8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities and Exchange Act of 1934

November 9, 2006
Date of Report
(Date of earliest event reported)

NOVELL, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation or organization) 0-13351
(Commission File
Number) 87-0393339
(IRS Employer
Identification Number)

404 Wyman Street, Suite 500
Waltham, MA 02451
(Address of principal executive offices and zip code)

(781) 464-8000
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

(17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

(17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

On November 9, 2006, Novell, Inc. entered into a First Supplemental Indenture with Wells Fargo Bank, National Association, as trustee (the “Trustee”), which amends the Indenture entered into between Novell and the Trustee, dated as of July 2, 2004 (the “Original Indenture,” together with this first amendment, the “Indenture”), providing for the issuance of $600,000,000 aggregate principal amount of 0.50% Convertible Senior Debentures due 2024 (CUSIP Nos. 670006AB1 and 670006AC9) (collectively, the “Debentures”).

The First Supplemental Indenture was entered into upon the successful completion of Novell's previously announced consent solicitation with respect to certain amendments to, and a waiver of rights to pursue remedies available with respect to certain alleged defaults under, the provisions of the Original Indenture. As of the expiration of the consent solicitation at 5:00 p.m., New York City time, on November 9, 2006, Novell had received the consents from the holders in excess of a majority of the outstanding aggregate principal amount of the Debentures. A copy of a press release that Novell issued on November 10, 2006 announcing the successful completion of the consent solicitation is attached as Exhibit 99.1

The First Supplemental Indenture provides that Novell will pay an additional 7.33% per annum (payable semi-annually) in special interest on the Debentures from and after November 9, 2006 to, but excluding, November 9, 2007. Payments of the special interest will be made along with the regular interest payments to debentureholders entitled to such regular interest payments.

The First Supplemental Indenture also provides that (i) any failure by Novell to file reports required to be filed with the SEC under the Securities Exchange Act of 1934 (the “Exchange Act”) or to comply with certain other reporting covenants before 5:30 p.m., New York City time, on May 31, 2007 shall not constitute a default under the Indenture, and (ii) if as of 5:30 p.m., New York City time, on May 31, 2007 Novell has not filed all such required reports with the SEC in a form that causes Novell to be then current in all material respects in its filing obligations under the Exchange Act and complied with the other reporting covenants, any default arising from Novell's failure to file such required reports or to comply with such certain other reporting covenants that has occurred and remains uncured as of 5:30 p.m., New York City time, on May 31, 2007 shall be deemed to have occurred at such time. A copy of the First Supplemental Indenture is attached as Exhibit 99.2.

Item 9.01 Financial Statements and Exhibits.

(c)  Exhibits

Exhibit Number	Description
99.1	Press Release dated November 10, 2006.
99.2	First Supplemental Indenture dated November 9, 2006

SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Novell, Inc. (Registrant)
Date: November 15, 2006	By /s/ Dana C. Russell (Signature) Vice President Finance, Chief Financial Officer (Title)

EXHIBIT INDEX

The following exhibit is filed as part of this current report on Form 8-K.

Exhibit Number	Description
Exhibit 99.1	Press Release of Novell, Inc. dated November 10, 2006
Exhibit 99.2	First Supplemental Indenture dated November 9, 2006

EX-99

Exhibit 99.1

FOR IMMEDIATE RELEASE
November 10, 2006

Novell Announces Successful Completion of Consent Solicitation

WALTHAM, Mass. – November 10, 2006 — Novell, Inc. (NASDAQ:NOVL) today announced the successful completion of its previously announced consent solicitation with respect to certain amendments to, and a waiver of rights to pursue remedies available with respect to certain alleged defaults under, the provisions of the indenture, dated July 2, 2004 (the “Indenture”), governing its 0.50% convertible senior debentures due 2024 (CUSIP Nos. 670006AB1 and 670006AC9) (collectively, the “Debentures”). As of the expiration of the consent solicitation at 5:00 p.m., New York City time, on November 9, 2006, Novell had received the consents from the holders in excess of a majority of the outstanding aggregate principal amount of the Debentures.

Novell and Wells Fargo Bank, National Association, the trustee under the Indenture, are entering into a first supplemental indenture implementing the proposed amendments described in the consent solicitation statement dated October 17, 2006, as amended and supplemented on October 31, 2006 and November 7, 2006 (the “Consent Solicitation Statement”). The amendments will be binding on all debentureholders, including non-consenting debentureholders.

Under the terms of the Consent Solicitation Statement, Novell will pay an additional 7.33% per annum (payable semi-annually) in special interest on the Debentures from and after November 9, 2006 to, but excluding, November 9, 2007. Payments of the special interest will be made along with the regular interest payments to debentureholders entitled to such regular interest payments.

Citigroup Corporate and Investment Banking served as the solicitation agent for the consent solicitation. Questions regarding the consent solicitation may be directed to Citigroup Corporate and Investment Banking at (800) 558-3745 (toll-free) or (212) 723-6106. The information agent for the consent solicitation was Global Bondholder Services Corporation.

This announcement is not an offer to purchase, a solicitation of an offer to purchase or a solicitation of consents with respect to the Debentures nor is this announcement an offer to sell or a solicitation of an offer to purchase new securities. The consent solicitation was made solely by means of the Consent Solicitation Statement and the related Consent Form.

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, and these statements are forward-looking statements. 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 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™. 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 environment while reducing costs. More information about Novell can be found at http://www.novell.com.

_________________

Novell and NetWare are registered trademarks, 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.

Press Contact:

Bruce Lowry
Novell, Inc.
Phone: 415-383-8408
E-Mail: blowry@novell.com

Investor Relations Contact:

Bill Smith
Novell, Inc.
Phone: 800-317-3195
E-Mail: wsmith@novell.com

EX-99

Exhibit 99.2

1-NY/2099949.5

FIRST SUPPLEMENTAL INDENTURE

        FIRST SUPPLEMENTAL INDENTURE (this “First Supplemental Indenture”), dated as of November 9, 2006, between Novell, Inc., a Delaware corporation (the “Company”), and Wells Fargo Bank, National Association, as trustee (the “Trustee”).

W I T N E S S E T H

        WHEREAS, the Company and the Trustee are parties to an Indenture dated as of July 2, 2004 (the “Original Indenture,” together with this first amendment, the “Indenture”), providing for the issuance of $600,000,000 aggregate principal amount of 0.50% Convertible Senior Debentures due 2024 (the “Securities”);

        WHEREAS, the Company has commenced a solicitation of consents (the “Solicitation”) from the holders of the Securities (the “Holders”) to certain amendments to the Original Indenture as set forth in the Consent Solicitation Statement, dated as of October 17, 2006, as amended and supplemented on October 31, 2006 and November 7, 2006 (the “Statement”);

        WHEREAS, pursuant to the Solicitation, the Holders of at least a majority in aggregate principal amount of the Securities outstanding have consented to the amendments effected by this First Supplemental Indenture in accordance with the provisions of Section 7.02 of the Indenture;

        WHEREAS, pursuant to Sections 7.06 and 14.05 of the Indenture, there has been delivered to the Trustee on the date hereof an Officers’ Certificate and an Opinion of Counsel certifying that this First Supplemental Indenture complies with applicable provisions of the Indenture.

        NOW THEREFORE, in consideration of the foregoing and the mutual premises and covenants contained herein and for other good and valuable consideration, the parties hereto agree as follows:

1) DEFINITIONS. Capitalized terms used but not defined in this First Supplemental Indenture shall have the specified meanings set forth in the Original Indenture.

2) AMENDMENTS TO INDENTURE.

a) The amendments set forth below will become effective upon the execution and delivery of this First Supplemental Indenture by the Company and the Trustee.

b) The sections of the Original Indenture identified below will be amended as indicated.

i) The following defined terms are hereby added to the Indenture in alphabetical order:

(1) “Expiration Date” means November 9, 2006.

(2) “SEC Reports” means the Company’s Quarterly Report on Form 10-Q for the three months ended July 31, 2006, and other information, documents and reports which the Company may be required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.

(3) “Special Interest” has the meaning specified in Section 9.01 hereof.

ii) The Indenture is hereby amended by adding a new Section 2.03(c) as follows: “(c) Each Security issued hereunder shall bear the following legend on the face thereof: ‘THIS DEBT INSTRUMENT HAS, FOR FEDERAL INCOME TAX PURPOSES, BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT. HOLDERS MAY CALL THE NOVELL DIRECTOR OF TAX AT 781-464-8000 TO LEARN THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND THE YIELD TO MATURITY OF THIS DEBT INSTRUMENT FOR PURPOSES OF THE ORIGINAL ISSUE DISCOUNT RULES.’"

iii) The following two sentences are hereby inserted at the end of Section 4.01 of the Indenture: “Notwithstanding any of the foregoing, but subject to the immediately succeeding sentence, the failure of the Company to file reports required to be filed with the SEC under the Exchange Act or to comply with Section 9.04(a) or Section 9.05 of this Indenture or §314 of the TIA before 5:30 p.m., New York City time, on May 31, 2007 shall not constitute a Default under clause (d) above. If, however, as of 5:30 p.m., New York City time, on May 31, 2007, the Company shall not have (1) filed the SEC Reports with the SEC in a form that causes the Company to be current in all material respects in its filing obligations under the Exchange Act and (2) provided such SEC Reports, and any required Officers’ Certificates pursuant to Section 9.05 of this Indenture, to the Trustee, any Default arising from the Company’s failure to file reports required to be filed with the SEC under the Exchange Act or to comply with Section 9.04(a) or Section 9.05 of this Indenture or Section §314 of the TIA that has occurred and remains uncured as of May 31, 2007 shall be deemed to have occurred on May 31, 2007.”

iv) The following two sentences are hereby inserted at the end of Section 9.01 of the Indenture: “In addition to any other payment required by the Securities and the Indenture, the Company shall pay special interest at a rate equal to 7.33% per annum (payable semi-annually) from and after the Expiration Date to, but excluding, the first anniversary of the Expiration Date (“Special Interest”). Special Interest payable pursuant to this Section 9.01 shall be paid in the same manner that regular interest is paid under the Indenture and the Securities.”

v) Section 12.01 of the Indenture is hereby amended by Schedule A to the Indenture being deleted and replaced in its entirety by the following:

                                                                                                              SCHEDULE A

                                                 Additional Shares Table
                                                       Stock Price
Effective Date        $8.23    $9.00   $10.00   $11.00   $12.00   $13.00   $14.00  $20.00  $25.00  $30.00  $40.00  $50.00

     July 15, 2004  34.7162  34.7162  30.4050  25.9314  22.3694  19.4865  17.1204  8.9874  5.9139  4.1759  2.4038  0.0000

     July 15, 2005  34.7162  34.7162  30.0767  25.4503  21.7924  18.8528  16.4571  8.3928  5.4529  3.8340  2.2293  0.0000

     July 15, 2006  34.7162  34.7162  30.0647  25.1645  21.3265  18.2723  15.8081  7.7575  4.9726  3.4957  2.0835  0.0000

  November 9, 2006  34.7162  34.7162  29.9253  24.9132  21.0071  17.9152  15.4340  7.4570  4.7707  3.3693  2.0438  0.0000

  January 14, 2007  34.7162  34.7162  29.8478  24.7716  20.8266  17.7130  15.2221  7.2866  4.6563  3.2979  2.0217  0.0000

  January 15, 2007  34.7162  34.7162  28.5028  23.5478  19.7040  16.6762  14.2589  6.6120  4.1170  2.8488  1.6854  0.0000

     July 14, 2007  34.7162  34.7162  28.2431  23.1160  19.1685  16.0841  13.6424  6.1198  3.7835  2.6368  1.6129  0.0000

     July 15, 2007  34.7162  30.9446  24.5767  19.7818  16.1114  13.2615  11.0212  4.2845  2.3157  1.4139  0.6962  0.0000

  November 9, 2007  34.7162  30.6020  23.9680  19.0205  15.2767  12.4074  10.1830  3.7679  2.0248  1.2578  0.6665  0.0000

  January 14, 2008  34.7162  30.4073  23.6215  18.5869  14.8013  11.9209  9.7055   3.4736  1.8593  1.1689  0.6497  0.0000

  January 15, 2008  34.4664  27.8252  21.2950  16.4701  12.8597  10.1279  8.0402   2.3085  0.9282  0.3939  0.0691  0.0000

     July 15, 2008  34.3067  27.1858  20.2453  15.1874  11.4679  8.7111   6.6535   1.4484  0.4335  0.1178  0.0000  0.0000

     July 15, 2009   0.0000   0.0000   0.0000   0.0000   0.0000  0.0000   0.0000   0.0000  0.0000  0.0000  0.0000  0.0000

3) RATIFICATION OF INDENTURE; SUPPLEMENTAL INDENTURE PART OF INDENTURE. Except as expressly amended hereby, the Original Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This First Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Securities (whether heretofore or hereafter authenticated and delivered) shall be bound hereby.

4) GOVERNING LAW. This First Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the state of New York but without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby.

5) TRUSTEE MAKES NO REPRESENTATION. The Trustee makes no representation as to the validity or sufficiency of this First Supplemental Indenture.

6) COUNTERPARTS. The parties may sign any number of copies of this First Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

7) EFFECT OF HEADINGS. The section headings herein are for convenience only and shall not effect the construction thereof.

8) CONFLICT WITH TIA. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this First Supplemental Indenture by any provision of the Trust Indenture Act of 1939, as amended, such required provision shall control.

9) SUCCESSORS AND ASSIGNS. All covenants and agreements in this First Supplemental Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

10) SEPARABILITY CLAUSE. In case any provision in this First Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

        IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, all as of the date first written above.

COMPANY:

NOVELL, INC.

By /s/ Joseph A. LaSala, Jr.
Name: Joseph A. LaSala, Jr.
Title: SVP, General Counsel and Secretary

TRUSTEE:

WELLS FARGO BANK,
NATIONAL ASSOCIATION,
as Trustee

By /s/ Julie J. Becker
Name: Julie J. Becker
Title: Vice President