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Corel Computer NetWinder(tm) Division to be Acquired by Hardware Canada Computing

Corel signs letter of intent to receive 25% equity stake in one
of Canada’s fastest growing IT companies.

Ottawa, Canada – January 20, 1999 – Corel Corporation and
Hardware Canada Computing (HCC) today announced they have signed a
letter of intent to transfer the Corel Computer NetWinder(tm)
division to HCC in exchange for a significant ownership
position.

Under the terms of the agreement, HCC will acquire all of the
assets of Corel Computer supporting the NetWinder family of
Linux®-based thin client/thin server computers and other
consideration, in exchange for a 25% equity stake in HCC. The
agreement is expected to close by the end of Corel’s fiscal first
quarter 1999, subject to certain closing conditions including
necessary approvals. No further details of the transaction are
being released at this time, until all terms of the agreement are
finalized.

“On several occasions Corel has entertained the idea of spinning
off Corel Computer, but not until the time was right and in a
fashion that would deliver the fullest possible value to our
shareholders,” said Corel president and chief executive officer Dr.
Michael Cowpland. “The development of the NetWinder is essentially
complete and we have seen extremely positive acceptance from our
initial sales.

“We believe the NetWinder family will experience tremendous
success from Hardware Canada Computing’s status as one of Canada’s
largest VARs and its experience in the SPARC/UNIX space,” Cowpland
said. “Corel will continue to benefit from HCC’s success through
our ownership position while at the same time, continuing to
further focus efforts on our core software business and our two
flagship brands WordPerfect and CorelDRAW, including the delivery
of those applications and more on the Linux platform.”

Based in Ottawa, Canada, HCC was recently recognized as the 14th
fastest growing IT company in the Financial Post/Deloitte &
Touche Technology Fast-55. HCC has also been identified as Canada’s
19th largest Value Added Reseller by International Data Corporation
(IDC) Canada and is well positioned to serve the major world-wide
telecom companies.

HCC, with sales approaching $60 million a year, is a leading
manufacturer and supplier of UNIX®, Windows NT® and
SPARC® systems and is one of Sun Micro Electronics’ largest
OEMs in Canada.

HCC president Michael Mansfield said the acquisition of Corel
Computer is a key ingredient in his company’s entry into the Linux
corporate operating system environment.

“Linux and open source code is the future,” said Mansfield.
“This acquisition has vaulted us into a world-class opportunity
which will let us move forward with an initial public offering
later this year.”

HCC chairman and founder Mac Brown said his company has always
taken a multi-vendor approach in order to offer the best solutions
available to its corporate and government clients.

“This is a definite win/win for both Corel and HCC,” Brown said.
“With the NetWinder technology, our customers will now benefit from
a scaleable and robust product line from HCC.”

NOTICE TO MEDIA AND ANALYSTS

Please join Corel Corporation’s Dr. Michael Cowpland, president
and chief executive officer, Michael Mansfield, president of
Hardware Canada Computing and other senior executives for a
teleforum on Wednesday, January 20, 1999 at 6:10 p.m. (eastern
standard time) to discuss the transfer of Corel’s hardware division
to Hardware Canada Computing.

This call will follow the separate teleforum discussing Corel’s
Q4 fiscal 1998 results.

Should you wish to participate, please dial the teleforum number
1-800-273-9672 approximately ten minutes before 6:10 p.m. An
instant reply number will be provided for 24 hours commencing one
hour after the end of the teleforum. The instant replay number is
416-695-5800, pass code access number 241577.

Following the announcement, analysts and members of the media
will be invited to participate in a question and answer
session.

About 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 ™ line of graphics applications and the
Corel® WordPerfect® Suite of business tools is continually
evolving to meet the demands of the corporate, retail and academic
markets. Committed to value, compatibility, choice and open
standards, Corel develops products for the Windows®,
Macintosh®, UNIX®, Linux® and Java(tm) platforms.
Corel’s common stock trades on The NASDAQ Stock Market under the
symbol COSFF and on the Toronto Stock Exchange under the symbol
COS. For more information visit Corel’s Web site at
[www.corel.com].

About HCC

Incorporated in February 1987, Hardware Canada Computing is a
privately held company located in Ottawa, Canada. HCC manufactures
its own line of SPARC/UNIX based systems under the brand name
Horizon and has established a reseller network across Canada. In
addition to its Horizon brand of SPARC systems, HCC is an original
equipment manufacturer for the Telecom market, providing this niche
market with SPARC motherboard, rack mount systems. HCC also resells
a complete line of UNIX/NT products from Hewlett Packard and
Silicon Graphics, as well as, file servers and NetCache products
from Network Appliance. HCC is the largest reseller of Sun Micro
Electronics in Canada. For more information, visit HCC’s website at
[www.hcc.ca].

Corel, WordPerfect, CorelDRAW, and the Go further logo are
trademarks or registered trademarks of Corel Corporation or Corel
Corporation Limited. Hardware Canada Computing and Horizon are
registered trademarks. SPARC is a registered trademark of SPARC
International Inc. Products bearing SPARC trademarks are based on
an architecture developed by Sun Microsystems Inc. All other
product and company names are trademarks or registered trademarks
of their respective companies or individuals.

For more information please contact:
For Corel:
Nicole Sanford (Canada)
613-728-0826 x5046
[email protected]

Catherine Hughes (US)
613-728-0826 x1659
[email protected]

John Hladkowicz (Investors)
613-728-0826 x1194
[email protected]

For Hardware Canada Computing
Jessica Gould (Highroad Communications)
613-794-0763 or 613-236-0909 x303
[email protected]