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Severance Agreement - Caldera International Inc. and Ransom Love

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        THIS AGREEMENT (this "Agreement") is made and entered into this 24th day of July, 2002, by and between CALDERA INTERNATIONAL, INC., a Delaware corporation ("Caldera"), and RANSOM LOVE, an individual ("Mr. Love"), based on the following:


        A.    Mr. Love has served as the president and chief executive officer of Caldera, and on June 26, 2002 announced his resignation. Mr. Love currently holds options (the "Options") to acquire 328,414 shares of Caldera common stock, a portion of which are still subject to vesting. The exercise price of such options ranges from $1.12 per share to $24.00 per share.

        B.    Mr. Love has agreed to remain with Caldera and to provide transitional services to assist the new chief executive officer of Caldera.

        C.    Caldera agreed on June 26, 2002, to pay Mr. Love severance and certain other benefits as well as issue him 175,000 shares of its restricted common stock in connection with his resignation as chief executive officer and the cancellation of his options and this Agreement is intended to document such prior agreement.


        NOW, THEREFORE, based on the foregoing premises, which are incorporated herein by this reference, and for and in consideration of the mutual promises and covenants hereinafter set forth and the benefit to the parties to be derived therefrom, it is hereby agreed as follows:

        1.    Severance.    In connection with the resignation and termination of Mr. Love's employment and position with Caldera, Caldera agrees to make, on or about July 31, 2002, the following severance payments and issuances:

        2.    Taxes.    All payments set forth in Section 1 above shall be subject to appropriate withholding taxes, including appropriate withholding taxes on the issuance of the 175,000 shares of common stock.

        3.    Termination and Resignation.    Mr. Love's resignation as chief executive officer of Caldera was effective June 26, 2002. The cancellation of his Options and his rights under prior agreements with Caldera shall be effective upon receipt of the items provided for in Sections 1.1 and 1.2 above (the "Effective Date").

        4.    Termination of Options.    The options held by Mr. Love to purchase up to 328,414 shares of Caldera common stock shall be of no further force and effect and all rights thereunder are terminated as of the Effective Date. Mr. Love shall deliver the original of the options to Caldera.

        5.    Representations and Warranties of Mr. Love.    Mr. Love represents and warrants to Caldera with the express intention that Caldera rely upon such representations and warranties and with the knowledge that Caldera will rely upon same:

        6.    Representation of Caldera.    Caldera has taken all corporate action necessary to duly authorize the transactions contemplated by this Agreement and has all requisite power and authority to enter into this Agreement and to perform all of its obligations under this Agreement.


        7.    Confidentiality.    

        8.    Release and Indemnification.    


        9.    Further Agreements.    In addition to the waivers and releases contained in Section 8 above, Mr. Love further agrees:

        10.    Registration Rights.    The 175,000 shares of common stock shall be issued to Mr. Love pursuant to an effective registration on Form S-8 and, consequently, will not be "restricted securities" as defined in Rule 144 promulgated under the Securities Act of 1933, as amended. Mr. Love agrees that he will not sell, transfer, or hypothecate such shares on or before October 31, 2002. The certificates representing the shares shall contain a legend reflecting the foregoing restrictions on transfer.

        11.    Noncompetition.    Mr. Love shall not, for a period of six months after June 26, 2002, engage in, support, or facilitate: (i) the development, creation, marketing, sales, promotion, distribution, licensing, or commercialization of any Linux product which competes with any Linux product of Caldera; or (ii) any business involving the commercial distribution of any existing or future version of Linux. Said six month period shall be extended by any period of time during which Mr. Love is not in compliance with this obligation. This paragraph 11 shall be limited to the geographic markets in or to which the products or services of Caldera are now or hereafter marketed, distributed, licensed, used, sold, commercialized, or delivered. Notwithstanding the forgoing, the provisions of this paragraph 11 will not apply to the acceptance by Mr. Love of a position with UnitedLinux, LLC. Mr. Love acknowledges that this paragraph 11 is reasonable and is necessary for the legitimate protection of Caldera, and will not deprive Mr. Love of a reasonable opportunity to practice his profession or trade.

        12.    No Admission.    Mr. Love expressly agrees and acknowledges that this Agreement cannot be construed as an admission of or evidence of wrongdoing with respect to the termination of Mr. Love, nor is it an admission of or evidence that Love or any employee of Caldera is other than an at-will employee.


        13.    No Assignment.    Mr. Love represents and warrants that there has been no assignment or other transfer of any claims he has or may have as against Caldera.

        14.    Arbitration.    All disputes under this Agreement shall be resolved by final and binding arbitration in the County of Utah, State of Utah, before an arbitrator agreed upon by the parties and judgment upon the award rendered may be entered in any court having jurisdiction.

        15.    Survival.    The representations and warranties of the respective parties set forth herein shall survive the date of closing, the consummation of the transactions contemplated in this Agreement, and the delivery of the shares of common stock pursuant hereto.

        16.    Governing Law.    This Agreement shall be governed by and construed under and in accordance with the laws of the state of Utah.

        17.    Entire Agreement.    This Agreement is the only agreement or understanding between parties, with the exception of that certain Proprietary Information Agreement that Mr. Love previously executed, and supersedes and is controlling over any and all prior existing agreements or communications between the parties, except as set forth in the Proprietary Information Agreement concerning confidential or proprietary information and Mr. Love's covenant not to compete. All negotiations, commitments, and understandings acceptable to both parties have been incorporated in this Agreement and the accompanying termination letter.

        18.    Severability.    If any provision of this Agreement or the application of such provisions to any person or circumstance shall be held invalid or unenforceable, the remainder of this Agreement or the application of such provisions to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be effected thereby.

        19.    Attorneys' Fees.    If any suit, action, or proceeding is brought to enforce any term or provision of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees, costs, and expenses incurred, in addition to any other relief to which such party may be legally entitled.

        20.    Execution in Counterparts.    This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument.

        21.    No Waiver.    Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, in law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation of the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing.

        22.    Expenses.    Each of the parties shall bear its own costs and expenses, including legal fees, incurred in connection with this Agreement and the transactions contemplated hereby.

        23.    No Third-Party Beneficiaries.    This Agreement is for the sole benefit of the parties hereto and nothing herein expressed or implied shall give, or be construed to give, any other person any legal or equitable rights hereunder.

        24.    Amendment.    This Agreement may not be amended except as mutually agreed to in writing by the parties.


        IN WITNESS WHEREOF, the parties to this Agreement have executed the same as of the date first above written.















/s/  DARL MCBRIDE      
Darl McBride, CEO



Mr. Love:










/s/  RANSOM LOVE      
Ransom Love


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