Novell Commences Debentureholder Consent Solicitation

Novell Commences Debentureholder Consent Solicitation

Novell, Inc. (NASDAQ: NOVL) today announced that it is soliciting consents from the holders of its 0.50% convertible senior debentures due 2024 (CUSIP Nos. 670006AB1 and 670006AC9). Novell is seeking consents to proposed amendments of certain provisions of the indenture pursuant to which the debentures were issued and a waiver of rights to pursue remedies available under the indenture with respect to certain defaults thereunder. The consent solicitation is expected to expire at 5:00 p.m., New York City time, on Thursday, Oct. 26, 2006, unless extended to a later time or date (the “Expiration Date”).

As previously disclosed, Novell has not yet filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q for the quarter ended July 31, 2006. As a result, Novell has received notices of default from the trustee under the indenture. Novell believes that these above-mentioned notices of default were invalid and without merit because the indenture only requires Novell to provide the trustee copies of SEC reports within 15 days after such filings are actually made. However, in order to avoid the expense and uncertainties of further disputing whether a default under the indenture has occurred, Novell has determined to solicit consents to proposed amendments to the indenture that would give Novell until Friday, March 30, 2007, to become current in its reporting obligations and a waiver of rights to pursue remedies available under the indenture with respect to any default caused by its not timely filing SEC reports.

Holders of record as of 5:00 p.m., New York City time, on Oct. 16, 2006, who validly deliver and do not revoke their consents prior to 5:00 p.m., New York City time, on Thursday, Oct. 26, 2006, will receive an initial consent fee for each $1,000 in principal amount of debentures with respect to which consents are received equal to the product of $20.00 multiplied by a fraction, the numerator of which is the aggregate principal amount of debentures outstanding on the Expiration Date and the denominator of which is the aggregate principal amount of debentures as to which Novell received and accepted consents. If Novell has not filed its Quarterly Report on Form 10-Q for the quarter ended July 31, 2006 and all additional SEC reports required to have been filed, with the SEC by 5:30 p.m., New York City time, on Feb. 15, 2007, Novell will pay to these holders an additional $10.00 for each $1,000.00 in principal amount of debentures as to which Novell has received and accepted consents. These consent fees are collectively referred to as the “Consent Fees.”

The effectiveness of the proposed amendments and waiver and the payment of the Consent Fees are subject to the receipt of valid consents that are not revoked in respect of at least a majority of the aggregate principal amount outstanding of the debentures. Holders of the debentures may revoke their consents at any time before the proposed amendments and waiver become effective, but upon receipt by Novell of the consents of a majority of holders of the debentures and evidence of such receipt provided to the trustee the waiver will become effective, a supplemental indenture setting forth the amendments will be executed and consents may no longer be revoked unless Novell fails to pay holders the Consent Fees.

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