Microsoft Agrees to Stop Dissemination of False Statements about Novell

Novell, Inc., a leader in eBusiness solutions and Net services software, today announced that Microsoft Corporation has agreed to stop the dissemination of statements about Novell that are the center of Novell's false advertising lawsuit filed Oct. 1 against Microsoft. Microsoft has also agreed to send a retraction letter along with corrective information of Novell's choosing to the same Novell® customers who received the original Microsoft "Server Crunch" marketing piece containing what Novell asserts are false and misleading statements about Novell. Novell will continue to pursue the lawsuit to recover damages. (See announcement, "Novell Files Suit Against Microsoft; Seeks Injunction, Damages," http://www.novell.com/news/press/archive/2001/10/pr01093.html.)

In response to Novell's motion for a temporary restraining order to prohibit Microsoft from further disseminating false statements about Novell, Microsoft entered into a stipulation on the record before the U.S. District Court in Utah in which Microsoft agreed to stop distribution of the statements in question in any form or media. Microsoft also agreed to send an amended correction letter to the recipients of the original Microsoft marketing piece.

Microsoft's correction letter will include the following excerpt: "Contrary to the statements made about Novell on the package by Microsoft, Novell has advised Microsoft that it is growing and expanding its software business, while adding significant resources to its existing consulting services business. Accordingly, Microsoft retracts its statements that Novell will not fully support NetWare®, that NetWare has an 'expiration date' or that it is or will become 'obsolete,' and that NetWare will become costly and time-consuming to maintain."

"We are pleased with today's developments because Microsoft represented to a court of law that it will no longer disseminate the statements Novell contends constitute false advertising, whether on the original marketing piece in question or by any other means," said Joe LaSala, Novell senior vice president and general counsel. "We are also satisfied with Microsoft's agreement to send out an amended retraction to our customers. We believe this is recognition by Microsoft that its initial 'corrective action' was insufficient and shows Microsoft's initial attempt to correct its false and misleading statements about Novell was half-hearted at best. While the revised retraction is a good beginning, it does not adequately redress the harm to Novell caused by Microsoft's campaign of false statements. We are anxious to move to the next phase of the litigation where discovery will begin and we will put together our case for damages."

According to Microsoft, it sent the marketing mailer in August to some 3,000 Novell customers. The piece, a box headlined "Microsoft Server Crunch," contained false statements relative to the future of Novell's NetWare product, Novell's commitment to NetWare and its acquisition of Cambridge Technology Partners, among other misleading and untrue statements. In fact, Novell is fully committed to NetWare and has future versions of the product in development. NetWare is Novell's flagship network operating system and is widely regarded in the computer industry as the most reliable and secure platform on the market.

For more information about NetWare and to see what technology industry press are saying about NetWare 6 - the latest version of Novell's premier platform for delivering Net services across all types of computer networks, storage systems and client desktops - visit http://www.novell.com/products/netware/nw6_news.html.

About Novell
Novell, Inc. (NASDAQ: NOVL), is a leader in eBusiness solutions and Net services software designed to secure and power the networked world. Novell and its subsidiary, Cambridge Technology Partners, help organizations solve complex business challenges, simplify their systems and processes, and capture new opportunities with one Net solutions. Novell provides worldwide channel, consulting, education and developer programs to support its offerings.

For information on Novell's complete range of products and services, contact Novell's Customer Response Center at (888) 321-4CRC (4272), or visit Novell's Web site at http://www.novell.com. Information on eBusiness and e-integration solutions from Cambridge Technology Partners can be accessed at http://www.ctp.com. Press may access Novell announcements and company information on the World Wide Web at http://www.novell.com/pressroom.

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