LINDON, Utah, Aug. 4 /PRNewswire-FirstCall/ -- The following statement is being issued by The SCO Group, Inc. (Nasdaq: SCOX - News):

     (Logo:  http://www.newscom.com/cgi-bin/prnh/19990421/SCOLOGO )

     SCO has consistently stated that our UNIX System V source code and
     derivative UNIX code have been misappropriated into Linux 2.4 and 2.5
     kernels.  We have been showing a portion of this code since early June.
     SCO has not been trying to spread fear, uncertainty and doubt to end
     users.  We have been educating end users on the risks of running an
     operating system that is an unauthorized derivative of UNIX.  Linux
     includes source code that is a verbatim copy of UNIX and carries with it
     no warranty or indemnification.  SCO's claims are true and we look
     forward to proving them in court.

     Recent correspondence from SCO to Red Hat further explains SCO's
     position.

     The first letter is from Bob Bench, CFO of The SCO Group, Inc., to Mark
     Webbink, Sr. Vice President and General Counsel of Red Hat, Inc., that
     SCO intended to send to Red Hat.  After a conversation between Matthew
     Szulik and Darl McBride, Red Hat determined that SCO did not need to send
     this letter.

     The second letter is one that was sent to Matthew Szulik today from Darl
     McBride after Red Hat's lawsuit was filed.




     July 31, 2003


     Mark Webbink, Esq.
     Sr. Vice President and General Counsel
     RED HAT, INC.
     1801 Varsity Drive
     Raleigh, NC 27606



     VIA FACSIMILE: (919) 754-3700


     Dear Mr. Webbink:

     This letter is in response to yours of July 18, 2003 to Darl McBride,
     President and CEO of The SCO Group, Inc. ("SCO").

     Before responding to your request, it is important to place your letter
     in context.  Your letter follows on the heels of Red Hat's S-3 filing of
     July 7, 2003, in which your company revised its risk disclosure
     statement.[1]  In addition, SCO is currently engaged in litigation with
     International Business Machines Corporation ("IBM") regarding its role in
     the development of the Linux operating system.  At the time of your
     letter, we had expected the possibility of a global resolution of SCO's
     intellectual property claims against all Linux-related companies that
     would have likely included Red Hat.  This effort has apparently stalled,
     through no fault of SCO.

     Based on the posture of our litigation and your revised risk disclosures,
     it is unclear to us the purpose of your July 18, 2003 letter.  If you
     desire to enter good faith discussions to address SCO's intellectual
     property claims against Linux, either on behalf of a wider consortium of
     Linux companies or solely on behalf of Red Hat, we are willing to meet
     with you for that purpose.  In any such meeting, we will provide example
     after example of infringement of our intellectual property found in
     Linux.  Of course, any such demonstration must be pursuant to an
     acceptable confidentiality agreement and must be intended to further good
     faith discussions about resolving the differences between us.

     If you seek information for the purpose of informal discovery intended to
     benefit IBM in the pending litigation, or for the purpose of devising
     your own litigation plans against SCO related to Linux, we must
     respectfully decline your request.  Therefore, please clarify in writing
     the purpose for your request.  Thank you.


     Sincerely,




     Robert Bench
     Chief Financial Officer
     The SCO Group, Inc.

---

     [1] Red Hat states in the revised disclosure that it is "vulnerable to
         claims that [its] products infringe third-party intellectual property
         rights particularly because [its] products are comprised of distinct
         software components many of which are developed by independent
         parties."  The revised risk disclosure continues: "[M]uch of the code
         in [Red Hat's] products is developed by independent parties over whom
         we exercise no supervision or control ... [and Red Hat's] lack of
         access to unpublished software patent applications, copyright
         registrations which fail to adequately disclose source code, and
         numerous issued software patents that are of dubious validity ...
         Claims of infringement could require us to seek to obtain licenses
         from third parties in order to continue offering our products, to
         reengineer our products, or to discontinue the sale of our products
         in the event reengineering could not be accomplished on a timely
         basis."




     August 4, 2003


     Matthew J. Szulik
     CEO
     RED HAT, INC.
     1801 Varsity Drive
     Raleigh, NC  27606


     Dear Matthew,

     Attached is the letter I discussed with you during our July 31, 2003
     telephone conversation.  Instead of actually sending the letter, I
     thought it was best to telephone you and speak in person to see if we
     could resolve the issues between our companies short of litigation.  We
     left the conversation with a preliminary agreement to meet and continue
     our discussions further.

     To my surprise, I just discovered that your company filed legal action
     against The SCO Group earlier today.  You, of course, mentioned nothing
     of this during our telephone conversation.  I am disappointed that you
     were not more forthcoming about your intentions.  I am also disappointed
     that you have chosen litigation rather than good faith discussions with
     SCO about the problems inherent in Linux.

     Of course, we will prepare our legal response as required by your
     complaint.  Be advised that our response will likely include
     counterclaims for copyright infringement and conspiracy.

     I must say that your decision to file legal action does not seem
     conducive to the long-term survivability of Linux.

     Yours truly




     Darl C. McBride
     President & CEO