Crossroads Systems Announces Settlement of Patent Infringement Lawsuit Against Dot Hill; Agreement Includes $10.5 Million Payment to Crossroads, 2.5 Percent Ongoing Royalty for Certain Products

Business Wire, June 29, 2006

AUSTIN, Texas -- Crossroads Systems, Inc. (Pink Sheets: CRDS), a leading provider of Business Information Assurance solutions for guaranteed access, resiliency and security of enterprise information, today announced it has settled its outstanding patent litigation with Carlsbad, California-based Dot Hill Systems Corp. (NASDAQ: HILL), a provider of storage networking solutions. In the settlement, Crossroads will receive a one-time $10.5 million cash payment and a 2.5 percent ongoing royalty on net sales of products utilizing Crossroads patented access controls technology.

Originally filed October 17, 2003, the lawsuit claimed that Dot Hill sold solutions that violated U.S. patent Nos. 5,941,972 and 6,425,035 which cover the ability to control access between hosts and storage devices in a networked storage environment. Crossroads is the exclusive owner of these patents. In exchange for the one-time cash payment and running royalty, Crossroads granted Dot Hill a nonexclusive license to these patents and the parties settled all claims arising out of the litigation.

"Our settlement with Dot Hill is significant for Crossroads, as it demonstrates our commitment to protecting our extensive portfolio of intellectual property," said Rob Sims, President and CEO of Crossroads Systems. "We are pleased to announce this settlement has been reached so we can now focus on the successful deployment of our Business Information Assurance (BIA) solutions."

About Crossroads Systems, Inc.

With headquarters in Austin, Texas, Crossroads Systems is a leading provider of Business Information Assurance solutions. Crossroads solves today's growing data storage, business continuity, disaster recovery and information security markets needs. Crossroads solutions are designed to help companies store, manage and ensure the security, resiliency and accessibility of their data. Crossroads products are sold as part of packaged offerings from companies such as EMC, HP, Quantum and SUN, and are distributed through partners such as ACAL, Bell Micro, Info-X, and Promark. Crossroads (CRDS.PK) is currently traded on the Over The Counter ("OTC") Bulletin Board. Crossroads is a member of the Storage Networking Industry Association (SNIA). For more information about Crossroads Systems, please visit www.crossroads.com or call 800-BUY-CRDS / 800.643.7148.

Forward-Looking Statements

This release may include forward-looking statements. The words "believe," "expect," "intend," "plan," "project," "will" and similar phrases as they relate to Crossroads are intended to identify such forward-looking statements. These statements reflect the current views and assumptions of Crossroads, and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations.

(C) 2006 Crossroads Systems, Inc. Crossroads and Crossroads Systems are registered trademarks of Crossroads Systems, Inc. SecurDB and SPIE are trademarks of Crossroads Systems, Inc. All specifications are subject to change without notice.