited.

              5.10         With the written consent of the Borrower and the
Holders holding at least a majority of the Registrable Securities that are then
outstanding, any provision of this Article V may be waived (either generally or
in a particular instance, either retroactively or prospectively and either for a
specified period of time or indefinitely) or amended. Upon the effectuation of
each such waiver or amendment, the Borrower shall promptly give written notice
thereof to the Holders, if any, who have not previously received notice thereof
or consented thereto in writing.

              5.11         Except to the extent any delay is due to the failure
of a Holder to reasonably cooperate in providing to the Borrower such
information as shall be reasonably requested by the Borrower for use in the
Registration Statement, in the event that the Registration Statement is not
filed by the date that is 30 days following the Maturity Date, the Borrower
shall, for no additional consideration, pay to each Holder as liquidated damages
and not as a penalty an amount in cash equal to one percent (1%) of the
outstanding principal amount then owed to such Holder hereunder for each 15 day
period in which the Registration Statement remains unfiled; provided, however,
that in no event shall the amount of liquidated damages payable by the Borrower
to any Holder pursuant to this Section 5.11 exceed ten percent (10%) of the
amount invested by such Holder.

6.            Waiver. Borrower and all endorsers, sureties and guarantors of
this Note waive demand, presentment, protest, notice of dishonor, notice of
nonpayment, notice of intention to accelerate, notice of acceleration, notice of
protest and any and all lack of diligence or delay in collection or the filing
of suit hereon which may occur, and agree to all extensions and partial
payments, before or after maturity, without prejudice to the holder hereof.

7.            Collection Costs. In the event that, upon an Event of Default, any
amount under this Note is collected in whole or in part through suit,
arbitration or mediation, then and in any such case there shall be added to the
unpaid principal balance hereof all costs of collection, (including, but not
limited to, reasonable attorneys' fees and expenses) whether or not suit is
filed.

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8.            Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of California.

9.            Venue. The parties agree that any dispute regarding the
interpretation or validity of, or otherwise arising out of this Note, shall be
subject to the exclusive jurisdiction of the California State Courts in and for
Santa Clara County, California or, in the event of federal jurisdiction, the
United States District Court for the Northern District of California sitting in
Santa Clara County, California, and each party hereby agrees to submit to the
personal and exclusive jurisdiction and venue of such courts and not to seek the
transfer of any case or proceeding out of such courts.

10.           Headings. The headings of the sections of this Note are inserted
for convenience of reference only and shall not be deemed to constitute a part
hereof.

11.           Usury. All agreements between Borrower and the holder of this
Note, whether now existing or hereafter arising and whether written or oral, are
expressly limited so that in no contingency or event whatsoever, whether by
acceleration of the maturity of this Note or otherwise, shall the amount paid,
or agreed to be paid, to the holder hereof for the use, forbearance or detention
of the money to be loaned hereunder or otherwise, exceed the maximum amount
permissible under applicable law. If from any circumstances whatsoever
fulfillment of any provision of this Note or of any other document evidencing,
securing or pertaining to the indebtedness evidenced hereby, at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by law, then ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity, and if from any such
circumstances the holder of this Note shall ever receive anything of value as
interest or deemed interest by applicable law under this Note or any other
document evidencing, securing or pertaining to the indebtedness evidenced hereby
or otherwise an amount that would exceed the highest lawful rate, such amount
that would be excessive interest shall be applied to the reduction of the
principal amount owing under this Note or on account of any other indebtedness
of Borrower to the holder hereof relating to this Note, and not to the payment
of interest, or if such excessive interest exceeds the unpaid balance of
principal of this Note and such other indebtedness, such excess shall be
refunded to Borrower. In determining whether or not the interest paid or payable
with respect to any indebtedness of Borrower to the holder hereof, under any
specific contingency, exceeds the highest lawful rate, Borrower and the holder
hereof shall, to the maximum extent permitted by applicable law, (i)
characterize any nonprincipal payment as an expense, fee or premium rather than
as interest, (ii) amortize, prorate, allocate and spread the total amount of
interest throughout the full term of such indebtedness so that the actual rate
of interest on account of such indebtedness is uniform throughout the term
thereof, and/or (iii) allocate interest between portions of such indebtedness,
to the end that no such portion shall bear interest at a rate greater than that
permitted by law. The terms and provisions of this paragraph shall control and
supersede every other conflicting provision of all agreements between Borrower
and the holder hereof.

12.           Successors and Assigns. All of the stipulations, promises and
agreements in this Note made by or on behalf of Borrower shall bind the
successors and assigns of Borrower,

                                       11

<PAGE>   12

whether so expressed or not, and inure to the benefit of the successors and
assigns of Borrower and Lender. Any assignee of Borrower or Lender shall agree
in writing prior to the effectiveness of such assignment to be bound by the
provisions hereof.

13.           Severability. In the event any one or more of the provisions
contained in this Note shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Note shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein.

14.           Notices. All notices and other communications hereunder shall be
in writing or by telex, telegram or telecopy, and shall be deemed to have been
duly made when delivered in person or sent by telex, telegram, telecopy, same
day or overnight courier, or 72 hours after having been deposited in the United
States first class or registered or certified mail return receipt requested,
postage prepaid, to a party at the address set forth below (which may be changed
in accordance with these notice procedures):

         If to Lender:

                  Caldera Systems, Inc.
                  240 West Center Street
                  Orem, Utah 84057
                  Attention: Chief Executive Officer
                  Fax:  (801) 765-1313

         with a copy (which shall not constitute notice) to:

                  Brobeck, Phleger & Harrison LLP
                  370 Interlocken Boulevard, Suite 500
                  Broomfield, Colorado 80021
                  Attention: John E. Hayes, III
                  Fax: (303) 410-2199

         If to Borrower:

                  The Santa Cruz Operation, Inc.
                  425 Encinal
                  Santa Cruz, California 95061-1900
                  Attention: Law and Corporate Affairs
                  Fax:  (831) 427-5454

         with a copy (which shall not constitute notice) to:

                  Wilson Sonsini Goodrich & Rosati
                  650 Page Mill Road
                  Palo Alto, CA 94304-1050
                  Attention: Michael Danaher
                  Fax:  (650) 493-6811

                                       12

<PAGE>   13

                  IN WITNESS WHEREOF, the undersigned has executed this Secured
Convertible Promissory Note on and as of the date first set forth above.

                                                 THE SANTA CRUZ OPERATION, INC.

                                                 By:
                                                    ----------------------------

AGREED AND ACCEPTED:

CALDERA SYSTEMS, INC.

By:
   ----------------------------

                                       13<PAGE>   1
                                                                   EXHIBIT 10.44

                               SECURITY AGREEMENT

         This Security Agreement, as amended, modified or otherwise supplemented
from time to time (this "AGREEMENT"), is made and entered into as of January 8,
2001 by and between The Santa Cruz Operation, Inc., a California corporation
with principal offices at 425 Encinal, Santa Cruz, California 95061 ("DEBTOR"),
and Caldera Systems, Inc., a Delaware corporation, with principal offices at 240
West Center Street, Orem, Utah 84057 ("SECURED PARTY").

                                 RECITALS

         A. In connection with the execution of the Secured Convertible
Promissory Note of even date herewith (the "NOTE") and as security for its
obligations under the Note, Debtor has agreed, among other things, to grant
Secured Party a security interest in the Collateral (as defined below) on the
terms set forth in this Agreement. An Intercreditor Agreement of even date
herewith (the "INTERCREDITOR AGREEMENT") by and among Debtor, the Secured Party
and The Canopy Group, Inc. ("CANOPY") sets forth the parties' agreement with
respect to the relative priorities of the Liens of Secured Party and Canopy.

         NOW, THEREFORE, in consideration of the foregoing recitals, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

         1. DEFINED TERMS. All capitalized terms used in this Agreement that are
listed on Exhibit A attached hereto (which is incorporated by this reference)
will have the meanings indicated thereon. Unless otherwise defined herein, all
other capitalized terms used in this Agreement will have the same meanings given
to such terms in the Note.

         2. GRANT OF SECURITY INTEREST; COLLATERAL ASSIGNMENT. As collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations, and
subject to Prior Liens set forth in Exhibit B to this Agreement, Debtor hereby
grants to Secured Party a first priority security interest in all of Debtor's
assets, which assets are collectively referred to herein as the "COLLATERAL" and
include, without limitation:

                  (a) General Intangibles. All of Debtor's General Intangibles,
now existing or hereafter arising or acquired, together with the proceeds there
from. As used herein, the term "GENERAL INTANGIBLES" means all personal property
(including things in action) other than goods, accounts, chattel paper,
documents, instruments, and money, and includes, but is not limited to, business
records, deposit accounts, inventions, intellectual property, designs, patents,
patent applications, patent rights, trademarks, trademark applications,
trademark registrations, service marks, service mark applications, service
registrations, trade names, goodwill, technology, know-how, confidential
information, trade secrets, customer lists, supplier lists, copyrights,
copyright applications, copyright registrations, licenses, permits, franchises,
tax refund claims, and any letters of credit, guarantee claims, security
interests, or other security held by Debtor to secure any "Accounts" (as
hereinafter defined).

<PAGE>   2

                  (b) Accounts (including Accounts Receivable). All of Debtor's
Accounts, whether now existing or hereafter arising or acquired, together with
the proceeds there from. As used herein, the term "ACCOUNTS" means any right of
Debtor to receive payment from another person or entity, including payment for
goods sold or leased, or for services rendered, no matter how evidenced or
arising, and regardless of whether yet earned by performance. It includes, but
is not limited to, accounts, accounts receivable, contract rights, contracts
receivable, purchase orders, notes, drafts, acceptances, all rights to payment
earned or unearned under a charter or other contract involving the use or hire
of a vessel and all rights incident to the charter or contract, and other forms
of obligations and receivables.

                  (c) Inventory. All of Debtor's Inventory, whether now owned or
hereafter acquired, together with the products and proceeds there from and all
packaging, manuals, and instructions related thereto. As used herein, the term
"INVENTORY" means all goods, merchandise, and personal property held for sale or
lease or furnished or to be furnished under contracts of service, and all raw
materials, work in process, or materials used or consumed in Debtor's business,
wherever located and whether in the possession of Debtor, a warehouseman, a
bailee, or any other person.

                  (d) Equipment. All of Debtor's Equipment, now owned or
hereafter acquired, together with the products and proceeds there from, and all
substitutes and replacements therefor. As used herein, the term "EQUIPMENT"
includes all equipment, machinery, tools, office equipment, supplies,
furnishings, furniture, or other items used or useful, directly or indirectly,
in Debtor's business, all accessions, attachments, and other additions thereto,
all parts used in connection therewith, all packaging, manuals, and instructions
related thereto, and all leasehold or equitable interests therein.

                  (e) Fixtures. All of Debtor's interest in and to all fixtures
and furnishings, now owned or hereafter acquired, together with the products and
proceeds there from, all substitutes and replacements therefor, all accessories,
attachments, and other additions thereto, all tools, parts, and supplies used in
connection therewith, and all packaging, manuals, and instructions related
thereto, located on or attached to Debtor's business premises located at 425
Encinal, Santa Cruz, California 95061.

                  (f) Chattel Paper, Documents and Instruments. All of Debtor's
right, title, and interest in any chattel paper, documents, or instruments, now
owned or hereafter acquired or arising, or now or hereafter coming into the
possession, control, or custody of either Debtor or Secured Party, together with
all proceeds there from. The terms "chattel paper," "documents," and
"instruments" shall have those meanings ascribed to them in the Utah Uniform
Commercial Code.

                  (g) Excluded Assets. Notwithstanding the foregoing, in no
event shall Collateral include, and Secured Party shall not be deemed to have an
interest in, any of Debtor's right, title or interest (a) in any Intellectual
Property if the grant of such interest shall constitute or result in the
abandonment, invalidation or rendering unenforceable any right, title or
interest of Debtor therein, (b) in any license, contract or agreement to which
Debtor is a party or any of its

                                       2

<PAGE>   3

rights or interests thereunder to the extent, but only to the extent, that such
a grant would, under the terms of such license, contract or agreement, or
otherwise, result in a breach or termination of the terms or, constitute a
default under or termination of, any such license, agreement or contract (other
than to the extent that any such term would be rendered ineffective pursuant to
the Uniform Commercial Code of any relevant jurisdiction, and any other
applicable law or principles of equity); provided that immediately upon the
ineffectiveness, lapse or termination of any such provision, the Collateral
shall include, and Debtor shall be deemed to have granted a security interest
in, all such rights and interests as if such provision had never been in effect,
and (c) in any of the outstanding capital stock of a controlled foreign
corporation, as such term is defined in the Internal Revenue Code of 1986, as
amended, in excess of 65% of the voting power of all classes of capital stock of
such controlled foreign corporation entitled to vote. .

         3. REPRESENTATIONS AND WARRANTIES. Debtor hereby represents and
warrants to Secured Party that:

                  (a) Title; No Other Liens. Except for (i) the liens granted to
Secured Party pursuant to this Agreement (ii) the Prior Liens, and (iii) the
Permitted Liens, Debtor owns (and, in the case of after-acquired Collateral,
will own at the time it is acquired) all right, title and interest in and to
each item of the Collateral free and clear of any and all liens, claims,
security interests, encumbrances and restrictions of any kind. No security
agreement, financing statement or other public notice with respect to all or any
part of the Collateral is on file or of record in any public office, except such
as may have been filed in favor of Secured Party pursuant to this Agreement and
except such as may have been filed with respect to the Prior Liens or the
Permitted Liens. Debtor has provided Secured Party with copies of all
obligations exceeding $50,000 secured by a lien on any of the Collateral.

                  (b) No Consents. Debtor has all right, power and authority
necessary to grant Secured Party the security interest granted in Section 2
above, without the need for the consent or approval of any third party other
than consents or approvals that have been obtained.

                  (c) Location of Collateral. The Collateral (other than the
Intellectual Property) is located and will at all times be kept at Debtor's
office at the address indicated above, and such other premises owned or leased
by Debtor.

         4. COVENANTS. Debtor covenants and agrees with Secured Party that, from
and after the date of this Agreement until all Obligations are paid in full and
satisfied:

                  (a) Further Documentation. Upon Secured Party's written
request and at Debtor's sole expense, Debtor will promptly and duly execute and
deliver such further instruments and documents and take such further action as
Secured Party may reasonably request for the purpose of obtaining, giving notice
of, protecting, preserving and perfecting the security interests granted under
this Agreement, including, without limitation, the filing of any financing or
continuation statements under the Code in effect in any jurisdiction with
respect to the security interests created hereby and the recording of the
security interests granted hereunder in any Intellectual Property with the
appropriate governmental or other authorities in any jurisdiction.

                                       3

<PAGE>   4

Debtor agrees that a carbon, photographic or other reproduction of this
Agreement (or, if appropriate, any other Security Document) will be sufficient
as a financing statement for filing in any jurisdiction, if permitted by such
jurisdiction.

                  (b) Maintenance of Records. Debtor will keep and maintain
complete records of the Collateral as it does in the ordinary course of
business. For Secured Party's further security, Secured Party will have a
security interest in all of the books and records of Debtor pertaining to the
Collateral.

                  (c) No Liens on Collateral. Debtor will not create, incur or
permit to exist, will defend the Collateral against, and will take such other
action as is necessary to remove, any lien, claim, security interest or
encumbrance on or to any of the Collateral, other than the liens granted to
Secured Party under this Agreement and the Prior Liens and Permitted Liens.

                  (d) Limitation on Dispositions of Collateral. Debtor will use
all commercially reasonable efforts to preserve the Collateral without material
impairment while conducting its business in the ordinary course in a manner that
is consistent with Debtor's past business practices. Debtor will not, through
any license, encumbrance, assignment, transfer or disposition of any of the
Collateral, any creation of obligations of Debtor, any issuance of securities,
or any other action, (i) avoid or seek to avoid the observation or performance
of any of the terms to be observed or performed by Debtor under this Agreement,
(ii) materially impair the benefit of this Agreement or the Collateral to
Secured Party, or (iii) materially and adversely affect Secured Party's ability
to operate, or obtain the financial or economic benefit of, the Collateral in
accordance with the terms of this Agreement; provided, however, that Debtor may
(A) enter into Licenses with third parties in the ordinary course of its
business and consistent with its past licensing practice of Intellectual
Property owned or licensed by Debtor, and (B) sell or otherwise dispose of
worn-out or obsolete Equipment or Fixtures. Debtor will at all times in good
faith take, and assist in taking, all such action as may be necessary or
appropriate to protect Secured Party's rights under this Agreement from
impairment and to preserve for Secured Party's benefit the value of the
Collateral.

                  (e) No Change in Location, Name, etc. Except upon thirty (30)
days prior written notice to Secured Party, Debtor will not move the Collateral
(other than the Intellectual Property) from the location specified in Section
3(c) above or change Debtor's name, identity or structure to such an extent that
any financing statement or other Security Documents filed by Secured Party would
become misleading.

                  (f) Payment of Taxes and Assessments. Debtor will pay prior to
delinquency all taxes and assessments assessed against, levied upon or placed
against the Collateral, other than taxes and assessments being contested in good
faith and by appropriate proceedings, and for which adequate reserves are
maintained on the books of the Debtor in accordance with GAAP.

                  (g) Insurance. Debtor shall maintain insurance with respect to
the Collateral in accordance with the insurance standards and practices adhered
to generally by owners of like collateral.

                                       4

<PAGE>   5

         5. SECRECY AND ASSIGNMENT OF INTELLECTUAL PROPERTY. Debtor will use
commercially reasonable efforts to ensure that each current and future employee
and contractor hired or engaged by Debtor who receives trade secrets or other
confidential and proprietary information of Debtor and/or who in the course of
his/her employment or engagement with Debtor is involved in any way whatsoever
with the Intellectual Property executes and delivers to Debtor a Debtor's
employee or contractor invention assignment and confidentiality agreement, in
Debtor's customary form, imposing invention and intellectual property rights
assignment obligations and confidentiality obligations on the part of such
employee or contractor to Debtor. Debtor will further take reasonable steps and
procedures to preserve and protect the secrecy of Debtor's trade secrets and
other confidential or proprietary information.

         6. APPOINTMENT OF SECURED PARTY AS ATTORNEY-IN-FACT.

                  (a) Powers. Debtor hereby irrevocably constitutes and appoints
Secured Party, and any agent of Secured Party, with full power of substitution,
as its true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of Debtor and in the name of Debtor or in the
name of Secured Party, from time to time in Secured Party's discretion, for the
purpose of carrying out the terms of this Agreement, to take any and all
appropriate actions and to execute any and all documents which may be necessary
or desirable to accomplish the purposes of this Agreement, including (without
limiting the generality of the foregoing) to execute, in connection with any
sale or other disposition of Collateral pursuant to Section 7 hereof, any
endorsements, assignments, bills of sale, licenses or other instruments of
conveyance or transfer with respect to the Collateral. This power of attorney is
a power coupled with an interest and is irrevocable.

                  (b) No Duty on Secured Party's Part. The powers conferred on
Secured Party hereunder are solely to protect Secured Party's interests in the
Collateral and will not impose any duty upon it to exercise any such powers.
Secured Party and its agents will not be responsible to Debtor for any act or
failure to act hereunder, except for Secured Party's own gross negligence or
willful misconduct. It is further agreed and understood between the parties
hereto that such care as Secured Party gives to the safekeeping of its own
property of like kind shall constitute reasonable care of the Collateral when in
Secured Party's possession.

         7. SECURED PARTY'S RIGHTS AND REMEDIES; RELEASE.

                  (a) General Remedies. If an Event of Default occurs, then in
addition to exercising any other right or remedies Secured Party may have under
the Note, at law or in equity, or pursuant to the provisions of the Code,
Secured Party may, at its sole option and without demand first made, exercise
any one, some or all of the following rights and remedies:

                           (i)         Collect the Collateral and its Proceeds;

                           (ii)        Take possession of the Collateral and its
Proceeds wherever such may be found or require Debtor to assemble the Collateral
and make it available to Secured

                                       5

<PAGE>   6

Party at a place designated by Secured Party which is reasonably convenient to
Debtor and Secured Party;

                           (iii)       Proceed with the foreclosure of the
security interest in the Collateral or any part thereof granted herein and the
sale or endorsement and collection of the Proceeds of such Collateral in any
manner permitted by law or provided for herein;

                           (iv)        Sell, lease, license or otherwise dispose
of the Collateral or any part thereof at public or private sale, with or without
having the Collateral at the place of sale, after giving Debtor ten (10) days
prior written notice of such sale, lease, license or other disposition of
Collateral;

                           (v)         Institute a suit or other action against
Debtor for recovery on the Note;

                           (vi)        Exercise any rights and remedies of a
secured party under the Code; and/or

                           (vii)       With respect to any Software, Inventions,
Documentation, Intellectual Property and Licenses, in the exercise of the rights
of a secured party under applicable law with respect thereto, and subject to the
rights of any licensor of any such property not owned by Debtor, use, exercise,
practice, reproduce, perform, display, distribute, create derivative works,
make, have made, sell, license, sublicense, transfer, assign and commercialize.

                  (b) No Election of Remedies. The election by Secured Party of
any right or remedy will not prevent Secured Party from exercising any other
right or remedy against Debtor.

                  (c) Proceeds. If an Event of Default occurs, all proceeds and
payments with respect to the Collateral will be retained by Secured Party (or,
if received by Debtor, will be held in trust and will be delivered by Debtor to
Secured Party in the original form received, endorsed in blank) and held by
Secured Party as part of the Collateral or applied by Secured Party to the
payment of the Obligations.

                  (d) Sale of Collateral. Any item of Collateral may be sold,
leased or licensed or otherwise disposed of for cash or other value at public or
private sale or other disposition and the Proceeds thereof collected by or for
Secured Party. Debtor agrees to promptly execute and deliver, or promptly cause
to be executed and delivered, such instruments, documents, assignments, waivers,
certificates and affidavits and supply or cause to be supplied such further
information and take such further action as Secured Party may require in
connection with any such sale or disposition. Secured Party shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in Debtor, which
right or equity is hereby waived or released. If any notice of a proposed sale,
lease, license or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least ten (10) days
before such sale, lease, license or other disposition. Secured

                                       6

<PAGE>   7

Party agrees to give Debtor ten (10) days prior written notice of any sale,
lease, license or other disposition of Collateral (or any part thereof) by
Secured Party.

                  (e) Application of Proceeds. The Proceeds of all sales and
collections in respect of the Collateral, the application of which is not
otherwise specifically herein provided for, will be applied as follows:

                           (i)      First, to the payment of the costs and
expenses of such sale or sales and collections and the attorneys' fees and
out-of-pocket expenses incurred by Secured Party relating to costs of
collection;

                           (ii)     Second, any surplus then remaining will be
applied first, to the payment of all unpaid interest accrued under the Note,
next to the payment of unpaid principal under the Note, and next to the
satisfaction of any remaining Obligations; and

                           (iii)    Third, any surplus then remaining will be
paid to Debtor.

                  (f) Liability for Deficiency. Debtor will remain liable for
any deficiency if the Proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Obligations and the fees and
disbursements of any attorneys or agents employed by Secured Party to collect
such deficiency.

                  (g) Limitation on Duties Regarding Collateral. Secured Party's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under the Code or otherwise, shall be to deal
with it in the same manner as Secured Party deals with similar property for its
own account. Secured Party and its agents will not be liable for failure to
demand, collect or realize upon all or any part of the Collateral or for any
delay in doing so nor will any of them be under any obligation to sell or
otherwise dispose of any Collateral upon the request of Debtor or otherwise.

                  (h) Release. Upon the full and complete payment and
performance when due of the Obligations, upon Debtor's written request and at
Debtor's sole expense, Secured Party will promptly and duly execute and deliver
such further instruments and documents and take such further action as Debtor
may reasonably request for the purpose of releasing or terminating the security
interests granted under this Agreement.

         8. GOVERNING LAW; VENUE.

                           (i)      This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California, without reference to principles of conflict of laws or choice of
laws (except to the extent governed by the UCC).

                           (ii)     The parties agree that any dispute
regarding the interpretation or validity of, or otherwise arising out of this
Agreement, shall be subject to the exclusive jurisdiction of the California
State Courts in and for Santa Clara County, California, or, in the

                                       7

<PAGE>   8

event of federal jurisdiction, the United States District Court for the Northern
District of California sitting in Santa Clara County, California, and each party
hereby agrees to submit to the personal and exclusive jurisdiction and venue of
such courts and not to seek the transfer of any case or proceeding out of such
courts.

         9. NO WAIVER. Secured Party will not by any act (except by a written
instrument pursuant to Section 11 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Event of Default or in any breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in exercising, on the
part of Secured Party, any right, power or privilege hereunder will operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder will preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. A waiver by Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which Secured Party would otherwise have on any future occasion.
The rights and remedies of Secured Party herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.

         10. SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of the parties; provided, however, that Debtor may not assign or
delegate any of its rights or obligations hereunder without Secured Party's
prior written consent, and any assignment or delegation without such consent
shall be void. Nothing herein shall be interpreted to prevent, limit or
otherwise restrain Debtor's grant of licenses to customers and other third
parties in the ordinary course of its business.

         11. AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of both Debtor and Secured Party.

         12. RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies herein
provided will be cumulative and not exclusive of any other rights or remedies
provided by law or otherwise.

         13. SEVERABILITY. If any provision of this Agreement, or the
application thereof, will for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances will be interpreted so as reasonably to effect
the intent of the parties hereto. The parties further agree to replace such void
or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and
other purposes of the void or unenforceable provision.

         14. NOTICES. Any notice or other communication required or permitted to
be given under this Agreement shall be in writing, shall be delivered by hand or
overnight courier service, by certified mail, postage prepaid, or by facsimile,
and will be deemed given upon delivery, if

                                       8

<PAGE>   9

delivered personally, one business day after deposit with a national courier
service for overnight delivery, or one business day after transmission by
facsimile with confirmation of receipt, and three days after deposit in the
mails, if mailed, to the following addresses:

                  (i)  If to Secured Party:

                                    Caldera International, Inc.
                                    240 West Center Street
                                    Orem, Utah 84057
                                    Attention:  President and CEO

                                    With a copy (which shall not constitute
                                    notice) to:

                                    Brobeck Phleger & Harrison LLP
                                    370 Interlocken Blvd., Suite 500
                                    Broomfield, Colorado  80021
                                    Attention:  John E. Hayes, III

                  (ii)  If to Debtor:

                                    The Santa Cruz Operation, Inc.
                                    425 Encinal
                                    Santa Cruz, California 95061
                                    Attention:  Chief Executive Officer and Law
                                                and Corporate Affairs

                                    With a copy (which shall not constitute
                                    notice) to:

                                    Wilson, Sonsini, Goodrich & Rosati
                                    650 Page Mill Road
                                    Palo Alto, California 94304
                                    Attention:  Michael Danaher

or to such other address as a party may have furnished to the other parties in
writing pursuant to this Section 14, except that notices of change of address
shall only be effective upon receipt.

         15. ATTORNEYS' FEES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to recover, as an element of the costs of suit and not as damages,
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled. The prevailing party will be
entitled to recover its costs of suit, regardless of whether such suit proceeds
to final judgment.

         16. ENTIRE AGREEMENT. This Agreement and the Loan Documents and all
exhibits and schedules hereto and thereto, when taken together, constitute the
entire understanding and agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior

                                       9

<PAGE>   10

and contemporaneous agreements or understandings, inducements or conditions,
express or implied, written or oral, between the parties with respect hereto.

         17. CONSTRUCTION OF AGREEMENT. This Agreement has been negotiated by
the respective parties hereto and their attorneys and the language hereof will
not be construed for or against either party. Unless otherwise explicitly set
forth, a reference to a Section or an Exhibit will mean a Section in, or Exhibit
to, this Agreement, all of which Exhibits are incorporated herein by this
reference. The titles and headings herein are for reference purposes only and
will not in any manner limit the construction of this Agreement, which will be
considered as a whole.

         18. COUNTERPARTS. This 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. This Agreement will
become binding when one or more counterparts hereof, individually or taken
together, will bear the signatures of all parties reflected hereon as
signatories.

                           [SIGNATURE PAGE TO FOLLOW]

                                       10
<PAGE>   11

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

DEBTOR:                                      SECURED PARTY:

THE SANTA CRUZ OPERATION, INC.               CALDERA SYSTEMS, INC.

By:                                          By:
   --------------------------------              -------------------------------

Name:                                        Name:
     ------------------------------                -----------------------------

Title:                                       Title:
      -----------------------------                 ----------------------------

                  [SIGNATURE PAGE TO SECURITY AGREEMENT BETWEEN
            THE SANTA CRUZ OPERATION, INC. AND CALDERA SYSTEMS, INC.]

ATTACHMENTS:

Exhibit A - Definitions

Exhibit B - Liens

                                       11
<PAGE>   12

                                    EXHIBIT A

                                   DEFINITIONS

         As used in the Security Agreement to which this Exhibit A is attached,
the following terms will have the following meanings:

         (a) "CAPITALIZED LEASE OBLIGATIONS" shall mean any and all lease
obligations that, in accordance with GAAP, are required to be capitalized on the
books of a lessee.

         (b) "CODE" means the Uniform Commercial Code (or successor law) as from
time to time in effect in the State of California.

         (c) "COLLATERAL" will have the meaning assigned to such term in Section
2 of the Security Agreement.

         (d) "COPYRIGHTS" means all past, present and future copyrights,
copyright applications and copyright registrations in the United States and in
any and all other countries and jurisdictions, including, without limitation,
all of the exclusive rights afforded a copyright owner in the United States
under 17 U.S.C. Section 106 and any rights relating to copyrights which may in
the future arise by act of Congress or any foreign governmental entity, and any
rights given to a copyright owner or registrant in or under any copyright
conventions, treaties or foreign laws, and further including, without
limitation, all renewals extensions, and modifications thereof, all income,
royalties, damages and payments now or hereafter due and/or payable under or
with respect thereto, the right to sue for, and to recover damages and receive
remedies for, all past, present and future infringements thereof, and all other
rights of any kind whatsoever accruing thereunder or pertaining thereto anywhere
in the world.

         (e) "DOCUMENTATION" means, collectively: (i) all documentation,
manuals, drawings, designs, plans, blueprints, specifications, schematics,
layouts, flow charts, logic diagrams, engineering and test reports, components
lists, customer lists, suppliers lists, user, installation or repair manuals,
programmers' notes, programming documentation, any recorded information
regarding any Invention, and any other works of authorship; (ii) all
documentation regarding the design, development, testing or manufacture of any
products or any equipment used to design, develop, test, or manufacture any such
products or components of such products; (iii) all field repair data, sales data
and other information relating to sales or service of any products; and (iv) all
media in which or on which any of the are recorded or stored or from which they
can be read or retrieved.

                                      A-1

<PAGE>   13

         (f) "EVENT OF DEFAULT" Ten (10) days after written notice from Secured
Party to Debtor for monetary defaults and thirty (30) days after written notice
from Secured Party to Debtor for non-monetary defaults, if such defaults are not
cured within such ten (10) day or thirty day (30) periods, respectively, each of
the following shall constitute an event of default ("EVENT OF DEFAULT") under
this Agreement:

                  (i)      Default in Payment. If Debtor fails to make any
payment due and payable under the terms of the Note, this Agreement or the Loan
Agreement.

                  (ii)     Representations and Warranties. If any of the
representations and warranties made by Borrower shall be false or misleading in
any material respect when made.

                  (iii)    Covenants. If Borrower shall be in material default
under any of the material terms, covenants, conditions, or obligations under any
Loan Document.

                  (iv)     Dissolution. If Borrower is dissolved.

                  (v)      Receiver. If a receiver, trustee, or custodian is
appointed for any part of the Collateral, or any part of the Collateral is
assigned for the benefit of creditors.

                  (vi)     Impairment to Lien. If at any time any lien created
under the Note, this Agreement or the Loan Agreement on any of the Collateral
may be impaired by any material lien, encumbrance or other defect other than the
Prior Liens or the Permitted Liens.

                  (vii)    Bankruptcy. If a petition in bankruptcy is filed
against Debtor, and such petition is not dismissed within ninety (90) days of
filing, a petition in bankruptcy is filed by Borrower or a receiver, trustee or
custodian of any part of the Collateral is appointed; or if Borrower files a
petition for reorganization under any of the provisions of the Bankruptcy Act or
any law, State or Federal, or makes an assignment for the benefit of creditors
or is adjudged insolvent by any State or Federal Court of competent
jurisdiction.

                  (viii)   Judgment or Attachment. If any writ, attachment,
citation, judgment, lien or distress warrant being issued against or levied on
the Collateral for an amount in excess of $100,000.00 and such judgment or
attachment is not vacated, discharged, stayed or bonded pending appeal, or paid
or otherwise fully satisfied within thirty (30) days of the date it is entered.

                  (ix)     Diminished Value. If the Collateral is subject to any
uninsured loss, theft, damage or destruction to the Collateral which materially
and substantially diminishes the value of the Collateral.

         (g) "GENERAL INTANGIBLES" has the meaning as set forth in Section 2(a)
of this Agreement.

         (h) "GOVERNMENTAL AUTHORITY" shall mean any domestic or foreign
national, state or local government, any political subdivision thereof, any
department, agency, authority or bureau

                                      A-2

<PAGE>   14

of any of the foregoing, or any other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

         (i) "GOVERNMENTAL CHARGES" shall mean all taxes, levies, assessments,
fees, claims or other charges imposed by any Governmental Authority upon or
relating to (i) Debtor, (ii) the Note, (iii) employees, payroll, income or gross
receipts of Debtor, (iv) the ownership or use of any of its assets by Debtor, or
(v) any other aspect of the business of Debtor.

         (j) "INTELLECTUAL PROPERTY" means, any, some or all of the following:
(i) Copyrights, Patents, Mask Works, Trademarks, know-how, trade secrets,
proprietary information, Moral Rights and any and all other forms of
intellectual property; (ii) all Licenses and similar rights granted to or held
by Debtor with respect to any Copyrights, Patents, Mask Works, Trademarks,
Inventions, Software, Documentation, know-how, trade secrets, proprietary
information, Moral Rights or other form of intellectual property, (iii) all
licenses, consents, permits, variances, certifications and approvals of
governmental agencies; and (iv) all causes of action, claims and warranties in
respect of any of the items listed above.

         (k) "INVENTIONS" means all past, present and future inventions,
improvements, enhancements, processes, production or manufacturing methods,
compositions of matter, formulas, Software, works of authorship, data, and other
proprietary information, whether or not protected or protectable by copyright,
patent, mask work, trade secret or other laws regarding intellectual property.

         (l) "LICENSES" means all past, present and future licenses,
sublicenses, covenants-not-to-sue, consents and authorizations relating to any
Intellectual Property, Documentation, Software or Inventions.

         (m) "LOAN DOCUMENTS" means the Note, the Intercreditor Agreement, and
this Agreement together with all schedules and exhibits attached thereto.

         (n) "MASK WORK" means mask work as defined in the Semiconductor Chip
Protection Act of 1984 and all registrations of claims of protection for such
mask work under the laws of the United States of America or any other
jurisdiction.

         (o) "MORAL RIGHTS" means any right to claim authorship to or to object
to any distortion, mutilation, or other modification or other derogatory action
in relation to a work, whether or not such would be prejudicial to the author's
reputation, and any similar right, existing under common or statutory law of any
country in the world or under any treaty, regardless of whether or not such
right is denominated or generally referred to as a "moral right." "Moral Rights"
include, without limitation, anything designated as a moral right under any law,
statute, treaty or convention.

         (p) "OBLIGATIONS" means all obligations, liabilities and indebtedness
of Debtor to Secured Party and/or its assigns, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter
incurred, which may arise under or out of the Note and the

                                      A-3

<PAGE>   15

Loan Documents, whether for obligations with respect to principal, interest,
costs, expenses (including, without limitation, all reasonable fees and
disbursements of counsel to Secured Party) or otherwise.

         (q) "PATENTS" means all past, present and future patents and patent
applications in the United States and in all other countries and jurisdictions,
including, without limitation, the inventions and improvements described or
claimed therein, together with the reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof, and all rights given to a patent
owner in or under any patent conventions, treaties and foreign laws, and further
including, without limitation, all income, royalties, damages and payments now
or hereafter due and/or payable under or with respect thereto, the right to sue
for, and to recover damages and receive remedies for, all past, present and
future infringements thereof, and all rights of any kind accruing thereunder or
pertaining thereto anywhere in the world.

         (r) "PERMITTED LIENS" shall mean and include:

                  (i)      Liens securing obligations of less than $50,000 each,
and that are:

                           (A)      Liens for taxes or other Governmental
Charges not at the time delinquent or thereafter payable without penalty or
being contested in good faith, provided provision is made to the reasonable
satisfaction of Secured Party for the eventual payment thereof if subsequently
found payable, (adequate reserves maintained on the books of the Debtor in
accordance with GAAP shall be deemed reasonably satisfactory to Secured Party);

                           (B)      Liens of carriers, warehousemen, mechanics,
materialmen, vendors, and landlords incurred in the ordinary course of business
for sums not overdue or being contested in good faith, provided provision is
made to the reasonable satisfaction of Secured Party for the eventual payment
thereof if subsequently found payable;

                           (C)      Deposits under workers' compensation,
unemployment insurance and social security laws or to secure the performance of
bids, tenders, contracts (other than for the repayment of borrowed money) or
leases, or to secure statutory obligations of surety or appeal bonds or to
secure indemnity, performance or other similar bonds in the ordinary course of
business;

                           (D)      Liens securing obligations under a
Capitalized Lease Obligation or operating lease and if such Liens do not extend
to property other than the property leased under such Capitalized Lease
Obligation or operating lease; and

                           (E)      Liens upon any equipment acquired or held
by Debtor to secure the purchase price of such equipment or indebtedness
incurred solely for the purpose of financing the acquisition of such equipment;

                           (F)      Easements, reservations, rights of way,
restrictions, minor defects or irregularities in title and other similar charges
or encumbrances affecting real property in a manner not materially or adversely
affecting the value or use of such property;

                                      A-4

<PAGE>   16

                           (G)      Liens on insurance proceeds in favor of
insurance companies to secure the financing of insurance premiums;

                           (H)      Liens which constitute rights of setoff of a
customary nature or bankers' Liens with respect to amounts on deposit, whether
arising by operation of law or by contract, in connection with arrangements
entered into with banks in the ordinary course of business not relating to a
financing transaction;

                  (ii)     Liens arising out of a judgment or award in
circumstances not constituting an Event of Default;

                  (iii)    Leases, subleases, licenses and sublicenses entered
into by Debtor in the ordinary course of business;

                  (iv)     Liens in favor of Secured Party, or;

                  (v)      Liens that have been approved in writing by Secured
Party.

                  (vi)     Liens incurred in connection with the extension,
renewal or refinancing of the indebtedness secured by liens of the type
described in clauses (i) through (v) above, provided that any extension, renewal
or replacement lien shall be limited to the property encumbered by the existing
lien and the principal amount of the indebtedness being extended, renewed or
refinanced does not increase.

         (s) "PRIOR LIENS" means liens that are not Permitted Liens and are
listed in Exhibit B and attached hereto.

         (t) "PROCEEDS" means whatever is received upon the sale, exchange,
collection, licensing or other disposition of Collateral or proceeds of
Collateral, including, without limitation, insurance proceeds.

         (u) "SOFTWARE" means all past, present and future computer programs, in
any and all forms including source code, object code, executable code, binary
code and machine readable code, and including applications, system software,
communications software, development tools, software utilities, development
environments, interfaces, and other computer code, and further including the
graphics, sounds, data and other content in or generated by the foregoing
computer programs. The Software includes, but is not limited to, the Software
identified in Exhibit B.

         (v) "TRADEMARKS" means all past, present and future trade names,
trademarks, trademark applications, trademark registrations, service marks,
service mark applications, and service mark registrations in the United States
and any and all other countries and jurisdictions, including, without
limitation, all renewals of trademark and service mark registrations, and all
rights given to a trademark or service mark owner or registrant in or under any
trademark or service mark conventions, treaties and foreign laws, and further
including, without limitation, all income, royalties, damages and payments now
or hereafter due and/or payable under or with respect thereto, the right to sue
for, and to recover damages and receive remedies for, all past, present and
future infringements thereof, and all rights of any kind accruing thereunder or
pertaining thereto anywhere in the world.

                                      A-5

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