Novell Receives Delisting Notice From NASDAQ and Notice of Default From Wells Fargo Related to its Convertible Subordinated Notes Due to Late Filing of Form 10-Q

-- Novell to request a hearing from the NASDAQ listing qualifications panel

-- Novell disputes Wells Fargo assertions

Sep 20, 2006, 01:00 ET from Novell, Inc.

    WALTHAM, Mass., Sept. 20 /PRNewswire-FirstCall/ -- Novell, Inc.
 (Nasdaq:   NOVL) today announced that it had received a staff determination
 notice from the NASDAQ Stock Market stating that the company's common stock
 is subject to delisting from the NASDAQ Stock Market. The notice was issued
 in accordance with standard NASDAQ procedures as a result of the delayed
 filing of Novell's quarterly report on Form 10-Q for the period ended July
 31, 2006. Timely filing of periodic reports is a requirement for continued
 listing under NASDAQ marketplace rule 4310(c)(14).
     Novell will appeal and request a hearing before a NASDAQ listing
 qualifications panel, which will automatically stay delisting of the
 company's common stock pending the panel's review and determination.
     The late filing resulted from Novell's previously announced voluntary
 review by its audit committee of Novell's historical stock-based
 compensation practices. The company intends to file its quarterly report on
 Form 10-Q for the period ended July 31, 2006 as soon as practicable after
 the audit committee's review is concluded.
     Novell also announced today that it had received a letter from Wells
 Fargo Bank, N.A., the trustee with respect to Novell's $600 million 0.50%
 convertible senior debentures due 2024, which asserts that Novell is in
 default under the indenture because of the delay in filing its Form 10-Q
 for the period ended July 31, 2006. The letter states that this asserted
 default will not become an "event of default" under the indenture if the
 company cures the default within 60 days after the date of the notice.
     Novell does not believe that it has failed to perform its obligations
 under the indenture. Therefore, Novell believes that the above-mentioned
 notice of default is invalid and without merit. Novell's indenture requires
 that it provide the trustee copies of all SEC filings within 15 days after
 such filings are actually made. Novell will comply with this requirement by
 providing the Form 10-Q for the period ended July 31, 2006 to the trustee
 after filing it with the SEC.
     In the event the above-mentioned notice of default is not invalid, and
 in the event such default were to mature into an event of default under the
 indenture, the trustee or the holders of at least 25% in aggregate
 outstanding principal amount of debentures may accelerate the maturity of
 the debentures.
     Legal notice regarding forward-looking statements
     This press release includes statements that disclose Novell's or
 management's intentions, expectations or predictions of the future,
 including statements about claims of default with respect to Novell's 0.50%
 convertible senior debentures due 2024 and potential consequences are
 forward-looking statements within the meaning of the Private Securities
 Litigation Reform Act. Novell cautions that these statements involve risks
 and uncertainties and other factors that may cause results to differ
 materially from those anticipated at the time such statements are made. In
 addition, potential risks and uncertainties include, among other things:
 (1) the results of the review of Novell's historical stock-based
 compensation practices and the related potential accounting impact; (2) the
 timing of the completion of such review by the audit committee and the
 independent outside legal counsel engaged by the audit committee to conduct
 the review; (3) any potential restatement and filing of previously issued
 financial statements and assessment of the effectiveness of disclosure
 controls and procedures and internal control over financial reporting; (4)
 the review and filing of Novell's Form 10-Q for the fiscal quarter ended
 July 31, 2006; (5) the possibility that the occurrence of an event of
 default under the indenture could cause acceleration of repayment of the
 entire principal amounts and accrued interest on the debentures; (6) the
 possibility that the NASDAQ listing qualifications panel may not grant
 Novell's request for an extension to regain compliance with NASDAQ listing
 qualifications or Novell's failure to regain compliance within any
 extension period that is granted, in which case Novell's common stock would
 be delisted from the the NASDAQ Stock Market; (7) any adverse results of
 lawsuits or governmental inquiries; and (8) additional risks and
 uncertainties and important factors described in Novell's filings with the
 SEC, including our most recent annual report on Form 10-K. There can be no
 assurance that the outcome of the review by Novell's audit committee of
 Novell's past stock-based compensation practices and the related potential
 accounting impact will not result in changes in the preliminary financial
 results for the third fiscal quarter 2006 or a restatement of financial
 results provided by the company for any historical period. Although we
 believe the expectations reflected in such forward-looking statements are
 based upon reasonable assumptions, we can give no assurance that our
 expectations will be attained or that results will not materially differ.
 We undertake no obligation to publicly update or revise any forward-looking
 statement, whether as a result of new information, future events or
 otherwise, except as may be required by law.
     About Novell
     Novell, Inc. delivers Software for the Open Enterprise(TM). With more
 than 50,000 customers in 43 countries, Novell helps customers manage,
 simplify, secure and integrate their technology environments by leveraging
 best-of-breed, open standards-based software. With more than 20 years of
 experience, 4,700 employees, 5,000 partners and support centers around the
 world, Novell helps customers gain control over their IT operating
 environments while reducing costs. More information about Novell can be
 found at .
     NOTE: Novell is a registered trademark, and Software for the Open
 Enterprise is a trademark of Novell, Inc. in the United States and other
 countries. Linux is a registered trademark of Linus Torvalds. All other
 third-party trademarks are the property of their respective owners.

SOURCE Novell, Inc.