FIRST AMENDMENT
                                       TO
                              EMPLOYMENT AGREEMENT

      THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment") is
executed and delivered effective as of June 9, 2004, by and between Lindows
Inc., a Delaware corporation (the "Company"), and Kevin B. Carmony, an
individual resident of the State of California ("Employee").

                                    RECITALS

      WHEREAS, the Company and Employee previously executed and delivered an
Employment Agreement, dated as of April 1, 2004 (the "Original Agreement); and

      WHEREAS, the Company and Employee intended the salary, bonus and severance
portions of the Original Agreement to be effective only upon the closing of the
Company's initial public offering under the Securities Act of 1933, as amended
(the "IPO Closing"); and

      WHEREAS, the Company and Employee now wish to amend the Original
Agreement, to clarify their original intent, as described below;

      NOW, THEREFORE, in consideration of the mutual covenants contained herein
and Employee's continued employment pursuant to the terms of the Original
Agreement, as amended by this Amendment, the Company and Employee, intending to
be legally bound, hereby agree as follows:

      1. Sections 2(a), 2(b) and 3(c) of the Original Agreement shall not be of
any legal force or effect whatsoever unless and until the IPO Closing, at which
time such sections shall become effective unless Employee has ceased to be
employed by the Company prior to the date of the IPO Closing or the Original
Agreement has otherwise been terminated prior to the date of the IPO Closing.

      2. If Employee is still employed by the Company upon the IPO Closing, then
within five (5) days after the IPO Closing the Company shall pay to Employee an
amount equal to: (a) the Base Salary (as defined in Section 2(a) of the Original
Agreement) pro rated for the period of time between execution and delivery of
the Original Agreement and the IPO Closing; minus (b) the amount of any other
salary that the Company paid to Employee for the period of time between the
execution and delivery of the Original Agreement and the IPO Closing.

      3. Except as provided above in this Amendment, all terms, covenants and
conditions in the Original Agreement shall remain in full force and effect and
shall not be affected by this Amendment.

      4. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original and all of which shall be taken together shall
deemed to be one instrument.


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<PAGE>
      IN WITNESS WHEREOF, the parties hereby execute this First Amendment to
Employment Agreement as of the date first above written.

LINDOWS, INC.                                      EMPLOYEE

By:     Michael L. Robertson                       Kevin B. Carmony
   --------------------------------                -------------------
Name:   Michael L. Robertson                       Kevin B. Carmony
Title:  Chairman and Chief Executive Officer


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           [SIGNATURE PAGE TO FIRST AMENDMENT TO EMPLOYMENT AGREEMENT]


Source: OneCLE Business Contracts.