Linuxcare Completes Third Funding Round, Industry Leaders Invest US$30 Million

Dell, Motorola and Sun Reinvest in the Future of Linux

SAN FRANCISCO, Aug. 2, 2000 -- Linuxcare, Inc., a recognized leader in providing comprehensive professional services and solutions for Linux and open-source technologies, has raised US$30 million in its third funding round, led by Lehman Brothers Venture Capital. Linuxcare's Series C round will fuel development and expansion of its four-pronged services, support, education and certification business model.

With this funding round, Linuxcare's corporate partners Dell Ventures, the strategic investment arm of Dell Computer Corp., Motorola, Inc. [NYSE:MOT] and Sun Microsystems, Inc. [NASDAQ:SUNW] all increased their existing investments.

ITOCHU International, Inc. (http://www.itochu.com), the North American subsidiary of ITOCHU Corp.--a diversified trading company with offices in over 80 countries and currently the tenth largest company in the world--has signed on as one of Linuxcare's newest corporate investors.

"The Global 2000 companies are rapidly moving toward the use of Linux and open-source products in their mission-critical environments," said Tom Banahan, managing director, Lehman Brothers Venture Capital. "Linuxcare continues to demonstrate the growth, innovation and technical expertise required to meet the evolving needs of open-source technology customers. Lehman Brothers is excited to partner with the Linuxcare team."

Since its second round of equity financing, announced Dec. 14, 1999, Linuxcare has been steadily expanding its service offerings. The third-round financing will be used for working capital and continued expansion of the company's solution offerings.

Linuxcare's venture firm partners, Kleiner Perkins Caufield & Byers and Patricof & Co., are joined in this round by Charter Growth Capital and an affiliated entity of Sands Brothers & Co., Ltd., in addition to Lehman Brothers.

"Our world-class partners underscore that a services-based business is the right model for building a successful Linux company," said Chris Paul, CFO, Linuxcare. "We are pleased to see these industry leaders returning to support us in this round, and welcome our new investors."

About Linuxcare, Inc.
Linuxcare, Inc. is a recognized leader in providing comprehensive professional services and solutions for Linux and open-source technologies. Linuxcare helps original equipment manufacturers (OEMs), independent software vendors (ISVs), Internet infrastructure vendors and Global 2000 companies maximize their success in putting Linux and open-source solutions to work. The company, with funding from Kleiner Perkins and corporate partners such as ITOCHU, Motorola, Oracle and Sun, hosts http://www.linuxcare.com, a leading technical resource for Linux and open-source solutions. Founded in 1998, Linuxcare is headquartered in San Francisco with offices around the world. The company can be reached at +1-415-354-4878.

Linuxcare is a trademark of Linuxcare, Inc. Other names used may be trademarks of their respective owners.