Corel Corporation to acquire SoftQuad Software

[Lauren Wood <lauren@softquad.com>]

Corel To Acquire SoftQuad 

Companies Sign Definitive Agreement:

Acquisition Advances Next Phase of Corel's Growth Strategy

Ottawa & Toronto, Canada - August 7, 2001 - Corel Corporation 
(NASDAQ:CORL, TSE: COR) and SoftQuad Software, Ltd. (OTC BB: SXML) 
today announced that they have signed a definitive agreement whereby Corel 
will acquire SoftQuad in a stock-for-stock transaction to be accounted for as 
a purchase transaction.

This acquisition advances key aspects of the company's growth strategy and 
builds upon its recently-announced plans to acquire Micrografx, Inc. By 
acquiring SoftQuad and its ground-breaking XML-enabling technologies, 
Corel is adding a key ingredient required to implement horizon two of its 
growth strategy. In addition, this acquisition will enable Corel to enrich the 
existing XML capabilities within its WordPerfect(r) product line.

"Upon completion of this acquisition, we believe we will have the core 
technologies needed to realize our vision of providing customers with an 
expansive cross-media publishing solution," said Derek Burney, president 
and CEO of Corel Corporation. "We intend to give customers the tools they 
need to create, manage and simultaneously deploy customized content 
across multiple delivery channels, including the Web. This streamlined 
production process will afford them maximum flexibility while saving them 
valuable time and resources. Our solution will capitalize on SoftQuad's 
expertise in the XML arena and its strong partnerships with leading content 
management system vendors, Micrografx's innovative emerging technologies 
and Corel's internationally recognized strengths in graphics and publishing. 
This acquisition will also benefit our WordPerfect customers. By integrating 
SoftQuad's market-leading XML technologies into our award-winning word-
processing application, we will further enhance the XML functionality that 
many of our customers in the government and legal community currently 
enjoy.

"We are very excited about the opportunities that lie ahead for Corel. With a 
clear focus on our immediate goals and intelligent investments to 
supplement our long-term growth, we believe we now have the tools 
necessary to position Corel as the new industry standard in emerging 
segments where there are currently no established leaders." 
					
"We are pleased to be joining forces with a company that shares our vision 
for pervasive XML content," said Roberto Drassinower, CEO of SoftQuad. 
"With Corel's development expertise, international brand recognition and 
strong balance sheet, we will be  able to accelerate the delivery of XML-
based content creation, transformation and exchange solutions to our shared 
customer base."

Corel and SoftQuad share synergies which, when the two operations are 
combined, are expected to generate new revenue opportunities and cost 
efficiencies from which its collective global customer base will benefit. Based 
on preliminary estimates, after the realization of anticipated synergies and 
excluding any one-time integration costs, this acquisition is expected to be 
accretive to cash flow and cash earnings per share within approximately 
twelve months from the date of closing. The company does not expect any 
significant negative impact on cash flow as a result of this acquisition. Over 
the next several weeks, Corel and SoftQuad will work together on a 
comprehensive plan outlining how best to integrate the two companies. 
Following the closing of the deal, expected in the fourth quarter of Corel's 
fiscal 2001, the companies will announce further details related to the 
integration plan.

Exchange terms:

The transaction will be a stock-for-stock transaction. Each common share, 
or equivalent, of SoftQuad will be exchanged for .4152 of a Corel common 
share on closing, being the ratio of $1.50 to $3.6129. The $1.50 value for 
each SoftQuad share equals an approximate 34 per cent premium over the 
closing price of SoftQuad on August 6, 2001. 

The $3.6129 value for Corel common shares represents the prior 10 day 
volume weighted average share price of Corel common stock. At current 
values, Corel would issue approximately 9.85 million shares if all in-the-
money options and warrants of SoftQuad are exercised prior to closing. All 
figures are expressed in US currency.

The above noted exchange ratio will be fixed for movement in Corel's 
common share price between $2.71 per share and $4.52 per share. For 
prices outside this range, Corel would issue more shares at a lower price 
and fewer shares at a higher price. The maximum number of shares Corel 
could issue is approximately 11.2 million.

The transaction is subject to regulatory approval and approval by SoftQuad's 
shareholders.

Corel Corporation

Corel Corporation provides its customers with the creative tools they need  to 
unleash their imaginations. 

With its heritage of software innovation and a solid franchise of loyal 
customers worldwide, Corel has earned its reputation as an internationally 
recognized developer of award-winning graphics and business productivity 
applications on the Windows(r), Macintosh(r),  Linux(r) and UNIX(r) platforms. 
Corel will continue to expand its support of the Web, delivering the Internet's 
versatility to customers  through exciting Web-based applications, content 
and services. Corel will also be developing applications for Microsoft's .NET 
platform as part of its commitment to provide customers with a full range of 
applications and services over the Internet. With its headquarters in Ottawa, 
Canada, Corel continues to be one of Silicon Valley North's most exciting 
and influential software companies.

Corel's common stock trades on the NASDAQ Stock Market under the 
symbol CORL and on the Toronto Stock Exchange under the symbol COR. 
For more information on Corel Corporation, please visit www.corel.com 
<http://www.corel.com> .

SoftQuad Software, Inc.

SoftQuad Software, Ltd. is an internationally recognized developer of XML-
enabling technologies and commerce solutions for e-business. A founding 
member of the World Wide Web Consortium (W3C), the Organization for the 
Advancement of Structured Information Standards (OASIS) and XML.org, 
SoftQuad has been instrumental in shaping and developing both the 
standards and technologies that are changing the way companies exchange 
information and do business over the Web. Headquartered in Toronto, 
Canada, with U.S. offices in Seattle and San Francisco, and European 
operations based in London, England, SoftQuad was  first to market with an 
advanced, yet easy-to-use XML content creation solution, XMetaL. It has 
become the premier enabling technology for XML-based content applications 
in electronic publishing, e-commerce and knowledge management. 

Investors and security holders are advised to read the joint proxy 
statement/prospectus regarding the business combination transaction 
referenced in the foregoing information, when it becomes available, because 
it will contain important information. The joint proxy statement/prospectus 
will be filed with the Securities and Exchange Commission by Corel and 
SoftQuad. Investors and security holders may obtain a free copy of the joint 
proxy statement/prospectus (when available) and other documents filed by 
Corel and SoftQuad with the Commission at the Commission's Web site at 
www.sec.gov <http://www.sec.gov> . The joint proxy statement/prospectus 
and such other documents may also be obtained for free from Corel by 
directing such request to: Corel Corporation, 1600 Carling Avenue, Ottawa, 
Ontario, Canada, K1Z 8R7, Attention: Investor Relations, telephone (613) 728-
8200, email:  ir@corel.ca <mailto:ir@corel.ca> , and to SoftQuad, 161 
Eglinton Avenue East, Suite 400, Toronto, Ontario, Canada, M4P 1J5, 
Attention: Investor Relations, telephone: (416) 544-9000, email:  
investorinfo@softquad.com <mailto:investorinfo@softquad.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. 

Corel, WordPerfect and its logo are trademarks or registered trademarks of 
Corel Corporation or Corel Corporation Limited. All other product, font, 
company names and logos are trademarks or registered trademarks of their 
respective owners.

Corel Press Contact:					SoftQuad Press Contact:	

Louise Hanlon						Muriel Guilbert (Parker LePla)

(613) 728-0826 ext. 5182				(206) 625-1541

louiseh@corel.com <mailto:louiseh@corel.com>
murielg@parkerlepla.com <mailto:murielg@parkerlepla.com> 

								
Corel Investor Relations Contact: John Hladkowicz (613) 728-0826 ext. 1194 
johnh@corel.com <mailto:johnh@corel.com>

SoftQuad Investor Relations Contact: Bruce Wigle (416) 544-9000 ext. 2206
bwigle@softquad.com <mailto:bwigle@softquad.com>