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Novell Inc. said it agreed to settle a lawsuit accusing its former reseller, Aqua Systems Inc., of improperly obtaining upgrades of its Netware software product.

Novell said Aqua denied any liability but agreed to pay a "substantial settlement." Terms weren't disclosed.Provo-based Novell, a producer of computer networking software and systems, filed the lawsuit in April 1994.

Novell charged that Aqua, based in Bellerose, N.Y., violated its Novell reseller and upgrade agreements by repeatedly using individual serial numbers of licensed software to obtain more upgrades than it was entitled to.

Novell said that under its upgrade policy, Aqua was able to obtain the improper upgrades at cut-rate prices.

Novell terminated Aqua as an authorized reseller in June 1994. Aqua said it has no comment about the settlement.