Corel Signs Strategic Licensing Deal With Ultimatte Corporation : Corel licenses rights to distribute and enhance KnockOut software.

OTTAWA--(BUSINESS WIRE)--Sept. 1, 1999--

Corel Corporation (NASDAQ: CORL, TSE: COR) is pleased to announce that it has entered into a licensing agreement with Ultimatte Corporation. The agreement grants Corel the worldwide, perpetual right to distribute the PC and Macintosh versions of Ultimatte's KnockOut(tm) software application on a stand alone basis and as part of Corel applications.

In addition to the distribution rights, Corel has been granted a license to the source code for the KnockOut software which will enable Corel to continually enhance and add new features to the software.

The KnockOut software product offers a groundbreaking new method for defining digital masks. This masking technology enables users to create seamless composites that preserve fine details such as hair transparencies, smoke, motion blur and shadows. Users can easily select the object that they wish to mask out of a digital photograph by drawing selection lines that define the inner and outer boundaries of the object. The software then outputs a processed foreground (the object with the background colors removed) and a channel that preserves all of the transparencies of the original.

"Corel has long prided itself in providing its users with world-class, award-winning graphics applications," said Dr. Michael Cowpland, president and chief executive officer of Corel Corporation. "The masking technology that Ultimatte has developed is unrivaled in the industry and we are pleased to have the opportunity to introduce it to our users. We are confident that the integration of the KnockOut software will be an excellent addition to our graphics applications."

Corel has been a leader in the high-end graphics market for over 10 years. It recently celebrated the tenth anniversary of its CorelDRAW(r) software, a powerful and intuitive vector illustration and page layout application; and just launched CorelDRAW 9 Premium Color Edition, the only PC graphics suite that includes fully color-managed creation and output capabilities.

"We are delighted to license our KnockOut software to a company like Corel, who can really leverage it by incorporating it into its technologies," said Paul Vlahos, president of Ultimatte Corporation. "We've created a revolutionary new way to generate image masks and it's very gratifying to have this new technology recognized by other leaders in the industry."

Corel Corporation

Corel Corporation is an internationally recognized developer of award-winning graphics and business productivity applications. Development of market-leading products such as the CorelDRAW(r) line of graphics applications and the Corel(r) WordPerfect(r) Suite of business tools is continually evolving to meet the demands of the corporate, retail and academic markets. Committed to performance, compatibility, value and open standards, Corel develops products for the Windows(r), Macintosh(r), UNIX(r), Linux(r) and Java(tm) platforms. Corel's common stock trades on The NASDAQ Stock Market(sm) under the symbol CORL and on the Toronto Stock Exchange under the symbol COR. For more information visit Corel's Web site at www.corel.com.

About Ultimatte Corporation

For over 20 years, Ultimatte Corporation has set the standard for hardware and software used in bluescreen compositing. For revolutionizing the quality of motion picture and television effects, the patented Ultimatte process has been honored with the Oscar, the Emmy, and numerous other awards. Ultimatte products are in use everywhere today, from the smallest graphic design studio to the largest movie effects house. Ultimatte Corp. now brings its renowned expertise in the field of matte creation to the graphic arts industry with Ultimatte KnockOut.

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