August 22, 2006

Ladies and Gentlemen,

I am sending this complaint to the Securities Exchange Commission (enforcement@sec.gov) to describe the illegal actions being taken by Jim Allchin, Paul Allen, Steve Ballmer, BayStar Capital LP, Baystar Capital II, L.P., BayStar Capital Management, LLC, Boies Schiller & Flexner, The Canopy Group, Brent Christensen, Steven Derby, Bill Gates, Lawrence Goldfarb, Jeff Hunsaker, Steven M. Lamar, Darl McBride, Microsoft Corporation, Morgan Keegan, Darcy Mott, Thomas Raimondi, Royal Bank of Canada, S2 Strategic Consulting, Blake Stowell, The SCO Group, Inc., Vulcan Capital, Ralph Yarro, and Bert Young. These entities have committed numerous crimes centered around the recent activities of The SCO Group, Inc.

Ishtiaque Omar has written a thesis which thoroughly explains the background
and origins of the current fight between Microsoft and SCO on one side versus
IBM and the Open Source community on the other.  You can read the thesis, "The
Penguin in Peril: SCO's Legal Threat to Linux" here.

http://firstmonday.org/issues/issue10_1/omar/#o1

My specific complaints are:

1.  SCO is grossly exaggerating the value of its intellectual property by
    claiming ownership of operating systems actually owned by other people.
    This exaggerated claim is a fraud on the investing public.

    Among my experiences in investing I learned to understand the Vancouver
    Exchange gold mine fraud which seem to always be with us.  Typically a
    Vancouver Exchange gold mine promoter finds some gold, which is easy to do,
    but of course the gold deposit is too small or too dilute to be profitably
    mined.  Then the promoter forms a penny stock company which owns the gold
    claim and begins hyping the stock.  There is actually some gold in the
    company's mining claim but the promotion propaganda exaggerates the claim
    into the greatest strike since the Comstock lode.  If the promoter succeeds
    in creating a stock price bubble then he sells as much stock as he can until
    the bubble bursts leaving the current crop of gullible investors with heavy
    losses.  I am sure that the investigators at the SEC are thoroughly familar
    with Vancouver Exchange gold mine stock frauds.

    Now comes SCO with a new twist on the Vancouver Exchange gold mine fraud.
    SCO has a contested claim to ownership to an obsolete computer operating
    system called System V which has a microscopic share of the market for
    operating systems.  SCO has hyped this asset into a claim of ownership of
    several other UNIX style operating systems sold by competing companies.  The
    SCO propaganda has created a stock price bubble in SCOX stock and the SCO
    insiders are methodically selling SCOX stock at inflated prices.

    This fraud is illegal under the Securities Act of 1934. Rule 10b-5 states:
    
      "It shall be unlawful for any person, directly or indirectly, by the use
      of any means or instrumentality of interstate commerce, or of the mails
      or of any facility of any national securities exchange,

        a. To employ any device, scheme, or artifice to defraud,

        b. To make any untrue statement of a material fact or to omit to state
           a material fact necessary in order to make the statements made, in
           the light of the circumstances under which they were made, not
           misleading, or 
            
        c. To engage in any act, practice, or course of business which operates
           or would operate as a fraud or deceit upon any person, in connection
           with the purchase or sale of any security."
    
    http://www.law.uc.edu/CCL/34ActRls/rule10b-5.html

    A. SCO sells a computer operating system called System V which is sometimes
       referred to by the brand name of UnixWare.
       
       http://www.caldera.com/products/unixware713/

       Unix System V and its derivatives, including UnixWare, have a small and
       shrinking share of the operating system market.  That share has been
       steadily shrinking for several years because System V is gradually
       becoming obsolete.
       
       http://www.computerworld.com/news/2000/story/0,11280,41643,00.html

    B. Linux is a operating system written by Linus Torvalds and thousands of
       volunteers who donate their creativity for free.
       
       http://www.linux.org/
       
    C. "Project Monterey" is a code name for a joint project between IBM and
       "The Santa Cruz Operation" of Santa Cruz, California to create an
       operating system based on System V code which works on large IBM 
       computers. Then later IBM started a second project team with the       
       same goals as Monterey except the second project was based on Linux.

       To my personal knowledge IBM has at least a 40 year history of competing
       development projects. IBM has often developed both software and hardware
       products by setting up two development projects unbeknownst to each other
       and giving both project teams the same assignment. Then IBM chooses to
       market the project with better product results and gives the axe to the
       among the members of the losing project team.  Here is an explanation of 
       why IBM chose to start supporting Linux.
       
       http://www.groklaw.net/article.php?story=20050117091704111
       
       The reason that IBM gave for cancelling the Monterey project was that 
       The Santa Cruz Operation (SCO) sold their interest in the Unix System V
       code and the Monterey project to Caldera Systems.  The Monterey project
       contract gives IBM the right to cancel the project in the event of such
       a sale by The Santa Cruz Operation. 
       
         "IBM shall have the right to terminate this Agreement immediately upon
         the occurrence of a Change of Control of SCO which IBM in its sole
         discretion determines will substantially and adversely impact the
         overall purpose of the cooperation set forth by this Agreement and
         applicable Project Supplements or will create a significant risk or
         material and adverse exposure of IBM's confidential and/or technical
         proprietary information (which is subject to, and to the extent of,
         confidentiality restrictions) ("Information")."
        
       http://www.sec.gov/Archives/edgar/data/851560/0000891618-99-000561.txt

       The Santa Cruz Operation sold the Monterey project agreement to Caldera
       Systems in August, 2000.
         
         "Caldera Systems Inc., a Linux distributor will acquire the Server
         Software Division and the Professional Services Division of The Santa
         Cruz Operation (SCO) Inc., a Unix provider."
       
       http://www.entmag.com/news/article.asp?EditorialsID=678

       Caldera Systems Inc. changed their name to The SCO Group (SCO).  This
       similarity in names can sometimes be confusing when discussing the
       history of the Monterey project.  Since IBM terminated the Monterey
       project based on the change in control from The Santa Cruz Operation
       (old SCO) to Caldera Systems (new SCO) the distinction between the two
       very similar names is important.
       
       http://news.zdnet.co.uk/software/developer/0,39020387,2121346,00.htm

       Great was (new) SCO's consternation when Monterey was axed in favor of
       IBM's Linux project.  SCO decided to sue IBM but had no legally
       compelling case.  SCO decided on a nuisance lawsuit against IBM for
       contributing operating system code allegedly owned by SCO to the Linux
       operating system.
       
       http://news.com.com/2100-1016-991464.html

    D. SCO knew before they filed suit against IBM that their claim was
       fraudulent.

       SCO hired an outside consultant named Bob Swartz who spent several months
       comparing the computer code in Linux against several versions of the Unix
       operating system originally developed by AT&T.  Michael Davidson of
       Caldera Internation (Caldera later changed their name to SCO) worked with
       Bob Swartz and received Bob Swartz' report.  On August 13, 2002 Michael
       Davidson sent an email to Reg Broughton, who forwarded it to Darl McBride
       with a cover note.  Here is Reg Broughton's email to Darl McBride.
       
       http://www.groklaw.net/pdf/IBM-459-22.pdf

       The reasons for the study and the results are summerized by Michael
       Davidson in his email thusly:

         "The project was a result of SCO's executive management refusing to
         believe that it was possible for Linux and much of the GNU software to
         have come into existance without *someone* *somewhere* having copied
         pieces of proprietary UNIX source code to which SCO owned the
         copyright. The hope was that we would find a "smoking gun" somwhere in
         code that was being used by Red Hat and/or the other Linux companies
         that would give us some leverage. (There was, at one stage, the idea
         that we would sell licenses to corporate customers who were using
         Linux as a kind of "insurance policy" in case it turned out that they
         were using code which infringed our copyright)."

         "At the end, we had found absolutely *nothing*. ie no evidence of any
         copyright infringement whatsoever."

    E. SCO v IBM

       IBM has contributed code to the Linux operating system.  SCO claimed that
       the contributed code was written and owned by SCO.  This claim was widely
       and repeatedly publicized.
        
       http://www.mozillaquest.com/Linux03/ScoSource-20-CodeReview_Story01.html

       quoting MozillaQuest:

         "Simply take a look at this excerpt from the letter Darl McBride and
         SCO-Caldera sent out to at least 1,500 companies, including Fortune 500
         and Forbes 1000 top companies. It is that letter that precipitated the
         German Linux community's successful legal counterattack against
         SCO-Caldera. That letter, dated 12 May 2003, states in part:

         Linux is, in material part, an unauthorized derivative of UNIX . . . We
         have evidence that portions of UNIX System V software code have been
         copied into Linux . . . legal liability that may arise from the Linux
         development process may also rest with the end user . . . We intend to
         aggressively protect and enforce these rights . . . we are prepared to
         take all actions necessary to stop the ongoing violation of our
         intellectual property or other rights."

       SCO told the investing public that SCO would reap huge profits from the
       damages that IBM would have to pay for illegal distribution of SCO code.
        
       http://webreprints.djreprints.com/875991416323.html#top

       1) In the SCO v IBM court hearings SCO lawyers have dropped their claim
          that System V code was contributed to Linux after SCO was unable to
          produce any evidence supporting that claim.  SCO now claims that the
          code in question was written by IBM but belongs to SCO anyway.
           
          http://www.groklaw.net/article.php?story=2003121122033016
           
          http://www.theage.com.au/articles/2004/02/09/1076175080452.html
       
          This is in spite of clear legal precedents, most notably USL v BSDi,
          which clearly state that the code written by SCO belongs to SCO and
          the code written by IBM belongs to IBM.
          
          http://www.groklaw.net/article.php?story=20031128153414688

       2) The code that IBM has contributed to Linux is publically available to
          anyone.  IBM has demanded that SCO identify which lines of that code
          are the stolen code. SCO has never answered that question.  On
          December 5, 2003 Judge Brooke Wells ordered SCO to answer that
          question in great detail within 30 days.
          
          http://www.groklaw.net/article.php?story=2003121122033016
       
          On March 3, 2004 Judge Brooke Wells found that SCO had not complied
          with the December 5 order and issued the order again with a 45 day
          deadline.
          
          http://www.groklaw.net/article.php?story=20040303195948664
       
          Even when ordered to do so in a court case that SCO must win in order
          to survive as a company, SCO cannot provide specific evidence that IBM
          gave any SCO intellectual property to Linux.
       
       3) IBM explains the importance of the absence of evidence to Judge
          Kimball this way.
          
          http://www.groklaw.net/article.php?story=20040521183116140

          IBM has asked the court for a series of partial summary judgements to
          resolve some of the disputed points in the case.  One partial summary
          judgement that IBM asked for was for the judge to rule that SCO's
          claim that IBM infringed SCO's copyrights by contributing SCO code to
          Linux was false.  On February 9, 2005 Judge Kimball ruled that IBM's
          motions for partial summary judgements are premature.  In his ruling
          Judge Kimball made the following statement about SCO's lack of
          evidence.

            "Viewed against the backdrop of SCO's plethora of public statements
            concerning IBM's and others' infringement of SCO's purported
            copyrights to the UNIX software, it is astonishing that SCO has not
            offered any competent evidence to create a disputed fact regarding
            whether IBM has infringed SCO's alleged copyrights through IBM's
            Linux activities."
          
          http://www.groklaw.net/article.php?story=20050209203941896
          
          http://news.com.com/Judge+slams+SCOs+lack+of+evidence+against+IBM/2100-7344_3-5570265.html

          If the SEC has any doubt that the whole SCO claim to owning Linux
          intellectual property rights is a complete fraud this statement by
          Judge Kimball should remove that doubt.

       4) After the deadline for submitting claims has long passed SCO tried to
          introduce the unsubstantiated claims again as part of some expert
          witness testimony.  IBM moved to strike SCO's claims.  On June 28,
          2006 Magistrate Judge Brooke C. Wells issued a court order in SCO v
          IBM which states that SCO has willfully disobeyed several court orders
          to produce specific evidence against IBM.  In that court order Judge
          Wells makes the following statements.

          On page 2:

            "As outlined in greater detail below, the court finds that SCO has
            failed in part to meet the level of specificity required by this
            court's orders and the order entered by Judge Kimball. It is also
            apparent that SCO in some instances failed to meet the level of
            specificity it required of IBM. Further, this failure was willful
            under case law and prejudicial to IBM. Therefore, the court GRANTS
            IBM's Motion to Limit SCO's Claims Relating to Allegedly Misused
            Material in Part."

          On page 32:

          There appears to be a mistake where the court mentions SCO when she
          obviously means IBM.  I have placed this correction in parenthesis.

            "Based on the foregoing, the court finds that SCO has had ample
            opportunity to articulate, identify and substantiate its claims
            against SCO (IBM).  The court further finds that such failure was
            intentional and therefore willful based on SCO's disregard of the
            court's orders and failure to seek clarification.  In the view of
            the court it is almost like SCO sought to hide its case until the
            ninth inning in hopes of gaining an unfair advantage despite being
            repeatedly told  to put "all evidence . . . on the table."

            "Accordingly, the court finds that SCO willfully failed to comply
            with the court's orders."

          On page 33:

            "The court finds SCO's arguments unpersuasive.  SCO's arguments are
            akin to SCO telling IBM sorry we are not going to tell you what
            you did because you already know."

          On page 36:

            "Accordingly, based on the delays that would arise form SCO's lack
            of specificity, and the burdens that this places on IBM at such a
            late stage in this litigation, the court finds that IBM is
            prejudiced by the lack of specificity in SCO's disclosures."

          These repeated charges without any evidence and in violation of a
          judge's specific orders to stop making such claims is further proof
          that SCO v IBM is a deliberate criminal attack on IBM and Linux.
          
          http://www.groklaw.net/pdf/IBM-718.pdf

    F. SCO claims ownership of Linux.  SCO's claims are partially based on their
       claimed ownership of the IBM code contributed to Linux.

       SCO also claims that 65 Linux programs were copied from SCO's version of
       Unix.
       
       http://lwn.net/Articles/64052/

       Linus Torvalds has documentary proof that he wrote the code claimed by
       SCO.
       
       http://www.ussg.iu.edu/hypermail/linux/kernel/0312.2/1241.html

       When IBM proved to be steadfast in fighting the lawsuit and refused to
       negotiate a settlement SCO attacked IBM customers in an attempt to put
       pressure on IBM to settle on terms favorable to SCO.  SCO is demanding
       that corporations which use Linux pay SCO a licensing fee to use Linux. 
       SCO sent a letter to 1500 corporations claiming ownership of Linux and
       threatening to bill for Linux.  These threats have never been carried
       through because SCO would be indicted for  mail fraud, billing for
       something that they do not own.
       
       http://lwn.net/Articles/43085/
       
       http://www.cxotoday.com/cxo/jsp/index.jsp?file=template0.jsp&storyid=472§ion=News&subsection=Business&subsection_code=1
       
       http://www.groklaw.net/staticpages/index.php?page=20030929022014462
       
       http://www.informationweek.com/story/showArticle.jhtml?articleID=17100017
       
       http://www.forbes.com/forbes/2003/1124/096_print.html

       In SCO v Novell Novell's counterclaims include the charge that SCO
       fraudently tried to sell Linux licenses.

         "45. A significant aspect of SCO's rebranding efforts and new business
         strategy was its adoption of a scheme to extract "licenses" from the
         UNIX and Linux communities based on claims to own intellectual
         property specifically  reserved to Novell, i.e., the UNIX Copyrights.
         SCO proceeded on its own in  this scheme after Novell rebuffed SCO's
         overtures to participate."

         "38. In late 2002, SCO repeatedly contacted Novell in connection with
         SCO's soon-to-be- announced SCOsource campaign. SCO requested copies
         of certain documentation concerning rights to UNIX, including the
         agreement between Novell and Santa Cruz. SCO also expressed its
         interest in a campaign to assert UNIX infringement claims against
         users of Linux. SCO asked Novell to assist SCO in a Linux licensing
         program, under which SCO contemplated extracting a license fee from
         Linux end users to use the UNIX intellectual property purportedly
         contained in Linux. Novell refused to participate."

         '46. On January 22, 2003, SCO publicly announced its licensing scheme
         as part of its "SCOsource" program. In connection with this
         announcement, SCO's CEO, Darl McBride, commented that "SCO owns much
         of the core UNIX intellectual property, and has full rights to license
         this technology and enforce the associated patents and copyrights."'

         '47. Under the SCOsource licensing program, SCO seeks to enter into
         license agreements with UNIX vendors and offers Intellectual Property
         Licenses to Linux end users ("Intellectual Property Licenses").  The
         purported purpose of these licenses is to allow UNIX vendors to use
         SCO's UNIX intellectual property and to permit Linux end users to
         "properly compensate us for our UNIX intellectual property as
         currently found in Linux." One term of SCO's Intellectual Property
         Licenses for Linux is that licensees "will be held harmless against
         past and future copyright violations based on their use of SCO's
         intellectual property . . . in Linux distributions . . . ."'

         "48. As part of its SCOsource initiative, SCO filed a lawsuit against
         IBM on March 7, 2003, asserting, among other things, UNIX Copyrights
         that SCO does not own. SCO has alleged that it owns the UNIX
         Copyrights and that IBM's contributions to Linux and use of Linux
         infringe these copyrights."

         "52. As part of the SCOsource program, in May 2003, SCO sent letters
         to 1,500 of the world's largest corporations threatening suit based on
         its alleged ownership of the UNIX Copyrights ("End User Letters"). On
         May 12, 2003, SCO sent one of these letters to IBM, and sent another
         letter to Novell. On information and belief, all of the End User
         Letters were nearly identical in content to the IBM and Novell
         letters."

         '53. In the End User Letters, SCO made the false and misleading
         statement that "SCO holds the rights to the UNIX operating system
         software originally licensed by AT&T to approximately 6,000 companies
         and institutions worldwide (the 'UNIX Licenses')."'

         '54. In the End User Letters, SCO also made the unsupported assertion
         that "We [SCO] have evidence that portions of UNIX System V software
         code have been copied into Linux and that additional other portions of
         UNIX System V software code have been modified and copied into Linux,
         seemingly for the purposes of obfuscating their original source."'

         "55. After setting forth these alleged facts in the End User Letters,
         SCO erroneously concluded that "Linux infringes on our UNIX
         intellectual property and other rights." According to SCO, end users
         of Linux were liable for this alleged infringement whether-or not they
         participated in any contribution of UNIX System V software code into
         Linux.'

         "56. As set forth in detail above, besides sending the End User
         Letters, SCO has made numerous public statements that it owns the UNIX
         Copyrights and that end users of Linux are liable for infringement of
         those copyrights. For instance, contrary to the express terms of the
         APA, SCO has stated on its website that "only SCO is in a position to
         license the use of this infringing intellectual property." The Court
         itself has noted SCO's "barrage of public statements about pursuing
         alleged infringers of its alleged intellectual property." The SCO
         Group Inc. v. Int'l Bus. Machs., Case No. 2:03CV294 DAK, Memorandum
         Decision and Order at 5 (Feb. 9, 2004)."

         "38. In late 2002, SCO repeatedly contacted Novell in connection with
         SCO's soon-to-be- announced SCOsource campaign. SCO requested copies
         of certain documentation concerning rights to UNIX, including the
         agreement between Novell and Santa Cruz. SCO also expressed its
         interest in a campaign to assert UNIX infringement claims against
         users of Linux. SCO asked Novell to assist SCO in a Linux licensing
         program, under which SCO contemplated extracting a license fee from
         Linux end users to use the UNIX intellectual property purportedly
         contained in Linux. Novell refused to participate. "
       
       http://www.groklaw.net/article.php?story=20050915183241951

       SCO is asking operating systems resellers to sell an "Intellectual
       Property License for Linux".  SCO expects the threat of lawsuits to
       create new revenue for both the resellers and SCO.
       
       http://www.vnunet.com/News/1152257
       
       http://www.caldera.com/scosource/

       Here is where you can order your SCO IP License license for US$699.
       
       http://shop.sco.com/caldera/cart.jsp?action=add&collection=Scosource&sku=LA520-0001-CC1&additem_LA520-0001-CC1_0_Quantity=1&additem_LA520-0001-CC1_0_ShipTo=Me&additem_LA520-0001-CC1_0_BillTo=Me
       
       The investing public has been repeatedly told that SCO owns Linux and is
       about to bill 1500 major corporations huge amounts of money in Linux
       licensing fees.

    G. Two German courts ruled that SCO's claims to own Linux was a criminal
       offence in Germany and SCO must stop making such claims in Germany.
       Subsequently, SCO was fined 10,000 euros for continuing to make false
       claims in Germany that SCO owns Linux.

       On May 28, 2003 the Bremen, Germany Regional Court ruled in favor of
       Univention GmbH and issued a preliminary injunction against SCO-Caldera.

         "The order prohibits SCO-Caldera from circulating:
         'the idea that the Linux Operating System illegitimately acquired and
         contains the Intellectual Property of SCO UNIX and/or that the end
         users of LINUX can be made liable for patent/copyright infringements
         against SCO's intellectual Properties.'"
       
       http://www.mozillaquest.com/Linux03/ScoSource-19-Injunction_Story01.html

       The injunction was based on the fact that SCO had no proof of any of its
       intellectual property claims.  The injunction gave Univention the right
       to ask for a permanent injunction if SCO did not provide such proof
       within 30 days.

       On June 5, 2003 the Munich, Germany District Court ruled in favor of
       Tarent GmbH and issued a permanent injunction against SCO-Caldera which
       is very similar to the Bremen injunction.
       
       http://www.tarent.de/html/tarent-vs-sco/030612_Questions-and-Answers.html

       On September 2, 2003 SCO Group was fined 10,000 Euros (about US$11,000)
       by the Munich court for violating the June 5 injunction.
       
       http://www.computerworld.com/softwaretopics/os/linux/story/0,10801,84564,00.html
       
       On February 18, 2004 Univention GmbH and SCO Group GmbH agreed to an out
       of court settlement of the Bremen case.  In this agreement:
          
         "1) SCO Group GmbH (German branch of SCO) has agreed not to allege any
         more that Linux contains SCO's unlawfully acquired intellectual
         property.
         2) The settlement also forbids SCO from claiming that if end users
         are running Linux they might be liable for breaches of SCO's
         intellectual property.
         3) Also they cannot say that Linux is an unauthorized derivative of
         Unix.
         4) Finally SCO Group GmbH is prohibited to threaten to sue Linux users
         unless they bought SCO Linux or Caldera Linux."
       
       http://www.groklaw.net/article.php?story=20040301025634926&mode=print

       Here is the agreement in German.
       
       http://www.computerwoche.de/index.cfm?pageid=254&artid=58483&main_id=58483&category=8&currpage=1&kw=

       Here is an English synopsis of the agreement.
       
       http://www.groklaw.net/article.php?story=20040301025634926
       
       So in Germany the courts have ruled that SCO's claims against Linux are
       completely unsubstantiated.  And in spite of the German court orders SCO
       is still fraudently claiming in Germany that SCO will make "millions or
       up to billions of profit" by selling licenses for intellectual property
       that SCO does not own.
       
       http://www.groklaw.net/article.php?story=20040413122355148

       On August 19, 2003 SCO announced:

         "LINDON, Utah, Aug 19, 2003 -- The SCO Group, Inc. (Nasdaq: SCOX), the
         owner of the UNIX® operating system, today announced the appointment of
         Gregory Blepp as vice president of SCOsource. Blepp will report to
         Chris Sontag, the senior vice president and general manager of
         SCOsource, the division of SCO tasked with protecting and licensing the
         company's UNIX intellectual property."
       
       http://ir.sco.com/ReleaseDetail.cfm?ReleaseID=116432

       SCO never filed notice of this appointment with the SEC.

       On August 16, 2004 Chris Preimesberger conducted an interview with Blake
       Stowell of SCO in which Blake Stowell said that Gregory Blepp was no
       longer a SCO employee.  Chris Preimesberger asked:

         "What ever happened to that SCO sales guy in Germany, Gregory Blepp,
         who said he was carrying 'millions of lines' of the disputed
         Linux code in his own briefcase last April?" I asked. "That was an
         interesting story. He kind of fell off the map; I haven't heard about
         him lately."

         'Stowell laughed. "Oh, he no longer works for us," he said. "But I
         think he might be doing some consulting. Anyway, do you know how many
         pages 'millions of lines of code' would be? A lot bigger than his
         briefcase, that's for sure. That should have been somebody's first
         clue."'
       
       http://www.newsforge.com/article.pl?sid=04/08/16/0658202

       SCO never reported to the the SEC that Gregory Blepp has been terminated
       as a SCO officer.

       In an interview with Pamela Jones published on August 19, 2004 Gregory
       Blepp denied that he had ever been a SCO employee:

         "I am only consulting with SCO since day one for a couple of reasons. I
         know it was taken up differently in many places, as some other facts,
         especially by Heise in Germany, but they did not as you, contact me
         directly (and I offered) so I did not bother any more correcting all
         the time."

       And later in the interview:

         "PJ: One thing since we last spoke: I checked the press release
         announcing your hiring by SCO as VP. They didn't say you were a
         consultant. They indicated you were staff. Even now, the statement by
         Stowell indicates you were staff but now are consulting. Can you
         clarify? I understood that you were a consultant throughout."

         "BLEPP: Yep, the announcement did say this. Being in Germany, we needed
         to make sure that I can talk at that time, facing the TRO's and at
         least try to inform the respective people about what SCO's position is.
         So, being employed in Germany was no option. I was always consulting
         SCO."
       
       http://www.groklaw.net/article.php?story=20040819062642232

       So the way that I interpret the situation is that the German courts
       decreed a permanent injunction against SCO forbidding SCO to claim
       ownership of Linux.  SCO tried to evade the court order by hiring Gregory
       Blepp as a consultant, rather than as an employee, to spread false
       information.  SCO issued a press release announcing that Blepp was a vice
       president of SCOsource, which both SCO and Blepp now deny.  However, SCO
       did not notify the SEC that Gregory Blepp was appointed as an officer of
       the company.  Also Gregory Blepp never received any stock options, which
       every other officer of SCO has received.  Therefore I think that the
       announcement that Gregory Blepp was appointed vice president of SCOsource
       was a lie designed to add credence to the illegal propaganda Gregory
       Blepp spread in Germany to bolster the SCO stock scam.

    H. Red Hat is a company whose main product is distributing Linux operating
       systems.  Red Hat sued SCO in the United States to contest SCO's claims
       to own Linux.
       
       http://news.com.com/2100-7252-5059547.html?tag=nl

    I. Embedded Linux is a small version of Linux used in such things as mobile
       phones and handheld computers.
       
       http://www.linuxdevices.com/articles/AT9952405558.html
              
       SCO claims ownership of Embedded Linux and demands a $32 fee for each
       embedded device using Linux even though SCO has absolutely no logical or
       legal basis for such a claim.  SCO's claim to Linux is that IBM donated
       SCO code to Linux.  The code that IBM has contributed to Linux allows Linux
       to work well on extremely large computers.  Such code is inappropriate for
       embedded devices and it is impossible for embedded devices to run the IBM
       code.
       
       http://www.eet.com/sys/news/OEG20030806S0025

       Once again the general investing public has been told that SCO will reap
       huge amounts of money by selling an operating system, embedded Linux,
       that SCO does not own.

    J. BSD is an operating system that was developed at the University of
       California, Berkeley using government grants handed out to develop the
       Internet. AT&T sued the University of California claiming that AT&T
       owned the BSD operating system.  Early in the trial (USL v BSDi) the
       court ruled that the code written by AT&T was owned by AT&T and the code
       written by University of California was owned by the University of
       California.  The story is complicated because both operating systems have
       changed ownership.  BSD is currently owned by Berkeley Software
       Development and System V ownership is currently disputed between Novell
       and SCO.

       There is a 1994 agreement between (now) BSD and (now) Novell deliniating
       what code is owned by each.  Also the agreement states that Novell or its
       successor, SCO, (if in fact SCO is Novell's successor as SCO claims and
       Novell denies) can never again sue over the BSD code.
       
       http://www.groklaw.net/article.php?story=20031128153414688

       On November 28, 2004 this agreement was made public by a request under
       California's Public Records Law. Here is a copy of the 1994 USL-Regents
       of UCal Settlement Agreement.
       
       http://www.groklaw.net/article.php?story=20041126130302760

       Ray Noorda knew the contents of the agrement and is quoted in the agreed
       upon press release as saying:

         "Ray Noorda, Chairman of Novell, Inc., which recently acquired USL,
         called the settlement an "excellent example of what can be
         accomplished by cooperation between the business and academic 
         communities." Mr. Noorda stated that "the settlement permits the
         University to accomplish its goals but preserves USL's legitimate
         interest in protecting its intellectual property." David Hodges,"
  
       The Noorda Family Trust is the majority shareholder in Canopy and Canopy
       is the controlling shareholder in SCO.

       Darl McBride keeps claiming he knows what's in various sealed documents
       from the case. Also SCO claims that they have no copy of the agreement. 
       This conflict is easily resolved by the fact that Ray Noorda told the
       officers of SCO verbally what the contents of the agreement are.  Then
       SCO proceeded to lie about the contents knowing that they would be
       protected by the secrecy clause in the agreement.  Such lies are fraud on
       the investing public.

       SCO claims ownership of BSD even though Novell's predecessor in
       interest thoroughly lost any and all claims to BSD in 1994 so that 
       Novell can not possibly have sold BSD to SCO.  SCO has threatened to
       reopen the BSD suit even though to do so is forbidden by the agreement
       settling the case.  This creates the false impression among public
       investors that SCO owns BSD.
       
       http://www.newsforge.com/business/03/11/18/1742216.shtml

    K. SCO claims ownership of all UNIX operating systems.
       
       http://radio.weblogs.com/0120124/2003/09/06.html

       Eric Raymond gives a comprehensive explanation of why SCO's claims to own
       all of UNIX are false.
       
       http://www.opensource.org/sco-vs-ibm.html#id2790728

       In fact SCO owns only a disputed claim to System V.  Claiming ownership
       of all the other UNIX operating systems is a gross exaggeration of SCO
       assets and is a fraud against the investing public.

    L. Novell is the company from which SCO obtained a contract to sell System
       V.  Novell strongly disputes the exaggerated size of the intellectual
       property claimed by SCO.  Novell's position is that SCO has the right
       to sell System V but SCO does not own System V.
       
       http://www.wired.com/news/technology/0,1282,59013,00.html
       
       http://www.infoworld.com/article/03/12/22/HNnovellSCO_1.html
       
       http://www.theage.com.au/articles/2004/01/08/1073437391747.html

       In the MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS OF NOVELL, INC.
       MONDAY, SEPTEMBER 18, 1995 the minutes contain the following explanation
       that the agreement with SCO did not include certain assets which are now
       claimed by SCO.

         "Novell will retain all of its patents, copyrights and trademarks
         (except for the trademarks UNIX and UnixWare), a royalty-free,
         perpetual, worldwide license back to UNIX and UnixWare for internal
         use and resale in bundled products, Tuxedo and other miscellaneous,
         unrelated technology."
       
       http://www.groklaw.net/article.php?story=20041129162537548

       Here is the agreement between Novell and SCO which is dated September
       19, 1995.
       
       http://www.groklaw.net/article.php?story=2003111023050367
       
       Here is the correspondence between Novell and SCO.
       
       http://www.novell.com/licensing/indemnity/legal.html
       
       In the list of assets excluded from the sale are:

         "Schedule 1.1(b) Excluded Assets (Page 2 of 2)
          V. Intellectual Property:
          A. All copyrights and trademarks, except for the trademarks UNIX
             and UnixWare.
          B. All Patents"

       In April 1996, after the agreement between Novell and SCO, Novell
       negotiated an amendment to the software license with IBM.  This 
       amendment to the contract has been entered as exhibit 13 in SCO v IBM. 
       The fact that the contract is between Novell and IBM versus between SCO
       and IBM is consistent with Novell's stance that SCO only bought
       marketing rights to System V.  If SCO had bought the copyright to System
       V then SCO would have nogotiated the amended contract directly with IBM
       without any Novell participation at all.  And the amended contract
       clearly states that the copyright belongs to Novell.
       
         "Notwithstanding the above, the irrevocable nature of the above rights
         will in no way be construed to limit Novell's rights to enjoin or
         otherwise prohibit IBM from violating any and all of Novell's rights
         under this Amendment, the Related Agreements, or under general patent,
         copyright, or trademark law."
       
       http://www.groklaw.net/article.php?story=20041023052655609

       This viewpoint is supported by the testimony of the man who negotiated
       the contract for Novell, Michael J. DeFazio.
       
       http://www.groklaw.net/article.php?story=20041022220159488

       SCO is suing Novell in an attempt to obtain clear title to System V.
       
       http://www.iht.com/articles/125939.html

       In SCO v Novell Novell's counterclaims include the charge that SCO
       fraudently claims ownership of UNIX.

         "40. Notwithstanding Novell's rejections, SCO embarked on an aggressive
         campaign in which it falsely asserted ownership over these same
         copyrights via public statements, a series of letters to Linux end
         users, several lawsuits against Linux distributors and end users,
         and a licensing program purporting to offer SCO's Intellectual Property
         Licenses for Linux."

         "41 SCO's misleading and wrongful public assertions of ownership
         include the following:"

           'a. On March 7, 2003, SCO stated in a press release, "In 1995, SCO
           purchased the rights and ownership of UNIX and UnixWare that had been
           originally owned by AT&T. This included source code, source
           documentation, software development contracts, licenses and other
           intellectual property that pertained to UNIX-related business. . . .
           'SCO is in the enviable position of owning the UNIX
           operating system,' said Darl McBride, president and CEO, SCO."'

           'b. On May 14, 2003, SCO stated in a press release, "[SCO], the owner
           of the UNIX operating system, today warned that Linux is an
           unauthorized derivative of UNIX and that legal liability for the use
           of Linux may extend to commercial users."'

           "c. On June 6, 2003, SCO stated in a press release, "[SCO], the owner
           of the UNIX© operating system, today confirmed its previously stated
           ownership of UNIX copyrights. As SCO has consistently maintained, all
           rights to the UNIX and Unix-Ware technology, including the
           copyrights, were transferred to SCO as part of the Asset Purchase
           Agreement between Novell and SCO dated September 19, 1995. Any
           question of whether the UNIX copyrights were transferred to SCO under
           the Asset Purchase Agreement was clarified in Amendment No. 2 to the
           Asset Purchase Agreement dated October 16, 1996."

           '"This amendment simply confirms SCO's long stated position that it
           owns all copyrights associated with the UNIX and UnixWare
           businesses,' said Chris Sontag, senior vice president and general
           manager, SCOsource intellectual property division, SCO. . . . 'SCO is
           the owner of the UNIX operating system, as well as all of the UNIX
           contracts, claims and copyrights necessary to conduct that business,'
           said Sontag. 'None of the litigation we are currently involved with
           asserts claims based on copyrights. Because others have called into
           question SCO's ownership of the UNIX and UnixWare copyrights, we are
           satisfied that we have now proven without a doubt that SCO owns those
           copyrights. "'

           "d. During at least June and July, 2003, SCO wrongfully registered
           copyrights in UNIX and UnixWare releases owned by Novell. These
           registrations related to UNIX System V release 3.0, UNIX System V
           release 3.1, UNIX System V release 3.2, UNIX System V release
           3.21386, UNIX System V release 4.0, UNIX System V release 4.1, UNIX
           System V release 4.lES, UNIX System V release 4.2, UNIX System V
           release 4.2MP, and UnixWare 7.1.3."

           'e. On January 13, 2004, SCO stated, "[SCO] today reiterated its
           ownership of UNIX intellectual property, source code, claims and
           copyrights and has made all of the documents surrounding the
           companies' ownership of UNIX and UnixWare available for public
           viewing at www.sco.com/novell."'

           'f. On January 28, 2004, in its Form 10-K filed with the United
           States Securities and Exchange Commission, SCO stated, "We own
           the UNIX operating system and are a provider of UNIX-based products
           and services.  . . . We acquired our rights to the UNIX source code
           and derivative works and other intellectual property rights when we
           purchased substantially all of the assets and operations of the
           server and professional services groups of The Santa Cruz Operation,
           Inc., in May 2001. The Santa Cruz Operation (now known as Tarantella,
           Inc.) had previously acquired such UNIX source code and other 
           intellectual property rights from Novell in September 1995, which
           were  initially developed by AT&T Bell Labs. Through this process, we
           acquired all UNIX source code, source code license agreements with
           thousands of UNIX vendors, all UNIX copyrights, all claims for
           violation of the above mentioned UNIX licenses and copyrights and
           other claims, and the control over UNIX derivative works . . .."'

           "Interviewer: Well, Novell would say that you actually don't own
           those copyrights fully.  McBride: Yeah, well, the Novell thing, they,
           they came out and made a claim that held up for about four days and
           then we put that one to bed. If you go talk to Novell today, I'll
           guarantee you what they'll say, which is they don't have a claim on
           those copyrights."

         "43. Novell has not acquiesced to SCO's claims, as recited in SCO's own
         Amended Complaint. (Amended Complaint ¶ 19(d)-(e).) To the contrary,
         Novell was vigorously contesting those claims in private correspondence
         with SCO at the very same time SCO was publicly claiming otherwise. For
         example:"

           "a. On May 12, 2003, SCO's CEO Darl McBride sent Novell a letter
           asserting that it owned the UNIX copyrights and that Linux end users
           were infringing those copyrights."

           "b. On May 28, 2003, Novell's CEO, Jack Messman, responded by letter,
           asserting in no uncertain terms that "SCO is not the owner of the
           UNIX copyrights."

           'c. After SCO registered its claim to the UNIX copyrights with the
           U.S. Copyright Office, Novell's General Counsel, Joseph LaSala wrote
           to SCO, again disputing its claim to ownership of the copyrights. In
           his August 4, 2003, letter, LaSala stated, "We dispute SCO's claim to
           ownership of these copyrights."'

         "44. In September and October 2003, Novell attempted to protect its
         rightful  ownership of the UNIX Copyrights, and to correct SCO's
         erroneous registrations  claiming ownership, by filing its own
         copyright registrations."

         "95. SCO made its public statements claiming ownership of the UNIX
         Copyrights, and improperly registered its claim to UNIX Copyrights,
         with knowledge that title to these copyrights remains with Novell."

         "96. SCO made such statements maliciously, in bad faith, and with
         intentional disregard for the truth."
         
         http://www.groklaw.net/article.php?story=20050915183241951

       SCO is deceiving the investing public by falsely claiming to have
       purchased System V in its entirety from Novell.

    M. BSD has a valid claim to partial ownership of System V.  BSD allows
       anyone to use BSD code as long as the source code displays the BSD
       copyright notice.  In the law case explained in section G, AT&T barred
       BSD from using AT&T code but BSD said that AT&T was welcome to use BSD
       code, provided that it was copyrighted as BSD code.  SCO accidently
       showed that some of System V code actually belongs to BSD when SCO held a
       public viewing of some code that they claimed was SCO code illegally
       added into Linux.  The BSD code would also be legal in System V if SCO
       included the BSD copyright notice in the code.  SCO did not include the
       BSD copyright notice in the example of BSD code that they claimed was SCO
       code illegally incorporated into Linux.
       
       http://www.perens.com/SCO/SCOSlideShow.html

       Therefore System V contains some BSD code but the amount of BSD code in
       System V is not public knowledge.  SCO says that there are millions of
       lines of SCO code in Linux.  If in fact there are millions of lines of
       BSD code in both Linux and System V then a very significant portion of
       System V is actually owned by BSD.
       
       http://josiah.ritchietribe.net/blog/index.php?p=469&c=1

       There is a 1994 agreement between (now) BSD and (now) Novell deliniating
       what code is owned by each.  Also the agreement states that Novell or its
       successor, SCO, (if in fact SCO is Novell's successor as SCO claims and
       Novell denies) can never again sue over the BSD code.
       
       http://www.groklaw.net/article.php?story=20031128153414688

       On November 28, 2004 this agreement was made public by a request under
       California's Public Records Law. Here is an explanation of what portions
       of System V are owned by BSD.

         "4.  BSD Derived Materials are computer files or documents which the
         University contends are derived from the BSD Releases which are
         contained in the UNIX System or are otherwise distributed by USL. A
         list of the BSD Derived Materials is attached as Exhibit C."

         "f. USL agrees that it shall affix the University Copyright Notice and
         the University Acknowledgment to the files listed in Exhibit C in the
         following manner:"

         "(v) In any future release of the UNIX System issued following the
         issuance of UNIXWARE 2.0, USL shall include the University Copyright
         Notice and the University Acknowledgment in all of the files listed in
         Exhibit C, other than the .mk files (the "Files"). In all events, USL
         shall include the University Copyright Notice and the University
         Acknowledgment in all such Files in any copies of UNIXWARE 2.0
         distributed after January 31, 1995. If any such File contains a
         copyright notice reflecting publication by the University at some date
         earlier than the dates appearing in the University Copyright Notice,
         USL shall not delete the reference to such earlier date(s) of
         publication, but shall include those dates in addition to the later
         dates reflected in the University Copyright Notice."

       EXHIBIT C Then contains a 17 page list listing the files which are
       owned by BSD and to which SCO is required to attach BSD copyrights.
       Here is a copy of the 1994 USL-Regents of UCal Settlement Agreement.
       
       http://www.groklaw.net/article.php?story=20041126130302760

       Ransom Love is a former CEO of the company now called SCO.  When
       discussing the possibility of releasing SCO code as Open Source software
       Ransom Love said, "Some code, however, can't be open sourced because
       other companies own it."
       
       http://www.practical-tech.com/infrastructure/i08042000.htm

       Other individuals and organizations with known copyrights to portions of 
       System V code include:
	  
         Computer Associates International, Inc.
         Edison Design Group, Inc.
         Eric P. Allman
         Hewlett-Packard Company
         Hitachi, Ltd.
         Intel Corporation
         International Business Machines Corporation
         Massachusetts Institute of Technology
         Microsoft Corporation
         The Regents of the University of California
         Sun Microsystems, Inc.
         The Open Group (formerly OSF)
         Compaq Computer Corporation
         Digital Equipment Corporation
       
       http://www.groklaw.net/article.php?story=2004061708050599
		 
       By not providing information as to how much of System V is owned by
       BSD and the other copyright holders SCO is misleading the general
       investing public about the value of the System V asset.  By claiming
       ownership of BSD code SCO is committing fraud.

    N. One of the results of SCO attacking the validity of the GPL was that
       SCO's Linux customers refused to buy Linux from SCO. SCO's customers
       began returning SCO's Linux products. SCO's Linux business was hard hit
       and was discontinued as a result. Erik Hughes, Director of Product
       Management, for SCO filed a declaration in SCO v IBM which says in part:

         "9. SCO copied, advertised and distributed the Linux kernel and other
         related Linux software for years before 2003."

         "10. Prior to suspending sales of Linux-related products in May, 2003,
         SCO had a promising Linux business with long standing customers and
         pre-existing binding sales and service contracts.  The Linux product
         line, including the operating system, services, support, professional
         services, education, and layered applications had accounted for 5-10%
         of SCO's revenues."

         "7. In accordance to its obligations to current customers from May
         14, 2003, until May 31, 2003, SCO sold 83 units of SCO Linux Server
         4.0, for gross revenue of %9,209.  During this same period, 79 units
         were returned, which resulted in a loss of $7,360, so net sales for
         this period were 4 units and net revenue was $1,849."

         "6. As indicated in SCO press release attached as Exhibit C, August 5,
         2003, was the first date on which SCO offered its SCO Intellectual
         Property License for sale."

         "4. From August 5, 2003, until May 31, 2004, (the date of the last
         sale), SCO sold 45 units of SCO Linux Server 4.0, for gross revenue of
         $5,294. During this same period, 70 units were returned, which resulted
         in a loss of $6,473, so net sales for this period were -25 units and
         net revenue was -$1,179."
       
       http://www.groklaw.net/pdf/IBM-353-B.pdf

    O. SCO has sent letters to about 6000 SCO customers stating that SCO owns
       Linux and that the terms of the contract between SCO and each customer
       forbids the customer from using Linux unless the customer pays SCO for
       Linux.  SCO demanded that each customer certify that they had not
       inserted any SCO code into Linux..
       
       http://www.groklaw.net/article.php?story=20040106112439165
       
       This letter has received wide publicity and creates the false impression
       among investors that SCO will receive money for Linux from the existing
       SCO customers.

    P. When SCO sued IBM, SCO hired a prominent law firm, Boies, Schiller, and
       Flexner to handle the case.  SCO initially told the general investing
       public that Boies, Schiller, and Flexner was working on a contingency
       basis.  This created the false impression among the general investing
       public that Boies, Schiller, and Flexner was so confident of SCO's
       chances of winning the IBM case that they would accept the case on
       a contingency fee basis.
       
       http://zdnet.com.com/2100-1104-1010981.html

         "SCO's legal costs are being paid under a contingency arrangement,
         McBride said. In such cases, lawyers typically are paid not by the
         hour, but with a percentage of whatever money they can win for their
         clients in the case."

       In fact Boies, Schiller, and Flexner is being paid a retainer fee and is
       billing SCO at hourly rates, as well as a 20% contingency fee on windfall
       profits from equity sales.
       
       http://www.sec.gov/Archives/edgar/data/1102542/000110465903028046/a03-6084_1ex99d1.htm

    Q. The ELF standard is a description of a format used to store executable
       programs on a computer disk.  The ELF standard is widely used in UNIX
       operating systems, including System V and Linux among others.  SCO claims
       ownership of the UNIX Executable and Linking Format (ELF) standard.

         "SCO's two latest filings with the Utah district court hearing its $5
         billion suit against IBM claim that SCO's Unix Executable and Linking
         Format (ELF) codes are in Linux illegally."

         "The charge was made by SCO VP of engineering Sandeep Gupta in a
         declaration that is currently under seal, but is quoted, albeit
         tersely, in the new filings."

       The ELF standard was created by a committee of companies called Tool
       Interface Standard Committee (TISC).  One of the companies on the TISC
       was named SCO.  That SCO corporation is not the same corporation as the
       corporation currently using the SCO name.  The TISC committee issued non
       exclusive licenses to use the standard to all comers to the point that
       the ELF standard is essentially in the public domain.  So while the
       current SCO has the right to use the ELF standard, and does use the ELF
       standard, the current SCO has absolutely no ownership claim to the ELF
       standard.
       
       http://www.linuxworld.com/story/45588.htm

       SCO's claim that they own the ELF standard is an example of SCO claiming
       ownership of something it does not own.

    R. Eric Levenez has created a chart showing the history of the various UNIX
       operating systems and the relationships between them.
       
       http://www.levenez.com/unix/

       The SCO group made two small modifications to Eric Levenez's chart. 
       These modifications are intended to bolster SCO's claim of owning Linux. 
       SCO posted the modified chart, still attributed as the original by Eric
       Levenez, on the SCO web site.  The forged chart added the claims that
       UNIX SVR4 code was copied into Minix and that Minix code was copied into
       Linux.  Neither claim is true.

       The forgery was noticed and publicized on the Groklaw web site.
       
       http://www.groklaw.net/article.php?story=20040620053051348

       SCO immediately tried to destroy the evidence by removing the forged
       chart from the SCO web site.  However a copy of the forged chart is still
       available here.
       
       http://web.archive.org/web/20030605133708/www.sco.com/scosource/unixtree/unixhistory01.html

       SCO is guilty of both forgery and obstruction of justice in trying to
       destroy the evidence.
	  
    S. On August 8, 2004 SCO released a story saying that SCO had found a
       "smoking gun" to be used against IBM in the SCO v IBM lawsuit.  Please
       note that Santa Cruz Operation is a different company than the company
       now called SCO.

         "McBride says that as part of the Monterey deal, Santa Cruz Operation
         gave IBM the right to use a version of Unix called System V Release 4
         (SVR4)--but only on Intel-based microprocessors, and only if IBM stuck
         to the partnership."

         "McBride says IBM ignored that restriction and used SVR4 to build a
         version of AIX--AIX 5L, released in 2001--that runs on IBM's
         proprietary PowerPC microprocessor. (SCO claims that until then, AIX
         had been based on Unix System V Release 3, an earlier version of
         Unix.)"
       
       http://www.forbes.com/business/2004/08/04/cz_dl_0804sco.html

       This story is completely false.  In August, 2000 IBM announced that AIX
       5L would run on both Intel's Itanium chip and IBM's PowerPC
       microprocessor.
       
       http://www.eetimes.com/printableArticle.jhtml?doc_id=19168&_requestid=188585

       There are bits and pieces of other articles in the 1999 - 2001 time frame
       which show that the original SCO, the company that signed the Monterey
       agreement with IBM, knew and approved of IBM using AIX on the PowerPC.
       
       http://www.theinquirer.net/?article=17742

       SCO floated this false rumor in an attempt to hype their stock price by
       claiming much greater chance of success in the IBM lawsuit than is likely
       otherwise.  There is a difference between presenting this evidence in
       court and presenting it to Forbes.

    T. SCO publicly claimed to have hired a team of mathematicians from MIT who
       found that System V code had been copied into Linux.  This claim was
       widely reported.

         "SCO was able to uncover the alleged violations by hiring three teams
         of experts, including a group from the MIT math department, to analyze
         the Linux and Unix source code for similarities. "All three found
         several instances where our Unix source code had been found in
         Linux," said a SCO spokesman."
       
       http://www.computerworld.com/governmenttopics/government/legalissues/story/0,10801,81973,00.html

       This story is completely false.  SCO never hired a team of MIT
       mathematicians.  Here the story is debunked by a MIT newspaper, "The
       Tech".
       
       http://www-tech.mit.edu/V123/N33/33sco.33n.html

    U. C++ is a widely used programming language.  C++ was created by Bjarne
       Stroustrup.
       
       http://www.research.att.com/~bs/homepage.html

       SCO claims ownership of the C++ programming language and that people are
       paying SCO to license C++.  Statements to this effect were made by Darl
       McBride and Blake Stowell of SCO and widely publicized.

         "Blake Stowell: C++ is one of the properties that SCO owns today and we
         frequently are approached by customers who wish to license C++ from us
         and we do charge for that. Those arrangements are done on a
         case-by-case basis with each customer and are not disclosed publicly.
         C++ licensing is currently part of SCO's SCOsource licensing program."
       
       http://www.mozillaquest.com/Linux03/ScoSource-02_Story03.html

       In fact the C++ programming language is a standard published by ANSI
       committee X3J16.
       
       http://www.cplusplus.com/info/history.html

         "No one owns the C++ language and the language is royalty-free."
       
       http://en.wikipedia.org/wiki/C_Plus_Plus

       SCO has the right to use the C++ programming language but SCO does not
       own C++.  The SCO statements claiming ownership of C++ are lies.  I doubt
       that anyone is foolish enough to pay royalties on C++ to SCO so the SCO
       statements about collecting royalties for C++ are probably lies.  The
       purpose of these lies is to illegally promote the value of SCOX.

    V. In 1994 Novell transferred the UNIX trademark to the Open Group.

         "In 1994 Novell (who had acquired the UNIX systems business of
         AT&T/USL) decided to get out of that business. Rather than sell the
         business as a single entity, Novell transferred the rights to the
         UNIX trademark and the specification (that subsequently became the
         Single UNIX Specification) to The Open Group (at the time X/Open
         Company). Simultaneously, it sold the UNIX source code and the
         product implementation (UNIXWARE) to SCO. The Open Group also owns
         the trademark UNIXWARE, transferred to them from SCO more recently.

         As the owner of the UNIX trademark, The Open Group has separated the
         UNIX trademark from any actual code stream itself, thus allowing
         multiple implementations. Since the introduction of the Single UNIX
         Specification, there has been a single, open, consensus specification
         that defines the requirements for a conformant UNIX system."
       
       http://www.opengroup.org/comm/press/who-owns-unix.htm

       The UNIX trademark is owned by the Open Group.  The Open Group has set   
       up guidelines for allowing companies to use the UNIX trademark.  These  
       guidelines include:

         "*  It must not be used as a generic term.
          * It must not be used in connection with products, unless the product
            is licensed to use the mark.
          * There are detailed guidelines referring to the visual presentation,
            form and manner of use.
          * In editorial or articles, but not advertising the trade marks may be
            used without prior permission - provided that the rules in our
            Trademark Usage Guide are followed."
       
       http://www.unix.org/trademark.html

       While SCO has the right to use the UNIX trademark under certain
       conditions SCO does not have exclusive rights to use the UNIX trademark. 
       The Open Group has publicly stated that SCO's use of the UNIX trademark
       is incorrect.

         "Regarding SCO's positioning on UNIX, The Open Group would like to make
         it clear that SCO holds the rights ONLY to the operating system source
         code (originally licensed by AT&T) and related intellectual property
         and DOES NOT OWN the UNIX trademark itself or the definition (the
         Single UNIX Specification) of what the UNIX system is.

         Reference to the SCO web site shows that they own certain intellectual
         property and that they correctly attribute the trademark to The Open
         Group.  SCO has never owned "UNIX". SCO is licensed to use the
         registered trademark UNIX "on and in connection" with their products
         that have been certified by The Open Group, as are all other
         licensees.

         These are the ONLY circumstances in which a licensee may use the
         trademark UNIX on and in connection with its products.

         Statements that SCO "owns the UNIX operating system" or has "licensed
         UNIX to XYZ", are clearly inaccurate and misleading."
       
       http://www.opengroup.org/comm/press/unix-backgrounder.htm

       Indeed, SCO has flagrently violated the Open Group's term of usage for
       the UNIX trademark.  SCO has widely publicized the notions that SCO "owns
       the UNIX operating system" and/or has "licensed UNIX to XYZ".  A Google
       search turns up thousands of examples of SCO mischaracterizing its rights
       to use the UNIX trademark.  One example that I give is a SCO quarterly
       report filed with the SEC in which SCO repeatedly refers to UNIX as their
       product without qualifying that the UNIX name is shared by several other
       companies' products.
       
       http://www.sec.gov/Archives/edgar/data/1102542/000110465904027598/a04-10532_110q.htm

       Another example is this press release in which SCO states that it owns
       UNIX. The press release notes that UNIX is a registered trademark but it
       does not note that the UNIX trademark belongs to the Open Group, not SCO.

         "LINDON, Utah, Jun 15, 2004 /PRNewswire-FirstCall via COMTEX/ -- The
         SCO Group, Inc. ("SCO") (Nasdaq: SCOX), the owner of the UNIX(R)
         operating system and a leading provider of UNIX-based solutions, today
         announced a broad array of new and enhanced UNIX products as well as
         new channel support and training programs."
       
       http://ir.sco.com/ReleaseDetail.cfm?ReleaseID=137086

       Thus SCO has misled the investing public by repeatedly stating that they
       own UNIX when in fact they have a dubious claim to System V which is one
       of several operating systems which conform to the UNIX specifications.

    W. SCO has misled investors about SCO's revenues.

       1) On March 1, 2004 SCO announced that EV1Servers.Net had bought a
          SCOsource license.  Blake Stowell, SCO Director of Public Relations,
          said that SCO had received more than $1 million for the SCOsource
          license.

            'Blake Stowell, SCO's director of public relations, said that
            EV1Servers.Net had made the deal because its "CEO felt that there
            was uncertainty about Linux's legal standing and they made a
            business decision to avoid any possible doubts about their use of
            Linux for both themselves and their customers."'

            'Stowell added, "They didn't pay full retail price on each server,
            but the deal was still worth seven figures all together for SCO."'
          
          http://www.eweek.com/article2/0,1759,1541140,00.asp

       2) On March 3, 2004 Robert Marsh, CEO of EV1Servers.net, denied that EV1
          had paid that large an amount for the SCOsource license.

            "I would discount ANY reports or quotes of a 7 figure cash payment
            as has been reported."

            "We did agree to a one time payment, however we did not agree to pay
            a 7 figure cash payment as reported in the media."

            "__________________"
            "Robert Marsh"
            "Head Surfer Ev1servers.net"
          
          http://forum.ev1servers.net/showthread.php?s=ec6c44446e8b2650e51ec132337d3bf4&postid=261665#post261665

       3) On June 10, 2004 SCO held their 2nd Quarter Earnings Conference Call.
          During this conference call SCO made several evasive statements about
          the amount and accounting for the EV1 SCOsource license.  Eventually
          Darl McBride stated that the EV1 SCOsource revenue was less than
          $250,000 and at least $100,000.

            "McBride: We had a few deals on the SCOsource side, Maureen. You
            know with last quarter we had announced a major deal with EV1.  That
            is not part of the revenue stream that we're reporting in second
            quarter. That revenue will start to be accounted for in the quarter
            that we're currently in."

            "Cornett: Just what's the magnitude going to be? I mean is the
            quarter million still right for the July quarter?"

            "Young: That'd be a little high."

            "McBride: From them, that would be high. It's going to be spread out
            over multiple quarters, but it will be in the six figures."
          
          http://www.groklaw.net/article.php?story=20040615030206675

          So from March 1, 2004 to June 10, 2004 SCO misled the investing public
          by stating that revenue from the EV1 SCOsource license was at least
          four times as high as it actually was.

    X. SCO has engaged in fraudulent accounting.

       Section 1350 of the Sarbanes-Oxley Act of 2002 says:

         "Sec. 1350. Failure of corporate officers to certify financial reports"

         "(a) CERTIFICATION OF PERIODIC FINANCIAL REPORTS- Each periodic report
         containing financial statements filed by an issuer with the Securities
         Exchange Commission pursuant to section 13(a) or 15(d) of the
         Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)) shall be
         accompanied by a written statement by the chief executive officer and
         chief financial officer (or equivalent thereof) of the issuer."

         "(b) CONTENT- The statement required under subsection (a) shall certify
         that the periodic report containing the financial statements fully
         complies with the requirements of section 13(a) or 15(d) of the
         Securities Exchange Act pf 1934 (15 U.S.C. 78m or 78o(d)) and that
         information contained in the periodic report fairly presents, in all
         material respects, the financial condition and results of operations of
         the issuer."

         "(c) CRIMINAL PENALTIES- Whoever--"

         "(1) certifies any statement as set forth in subsections (a) and (b)
         of this section knowing that the periodic report accompanying the
         statement does not comport with all the requirements set forth in this
         section shall be fined not more than $1,000,000 or imprisoned not more
         than 10 years, or both; or"

         "(2) willfully certifies any statement as set forth in subsections (a)
         and (b) of this section knowing that the periodic report accompanying
         the statement does not comport with all the requirements set forth in
         this section shall be fined not more than $5,000,000, or imprisoned not
         more than 20 years, or both."
       
       http://thomas.loc.gov/cgi-bin/query/F?c107:1:./temp/~c1077MINQe:e197484:

       On September 1, 1998 Novell and the first of two companies to be called
       SCO entered into a sales agreement which gave old SCO the right to market
       the Unix System V operating system and its derivatives.  In this
       agreement SCO agreed to pay 95% of the revenue from existing customers to
       Novell.  SCO also agreed that if the contract of an existing customer
       were renegotiated then Novell was still entitled to 95% of the revenue
       from that customer.
       
       http://www.groklaw.net/article.php?story=20040229023446199

       Old SCO later transfered their rights in the Novell-SCO contract to
       Caldera.
       
       http://contracts.corporate.findlaw.com/agreements/sco/caldera.mer.2000.08.01.html

       In August 2002 Caldera changed its name to The SCO Group (SCO).  This
       corporation now called SCO is the successor company to the company called
       SCO which signed the agreement with Novell.
       
       http://news.zdnet.co.uk/software/developer/0,39020387,2121346,00.htm

       1) Under the terms of the Novell - SCO agreement SCO must pay Novell
          about 3 million dollars per quarter for the original contract between
          Sun and Novell.  This was explained in the transcript of the "SCO 4Q &
          Year-End Financial Conference Call" on December 22 2004.

            "Eisenberg:  Right, I know you mentioned this once before, but I'm
            now looking at the balance sheets. Funny. There were two press
            releases -- one didn't have the balance sheet but the other did. I
            found it. The restricted cached 8 million is earmarked for legal
            expenses."

            "Young: 5 million of that is."

            "Eisenberg: Uh-huh. What about the other 3?"

            "Young: The other 3 is a royalty agreement that we collect on behalf
            of Novell and then send to them. So it's basically just a
            pass-through here in the company. We have that every quarter."
          
          http://www.groklaw.net/article.php?story=20041222011158357

          SCO is accounting for pass through royalty payments to Novell by
          recording them as legal expenses.  This is a serious misrepresentation
          of what the money is spent on.  SCO has repeatedly claimed that
          their ongoing software business is cash flow positive.  By recording
          these expenses payable to Novell as legal expenses SCO is making
          fraudulent claims of the viability of their ongoing software business.

          On April 1, 2005 SCO filed their 10-K for 2004.  In that 10-K there is
          a statement confirming that SCO owes Novell money and that such money
          had been previously been accounted as restricted cash for legal
          expenses.

            "Restricted Cash and Payable to Novell, Inc."

            "Pursuant to the 1995 Asset Purchase Agreement and the Company’s
            acquisition of assets and operations of The Santa Cruz Operation,
            the Company acts as an administrative agent in the collection of
            payments from a limited number of pre-existing Novell, Inc.
            (“Novell”) customers who continue to deploy SVRx technology.  Under
            the agency agreement, the Company collects payments from such
            customers and receives 5 percent as an administrative fee.  The
            Company records the 5 percent administrative fee as revenue in its
            consolidated statements of operations.  The accompanying
            consolidated balance sheets as of October 31, 2004 and 2003 reflect
            amounts collected related to this agency agreement but not yet
            remitted to Novell of $3,283,000 and $2,025,000, respectively, as
            restricted cash and payable to Novell.  The Company’s obligation to
            act as an administrative agent for Novell is unrelated to the
            Company’s SCOsource initiatives related to its intellectual property
            rights or the Company’s lawsuit against Novell for slander of title
            alleging Novell’s bad faith effort to interfere with the Company’s
            copyrights in its UNIX source code and derivative works and its
            UnixWare product. . . . ."
          
          http://www.sec.gov/Archives/edgar/data/1102542/000110465905014787/a05-6064_110k.htm

       2) In February 2003 Sun Microsystems renegotiated their contract with
          SCO. Scott McNealy is Chairman and CEO of Sun Microsystems.  In a
          Newsforge interview he was asked a question by Jem Matzan.

            "McNealy responded by saying that the process of open sourcing
            Solaris actually started five years ago. 'There were hundreds of
            encumbrances to open sourcing Solaris. Some of them we had to buy
            out, others we had to eliminate.  We had to pay SCO more money so we
            could open the code -- I couldn't say anything about that at the
            time, but now I can tell you that we paid them that license fee to
            expand our rights to the code,' he said, referring to the February
            2003 multi-million-dollar purchase of expanded Unix SVR4 license
            rights from the SCO Group."
          
          http://www.newsforge.com/article.pl?sid=04/11/18/1540233

          SCO owed Novell 95% of the multimillion dollar fee paid by Sun to SCO
          for Sun's expanded Unix SVR4 license rights in the February 2003
          agreement.  This money has not appeared on the SCO books either as
          payable to Novell or as a disputed payable.

          Before the December 22, 2004 SCO 4Q & Year-End Financial Conference
          Call I looked at the SCO financial report in a SCO press release.  The
          fourth quarter balance sheet showed a multimillion dollar liability to
          Novell which was more than 72 days old.  That item had not appeared on
          any previous SCO quarterly statement.  After the teleconference when I
          went looking for that balance sheet I could not find it.  I found a
          different balance sheet which did not contain any mention of overdue
          payables to Novell.

          I am not the only person who remembers two balance sheets.  One of the
          people asking questions at the teleconference was Tom Eisenberg with
          Open Road Partners.  Tom Eisenberg asked a series of questions that
          showed he was confused about the balance sheet and was trying to
          figure it out.  His comments included this statement:

            "Eisenberg:  Right, I know you mentioned this once before, but I'm
            now looking at the balance sheets. Funny. There were two press
            releases -- one didn't have the balance sheet but the other did. I
            found it. The restricted cached 8 million is earmarked for legal
            expenses."
          
          http://www.groklaw.net/article.php?story=20041222011158357

          My recollection differs from Tom Eisenberg in that I remember that
          both press releases had balance sheets but that the two balance sheets
          differed.  The financial statements as they appeared in the second
          press release can be found in a FORM 8-K files by SCO on January 26,
          2005.
          
          http://www.sec.gov/Archives/edgar/data/1102542/000110465905002648/a05-2253_1ex99d1.htm

          There has been a series of letters exchanged between Novell and SCO.
          These letters reveal a pattern of SCO withholding payments due Novell
          and Novell demanding both payments and audits, the right for Novell to
          conduct such audits being a part of the contract between Novell and
          SCO.
          
          http://www.groklaw.net/article.php?story=20040115161155820

          Novell has filed a reply in SCO v Novell.  On page 27, section 63 of
          Novell's pleadings Novell states:

            "Section 1.2(b) of the APA gives Novell broad audit rights relating
            to the administration of the SVRX licensing program.  It reads in
            part:

              [Novell] shall be entitled to conduct periodic audits of [SCO]
              concerning all royalties and payments due to [Novell] hereunder or
              under the SVRX Licenses, provided that [Novell] shall conduct such
              audits after reasonable notice to [SCO] and during normal business
              hours and shall not be entitled to more than two (2)such audits
              per year."

          On page 30, section 73 of Novell's pleadings Novell states:

            "Despite Novell's repeated requests, SCO has never provided copies
            of the Sun and Microsoft licenses, or amendments, or copies of SCO's
            Intellectual Property Licenses for Linux or other agreements
            connected with attempts by SCO to enter into new or amended SVRX
            licenses.  SCO also never provided any explanation why SCO was not
            obligated under the APA to seek Novell's consent to amend or
            otherwise enter into new SVRX agrements.  As a result, Novell has
            been unable to verify SCO's compliance with the APA, as Novell is
            entitled under the APA."

          On page 30, section 75 of Novell's pleadings Novell states:

            "SCO has failed to remit to Novell all royalties owen under 1.2(b)
            and 4.16(a) of the APA."

          On page 31, section 78 of Novell's pleadings Novell states:

            "SCO has not remitted any royalties from its new SVRX Licenses with
            Sun or Microsoft."
          
          http://www.groklaw.net/pdf/Novell-78.pdf

            "In fiscal 2003, SCO Group reported $25.8 million in new Unix
            license fees from Sun and Microsoft, according to its financial
            statements. Novell says 95% of that should be paid to Novell. That
            would come to $24.5 million that SCO owes Novell."

            "But SCO currently has only about $11 million. So Novell is asking
            for SCO's assets to be attached and its cash put in a trust fund
            until the legal issues are resolved, in order to protect the money
            Novell says it's owed. If the judge in this case (who's also the
            judge in SCO v IBM), grants those preliminaries, SCO will have no
            money at all to continue in business -- much less to sue IBM, Novell
            or Linux users."
          
          http://www.computerworld.com/blogs/node/688

          I consider these facts to be evidence that SCO has misrepresented
          large payments by Microsoft and Sun Microsystems as income in the SCO
          books without recording the corresponding liability to Novell.  SCO
          must file their yearly statement with the SEC by January 31, 2005 and
          this report must be certified by an outside auditor, KPMG.  Is this
          why SCO made a belated effort to correct their books in the first
          December 22, 2004 press release and then pulled the corrections
          between the press release and the teleconference?  I suggest that the
          SEC audit the SCO books to determine whether or not the royalty fees
          due to Novell have been accounted for correctly.

       3) Novell's counterclaims include the charge that SCO has fraudulently
          failed to pay money owed to Novell.  SCO concealed this fraud from the
          investing public by engaging in fraudulent accounting.

            "63. Section 1.2(b) of the APA gives Novell broad audit rights
            relating to the administration of the SVRX licensing program.
            It reads in pertinent part:"

            "[Novell] shall be entitled to conduct periodic audits of [SCO]
            concerning all royalties and payments due to [Novell] hereunder or
            under the SVRX Licenses, provided that [Novell] shall conduct such
            audits after reasonable notice to [SCO] and during normal business
            hours and shall not be entitled to more than two (2) such audits per
            year."

            "64. Further, section 1.2(f) of the APA obligates SCO to provide
            Novell monthly reports detailing the SVRX royalties that SCO
            received."

            "65. On July 11, 2003 Novell notified SCO that it intended to
            conduct an audit beginning on August 18, 2003 covering the period
            beginning January 1, 1998 through June 30."

            "66. By reply correspondence dated July 17, 2003, SCO accepted
            Novell's right to an audit. Novell's audit began during the week of
            August 25, 2003."

            "67. As part of Novell's aforementioned audit rights, on November
            21, 2003, Novell sought information and documentation relating to:"

              "a. Any amendments and modifications to SVRX licenses, and in
              particular the amendments to the Sun and Microsoft SVRX licenses.
              Novell specifically requested (1) "copies of the Sun and Microsoft
              amendments to verify SCO's compliance" with the APA and (2) "a
              detailed explanation of SCO's position" if SCO contends that
              either of the two exceptions to the prohibition on unilateral
              amendments by SCO were applicable."

              "b. Any buy-out of SVRX licenses, and in particular any
              information concerning any buy-out of Sun's and Microsoft's
              royalty obligations under their SVRX licenses. Novell specifically
              requested that SCO identify any potential buy-out transactions so
              that Novell could verify SCO's compliance with the APA."

              "c. Any new SVRX licenses, and in particular SCO's Intellectual
              Property Licenses for Linux. Novell specifically requested (1)
              "copies of all SCO Intellectual Property Licenses for Linux, and
              any other agreements connected with attempts by SCO to enter into
              new SVRX Licenses, so Novell can verify SCO's compliance" with the
              APA and (2) "a detailed explanation of SCO's position" if SCO
              contends that the exception to the prohibition on new SVRX
              licenses by SCO was applicable."

              "d. Any SVRX to UnixWare Conversions. Novell specifically
              requested that SCO (I) identify and provide documentation for any
              allegedly valid conversions and (2) "explain in detail" how the
              alleged conversion complies with the APA and (3) provide "a
              detailed explanation of SCO's position" if SCO contends that any
              exception to the prohibition on conversion by SCO was applicable."

              "68. Novell renewed its November 21, 2003 demand on December 29,
              2003 and again on February 4, 2004."

              "69. On February 5, 2004, SCO conveyed its refusal to provide at
              least the information identified in subparagraphs a, b and c of
              Paragraph 67, above."

              "70. On March 1, 2004, Novell again contacted SCO for the above
              categories of information: "In order to complete our audit, we
              need the Sun, Microsoft and any other Intellectual Property
              Licenses for Linux. Stated more categorically, we need all
              agreements in which SCO purported to grant rights with respect to
              Unix System V." Novell noted that SCO's Intellectual Property
              Licenses for Linux appeared to be SVRX Licenses since they
              purported to grant rights relating to UNIX System V or Unix-Ware."

              "71. Novell again sent a letter to SCO on April 2, 2004 urging a
              response."

              "72.  On November 17, 2004, Novell contacted SCO yet again:

              We have communicated with SCO several times about our concerns
              with SCO's handling of UNIX licenses, including the license with
              Sun. In these communications, we have noted that our audit rights
              under the Asset Purchase Agreement require SCO to provide Novell
              with copies of any UNIX agreements (including amendments) SCO has
              reached with Sun. We have sent you letters twice on this issue (in
              March and April 2004), and have not received an adequate response.
              . . . Accordingly, we must once again insist that you provide us
              with copies of any agreements with Sun (including amendments) that
              relate to UNIX. We would appreciate a response by Friday,
              December 3, 2004."

              "73. Despite Novell's repeated requests, SCO has never provided
              copies of the Sun and Microsoft licenses, or amendments, or copies
              of SCO's Intellectual Property Licenses for Linux or other
              agreements connected with attempts by SCO to enter into new or
              amended SVRX licenses. SCO also never provided any explanation why
              SCO was not obligated under the APA to seek Novell's consent to
              amend or otherwise enter into new SVRX agreements. As a result,
              Novell has been unable to verify SCO's compliance with the APA, as
              Novell is entitled under the APA."

              '74. Sections 1.2(b) and 4.16(a) of the APA obligate SCO to remit
              100% of "all royalties, fees and other amounts due under all SVRX
              Licenses" to Novell. "SVRX Licenses" are in turn defined to
              include "[a]ll contracts relating to" the various UNIX System
              releases and auxiliary products enumerated at Schedule 1.1(a)(VI)
              and Attachment A to Amendment No. 1. Under the APA, Novell has
              "all right, title and interest to the SVRX Royalties, less the 5%
              fee for administering the collection thereof."'

              "75. SCO has failed to remit to Novell all royalties owed under §§
              1.2(b) and 4.16(a) of the APA."

              "76. As SCO admitted in its February 5, 2004 letter to Novell, SCO
              has entered into "new" agreements with Sun and Microsoft."

              "77. On information and belief, these new agreements are
              "contracts relating to" the various UNIX System releases and
              auxiliary products enumerated at Schedule 1.1 (a)(VI) and
              Attachment A to Amendment No. 1. The new agreements are therefore
              SVRX Licenses under the APA."

              "78. SCO has not remitted any royalties from its new SVRX Licenses
              with Sun or Microsoft."
            
            http://www.groklaw.net/article.php?story=20050915183241951

       4) SCO has deliberately falsified their accounting for SCOsource
          revenues.   
          
          a) On March 1, 2004 SCO announced that EV1Servers.Net had bought a
             SCOsource license.  SCO said that they had received more than $1
             million for the SCOsource license.

               'Blake Stowell, SCO's director of public relations, said that
               EV1Servers.Net had made the deal because its "CEO felt that there
               was uncertainty about Linux's legal standing and they made a
               business decision to avoid any possible doubts about their use of
               Linux for both themselves and their customers."'

               'Stowell added, "They didn't pay full retail price on each
               server, but the deal was still worth seven figures all together
               for SCO."'
             
             http://www.eweek.com/article2/0,1759,1541140,00.asp

          b) On March 3, 2004 Robert Marsh, CEO of EV1Servers.net, denied that
             EV1 had paid that large an amount for the SCOsource license.

               "I would discount ANY reports or quotes of a 7 figure cash
               payment as has been reported."

               "We did agree to a one time payment, however we did not agree to
               pay a 7 figure cash payment as reported in the media."

               "__________________"
               "Robert Marsh"
               "Head Surfer Ev1servers.net"
             
             http://forum.ev1servers.net/showthread.php?s=ec6c44446e8b2650e51ec132337d3bf4&postid=261665#post261665

          c) On June 10, 2004 SCO held their 2nd Quarter Earnings Conference
             Call.  During this conference call SCO made several evasive
             statements about the amount and accounting for the EV1 SCOsource
             license.  Eventually Darl McBride stated that the EV1 SCOsource
             revenue was less than $250,000 and at least $100,000.

               "McBride: We had a few deals on the SCOsource side, Maureen. You
               know with last quarter we had announced a major deal with EV1.
               That is not part of the revenue stream that we're reporting in
               second quarter. That revenue will start to be accounted for in
               the quarter that we're currently in."

               "Cornett: Just what's the magnitude going to be? I mean is the
               quarter million still right for the July quarter?"

               "Young: That'd be a little high."

               "McBride: From them, that would be high. It's going to be spread
               out over multiple quarters, but it will be in the six figures."
             
             http://www.groklaw.net/article.php?story=20040615030206675

             In the same conference call SCO stated that revenue for SCOsource
             was $11,000 the in 2nd quarter of 2004 and did not provide any
             customer names.  The customers are probably Questar Corp. and
             Leggett & Platt Inc.
             
             http://www.computerworld.com/softwaretopics/os/linux/story/0,10801,90791,00.html

               "McMillan: Yeah, hi there. Just a question about SCOsource
               revenue for Q2, can you tell me what that was?"

               "McBride: [pause] Well, it's not ... go ahead Bert."

               "Young: Yeah, I mean, it's Bert. It was just a couple of small
               licensing deals, people that, you know, signed up for our
               SCOsource agreement."

               "McMillan: So you're not saying what the ... so was it zero?"

               "Young: No, it's eleven thousand dollars."
             
             http://www.groklaw.net/article.php?story=20040615030206675

          d) On August 31, 2004 SCO held their 3d Quarter Earnings Conference
             Call.

             The SCOsource revenue from EV1 was not mentioned specifically but
             was lumped into a total SCOsource revenue of $678,000.  Since EV1
             SCOsource revenue was less than $250,000 then SCO is claiming 
             SCOsource revenue of more than $438,000 from an unnamed customer
             in the 3d quarter of 2004.

               "Revenue from our SCOsource division relating to compliance
               licenses was $678,000 for the 3rd quarter, and $709,000
               year-to-date. This revenue was primarily from two sources,
               including a transaction that was completed in a prior quarter,
               and a newly signed license agreement in the third quarter.  Due
               to confidentiality reasons we are not disclosing specific terms
               of either of these license agreements."
             
             http://www.groklaw.net/article.php?story=20040902040655144

          e) On December 21, 2004 SCO held their 4th Quarter Earnings Conference
             Call.  In the 4th quarter of 2004 SCO claimed SCOsource revenue of
             $120,000 from and unnamed source.

               "The remaining revenue for the 4th quarter was derived from
               $120,000 in SCOsource licensing, which represents significant
               year-over-year decrease, given the 4th quarter of 2003 was an
               exceptional quarter in which the company closed two large
               licenses."
             
             http://www.groklaw.net/article.php?story=20041222011158357

             I consider these facts to be evidence that SCO has deliberately
             falsified their accounting for SCOsource revenues.

       5) On January 31, 2005 SCO filed a FORM 12b-25 with the SEC which stated
          that SCO could not file a FORM 10-K on time and requested a 15 day
          extension.
          
          http://www.sec.gov/Archives/edgar/data/1102542/000104746905001904/a2150650znt10-k.htm

          Part III of the FORM 12b-25 contained an explanation by SCO of why the
          10-K could not be filed on time:

            "PART III — NARRATIVE"

            "State below in reasonable detail why forms 10-K, 20-F, 11-K, 10-Q,
            N-SAR, N-CSR, or the transition report or portion thereof, could not
            be filed within the prescribed time period."

            "The SCO Group, Inc. (the "Company") hereby requests an extension of
            time to file its Annual Report on Form 10-K for the period ended
            October 31, 2004.  The Company was unable to file its Form 10-K by
            January 31, 2005 without unreasonable effort or expense because the
            Company needs more time to adequately compile and analyze supporting
            documentation and provide such documentation to its auditor.
            Consequently, the Company's auditor was unable to complete the audit
            of the Company's financial statements within the necessary period of
            time. The Company currently anticipates that the Form 10-K will be
            filed by no later than the fifteenth calendar day following the date
            on which the Form 10-K was due."

            "The SCO Group, Inc. (the "Company") hereby requests an extension of
            time to file its Annual Report on Form 10-K for the period ended
            October 31, 2004. The Company was unable to file its Form 10-K by
            January 31, 2005 without unreasonable effort or expense because the
            Company needs more time to adequately compile and analyze supporting
            documentation and provide such documentation to its auditor.
            Consequently, the Company's auditor was unable to complete the audit
            of the Company's financial statements within the necessary period of
            time. The Company currently anticipates that the Form 10-K will be
            filed by no later than the fifteenth calendar day following the date
            on which the Form 10-K  was due."
          
          http://www.sec.gov/Archives/edgar/data/1102542/000104746905001904/a2150650znt10-k.htm

          Exhibit A is a letter from KPMG agreeing that the reasons given in
          PART III of the FORM 12b-25 were why KPMG has been unable to complete
          their audit and report on SCO's financial statements for the year
          ended October 31, 2004.  I wish to emphasis that KPMG only agreed to
          PART III of the FORM 12b-25.

            "January 28, 2005"

            "The SCO Group, Inc.
            355 South 520 West
            Lindon, Utah 84042"

            "Ladies and Gentlemen:"

            "Pursuant to Rule 12b-25 of the General Rules and Regulations under
            the Securities and Exchange Act of 1934, we inform you that we have
            been furnished a copy of the Form 12b-25 to be filed by The SCO
            Group, Inc. (the "Company") on or about January 31, 2005, which
            contains notification of the registrant's inability to file its Form
            10-K by January 31, 2005. We have read the Company's statements
            contained in Part III therein and we agree with the stated reason as
            to why we have been unable to complete our audit and report on the
            Company's financial statements for the year ended October 31, 2004,
            to be included in its Form 10-K."

            "Very truly yours,"

            "/s/ KPMG LLP"

          PART IV — OTHER INFORMATION of the FORM 12B-25 SCO contains some
          questions to be answered by SCO.  One of these questions is:

            "(3)  Is it anticipated that any significant change in results of
            operations from the corresponding period for the last fiscal year
            will be reflected by the earnings statements to be included in the
            subject report or portion thereof?"

          SCO has answered both "yes" and "no" to this question.  NOTE THAT KPMG
          HAS NOT AGREED TO THIS ANSWER.  Both the "yes" and the "no" reference
          a footnote which seems to shed more light on the nature of the
          problem.  The footnote says:

            "The Company is examining certain matters related to the issuance of
            shares of common stock issued under the Company's 2000 Employee
            Stock Purchase Plan and potentially its other equity compensation
            plans. More time is needed to compile and analyze all relevant
            data."

          NOTE THAT KPMG HAS NOT AGREED TO THIS FOOTNOTE.

          The SCO 2003 10-K states that Arthur Andersen used to be the SCO
          external auditors until Arthur Andersen folded.  Then KPMG became the
          SCO external auditors.  KPMG refuses to express any opinion or any
          form of assurance on events before November 1, 2001.  So KPMG cannot
          express any opinion on whatever problems SCO might be having with
          their 2000 Employee Stock Purchase Plan.

            "As discussed above, the consolidated financial statements of The
            SCO Group, Inc. and subsidiaries for the year ended October 31, 2001
            were audited by other auditors who have ceased operations. . . .
            However, we were not engaged to audit, review, or apply any
            procedures to the fiscal year 2001 consolidated financial statements
            of The SCO Group, Inc. and subsidiaries other than with respect to
            such adjustments and disclosures and, accordingly, we do not express
            an opinion or any form of assurance on the fiscal year 2001
            consolidated financial statements taken as a whole."

            "/s/ KPMG LLP"
          
          http://www.sec.gov/Archives/edgar/data/1102542/000104746904002142/a2127332z10-k.htm

          Regardless of whether or not the ambiguous answer and tangential
          footnote by SCO in PART IV are true they are not the reasons why KPMG
          has been unable to complete its audit. The statements by SCO in PART
          IV are a fraud meant to mislead investors about the true nature of the
          accounting problems at SCO.

       6) SCO failed to file a FORM 10-K for 2004.

          SCO has failed to file a FORM 10-K for the 2004 fiscal year.  The FORM
          10-K was due by January 31, 2005.  On January 31, 2005 SCO filed a
          FORM 12b-25 notifying the SEC that the 10-K would file filed late.
          The FORM 12b-25 gave two reasons for the late filing.  One of the two
          reasons was fraudulent.  SCO promised that the 10-K would be filed no
          later than February 15, 2005.  That deadline has passed and SCO still
          has not filed a 10-K.
          
          http://www.sec.gov/Archives/edgar/data/1102542/000104746905001904/a2150650znt10-k.htm

          I suggest that the SEC conduct a formal investigation into why KPMG
          refuses to certify SCO's accounts.

       7) SCO's financial statements for the quarters ending January 31, 2004,
          April 30, 2004 and July 31, 2004 are incorrect.
          
          On March 3, 2005 SCO filed an 8-K with the SEC.  This 8-K said in
          part:

            "On February 28, 2005, on management’s recommendation, the Audit
            Committee of the Board of Directors of The SCO Group, Inc. (the
            “Company”) concluded, and KPMG LLP, the Company’s independent
            auditors agreed, that, due to certain accounting errors, the
            Company’s financial statements for the quarters ending January 31,
            2004, April 30, 2004 and July 31, 2004 should no longer be relied
            upon and should be restated."
          
          http://www.sec.gov/Archives/edgar/data/1102542/000110465905009368/a05-4200_28k.htm
  
          The 8-K then included some more explanations of SCO's accounting
          problems.  Such explanations were not certified by KPMG.  A press
          release with further explanations, again not certified by KPMG, was
          attached.
          
          http://www.sec.gov/Archives/edgar/data/1102542/000110465905009368/a05-4200_2ex99d1.htm

          All of the accounting problems listed in the press release could be
          solved to both parties' satisfaction in a half hour meeting between
          SCO and KPMG. Whatever problem(s) is causing the deadlock between SCO
          and KPMG is not listed in the press release.  The best description
          that I could find of what SCO's elaborations mean is this:

            "Those assiduous corporate officers -- singlemindedly and doggedly
            badgering the auditors into seeing the necessity for restating
            results: no matter how long it took.  What a team. What ethics.
            What ... self-serving bilgewater."
          
          http://www.groklaw.net/article.php?story=20050303161820784

       8) On April 1, 2005 SCO filed their 10-K for 2004 very late.  In that
          10-K SCO stated that the S-3 registration statement was invalid
          because the 10-K was filed late.  I suggest that the 10-K has cause
          and effect backwards; the 10-K was filed late because SCO (and
          BayStar) lied about the SEC approving the S-3 registration for the
          SCOX common stock exchanged for the Series A-1 Preferred Stock and the
          auditors, KPMG, refused to certify actions taken under the unapproved
          SCO/BayStar registration statement.

            "We previously had an effective registration statement on Form S-3
            relating to the sale or distribution by BayStar as a selling
            stockholder of the 2,105,263 shares of common stock issued to
            BayStar in connection with our repurchase completed in July 2004 of
            all Series A-1 shares previously held by BayStar. When we failed to
            file this Form 10-K in a timely fashion, we became ineligible to use
            Form S-3, our registration statement ceased to be effective and
            BayStar’s ability to resell shares pursuant to that registration
            statement terminated.  We are currently in the process of preparing
            a new registration statement for the resale of BayStar’s shares on
            Form S-1.  Upon that registration statement being declared effective
            by the SEC, BayStar will again be able to resell its shares."
          
          http://www.sec.gov/Archives/edgar/data/1102542/000110465905014787/a05-6064 _110k.htm

          One of the actions taken under the invalid contract was that the
          outstanding dividends owed by SCO on the Series A-1 redeemable
          convertible preferred stock were canceled.  As part of the accounting
          corrections forced by KPMG $7,123,000 in dividends on the Series A-1
          preferred stock were moved to liabilities.
          
          http://www.sec.gov/Archives/edgar/data/1102542/000110465905014787/a05-6064 _110k.htm

       9) SCO failed to file a 10-Q for the first quarter of 2005,

            "On March 18, 2005, the Company received a notice from the staff of
            The Nasdaq Stock Market regarding the Company's failure to comply
            with Nasdaq's requirement to file its Form 10-Q for the quarterly
            period ended January 31, 2005 in a timely fashion, as required under
            Marketplace Rule 4310(c)(14)."
          
          http://ir.sco.com/ReleaseDetail.cfm?ReleaseID=158467

      10) KPMG has resigned as SCO's external auditors.

            "June 3, 2005"

            "Securities and Exchange Commission
            Washington, D.C. 20549"

            "Ladies and Gentlemen:"

                 "We were previously principal accountants for The SCO Group,
            Inc. and, under the date of February 18, 2005, except as to note 16,
            which is as of March 11, 2005, we reported on the consolidated
            financial statements of The SCO Group, Inc. as of and for the years
            ended October 31, 2004 and 2003. On May 27, 2005, we notified the
            SCO Group, Inc. that we would resign upon completion of the
            Statement of Auditing Standards (SAS) No. 100 review of The SCO
            Group, Inc.'s condensed consolidated financial statements as of
            April 30, 2005 and for the related three-month and six-month periods
            ended April 30, 2005. The SAS No. 100 review was completed June 2,
            2005. We have read The SCO Group, Inc's statements included under
            Item 4.01 of its Form 8-K dated June 3, 2005, and we agree with such
            statements, except that we are not in a position to agree or
            disagree with The SCO Group, Inc's statements that: 1) Tanner LC was
            engaged as the independent registered public accounting firm and the
            Audit Committee recommended or approved their appointment and 2)
            whether or not The SCO Group, Inc. consulted with Tanner LC
            regarding any of the matters set forth in Item 304(a)(2)(i) and (ii)
            of Regulation S-K."

            "Very truly yours,"

            "/s/ KPMG LLP"
          
          http://www.sec.gov/Archives/edgar/data/1102542/000104746905016438/a2159203z424b3.htm#toc_ka2085_1

          An external auditor can make no public statements about their clients.
          Anything that KPMG says about SCO has to be published by SCO.  I have
          read through all of the statements published by SCO about what KPMG
          has told SCO in KPMG's audit reports.  According to SCO, KPMG has
          approved everything done by SCO with one exception.  The exception is
          that KPMG found a weakness in SCO's internal controls related to the
          accounting for capital stock and stock option transactions.

            "KPMG reported in a letter to the Company's Audit Committee dated
            May 17, 2005 that during its audit of the Company's financial
            statements for the fiscal year ended October 31, 2004, it noted a
            material weakness in internal controls related to the accounting
            for capital stock and stock option transactions."
          
          http://www.sec.gov/Archives/edgar/data/1102542/000104746905016438/a2159203z424b3.htm

      11) When KPMG refused to certify SCO's 10-Q all of the reasons for why
          they did so were published by SCO. While KPMG possibly raised the
          objections published by SCO, I think SCO lied about THE reason why
          KPMG refused to certify SCO's books.  KPMG had discovered that the SEC
          never did approve the BayStar repurchase agreement.

          While SCO has stated that KPMG objected to SCO's internal controls
          related to the accounting for capital stock and stock option
          transactions, SCO never did explain what KPMG's objection was to the
          repurchase agreement.  When SCO finally admitted that the repurchase
          agreement was invalid they gave a bafflegab explanation of why it was
          invalid.  KPMG finally certified the books.  But the evidence
          indicates that KPMG wound up their work at a convenient point and then
          resigned because KPMG was horrified that SCO was and still is lying
          about what the KPMG audit reports said about the repurchase agreement.

          Here are the responsibilities laid down by the Sarbanes-Oxley act for
          Darl McBride (CEO) and Bert Young (CFO).

            "SOX Section 302 - Corporate Responsibility for Financial Reports
            a) CEO and CFO must review all financial reports.
            b) Financial report does not contain any misrepresentations.
            c) Information in the financial report is "fairly presented".
            d) CEO and CFO are responsible for the internal accounting controls.
            e) CEO and CFO must report any deficiencies in internal accounting
               controls, or any fraud involving the management of the audit
               committee.
            f) CEO and CFO must indicate any material changes in internal
               accounting controls."
          
          http://www.sarbanes-oxley-101.com/sarbanes-oxley-compliance.htm

          The penalties for violating the Sarbanes-Oxley reporting
          responsibilities include the following.

            "Besides lawsuits and negative publicity, a corporate officer who
            does not comply or submits an inaccurate certification is subject to
            a fine up to $1 million and ten years in prison, even if done
            mistakenly. If a wrong certification was submitted purposely, the
            fine can be up to $5 million and twenty years in prison."
          
          http://www.sarbanes-oxley-101.com/sarbanes-oxley-faq.htm

          I think that the SEC should obtain a search warrant to find all of the
          audit reports which KPMG has submitted to SCO.  The SEC should compare
          the KPMG audit reports with the information that Darl McBride and Bert
          Young have filed with the SCO and their public statements through
          press releases and the quarterly earning conference calls.

          Darl McBride and Bert Young are violating their Sarbanes-Oxley
          reporting responsibilities and should be indicted for doing so.

          I also suggest that the SEC freeze all payments to Darl McBride,
          Ralph Yarro, and Bert Young under the authority given to the SEC to
          do so by the Sarbanes Oxley Act.
        
        http://www.webcpa.com/article.cfm?articleid=15839

    Y. SCO fraudulently claimed that Computer Associates bought a SCOsource
       license.

       Robert Bench, SCO Chief Financial Officer, said that Computer Associates
       had purchased a SCOsource license.

         "Software giant Computer Associates International Inc. has signed up
         for The SCO Group Inc.'s Intellectual Property License for Linux, SCO
         Chief Financial Officer Bob Bench confirmed yesterday."
       
       http://www.computerworld.com/softwaretopics/os/linux/story/0,10801,90791,00.html

       Sam Greenblatt, Computer Associates Senior Vice Ppresident, said that SCO
       had misconstrued the terms of the agreement settling a breach of contract
       dispute between Canopy and Computer Associates.  Canopy insisted that a
       SCOsource license be included in the settlement even though no money was
       paid by Computer Associates to SCO and SCO was not party to the
       agreement.

         "The settlement that gave CA the Linux rights took place in August, CA
         spokeswoman Michelle Healy said. In that settlement, CA agreed to pay
         $40 million to Canopy and Center 7, a company in which Canopy holds a
         majority ownership, according to a SCO filing with the Securities and
         Exchange Commission. Center 7 sued CA in April 2001, alleging a breach
         of contract of a software license agreement, CA said in a filing with
         the SEC."

         "CA disagrees with SCO's tactics, which are intended to intimidate and
         threaten customers. CA's license for Linux technology is part of a
         larger settlement with the Canopy Group. It has nothing to do with
         SCO's strategy of intimidation,"
       
       http://news.zdnet.com/2100-3513_22-5170310.html

    Z. The SCOX stock price rose spectactularly after SCO began claiming       
       exaggerated worth for their intellectual property beginning about       
       February 25, 2003.  The bubble reached a high on October 17, 2003 and
       eventually faded away about May 20, 2004 
       
       http://bigcharts.com/custom/washingtontimes-com/interactivechart.asp?sid=&o_symb=scox&symb=scox&x=0&y=0&time=9&uf=7168&compidx=aaaaa%3A0
       
       http://lwn.net/Articles/75129/

   AA. SCO insiders have registered the following SCO stock sales with the Securities
       Exchange Commission during the period of March 6, 2003 through April 7, 2004.

       SCO insider sales from March 6, 2003 through April 7, 2004
       -------------------------------------------------------------
          Date           Name                Shares          Amount
       04/08/2003     Robert Bench            4,100      $11,890.00
       03/10/2003     Robert Bench            7,000      $21,420.00
       04/08/2003     Robert Bench            4,100      $11,890.00
       06/03/2003     Opinder Bawa           15,000      $90,000.00
       06/04/2003     Opinder Bawa            7,916      $52,245.60
       06/06/2003     Jeff Hunsaker           5,000      $44,500.00
       06/09/2003     Robert Bench            3,000      $27,788.00
       06/11/2003     Michael Olson           6,000      $51,820.00
       06/20/2003     Reginald Broughton      5,000      $55,446.00
       06/25/2003     Reginald Broughton      5,000      $50,000.00
       07/08/2003     Robert Bench            7,000      $77,213.00
       07/09/2003     Jeff Hunsaker           5,000      $59,000.60
       07/11/2003     Michael Olson           8,000      $84,208.00
       07/14/2003     Sean Wilson             6,000      $65,045.00
       07/15/2003     Sean Wilson             6,000      $64,240.00
       07/22/2003     Reginald Broughton     20,000     $242,893.00
       07/23/2003     Jeff Hunsaker           5,000      $66,694.00
       07/30/2003     Reginald Broughton      5,000      $64,001.00
       08/05/2003     Reginald Broughton      5,000      $62,819.00
       08/08/2003     Robert Bench            7,000      $76,300.00
       08/11/2003     Michael Olson           5,000      $46,270.00
       08/13/2003     Jeff Hunsaker           5,000      $50,000.00
       08/19/2003     Reginald Broughton      5,000      $52,028.00
       08/25/2003     Jeff Hunsaker           5,000      $71,400.00
       08/26/2003     Reginald Broughton      5,000      $73,700.00
       09/02/2003     Reginald Broughton      5,000      $73,555.45
       09/09/2003     Reginald Broughton      5,000      $90,262.00
       09/11/2003     Michael Olson           7,000     $122,850.00
       09/14/2003     Reginald Broughton      2,450      $49,000.00
       09/15/2003     Reginald Broughton      2,550      $51,199.00
       10/08/2003     Robert Bench            6,800     $112,880.00
       10/13/2003     Michael Olson          10,000     $141,486.50
       12/29/2003     Duff Thompson          10,000     $174,860.00
       01/07/2004     Thomas Raimondi        11,841     $210,189.59
       01/26/2004     Larry Gasparro          5,259      $81,076.06
       02/04/2004     Thomas Raimondi        11,841     $170,510.40
       03/03/2004     Thomas Raimondi        11,841     $143,276.10
       04/07/2004     Thomas Raimondi        11,481     $128,736.45
       04/07/2004     Jeff F. Hunsaker        5,976      $66,733.84
                                            -------   -------------
       Totals                               268,255   $3,149,426.59
       
       http://ir.sco.com/edgar.cfm
2.  SCO has illegally manipulated its insider stock option plan and its
    employee stock option plan..