Corel Distributes Special Meeting Materials to Securityholders: Board Recommends Approval of Vector Acquisition.

Business Editors/High-Tech Writers

OTTAWA, Canada--(BUSINESS WIRE)--July 31, 2003

Corel Corporation (NASDAQ: CORL, TSX: COR) today announced that it has completed the distribution of the Management Proxy Circular and related materials for the Special Meeting of Corel securityholders, scheduled for August 20, 2003 in Toronto.

The circular includes the recommendation of the Corel Board of Directors that securityholders vote in favour of the Plan of Arrangement that would result in the Vector Capital group acquiring all the common shares of Corel for US $1.05 (or approximately Cdn $1.48 based on recent exchange rates) per share.

"Your Directors are committed to fulfilling our duty to maximize shareholder value," James Baillie, Chairman of the Board of Directors of Corel, says in a letter to securityholders included in the Circular. "When we received the unsolicited Vector proposal, we concluded it was sufficiently favourable that we should make it available to our shareholders, unless a superior offer emerged. None did, despite an extensive search by CIBC World Markets Inc."

Mr. Baillie notes that CIBC World Markets, as financial advisors to Corel, provided the Board with an opinion that the Vector offer is fair to securityholders from a financial point of view and that KPMG Corporate Finance Inc. subsequently valued Corel shares at between US $1.00 and US $1.08 each. Full details of the CIBC fairness opinion and the KPMG Formal Valuatioon are included as part of th Management Proxy Circular.

The Board of Directors also considered and evaluated a number of factors including Corel's historical operating results, financial condition, and prospects, as well as the market conditions, trends and future prospects of the industry in which Corel operates. These factors are discussed in detail in the Circular.

"Your Board recommends that Corel securityholders approve the transaction and the plan of arrangement that will put it into effect," Mr. Baillie says. "It is important that your securities be represented at the meeting and your Board urges you to make an informed decision."

Corel securityholders are being asked to vote on three resolutions, through the proxies included with the Circular, by giving instructions to their brokers, or in person at the Special Meeting. The resolutions are:

1. The Arrangement Resolution which approves the plan of arrangement.

2. The Continuance Resolution which approves the continuance of Corel

from the jurisdiction of the Canada Business Corporations Act to the jurisdiction of the Business Corporations Act (Ontario)

3. The Rights Plan Resolution which approves the termination of the Corel shareholders rights plan.

In the letter to securityholders, Mr. Baillie notes: "The Board recommends that Corel securityholders approve the transaction by voting for the Arrangement Resolution, for the Continuance Resolution, and for the Rights Plan Resolution."

Alex Slusky, managing partner of Vector Capital Corporation, said: "We urge securityholders to review the materials for the Special Meeting so their decision can be based on full knowledge of the background to the transaction. We believe that they will conclude that their interests are best served by approving the Plan of Arrangement and accepting the 42 percent premium over the value of the shares at the time negotiations with Vector were first publicly announced."

The mailing to securityholders includes the notice of the Special Meeting, the Management Proxy Circular, which provides full details of the transaction, the Plan of Arrangement, and the resolutions, as well as proxy forms related to the meeting and letters of transmittal.

The Special Meeting will be held on August 20, 2003 at 4:00 p.m., Eastern time, at the Holiday Inn on King, 370 King Street West, Toronto, for holders of: Corel common shares; Series A participating convertible preferred shares, and; options, warrants or other securities (excluding Series A shares) exercisable for, convertible into or exchangeable for common shares for less than US $1.05 per share.

Corel Corporation securityholders with questions about the Special Meeting can contact MacKenzie Partners Inc., the company's proxy solicitation agents.

Corel securityholders who have not received the Management Proxy Circular and related materials by August 1, 2003 should contact their brokers or MacKenzie Partners, toll-free at [phone]. The Circular can also be accessed through SEDAR and EDGAR, or from Corel's Web site at www.corel.com.

Corel Corporation

Founded in 1985, Corel Corporation (www.corel.com) is a leading technology company specializing in content creation tools, business process management and XML-enabled enterprise solutions. The company's goal is to give consumers and enterprise customers the ability to create, exchange and instantly interact with visual content that is always relevant, accurate and available. With its headquarters in Ottawa, Canada, Corel's common stock trades on the Nasdaq Stock Market under the symbol CORL and on the Toronto Stock Exchange under the symbol COR.

Vector Capital

Vector Capital is a San Francisco-based venture capital and private equity firm focused on special opportunity investments in software and information technology services. Vector serves the needs of growing software companies by actively partnering with their management in creating value for their customers and shareholders. Vector Capital's investments include LANDesk Software, Savi Technology and ProcessClaims. Additional information about Vector Capital can be obtained at www.vectorcapital.com.

This press release contains forward-looking statements as defined by the United States Private Securities Litigation Reform Act of 1995, involving the company's expectations about future financial results and other matters. These statements reflect management's current forecast of certain aspects of the company's future business. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results of operations to differ materially from historical results or current expectations. The words "plan", "expect", "believe", "intend", "anticipate", "forecast", "target", "estimate" and similar expressions identify forward-looking statements. Risk factors include shifts in customer demand, product shipment schedules, product mix, competitive products and pricing, technological shifts and other variables. Readers are referred to Corel's most recent reports filed with the Securities and Exchange Commission for a more complete discussion of the other risks and uncertainties. The factors underlying forecasts are dynamic and subject to change. As a result, forecasts speak only as of the date they are given and do not necessarily reflect the company's outlook at any other point in time. The company does not undertake to update or review these forward-looking statements.

(C) 2003 Corel Corporation. All rights reserved. Corel and the Corel logo are trademarks or registered trademarks of Corel Corporation and/or its subsidiaries. All other product, font and company names and logos are trademarks or registered trademarks of their respective companies.