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Corel Provides Update on Acquisition Discussions with Vector Capital

Press release from the issuing company

OTTAWA, Ontario--June 5, 2003-- Corel Corporation today announced that, as previously reported on May 6, 2003, the Company continues to be in discussions with Vector Capital Corporation with respect to a potential transaction for the acquisition of Corel. As previously announced, Vector Capital has the contractual right to make an offer to Corel's shareholders to purchase all common shares at a price of US $1.10 and the Board of Directors of Corel agreed to recommend such an offer provided that it receives a fairness opinion. In light of recent trading activity in Corel's common shares, Corel has announced that there is a high likelihood that it will shortly enter into a definitive agreement with Vector Capital for a transaction at a price per common share which will be below US $1.10 per share and which the Board of Directors will recommend that shareholders approve. Corel will make a further announcement upon entering into any definitive agreement with Vector Capital or terminating discussions, whichever occurs.