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                                                                    EXHIBIT 10.4
                              DURECT CORPORATION

                       2000 EMPLOYEE STOCK PURCHASE PLAN
                       ---------------------------------

     The following constitute the provisions of the 2000 Employee Stock Purchase
Plan of Durect Corporation.

     1.  Purpose.  The purpose of the Plan is to provide employees of the
         -------
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company.  It is the intention of the Company to have the Plan
qualify as an "Employee Stock Purchase Plan" under Section 423 of the Code.  The
provisions of the Plan shall, accordingly, be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

     2.  Definitions.
         -----------

         (a) "Board" means the Board of Directors of the Company.
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         (b) "Code" means the Internal Revenue Code of 1986, as amended.
              ----

         (c) "Common Stock" means the Common Stock of the Company.
              ------------

         (d) "Company" means Durect Corporation, a Delaware corporation.
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         (e) "Compensation" means all regular straight time gross earnings, and
              ------------
shall not include payments for overtime, shift premium, incentive compensation,
incentive payments, bonuses, commissions and other compensation.

         (f) "Continuous Status as an Employee" means the absence of any
              --------------------------------
interruption or termination of service as an Employee.  Continuous Status as an
Employee shall not be considered interrupted in the case of (i) sick leave; (ii)
military leave; (iii) any other leave of absence approved by the Administrator,
provided that such leave is for a period of not more than 90 days, unless
reemployment upon the expiration of such leave is guaranteed by contract or
statute, or unless provided otherwise pursuant to Company policy adopted from
time to time; or (iv) in the case of transfers between locations of the Company
or between the Company and its Designated Subsidiaries.

         (g) "Contributions" means all amounts credited to the account of a
              -------------
participant pursuant to the Plan.

         (h) "Corporate Transaction" means a sale of all or substantially all
              ---------------------
of the Company's assets, or a merger, consolidation or other capital
reorganization of the Company with or into another corporation.

         (i) "Designated Subsidiaries" means the Subsidiaries which have been
              -----------------------
designated by the Board from time to time in its sole discretion as eligible to
participate in the Plan; provided however that the Board shall only have the
discretion to designate Subsidiaries if
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the issuance of options to such Subsidiary's Employees pursuant to the Plan
would not cause the Company to incur adverse accounting charges.

          (j) "Employee" means any person, including an Officer, who is
               --------
customarily employed for at least twenty (20) hours per week and more than five
(5) months in a calendar year by the Company or one of its Designated
Subsidiaries.

          (k) "Exchange Act" means the Securities Exchange Act of 1934, as
               ------------
amended.

          (l) "Offering Date" means the first business day of each Offering
               -------------
Period of the Plan.

          (m) "Offering Period" means a period of twenty-four (24) months
               ---------------
commencing on May 1 and November 1 of each year, except for the first Offering
Period and as otherwise as set forth in Section 4(a).

          (n) "Officer" means a person who is an officer of the Company within
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the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

          (o) "Plan" means this Employee Stock Purchase Plan.
               ----

          (p) "Purchase Date" means the last day of each Purchase Period of the
               -------------
Plan.

          (q) "Purchase Period" means a period of six (6) months within an
               ---------------
Offering Period, except for the first Purchase Period as set forth in Section
4(b).

          (r) "Purchase Price" means with respect to a Purchase Period an amount
               --------------
equal to 85% of the Fair Market Value (as defined in Section 7(b) below) of a
Share of Common Stock on the Offering Date or on the Purchase Date, whichever is
lower; provided, however, that in the event (i) of any increase in the number of
Shares available for issuance under the Plan as a result of a stockholder-
approved amendment to the Plan, and (ii) all or a portion of such additional
Shares are to be issued with respect to one or more Offering Periods that are
underway at the time of such increase ("Additional Shares"), and (iii) the Fair
                                        -----------------
Market Value of a Share of Common Stock on the date of such increase (the

"Approval Date Fair Market Value") is higher than the Fair Market Value on the
--------------------------------
Offering Date for any such Offering Period, then in such instance the Purchase
Price with respect to Additional Shares shall be 85% of the Approval Date Fair
Market Value or the Fair Market Value of a Share of Common Stock on the Purchase
Date, whichever is lower.

          (s) "Share" means a share of Common Stock, as adjusted in accordance
               -----
with Section 19 of the Plan.

          (t) "Subsidiary" means a corporation, domestic or foreign, of which
               ----------
not less than 50% of the voting shares are held by the Company or a Subsidiary,
whether or not such corporation now exists or is hereafter organized or acquired
by the Company or a Subsidiary.

                                      -2-
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     3.   Eligibility.
          -----------

          (a) Any person who is an Employee as of the Offering Date of a given
Offering Period shall be eligible to participate in such Offering Period under
the Plan, subject to the requirements of Section 5(a) and the limitations
imposed by Section 423(b) of the Code.

          (b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own capital stock of
the Company and/or hold outstanding options to purchase stock possessing five
percent (5%) or more of the total combined voting power or value of all classes
of stock of the Company or of any subsidiary of the Company, or (ii) if such
option would permit his or her rights to purchase stock under all employee stock
purchase plans (described in Section 423 of the Code) of the Company and its
Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars
($25,000) of the Fair Market Value (as defined in Section 7(b) below) of such
stock (determined at the time such option is granted) for each calendar year in
which such option is outstanding at any time.

     4.   Offering Periods and Purchase Periods.
          -------------------------------------

          (a) Offering Periods.  The Plan shall be implemented by a series of
              ----------------
Offering Periods of approximately twenty-four (24) months duration, with new
Offering Periods commencing on or about May 1 and November 1 of each year (or at
such other time or times as may be determined by the Board of Directors).  If
and to the extent the Board takes action prior to the effective date of the
Company's Registration Statement on Form S-1 for the initial public offering of
the Company's Common Stock (the "IPO Date") to grant eligible Employees options
                                 --------
to participate in an Offering Period beginning on the IPO Date (such period, the
"IPO Offering Period"), then such period shall begin on the IPO Date and
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continue until October 31, 2002.  The Plan shall continue until terminated in
accordance with Section 20 hereof.  The Board of Directors of the Company shall
have the power to change the duration and/or the frequency of Offering Periods
with respect to future offerings without stockholder approval if such change is
announced at least five (5) days prior to the scheduled beginning of the first
Offering Period to be affected.

          (b) Purchase Periods.  Each Offering Period shall consist of four (4)
              ----------------
consecutive Purchase Periods of six (6) months' duration.  The last day of each
Purchase Period shall be the "Purchase Date" for such Purchase Period.  A
                              -------------
Purchase Period commencing on May 1 shall end on the next October 31 and
Purchase Period commencing on November 1 shall end on the next April 30.  If the
Board takes action to cause there to be an IPO Offering Period, then the first
Purchase Period shall commence on the IPO Date and shall end on April 30, 2001.
The Board of Directors of the Company shall have the power to change the
duration and/or frequency of Purchase Periods with respect to future purchases
without stockholder approval if such change is announced at least five (5) days
prior to the scheduled beginning of the first Purchase Period to be affected.

                                      -3-
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     5.   Participation.
          -------------

          (a) Except with respect to the IPO Offering Period, if any, an
eligible Employee may become a participant in the Plan by completing a
subscription agreement on the form provided by the Company and filling it with
the Company prior to the applicable Offering Date.  The subscription agreement
shall set forth the percentage of the participant's Compensation (subject to
Section 6(a) below) to be paid as Contributions pursuant to the Plan.  With
respect to the IPO Offering Period, if any, an eligible Employee will become a
participant in the Plan by the Board's taking action prior to the IPO Date to
grant such persons options to purchase Shares pursuant to the Plan.

          (b) Except with respect to the IPO Offering Period, if any, payroll
deductions shall commence on the first payroll paid following the Offering Date
and shall end on the last payroll paid on or prior to the last Purchase Period
of the Offering Period to which the subscription agreement is applicable, unless
sooner terminated by the participant as provided in Section 10.  With respect to
the IPO Offering Period, payroll deductions shall commence on the first payroll
date following the date, if any, on which the participant elects pursuant to
Section 6(b) below to have amounts withheld from his or her Compensation.

     6.   Method of Payment For Purchase of Shares.
          ----------------------------------------

          (a)  Except with respect to the first Purchase Period of the IPO
Offering Period, if any, this Plan shall be operated as a payroll deduction
plan.

          (i)  IPO Offering Period.  A participant in the IPO Offering Period
               -------------------
shall make payment for the purchase of Shares by (A) making a lump sum cash
payment to the Company on or prior to the first Purchase Date for such Offering
Period for the amount of the purchase price for the Shares being purchased
(after which date an Employee wishing to continue participating in the Plan
shall participate on a payroll deduction basis unless the participant withdraws
from the Plan under Section 10), or (B) electing, following the IPO Date, to
have amounts directly withheld from the Employee's Compensation pursuant to
Section 6(a)(ii).  To the extent that a participant purchases Shares on the
first Purchase Date of the IPO Offering Period by delivering a check to the
Company, such delivery and purchase shall operate, unless the participant
withdraws from the Plan pursuant to Section 10, as an election by the
participant to continue participating in the Plan on the payroll deduction basis
described in Section 6(a)(ii) and the Company shall withhold from the
participant's Compensation beginning with the first payroll paid following such
first Purchase Date at a Contribution rate equal to the ratio that the aggregate
purchase price paid for Shares purchased on such Purchase Date bears to the
participant's total Compensation during that Purchase Period (which rate shall
not exceed the percentage specified in Section 6(a)(ii)).

          (ii)  Other Periods.  A participant shall elect to have payroll
                -------------
deductions made on each payday during an Offering Period in an amount not less
than one percent (1%) and not more than twenty percent (20%) (or such other
maximum percentage as the Board may establish from time to time before an
Offering Date) of such participant's Compensation on each payday during the
Offering Period; provided that to the extent a

                                      -4-
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participant is participating in more than one Offering Period, the maximum
aggregate percentage of Compensation that he or she may contribute under the
Plan shall be twenty percent (20%) (or such other maximum percentage as the
Board may establish from time to time before an Offering Date). All payroll
deductions made by a participant shall be credited to his or her account under
the Plan. Once a participant is participating in the Plan on a payroll deduction
basis, he or she may not make any additional payments into such account.

          (b)  A participant may discontinue his or her participation in the
Plan as provided in Section 10, or, on one occasion only during a Purchase
Period may increase and on one occasion only during a Purchase Period may
decrease the rate of his or her Contributions with respect to the Offering
Period, by completing and filing with the Company a new subscription agreement
authorizing a change in the payroll deduction rate. Any change in rate of
Contributions pursuant to the preceding sentence shall be effective as of the
beginning of the next calendar month following the date of filing of the new
subscription agreement, provided the agreement indicating such change is filed
at least ten (10) business days prior to such date and, if not, then as of the
beginning of the next succeeding calendar month. With respect to the IPO
Offering Period, any election by a participant to commence payroll deductions
under the Plan following the IPO Date at a rate of Compensation that would
result in his or her purchasing less than the full amount of Shares that he or
she could purchase under the option granted to him or her by the Board
(including a deemed election pursuant to the second sentence of Section 6(a)(i))
shall not count as a decrease in participation for purposes of the first
sentence of this Section 6(b).

          (c)  Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b), a participant's payroll
deductions may be decreased by the Company to 0% at any time during a Purchase
Period.  Payroll deductions shall re-commence at the rate provided in such
participant's subscription agreement at the beginning of the first Purchase
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10.  In addition, a
participant's payroll deductions may be decreased by the Company to 0% at any
time during a Purchase Period in order to avoid unnecessary payroll
contributions as a result of application of the maximum share limit set forth in
Section 7(a), or as a result of the limitations set forth in Section 3(b), in
which case payroll deductions shall re-commence at the rate provided in such
participant's subscription agreement at the beginning of the next Purchase
Period, unless terminated by the participant as provided in Section 10.

          (d)  At the time the option is exercised, in whole or in part, or at
the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but shall not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the participant.

                                      -5-
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     7.   Grant of Option.
          ---------------

          (a) Except with respect to the IPO Offering Period, if any, and
subject to the final sentence of this Section 7(a), on the Offering Date of each
Offering Period, each eligible Employee participating in such Offering Period
shall be granted an option to purchase on each Purchase Date a number of Shares
of the Company's Common Stock determined by dividing such Employee's
Contributions accumulated prior to such Purchase Date and retained in the
participant's account as of the Purchase Date by the applicable Purchase Price.
With respect to the IPO Offering Period, if any, each eligible Employee shall be
granted an option to purchase on each Purchase Date a number of Shares of the
Company's Common Stock determined by dividing the maximum amount specified by
the Board in granting the option (which amount shall be a percentage of such
Employee's Compensation) by the applicable Purchase Price.  Notwithstanding the
above, the maximum number of Shares an Employee may purchase during each
Purchase Period of any Offering Period (including the IPO Offering Period) shall
be 2,000 Shares (subject to any adjustment pursuant to Section 19 below), and
provided further that such purchase shall be subject to the limitations set
forth in Sections 3(b) and 13.

          (b) The fair market value of the Company's Common Stock on a given
date (the "Fair Market Value") shall be determined by the Board in its
           -----------------
discretion based on the closing price of the Common Stock for such date (or, in
the event that the Common Stock is not traded on such date, on the immediately
preceding trading date), as reported by the National Association of Securities
Dealers Automated Quotation (Nasdaq) National Market or, if such price is not
reported, the mean of the bid and asked prices per share of the Common Stock as
reported by Nasdaq or, in the event the Common Stock is listed on a stock
exchange, the Fair Market Value per share shall be the closing sales price on
such exchange on such date (or, in the event that the Common Stock is not traded
on such date, on the immediately preceding trading date), as reported in The
                                                                         ---
Wall Street Journal.  For purposes of the IPO Offering Period, if any, the Fair
-------------------
Market Value of a share of the Common Stock of the Company shall be the Price to
Public as set forth in the final prospectus filed with the Securities and
Exchange Commission pursuant to Rule 424 under the Securities Act of 1933, as
amended.

     8.   Exercise of Option.  Except with respect to the first Purchase Period
          ------------------
of the IPO Offering Period, if any, and unless a participant withdraws from the
Plan as provided in Section 10, his or her option for the purchase of Shares
will be exercised automatically on each Purchase Date of an Offering Period, and
the maximum number of full Shares subject to the option will be purchased at the
applicable Purchase Price with the accumulated Contributions in his or her
account. With respect to the first Purchase Period of the IPO Offering Period, a
participant's option thereunder shall either be exercised as provided in the
preceding sentence or by the participant's delivering to the Company a check for
the full amount of the purchase price of the Shares being purchased (which
number of Shares may be less than the entire number of Shares subject to the
option granted by the Board) prior to the time of purchase for such Purchase
Date.  No fractional Shares shall be issued.  The Shares purchased upon exercise
of an option hereunder shall be deemed to be transferred to the participant on
the Purchase Date.  During his

                                      -6-
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or her lifetime, a participant's option to purchase Shares hereunder is
exercisable only by him or her.

     9.   Delivery.  As promptly as practicable after each Purchase Date of each
          --------
Offering Period, the Company shall arrange the delivery to each participant, as
appropriate, of the Shares purchased upon exercise of his or her option.  No
fractional Shares shall be purchased; any payroll deductions accumulated in a
participant's account which are not sufficient to purchase a full Share shall be
retained in the participant's account for the subsequent Purchase Period or
Offering Period, subject to earlier withdrawal by the participant as provided in
Section 10 below.  Any other amounts left over in a participant's account after
a Purchase Date shall be returned to the participant.

     10.  Voluntary Withdrawal; Termination of Employment.
          -----------------------------------------------

          (a) A participant may withdraw all but not less than all the
Contributions credited to his or her account under the Plan at any time prior to
each Purchase Date by giving written notice to the Company.  All of the
participant's Contributions credited to his or her account will be paid to him
or her promptly after receipt of his or her notice of withdrawal and his or her
option for the current period will be automatically terminated, and no further
Contributions for the purchase of Shares will be made during the Offering
Period. With respect to the IPO Offering Period, a participant who has not
previously chosen to have amounts withheld from his or her Compensation shall be
considered to have withdrawn from such period if he or she fails to exercise the
options granted hereunder by delivering to the Company the full amount of the
purchase price for the Shares being purchased (which number of Shares may be
less than the entire number of Shares subject to the option granted by the
Board) for the first Purchase Period within the IPO Offering Period.

          (b) Upon termination of the participant's Continuous Status as an
Employee prior to the Purchase Date of an Offering Period for any reason,
including retirement or death, the Contributions credited to his or her account
will be returned to him or her or, in the case of his or her death, to the
person or persons entitled thereto under Section 15, and his or her option will
be automatically terminated.

          (c) In the event an Employee fails to remain in Continuous Status as
an Employee of the Company for at least twenty (20) hours per week during the
Offering Period in which the employee is a participant, he or she will be deemed
to have elected to withdraw from the Plan and the Contributions credited to his
or her account will be returned to him or her and his or her option terminated.

          (d) A participant's withdrawal from an offering will not have any
effect upon his or her eligibility to participate in a succeeding offering or in
any similar plan which may hereafter be adopted by the Company.

     11.  Automatic Withdrawal.  To the extent permitted by any applicable laws,
          --------------------
regulations or stock exchange rules, if the Fair Market Value of the Shares on
an Offering Date for an Offering Period (the "New Offering Period") commencing
within an Offering Period (the

                                      -7-
<PAGE>

"Ongoing Offering Period") then in progress, is lower than was the Fair Market
Value of the Shares on the Offering Date for the Ongoing Offering Period, then
every participant in the Ongoing Offering Period shall automatically be deemed
to have (i) withdrawn from the Ongoing Offering Period at the close of the
Purchase Period immediately preceding the New Offering Period, and (ii) to have
enrolled in such New Offering Period.

     12.  Interest.  No interest shall accrue on the Contributions of a
          --------
participant in the Plan.

     13.  Stock.
          -----

          (a) Subject to adjustment as provided in Section 19, the maximum
number of Shares which shall be made available for sale under the Plan shall be
150,000 Shares, plus an annual increase on the first day of each of the
Company's fiscal years beginning in 2001 through 2010 equal to the lesser of (i)
225,000 Shares (before giving effect to a stock split effected in connection
with the Company's initial public offering), (ii) one-half of one percent (0.5%)
of the Shares outstanding on the last day of the immediately preceding fiscal
year, or (iii) such lesser number of Shares as is determined by the Board.  If
the Board determines that, on a given Purchase Date, the number of shares with
respect to which options are to be exercised may exceed (i) the number of shares
of Common Stock that were available for sale under the Plan on the Offering Date
of the applicable Offering Period, or (ii) the number of shares available for
sale under the Plan on such Purchase Date, the Board may in its sole discretion
provide (x) that the Company shall make a pro rata allocation of the Shares of
Common Stock available for purchase on such Offering Date or Purchase Date, as
applicable, in as uniform a manner as shall be practicable and as it shall
determine in its sole discretion to be equitable among all participants
exercising options to purchase Common Stock on such Purchase Date, and continue
all Offering Periods then in effect, or (y) that the Company shall make a pro
rata allocation of the shares available for purchase on such Offering Date or
Purchase Date, as applicable, in as uniform a manner as shall be practicable and
as it shall determine in its sole discretion to be equitable among all
participants exercising options to purchase Common Stock on such Purchase Date,
and terminate any or all Offering Periods then in effect pursuant to Section 20
below.  The Company may make pro rata allocation of the Shares available on the
Offering Date of any applicable Offering Period pursuant to the preceding
sentence, notwithstanding any authorization of additional Shares for issuance
under the Plan by the Company's stockholders subsequent to such Offering Date.

          (b) The participant shall have no interest or voting right in Shares
covered by his or her option until such option has been exercised.

          (c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.

     14.  Administration.  The Board, or a committee named by the Board, shall
          --------------
supervise and administer the Plan and shall have full power to adopt, amend and
rescind any rules deemed desirable and appropriate for the administration of the
Plan and not inconsistent with the Plan, to

                                      -8-
<PAGE>

construe and interpret the Plan, and to make all other determinations necessary
or advisable for the administration of the Plan.

     15.  Designation of Beneficiary.
          --------------------------

          (a) A participant may file a written designation of a beneficiary who
is to receive any Shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to the end of a
Purchase Period but prior to delivery to him or her of such Shares and cash.  In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under the Plan in the event
of such participant's death prior to the Purchase Date of an Offering Period.
If a participant is married and the designated beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.

          (b) Such designation of beneficiary may be changed by the participant
(and his or her spouse, if any) at any time by written notice.  In the event of
the death of a participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such participant's death,
the Company shall deliver such Shares and/or cash to the executor or
administrator of the estate of the participant, or if no such executor or
administrator has been appointed (to the knowledge of the Company), the Company,
in its discretion, may deliver such Shares and/or cash to the spouse or to any
one or more dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as the
Company may designate.

     16.  Transferability.  Neither Contributions credited to a participant's
          ---------------
account nor any rights with regard to the exercise of an option or to receive
Shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 15) by the participant.  Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds in accordance with Section 10.

     17.  Use of Funds.  All Contributions received or held by the Company under
          ------------
the Plan may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such Contributions.

     18.  Reports.  Individual accounts will be maintained for each participant
          -------
in the Plan.  Statements of account will be given to participating Employees at
least annually, which statements will set forth the amounts of Contributions,
the per Share Purchase Price, the number of Shares purchased and the remaining
cash balance, if any.

     19.  Adjustments Upon Changes in Capitalization; Corporate Transactions.
          ------------------------------------------------------------------

          (a) Adjustment.  Subject to any required action by the stockholders of
              ----------
the Company, the number of Shares covered by each option under the Plan which
has not yet been exercised and the number of Shares which have been authorized
for issuance under the Plan but have not yet been placed under option
(collectively, the "Reserves"), as well as the maximum
                    --------

                                      -9-
<PAGE>

number of shares of Common Stock which may be purchased by a participant in a
Purchase Period, the number of shares of Common Stock set forth in Section 13(a)
above, and the price per Share of Common Stock covered by each option under the
Plan which has not yet been exercised, shall be proportionately adjusted for any
increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock (including any such change in the number of Shares of Common
Stock effected in connection with a change in domicile of the Company), or any
other increase or decrease in the number of Shares effected without receipt of
consideration by the Company; provided however that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issue by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of Shares subject to an option.

          (b) Corporate Transactions.  In the event of a dissolution or
              ----------------------
liquidation of the Company, any Purchase Period and Offering Period then in
progress will terminate immediately prior to the consummation of such action,
unless otherwise provided by the Board. In the event of a Corporate Transaction,
each option outstanding under the Plan shall be assumed or an equivalent option
shall be substituted by the successor corporation or a parent or Subsidiary of
such successor corporation.  In the event that the successor corporation refuses
to assume or substitute for outstanding options, each Purchase Period and
Offering Period then in progress shall be shortened and a new Purchase Date
shall be set (the "New Purchase Date"), as of which date any Purchase Period and
                   -----------------
Offering Period then in progress will terminate.  The New Purchase Date shall be
on or before the date of consummation of the transaction and the Board shall
notify each participant in writing, at least ten (10) days prior to the New
Purchase Date, that the Purchase Date for his or her option has been changed to
the New Purchase Date and that his or her option will be exercised automatically
on the New Purchase Date, unless prior to such date he or she has withdrawn from
the Offering Period as provided in Section 10.  For purposes of this Section 19,
an option granted under the Plan shall be deemed to be assumed, without
limitation, if, at the time of issuance of the stock or other consideration upon
a Corporate Transaction, each holder of an option under the Plan would be
entitled to receive upon exercise of the option the same number and kind of
shares of stock or the same amount of property, cash or securities as such
holder would have been entitled to receive upon the occurrence of the
transaction if the holder had been, immediately prior to the transaction, the
holder of the number of Shares of Common Stock covered by the option at such
time (after giving effect to any adjustments in the number of Shares covered by
the option as provided for in this Section 19); provided however that if the
consideration received in the transaction is not solely common stock of the
successor corporation or its parent (as defined in Section 424(e) of the Code),
the Board may, with the consent of the successor corporation, provide for the
consideration to be received upon exercise of the option to be solely common
stock of the successor corporation or its parent equal in Fair Market Value to
the per Share consideration received by holders of Common Stock in the
transaction.

                                      -10-
<PAGE>

     The Board may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the Reserves, as well as the price per Share
of Common Stock covered by each outstanding option, in the event that the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of Shares of its outstanding Common Stock, and
in the event of the Company's being consolidated with or merged into any other
corporation.

     20.  Amendment or Termination.
          ------------------------

          (a) The Board may at any time and for any reason terminate or amend
the Plan.  Except as provided in Section 19, no such termination of the Plan may
affect options previously granted, provided that the Plan or an Offering Period
may be terminated by the Board on a Purchase Date or by the Board's setting a
new Purchase Date with respect to an Offering Period and Purchase Period then in
progress if the Board determines that termination of the Plan and/or the
Offering Period is in the best interests of the Company and the stockholders or
if continuation of the Plan and/or the Offering Period would cause the Company
to incur adverse accounting charges as a result of a change after the effective
date of the Plan in the generally accepted accounting rules applicable to the
Plan.  Except as provided in Section 19 and in this Section 20, no amendment to
the Plan shall make any change in any option previously granted which adversely
affects the rights of any participant.  In addition, to the extent necessary to
comply with Rule 16b-3 under the Exchange Act, or under Section 423 of the Code
(or any successor rule or provision or any applicable law or regulation), the
Company shall obtain stockholder approval in such a manner and to such a degree
as so required.

          (b) Without stockholder consent and without regard to whether any
participant rights may be considered to have been adversely affected, the Board
(or its committee) shall be entitled to change the Offering Periods and Purchase
Periods, limit the frequency and/or number of changes in the amount withheld
during an Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding in
excess of the amount designated by a participant in order to adjust for delays
or mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly correspond with amounts withheld from
the participant's Compensation, and establish such other limitations or
procedures as the Board (or its committee) determines in its sole discretion
advisable which are consistent with the Plan.

     21.  Notices.  All notices or other communications by a participant to the
          -------
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

     22.  Conditions Upon Issuance of Shares.  Shares shall not be issued with
          ----------------------------------
respect to an option unless the exercise of such option and the issuance and
delivery of such Shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign,

                                      -11-
<PAGE>

including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, applicable state
securities laws and the requirements of any stock exchange upon which the Shares
may then be listed, and shall be further subject to the approval of counsel for
the Company with respect to such compliance.

     As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.

     23.  Term of Plan; Effective Date.  The Plan shall become effective upon
          ----------------------------
the IPO Date.  It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 20.

                                      -12-
<PAGE>

                              DURECT CORPORATION

                       2000 EMPLOYEE STOCK PURCHASE PLAN
                            SUBSCRIPTION AGREEMENT
                            ----------------------

                                                             New Election ______
                                                       Change of Election ______

     1.  I, ________________________, hereby elect to participate in the Durect
Corporation 2000 Employee Stock Purchase Plan (the "Plan") for the Offering
                                                    ----
Period ______________, ____ to _______________, ____, and subscribe to purchase
shares of the Company's Common Stock in accordance with this Subscription
Agreement and the an.

     2.  I elect to have Contributions in the amount of ____% of my
Compensation, as those terms are defined in the Plan, applied to this purchase.
I understand that this amount must not be less than 1% and not more than 20% of
my Compensation during the Offering Period.  (Please note that no fractional
percentages are permitted).

     3.  I hereby authorize payroll deductions from each paycheck during the
Offering Period at the rate stated in Item 2 of this Subscription Agreement.  I
understand that all payroll deductions made by me shall be credited to my
account under the Plan and that I may not make any additional payments into such
account.  I understand that all payments made by me shall be accumulated for the
purchase of shares of Common Stock at the applicable purchase price determined
in accordance with the Plan.  I further understand that, except as otherwise set
forth in the Plan, shares will be purchased for me automatically on the Purchase
Date of each Offering Period unless I otherwise withdraw from the Plan by giving
written notice to the Company for such purpose.

     4.  I understand that I may discontinue at any time prior to the Purchase
Date my participation in the Plan as provided in Section 10 of the Plan.  I also
understand that I can increase or decrease the rate of my Contributions during
an Offering Period by completing and filing with the Company a new Subscription
Agreement with such increase or decrease taking effect as of the beginning of
the next following calendar month, if filed at least ten (10) business days
prior to the beginning of such month.  Further, I may change the rate of
deductions for future Offering Periods by filing a new Subscription Agreement,
and any such change will be effective as of the beginning of the next Offering
Period.  In addition, I acknowledge that, unless I discontinue my participation
in the Plan as provided in Section 10 of the Plan, my election will continue to
be effective for each successive Offering Period.

     5.  I have received a copy of the Company's most recent description of the
Plan and a copy of the complete "Durect Corporation 2000 Employee Stock Purchase
Plan."  I understand that my participation in the Plan is in all respects
subject to the terms of the Plan.
<PAGE>

     6.  Shares purchased for me under the Plan should be issued in the name(s)
of (name of employee or employee and spouse only):

                                            ____________________________________

                                            ____________________________________

     7.  In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due to me under the Plan:

NAME:  (Please print)                      _____________________________________
                                           (First)   (Middle)    (Last)

_______________________                    _____________________________________
(Relationship)                             (Address)

Social Security #: _________               _____________________________________

     8.  I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Offering Date (the first day of the Offering
Period during which I purchased such shares) or within 1 year after the Purchase
Date, I will be treated for federal income tax purposes as having received
ordinary compensation income at the time of such disposition in an amount equal
to the excess of the fair market value of the shares on the Purchase Date over
the price which I paid for the shares, regardless of whether I disposed of the
shares at a price less than their fair market value at the Purchase Date. The
remainder of the gain or loss, if any, recognized on such disposition will be
treated as capital gain or loss.

     I hereby agree to notify the Company in writing within 30 days after the
     ------------------------------------------------------------------------
date of any such disposition, and I will make adequate provision for federal,
-----------------------------------------------------------------------------
state or other tax withholding obligations, if any, which arise upon the
------------------------------------------------------------------------
disposition of the Common Stock. The Company shall be entitled, to the extent
-------------------------------
required by applicable law, to withhold from my Compensation any amount
necessary to comply with applicable tax withholding requirements with respect to
the purchase or sale of shares under the Plan.

     9.  If I dispose of such shares at any time after expiration of the 2-year
and 1-year holding periods, I understand that I will be treated for federal
income tax purposes as having received compensation income only to the extent of
an amount equal to the lesser of (1) the excess of the fair market value of the
shares at the time of such disposition over the purchase price which I paid for
the shares under the option, or (2) 15% of the fair market value of the shares
on the Offering Date. The remainder of the gain or loss, if any, recognized on
such disposition will be treated as capital gain or loss.

                                      -2-
<PAGE>

     I understand that this tax summary is only a summary and is subject to
     ----------------------------------------------------------------------
change.  I further understand that I should consult a tax advisor concerning the
------
tax implications of the purchase and sale of stock under the Plan.

     10. In connection with the initial public offering of the Company's
securities and upon request of the Company or the underwriters managing any
underwritten offering of the Company's securities, I agree not to sell, make any
short sale of, loan, grant any option for the purchase of, or otherwise dispose
of any securities of the Company, however or whenever I acquired them, without
the prior written consent of the Company or such underwriters, as the case may
be, for such period of time (not to exceed 180 days) from the effective date of
such registration as may be requested by the Company or such managing
underwriters and to execute an agreement reflecting the foregoing as may be
requested by the underwriters at the time of the public offering.

     11. I hereby agree to be bound by the terms of the Plan. The effectiveness
of this Subscription Agreement is dependent upon my eligibility to participate
in the Plan.

NAME (print): ___________________________

SIGNATURE: ______________________________

SOCIAL SECURITY #: ______________________

DATE: ___________________________________

SPOUSE'S SIGNATURE (necessary
if beneficiary is not spouse):

_________________________________________
(Signature)

_________________________________________
(Print name)

                                      -3-
<PAGE>

                              DURECT CORPORATION

                       2000 EMPLOYEE STOCK PURCHASE PLAN
                            SUBSCRIPTION AGREEMENT
                            ----------------------

                             (IPO Offering Period)

                                                             New Election ______
                                                       Change of Election ______

     1.  I have received an option to purchase shares of the Company's Common
Stock under the Durect Corporation 2000 Employee Stock Purchase Plan (the

"Plan") for the Offering Period that commenced on September __, 2000 and ends on
 ----
October 31, 2002 (the "Initial Offering Period").
                       -----------------------

     2.  I hereby elect to participate in the Plan by having Contributions in
the amount of ____% of my Compensation, as those terms are defined in the Plan,
applied to purchases under the Plan.  I understand that this amount (together
with any other amounts I am contributing under the Plan) must not be less than
1% and not more than 20% of my Compensation during any Offering Period.  (Please
note that no fractional percentages are permitted).  I also understand that, as
a result of making this election to participate in the Plan on a payroll-
deduction basis, I am no longer eligible to have purchase Shares by delivering
to the Company a check for the amount of any purchases made on my behalf under
the Plan and that I shall at all times in the future be able to participate in
the Plan solely on a payroll-deduction basis on the terms set forth in the Plan.

     3.  I hereby authorize payroll deductions from each paycheck during the
Offering Period at the rate stated in Item 2 of this Subscription Agreement.  I
understand that all payroll deductions made by me shall be credited to my
account under the Plan and that I may not make any additional payments into such
account.  I understand that all payments made by me shall be accumulated for the
purchase of shares of Common Stock at the applicable purchase price determined
in accordance with the Plan.  I further understand that, except as otherwise set
forth in the Plan, shares will be purchased for me automatically on the Purchase
Date of each Offering Period unless I otherwise withdraw from the Plan by giving
written notice to the Company for such purpose.

     4.  I understand that I may discontinue at any time prior to the Purchase
Date my participation in the Plan as provided in Section 10 of the Plan.  I also
understand that I can increase or decrease the rate of my Contributions on one
occasion only with respect to any increase and one occasion only with respect to
any decrease during any Purchase Period by completing and filing a new
Subscription Agreement with such increase or decrease taking effect as of the
beginning of the calendar month following the date of filing of the new
Subscription Agreement, if filed at least ten (10) business days prior to the
beginning of such month.  Further, I may change the rate of deductions for
future Offering Periods by filing a new Subscription
<PAGE>

Agreement, and any such change will be effective as of the beginning of the next
Offering Period. In addition, I acknowledge that, unless I discontinue my
participation in the Plan as provided in Section 10 of the Plan, my election
will continue to be effective for each successive Offering Period.

     5.  I have received a copy of the Company's most recent description of the
Plan and a copy of the complete "Durect Corporation 2000 Employee Stock Purchase
Plan."  I understand that my participation in the Plan is in all respects
subject to the terms of the Plan.

     6.  Shares purchased for me under the Plan should be issued in the name(s)
of (name of employee or employee and spouse only):

                                            ____________________________________

                                            ____________________________________

     7.  In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due to me under the Plan:

NAME:  (Please print)                      _____________________________________
                                           (First)   (Middle)    (Last)

______________________                     _____________________________________
(Relationship)                             (Address)

                                           _____________________________________

     8.  I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Offering Date (the first day of the Offering
Period during which I purchased such shares) or within 1 year after the Purchase
Date, I will be treated for federal income tax purposes as having received
ordinary compensation income at the time of such disposition in an amount equal
to the excess of the fair market value of the shares on the Purchase Date over
the price which I paid for the shares, regardless of whether I disposed of the
shares at a price less than their fair market value at the Purchase Date. The
remainder of the gain or loss, if any, recognized on such disposition will be
treated as capital gain or loss.

     I hereby agree to notify the Company in writing within 30 days after the
     ------------------------------------------------------------------------
date of any such disposition, and I will make adequate provision for federal,
-----------------------------------------------------------------------------
state or other tax withholding obligations, if any, which arise upon the
------------------------------------------------------------------------
disposition of the Common Stock.  The Company may, but will not be obligated to,
-------------------------------
withhold from my compensation the amount necessary to meet any applicable
withholding obligation including any withholding necessary to make available to
the Company any tax deductions or benefits attributable to the sale or early
disposition of Common Stock by me.

                                      -5-
<PAGE>

     9.  If I dispose of such shares at any time after expiration of the 2-year
and 1-year holding periods, I understand that I will be treated for federal
income tax purposes as having received compensation income only to the extent of
an amount equal to the lesser of (1) the excess of the fair market value of the
shares at the time of such disposition over the purchase price which I paid for
the shares under the option, or (2) 15% of the fair market value of the shares
on the Offering Date. The remainder of the gain or loss, if any, recognized on
such disposition will be treated as capital gain or loss.

     I understand that this tax summary is only a summary and is subject to
     ----------------------------------------------------------------------
change.  I further understand that I should consult a tax advisor concerning the
------
tax implications of the purchase and sale of stock under the Plan.

     10. In connection with the initial public offering of the Company's
securities and upon request of the Company or the underwriters managing any
underwritten offering of the Company's securities, I agree not to sell, make any
short sale of, loan, grant any option for the purchase of, or otherwise dispose
of any securities of the Company, however or whenever I acquired them, without
the prior written consent of the Company or such underwriters, as the case may
be, for such period of time (not to exceed 180 days) from the effective date of
such registration as may be requested by the Company or such managing
underwriters and to execute an agreement reflecting the foregoing as may be
requested by the underwriters at the time of the public offering.

     11. I hereby agree to be bound by the terms of the Plan. The effectiveness
of this Subscription Agreement is dependent upon my eligibility to participate
in the Plan.

SIGNATURE: _____________________________

SOCIAL SECURITY #: _____________________

DATE: __________________________________

SPOUSE'S SIGNATURE (necessary
if beneficiary is not spouse):

________________________________________
(Signature)

________________________________________
(Print name)

                                      -6-
<PAGE>

                              DURECT CORPORATION

                       2000 EMPLOYEE STOCK PURCHASE PLAN

                             ELECTION TO PURCHASE
                             --------------------

     I, __________________________, hereby elect to purchase Shares pursuant to
the option granted to me on September __, 2000 under the Durect Corporation 2000
Employee Stock Purchase Plan (the "Plan").   Accompanying this Election to
                                   ----
Purchase is a check in the amount of $___________ and I elect to purchase that
number of Shares that is calculated by dividing such amount by the applicable
Purchase Price as specified in the Plan with respect to the purchase being made
on April 30, 2001.  I understand that the amount I specified above may not
exceed 20% of my Compensation for the period beginning on September __, 2000 and
ending on April 30, 2001 or result in my purchasing a number of Shares in excess
of the limits specified in Sections 3(b) and 7(a) of the Plan.

     I understand that, as a result of my delivering the amount specified in the
preceding paragraph to the Company, I shall be deemed to have elected to
continue participating in the Plan on a payroll deduction basis (on the terms
described in the Plan) and that, beginning with the first payroll paid following
April 30, 2001 and unless I specify another percentage Contribution rate by
filling out a Subscription Agreement, the Company shall withhold a percentage of
my Compensation equal to the ratio that the above amount bears to my
Compensation for the period beginning on September __, 2000 and ending on April
30, 2001.

Dated:___________________               ________________________________________
                                        Signature of Employee

Check, payable to Durect Corporation, is  enclosed.
                  ------------------
<PAGE>

                              DURECT CORPORATION

                       2000 EMPLOYEE STOCK PURCHASE PLAN

                             NOTICE OF WITHDRAWAL
                             --------------------

     I, __________________________, hereby elect to withdraw my participation in
the Durect Corporation 2000 Employee Stock Purchase Plan (the "Plan") for the
                                                               ----
Offering Period that began on _________ ___, _____.  This withdrawal covers all
Contributions credited to my account and is effective on the date designated
below.

     I understand that all Contributions credited to my account will be paid to
me within ten (10) business days of receipt by the Company of this Notice of
Withdrawal and that my option for the current period will automatically
terminate, and that no further Contributions for the purchase of shares can be
made by me during the Offering Period.

     The undersigned further understands and agrees that he or she shall be
eligible to participate in succeeding offering periods only by delivering to the
Company a new Subscription agreement.

Dated:___________________               ________________________________________
                                        Signature of Employee

                                        ________________________________________
                                        Social Security Number

                                      -2-<PAGE>

                                                                    EXHIBIT 10.1

                        The Santa Cruz Operation, Inc.

      ___________________________________________________________________

                   COMMON STOCK AND WARRANT PURCHASE AGREEMENT

      ___________________________________________________________________
<PAGE>

                  COMMON STOCK AND WARRANT PURCHASE AGREEMENT

     THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT (the "Agreement") is made
as of September 11, 2000 by and among The Santa Cruz Operation, Inc., a
California corporation (the "Company"), and the investor identified on the
Investor Schedule which is attached hereto as Exhibit A (each an "Investor,"
                                              ---------
collectively the "Investors").

                               R E C I T A L S:
                               ---------------

     A.   The Company desires to sell shares of its common stock, as well as
warrants to purchase additional shares of its common stock, and/or the common
stock of Caldera, Inc. held by Company, (hereinafter "Shares and Warrants") to
the Investors and the Investors desire to purchase such Shares and Warrants on
the terms and subject to the conditions set forth in this Agreement and the
Stock Purchase Warrant, the form of which is attached hereto as Exhibit B.
                                                                ---------

     THE PARTIES AGREE AS FOLLOWS:

     1.   Purchase and Sale of Common Stock and Warrants.
          ----------------------------------------------

     1.1  Sale and Issuance of Common Stock and Warrants. The Company shall
          ----------------------------------------------
sell to each Investor and each such Investor shall purchase from the Company the
number of Shares and Warrants as set forth opposite the name of such Investor in
column two (2) of Exhibit A in exchange for the total purchase price set forth
                  ---------
in column three (3) of Exhibit A.
                       ---------

     1.2  Escrow. Company shall deliver to the escrow agent, Wells Fargo Bank,
          ------
National Association, Corporate Trust Services, (hereinafter "Escrow Agent") (i)
certificates representing the Shares, and (ii) executed Stock Purchase Warrants
representing the Warrants to be purchased by the Investors as set forth in
Exhibit A. Investors shall deposit the purchase price, via check or wire
transfer to the Escrow Agent, as set forth in Exhibit A. The Closing shall be
subject to receipt of the foregoing by the Escrow Agent. The Escrow Agent shall
hold the share certificates, Warrants and purchase price in an escrow account
until the parties have executed the Agreement, the Registration Rights
Agreement, and the Escrow Agent has received an authorization from the Company
instructing the Escrow Agent to release the purchase price to the Company, and
the certificates and warrants to the Investors.

          The parties hereby acknowledge that Escrow Agent is acting only as an
escrow agent in connection with this Agreement, and has not endorsed,
recommended or guaranteed the value of the stock and warrants purchased in
connection with this Agreement.

     1.3  Registration Rights. At the Closing, the parties will enter into a
          -------------------
Registration Rights Agreement, the form of which is attached hereto as Exhibit
                                                                       -------
C.
-

     1.4  Closing. The purchase and sale of the Shares and Warrants shall take
          -------
place upon the execution and delivery of this Agreement, the Registration Rights
Agreement, and the authorization
<PAGE>

by Company authorizing the escrow agent to release the purchase price to the
Company and the shares and Warrants to the Investors. (the "Closing"). It is
anticipated that the Closing shall occur on or about September 8, 2000, with a
termination date of September 15, 2000. In the event the Investors have not
placed in escrow an aggregate sum of not less than $10,000,000, on or before
September 15, 2000, the Company and Security Research Associates, Inc. (the
"Placement Agent"), may, in their discretion, terminate this transaction and
cause the Escrow Agent to return any funds received to the applicable Investors.
Consequently, there is no minimum amount to be raised in the offering.

     2.   Representations and Warranties of the Company to the Investors. Except
          --------------------------------------------------------------
as set forth on the Schedule of Exceptions attached hereto as Exhibit D, the
                                                              ---------
Company hereby represents and warrants to the Investor that:

     2.1  Organization; Good Standing; Qualification and Power. The Company
          ----------------------------------------------------
is a corporation duly organized, validly existing and in good standing under the
laws of the State of California, has all requisite corporate power and authority
to execute this Agreement and the Stock Purchase Warrant (collectively, the
"Agreements"), and to carry out the transactions contemplated hereby and
thereby, to own, lease and operate any and all of its properties, and to carry
on its business as now being conducted.

     2.2  Capital Structure. The number of shares authorized and outstanding
          -----------------
as of the date of July 28, 2000, is set forth in the Schedule of Exceptions. No
shares of the capital stock of the Company are held by the Company in its
treasury. Except as specified in the Schedule of Exceptions, all outstanding
shares of the capital stock of the Company on July 28, 2000 are set forth in the
Schedule of Exceptions and are validly issued, fully paid and nonassessable and
free and clear of any Encumbrances and not subject to preemptive rights under
any statute, pursuant to the Certificate of Incorporation or Bylaws, or pursuant
to any agreement or document.

     2.3  Other. Except as set forth in the Schedule of Exceptions and as
          -----
contemplated by the Agreements, there are no outstanding warrants, conversion
privileges, preemptive rights, or other rights or agreements to purchase or
otherwise acquire or issue any equity securities of the Company.

     2.4  Authorization. All corporate action on the part of the Company, its
          -------------
officers, directors and stockholders necessary for the authorization, execution
and delivery of, and performance of all obligations under the Agreements, and
for the issuance and delivery of the Shares, has been taken. The Agreements
constitute legally binding valid obligations of the Company enforceable against
the Company in accordance with their terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, and (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies.

     2.5  Validity of Shares. The Shares, when issued, sold and delivered in
          ------------------
accordance with the terms and for the consideration expressed in this Agreement,
shall be duly and validly issued (including, without limitation, issued in
compliance with applicable federal and state securities laws), fully-paid and
non-assessable, and free from any liens or encumbrances other than those
<PAGE>

accepted or imposed by the holders thereof, and the applicable state and federal
securities laws restrictions on transfer to which such Shares are subject.

     2.6  No Conflict with Other Instruments; Compliance with Laws. The
          --------------------------------------------------------
execution, delivery and performance of the Agreements will not result in any
violation of, be in conflict with, or constitute a default under, with or
without the passage of time or the giving of notice: (i) any provision of the
Company's Certificate of Incorporation or Bylaws; (ii) any provision of any
judgment, decree or order to which the Company is a party or by which it is
bound; (iii) any material contract, obligation or commitment to which the
Company is a party or by which it is bound; or (iv) to the best of Company's
knowledge, any statute, rule or governmental regulation applicable to the
Company. To the best of Company's knowledge, the Company is conducting its
business in compliance with all statutes, rules, and governmental regulations
applicable to the Company where the failure to do so would constitute a material
adverse event.

     2.7  Agreements; Actions.
          -------------------

     (a)  Except as set forth in the Company's SEC filings, there are no
agreements, understandings or proposed transactions between the Company and any
of its officers, directors, affiliates or any affiliate thereof.

     (b)  Except as set forth in the Schedule of Exceptions, the Company has not
(i) declared or paid any dividends, or authorized or made any distribution upon
or with respect to any class or series of its capital stock, (ii) incurred any
indebtedness for money borrowed, (iii) incurred any other liabilities other than
in the ordinary course of business, (iv) sold, exchanged or otherwise disposed
of any of its material assets or rights or (v) agreed to any of the foregoing.

     (c)  Except as set forth in the Schedule of Exceptions, the Company is not
a party to and is not bound by any contract, agreement or instrument, or subject
to any restriction under its Certificate or Bylaws, which to the knowledge of
the Company adversely affects in any material respect its business as now
conducted or as proposed to be conducted, its properties or its financial
condition.

     2.8  Litigation. Except as set forth in the Schedule of Exceptions,
          ----------
there is no legal action, proceeding or investigation pending or to the best of
the Company's knowledge, threatened, that questions the validity of the
Agreements, or the right of the Company to enter into the Agreements or to
consummate the transactions contemplated hereby and thereby, or that would
result, either individually or in the aggregate, in any material adverse event
or any change in the current equity ownership of the Company, nor is the Company
aware that there is any basis for the foregoing. To the best of the Company's
knowledge, there is no judgment, decree or order of any court in effect against
the Company and the Company is not in default with respect to any order of any
governmental authority to which the Company is a party or by which it is bound.
The Company has no present intention to commence litigation against any other
party.

     2.9  Title to Property and Assets; Leases. Except (a) for liens for
          ------------------------------------
current taxes not delinquent, (b) for liens imposed by law and incurred in the
ordinary course of business for obligations not past due to carriers,
warehousemen, laborers, material, men and the like, (c) for minor defects in
title, none of which, individually or in the aggregate, materially interferes
with the
<PAGE>

use of such property, or (d) the proposed liens pursuant to the proposed
agreements with the Canopy Group, and Caldera Systems, Inc., the Company owns
its property and assets free and clear of all mortgages, liens, claims and
encumbrances. With respect to the property and assets it leases, the Company is
in compliance with such leases and, to the best of its knowledge, holds a valid
leasehold interest free of any liens, claims, or encumbrances, subject to
clauses (a)-(c) above.

     2.10 Patents and Other Proprietary Rights. To the best of the Company's
          ------------------------------------
knowledge, the Company has sufficient title and ownership or license to use all
material patents, trademarks, service marks, trade names, copyrights, trade
secrets, information, proprietary rights and processes necessary for its
business as now conducted, and as proposed to be conducted, without conflict
with or infringement of the rights of others. Except as set forth in the
Schedule of Exceptions, the Company has not received any communications
alleging, nor is the Company aware of any basis for such allegation, that the
Company has violated or, by conducting its business as proposed, would violate
any of the patents, trademarks, service marks, trade names, copyrights or trade
secrets or other proprietary rights of any other person or entity. The Company
is not aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with the use of such employee's best efforts to
promote the interests of the Company or that would conflict with the Company's
business as proposed to be conducted. Neither the execution nor delivery of this
Agreement, nor the carrying on of the Company's business by the employees of the
Company, nor the conduct of the Company's business as now conducted and as
proposed to be conducted, will, to the best of the Company's knowledge, conflict
with or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any contract, covenant or instrument under which any
of such employees is now obligated. The Company does not believe it is or will
be necessary to use any inventions of any of its employees (or persons it
currently intends to hire) made prior to their employment by the Company.

     2.11 Proprietary Information and Invention Assignments. Each employee of
          -------------------------------------------------
and consultant to the Company has executed and delivered to the Company a
Proprietary Information Agreement, that includes an invention assignment
provision. The Company is not aware that any of its employees or consultants are
in violation thereof, and the Company will use its best efforts to prevent any
such violation.

     2.12 No Defaults; Violations or Conflicts. The Company is not in violation
          ------------------------------------
of any term or provision of its Certificate of Incorporation, Bylaws, or any
term or provision of any indebtedness, mortgage, indenture, contract, agreement,
or judgment which would constitute a material adverse event.

     2.13 Governmental Consents. No consent, approval, order or authorization
          ---------------------
of, or registration, qualification, designation, declaration or filing with, any
federal, state, local or provincial governmental authority on the part of the
Company is required in connection with the consummation of the transactions
contemplated by this Agreement.

     2.14 Disclosure. The Company has provided the Investors with all the
          ----------
information that the Investors have requested for deciding whether to acquire
the Shares and Warrants, including information regarding the agreement Company
entered into with Caldera Systems, Inc. on August 1,
<PAGE>

2000, regarding the sale of Company's Server Software and Professional Services
Divisions to Caldera Systems, Inc. To the best of the Company's knowledge, no
representation or warranty of the Company contained in this Agreement and the
exhibits attached hereto, any certificate furnished or to be furnished to
Investors at the Closing or the Stock Purchase Warrant (when read together)
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made.

     2.15 No Conflict of Interest. Except as set forth in Company's SEC filings,
          -----------------------
the Company is not indebted, directly or indirectly, to any of its officers or
directors or to their respective spouses or children, in any amount whatsoever
other than in connection with expenses or advances of expenses incurred in the
ordinary course of business or relocation expenses of employees. To the
Company's knowledge, and except as set forth in Company's SEC filings, none of
the Company's officers or directors, or any members of their immediate families,
are, directly or indirectly, indebted to the Company (other than in connection
with purchases of the Company's stock) or have any direct or indirect ownership
interest in any firm or corporation with which the Company in affiliated or with
which the Company has a business relationship, or any firm or corporation which
competes with the Company except that officers, directors and/or stockholders of
the Company may own stock in (but not exceeding two percent of the outstanding
capital stock of) any publicly traded company that may compete with the Company.
Except as set forth in Company's SEC filings, to the Company's knowledge, none
of the Company's officers or directors or any members of their immediate
families are, directly or indirectly, interested in any material contract with
the Company.

     3.   Representations and Warranties of the Investors to the Company. Each
          --------------------------------------------------------------
Investor represents and warrants to the Company as follows:

     3.1  Authorization. When executed and delivered by such Investor, and
          -------------
assuming execution and delivery by the Company, the Agreements will constitute
valid obligations of such Investor, enforceable in accordance with their terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of
creditors' rights generally, and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies.

     3.2  Each Investor represents and warrants that such Investor has reviewed
the Company's 10Q and 8-K SEC filings related to the agreement Company entered
into with Caldera Systems, Inc., on August 1, 2000, regarding the sale of the
Company's Server Software and Professional Services Divisions to Caldera
Systems, Inc., and acknowledges the risks involved with such agreement,
including but not limited to (i) the risk that the transaction may not close;
(ii) the risk that the transaction may disrupt or is disrupting the efficient
functioning of the Company; and (iii) the risk that the Company's cash flow
requirements exceed its ability to generate cash in the near term.

     4.   Securities Laws.
          ---------------
<PAGE>

     4.1  Securities Laws Representations and Covenants of Investor. Each
          ---------------------------------------------------------
Investor represents and warrants to the Company as follows:

     (a)  This Agreement is made with such Investor in reliance upon such
Investor's representation to the Company, which by such Investor's execution of
this Agreement such Investor hereby confirms, that the Shares and the Warrants
purchased hereto and to be received by such Investor will be acquired for
investment for such Investor's own account, not as a nominee or agent, and not
with a view to the sale or distribution of any part thereof, and that such
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the same. By executing this Agreement, such Investor
further represents that such Investor has no contract, undertaking, agreement or
arrangement with any person to sell, transfer, or grant participations to such
person or to any third person, with respect to any of the Securities.

     (b)  Each such Investor understands and acknowledges that the offering of
the Securities pursuant to this Agreement will not be registered under the
Securities Act on the grounds that the offering and sale of securities
contemplated by this Agreement are exempt from registration pursuant to Section
4(2) of the Securities Act, and that the Company's reliance upon such exemption
is predicated upon such Investor's representations set forth in this Agreement.

     (c)  Each such Investor represents that it is an Accredited Investor, as
defined under Rule 501(a) of the Securities Exchange Commission Act of 1933, or
that it is an Institutional Investor. In addition, each Investor represents
that: (i) such Investor has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of such
Investor's prospective investment in the Securities; (ii) such Investor has
received all the information it has requested from the Company and considers
necessary or appropriate for deciding whether to purchase the Securities; (iii)
such Investor has the ability to bear the economic risks of such Investor's
prospective investment.

     4.2  Legends.  All certificates for the Shares and Warrants shall bear the
          -------
following legend:

"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED ("ACT"). SUCH SECURITIES MAY NOT BE TRANSFERRED UNLESS A
REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER OR SUCH
TRANSFER MAY BE MADE PURSUANT TO RULE 144 OR IN THE OPINION OF COUNSEL FOR THE
COMPANY, REGISTRATION UNDER THE ACT IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO
COMPLY WITH THE ACT."

     5.   Miscellaneous.
          -------------

     5.1  Entire Agreement; Successors and Assigns. The Agreements constitute
          ----------------------------------------
the entire agreement between the Company and the Investors relative to the
subject matter hereof. Any previous agreement between the Company and the
Investors is superseded by this Agreement. Subject to the exceptions
specifically set forth in this Agreement, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
executors, administrators, heirs, successors and assigns of the parties.
<PAGE>

     5.2  Governing Law. This Agreement shall be governed by and construed in
          -------------
accordance with the laws of the State of California.

     5.3  Counterparts. This Agreement may be executed in two (2) or more
          ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     5.4  Headings. The headings of the sections of this Agreement are for
          --------
convenience and shall not by themselves determine the interpretation of this
Agreement.

     5.5  Notices. Any notice required or permitted hereunder shall be given in
          -------
writing and shall be conclusively deemed effectively given (i) five (5) days
after sending by first class U.S. mail postage prepaid, (ii) upon personal
delivery, or (iii) two (2) days after the date of sending if sent by commercial
overnight courier addressed to the Company as set forth below the Company's name
on the signature page of this Agreement, and to an Investor, at such Investor's
address as set forth on Exhibit A or at such other address as the Company or
                        ---------
such Investor may designate.

     5.6  Survival of Warranties. The warranties, representations and covenants
          ----------------------
of the parties contained in or made pursuant to this Agreement shall survive the
Closing, and such warranties, representations and covenants of the Company shall
in no way be affected by any investigation of the subject matter thereof made by
or on behalf of the Investors; provided, however, that such representations and
warranties need only be accurate as of the Closing.

     5.7  Finders Fees. Each of the Company and the Investors will be
          ------------
responsible for its own costs and expenses related to investment banking or
finders fees in connection with the transactions contemplated by this Agreement,
including those fees Company shall pay to Securities Research Associates, Inc.,
in connection with this transaction.

     5.8  Severability. If any provision of this Agreement is held to be
          ------------
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.

     5.9  Delays or Omissions. No delay or omission to exercise any right, power
          -------------------
or remedy accruing to any party under this Agreement, upon any breach or default
of any other party under this Agreement, shall impair any such right, power or
remedy of such non-breaching or non-defaulting party nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence therein, or of
or in any similar breach or default thereafter occurring; nor shall any waiver
of any single breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any breach or
default under this Agreement, or any waiver on the part of any party of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.
<PAGE>

     5.10 Exculpation Among Investors. Each Investor acknowledges that it is not
          ---------------------------
relying upon any person, firm or corporation, other than the Company and its
officers and directors, in making its investment or decision to invest in the
Company. Each Investor agrees that no Investor nor the respective controlling
persons, officers, directors, partners, agents, or employees of any Investor
shall be liable to any other Investor for any action heretofore or hereafter
taken or omitted to be taken by any of them in connection with the purchase of
the Shares and Warrants.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

THE COMPANY:                              The Santa Cruz Operation, Inc.
                                          a California corporation
                                          425 Encinal Street
                                          Santa Cruz, CA 95061-1900

                                          By:________________________________

                                          Name:______________________________

                                          Title:_____________________________
<PAGE>

THE INVESTOR:

                                          By:________________________________

                                          Name:______________________________

                                          Title:_____________________________
<PAGE>

                                   EXHIBIT A
                                   ---------

                               INVESTOR SCHEDULE
                               -----------------

Price per Unit is $32.00.

Unit is defined as follows:

Upon close of the Agreement and Plan of Reorganization by and among Caldera
Systems, Inc., Caldera Holding, Inc., and Company, (hereinafter "Merger
Agreement") a Unit will consist of eight (8) shares of Company's common stock
and warrants to purchase either (a) one (1) share of Caldera, Inc. common stock
held by Company at $8.00 per share, or (b) two (2) shares of Company's common
stock at $4.00 per share.

If the Merger Agreement does not close, for any reason, or is terminated by the
parties thereto, a Unit will consist of eight (8) shares of Company's common
stock and warrants to purchase two (2) shares of Company's common stock at the
lesser of $4.00 per share, or 90% of the closing price of the Company's Common
Stock on the first trading day following the announcement that the Merger
Agreement shall not be consummated.

Notwithstanding the foregoing, in the event that within 90 days from the Closing
of the Merger Agreement, the Caldera shares held by Company purchasable under
the Warrant have not been registered, then Investor's exercise price shall
decrease by 1/8/th of a point (12.5 cents) each month until either the
registration of the shares becomes effective, or twelve months elapse.

Further, in the event that within 90 days from the Closing of this Common Stock
and Warrant Purchase Agreement, the Company shares purchasable under the Warrant
have not been registered, then Investor's exercise price shall decrease by
1/16/th (6.25 cents) each month until the either the registration of the shares
becomes effective, or twelve months elapse.

The purchase price must be deposited via check or wire transfer to:

     If by Wire:

     Wells Fargo Bank, N.A.
     ABA #091000019
     Trust Clearing Account #1038377
     For Credit to SCO/SRA Escrow Account #10215800

     If by Check:
     Checks should be payable to SCO, Inc./SRA, Inc. Escrow - Ref: SEI A/C
     #10215800

     Checks should be forwarded to:
<PAGE>

     Wells Fargo Bank, Minnesota, N.A.
     IPS-MTU Check Processing
     MAC N9303-122
     608 2nd Avenue South
     Minneapolis, MN 55479
     Attn: Greg Maples 612-667-3614

Investor Name, Address, and        Number of Units     Aggregate Purchase Price
---------------------------        ---------------     ------------------------
Taxpayer ID Number
------------------

   Name:

   Address:

   Social Security or Taxpayer ID:
<PAGE>

                                   EXHIBIT B

                            STOCK PURCHASE WARRANT
                            ----------------------
<PAGE>

                            STOCK PURCHASE WARRANT
                     To Purchase Shares of Common Stock of
              The Santa Cruz Operation, Inc. and/or Caldera, Inc.

     THIS CERTIFIES that, for value received, ___________________________, The
Holder, or Holder's transferee (the "Holder"), is entitled, upon the terms and
subject to the conditions set forth herein, at any time on or after the date of
this Warrant and on or before, but in no case after, two (2) years from the date
of this Warrant (and subject to early termination as provided in Section 9
herein), to subscribe for and purchase, from The Santa Cruz Operation, Inc., a
California corporation (the "Company"), shares of the Company's Common Stock,
and/or shares of Caldera, Inc.'s Common Stock held by the Company.

     This Warrant is issued pursuant to a certain Common Stock and Warrant
Purchase Agreement (the "Agreement"), attached hereto as Exhibit A and
incorporated herein by this reference, dated as of September 11, 2000, by and
between the Company and the Investor set forth in Exhibit "A" of the Agreement.

     1.   Number of Warrant Shares.
          ------------------------

     (a)  If the Agreement and Plan of Reorganization between the Company and
Caldera Systems, Inc. (the "Merger Agreement") closes, this Warrant entitles the
Holder, at Holder's option, to purchase up to [_____] shares of the Common Stock
of Company, or up to [_____] shares of the Common Stock of Caldera, Inc. (held
by Company), or some combination thereof.

     For every purchase of two (2) shares of Common Stock of Company, the number
of shares of Common Stock of Caldera, Inc. that Holder may purchase under this
Warrant shall be reduced by one (1).

     For every purchase of one (1) share of Common Stock of Caldera, Inc., the
number of shares of Common Stock of Company that Holder may purchase under this
Warrant shall be reduced by two (2).

     (b)  If the Merger Agreement does not close, this Warrant entitles the
Holder to purchase up to [_____] shares of the Common Stock of Company.

     2.   Exercise Price.
          --------------

     (a)  The purchase price is as follows:

                    (i)  If the Merger Agreement closes, then;

                         (A)  Company's Common Stock. The Exercise Price under
                              ----------------------
                              this Warrant shall be $4.00 per share.
<PAGE>

                         (B)  Caldera, Inc.'s Common Stock (held by Company).
                              -----------------------------------------------
                              The Exercise Price under this Warrant shall be
                              $8.00 per share.

          (ii)  If the Merger Agreement does not close, for any reason, or is
terminated by the parties thereto, then the exercise price for Company's Common
Stock shall be the lesser of $4.00 per share, or 90% of the closing price of the
Company's Common Stock on the first trading day following the announcement that
the Merger Agreement shall not be consummated.

          (iii) Notwithstanding the foregoing, in the event that within 90 days
from the Closing of the Merger Agreement, the Caldera shares held by Company
purchasable under this Warrant have not been registered with the SEC for sale in
a public offering, then Holder's exercise price shall decrease by 1/8th of a
point (12.5 cents) each month until either the registration of the shares
becomes effective, or twelve months elapse. Further, in the event that within 90
days from the Closing of the Common Stock and Warrant Purchase Agreement, the
Company shares purchasable under this Warrant have not been registered with the
SEC for sale in a public offering, then Holder's exercise price shall decrease
by 1/16th of a point (6.25 cents) each month until either the registration of
the shares becomes effective, or twelve months elapse.

     3.   Exercise of Warrant. The purchase rights represented by this Warrant
          -------------------
are exercisable by the Holder, in whole or in part, at any time on or after the
date of this Warrant and on or before two (2) years from the date of this
Warrant (and subject to early termination as provided in Section 9 herein), by
the surrender of this Warrant, a Notice of Exercise in the form attached as
Exhibit B, and, if no registration statement is then in effect, the Investment
Representation Certificate in the form attached as Exhibit D duly executed at
the office of the Company in Santa Cruz, California (or such other office or
agency of the Company as it may designate by notice in writing to the Holder at
the address of such Holder appearing on the books of the Company), and upon
payment of the purchase price of the shares thereby purchased (by cash or by
check or bank draft payable to the order of the Company or by cancellation of
indebtedness of the Company to the Holder, if any, at the time of exercise in an
amount equal to the purchase price of the shares thereby purchased); whereupon
the Holder shall be entitled to receive a certificate for the number of shares
of Common Stock so purchased.

     4.   Conversion of Warrant (Cashless Exercise). In lieu of exercising
          ----------------------------------------
this Warrant as described in Section 3, the registered holder hereof shall have
the right to convert this warrant, in whole or in part, by surrender of this
Warrant and a Notice of Conversion in the form attached as Exhibit E duly
executed at the office of the Company, into shares of Common Stock of the
Company, or shares of Common Stock of Caldera held by the Company, as provided
in this Section 4. Upon exercise of this conversion right, the holder hereof
shall be entitled to receive that number of shares of Common Stock of the
Company, or shares of Common Stock of Caldera held by the Company, equal to the
quotient obtained by dividing [(A - B)(X)] by (A), where:

          A = the Fair Market Value (as defined below) of one share of Common
Stock on the date of conversion of this Warrant.

          B = the purchase price for one share of Common Stock under this
Warrant.

          X = the number of shares of Common Stock as to which this Warrant is
being converted.
<PAGE>

     If the above calculation results in a negative number, then no shares of
Common Stock shall be issued or issuable upon conversion of this Warrant.

     "Fair Market Value" of a share of Common Stock shall be the average closing
price of such stock on the ten (10) trading days immediately preceding the date
as of which such value is to be determined.

     5.   Restrictions on Transfer.
          ------------------------

          (a)  Permitted Transfers. This Warrant shall be freely transferable in
               -------------------
whole or in part, subject to the limitations specified in this Section 5.

          (b)  Investment Representation. The Holder agrees that the
               -------------------------
Holder will not offer, sell or otherwise dispose of this Warrant or any
securities issued on exercise of this Warrant except under circumstances which
will not result in a violation of the Securities Act. Unless a registration
statement is in effect, then upon exercise of this Warrant, the Holder shall
confirm in writing, by executing the form attached as Exhibit D hereto, that the
securities purchased thereby are being acquired for investment solely for the
Holder's own account and not as a nominee for any other Person, and not with a
view toward distribution or resale.

          (c)  Disposition of Warrant or Shares. With respect to any
               --------------------------------
offer, sale or other disposition of this Warrant or any securities issued upon
exercise of this Warrant, the Holder agrees to give written notice to the
Company prior thereto, describing briefly the manner thereof, together with a
written opinion of the Holder's counsel, if reasonably requested by the Company,
to the effect that such offer, sale or other disposition may be effected without
registration under the Securities Act or qualification under any applicable
state securities laws of this Warrant or such shares, as the case may be, and
indicating whether or not under the Securities Act certificates for this Warrant
or such shares, as the case may be, to be sold or otherwise disposed of require
any restrictive legend as to applicable restrictions on transferability in order
to insure compliance with the Securities Act. Each certificate representing this
Warrant or the securities thus transferred (except a transfer pursuant to Rule
144) shall bear a legend as to the applicable restrictions on transferability in
order to insure compliance with the Securities Act, unless in the aforesaid
reasonably satisfactory opinion of counsel for the Holder or the security
holder, as the case may be, such legend is not necessary in order to insure
compliance with the Securities Act. The Company may issue stop transfer
instructions to its transfer agent in connection with such restrictions.

     In the event Holder seeks an opinion from Holder's counsel as to transfer
without registration, the Company shall provide such factual information to
Holder's counsel as Holder's counsel may reasonably request for the purpose of
rendering such opinion and such counsel may rely on the accuracy and
completeness of such information in rendering such opinion.

          (d)  Procedure. Subject to the limitations set forth in this
               ---------
Section 5, Holder may transfer the Warrant on the books of the Company by
surrendering to the Company: (i) this Warrant; (ii) a written Assignment, in the
form attached as Exhibit C, naming the assignee and duly executed by Holder; and
(iii) funds sufficient to pay any stock transfer taxes payable upon the making
of such transfer.
<PAGE>

     The Company shall thereupon execute and deliver a new Warrant in the name
of the assignee specified in such instrument of assignment, and if the Warrant
is transferred in part, the Company shall also execute and deliver in the name
of the Holder a new Warrant covering the untransferred portion of the Warrant.
Upon issuance of the new Warrant or Warrants, the Warrant surrendered for
transfer shall be canceled by the Company.

          (e)  Expenses. The Company shall pay all expenses, and other
               --------
charges payable in connection with the preparation, issue, and delivery of any
new Warrant under this Section 5.

     6.   No Rights as Shareholder. This Warrant does not entitle the Holder to
          ------------------------
any voting rights or other rights as a shareholder of the Company prior to
exercise.

     7.   Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by
          -------------------------------------------------
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new Warrant of like tenor and dated as of such cancellation,
in lieu of this Warrant.

     8.   Saturdays, Sundays, Holidays, etc. If the last or appointed day for
          ---------------------------------
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or a Sunday or shall be a legal holiday, then such
action may be taken or such right may be exercised on the next succeeding day
not a legal holiday.

     9.   Early Termination. This Warrant shall terminate earlier than two (2)
          -----------------
years from the date of this Warrant if the Agreement is earlier terminated or
fails to close.

     10.  Miscellaneous. This Warrant may be amended and any term of this
          -------------
Warrant may be waived only by a written instrument signed by the Company and the
Holder. This Warrant shall be binding upon any successors or assigns of the
Company. This Warrant shall constitute a contract under the laws of the State of
California and for all purposes shall be construed in accordance with and
governed by the laws of said state applied without reference to conflict of laws
principles.

Dated:  September 11, 2000

                                            COMPANY

                                            ___________________________
<PAGE>

                                   EXHIBIT A

                  COMMON STOCK AND WARRANT PURCHASE AGREEMENT

                              (See Exhibit 10.1)
<PAGE>

                                   EXHIBIT B

                              NOTICE OF EXERCISE
                              ------------------

TO:  The Santa Cruz Operation, Inc.

     The undersigned hereby elects to purchase [_______] shares of Common Stock
of The Santa Cruz Operation, Inc., and or [________] shares of Common Stock of
Caldera, Inc. held by the Santa Cruz Operation, Inc., pursuant to the terms of
the attached Warrant, and tenders herewith payment of the purchase price in
full, together with all applicable transfer taxes, if any.

                    (1)  Please issue a certificate or certificates representing
said shares of Common Stock in the name of the undersigned.

                    (2)  The undersigned represents that the aforesaid shares of
Common Stock are being acquired for the account of the undersigned for
investment.

_____________________________        ________________________________
(Date)                               (Signature)
<PAGE>

                                   EXHIBIT C

                                  ASSIGNMENT
                                  ----------

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto __________ [Name and Address]_______ the rights represented by the
foregoing Common Stock Warrant issued by The Santa Cruz Operation, Inc., on
[__date__], and appoints ________________ its attorney to transfer said rights
on the books of said corporation, with full power of substitution in the
premises.

_______________________________

Signature guaranteed:

Dated: _________________
<PAGE>

                                   EXHIBIT D

                     INVESTMENT REPRESENTATION CERTIFICATE
                     -------------------------------------

HOLDER:

COMPANY:

SECURITY:                           COMMON STOCK

AMOUNT:

DATE:

     In connection with the purchase of the above-listed Securities, the
undersigned Holder represents to the Company the following:

          (a)  Holder is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. Holder is
acquiring these Securities for investment for Holder's own account only and not
with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"). Holder represents that such Holder has no contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to any such person or any third person with respect to any of the
Securities.

          (b)  Holder acknowledges and understands that the Securities
constitute "restricted securities" under the Securities Act and have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of Holder's investment intent as expressed herein. In this connection,
Holder understands that, in the view of the Securities and Exchange Commission,
the statutory basis for such exemption may be unavailable if Holder's
representation was predicated solely upon a present intention to hold these
Securities for the minimum capital gains period specified under tax statutes,
for a deferred sale, for or until an increase or decrease in the market price of
the Securities, or for a period of one year or any other fixed period in the
future. Holder further understands that the Securities must be held indefinitely
unless they are subsequently registered under the Securities Act or an exemption
from such registration is available. Holder understands that the certificate
evidencing the Securities will be imprinted with a legend which prohibits the
transfer of the Securities unless they are registered or such registration is
not required in the opinion of counsel satisfactory to the Company.

          (c)  Holder is familiar with the provisions of Rule 144, promulgated
under the Securities Act, which, in substance, permit limited public resale of
"restricted securities" acquired, directly or indirectly from the issuer
thereof, in a non-public offering subject to the satisfaction of certain
conditions.
<PAGE>

          The Securities may be resold in certain limited circumstances subject
to the provisions of Rule 144, which requires the resale to occur not less than
one year after the later of the date the Securities were sold by the Company or
the date the Securities were sold by an affiliate of the Company, within the
meaning of Rule 144; and, in the case of acquisition of the Securities by an
affiliate, or by a non-affiliate who subsequently holds the Securities less than
two years, the satisfaction of certain conditions of Section 13 or 15(d) of the
Securities Exchange Act of 1934, ninety (90) days thereafter (or such longer
period as any market stand-off agreement may require) the Securities may be
resold, subject to the satisfaction of certain of the conditions specified by
Rule 144, including: (1) the resale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934); and,
in the case of an affiliate, (2) the availability of certain public information
about the Company, (3) the amount of Securities being sold during any three
month period not exceeding the limitations specified in Rule 144, and (4) the
timely filing of a Form 144, if applicable.

          (d)  Holder further understands that in the event all of the
applicable requirements of or 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rule 144 is
not exclusive, the Staff of the Securities and Exchange Commission has expressed
its opinion that persons proposing to sell private placement securities other
than in a registered offering and otherwise than pursuant to Rule 144 will have
a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their own
risk. Holder understands that no assurances can be given that any such other
registration exemption will be available in such event.

                                              Signature of Holder:

                                              ________________________________

                                              Date:___________________________
<PAGE>

                                   EXHIBIT E

                             NOTICE OF CONVERSION
                             --------------------

To:  The Santa Cruz Operation, Inc.

     (1) The undersigned hereby elects to convert that portion of the attached
Warrant representing the right to purchase [_______] shares of Common Stock of
the Company and/or [_______] shares of Common Stock of Caldera held by the
Company into such number of shares of Common Stock of the Company or of Caldera
(held by the Company) as is determined pursuant to Section 4 of such Warrant,
which conversion shall be effected pursuant to the terms of the attached
Warrant.

     (2) Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name as is specified below:

     (Name):       _______________________________________

     (Address):    _______________________________________

     (3) The undersigned represents that the aforesaid shares of Common Stock of
the Company and/or the Common Stock of Caldera held by the Company are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares.

_________________________________        _____________________________________
(Date)                                   (Signature)
<PAGE>

                                   EXHIBIT C

                         REGISTRATION RIGHTS AGREEMENT
                         -----------------------------

                              (See Exhibit 10.2)
<PAGE>

                                   EXHIBIT D
                                   ---------

                            SCHEDULE OF EXCEPTIONS
                            ----------------------

2.2  Capital Structure.
     -----------------

As of July 28, 2000, 35,914,424 shares of SCO's Common Stock were issued and
outstanding

2.3  Other.
     -----

As of August 1, 2000, there were 12,302,271 employee and director options
outstanding.

The Company is in the process of preparing a Form S-8 Registration Statement
registering additional shares to be reserved for issuance under the Company's
1994 Incentive Stock Option Plan, 1993 Director Option Plan and 1993 Employee
Stock Purchase Plan.

2.7  Agreements; Actions.
     -------------------

(b)  On August 1, 2000, the Company entered into a transaction with Caldera
Systems, Inc., under which Caldera intends to purchase Company's Server Software
Division and Professional Services Division, both such divisions being
approximately 90% of the assets of the Company.

In addition, the Company is currently in negotiations with the Canopy Group, and
with Caldera to borrow $18,000,000 and $7,000,000 respectively, using its assets
as security for the loans.

(c)  On August 1, 2000, the Company entered into a transaction with Caldera
Systems, Inc., under which Caldera intends to purchase Company's Server Software
Division and Professional Services Division, both such divisions being
approximately 90% of the assets of the Company.

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