Novell Receives Delisting Notice from NASDAQ and Notice of Default from Wells Fargo Related to Its Convertible Subordinated Notes

Novell Receives Delisting Notice from NASDAQ and Notice of Default from Wells Fargo Related to Its Convertible Subordinated Notes

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.

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