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Principal Stockholders (as That Term Is Defined In This Agreement - COREL CORP - 4-4-2006

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Principal Stockholders (as That Term Is Defined In This Agreement - COREL CORP - 4-4-2006 Powered By Docstoc
					Exhibit 2.1 EXECUTION VERSION COREL CORPORATION -andCOREL JS ACQUISITION, INC. -andCOREL HOLDINGS CORPORATION -andJASC SOFTWARE, INC. -andPRINCIPAL STOCKHOLDERS (AS THAT TERM IS DEFINED IN THIS AGREEMENT) -andEACH OTHER JASC STOCKHOLDER (AS THAT TERM IS DEFINED IN THIS AGREEMENT) THAT BECOMES PARTY TO THIS AGREEMENT

AGREEMENT AND PLAN OF MERGER

OCTOBER 8, 2004

TABLE OF CONTENTS
ARTICLE 1 INTERPRETATION.......................................................... 1.1 Definitions........................................................ 1.2 Schedules and Exhibits............................................. 1.3 Headings and Table of Contents..................................... 1.4 Gender and Number.................................................. 1.5 Date............................................................... 1.6 Laws............................................................... 1.7 Currency........................................................... 1.8 Generally Accepted Accounting Principles........................... 1.9 Construction of Agreement.......................................... 1.10 Invalidity of Provisions........................................... 1.11 Entire Agreement................................................... 1.12 Waiver, Amendment.................................................. 1.13 Governing Law...................................................... ARTICLE 2 THE TRANSACTION......................................................... 2.1 The Transaction.................................................... 2.2 Closing and the Effective Time.....................................

2 2 10 11 11 11 12 12 12 12 12 12 13 13

13 13 13

2.3 2.4 2.5 2.6

2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14

Effect of the Merger............................................... Articles of Incorporation and Bylaws............................... Directors and Officers............................................. Effect on Capital Stock............................................ 2.6.1 Conversion of Jasc Shares................................... 2.6.2 Conversion of Merger Subsidiary Common Stock................ 2.6.3 Fractional Shares........................................... 2.6.4 Dissenters' Rights.......................................... Surrender of Certificates and Payment of Merger Consideration...................................................... Adjustments........................................................ Working Capital Adjustment......................................... Q3 Net Revenue Adjustment.......................................... Dispute Process.................................................... Escrow............................................................. Convertible Securities and Option Plan............................. Tax Related Payment................................................

13 14 14 14 14 14 14 14 15 16 16 17 18 18 18 19

ARTICLE 3 REPRESENTATIONS AND WARRANTIES.......................................... 3.1 By the Corporation and the Principal Stockholders.................. 3.1.1 Formation and Status of the Corporation..................... 3.1.2 Power of the Corporation and Due Authorization.............. 3.1.3 Capital of the Corporation.................................. 3.1.4 Subsidiaries and Investments................................ 3.1.5 No Obligations to Issue Securities.......................... 3.1.6 No Contravention by the Corporation.........................

20 20 20 20 20 21 21 21

-iiApprovals and Consents...................................... Financial Statements........................................ Accounts Receivable......................................... Inventory Valuation......................................... Liabilities and Guarantees.................................. Indebtedness................................................ Absence of Unusual Transactions and Events.................. No Dividends, Loans, etc.................................... Insider Interests........................................... As to Certain Contracts In and Out of the Ordinary Course...................................................... 3.1.17 Certain Distribution and Master Representative Agreements.................................................. 3.1.18 No Default Under Agreements................................. 3.1.19 No Owned Real Property...................................... 3.1.20 Leased Real Property........................................ 3.1.21 Zoning and Other Matters Relating to Real Property.......... 3.1.22 Title to Assets............................................. 3.1.23 Environmental Matters....................................... 3.1.24 Tax Matters................................................. 3.1.25 Employment Matters.......................................... 3.1.26 Employee Plans.............................................. 3.1.27 Labor Relations............................................. 3.1.28 Insurance................................................... 3.1.29 Intellectual Property....................................... 3.1.30 Permits, Registrations and Elections........................ 3.1.31 Compliance with Laws........................................ 3.1.32 Litigation and Other Proceedings and Warranty Claims...................................................... 3.1.33 Corporate Records........................................... 3.1.34 Books of Account and Internal Controls...................... 3.1.35 Bank Accounts, etc.......................................... 3.1.36 Customers and Suppliers..................................... 3.1.37 Conduct of Business......................................... 3.1.38 Disclosure.................................................. By Principal Stockholders.......................................... 3.2.1 Corel Common Shares......................................... 3.2.2 No Foreign Person........................................... 3.2.3 Incorporation and Status of the Principal Stockholder................................................. 3.2.4 Power of the Principal Stockholder and Due Authorization............................................... 3.1.7 3.1.8 3.1.9 3.1.10 3.1.11 3.1.12 3.1.13 3.1.14 3.1.15 3.1.16 21 21 22 22 22 22 22 23 24 24 25 25 25 26 26 26 27 28 29 30 32 32 32 36 37 37 37 37 38 38 38 38 39 39 39 39 39

3.2

3.3

3.4

Authorization............................................... 3.2.5 Title to, and Right to Sell, Purchased Shares............... 3.2.6 No Contravention by Principal Stockholders.................. 3.2.7 Accredited Investor......................................... By Merger Subsidiary and Corel Holdings............................ 3.3.1 Incorporation and Status.................................... 3.3.2 Corporate Power and Due Authorization....................... 3.3.3 No Contravention............................................ 3.3.4 Approvals and Consents...................................... By Corel........................................................... 3.4.1 Incorporation and Status of Corel........................... 3.4.2 Corporate Power of Corel and Due Authorization..............

39 39 40 40 40 40 40 41 41 41 41 41

-iii3.4.3 Capital of Corel............................................ 3.4.4 No Obligations to Issue Securities.......................... 3.4.5 No Contravention of Corel................................... 3.4.6 Approvals and Consents...................................... 3.4.7 Equity Consideration........................................ 3.4.8 Corel Financial Statements.................................. 3.4.9 Sufficiency of Capital, Access to Capital................... No Finder's Fees................................................... Survival of Covenants, Representations and Warranties.............. 42 42 42 42 42 42 42 43 43

3.5 3.6

ARTICLE 4 CONDITIONS.............................................................. 4.1 Conditions for the Benefit of Corel and the Merger Subsidiary...................................................... 4.1.1 Accuracy of Representations and Compliance With Covenants................................................ 4.1.2 Opinion of Faegre & Benson LLP.............................. 4.1.3 Force Majeure............................................... 4.1.4 No Adverse Legislation...................................... 4.1.5 No Action to Restrain....................................... 4.1.6 [Reserved].................................................. 4.1.7 Consents and Approvals...................................... 4.1.8 Delivery of Other Agreements and Documents.................. 4.1.9 Q3 Net Revenue.............................................. 4.1.10 Exercise of Dissenters' Rights.............................. 4.1.11 Certain Terminations........................................ 4.2 Conditions for the Benefit of the Corporation...................... 4.2.1 Accuracy of Representations of Merger Subsidiary and Corel and Compliance With Covenants...................... 4.2.2 Opinion of Torys LLP........................................ 4.2.3 No Action to Restrain....................................... 4.2.4 [Reserved].................................................. 4.2.5 Delivery of Other Agreements................................

43 43 43 44 44 44 44 44 44 45 45 45 45 46 46 46 46 46 46

ARTICLE 5 ADDITIONAL AGREEMENTS OF THE PARTIES.................................... 5.1 Access to Information.............................................. 5.2 Conduct of Business Until Time of Closing.......................... 5.3 Negative Covenant.................................................. 5.4 Merger Subsidiary's Covenant....................................... 5.5 Corporate Action, Releases......................................... 5.6 Obtaining of Consents and Approvals................................ 5.7 Additional Insurance............................................... 5.8 Non-Solicitation................................................... 5.9 [Reserved]......................................................... 5.10 Tax Matters........................................................ 5.11 Certain Payments and Expenses...................................... 5.12 Goodwill........................................................... 5.13 Cooperation........................................................

47 47 47 48 48 48 49 49 49 49 49 50 51 51

-iv-

5.14 5.15 5.16 5.17 5.18

Termination........................................................ Jasc Stockholder Approval.......................................... Jasc YE Bonus Program.............................................. Jasc Founder's Computer and Cell Phone............................. Post-Closing Access................................................

51 52 52 52 52

ARTICLE 6 INDEMNIFICATION......................................................... 6.1 Indemnification.................................................... 6.2 Notice of Claim.................................................... 6.3 Procedure for Indemnification...................................... 6.3.1 Corel Indemnified Party's Claims............................. 6.3.2 Third Party Claims........................................... 6.4 Additional Rules and Procedures.................................... 6.5 Escrow Agreement................................................... 6.6 Limitation of Remedies............................................. ARTICLE 7 CLOSING................................................................. 7.1 Location and Time of the Closing................................... 7.2 Deliveries at the Closing.......................................... ARTICLE 8 GENERAL MATTERS......................................................... 8.1 Public Notices..................................................... 8.2 Stockholder Representative......................................... 8.3 Expenses........................................................... 8.4 Assignment......................................................... 8.5 Notices............................................................ 8.6 Time of Essence.................................................... 8.7 Consent to Jurisdiction............................................ 8.8 Waiver of Jury Trial............................................... 8.9 No Third-Party Beneficiaries....................................... 8.10 Further Assurances................................................. 8.11 Counterparts.......................................................

53 53 54 54 54 54 55 56 56

57 57 57

57 57 57 57 59 59 60 60 61 61 61 61

(TORYS LLP NEW YORK TORONTO LOGO)

AGREEMENT AND PLAN OF MERGER THIS AGREEMENT AND PLAN OF MERGER is made as of the 8th day of October, 2004, AMONG: COREL CORPORATION, a corporation existing under the laws of the Province of Ontario ("COREL") - and COREL JS ACQUISITION, INC., a corporation existing under the laws of the State of Minnesota (the "MERGER SUBSIDIARY") - andCOREL HOLDINGS CORPORATION, a corporation existing under the laws of the Province of New Brunswick (the "COREL HOLDINGS") - andJASC SOFTWARE, INC., a corporation existing under the laws of the State of Minnesota (the "CORPORATION") -andthe PRINCIPAL STOCKHOLDERS (as defined below)

- andeach other JASC STOCKHOLDER (as defined below) that becomes party to this Agreement RECITALS: A. The Boards of Directors of the Corporation, Corel and the Merger Subsidiary believe it is in the best interests of their respective companies and the stockholders of their respective companies that (1) the Corporation sell the Specified Assets (as defined below) to a wholly-owned subsidiary of Corel (the "ASSET SALE"); and (2) the Corporation and the Merger Subsidiary combine into a single company through the statutory merger of the Merger Subsidiary with and into the Corporation (the "MERGER") and, in furtherance of these actions, have declared the advisability of and approved the Transaction. B. The Corporation, the Jasc Stockholders, Corel and the Merger Subsidiary desire to make certain representations and warranties and other agreements in connection with the Transaction. -2NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties to this Agreement agree as follows: ARTICLE 1 INTERPRETATION 1.1 DEFINITIONS In this Agreement, 1.1.1 "ACCREDITED INVESTOR" means an accredited investor within the meaning of Rule 501 (a) under the Securities Act; 1.1.2 "ADJUSTED SEPTEMBER 30 WORKING CAPITAL" means the Working Capital as of September 30, 2004 (excluding accruals in respect of the Jasc YE Bonus Program) adjusted to reflect all expenses and accruals for Stockholder Expenses occurring prior to the Closing Date; 1.1.3 "AFFILIATE" means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with that Person; 1.1.4 "AGREEMENT" means this agreement and all schedules attached to this agreement, in each case as they may be amended or supplemented from time to time, and the expressions "hereof," "herein," "to this Agreement," "hereunder," "hereby" and similar expressions refer to this agreement; and unless otherwise indicated, references to Articles, sections and Schedules are to Articles in, sections in, and Schedules to this agreement; 1.1.5 "ALBUM SOFTWARE PROGRAM" means the Paint Shop Photo Album 5 Software; 1.1.6 "ARTICLES OF MERGER" has the meaning given to that term in section 2.1.2; 1.1.7 "ASSET SALE" has the meaning given to that term in Recital A; 1.1.8 "ASSET SALE CASH CONSIDERATION" means $30,870,000, less, (1) any Stockholder Expenses not satisfied or accrued by the Corporation prior to the Effective Time to the extent not reflected in the calculation of the Initial Working Capital Shortfall, (2) the Initial Working Capital Shortfall, if any, and (3) the Initial Q3 Net Revenue Shortfall, if any; 1.1.9 "ASSET SALE CONSIDERATION" means the Asset Sale Cash Consideration and the Asset Sale Equity Consideration to be paid or issued, as the case may be, by Corel or a subsidiary of Corel to the Corporation as

consideration pursuant to the Transfer Agreement; 1.1.10 "ASSET SALE EQUITY CONSIDERATION" means 4,001,581 Corel Common Shares; 1.1.11 "AUDITED FINANCIAL STATEMENTS" means the balance sheet of the Corporation as at the Audited Statements Date and the accompanying statements of income, changes in stockholders' equity and cash flows for the year then ended, including the notes to those financial statements, and the report of the auditors of the Corporation on those financial statements, all as attached as Schedule 1.1.11; -31.1.12 "AUDITED STATEMENTS DATE" means December 31, 2003; 1.1.13 "BENEFIT PLANS" has the meaning given to that term in section 1.1.40.3; 1.1.14 "BUSINESS" means the development and global marketing and distribution of digital photography and imaging software business (i) carried on by the Corporation prior to the Effective Time; and (ii) carried on by the Surviving Corporation, Corel and/or one or more direct or indirect subsidiaries of Corel following the Effective Date utilizing assets of the Corporation; 1.1.15 "BUSINESS DAY" means any day, other than Saturday, Sunday or any statutory holiday in the State of California, the State of Minnesota and/or the Province of Ontario; 1.1.16 "CHARGE" means any security interest, lien, charge, pledge, encumbrance, mortgage, adverse claim or title retention agreement of any nature or kind; 1.1.17 "CLAIM," "COREL INDEMNIFIED PARTY'S CLAIM" and "THIRD PARTY CLAIM" have the meanings given to those terms respectively in section 6.2; 1.1.18 "CLOSING" means the consummation of the Transaction and the other transactions contemplated by this Agreement; 1.1.19 "CLOSING DATE" has the meaning given to that term in section 2.2; 1.1.20 "CLOSING BALANCE SHEET" means the statement of assets and liabilities of the Corporation as at the Closing Date calculated in accordance with GAAP, delivered in accordance with section 2.14; 1.1.21 "CLOSING REQUIRED CONSENTS" means the Required Consents listed under that heading on Schedule 3.1.7; 1.1.22 "CLOSING WORKING CAPITAL AMOUNT" means the Adjusted September 30 Working Capital as determined based upon the Working Capital Closing Balance Sheet; 1.1.23 "CODE" means the United States Internal Revenue Code of 1986, as amended; 1.1.24 "CONFIDENTIALITY AGREEMENTS" means the Confidentiality Agreement between Goldsmith, Agio, Helms & Lynner, LLC and Corel dated April 7, 2004 and the Mutual Non-Disclosure Agreement among Vector Capital Corporation, Corel and the Corporation dated July 30, 2004; 1.1.25 "CONSENTS" means those consents, authorizations and approvals set out in Schedule 3.1.7; 1.1.26 "CONTRACT" means any commitment, contract, agreement, license, lease, guarantee, binding arrangement or other instrument and includes any amendments; 1.1.27 "CONTROL," when used with respect to any Entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Entity, whether through the ownership, directly or indirectly, of more than 20% of the voting or equity securities or other interests of that Entity and/or by contract or otherwise; and the terms "controlling" and "controlled" have correlative meanings;

-41.1.28 "CONVERTIBLE SECURITIES" means all shares (excluding shares of common stock of the Corporation), options, warrants, rights or other securities to acquire shares of common stock of the Corporation; 1.1.29 "COREL AUDITED FINANCIAL STATEMENTS" means the consolidated balance sheet of Corel as at the Corel Audited Statements Date and the accompanying consolidated statements of operations and cash flows for the year then ended, including the notes to those financial statements, and the report of the auditors of the Corporation on those financial statements, all as attached as Schedule 1.1.29; 1.1.30 "COREL AUDITED STATEMENTS DATE" means November 30, 2003; 1.1.31 "COREL COMMON SHARES" means Class B Common Shares in the capital of Corel; 1.1.32 "COREL INDEMNIFIED PARTIES" has the meaning given to that term in section 6.1.1: 1.1.33 "COREL MINORITY SHAREHOLDERS AGREEMENT" means the shareholders agreement to be entered into at the Time of Closing between Corel, its shareholders and the Jasc Stockholders in the form attached as Schedule 1.1.33; 1.1.34 "COREL UNAUDITED FINANCIAL STATEMENTS" means the consolidated balance sheet of the Corporation as at August 31, 2004 and the accompanying consolidated statements of operations and cash flows for the nine months then ended, all as attached as Schedule 1:1.34; 1.1.35 "COREL Q3 NET REVENUE PAYMENT" has the meaning given to that term in section 2.10.3.2; 1.1.36 "COREL WORKING CAPITAL PAYMENT" has the meaning given to that term in section 2.9.3.2; 1.1.37 "DUE INQUIRY" means the due inquiry which is reasonably expected of a prudent member of the management of the Business; 1.1.38 "EFFECTIVE TIME" has the meaning given to that term in section 2.2; 1.1.39 "ELIGIBLE INVENTORY" means the raw materials which are purchased by the Corporation no earlier than 90 days prior to the Closing Date, and which either are, or are reasonably expected to be, used within 90 days of the Closing Date; 1.1.40 "EMPLOYEE PLANS" means all oral or written plans, arrangements, agreements, programs, policies, practices or undertakings with respect to some or all of the current or former directors, officers, employees, independent contractors or agents of the Corporation which provide for or relate to: 1.1.40.1 bonus, profit sharing or deferred profit sharing, performance compensation, deferred or incentive compensation, share compensation, share purchase or share option purchase, share appreciation rights, phantom stock, vacation or vacation pay, sick pay, employee loans, or any other compensation in addition to salary ("INCENTIVE PLANS"); -51.1.40.2 retirement or retirement savings, including registered or unregistered pension plans, pensions, supplemental pensions, registered retirement savings plans and retirement compensation arrangements ("PENSION PLANS"); or 1.1.40.3 insured or self-insured benefits for or relating to income continuation or other benefits during absence from work (including short term disability, long term disability and workers compensation), hospitalization, health, welfare, legal costs or expenses, medical or dental treatments or expenses, life insurance, accident, death or survivor's benefits, supplementary employment insurance, day care, tuition or professional commitments or expenses or similar employee benefits ("BENEFIT PLANS");

1.1.41 "ENTITY" means any partnership, limited partnership, company or corporation with or without share capital, trust or other entity however designated or constituted; 1.1.42 "ENVIRONMENTAL LAWS" and "ENVIRONMENTAL PERMITS" have the meanings given to those terms respectively in section 3.1.23.1; 1.1.43 "ERISA" means the United States Employee Retirement Income Security Act of 1974, as amended; 1.1.44 "ESCROW AGENT" means Royal Trust Corporation; 1.1.45 "ESCROW AGREEMENT" means the escrow agreement to be entered into at the Time of Closing, between the Merger Subsidiary, Corel, the Escrow Agent, the Jasc Stockholders and the Stockholder Representative, in the form attached as Schedule 1.1.45; 1.1.46 "ESCROW FUND" means all cash and property held by the Escrow Agent from time to time pursuant to the terms of the Escrow Agreement; 1.1.47 "GOVERNMENTAL AUTHORITY" means any (1) supranational, multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau, agency, association, institution, or other similar authority, (2) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under, delegated by, or for the account of any of the foregoing, (3) any industry self-regulatory organization or any stock exchange or (4) any minister, secretary or other governmentally appointed individual, in each case whether domestic or foreign; 1.1.48 "HAZARDOUS SUBSTANCE" has the meaning given to that term in section 3.1.23.1.5; 1.1.49 "HSR ACT" means the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and regulations adopted pursuant to that act, as amended; 1.1.50 "INCENTIVE PLANS" has the meaning given to that term in section 1.1.40.1; 1.1.51 "INCLUDES" or "INCLUDING" means includes, without limitation, or including, without limitation, as the case may be; 1.1.52 "INITIAL CLOSING BALANCE SHEET" means the statement of assets and liabilities of the Corporation as at the close of business on September 30, 2004 calculated in accordance with -6GAAP (excluding accruals in respect of the Jasc YE Bonus Program), delivered in accordance with section 2.9.1; 1.1.53 "INITIAL WORKING CAPITAL SHORTFALL" has the meaning given to that term in section 2.9.2; 1.1.54 "INITIAL Q3 NET REVENUE" means a calculation of the gross sales, less reserves, rebates, distributor discounts and miscellaneous for the Corporation for the three months ended September 30, 2004, all as determined in accordance with GAAP, as historically applied by the Corporation, delivered in accordance with section 2.10.1. 1.1.55 "INITIAL Q3 NET REVENUE SHORTFALL" has the meaning given to that term in section 2.10.2; 1.1.56 "INTELLECTUAL PROPERTY" means trade marks and trade mark applications, trade names, certification marks, patents and patent applications, copyrights, know-how, formulae, processes, inventions, technical expertise, research data, trade secrets, industrial designs and other similar property, whether registered or unregistered; 1.1.57 "JASC COUNSEL" means the firm of Faegre & Benson LLP of Minneapolis, Minnesota, or any other

counsel as the Corporation may appoint with respect to this Agreement and the matters contemplated by this Agreement; 1.1.58 "JASC SHARES" means shares of stock in the capital of the Corporation outstanding immediately prior to the Effective Time; 1.1.59 "JASC STOCKHOLDER" means a holder of Jasc Shares immediately prior to the Effective Time; 1.1.60 "JASC STOCKHOLDER MEETING" has the meaning given to that term in section 5.15.1; 1.1.61 "JASC STOCKHOLDER SIGNATURE PAGE" means the form of signature page attached as Schedule 1.1.61; 1.1.62 "JASC STOCKHOLDER'S OWNERSHIP PERCENTAGE" means the number of Jasc Shares held by a Jasc Stockholder immediately before the Effective Time divided by the number of Jasc Shares held by all Jasc Stockholders immediately before the Effective Time; 1.1.63 "JASC YE BONUS PROGRAM" means the calendar year 2004 year-end objective bonus payments for employees of Jasc based upon the letter agreement delivered to those employees, true and correct copies of which have been provided to Merger Subsidiary; 1.1.64 "KEY SOFTWARE PROGRAMS" means the following groupings of Software and each incorporated program: Paint Shop Power Suite - Photo Edition, Paint Shop Pro 8, Paint Shop Pro 9, Paint Shop Photo Album 5, Animation Shop 3, Paint Shop Photo Studio and WebDraw Version 1; 1.1.65 "KNOWLEDGE" means, with respect to the subject matter, the actual knowledge of the Person after Due Inquiry, and in the case of the knowledge of an Entity, means the Knowledge of its senior officers or comparable member(s) of management; 1.1.66 "LAWS" means any law, statute, rule, regulation, by-law, judgment or order of general application, or any direction, policy, guideline, bulletin, ruling, judgment, order or requirement, -7including of a Governmental Authority (whether or not having the force of law, but if it does not have the force of law being of a nature with which a prudent person would comply); 1.1.67 "LEASED REAL PROPERTY" has the meaning given to that term in section 3.1.20; 1.1.68 "LICENSED INTELLECTUAL PROPERTY" means all Intellectual Property of a Person other than the Corporation; 1.1.69 "LICENSED SOFTWARE" means all Software of a Person other than the Corporation; 1.1.70 "LICENSED SOURCE CODE" has the meaning given to that term in section 3.1.29.8; 1.1.71 "MATERIAL CONTRACT" means any Contract made in the ordinary course of the Business if it requires or may require the provision by the Corporation to any Person of goods or services having a fair market value in excess of $25,000; 1.1.72 "MERGER" has the meaning given to that term in the Recitals; 1.1.73 "MERGER CONSIDERATION" means the Total Adjusted Merger Cash Consideration and the Total Merger Equity Consideration to be paid or issued, as the case may be, by Corel or a subsidiary of Corel to Jasc Stockholders as consideration upon the Merger; 1.1.74 "MERGER SUBSIDIARY'S COUNSEL" means the firm of Torys LLP of Toronto, Ontario, and New York, New York or any other counsel as the Merger Subsidiary may appoint with respect to this Agreement and

the matters contemplated by this Agreement; 1.1.75 "MINNESOTA LAW" has the meaning given to that term in section 2.1; 1.1.76 "PENSION PLANS" has the meaning given to that term in section 1.1.40.2; 1.1.77 "PER JASC SHARE CASH CONSIDERATION" means the quotient of (i) the Total Adjusted Merger Cash Consideration; divided by (ii) the number of Jasc Shares; 1.1.78 "PER JASC SHARE EQUITY CONSIDERATION" means the quotient of (i) the Total Merger Equity Consideration; divided by (ii) the number of Jasc Shares; 1.1.79 "PERSON" means any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or governmental agency, authority or entity however designated or constituted, and any reference to a Person includes its successors and assigns; 1.1.80 "PREMISES" has the meaning given to that term in section 3.1.23; 1.1.81 "PRINCIPAL STOCKHOLDERS" means Jonathan C. Ort, Robert V. Voit, and Kris Tufto; 1.1.82 "PROCEEDING" means any court, administrative, regulatory or similar proceeding (whether civil, quasicriminal or criminal); arbitration or other dispute settlement procedure; investigation or inquiry by any governmental, administrative, regulatory or similar body; or any similar matter or proceeding including (1) those in process; (2) those pending or threatened; and (3) those in respect of which, to the Knowledge of the Corporation or the Principal Stockholders, circumstances exist that would be reasonably likely to result in a Proceeding; -81.1.83 "PROPRIETARY INTELLECTUAL PROPERTY" means all Intellectual Property other than Licensed Intellectual Property; 1.1.84 "PROPRIETARY SOFTWARE" means all Software other than Licensed Software; 1.1.85 "PUBLIC SOFTWARE" means software which creates, or purports to create, obligations for the Corporation or grants, or purports to grant, to any third party any rights or immunities under the Corporation's Intellectual Property or proprietary rights in the Corporation's Software or derivative work of that Software and includes any software that requires as a condition of use, modification and/or distribution of the software that other software incorporated into, derived from or distributed with that software be (1) disclosed or distributed in source code form; (2) licensed for the purpose of making derivative works; or (3) redistributable at no charge. 1.1.86 "Q3 NET REVENUE" means a calculation of the net revenues of the Corporation for the three months ended September 30, 2004, all as determined in accordance with GAAP, as historically applied by the Corporation, delivered in accordance with section 2.10.3; 1.1.87 "Q3 NET REVENUE ADJUSTMENT AMOUNT" has the meaning given to that term in section 2.10.3.1. 1.1.88 "REAL PROPERTY LEASES" has the meaning given to that term in section 3.1.20; 1.1.89 "RELATED AGREEMENTS" means all Contracts required by this Agreement to be executed and delivered at the Closing, including the Escrow Agreement, the Corel Minority Shareholders Agreement, the Transfer Agreement and the non-competition, non-solicitation and confidentiality agreements contemplated by section 4.1.6; 1.1.90 "REQUIRED CONSENTS" means, collectively, the Consents which are set out and identified as

"Required Consents" on Schedule 3.1.7 which, for greater certainty, includes any Consents required in connection with Contracts related to the "material Licensed Software" set out on Schedule 3.1.29; 1.1.91 "REQUIRED Q3 NET REVENUE" means $7,500,000; 1.1.92 "REQUIRED WORKING CAPITAL AMOUNT" means $2,000,000; 1.1.93 "SECURITIES ACT" means the United States Securities Act of 1933 and the rules and regulations adopted pursuant to that act, as amended; 1.1.94 "SEPTEMBER INCOME STATEMENT" means the statement of income for the Corporation prepared in accordance with GAAP consistently applied with the Corporation's past practice (excluding accruals in respect of the Jasc YE Bonus Program) for the month ended September 30, 2004; 1.1.95 "SEVERANCE PAYMENT" has the meaning given to that term in section 5.11.1; 1.1.96 "SOFTWARE" means all computer software programs, operating systems, and applications, firmware or software of any nature related to the Business, whether operational, under development or inactive, including all object code, source code, development and testing tools and scripts, technical manuals, user manuals and other documentation thereof, whether in machine-readable -9form, programming language or any other language or symbols, and whether stored, encoded, recorded or written on disk, tape, film, memory device, paper or other media of any nature; 1.1.97 "SPECIFIED ASSETS" has the meaning given to that term in the Transfer Agreement; 1.1.98 "STOCKHOLDER EXPENSES" means the costs, fees, expenses and liabilities described in sections 5.11.1, 5.11.2, 5.11.3, 5.11.5 and 5.11.6 and specifically set out on Schedule 1.1.98; 1.1.99 "STOCKHOLDER REPRESENTATIVE" means Robert V. Voit; 1.1.100 "SUBSIDIARY" means, with respect to any Person, any other Entity that directly, or indirectly through one or more intermediaries, is controlled by that Person; 1.1.101 "SURVIVING CORPORATION" has the meaning given to that term in section 2.1; 1.1.102 "TAX REASSESSMENT PERIOD" means the period ending on the first date on which no assessment, reassessment or other document assessing liability for Taxes may be issued to the Corporation or any past or current subsidiary of the Corporation in respect of any taxation year or other period ended prior to the Closing Date, or within which the Closing Date occurs, pursuant to any applicable Tax Laws; 1.1.103 "TAX RETURNS" will mean any return, report, document, statement or form required to be filed with respect to any Taxes (including any schedules required to be attached to it), including information returns, claims for refund, amended returns and declarations of estimated Tax; 1.1.104 "TAX RELATED PAYMENT" has the meaning given to that term in section 2.14.3; 1.1.105 "TAXES" means all taxes, levies, assessments, reassessments and other charges together with all related penalties, interest, costs and fines, including income, gross receipts, capital stock, profits, stamp, occupation, transfer, value added, excise, franchise, sales, use, property (whether real, personal or mixed), employment, unemployment, disability, withholding, social security and workers' compensation taxes and estimated income and franchise tax payments, due and payable to any domestic or foreign government (federal, state, provincial, municipal or otherwise) or to any regulatory authority, agency, commission or board of any domestic or foreign government, or imposed by any court or any other Governmental Authority having jurisdiction in relevant circumstances;

1.1.106 "THIRD PARTY" has the meaning given to that term in section 6.4.5; 1.1.107 "THIRD PARTY CLAIM" has the meaning given to that term in section 6.2; 1.1.108 "TIME OF CLOSING" means 10:00 a.m., Toronto time, on the Closing Date or any other time on the Closing Date as may be agreed upon in writing by the Merger Subsidiary and the Stockholder Representative; 1.1.109 "TOTAL CASH CONSIDERATION" means the aggregate of the Asset Sale Cash Consideration and the Total Merger Cash Consideration, the aggregate being $34,300,000; 1.1.110 "TOTAL MERGER CASH CONSIDERATION" means $3,430,000; 1.1.111 "TOTAL MERGER EQUITY CONSIDERATION" means 444,620 Corel Common Shares; -101.1.112 "TOTAL ADJUSTED MERGER CASH CONSIDERATION" means the Total Merger Cash Consideration, less (1) any Stockholder Expenses not satisfied or accrued by the Corporation prior to the Effective Time to the extent not reflected in the calculation of the Initial Working Capital Shortfall, (2) the Initial Working Capital Shortfall, if any, and (3) the Initial Q3 Net Revenue Shortfall, if any, to the extent such amounts in (1), (2) and/or (3) were not deducted in calculating the Asset Sale Cash Consideration; 1.1.113 "TOTAL EQUITY CONSIDERATION" means the aggregate of the Asset Sale Equity Consideration and the Total Merger Equity Consideration, the aggregate being 4,446,201 Corel Common Shares; 1.1.114 "TRANSACTION" means the Asset Sale and the Merger; 1.1.115 "TRANSFER AGREEMENT" means the Transfer Agreement dated the Closing Date between the Corporation and a wholly-owned subsidiary of Corel, in the form attached as Schedule 1.1.115, pursuant to which the Asset Sale will be effected; 1.1.116 "TRANSACTION CONSIDERATION" means the aggregate of the Merger Consideration and the Asset Sale Consideration; 1.1.117 "UNAUDITED FINANCIAL STATEMENTS" means the balance sheet of the Corporation as at the Unaudited Statements Date and the accompanying statements of income and cash flows, for the six months then ended, all as attached as Schedule 1.1.117; 1.1.118 "UNAUDITED STATEMENT DATE" means June 30, 2004; 1.1.119 "WORKING CAPITAL" means the Corporation's cash, cash equivalents, accounts receivable and Eligible Inventory, less the Corporation's current liabilities, all as determined in accordance with GAAP, as historically applied by the Corporation; 1.1.120 "WORKING CAPITAL ADJUSTMENT AMOUNT" has the meaning given to that term in section 2.9.3.1; and 1.1.121 "WORKING CAPITAL CLOSING BALANCE SHEET" means the statement of assets and liabilities of the Corporation as at the close of business on September 30, 2004 (excluding accruals in respect of the Jasc YE Bonus Program), delivered in accordance with section 2.9.3. 1.2 SCHEDULES AND EXHIBITS The following are the schedules and exhibit attached to this Agreement:
Exhibit A Exhibit B Schedule 1.1.10 - Articles of Merger - Form of Consent - Audited Financial Statements

Schedule Schedule Schedule Schedule Schedule Schedule Schedule

1.1.29 1.1.33 1.1.34 1.1.45 1.1.61 1.1.98 1.1.115

Corel Audited Financial Statements - Corel Minority Shareholders Agreement Corel Unaudited Financial Statements - Escrow Agreement - Jasc Stockholder Signature Page - Stockholder Expenses - Transfer Agreement

-11-

Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule

1.1.117 3.1.3 3.1.7 3.1.11 3.1.12 3.1.14 3.1.15 3.1.16

-

Unaudited Financial Statements Capital of the Corporation Approvals and Consents Liabilities and Guarantees Indebtedness Dividends Insider Interests As to Certain Contracts In and Out of the Ordinary Course

Schedule 3.1.17.1 - Certain Distribution Agreements Schedule 3.1.17.2 - Master Representative Contracts Schedule 3.1.20 - Leased Real Property Schedule 3.1.22.1 - Title to Assets Schedule 3.1.23.6 - Environmental Permits
Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule 3.1.25 3.1.26 3.1.28 3.1.29 3.1.30 3.1.32 3.1.35 3.1.37 3.3.4 3.4.3 3.4.6 4.1.1 4.1.2.1 4.1.2.2 4.1.6 4.2.2.1 4.2.2.2 5.3 5.10.2 - Employment Matters Employee Plans - Insurance - Intellectual Property - Permits, Registrations and Elections - Litigation and Other Proceedings - Bank Accounts, etc. - Conduct of Business - Approvals and Consents (Merger Subsidiary) - Capital of Corel - Approvals and Consents (Corel) - Bring-down Certificate - Opinion of Faegre & Benson LLP Opinion of Thomsen & Nybeck, P.A. - Non-Competition, Non-Solicitation and Confidentiality Agreement - Opinion of Torys LLP Opinion of Stewart McKelvey Stirling Scales LLP - Negative Covenants - Merger Consideration Allocation

1.3 HEADINGS AND TABLE OF CONTENTS The inclusion of headings and a table of contents in this Agreement is for convenience of reference only and will not affect the construction or interpretation of this Agreement. 1.4 GENDER AND NUMBER In this Agreement, unless the context otherwise requires, words importing the singular include the plural and vice versa, words importing gender include all genders or the neuter, and words importing the neuter include all genders. 1.5 DATE Any date specified for any action that is not a Business Day will be deemed to mean the first Business Day after that date. -12-

1.6 LAWS Any reference to any federal, state, local or foreign statute or law will be to that statute or law as amended at the applicable time, and will be deemed also to refer to all rules and regulations promulgated under that law at the applicable time. 1.7 CURRENCY Except where otherwise expressly provided, all amounts in this Agreement are stated and will be paid in United States currency. 1.8 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES In this Agreement, except to the extent otherwise expressly provided, references to "GAAP" mean generally accepted accounting principles in the United States and references to "CANADIAN GAAP" mean generally accepted accounting principles in Canada. 1.9 CONSTRUCTION OF AGREEMENT The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will rise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. 1.10 INVALIDITY OF PROVISIONS Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any provision or part of a provision by a court of competent jurisdiction will not affect the validity or enforceability of any other provision of this Agreement. To the extent permitted by applicable law, the parties waive any provision of law which renders any provision of this Agreement invalid or unenforceable in any respect. The parties will engage in good faith negotiations to replace any provision which is declared invalid or unenforceable with a valid and enforceable provision, the economic effect of which comes as close as possible to that of the invalid or unenforceable provision which it replaces. 1.11 ENTIRE AGREEMENT This Agreement, the Related Agreements and the Confidentiality Agreements constitute the entire agreement among the parties pertaining to the subject matter of this Agreement. There are no warranties, conditions, or representations (including any that may be implied by Law) and there are no agreements in connection with this subject matter except as specifically set out or referred to in this Agreement, the Related Agreements and/or the Confidentiality Agreements. No reliance is placed on any warranty, representation, opinion, advice or assertion of fact made either prior to, contemporaneous with, or after entering into this Agreement, or any amendment or supplement to this Agreement, by any party to this Agreement or its directors, officers, employees or agents, to any other party to this Agreement or its directors, officers, employees or agents, except to the extent that the same has been reduced to writing and included as a term of this Agreement, and none of the parties to this Agreement has been induced to enter into this Agreement or any amendment or supplement by reason of any such warranty, representation, opinion, advice or assertion of fact. Accordingly, there will be no liability, either in tort or in contract, assessed in relation to any such warranty, representation, opinion, advice or assertion of fact, except to the extent contemplated above. -131.12 WAIVER, AMENDMENT Except as expressly provided in this Agreement, no amendment or waiver of this Agreement will be binding unless executed in writing by the party to be bound by the amendment or waiver provided, however, that with respect to the Jasc Stockholders, this Agreement may be amended with the consent of the Stockholder Representative. No waiver of any provision of this Agreement will constitute a waiver of any other provision nor

will any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided. The failure of any party at any time or times to require performance of any provision of this Agreement will in no way affect its right at a later time to enforce that provision or any other provision. 1.13 GOVERNING LAW The validity of this Agreement and of any of its terms or provisions, as well as the rights and duties of the parties under this Agreement, will be construed pursuant to and in accordance with the laws of the State of Minnesota, without regard to the conflicts of laws provisions thereof. ARTICLE 2 THE TRANSACTION 2.1 THE TRANSACTION 2.1.1 On the Closing Date and immediately prior to the Effective Time (1) the Corporation will transfer the Specified Assets to Corel Holdings, and (2) Corel Holdings will pay to, or as directed by, the Corporation the Asset Sale Consideration, each as contemplated by the Transfer Agreement. 2.1.2 At the Effective Time and subject to and upon the terms and conditions of this Agreement and the Articles of Merger attached to this Agreement as Exhibit A (the "ARTICLES OF MERGER") and the applicable provisions of the Minnesota Business Corporation Act ("MINNESOTA LAW"), the Merger Subsidiary will be merged with and into the Corporation, the separate corporate existence of the Merger Subsidiary will cease and the Corporation will continue as the surviving corporation under the name " Jasc Software, Inc." The Corporation as the surviving corporation after the Merger is sometimes referred to as the "SURVIVING CORPORATION." 2.2 CLOSING AND THE EFFECTIVE TIME Upon satisfaction (or, to the extent permitted under this Agreement, waiver) of all conditions to the Transaction (that date being the "CLOSING DATE"), the parties will first complete the Asset Sale and immediately thereafter, the Merger Subsidiary and the Corporation will cause to be filed the Articles of Merger with the Secretary of State of the State of Minnesota and make all other filings or recordings required by Minnesota Law in connection with the Merger. Pending completion of the Merger following the Closing, all closing deliveries will be held in escrow. The Merger will become effective at the time when the Articles of Merger, specifying 11:59 p.m. on the date of filing as the effective date of the Merger, is duly filed with the Secretary of State of the State of Minnesota (the "EFFECTIVE TIME"). 2.3 EFFECT OF THE MERGER At the Effective Time, the effect of the Merger will be as provided in this Agreement, the Articles of Merger and the applicable provisions of Minnesota Law. Without limiting the generality of -14the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, powers and franchises of the Corporation and the Merger Subsidiary (excluding, for greater certainty, the Specified Assets) will vest in the Surviving Corporation, and all debts, liabilities and duties of the Corporation and the Merger Subsidiary will become the debts, liabilities and duties of the Surviving Corporation. 2.4 ARTICLES OF INCORPORATION AND BYLAWS 2.4.1 At the Effective Time, the Articles of Incorporation of the Corporation will be amended in their entirety to read as the Articles of Incorporation of the Merger Subsidiary as in effect immediately prior to the Effective Time, and will be the Articles of Incorporation of the Surviving Corporation until thereafter amended as provided by Minnesota Law, except that as of the Effective Time, Article I of the Articles of Incorporation will be amended to read: "The name of the corporation will be 'Jasc Software, Inc.'"

2.4.2 The Bylaws of the Merger Subsidiary, as in effect immediately prior to the Effective Time, will be the Bylaws of the Surviving Corporation until thereafter amended as provided by Minnesota Law, the Articles of Incorporation of the Surviving Corporation and those Bylaws. 2.5 DIRECTORS AND OFFICERS At the Effective Time, the directors of the Merger Subsidiary immediately prior to the Effective Time will be the initial directors of the Surviving Corporation, to hold office until those directors resign, are removed or their respective successors are duly elected or appointed in accordance with Minnesota Law and the Articles of Incorporation and Bylaws of the Surviving Corporation. The officers of the Merger Subsidiary immediately prior to the Effective Time will be the initial officers of the Surviving Corporation, to hold office until those officers resign, are removed or their respective successors are duly elected or appointed in accordance with Minnesota Law and the Articles of Incorporation and Bylaws of the Surviving Corporation. 2.6 EFFECT ON CAPITAL STOCK By virtue of the Merger and without any action on the part of Corel, the Merger Subsidiary, the Corporation or the Jasc Stockholders: 2.6.1 CONVERSION OF JASC SHARES. Each Jasc Share will be converted into (i) the Per Jasc Share Equity Consideration subject to any fractional share interest to be addressed in accordance with section 2.6.3; and (ii) the right to receive a cash payment equal to the Per Jasc Share Cash Consideration. 2.6.2 CONVERSION OF MERGER SUBSIDIARY COMMON STOCK. At the Effective Time, each share of common stock, $.01 par value, of the Merger Subsidiary will be converted automatically into one fully paid and nonassessable share of common stock of the Surviving Corporation. 2.6.3 FRACTIONAL SHARES. No fraction of a Corel Common Share will be issued in the Merger. Any fractional share that would otherwise be issued to a Jasc Stockholder will be rounded down to the nearest whole number of shares. 2.6.4 DISSENTERS' RIGHTS. Notwithstanding any provisions of this Agreement to the contrary, any Jasc Share outstanding immediately prior to the Effective Time held by a holder who has demanded and perfected the right, if any, to receive fair value for those Jasc Shares ("DISSENTING SHARES") in accordance with the provisions of Sections 302A.471 and 302A.473 of Minnesota Law -15and as of the Effective Time has not withdrawn or lost those dissenter's rights will not be converted into or represent a right to receive the Merger Consideration pursuant to section 2.6.1, but the stockholder will only be entitled to those rights as are granted by Minnesota Law. If a holder of Jasc Shares who asserts dissenter's rights under Minnesota Law withdraws or loses those rights (through failure to perfect or otherwise), then, as of the Effective Time or the occurrence of that event, whichever last occurs, those shares (the "UNPERFECTED SHARES") will be converted into and/or represent, as applicable, only the right to receive the Merger Consideration as provided in section 2.6.1, without interest, upon the surrender of the certificate or certificates formerly representing those Unperfected Shares. The Corporation will give Corel (i) prompt notice of any written notice of intent to demand fair value for any Unperfected Shares, attempted withdrawals of those demands, the deposit of any shares for which payment is demanded, and any other instruments served pursuant to Minnesota Law received by the Corporation relating to dissenters' rights and (ii) the opportunity to direct all negotiations and proceedings with respect to the assertion of dissenters' rights under Minnesota Law. The Corporation will not, except with the prior written consent of Corel, given in its sole discretion, voluntarily make any payment with respect to any of those demands for payment of fair value, offer to settle or settle any of those demands or approve any withdrawal of any of those demands. 2.7 SURRENDER OF CERTIFICATES AND PAYMENT OF MERGER CONSIDERATION 2.7.1 Promptly at the Effective Time, each of the Jasc Stockholders will surrender his or her existing share certificates representing Jasc Shares ("OLD CERTIFICATES") to Corel.

2.7.2 Each Jasc Stockholder, upon surrender to Corel of the Old Certificates, will receive in exchange for those certificates as soon as practicable following the receipt of the certificates by Corel, the Merger Consideration to which he, she or it is entitled pursuant to section 2.6.1 (subject to section 2.12), and the Old Certificates so surrendered will be cancelled. Unless and until so surrendered, each Old Certificate will, after the Effective Time, represent for all purposes only the right to receive upon surrender the Merger Consideration to which the Jasc Stockholder is entitled pursuant to section 2.6.1. 2.7.3 At and following the Effective Time, Jasc Stockholders will cease to be, and will have no rights as, stockholders of the Corporation (and/or, for greater certainty, the Surviving Corporation), other than as provided in this section 2.7.3. After the Effective Time, there will be no further registration of transfers of Jasc Shares. If, after the Effective Time, Old Certificates are presented to the Surviving Corporation or Corel, they will be cancelled and exchanged for the Merger Consideration as provided for, and in accordance with the procedures set out in this Article 2. 2.7.4 No dividends or other distributions on Corel Common Shares will be paid to the holder of any unsurrendered Old Certificates until those Old Certificates are surrendered as provided in this section 2.7. Upon that surrender, where the holder of the Old Certificate receives Corel Common Shares in accordance with section 2.6.1, there will be paid, without interest, to the Person in whose name the new share certificates representing the Corel Common Shares ("NEW CERTIFICATES") into which those Jasc Shares were converted are registered, all dividends and other distributions paid in respect of those Corel Common Shares on a date subsequent to, and in respect of a record date after, the Effective Time. Dividends and other distributions paid on Corel Common Shares subject to the Escrow Agreement will be dealt with in the manner provided in the Escrow Agreement. 2.7.5 If any Old Certificate has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming that Old Certificate to be lost, stolen or destroyed and the granting by that person of an indemnity in favour of Corel and the Surviving Corporation against -16any claim that may be made against Corel or the Surviving Corporation with respect to that Old Certificate, Corel will deliver the Merger Consideration as provided for in section 2.6.1. 2.8 ADJUSTMENTS If, at any time during the period between the date of this Agreement and the Effective Time, the outstanding Corel Common Shares are changed into a different number of shares, by reason of any reclassification, recapitalization, stock split or combination, reverse stock split, consolidation, exchange or readjustment of shares, stock dividend or similar transaction with a record date (or where there is no record date, effective date) during that period, the number of Corel Common Shares that the Jasc Stockholders are entitled to receive as Merger Consideration as provided for in section 2.6.1 will be appropriately adjusted. 2.9 WORKING CAPITAL ADJUSTMENT 2.9.1 At least 3 Business Days prior to the Closing Date, the Corporation will have prepared and delivered to Corel the Initial Closing Balance Sheet. The Initial Closing Balance Sheet will show a minimum amount of Adjusted September 30 Working Capital at least equal to the Required Working Capital Amount. 2.9.2 If the Initial Closing Balance Sheet shows Adjusted September 30 Working Capital that is less than the Required Working Capital Amount (the "INITIAL WORKING CAPITAL SHORTFALL"), then the Asset Sale Cash Consideration will be reduced by the amount of the Initial Working Capital Shortfall. If the Initial Working Capital Shortfall is greater than the Asset Sale Cash Consideration, then the Total Merger Cash Consideration will be reduced by that excess amount. 2.9.3 Within 60 days of the Closing Date, Corel will prepare and deliver to the Stockholder Representative a draft Working Capital Closing Balance Sheet. The Working Capital Closing Balance Sheet will contain a reconciliation that details any differences between this balance sheet and the Initial Closing Balance Sheet. Once the Working Capital Closing Balance Sheet is settled in accordance with this section 2.9, it will be used to

calculate the Closing Working Capital Amount. Within 10 Business Days after settling the Working Capital Closing Balance Sheet: 2.9.3.1 if the Closing Working Capital Amount is less than the Required Working Capital Amount by more than the Initial Working Capital Shortfall (the difference from the Initial Working Capital Shortfall being the "WORKING CAPITAL ADJUSTMENT AMOUNT") then the Jasc Stockholders will pay to Corel the Working Capital Adjustment Amount. Each of the Jasc Stockholders will pay to Corel cash equal to a pro rata portion of the Working Capital Adjustment Amount based upon the Jasc Stockholder's Ownership Percentage. If the entire Working Capital Adjustment Amount is not paid by the Jasc Stockholders within the 10 Business Day period, the unpaid balance of the Working Capital Adjustment Amount will be satisfied from the Escrow Fund and each Jasc Stockholder that did not make its required payment during the 10 Business Day period will (and will be severally, and not jointly, liable to) make a cash payment to the Escrow Fund equal to that Jasc Stockholder's pro rata share of the Working Capital Adjustment Amount (based upon the percentage of the Jasc Stockholder's Ownership Percentage); or 2.9.3.2 if the Closing Working Capital Amount is less than the Required Working Capital Amount by less than the Initial Working Capital Shortfall (the difference from the Initial Working Capital Shortfall being the "COREL WORKING CAPITAL PAYMENT"), then -17Corel will pay to the Jasc Stockholders cash equal to a pro rata portion of the Corel Working Capital Payment based upon the Jasc Stockholder's Ownership Percentage. 2.9.4 If the Stockholder Representative notifies Corel that it agrees with the Working Capital Closing Balance Sheet within 21 days after receiving it or fails to deliver notice to Corel of its disagreement with the Working Capital Closing Balance Sheet within that 21 day period, the Working Capital Closing Balance Sheet will be conclusive and binding on Corel and each of the Jasc Stockholders and the parties will be deemed to have agreed to it, in the first case on the date Corel receives the notice and, in the second case, on the 21st day. 2.9.5 If the Stockholder Representative notifies Corel of a disagreement with the Working Capital Closing Balance Sheet within the 21 day period, then Corel and the Stockholder Representative will attempt, in good faith, to resolve their differences with respect to it within 15 days after Corel's receipt of the notice of disagreement. Any disagreement over the Working Capital Closing Balance Sheet not resolved by Corel and the Stockholder Representative within that 15 day period (or any longer period as may be agreed to between the parties) will be settled in accordance with section 2.11. 2.10 Q3 NET REVENUE ADJUSTMENT 2.10.1 At least 3 Business Days prior to the Closing Date, the Corporation will have prepared and delivered to Corel a calculation of the Initial Q3 Net Revenue. 2.10.2 If the Initial Q3 Net Revenue is less than the Required Q3 Net Revenue (the "INITIAL Q3 NET REVENUE SHORTFALL"), then the Asset Sale Cash Consideration will be reduced by the amount of the Initial Q3 Net Revenue Shortfall. If the Initial Q3 Net Revenue Shortfall is greater than the Asset Sale Cash Consideration, then the Total Merger Cash Consideration will be reduced by that excess amount. 2.10.3 Within 60 days of the Closing Date, Corel will prepare and deliver to the Stockholder Representative a draft calculation of Q3 Net Revenue. The calculation of the Q3 Net Revenue will contain a reconciliation that details any differences between this calculation and the calculation of the Initial Q3 Net Revenue. Within 10 Business Days after settling the calculation of Q3 Net Revenue in accordance with this section 2.10: 2.10.3.1 if the Q3 Net Revenue is less than the Required Q3 Net Revenue by more than the Initial Q3 Net Revenue Shortfall (the difference from the Initial Q3 Net Revenue Shortfall being the "Q3 NET REVENUE ADJUSTMENT AMOUNT") then the Jasc Stockholders will pay to Corel the Q3 Net Revenue Adjustment Amount. Each of the Jasc Stockholders will pay to Corel cash equal to a pro rata portion of the Q3 Net Revenue Adjustment Amount based upon the Jasc Stockholder's Ownership Percentage. If the entire Q3 Net Revenue Adjustment Amount is not paid by the Jasc Stockholders within the 10 Business Day period, the unpaid balance

of the Q3 Net Revenue Adjustment Amount will be satisfied from the Escrow Fund and each Jasc Stockholder that did not make its required payment during the 10 Business Day Period will (and will be severally, and not jointly, liable to) make a cash payment to the Escrow Fund equal to that Jasc Stockholder's pro rata share of the Q3 Net Revenue Adjustment Amount (based upon the Jasc Stockholder's Ownership Percentage); or 2.10.3.2 if the Q3 Net Revenue is less than the Required Q3 Net Revenue by less than the Initial Q3 Net Revenue Shortfall (the difference from the Initial Q3 Net Revenue -18Shortfall being the "COREL Q3 NET REVENUE PAYMENT"), then Corel will pay to the Jasc Stockholders cash equal to a pro rata portion of the Corel Q3 Net Revenue Payment based upon the Jasc Stockholder's Ownership Percentage. 2.10.4 If the Stockholder Representative notifies Corel that it agrees with the calculation of Q3 Net Revenue within 21 days after receiving it or fails to deliver notice to Corel of its disagreement with the calculation of Q3 Net Revenue within that 21 day period, the calculation of Q3 Net Revenue will be conclusive and binding on Corel and each of the Jasc Stockholders and the parties will be deemed to have agreed to it, in the first case on the date Corel receives the notice and, in the second case, on the 21st day. 2.10.5 If the Stockholder Representative notifies Corel of a disagreement with the calculation of Q3 Net Revenue within the 21 day period, then Corel and the Stockholder Representative will attempt, in good faith, to resolve their differences with respect to it within 15 days after Corel's receipt of the notice of disagreement. Any disagreement over the calculation of Q3 Net Revenue not resolved by Corel and the Stockholder Representative within that 15 day period (or any longer period as may be agreed to between the parties) will be settled in accordance with section 2.11. 2.11 DISPUTE PROCESS Any dispute relating to the Working Capital Closing Balance Sheet, Q3 Net Revenue, Tax Related Payment or Stockholder Expense Adjustment Amount will be determined by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, expedited procedures, as amended and effective on the date of this Agreement provided that (1) the arbitration will be conducted before a single arbitrator agreed to by Corel and the Stockholder Representative or if the parties are unable to agree on a single arbitrator after using best efforts to reach agreement, appointed pursuant to the applicable expedited procedures under the Commercial Arbitration Rules, (2) any award or determination of an arbitrator will be final and binding on the parties and there will be no appeal on any ground, (3) an arbitrator will not, without the written consent of Corel and the Stockholder Representative, retain any expert, (4) all matters relating to the arbitration will be kept confidential to the full extent permitted by law, (5) the arbitrator will have power to award legal fees and costs associated with the arbitration (including fees of the arbitrator) and to order equitable relief in accordance with this section 2.11, and (6) no individual will be appointed as an arbitrator unless he or she agrees in writing to be bound by this arbitration provision. 2.12 ESCROW Pursuant to the terms of the Escrow Agreement, Corel will deliver at the Closing to the Escrow Agent 2,778,876 Corel Shares which comprise a portion of the Total Equity Consideration and $1.0 million which comprises a portion of the Total Cash Consideration. The Escrow Agent will hold the Escrow Fund in escrow in accordance with the terms of the Escrow Agreement. 2.13 CONVERTIBLE SECURITIES AND OPTION PLAN Prior to the Effective Time, the Corporation and each holder of Convertible Securities will enter into an agreement that will provide (i) that holders of Convertible Securities who are Accredited Investors on the date of that agreement will, prior to the Closing Date, in respect of each Convertible Security, either (a) exercise that Convertible Security for Jasc Shares or (b) receive a cash payment as consideration for the cancellation of that Convertible Security in an amount equal to the difference between the exercise price of that Convertible Security and the value of the Transaction Consideration which the holder would have received had that Convertible

Security been exercised immediately prior to -19the Time of Closing (if the holder fails to elect (a) or (b) at least 3 days prior to the Closing Date, the holder will be deemed to have elected (b)); and (ii) that holders of Convertible Securities who are not Accredited Investors on the date of that agreement will, prior to the Closing Date, for each Convertible Security held receive a cash payment as consideration for the cancellation of that Convertible Security in an amount equal to the difference between the exercise price of that Convertible Security and the value of the Transaction Consideration which the holder would have received had that Convertible Security been exercised immediately prior to the Time of Closing. The Corporation will pay the amounts due to the holders of Convertible Securities or will arrange with Corel, at least one Business Day prior to the Closing Date, for the payment of those amounts to be made directly out of the Asset Sale Cash Consideration as contemplated by section 5.11. 2.14 TAX RELATED PAYMENT 2.14.1 Upon the later of (i) at least 3 Business Days prior to the Closing Date; or (ii) October 15, 2004, the Corporation (or the Stockholder Representative, if that later date is following the Closing Date) will prepare and deliver to Corel a draft September Income Statement and a draft calculation of the Tax Related Payment calculated in accordance with section 2.14.3. 2.14.2 Within 10 Business Days after settling the calculation of the Tax Related Payment in accordance with this section 2.14, Corel will pay to the Jasc Stockholders cash equal to the Tax Related Payment, pro rata based upon the Jasc Stockholder's Ownership Percentage. 2.14.3 The "TAX RELATED PAYMENT" will be equal to the taxable income of the Corporation for the time period commencing on October 1, 2004 and ending at the Effective Time, multiplied by 0.43. The taxable income of the Corporation for the time period commencing on October 1, 2004 and ending at the Effective Time will be the product of (i) taxable income of the Corporation from September 1, 2004 to September 30, 2004 divided by 30 and (ii) the number of days from and including October 1, 2004, to the Effective Time. The Tax Related Payment will be a liability of the Corporation on the Effective Date and, for greater certainty, will be treated for tax purposes as Merger Consideration. The parties agree that (i) the foregoing calculation will be the basis for allocating income between the parties, from a Tax perspective, for the period from October 1, 2004 to the Effective Date; and (ii) in no event will the taxable income calculated pursuant to this section 2.14.3 be greater than the taxable income reported to the Internal Revenue Service for that same period. 2.14.4 If Corel notifies the Stockholder Representative that it agrees with the calculation of the Tax Related Payment within 21 days after receiving it or fails to deliver notice to the Stockholder Representative of its disagreement with the calculation of the Tax Related Payment within that 21 day period, the calculation of the Tax Related Payment will be conclusive and binding on Corel and each of the Jasc Stockholders and the parties will be deemed to have agreed to it, in the first case on the date the Stockholder Representative receives the notice and, in the second case, on the 21st day. 2.14.5 If Corel notifies the Stockholder Representative of a disagreement with the calculation of the Tax Related Payment within the 21 day period, then Corel and the Stockholder Representative will attempt, in good faith, to resolve their differences with respect to it within 15 days after the Stockholder Representative's receipt of the notice of disagreement. Any disagreement over the calculation of the Tax Related Payment not resolved by Corel and the Stockholder Representative within that 15 day period (or any longer period as may be agreed to between the parties) will be settled in accordance with section 2.11. -202.14.6 If it is later determined, in connection with a tax audit or otherwise, that the actual tax obligations of the Jasc Stockholders related to the period between September 30, 2004 and the Closing Date is greater than Tax Related Payment, Corel shall make an additional cash payment to each Jasc Stockholder in an amount equal to

Related Payment, Corel shall make an additional cash payment to each Jasc Stockholder in an amount equal to such additional tax liability. ARTICLE 3 REPRESENTATIONS AND WARRANTIES 3.1 BY THE CORPORATION AND THE PRINCIPAL STOCKHOLDERS The Corporation and each of the Principal Stockholders represent and warrant to the Merger Subsidiary and Corel as follows and acknowledge that the Merger Subsidiary and Corel are relying upon the following representations and warranties in connection with the Transaction: 3.1.1 FORMATION AND STATUS OF THE CORPORATION. The Corporation: 3.1.1.1 is duly formed and organized and is validly existing, in good standing and up-to-date in the filing of all corporate and similar returns under the laws of the State of Minnesota; 3.1.1.2 is duly registered, licensed or qualified, in good standing and up-to-date in the filing of all corporate and similar returns, under the laws of each jurisdiction in which the nature of the Business or the assets owned or leased by it makes that registration, licensing or qualification necessary or desirable; and 3.1.1.3 has provided to the Merger Subsidiary a correct and complete copy of the articles of incorporation, bylaws, constating documents and other organizational documents of the Corporation, in each case as amended to the date of this Agreement, as well as the corporate minutes and stock record books. 3.1.2 POWER OF THE CORPORATION AND DUE AUTHORIZATION. The Corporation has the corporate power and capacity to own or lease its assets and to carry on the Business as it is presently conducted and to enter into, and to perform its obligations under, this Agreement and the Related Agreements to which it is a party. Each of this Agreement and each of the Related Agreements to which the Corporation is a party has been duly authorized by the Corporation. This Agreement has been duly executed and delivered by the Corporation and is a valid and binding obligation of the Corporation, enforceable in accordance with its terms, subject to the usual exceptions as to bankruptcy and the availability of equitable remedies. At the Time of Closing, each of the Related Agreements to which the Corporation is a party will be duly executed and delivered by the Corporation and will be valid and binding obligations of the Corporation, enforceable in accordance with their respective terms, subject to the usual exceptions as to bankruptcy and the availability of equitable remedies. 3.1.3 CAPITAL OF THE CORPORATION. Schedule 3.1.3 sets out particulars of the authorized and issued securities of the Corporation (including shares, options, warrants, other rights to acquire securities or debt instruments), the names of the Persons who are the beneficial owners of those securities and, if those beneficial owners are not the registered owners of those securities, the names of the Persons shown on the securities register of the Corporation as the holder of any of those securities, and the number and class of securities held by those Persons. All the shares indicated on the Schedule as being issued and outstanding constitute all of the outstanding shares of -21capital stock of the Corporation, have been validly issued and are outstanding as fully paid and non-assessable shares. Except as set out in Schedule 3.1.3, there are no stockholders agreements, pooling agreements, voting trusts or other Contracts with respect to the voting of the securities of the Corporation. Complete and accurate records with respect to the issuance, transfer, redemption and cancellation of all shares of capital stock (including a list of all certificates issued at any time evidencing outstanding securities of the Corporation, the names of the holder or holders of each of those certificates and the type of Person(s) comprising that holder or holders) are set out in the Corporation's stock record books, copies of which have been provided to the Merger Subsidiary. At the Time of Closing, there will not be any outstanding Convertible Securities and the former holders of Convertible Securities will have no rights against the Corporation or the Surviving Corporation to receive cash, securities or other property. 3.1.4 SUBSIDIARIES AND INVESTMENTS. The Corporation does not have any subsidiaries. The

Corporation does not own beneficially or of record any securities of, or any other interests in, any Entity, nor have any Contract to acquire any such securities or other interests. 3.1.5 NO OBLIGATIONS TO ISSUE SECURITIES. Except as set out in Schedule 3.1.3, there are no options, warrants, rights of conversion or other rights or Contracts pursuant to which the Corporation is, or may become, obligated to issue any shares or any securities convertible or exchangeable, directly or indirectly, into any shares of the Corporation. 3.1.6 NO CONTRAVENTION BY THE CORPORATION. Except as set out in Schedule 3.1.6, none of the entering into of this Agreement or any Related Agreement, the consummation of the Transaction or the performance by the Corporation of its other obligations under this Agreement and the Related Agreements to which it is a party (a) will contravene, breach or result in any default under (1) the articles of incorporation, bylaws, constating documents or other organizational documents of the Corporation, or (2) any license, permit, order, judgment, decree or Law to which the Corporation is a party or by which it may be bound or (b) contravenes, breaches or results in any default under, or conflicts with or will conflict with, or results in or will result in any modification of any of the terms of, or results in or will result in the termination of or the creation of any Charge, acceleration right or other right pursuant to the terms of, any Contract or Permit to which the Corporation is a party or by which it may be bound or will in any way affect the continuation, validity or effectiveness of any such Contract or Permit. 3.1.7 APPROVALS AND CONSENTS. Except as set out in Schedule 3.1.7, no authorization, consent or approval of, or filing with or notice to, any Governmental Authority or other Person is required in connection with (1) the execution, delivery or performance of this Agreement by the Corporation or the Jasc Stockholders or the consummation of the Transaction or (2) any subsequent assignment or transfer by Corel or any of its subsidiaries (including the Surviving Corporation) of any part or all or substantially all of the Corporation's assets (including the Corporation's Contracts, Key Software Programs, Proprietary Intellectual Property or Proprietary Software) to Corel and/or one or more direct or indirect subsidiaries of Corel. The failure of the Corporation to obtain any or all of the Consents which are not Closing Required Consents would not have a material adverse impact on the Merger Subsidiary, the Surviving Corporation or the Business. 3.1.8 FINANCIAL STATEMENTS. The Audited Financial Statements and the Unaudited Financial Statements have been prepared and the Initial Closing Balance Sheet and the calculation of Initial Q3 Net Revenue will be prepared in accordance with GAAP (subject to usual year-end adjustments and the absence of notes in the case of the Unaudited Financial Statements) consistently applied throughout the periods indicated and fairly, completely and accurately present the financial position of the Corporation and the results of its operations as of the dates and throughout the periods -22indicated and there has been no material adverse change in the financial position of the Corporation from that reflected in the Audited Financial Statements. Notwithstanding the foregoing, the absence of any accrual for the Jasc YE Bonus Program will not be deemed to be a breach of the representations in this section 3.1.8. 3.1.9 ACCOUNTS RECEIVABLE. The accounts receivable reflected on the balance sheet forming part of the Unaudited Financial Statements and all accounts receivable arising after the Unaudited Statements Date are bona fide and collectible, other than those accounts receivable which are doubtful accounts and in respect of which a reasonable allowance, consistent with past practice, has been made, and are not subject to any set-off or counterclaim. 3.1.10 INVENTORY VALUATION. The inventory of the Corporation reflected on the balance sheet forming part of the Unaudited Financial Statements was, and the current inventory of the Corporation is, in usable and saleable condition in the ordinary course of the Business and, in the case of inventory reflected on that balance sheet, at an amount not less than the amounts carried in that balance sheet. 3.1.11 LIABILITIES AND GUARANTEES. The Corporation does not have any outstanding liabilities or obligations, whether accrued, absolute, known or unknown, contingent or otherwise (including any liabilities or obligations which would arise as a result of the consummation of the Transaction), and the Corporation is not a party to or bound by any agreement of guarantee, support, indemnification, assumption, or endorsement of, or

any other similar commitment with respect to the obligations, liabilities (contingent or otherwise) or indebtedness of any Person, other than: 3.1.11.1 those set out in the Unaudited Financial Statements; 3.1.11.2 current liabilities (determined in accordance with GAAP) in respect of trade or business obligations incurred after the Unaudited Statements Date in the ordinary course of the Business, consistent with past practice, none of which has been or could be materially adverse to the nature, results of operations, assets or financial condition of, or manner of conducting, the Business; and 3.1.11.3 those set out in Schedule 3.1.11. Except as set out in Schedule 3.1.11, there are no off-balance sheet arrangements (as defined in Item 303(a)(4) (ii) of Regulation S-K under the Securities Act) which are currently or at any point may be binding on the Corporation. 3.1.12 INDEBTEDNESS. Except as set out in the Audited Financial Statements or the Unaudited Financial Statements or in Schedule 3.1.12, the Corporation does not have outstanding any bonds, debentures, notes, mortgages or other indebtedness which mature more than one year after the date of their original creation or issuance and the Corporation has not agreed to create or issue any bonds, debentures, notes, mortgages or other indebtedness which will mature more than one year after the date of their creation or issuance. 3.1.13 ABSENCE OF UNUSUAL TRANSACTIONS AND EVENTS. Except as set out in Schedule 3.1.13, the Corporation has not, since the Unaudited Statement Date: 3.1.13.1 paid or satisfied any obligation or liability, absolute or contingent, other than current liabilities or obligations disclosed in the Unaudited Financial Statements and -23current liabilities or obligations incurred since the Unaudited Statements Date in the ordinary course of the Business, consistent with past practice; 3.1.13.2 waived or cancelled any rights or claims or made any gift, other than donations made in the ordinary course of the Business, consistent with past practice; 3.1.13.3 sold or otherwise disposed of any fixed or capital assets having a fair market value, in the case of any single sale or disposition, in excess of $25,000 and, in the case of all sales and dispositions, in excess of $50,000 in total; 3.1.13.4 made any capital expenditures, in the case of any single capital expenditure, in excess of $25,000 and, in the case of all capital expenditures, in excess of $50,000 in total; 3.1.13.5 made any material change or deviation from past practices in the manner of its billings, or the credit terms made available by it, to any of its customers or recording and/or treatment by the Corporation of customer accounts receivable or reserves for doubtful accounts; 3.1.13.6 made or suffered any change or changes in its financial condition, assets, liabilities or the Business which, singly or in the aggregate, have materially adversely affected or could materially adversely affect its financial condition, assets, liabilities or the Business; 3.1.13.7 suffered or incurred any damage, destruction or loss, whether or not covered by insurance, which has materially adversely affected or could materially adversely affect its financial condition, assets or the Business; 3.1.13.8 made any increase in the compensation payable or to become payable to directors, officers, employees, independent contractors or agents, including any improvements to severance or termination pay, except as required by Law, other than improvements to Employee Plans set out in Schedule 3.1.25;

3.1.13.9 declared or paid any dividend or made any distribution, whether in cash, stock or in specie, in respect of any of its shares or purchased, redeemed or otherwise acquired any of its securities or made any other payment to the Jasc Stockholders or Persons related to them outside the ordinary course of business; 3.1.13.10 changed any method of accounting or accounting principles; 3.1.13.11 incurred any Charges with respect to any assets, except non-exclusive licenses to the Corporation's Key Software Programs granted in the ordinary course of Business; or 3.1.13.12 authorized or agreed or otherwise become committed to do any of the foregoing. 3.1.14 NO DIVIDENDS, LOANS, ETC. 3.1.14.1 Except as disclosed on Schedule 3.1.14, subsequent to the Unaudited Statements Date, the Corporation has not (1) declared or paid any dividend (whether in -24cash, stock or specie) or made any other distribution of any kind in respect of its capital stock, and the Corporation has no obligation (contingent or otherwise) to pay any dividends or make any other distribution of any kind; or (2) purchased, redeemed or otherwise acquired any shares of capital stock or any notes, bonds or other securities of any kind and has no obligation (contingent or otherwise) to do any of the foregoing. 3.1.14.2 The Corporation has paid on a timely basis (1) all amounts due and payable under its indebtedness, leases and other Contract obligations; and (2) all other amounts due and payable to any Persons. 3.1.15 INSIDER INTERESTS. Except as disclosed on Schedule 3.1.15, no present or former stockholder, partner, principal, officer, director, employee of the Corporation or Affiliate of the Corporation or, to the Corporation's and each Principal Stockholder's Knowledge, any immediate or other family member of any such person or any Person in which any such person is an officer, director, principal, partner or stockholder (1) is presently a party to any transaction or arrangement with the Corporation (other than for services as officers, directors or employees of the Corporation in the ordinary course of the Business); (2) owns any interest in any of the assets or properties of the Corporation; (3) owns any interest in, controls or is an employee, officer, director or agent of, or consultant to, any other Person which is a competitor, supplier, customer, vendor, landlord or tenant of the Corporation; (4) is indebted or liable to, owns any interest in, or owns, holds or has guaranteed any obligation or debt of the Corporation; or (5) has acquired from or sold or transferred to the Corporation any assets or properties owned, leased or used by the Corporation. Except as disclosed on Schedule 3.1.15 (1) there is no Contract in effect between the Corporation, on the one hand, and any Jasc Stockholder or family member of that Jasc Stockholder or any Affiliate of any such Jasc Stockholder or family member, on the other hand; and (2) the Corporation has no outstanding obligation or liability of any kind (contingent, unknown or otherwise) to any such Jasc Stockholder, family member or Affiliate. 3.1.16 AS TO CERTAIN CONTRACTS IN AND OUT OF THE ORDINARY COURSE. Except as set out in Schedule 3.1.16 and except as disclosed in any other Schedule (and explicitly cross-referenced to Schedule 3.1.16), the Corporation is not a party to or bound by any: 3.1.16.1 Contract which expires or may expire, if the same is renewed or extended at the unilateral option of any other Person, more than one year after the date of this Agreement; 3.1.16.2 Contract for the purchase of materials, supplies or services which requires payment of more than $25,000, in the case of any single Contract, or, in the case of all such Contracts, in excess of $50,000 in the aggregate; 3.1.16.3 Contract for the purchase or sale of any equipment or fixed or capital assets having a fair market value in excess of $25,000; 3.1.16.4 management, consulting, agency or similar Contract;

3.1.16.5 license or royalty agreement relating to Intellectual Property; 3.1.16.6 Contract to make any gift of any of its property, other than donations made in the ordinary course of the Business, consistent with past practice; -253.1.16.7 Contract which materially adversely affects or could materially adversely affect the Business or its financial condition or any of its assets or is or could be materially burdensome to it; 3.1.16.8 Material Contract; 3.1.16.9 lease, agreement in the nature of a lease or agreement to lease whether as lessor or lessee, and whether in respect of real property or personal property, except for any lease or agreement in the nature of a lease relating to personal property where the total annual payments under that lease or agreement and under any related service or maintenance or similar Contract do not exceed $25,000; or 3.1.16.10 material Contract which was not made in the ordinary course of the Business, consistent with past practice. For the purposes of the foregoing, if a particular Contract falls within more than one of the categories established by sections 3.1.16.1 through 3.1.16.10, it need not be set out more than once in Schedule 3.1.16. Correct and complete copies of all of the Contracts set out in Schedule 3.1.16, or, where those Contracts are oral, correct and complete written summaries of their terms, have been provided to the Merger Subsidiary. 3.1.17 CERTAIN DISTRIBUTION AND MASTER REPRESENTATIVE AGREEMENTS. 3.1.17.1 Schedule 3.1.17.1 sets out those Contracts of the Corporation relating to all distribution, reselling and similar arrangements involving the Corporation's Key Software Programs. Except as set out on Schedule 3.1.17.1, all of those Contracts may be terminated by the Corporation on no more than 60 days written notice and without any requirement to pay any amounts, deliver any property, grant any rights or restrict the activities of the Corporation. 3.1.17.2 Except as set out in Schedule 3.1.17.2, each of the international master representative Contracts set out on Schedule 3.1.17.1 may be terminated in accordance with its terms or, if termination is not addressed by the terms of a Contract, in accordance with applicable Laws, without giving rise to any obligations and/or liabilities to the Corporation or to Corel or a subsidiary of Corel which is assigned the Contract. 3.1.18 NO DEFAULT UNDER AGREEMENTS. The Corporation is not in default or breach of any Contract to which it is a party or by which it may be bound (including the Contracts referred to in any Schedule to this Agreement) and there exists no state of facts which after notice or the passage of time, or both, would constitute such a default or breach, and all of those Contracts are now in good standing and the Corporation is entitled to all benefits, rights and privileges under them. To the Corporation's and each Principal Stockholder's Knowledge, no other party to any of the Corporation's Contracts is in default under that Contract. Each of the Contracts to which the Corporation is a party or by which it may be bound has been entered into in the ordinary course of the Business and is at arm's length. 3.1.19 NO OWNED REAL PROPERTY. The Corporation does not own any real property. -263.1.20 LEASED REAL PROPERTY. A list and description of all real property leased by the Corporation or in which the Corporation has any interest is set out in Schedule 3.1.20 (collectively, the "Leased REAL PROPERTY"). All of the Leased Real Property is held subject to the written leases that are identified on Schedule 3.1.20 (the "REAL PROPERTY LEASES"). Each of the Real Property Leases is valid and effective in accordance with their respective terms, and there are no existing defaults or events of default, or events which with notice or lapse of time or both would constitute defaults under the Real Property Leases on the part of the

with notice or lapse of time or both would constitute defaults under the Real Property Leases on the part of the Corporation. True and complete copies of all of the Real Property Leases, together with any amendments to the Real Property Leases, have been delivered to the Merger Subsidiary. To the Corporation's and each Principal Stockholder's Knowledge, there has not been any default or claimed or purported or alleged default or state of facts which with notice or lapse of time or both would constitute a default on the part of any other party in the performance of any obligation to be performed or paid by that other party under any Real Property Lease. Neither the Corporation nor any of the Principal Stockholders has received any written or oral notice to the effect that any Real Property Lease will not he renewed at the termination of the term of the Real Property Lease or that any Real Property Lease will be renewed only at a substantially higher rent. 3.1.21 ZONING AND OTHER MATTERS RELATING TO REAL PROPERTY. To the Corporation's and each Principal Stockholder's Knowledge, the buildings and other structures located on the Leased Real Property and the operation and maintenance of those buildings and structures, as now operated and maintained, comply with all material applicable Laws; none of those buildings or other structures encroaches upon any land other than the Leased Real Property; and there are no restrictive covenants or other Laws which in any way restrict or prohibit the use of those lands, buildings or structures for the purposes for which they are presently being used. There are no expropriation, pending assessment for public improvements or condemnation, taking by eminent domain or similar Proceedings, actual or threatened, of which any of the Principal Stockholders or the Corporation has received notice, related to the Leased Real Property. 3.1.22 TITLE TO ASSETS. 3.1.22.1 The Corporation has good, valid and marketable title to all of its properties and assets, real, personal and mixed, tangible and intangible, including the properties and assets reflected in the balance sheet forming part of the Audited Financial Statements (except for assets leased under Contracts identified on Schedule 3.1.22.1, and except for accounts receivable collected upon and inventory disposed of since the Audited Statements Date in the ordinary course of the Business), free and clear of all Charges. 3.1.22.2 All of the assets and properties owned or leased by the Corporation are in good operating condition and repair, normal wear and tear excepted, and have been maintained and serviced in accordance with the prudent conduct of business, are suitable for the purposes for which they presently are being used and constitute all of the assets and properties used in the operations of, and necessary to operate, the Business as presently conducted. None of the assets or properties owned or leased by the Corporation (or uses to which they are put) fails to conform in any material respect with any applicable Contract or Law. Except with respect to assets leased pursuant to valid Contracts identified on Schedule 3.1.22.1, the Corporation owns all the properties and assets located at or on the Real Property. 3.1.22.3 There are no defects in the design or manufacture of any of the products sold by the Corporation or on hand to be sold which could give rise to any liabilities or -27obligations which could result in a material adverse effect on the Corporation. The Corporation does not have and has never had any product recall plans or programs. 3.1.23 ENVIRONMENTAL MATTERS. 3.1.23.1 As used in this Agreement: 3.1.23.1.1 "Environmental Claim" means any written notice to the Corporation by a person or entity alleging potential material liability of the Corporation (including potential material liability for investigatory costs or governmental response costs) arising out of, based on, or resulting from (i) the presence, or release into the environment, of any Hazardous Substance at the Leased Real Property or (ii) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law; 3.1.23.1.2 "Environmental Laws" means all applicable federal, state, and local statutes, regulations, laws, or ordinances relating to the protection of human health or the environment;

3.1.23.1.3 "Environmental Permits" means all permits, licenses, or authorizations required to operate the Business pursuant to any Environmental Law; 3.1.23.1.4 "Environmental Reports" means those environmental reports made available to the Merger Subsidiary; and 3.1.23.1.5 "Hazardous Substance" means contaminants, hazardous wastes, petroleum, and other hazardous materials listed in, regulated by, or identified in any Environmental Law, including but not limited to asbestoscontaining material. 3.1.23.2 Except as disclosed by the Environmental Reports, the operation of the Business is in compliance with all applicable Environmental Laws and Environmental Permits and the Corporation has not disposed or released any Hazardous Substance at the Leased Real Property. 3.1.23.3 Except as disclosed by the Environmental Reports, there are no Environmental Claims pending or, to the Corporation's and each of the Principal Stockholder's Knowledge, threatened, with respect to the Corporation and/or the Leased Real Estate. 3.1.23.4 To the Corporation's and each of the Principal Stockholder's Knowledge, except as disclosed by the Environmental Reports, no Hazardous Substances are present in, on, or under, the Leased Real Property in such forms or quantities as would create a material risk to employees or invitees or would create any material liability of the Corporation under any Environmental Law. 3.1.23.5 The Corporation has made available to the Purchaser copies of all environmental reports in its possession, custody or control with respect to the Leased Real Estate and is not aware of any false or misleading information in such environmental reports. -283.1.23.6 All Environmental Permits obtained by the Corporation in connection with the Business (including any applicable expiry dates) are listed in Schedule 3.1.23 and are valid and in full force and effect. 3.1.23.7 For greater certainty, the representations and warranties contained in sections 3.1.6, 3.1.7 and 3.1.30 apply to Environmental Permits. 3.1.24 TAX MATTERS. 3.1.24.1 For the purposes of this section 3.1.24, "CORPORATION" includes the Corporation and any or all of its current or past subsidiaries, whether or not in existence as of the date of this Agreement. The Corporation has filed or caused to be filed on a timely basis all Tax Returns required to be filed by it and has paid all Taxes due and payable with respect to the periods covered by those Tax Returns (whether or not reflected on those Tax Returns). All Tax Returns filed by or on behalf of the Corporation are true, complete and correct in all material respects. No deficiency in Taxes of the Corporation for any period has been asserted by any taxing authority which remains unpaid at the date of this Agreement. No Tax Return is under audit or examination by any taxing authority, and no notice of such an audit or examination has been received by the Corporation. There is no deficiency, refund litigation, proposed adjustment or matter in controversy with respect to any Taxes due and owing by the Corporation. Each deficiency resulting from any completed audit or examination relating to Taxes by any taxing authority has been timely paid. No issues relating to Taxes were raised by the relevant taxing authority in any completed audit or examination that could reasonably be expected to recur in a later taxable period. The United States federal income tax Tax Returns of the Corporation have either been examined and settled with the Internal Revenue Service or closed by virtue of the expiration of the applicable statute of limitations for all years through the taxation year ended December 31, 2000. The Corporation has not agreed to the extension of the statute of limitations with respect to any Tax Returns or periods. There are no assessments relating to the Corporation's Tax Returns pending or threatened. The Corporation has delivered to the Merger Subsidiary true and complete copies of the federal and state income (or franchise) Tax Returns filed by the Corporation for the past three years. The Corporation is not, and has never been, the common parent or a member of any affiliated group of corporations filing a consolidated federal income tax return, and is not a party to any tax sharing agreement or other arrangement pursuant to which it could be liable for the Taxes of any third-

party. 3.1.24.2 The accruals for Taxes in the Audited Financial Statements and Unaudited Financial Statements accurately reflect the total amount of all unpaid Taxes, whether or not disputed and whether or not presently due and payable, of the Corporation as of the close of the period covered by the Audited Financial Statements and the Unaudited Financial Statements, respectively. Adequate accruals and reserves have been made in the Audited Financial Statements and the Unaudited Financial Statements and the books and records of the Corporation for the payment of all unpaid Taxes of the Corporation for all periods through the respective dates thereof, as at the Closing Date, whether or not yet due and payable and whether or not disputed by the Corporation, and nothing has occurred subsequent to the dates of the Audited Financial Statements and the Unaudited Financial Statements, as applicable, or such accruals or reserves in those books and records which make those accruals and reserves inadequate. -293.1.24.3 The Corporation is not a "United States real property holding corporation" within the meaning of Section 897(c)(2) of the Code. 3.1.24.4 The Corporation is not required to make any adjustment pursuant to Section 481 (a) of the Code or any similar provision of state, local or foreign Law by reason of a change in accounting method initiated by the Corporation. 3.1.24.5 Except as set forth in Schedule 3.1.24.5, the Corporation has elected, pursuant to Section 1362 of the Code, to be treated as an "S corporation" for federal income tax purposes continuously since inception, as that term is defined in Section 1361 of the Code, and has filed similar elections with each state taxing authority requiring a separate state election to be treated as an S corporation. 3.1.24.6 The Corporation's election to be treated as an S corporation was valid and timely filed and has never been challenged by the Internal Revenue Service or any state taxing authority, has been in effect for all taxable years of the Corporation since formation and has been at all times and is valid and effective under the Code and in all states where the Corporation is subject to Taxes. The Corporation is not and could not be subject to any obligation and/or liability in respect of its failure or alleged failure to qualify as an "S corporation" at any time. 3.1.25 EMPLOYMENT MATTERS. 3.1.25.1 Except as set out in Schedule 3.1.25, neither the Corporation nor any Subsidiary is a party to or is bound by any: 3.1.25.1.1 oral or written Contract for the employment or retainer of any individual, including, for greater certainty, any Contract with directors, officers, employees, independent contractors or agents, other than for Contracts of at-will employment terminable by the Corporation without cause; 3.1.25.1.2 oral or written Contract providing for severance, termination or similar payments, including on a change of control of the Corporation; or 3.1.25.1.3 Contract with any trade union, council of trade unions, employee bargaining agent or affiliated bargaining agent (collectively called "LABOR REPRESENTATIVES") and neither the Corporation nor any Subsidiary has conducted negotiations with respect to any such future Contracts; no labor representatives hold bargaining rights with respect to any employees of the Corporation; and there are no current or threatened attempts to organize or establish any trade union or employee association with respect to the Corporation. Correct and complete copies of all Contracts set out in Schedule 3.1.25, or where oral, correct and complete written summaries of their terms, have been provided to the Merger Subsidiary. 3.1.25.2 Schedule 3.1.25 sets out all full-time and part-time employees and their respective positions; job categories; location; salaries, bonuses and other compensation; and years of service. -30-

-303.1.25.3 Except as set out in Schedule 3.1.25, (1) all bonuses previously granted to employees have been paid in full to those employees, and (2) the Corporation does not have, and neither the execution of this Agreement nor the consummation of the Transaction will result in, any liability for severance pay or similar payment requirements to any employee, sales representative, independent contractor, consultant, distributor, agent or Affiliate of the Corporation. No employee of the Corporation has received any payment of any kind for services rendered to or on behalf of the Corporation from any Person other than payments made by the Corporation to the employee in compliance with all applicable Laws (including Laws relating to withholding with respect to wages, salaries and other payments to employees) and which payments are fully reflected in the books, records and financial statements of the Corporation. 3.1.25.4 Except as set out in Schedule 3.1.25, all of the employees of the Corporation are employed on at-will basis and no notice or severance or other termination payments would be required in connection with the termination of any of those employees whether in connection with the consummation of the Transaction or otherwise. 3.1.25.5 Except as referred to in Schedule 3.1.25, there is no work stoppage or other concerted action, grievance or dispute existing or threatened against the Corporation. 3.1.25.6 Except as set out in Schedule 3.1.25.6, all of the current and former employees of the Corporation and/or its subsidiaries (including subsidiaries which are no longer in existence) have entered into an "Intellectual Property Rights Agreement" and a "Confidentiality and Non-Disclosure Statement" with the Corporation in substantially the same form of the agreements provided by the Corporation to the Merger Subsidiary and which agreements survive the termination of the employment relationship with the applicable employee. 3.1.26 EMPLOYEE PLANS. Except as set out in Schedule 3.1.26, the Corporation does not maintain or sponsor or contribute to, is not a party to, is not bound by, and does not have any actual or contingent liability in respect of, any Employee Plan. Correct and complete copies of all Employee Plans set out in Schedule 3.1.26 and all related documents, or, where oral, correct and complete written summaries of their terms, have been provided to the Merger Subsidiary and any. related documents created or filed after the date of this Agreement will be provided to the Merger Subsidiary. For the purposes of this section 3.1.26, related documents in respect of an Employee Plan includes: (1) all documents establishing or creating such plan; (2) any funding agreement or amendment to a funding agreement; (3) actuarial reports; (4) all funding, investment and financial information; (5) all regulatory returns, reports, statements or filings made or completed; (6) all employee plan summaries and booklets describing or giving particulars of the plan; (7) all material correspondence with all regulatory authorities; (8) all material internal memoranda; and (9) all material professional opinions. All such related documents are and will be true, correct and complete in all material respects and none of the actuarial assumptions underlying those documents have changed since the respective dates of those documents. Except as set out in Schedule 3.1.26: 3.1.26.1 All Employee Plans comply in all material respects with all requirements of ERISA, the Code, and with all other applicable Law, and the Corporation has not taken or failed to take any action with respect to the Employee Plans which might create any liability on the part of the Corporation or the Merger Subsidiary. Each "fiduciary" (within the meaning of Section 3(21)(A) of ERISA) as to each Employee Plan has -31complied in all material respects with all requirements of ERISA and all other applicable Laws in respect of each such Employee Plan. 3.1.26.2 The Corporation does not maintain, sponsor or contribute to, and has never withdrawn from, maintained, sponsored or contributed to, a "defined benefit plan" (within the meaning of Section 3(35) of ERISA) or a "multiemployer plan" (within the meaning of Section 3(37) of ERISA). 3.1.26.3 Each Employee Plan intended to be qualified under Section 401 (a) of the Code has received a favorable determination letter from the Internal Revenue Service as to its

qualification under Section 401 (a) of the Code. 3.1.26.4 No "prohibited transaction" (within the meaning of Section 406 of ERISA or Section 4975(c) of the Code) has occurred with respect to any Employee Plan. 3.1.26.5 No provision of any Employee Plan or of any agreement, and no act or omission of the Corporation, in any way limits, impairs, modifies or otherwise affects the right of the Corporation, the Merger Subsidiary or the Surviving Corporation unilaterally to amend or terminate any Employee Plan after the Closing, subject to the requirements of applicable Law. 3.1.26.6 No policy, plan, program, arrangement, understanding or agreement exists which could result in the payment by the Corporation, the Merger Subsidiary or the Surviving Corporation of money or any other property or rights, or accelerate or provide any other rights or benefits, to any employee of the Corporation that would not have been required but for the consummation of the Transaction. 3.1.26.7 There are no contributions which are or hereafter will be required to be made to trusts in connection with any Employee Plan that would constitute a "defined contribution plan" (within the meaning of Section 3(34) of ERISA). 3.1.26.8 Other than claims in the ordinary course for benefits with respect to the Employee Plans, there are no Proceedings pending with respect to any Employee Plan, or any circumstances (including arising out of the operation or termination of any Employee Plan) which might give rise to any such Proceeding. 3.1.26.9 All reports, returns and similar documents with respect to the Employee Plans required to be filed with any Governmental Authority have been so filed on or before their due date or, if not currently due, will be filed when due. 3.1.26.10 The Corporation has no obligation to provide health or other welfare benefits to former, retired or terminated employees, except as specifically required under Section 4980B of the Code or Section 601 of ERISA. The Corporation has complied in all material respects with the notice and continuation requirements of Section 4980B of the Code and Section 601 of ERISA. 3.1.26.11 The Corporation is not a party to any Contract that would result, separately or in the aggregate, in any payment (whether or not in connection with any termination of employment or otherwise) of any "excess parachute payment" within the meaning of Section 280G of the Code. -323.1.27 LABOR RELATIONS. Except as set out in Schedule 3.1.27, there have been no violations of any Laws with respect to the employment of individuals by, or the employment practices or work conditions of, the Corporation, or the terms and conditions of employment, wages and hours. The Corporation is not engaged in any unfair labor practice or other unlawful employment practice and there are no charges of unfair labor practices or other employee-related complaints pending or threatened against the Corporation before the National Labor Relations Board, the Equal Employment Opportunity Commission, the Occupational Safety and Health Review Commission, the Department of Labor or any other Governmental Authority. There is no strike, picketing, slowdown or work stoppage or organizational attempt pending, threatened against or involving the Corporation or the Business. No issue with respect to union representation is pending or threatened with respect to the employees of the Corporation. No union or collective bargaining unit or other labor organization has ever been certified or recognized by the Corporation as the representative of any of the employees of the Corporation. The Corporation has complied with the Workers Adjustment and Retraining Notification Act. No employee of the Corporation benefits from a special protection status in respect of his termination by his employer. No employee of the Corporation is currently performing his severance period of notice and no employment agreement is currently suspended or temporarily discontinued due to illness, pregnancy, career interruption or any other legal cause of suspension. 3.1.28 INSURANCE. All physical assets of the Corporation are covered by fire and other insurance with responsible insurers against those risks and in those amounts as are reasonable for prudent owners of comparable assets. Schedule 3.1.28 sets out particulars of all the insurance policies held by the Corporation, including the

name of the insurer, the risks insured against and the amount of coverage. No other insurance is necessary to the conduct of the Business or would be considered to be desirable by a prudent Person operating a business similar to the Business. The Corporation is not in default with respect to any of the provisions contained in any those policies of insurance and has not failed to give any notice or pay any premium or present any claim under any of those insurance policies. Neither the Corporation nor any Principal Stockholder has any reason to believe that any of the insurance policies listed in Schedule 3.1.28 will not be renewed by the insurer upon the scheduled expiry of the policy or will be renewed by the insurer only on the basis that there will be a material increase in the premiums payable in respect of the policy. Correct and complete copies of all of the insurance policies set out in Schedule 3.1.28 have been provided to the Merger Subsidiary. The Corporation has not had any casualty loss or other occurrence which may give rise to any claim of any kind not covered by insurance and neither the Corporation nor any of the Principal Stockholders is aware of any occurrence which may give rise to any claim of any kind not covered by insurance. No third-party has filed any claim against the Corporation for personal injury, property damage or other occurrence of a kind for which liability insurance is generally available which is not fully insured. All claims against the Corporation covered by insurance have been reported to the insurance carrier on a timely basis and are listed on Schedule 3.1.28. 3.1.29 INTELLECTUAL PROPERTY. 3.1.29.1 Schedule 3.1.29 contains a complete and accurate listing of (1) all of the registrations and applications for registration of the Proprietary Intellectual Property, the name of the registered owner and the beneficial owner of that Proprietary Intellectual Property, the names of all persons who have been granted rights in respect of that Proprietary Intellectual Property and the outside legal counsel assisting with those applications and (2) versions of the Key Software Programs currently being used in production by the Corporation, a listing of all Licensed Software incorporated in each Key Software Program and a listing of all Proprietary Software (including any -33modifications to, enhancements to and derivative works based upon any Licensed Software) incorporated in each Key Software Program. Except as specified in Schedule 3.1.29, and except with respect to patent applications and registrations, all of the registrations and applications for registration of the Proprietary Intellectual Property are valid and subsisting, in good standing and are recorded in the name of the Corporation. Except as specified in Schedule 3.1.29, all of the registrations and applications for registration of patents which are part of the Proprietary Intellectual Property are recorded in the name of the Corporation and, to the Corporation's and each Principal Stockholder's Knowledge, are valid, subsisting and in good standing. No application for registration of any Proprietary Intellectual Property has been finally rejected and no rights to pursue any such application have been prejudiced for the Corporation's failure to prosecute that application. 3.1.29.2 Except as specified in Schedule 3.1.29, no person other than the Corporation has any right or interest of any kind or nature in or to the Proprietary Intellectual Property, including any right to sell, license, lease, transfer, distribute, use or otherwise exploit the Proprietary Intellectual Property or any portion of it. The Corporation has good, marketable and exclusive title to, and the valid and enforceable power and unqualified right to sell, license, transfer, distribute, use and otherwise exploit, the Proprietary Intellectual Property. Except as disclosed in Schedule 3.1.29, the Corporation is not subject to any obligation or arrangement pursuant to which a third person has or will have any right, title or interest in or to any Intellectual Property which is currently being developed or may in the future be developed by or for the Corporation. 3.1.29.3 No person has any right or interest of any kind or nature in or to the Key Software Programs, Proprietary Software or any Software which is currently being developed or may in the future be developed by or on behalf of the Corporation, including any right to sell, license, lease, transfer, distribute, use or otherwise exploit the Proprietary Software or any portion thereof other than (1) the Corporation, (2) any customer of the Corporation or (3) any licensor identified by name on Schedule 3.1.29 and explicitly cross referenced to this section 3.1.29.3, which licensor has no right to grant any rights to or in the Key Software Programs to any other person. No person other than the Corporation has the right to make modifications to, enhancements to or derivative works based upon the Key Software Programs or upon any Proprietary Software. The Corporation has not directly or indirectly granted to any person any rights or interests in the source code of the Key Software Programs or any Proprietary Software.

3.1.29.4 With respect to current versions and the version immediately prior to the current version of the Key Software Programs and any Proprietary Software listed on Schedule 3.1.29.4 (1) the Corporation maintains machine-readable, master-reproducible copies, complete human-readable source code listings, technical documentation and user manuals; (2) in each case, the machine-readable copy substantially conforms to the corresponding source code listing; (3) in each case, based on the source code and other organized technical documentation, it can be maintained, enhanced and modified by reasonably competent programmers familiar with the applicable language, hardware and operating systems; (4) in each case, the complete source code listings are maintained in an electronic repository enabling skilled personnel to completely compile, build and assemble the final machine-executable version at will without undue manual processes; (5) in each case, it has been developed by the Corporation in accordance with practices that are standard for the software industry and operates in accordance with the user -34manual therefor without material operating defects; and (6) there are employees of the Corporation that have familiarity with that Software. 3.1.29.5 Except as specified in Schedule 3.1.29, neither the Corporation nor any of the Principal Stockholders have received any written notice challenging the validity or ownership of the Proprietary Intellectual Property, the Key Software Programs or any Proprietary Software or the use of any Intellectual Property or any of the Software, and to the Corporation's and the Principal Stockholders' Knowledge there are no facts upon which such a challenge could be made. 3.1.29.6 Any person who contributed to the conception, reduction to practice, invention, creation or development of the Proprietary Intellectual Property of the Corporation or the creation or development of the Proprietary Software embodied in the Key Software Programs or of any other Proprietary Software has irrevocably assigned, or is obligated to irrevocably assign, to the Corporation or granted sufficient rights to conduct the Business as currently conducted in writing all intellectual property rights in that person's contribution to that Proprietary Intellectual Property or that Proprietary Software. Each person based in Canada that contributed to the conception, reduction to practice, invention, creation or development of the Proprietary Intellectual Property of the Corporation or the creation or development of the Proprietary Software of the Corporation embodied in the Key Software Programs or of any other Proprietary Software has waived his or her moral rights in any copyright works within that Proprietary Intellectual Property or Proprietary Software in favor of the Corporation and its successors and assigns. 3.1.29.7 The Corporation has taken or caused to be taken steps so that none of the Proprietary Intellectual Property, the value of which to the Corporation is contingent upon maintenance of the confidentiality thereof, has been disclosed by the Corporation to any person other than employees, contractors, customers, representatives and agents of the Corporation who are parties to customary confidentiality and nondisclosure agreements with the Corporation and which agreements survive the termination of the specific relationship with the applicable party. 3.1.29.8 Schedule 3.1.29 contains a complete and accurate listing of all material Licensed Software and the name of the applicable licensor. Each license or permission referred to in Schedule 3.1.29 is in full force and effect, the Corporation has not violated, breached or defaulted in, and is not currently violating, breaching or in default of its obligations, under the license and, to the Knowledge of the Corporation and the Principal Stockholders, no other party to the license has violated, breached or defaulted in, or is currently violating, breaching or in default of its obligations, under that license. For purposes of this section 3.1.29.8, "material Licensed Software" refers to all Licensed Software except for Licensed Software that (i) could be immediately replaced with comparable (from a functionality and royalties perspective) alternative and/or recreated without infringing upon the Intellectual Property of a third party, and (ii) with respect to the substitution in (i), could be incorporated into the affected product(s) in less than 15 person-days of development and testing. 3.1.29.9 Schedule 3.1.29 lists all source code for Licensed Software which is utilized in the current versions and/or the version immediately prior to the current version of the Key Software Programs and any Proprietary Software listed on Schedule 3.1.29.9 which the Corporation has the right to modify, enhance, prepare and has prepared derivative -35-

-35works based upon (the "LICENSED SOURCE CODE"). Except as set out in Schedule 3.1.29, all of the Licensed Source Code is in the possession of the Corporation. All intellectual and/or industrial property rights in or to modifications, enhancements and derivative works made by or for the Corporation and all associated functional or technical specifications and technical documentation (the "MODIFICATIONS") are owned solely and exclusively by the Corporation. Except as specified in Schedule 3.1.29, subject to any rights a customer has in respect of the Modifications by virtue of the inclusion of them in the Key Software Programs, no person other than the Corporation has any right or interest of any kind or nature in or to any Modifications. Subject to any written agreements with any customer, the Corporation has not entered into any Contract pursuant to which any right, title or interest of the Corporation in any Modification is assigned, licensed or otherwise granted to any other Person. 3.1.29.10 The Corporation has not furnished or otherwise disclosed the source code, any functional or technical specifications, or any technical documentation other than user documentation, for any Modifications to any person other than employees, contractors, representatives and agents of the Corporation who are parties to customary confidentiality and nondisclosure agreements with the Corporation (which agreements survive the termination of the specific relationship with the applicable party) and is under no duty or obligation to do so. 3.1.29.11 Except as set out in Schedule 3.1.29, there are no source code escrow agreements relating to any of the Software. 3.1.29.12 Except as set out in Schedule 3.1.29, to the Corporation's and each of the Principal Stockholder's Knowledge, no person has violated, infringed upon or breached, or is currently violating, infringing upon or breaching, any of the rights of the Corporation to the Proprietary Intellectual Property, to the Key Software Programs or to any Proprietary Software, or has asserted the right to take any action which might reasonably be considered such a violation, infringement or breach or has breached or is breaching any duty or obligation owed to the Corporation in respect of the Proprietary Intellectual Property, the Key Software Programs or any Proprietary Software. 3.1.29.13 All material amounts, including royalties, due and payable by the Corporation with respect to any Intellectual Property or any Software have been paid in full or accrued in the Audited Financial Statements. 3.1.29.14 Except as set out in Schedule 3.1.29.14, neither the use of the Intellectual Property or the Software nor the conduct of the Corporation's Business has violated, infringed or breached or currently violates, infringes upon or breaches or has been alleged by any Person in writing or verbally to a senior officer of the Corporation, to violate, infringe or breach (1) the industrial or intellectual property rights of any person (and in the case of patents, to the Corporation's and each of the Principal Stockholder's Knowledge), (2) any duty or obligation owed to any person or (3) the terms of any license granted to the Corporation by any other person. The Intellectual Property and the Software are sufficient to carry on the Business as currently conducted and as proposed to be conducted, without requiring any such infringement. The Corporation has not incorporated or used the Intellectual Property of any former employer (a "FORMER EMPLOYER") of any employee, consultant, former employee or former consultant of the Corporation in the Corporation's Intellectual Property or in the operation of the Business. Neither any Principal Stockholder nor the Corporation is aware of any claim or any basis -36for a claim by a Former Employer that the Corporation has incorporated into its Intellectual Property any Intellectual Property owned by, claimed to be owned by or previously disclosed to that Former Employer. 3.1.29.15 The Corporation has not (1) breached any duty or obligation of confidentiality or of non-disclosure or non-use of any confidential information owed to, or (2) misappropriated any confidential information of, any person, including any person who has licensed Licensed Intellectual Property or Licensed Software to the Corporation. 3.1.29.16 Except as set out in Schedule 3.1.29, no Contract which relates to any Intellectual Property or any Software requires consents or other actions as a result of the consummation of the Transaction or any subsequent

disposition of all or a portion of the Specified Assets and/or the Surviving Corporation's assets to Corel and/or one or more direct or indirect subsidiary of Corel in order for the Corporation to continue to be entitled to use, operate, sell and license that Intellectual Property or Software after the Closing Date without material alterations in the Corporation's obligations. 3.1.29.17 Except as set out in Schedule 3.1.29, there is no governmental prohibition or restriction on the use of the Intellectual Property or the Software. 3.1.29.18 Schedule 3.1.29 lists Proceedings (whether in progress or threatened) relating to the Intellectual Property and the Software. 3.1.29.19 Except as set out in the Contract for the Album Software Program listed in Schedule 3.1.29, the Corporation has been granted all Intellectual Property rights in and to the Album Software Program under one or more binding Contracts which are in full force and effect and which provide for those rights to be exclusive to the Corporation, irrevocable, perpetual and fully transferable by the Corporation. No third party has been granted Intellectual Property rights in or to the Album Software Program and the licensor of the Intellectual Property rights party to the Contract for the Album Software Program is not using those Intellectual Property rights in any manner which is competitive with the Business. 3.1.29.20 Except as set out in Schedule 3.1.29 and explicitly cross-referenced to this section 3.1.29.20, the Corporation has never (1) incorporated Public Software into or combined Public Software with the Proprietary Software or the Key Software Programs or a derivative work of that Software, (2) distributed Public Software in conjunction with the Key Software Programs or (3) used Public Software in the development of a derivative work of the Proprietary Software or the Key Software Programs. No Key Software Programs or any other Proprietary Software is required to be (a) disclosed or distributed in source code form; (b) licensed for the purpose of making derivative works; and/or (c) redistributable at no charge, as a result of the Corporation's use, modification and/or distribution of Public Software. 3.1.30 PERMITS, REGISTRATIONS AND ELECTIONS. The Corporation holds all permits, licenses, approvals, consents, authorizations, registrations, certificates and franchises, including all Environmental Permits, which it requires, or is required to have, to own its properties and assets and to carry on the Business as presently conducted by it (collectively, the "PERMITS"). All the Permits not otherwise listed in Schedule 3.1.23 are listed in Schedule 3.1.30 (including any applicable expiry dates) and are in full force and effect; the Corporation is in compliance with all the terms and conditions relating to the Permits; and there are no Proceedings in progress, pending -37or threatened which may result in revocation, cancellation, suspension, rescission or any adverse modification of any of the Permits nor are there any facts upon which those Proceedings could reasonably be based. Neither the terms and conditions relating to the Permits nor the Laws pursuant to which they were issued require that any consent or approval of, or filing with or notice to, any governmental agency or regulatory body or other Person be made to assure the continued holding by the Corporation (or any transferee contemplated by the Transaction) of the Permits after consummation of the Transaction (provided that such Permits were not transferred in the Asset Sale). 3.1.31 COMPLIANCE WITH LAWS. The Corporation is not in default under, nor has it failed to comply with or is otherwise in violation of, any Law or any order, judgment or decree of any court or other Governmental Authority of each jurisdiction in which the Business is carried on. There is no basis for assertion of any violation of the foregoing or for any claim for compensation or damages or otherwise arising out of any violation of the foregoing. None of the Corporation nor any of the Principal Stockholders has received any notification of any asserted present or past failure to comply with any of the foregoing which has not been satisfactorily responded to in the time period required under that notice. The Corporation has gathered (for greater certainty, not including information gathered on behalf of the Corporation by any Third Party) all information with respect to its customers (both past, current and prospective) in accordance with all applicable Laws, including those related to privacy and personal information. To the actual knowledge of the Corporation (which, for the purposes of this section 3.1.31, includes the actual knowledge of those individuals who are actively involved in the day-to-day

management of the Corporation's relationships with master representatives) and each of the Principal Stockholders, all information with respect to its customers (past, current and prospective) gathered by Third Parties has been gathered in accordance with all applicable Laws, including those related to privacy and personal information. Each Third Party that gathers information with respect to customers (past, current and prospective) of the Corporation is party to a Contract with the Corporation pursuant to which that Third Party is bound to comply with all applicable Laws. 3.1.32 LITIGATION AND OTHER PROCEEDINGS AND WARRANTY CLAIMS. Except as set out in Schedule 3.1.32, there is no Proceeding against or involving the Corporation or any Employee Plan (whether in progress or threatened); no event has occurred and, to the Corporation's and each of the Principal Stockholder's Knowledge, no facts or circumstances exist, which might give rise to any Proceeding; and there is no judgment, decree, injunction, rule, award or order of any court, government department, board, commission, agency, arbitrator or similar body outstanding against the Corporation. There are no warranty, damage or similar claims made or pending against the Corporation for or arising from defects in any products, in each case provided by the Corporation, for which the Corporation is or is alleged to be liable nor, to the Corporation's and each of the Principal Stockholder's knowledge, are there any facts upon which that type of claim could reasonably be made. 3.1.33 CORPORATE RECORDS. The corporate records and minute books of the Corporation contain complete and accurate minutes of all meetings of directors, committees of directors and shareholders held since its date of incorporation, and all of those meetings were duly called and held. The stock certificate books, registers of stockholders, registers of transfers and registers of directors of the Corporation are complete and accurate. 3.1.34 BOOKS OF ACCOUNT AND INTERNAL CONTROLS. 3.1.34.1 The books and records of the Corporation fairly present and disclose the financial position of the Corporation as at the relevant dates, have been maintained in -38accordance with GAAP and in accordance with good business practices and all material financial transactions of the Corporation have been accurately recorded in those books and records. 3.1.34.2 The Corporation maintains proper and adequate internal accounting controls which provide assurance that (1) transactions of the Corporation are executed with management's authorization; (2) transactions are recorded as necessary to permit preparation of the Corporation's financial statements; and (3) accounts, notes and other receivables and inventory are recorded accurately, and proper and adequate procedures are implemented to effect the collection of them on a current and timely basis. 3.1.35 BANK ACCOUNTS, ETC. Schedule 3.1.35 is a correct and complete list (including addresses and account numbers) of each bank, trust company or similar institution in which the Corporation has an account or safety deposit box and the names of all Persons, including any individual or firm holding a power of attorney, authorized to draw on those accounts or to have access to those accounts and safety deposit boxes. 3.1.36 CUSTOMERS AND SUPPLIERS. Since the Audited Statements Date, there has been no termination or cancellation of, and no modification or change in, the business relationship with any distributor, group of distributors, customer or group of customers which singly or in total provided more than 10% of the gross revenues of the Corporation for the fiscal year ended on the Audited Statements Date. Except as set out in Schedule 3.1.36, neither the Corporation nor the Principal Stockholders have any reason to believe that the benefits of any relationship with any of the customers or suppliers of the Corporation will not continue after the Closing Date in substantially the same manner as prior to the date of this Agreement, assuming the consummation of the Transaction. 3.1.37 CONDUCT OF BUSINESS. The Corporation is not restricted from conducting the Business in any manner or location by Contract or court decree. Except as set out in Schedule 3.1.37, the Business is conducted entirely through the Corporation (and not through any subsidiary, Affiliate, partner or any other Person), and the Corporation does not and never has conducted any other business other than the Business.

3.1.38 DISCLOSURE. 3.1.38.1 The Principal Stockholders, the Corporation and the Corporation's management have disclosed to the Merger Subsidiary and Corel all facts known to them relating to the Business and assets of the Corporation which could reasonably be expected to be material to an intending purchaser of the Jasc Shares. 3.1.38.2 No representation or warranty made under this Agreement (including the Schedules) or any certificate or other document delivered by the Corporation or any of the Jasc Stockholders or any representative of them pursuant to this Agreement, and none of the information furnished by the Corporation or any of the Principal Stockholders to the Merger Subsidiary and/or Corel, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements in this Agreement or therein not misleading. -393.2 BY PRINCIPAL STOCKHOLDERS Each of the Principal Stockholders represents and warrants to the Merger Subsidiary and Corel, severally and not jointly, as follows and acknowledges that the Merger Subsidiary and Corel are relying upon the following representations and warranties in connection with the Transaction: 3.2.1 COREL COMMON SHARES. With respect to the Corel Common Shares, each Principal Stockholder: 3.2.1.1 understands that those shares have not been and will not be registered under the Securities Act, and that the issuance of those shares is being made in reliance on a private placement exemption; 3.2.1.2 is acquiring those shares for its own account; 3.2.1.3 acknowledges those shares are not freely transferable; 3.2.1.4 has had the opportunity to ask all questions and to obtain all other information from the Merger Subsidiary and Corel as it has deemed necessary in connection with its decision to acquire those shares; and 3.2.1.5 acknowledges that it is not acquiring those shares as a result of any "general solicitation" or "general advertising," as those terms are used in Regulation D under the Securities Act. 3.2.2 NO FOREIGN PERSON. Each Principal Stockholder that is acquiring shares forming part of the Total Equity Consideration is not a foreign person within the meaning of Section 1445(f)(3) of the Code. 3.2.3 INCORPORATION AND STATUS OF THE PRINCIPAL STOCKHOLDER. If an Entity, the Principal Stockholder is duly formed and validly existing under the laws of its jurisdiction of formation. 3.2.4 POWER OF THE PRINCIPAL STOCKHOLDER AND DUE AUTHORIZATION. If an Entity, the Principal Stockholder has all necessary power and capacity to enter into, and to perform its obligations under, this Agreement. Each of this Agreement and each of the Related Agreements to which the Principal Stockholder is a party has been duly authorized by the Principal Stockholder. This Agreement has been duly executed and delivered by the Principal Stockholder and is a valid and binding obligation of the Principal Stockholder, enforceable in accordance with its terms, subject to the usual exceptions as to bankruptcy and the availability of equitable remedies. At the Time of Closing, each of the Related Agreements to which the Principal Stockholder is a party will be duly executed and delivered by the Principal Stockholder and will be valid and binding obligations of the Principal Stockholder, enforceable in accordance with their respective terms, subject to the usual exceptions as to bankruptcy and the availability of equitable remedies, provided that (i) no representation as to enforceability is made with respect to the agreements described in section 4.1.6. and (ii) the enforceability of the indemnification provisions contained in Schedule B to the Corel Minority Shareholders' Agreement may be limited by applicable federal or state securities laws. 3.2.5 TITLE TO, AND RIGHT TO SELL, PURCHASED SHARES. Each Principal Stockholder is the sole registered and beneficial owner of those Jasc Shares set out opposite the Principal Stockholder's name on Schedule 3.1.3 with good and marketable title to those Jasc Shares, free of all Charges.

-40There are no subscriptions, warrants, options, calls, or other rights or Contracts to which the Corporation or any Principal Stockholder is subject to or bound which in any way limit or restrict the consummation of the Transaction (specifically in respect of that Principal Stockholder's Jasc Shares) and there are no shareholders agreements, pooling agreements, voting trusts or other Contracts with respect to the voting of the Jasc Shares other than as set out in Schedule 3.1.3. At or prior to the Time of Closing, those agreements and restrictions will have been complied with or terminated (and evidence in form and substance satisfactory to the Merger Subsidiary to that effect will have been provided to the Merger Subsidiary). 3.2.6 NO CONTRAVENTION BY PRINCIPAL STOCKHOLDERS. None of the entering into of this Agreement or any Related Agreement, the consummation of the Transaction or the performance by each Principal Stockholder of that Principal Stockholder's other obligations under this Agreement or any Related Agreement to which it is a party (a) will contravene, breach or result in any default under (1) if the Principal Stockholder is an Entity, the certificate of incorporation, by-laws, constating documents or other organizational documents of that Principal Stockholder, or (2) any license, permit, order, judgment, decree or Law to which the Principal Stockholder is a party or by which it may be bound or (b) contravenes, breaches or results in any default under, or conflicts with or will conflict with or results in or will result in any modification of any of the terms of or results in or will result in the termination of or the creation of any Charge, acceleration right or other right pursuant to the terms of, any Contract to which the Principal Stockholder is a party or by which it may be bound or will in any way affect the continuation, validity or effectiveness of any such Contract. 3.2.7 ACCREDITED INVESTOR. Each of the Principal Stockholders is an Accredited Investor. 3.2.8 APPOINTMENT OF STOCKHOLDER REPRESENTATIVE. Each Principal Stockholder designates and appoints Robert V. Voit as the Stockholder Representative under this Agreement and authorizes the Stockholder Representative to take such actions on behalf of such Principal Stockholder under this Agreement, including, but not limited to, accepting notices, reviewing information provided to the Stockholder Representative and executing the certificate required in section 4.1.1 on behalf of each Jasc Stockholder, together with all such powers as are reasonably incidental thereto. The Stockholder Representative may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken, or omitted to be taken, by it in good faith in accordance with the advice of such counsel, accountants or experts. The Stockholder Representative shall not be liable for actions he takes or fails to take in the absence of his own gross negligence or willful misconduct. 3.3 BY MERGER SUBSIDIARY AND COREL HOLDINGS Each of the Merger Subsidiary and Corel Holdings, severally and not jointly, represents and warrants to the Corporation and the Jasc Stockholders as follows and acknowledges that the Corporation and the Jasc Stockholders are relying upon the following representations and warranties in connection with the Transaction: 3.3.1 INCORPORATION AND STATUS. Each of the Merger Subsidiary and Corel Holdings is duly incorporated and validly existing under the laws of its jurisdiction of incorporation. 3.3.2 CORPORATE POWER AND DUE AUTHORIZATION. Each of the Merger Subsidiary and Corel Holdings has the corporate power and capacity to enter into, and to perform its obligations under, this Agreement and the Related Agreements to which is party. Each of this Agreement and each of the Related Agreements to which it is a party has been duly authorized by each of the Merger -41Subsidiary and Corel Holdings. This Agreement has been duly executed and delivered by each of the Merger Subsidiary and Corel Holdings and is a valid and binding obligation of each of the Merger Subsidiary and Corel Holdings, enforceable in accordance with its terms, subject to the usual exceptions as to bankruptcy and the availability of equitable remedies. At the Time of Closing each of the Related Agreements to which it is a party will be duly executed and delivered by each of the Merger Subsidiary and Corel Holdings and will be valid and binding obligations of the Merger Subsidiary and Corel Holdings, enforceable in accordance with their respective

terms, subject to the usual exceptions as to bankruptcy and the availability of equitable remedies. 3.3.3 NO CONTRAVENTION. None of the entering into of this Agreement, any Related Agreement to which it is a party, the consummation of the Transaction nor the performance by each of the Merger Subsidiary and Corel Holdings of its other obligations under this Agreement and the Related Agreements to which it is a party (a) will contravene, breach or result in any default under (1) the articles of incorporation, by-laws, constating documents or other organizational documents of the Merger Subsidiary or Corel Holdings, as applicable, or (2) any Contract, license, permit, order, judgment, decree or Law to which the Merger Subsidiary is a party or by which the Merger Subsidiary or Corel Holdings, as applicable, may be bound, or (b) contravenes, breaches or results in any default under, or conflicts with or will conflict with, or results in or will result in any modification of any of the terms of, or results in or will result in the termination of or the creation of any Charge, acceleration right or other right pursuant to the terms of, any Contract to which the Merger Subsidiary or Corel Holdings, as applicable, is a party or by which it may be bound or will in any way affect the continuation, validity or effectiveness of any such Contact. 3.3.4 APPROVALS AND CONSENTS. Except as set out on Schedule 3.3.4, no authorization, consent or approval of, or filing with or notice to, any Governmental Authority or other Person is required in connection with the execution, delivery or performance of this Agreement by the Merger Subsidiary and Corel Holdings or the consummation of the Transaction. 3.4 BY COREL Corel represents and warrants to the Corporation and the Jasc Stockholders as follows and acknowledges that the Corporation and the Jasc Stockholders are relying upon the following representations and warranties in connection with the Transaction: 3.4.1 INCORPORATION AND STATUS OF COREL. Corel is duly incorporated and validly existing under the laws of the Province of Ontario. 3.4.2 CORPORATE POWER OF COREL AND DUE AUTHORIZATION. Corel has the corporate power and capacity to enter into, and to perform its obligations under, this Agreement. Each of this Agreement and each of the Related Agreements to which it is a party has been duly authorized by Corel. This Agreement has been duly executed and delivered by Corel and is a valid and binding obligation of Corel, enforceable in accordance with its terms, subject to the usual exceptions as to bankruptcy and the availability of equitable remedies. At the Time of Closing, each of the Related Agreements to which it is a party will be duly executed and delivered by Corel and will be valid and binding obligations of Corel, enforceable in accordance with their respective terms, subject to the usual exceptions as to bankruptcy and the availability of equitable remedies provided that no representation as to enforceability is made with respect to the agreements described in section 4.1.6. -423.4.3 CAPITAL OF COREL. Schedule 3.4.3 sets out particulars of the authorized and issued securities of Corel (including shares, options, warrants, other rights to acquire securities and debt instruments). 3.4.4 NO OBLIGATIONS TO ISSUE SECURITIES. Except as set out in Schedule 3.4.4, there are no agreements, options, warrants, rights of conversion or other rights or Contracts pursuant to which Corel is, or may become, obligated to issue any shares or any securities convertible or exchangeable, directly or indirectly, into any shares of Corel, other than pursuant to the terms of Corel's existing Series A Participating Convertible Preferred Shares, Class A Common Shares and Corel's Share Option and Phantom Share Unit Plan dated December 1, 2003. The issuance of the Corel Common Shares under this Agreement does not give rise to any preemptive rights or an adjustment of the conversion price of any outstanding securities of Corel. 3.4.5 NO CONTRAVENTION OF COREL. None of the entering into of this Agreement, any Related Agreement to which it is a party, the consummation of the Transaction nor the performance by Corel of its obligations under this Agreement (including the issuance by Corel of the Total Equity Consideration) and the Related Agreements to which it is a party (a) will contravene, breach or result in any default under (1) the restated articles of incorporation, by-laws, constating documents or other organizational documents of Corel, or (2) any Contract, license, permit, order, judgment, decree or Law to which the Corel is a party or by which

Corel may be bound, or (b) contravenes, breaches or results in any default under, or conflicts with or will conflict with, or results in or will result in any modification of any of the terms of, or results in or will result in the termination of or the creation of any Charge, acceleration right or other right pursuant to the terms of, any Contract to which Corel is party or by which it may be bound or will in any way affect the continuation, validity or effectiveness of any such Contract, except to the extent that the contravention, breach or default would not result in a material adverse effect to Corel. 3.4.6 APPROVALS AND CONSENTS. Except as set out on Schedule 3.4.6, no authorization, consent or approval of, or filing with or notice to, any Governmental Authority or other Person is required in connection with the execution, delivery or performance of this Agreement by Corel. 3.4.7 EQUITY CONSIDERATION. All the Corel Common Shares comprising the Total Equity Consideration, when issued and delivered in accordance with this Agreement, will be duly and validly issued and will be outstanding as fully paid and non-assessable shares. 3.4.8 COREL FINANCIAL STATEMENTS. The Corel Audited Financial Statements and the Corel Unaudited Financial Statements (copies of which have been provided by Corel to the Corporation and the Jasc Stockholders) have been prepared in accordance with Canadian GAAP (subject to usual year-end adjustments in the case of the Corel Unaudited Financial Statements) consistently applied throughout the periods indicated and fairly, completely and accurately present the consolidated financial position of Corel and the results of its consolidated operations as of the dates and throughout the periods indicated and there has been no material adverse change in the consolidated financial position of Corel from that reflected in the Corel Audited Financial Statements. 3.4.9 SUFFICIENCY OF CAPITAL, ACCESS TO CAPITAL. As of the Closing Date, Corel will have sufficient capital or credit arrangements in place to pay the Asset Sale Cash Consideration and the Total Adjusted Merger Cash Consideration on the Closing. -433.5 NO FINDER'S FEES Each of the Principal Stockholders and the Corporation represents and warrants to the Merger Subsidiary that neither the Corporation nor any Principal Stockholder has taken, and each agree that it will not take, any action that would cause the Corporation, the Merger Subsidiary or the Surviving Corporation to become liable to any claim or demand for a brokerage commission, finder's fee or other similar payment, except for commissions and fees due to Goldsmith Agio Helms, which will be paid by the Jasc Stockholders pursuant to section 5.11.6. 3.6 SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES To the extent that they have not been fully performed at or prior to the Time of Closing, the covenants, representations and warranties contained in this Agreement and in all certificates and documents delivered pursuant to or contemplated by this Agreement will survive the Closing and will continue as set out below: 3.6.1 all representations and warranties, except those set out in sections 3.1.1.1, 3.1.1.3, 3.1.2, 3.1.3, 3.1.5, 3.1.6(a), 3.1.24, 3.2.3, 3.2.4 and 3.2.5, and sections 1.3, 1.4 and 1.5 of the Jasc Stockholder Signature Page will terminate at the expiration of 18 months following the Closing; 3.6.2 the representations and warranties set out in sections 3.1.1.1, 3.1.1.3, 3.1.2, 3.1.3, 3.1.5, 3.1.6(a), 3.2.3, 3.2.4 and 3.2.5, and sections 1.3, 1.4 and 1.5 of the Jasc Stockholder Signature Page will survive the Closing indefinitely; 3.6.3 the representations and warranties set out in section 3.1.24 will, subject to section 3.6.4, terminate at the expiration of the Tax Reassessment Period; 3.6.4 there will be no termination of the representations and warranties set out in section 3.1.24 to the extent that any misrepresentation has been made or fraud has been committed in filing a return or in supplying information for the purposes of any legislation imposing Taxes on the Corporation; and

3.6.5 no claim for breach of representation or warranty will be valid unless the party against whom that claim is made has been given notice of the claim before the date on which the applicable representation or warranty will have terminated in accordance with the foregoing. ARTICLE 4 CONDITIONS 4.1 CONDITIONS FOR THE BENEFIT OF COREL AND THE MERGER SUBSIDIARY The obligations of the Merger Subsidiary and Corel to consummate and effect the Transaction and the transactions contemplated by this Agreement are subject to the satisfaction of, or compliance with, at (except with respect to section 4.1.8.9 which must be satisfied prior to the Effective Time) or prior to the Effective Time, each of the following conditions (each of which is acknowledged to be for the exclusive benefit of the Merger Subsidiary and Corel): 4.1.1 ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH COVENANTS. The representations and warranties of the Jasc Stockholders and of the Corporation made in or pursuant to this Agreement will be true and correct in all material respects (except for any representations and -44warranties which are qualified by materiality in Article 3, which representations and warranties will be strictly true and correct) at the Time of Closing with the same force and effect as if made at and as of the Time of Closing; the covenants contained in this Agreement to be performed by the Jasc Stockholders or the Corporation at or prior to the Time of Closing will have been performed in all material respects; neither the Jasc Stockholders nor the Corporation will be in breach of any agreement on its part contained in this Agreement; and the Merger Subsidiary and Corel will have received a certificate confirming the foregoing, signed for and on behalf of each Jasc Stockholder and the Corporation (and, in the case of the Corporation or of a Jasc Stockholder which is an Entity, by senior officers or directors or other persons acceptable to the Merger Subsidiary), in the form attached as Schedule 4.1.1. 4.1.2 OPINION OF FAEGRE & BENSON LLP. The Merger Subsidiary and Corel will have received an opinion of Faegre & Benson LLP in the form and substance as attached as Schedule 4.1.2.1. In addition, the Merger Subsidiary and Corel will have received an opinion of Thomsen & Nybeck, P.A. addressing the matters set out in Schedule 4.1.2.2 in respect of the Robert V. Voit GRAT. 4.1.3 FORCE MAJEURE. No fire, war, strike, riot, labor dispute, technical failure, or an act of God will have occurred (1) that restrains or prohibits the Corporation for a period of at least five (5) Business Days from carrying on in any material respect the Business as the Business is being carried on at the date of this Agreement; or (2) has or would reasonably be expected to have a material adverse effect on the Business, assets, financial condition, results of operations or prospects of the Corporation and/or the Business or which would materially and adversely affect the consummation of the Transaction. 4.1.4 NO ADVERSE LEGISLATION. No Laws will have been enacted that restrain or prohibit the Corporation from carrying on the Business as the Business is being carried on at the date of this Agreement. 4.1.5 NO ACTION TO RESTRAIN. No Proceeding will be pending by any Person (other than Corel or Merger Subsidiary or an Affiliate of Corel or a person acting on the behalf of or at the request of any Affiliate of Corel) to restrain or prohibit: 4.1.5.1 the consummation of the Transaction as contemplated by this Agreement; or 4.1.5.2 the Corporation from carrying on the Business as the Business is being carried on at the date of this Agreement. 4.1.6 [RESERVED]. 4.1.7 CONSENTS AND APPROVALS. The following consents, authorizations and approvals will have been

delivered to the Merger Subsidiary. In the case of Required Consents, the form and substance of the consents, authorizations and approvals will be substantially similar to the form of consent attached as Exhibit B: 4.1.7.1 [Reserved]; 4.1.7.2 approval of the Transaction by the affirmative vote of the holders of the requisite majority of the outstanding Jasc Shares in accordance with Minnesota Law; and 4.1.7.3 all Closing Required Consents. -454.1.8 DELIVERY OF OTHER AGREEMENTS AND DOCUMENTS. The following agreements and documents, duly executed by the Corporation, each of the Principal Stockholders and each of the other Jasc Stockholders, as applicable, will have been delivered to the Merger Subsidiary, with respect to subsections 4.1.8.1 and 4.1.8.9 in the forms attached to this Agreement and with respect to subsection 4.1.8.2, substantially in the form attached to this Agreement with such changes as may be reasonably agreed to by the Stockholder Representative and the Merger Subsidiary: 4.1.8.1 the Corel Minority Shareholders Agreement; 4.1.8.2 the Escrow Agreement; 4.1.8.3 [Reserved] 4.1.8.4 [Reserved]; 4.1.8.5 each of the Jasc Stockholders (including any holder of Convertible Securities that exercises those securities and acquires Jasc Shares as contemplated by section 2.13) will have delivered a Jasc Stockholder Signature Page; 4.1.8.6 [Reserved]; 4.1.8.7 evidence that as contemplated by section 5.11, the Stockholder Expenses have been fully satisfied prior to the Closing Date; or irrevocable directions have been provided to Corel directing Corel to fully satisfy the Stockholder Expenses not satisfied prior to the Closing Date directly out of the Asset Cash Consideration; 4.1.8.8 [Reserved]; and 4.1.8.9 the Transfer Agreement. 4.1.9 Q3 NET REVENUE. The Corporation will have Initial Q3 Net Revenue of at least $7,000,000. 4.1.10 EXERCISE OF DISSENTERS' RIGHTS. Jasc Stockholders holding less than two percent (2%) of the issued and outstanding Jasc Shares will have exercised appraisal or dissenters' rights in accordance with the provisions of Minnesota Law. 4.1.11 CERTAIN TERMINATIONS. The Corporation will accrue for all Severance Payments made to each of Jonathan C. Ort and Craig Letourneau in connection with that Person's termination of employment, as of September 30, 2004. If any of the conditions contained in this section 4.1 are not fulfilled or performed at (except with respect to section 4.1.8.9 which must be satisfied prior to the Effective Time and except as a direct result of actions taken or not taken by Jasc at the specific direction of Corel pursuant to section 5.1) or prior to the Effective Time to the satisfaction of the Merger Subsidiary and Corel (acting reasonably), the Merger Subsidiary and Corel may, by notice to the Stockholder Representative, terminate this Agreement and the obligations of the Corporation, the Principal Stockholders, the Merger Subsidiary and Corel under this Agreement other than the obligations contained in sections 3.5, 8.1 and 8.3. Any condition may be waived in whole or in part by the Merger

Subsidiary and/or Corel without prejudice to any claims it may have for breach of covenant, representation or warranty. -464.2 CONDITIONS FOR THE BENEFIT OF THE CORPORATION The obligation of the Corporation to consummate and effect the Transaction and the transactions contemplated by this Agreement is subject to the satisfaction of, or compliance with, at (except with respect to section 4.2.5.3 which must be satisfied prior to the Effective Time) or prior to the Effective Time, each of the following conditions (each of which is acknowledged to be for the exclusive benefit of the Corporation): 4.2.1 ACCURACY OF REPRESENTATIONS OF MERGER SUBSIDIARY AND COREL AND COMPLIANCE WITH COVENANTS. The representations and warranties of the Merger Subsidiary and Corel made in or pursuant to this Agreement will be true and correct in all material respects at the Time of Closing (except for any representations and warranties which are qualified by materiality in Article 3, which representations and warranties will be strictly true and correct) with the same force and effect as if made at and as of the Time of Closing; the covenants contained in this Agreement to be performed by the Merger Subsidiary and Corel at or prior to the Time of Closing will have been performed in all material respects; neither the Merger Subsidiary nor Corel will be in breach of any agreement on its part contained in this Agreement; and the Corporation and the Stockholder Representative will have received a certificate confirming the foregoing, signed for and on behalf of the Merger Subsidiary and Corel by senior officers or directors of the Merger Subsidiary and Corel or other persons acceptable to the Stockholder Representative, in form and substance satisfactory to the Stockholder Representative and Jasc Counsel. 4.2.2 OPINION OF TORYS LLP. The Corporation and Jasc Stockholders will have received an opinion of Torys LLP in the form and substance as attached as Schedule 4.2.2.1 and an opinion of Stewart McKelvey Stirling Scales LLP in the form and substance as attached as Schedule 4.2.2.2. 4.2.3 NO ACTION TO RESTRAIN. No Proceeding will be pending by any Person to restrain or prohibit the Transaction. 4.2.4 [RESERVED] 4.2.5 DELIVERY OF OTHER AGREEMENTS. The following agreements, duly executed by Corel and/or the Merger Subsidiary, as applicable, will have been delivered to each of the Jasc Stockholders who is a party to the applicable agreement, with respect to subsections 4.2.5.1 and 4.2.5.3 in the forms attached to this Agreement and with respect to subsection 4.2.5.2 substantially in the form attached to this Agreement with such changes as may be reasonably agreed to by the Stockholder Representative and the Merger Subsidiary: 4.2.5.1 the Corel Minority Shareholders Agreement; 4.2.5.2 the Escrow Agreement; and 4.2.5.3 the Transfer Agreement. If any of the conditions contained in this section 4.2 are not fulfilled or performed at (except with respect to section 4.2.5.3 which must be satisfied prior to the Effective Time) or prior to the Effective Time to the satisfaction of the Corporation (acting reasonably), the Corporation may, by notice to the Merger Subsidiary and Corel terminate this Agreement and the obligations of the Corporation, the Jasc Stockholders, the Merger Subsidiary and Corel under this Agreement other than the obligations contained in sections 3.5, 8.1 and 8.3. Any condition may be waived in whole or in part by the -47Corporation without prejudice to any claims it may have for breach of covenant, representation or warranty. ARTICLE 5

ARTICLE 5 ADDITIONAL AGREEMENTS OF THE PARTIES 5.1 ACCESS TO INFORMATION The Corporation will give, and the Principal Stockholders will cause the Corporation to give, until the Time of Closing, to the Merger Subsidiary, Corel and their respective accountants, legal advisers and representatives during normal business hours full access to their premises, all their assets, books, accounts, tax returns, contracts, commitments and records and to their personnel and to furnish them with all such information relating to the Business (collectively, the "JASC FACILITIES AND INFORMATION") and their affairs and assets as the Merger Subsidiary and/or Corel may reasonably request. In addition, the Corporation will give, and the Principal Stockholders will cause the Corporation to give, until the Time of Closing, to the Merger Subsidiary, Corel and their representatives reasonable access to the Jasc Facilities and Information to conduct ongoing integration and transaction planning which includes the initiation of customer surveys of existing Jasc customers; provided, however, that the Merger Subsidiary, Corel and their representatives shall have no right to legally bind the Corporation and, provided further, that the Stockholder Representative shall be provided with information about the integration and transaction planning that is being conducted and shall have the right to cause the delay or termination of such planning activities if he reasonably believes that it is necessary to do so in order to allow the Corporation to carry on the Business as the Business is being carried on at the date of this Agreement. No investigation made by the Merger Subsidiary, Corel or their respective representatives will affect the Merger Subsidiary's and/or Corel's right to rely on any representation or warranty made by the Jasc Stockholders or the Corporation in this Agreement or in any document contemplated by this Agreement or derogate from the Jasc Stockholders' acknowledgement of that reliance in sections 3.1 and 3.2 and the Jasc Stockholder Signature Page, as applicable. 5.2 CONDUCT OF BUSINESS UNTIL TIME OF CLOSING Except as expressly provided in this Agreement or except with the prior written consent of the Merger Subsidiary, prior to the Time of Closing the Corporation will, and the Principal Stockholders will cause the Corporation to: 5.2.1 operate the Business only in the ordinary course, consistent with past practice and, to the extent consistent with that operation, use best efforts to preserve its business organization, including the services of its officers and employees, and its business relationships with customers, suppliers and others having business dealings with it; 5.2.2 maintain all its assets, whether owned or leased, in good condition and repair and, subject to section 5.7, maintain insurance upon all its assets comparable in amount, scope and coverage to that in effect on the date of this Agreement; 5.2.3 satisfy or accrue all salary obligations to employees of the Corporation, as incurred up until and including the Closing Date; 5.2.4 maintain its books, records and accounts in the ordinary course on a basis consistent with past practice (including the recording and/or treatment by the Corporation of accounts receivable and payable); and -485.2.5 do or refrain from doing all acts and things in order to ensure that the representations and warranties in section 3.1 remain true and correct in all material respects at the Time of Closing (except for any representations and warranties which are qualified by materiality in section 3, which representations and warranties are to be strictly true and correct) as if those representations and warranties were made at and as of that date and to satisfy or cause to be satisfied the conditions in section 4.1 which are within its control. 5.3 NEGATIVE COVENANT Except as expressly provided in this Agreement or listed in Schedule 5.3 or except with the prior written consent of the Merger Subsidiary, prior to the Time of Closing the Corporation will not, and the Principal Stockholders will ensure that the Corporation will not:

5.3.1 amend its certificate of incorporation, by-laws, constating documents or other organizational documents; 5.3.2 merge or consolidate with, or acquire all or substantially all the shares or assets of, any Person; 5.3.3 transfer, lease, license, sell or otherwise dispose of any of its assets, other than inventory and non-exclusive licenses to the Key Software Programs in the ordinary course of the Business, consistent with past practice; 5.3.4 do any act or thing of the kind described in section 3.1.13 or enter into any Contract of the kind described in sections 3.1.16 or 3.1.25; or 5.3.5 without limiting the generality of this section 5.3, change the Corporation's pricing policies, announce new products, hire or terminate key employees, terminate master representatives, enter into, renew or terminate significant Contracts or alter any employee compensation or benefits (including any profit sharing or equity participation plans) or other terms and conditions of employment. 5.4 MERGER SUBSIDIARY'S COVENANT Except as expressly provided in this Agreement or except with the prior written consent of the Corporation, prior to the Time of Closing each of the Merger Subsidiary and Corel will do or refrain from doing all acts and things in order to ensure that the representations and warranties in sections 3.2 and 3.4 remain true and correct in all material respects at the Time of Closing (except for any representations and warranties which are qualified by materiality in section 3, which representations and warranties are to be true and correct) as if those representations and warranties were made at and as of that date and to satisfy or cause to be satisfied the conditions in section 4.2 which are within each entity's respective control. 5.5 CORPORATE ACTION, RELEASES At or prior to the Time of Closing, the Principal Stockholders will cause all necessary corporate action to be taken for the purpose of approving the Transaction and the transactions contemplated by this Agreement. If requested by the Merger Subsidiary, the Principal Stockholders will cause nominees of the Merger Subsidiary to be elected or appointed directors of the Corporation to fill any vacancies. -495.6 OBTAINING OF CONSENTS AND APPROVALS The Principal Stockholders will, and will cause the Corporation to, use best efforts to deliver, at or prior to the Time of Closing, the Required Consents. 5.7 ADDITIONAL INSURANCE The Principal Stockholders will, at the request and expense of the Merger Subsidiary, cause the Corporation to place promptly any additional insurance on its insurable assets and/or to place any additional public liability or other insurance as the Merger Subsidiary may request. 5.8 NON-SOLICITATION Neither the Corporation (including its directors, officers, employees and agents) nor any Jasc Stockholder will initiate, encourage, cooperate with, provide non-public information to or participate in any discussions with any third party (other than its professional advisors) regarding the Transaction or any other proposed financing of the Corporation or sale of the Corporation's securities or assets, and the Corporation and each Jasc Stockholder will immediately terminate any such discussions currently in progress. If, prior to the earlier of the Time of Closing and termination of this Agreement, the Corporation or a Jasc Stockholder receives an inquiry concerning a proposed transaction that could be inconsistent with the Transaction, then the Corporation or that Jasc Stockholder will immediately notify the Merger Subsidiary of that event and provide the Merger Subsidiary with a copy of that proposal (if in writing) or a summary of that inquiry (if oral). 5.9 [RESERVED]

5.10 TAX MATTERS 5.10.1 The Merger Subsidiary and the Jasc Stockholders will make an election under Section 338(h)(10) of the Code (and any comparable election under state or local Tax Law), with respect to the Transaction. The Merger Subsidiary and the Jasc Stockholders will cooperate fully with each other in the making of that election. In particular, and not by way of limitation, in order to effect that election, promptly upon the request of the Merger Subsidiary, each of the Jasc Stockholders will execute with the Merger Subsidiary necessary copies of Internal Revenue Service Form 8023 and all attachments required to be filed with that form pursuant to applicable Treasury regulations. 5.10.2 The Transaction Consideration and the liabilities of the Corporation assumed by the Merger Subsidiary under this Agreement will be allocated to the assets of the Corporation substantially as set out in Schedule 5.10.2. The parties agree that the Schedule 5.10.2 attached to this Agreement on the date of this Agreement is in draft form (the "DRAFT SCHEDULE 5.10.2") and that the final Schedule 5.10.2 (the "FINAL SCHEDULE 5.10.2") will be delivered by the Merger Subsidiary to the Stockholder Representative at least 2 Business Days prior to the Closing Date. The Final Schedule 5.10.2 will (i) contain the identical line items as the Draft Schedule 5.10.2 (and will not contain any additional items), and (ii) reflect amounts allocated to "Property, plant and equipment" and "Non-compete" that will not be more than 3 times the value allocated to those items in the Draft Schedule 5.10.2. The parties agree that this allocation is intended to comply with the allocation method required by Section 338 of the Code. The parties will cooperate to comply with all substantive and procedural requirements of Section 338 of the Code and any applicable regulations, and the allocation will be adjusted if, and to the extent, necessary to comply with the requirements of Section 338 of the Code. Neither the Merger Subsidiary nor any of the Jasc -50Stockholders will take, nor permit any Affiliated person to take, for federal, state or local income Tax purposes, any position inconsistent with (i) the allocation set out in Schedule 5.10.2, or, if applicable, that adjusted allocation; and/or (ii) the description of the Transaction as set out in section 2.1. 5.10.3 The Principal Stockholders will prepare, or cause to be prepared, and file, or cause to be filed, on a timely basis all Tax Returns with respect to the Corporation for taxable periods ending on or prior to the Closing Date (a "PRE-CLOSING TAX PERIOD") including any short period return for the Corporation ending at the end of the day on the Closing Date. The Principal Stockholders shall provide Corel copies of the Tax Returns at least 30 days prior to the due date for filing the specific Tax Return, and Corel shall have the right to comment on any of those Tax Returns. 5.10.4 Subject to the process set out in section 6.3, each of Corel on the one hand, and the Jasc Stockholders on the other hand (each a "RECIPIENT"), shall notify the other party in writing within 20 days of receipt by the Recipient of written notice of any pending or threatened audit, notice of deficiency, proposed adjustment, assessment, examination or other administration or Proceeding or other claim which could affect the liability for Taxes of the other party (a "TAX CLAIM"). The Jasc Stockholders agree that they will not settle any Proceeding in respect of a Tax Claim in a manner which could potentially materially affect, Corel, the Corporation or the Surviving Corporation for any taxable period that ends after the Closing Date without the prior consent of Corel. Corel agrees that it will not settle or allow to be settled any Proceeding in respect of a Tax Claim in a manner which could reasonably be expected to have a material affect on the Jasc Stockholders for any taxable period that ends before the Closing Date without the prior written consent of the Stockholder Representative, which consent will not be unreasonably withheld. In the case of any taxable period that includes (but does not end on) the Closing Date (a "STRADDLE PERIOD"), the Jasc Stockholders will be entitled to participate at their expense in any Tax Claim relating in any part to Taxes attributable to the portion of that Straddle Period deemed to end on or before the Closing Date, and with the written consent of Corel, at the Jasc Stockholders' sole expense, may assume the control of the entire Tax Claim. 5.11 CERTAIN PAYMENTS AND EXPENSES 5.11.1 Prior to the Effective Time, and except as set forth in section 5.16, the Jasc Stockholders will, or will

cause the Corporation to, satisfy any liability for severance pay, penalty, bonus (pro rata or otherwise) or similar payment requirements to any employee, sales representative, independent contractor, consultant, distributor, agent or Affiliate of the Corporation (each, a "SEVERANCE PAYMENT") that were either (1) incurred prior to the Time of Closing or (2) required to be satisfied in connection with the consummation of the Transaction as a result of a change of control or otherwise, including any amounts due to holders of Convertible Securities pursuant to section 2.13 or amounts contemplated by section 4.1.11. Following the Closing Date, by way of pro rata cash payment calculated based upon the Jasc Stockholder's Ownership Percentage, the Jasc Stockholders will satisfy Severance Payments that are required by Contract or Law to be satisfied as a result of the consummation of the Merger (and the resulting change of control) and/or the Asset Sale. All of the foregoing expenses shall include all associated payroll Taxes. 5.11.2 Prior to the Effective Time, the Jasc Stockholders will, or will cause the Corporation to, satisfy all costs and expenses incurred by the Corporation in connection with the consummation of the Merger, including any costs in connection with the obtaining of the Consents referred to in section 5.6. -515.11.3 Prior to the Effective Time, the Jasc Stockholders will, or will cause the Corporation to, satisfy 50% of any filing fees payable in connection with any filings made under the HSR Act. 5.11.4 If the costs and fees specified in sections 5.11.1, 5.11.2 and/or 5.11.3 are not satisfied prior to the Effective Time or taken into account in the calculation of the Asset Sale Cash Consideration and/or the Total Adjusted Merger Cash Consideration, those costs and fees will be reflected on the Working Capital Closing Balance Sheet as current liabilities. 5.11.5 The Jasc Stockholders will satisfy all fees, expenses and other required payments relating to the exercise of dissenter's rights by Jasc Stockholders under Minnesota Law. 5.11.6 The Jasc Stockholders will satisfy all fees and expenses of investment bankers (including, for greater certainty, commissions and fees due to Goldsmith Agio Helms as referenced in section 3.5) of the Jasc Stockholders and/or the Corporation incurred in connection with negotiation and settlement of this Agreement and the consummation of the Transaction. 5.11.7 Satisfaction of the payments set out in this section 5.11 will not constitute a breach of any covenant in section 5.3 of this Agreement. 5.12 GOODWILL Each Principal Stockholder and the Corporation covenants and agrees that the Principal Stockholder and the Corporation will not take or omit to take any action which could directly or indirectly impair the goodwill of the Corporation or the Business or the business reputation or good name of the Corporation. 5.13 COOPERATION The parties will cooperate fully in good faith with each other and their respective legal advisers, accountants and other representatives in connection with any steps required to be taken as part of their respective obligations under this Agreement. 5.14 TERMINATION This Agreement may be terminated and the Transaction may be abandoned at any time prior to the Closing (notwithstanding any approval of this Agreement by the Jasc Stockholders) by: 5.14.1 mutual written agreement of Corel and the Corporation; 5.14.2 either Corel or the Corporation, by written notice to the other, if the Transaction has not been consummated by October 31, 2004 or any later date as Corel and the Corporation may mutually agree (provided that the right to terminate this Agreement under this section 5.14.2 will not be available to any party

whose failure to fulfill any of its obligations under this Agreement has been the cause of or resulted in the failure to consummate the Transaction by such date). For greater certainly, (i) the condition set out in section 4.1.7.3 does not constitute an "obligation" for the purposes of this section; and (ii) without limitation, the Corporation may not terminate pursuant to this section 5.14.2 in the event that section 5.6 has been breached; 5.14.3 either Corel or the Corporation, by written notice to the other, if the stockholder approval referred to in section 4.1.7.2 is not obtained by reason of the failure to obtain the requisite vote -52upon a vote at a duly held meeting of Jasc Stockholders or at any adjournment of that meeting or by written consent in lieu of a meeting; or 5.14.4 either Corel or the Corporation, by written notice to the other, if there will be any applicable Law that makes the consummation of the Transaction illegal or otherwise prohibited or if any order of a Governmental Authority of competent jurisdiction restrains or prohibits the consummation of the Transaction, and that order becomes final and non-appealable. Sections 3.5, 8.1 and 8.3 of this Agreement will survive the termination of this Agreement pursuant to this section 5.14. 5.15 JASC STOCKHOLDER APPROVAL 5.15.1 The Corporation will promptly after the date of this Agreement take all actions necessary to call a meeting of the Jasc Stockholders (including the delivery to Jasc Stockholders of all material required by Minnesota Law) to be held as promptly as practicable for the purpose of voting upon this Agreement and the Transaction (the "JASC STOCKHOLDERS MEETING") or obtain the unanimous written consent of all Jasc Stockholders approving this Agreement and the Transaction. The Corporation will, through its board of directors, unanimously recommend to the Jasc Stockholders approval of this Agreement and the Transaction. 5.15.2 Each of the Principal Stockholders hereby agrees to vote that Principal Stockholder's Jasc Shares in favor of this Agreement and the Transaction at the Jasc Stockholders Meeting or in the written consent. If requested by the Stockholder Representative, each Principal Stockholder agrees to grant the Stockholder Representative a proxy to vote that Principal Stockholder's Jasc Shares in favor of this Agreement and the Transaction. 5.16 JASC YE BONUS PROGRAM Notwithstanding anything to the contrary in this Agreement, the Jasc Stockholders will not be liable for any amounts associated with the Jasc YE Bonus Program, including to the extent those amounts should have been accrued on the Initial Closing Balance Sheet or the Working Capital Closing Balance Sheet. Corel agrees that any liability the Corporation has to make payments in accordance with the Jasc YE Bonus Program will be solely the responsibility and liability of the Merger Subsidiary or Corel following the Closing and the Corel Indemnified Parties will have no right to indemnification for any losses, damages or deficiencies from their obligation to make any payments that become due. 5.17 JASC FOUNDER'S COMPUTER AND CELL PHONE At the Closing, the Corporation will sell to Robert V. Voit the computer and cell phone of the Corporation used by Mr. Voit for a total purchase price of $1, which items will become the personal property of Mr. Voit. 5.18 POST-CLOSING ACCESS Following the Closing Date, Corel will provide each Jasc Stockholder and their accounting advisors with reasonable access to the books and records of the Corporation and appropriate accounting and finance personnel of Corel, the Merger Subsidiary and/or the Surviving Corporation (during standard business hours and upon reasonable advance written notice from the Jasc Stockholder) in connection with the filing of the Jasc Stockholder's "Sub S" tax return for the 2004 fiscal year or the audit

-53of those tax returns for any prior year, and for purposes of taking actions required by this Agreement, such as the actions specified in sections 2.9, 2.10, 2.14 and 5.10.3. ARTICLE 6 INDEMNIFICATION 6.1 INDEMNIFICATION 6.1.1 Indemnification by the Principal Stockholders Each of the Principal Stockholders, jointly and severally, hereby agrees to defend, indemnify and hold harmless the Merger Subsidiary, Corel and the Surviving Corporation (collectively, the "COREL INDEMNIFIED PARTIES") for and from: 6.1.1.1 any loss, damages or deficiencies suffered by a Corel Indemnified Party as a result of any breach of a representation and warranty contained in section 3.1 or a covenant on the part of any Principal Stockholder or on the part of the Corporation contained in this Agreement or in any certificate or document delivered pursuant to or contemplated by this Agreement; and 6.1.1.2 all claims, demands, costs and expenses, including legal fees and applicable Taxes, in respect of the foregoing. 6.1.2 Indemnification by the Jasc Stockholders Each of the Jasc Stockholders, severally and not jointly, hereby agrees to defend, indemnify and hold harmless the Corel Indemnified Parties for and from: 6.1.2.1 any loss, damages or deficiencies suffered by a Corel Indemnified Party as a result of any breach of a representation and warranty given by that Jasc Stockholder in section 3.2 or a covenant on the part of that Jasc Stockholder in this Agreement or in any certificate or document delivered pursuant to or contemplated by this Agreement (including, for greater certainty, the Jasc Stockholder Signature Page; and 6.1.2.2 all claims, demands, costs and expenses, including legal fees and applicable Taxes, in respect of the foregoing. 6.1.3 Exceptions Notwithstanding the foregoing, no Principal Stockholder or any other Jasc Stockholder will have any obligation to defend, indemnify or hold harmless the Corel Indemnified Parties for or from any loss, damages or deficiencies suffered by a Corel Indemnified Party: 6.1.3.1 that relates to matters for which the Principal Stockholders and the other Jasc Stockholders are entitled to be indemnified by Corel and the Merger Subsidiary as set out in section 6.1.4 below; and 6.1.3.2 to the extent that loss, damage or deficiency has been included in the Closing Working Capital Amount such that the Closing Balance Sheet or the related working papers specifically identifies that particular accrual or adjustment as relating to the particular loss, damage or deficiency. -546.1.4 Indemnification by Merger Subsidiary and Corel Each of Corel and the Merger Subsidiary, jointly and severally, hereby agree to defend, indemnify and hold harmless the Principal Stockholders and Jasc Stockholders for and from any loss or damages suffered by the Principal Stockholders and/or Jasc Stockholders as a result of a violation of applicable Laws (including Laws related to privacy and sweepstakes) caused by the solicitation for, distribution of or collection of the Surveys (as

defined in the letter agreement executed by Corel dated September 20, 2004) on the same terms as set out in that letter. 6.2 NOTICE OF CLAIM A Corel Indemnified Party will promptly give notice to the Stockholder Representative of any claim for indemnification pursuant to section 6.1 (a "CLAIM", which term will include more than one Claim), provided that any delay or failure to so advise the Stockholder Representative will not relieve the applicable Jasc Stockholders from any liability except to the extent that the defense of that Claim is prejudiced by that delay or failure. That notice will specify whether the Claim arises as a result of a claim by a Person against the Corporation (a "THIRD PARTY CLAIM") or whether the Claim does not so arise (a "COREL INDEMNIFIED PARTY'S CLAIM"), and will also specify with reasonable particularity (to the extent that the information is available): 6.2.1 the factual basis for the Claim; and 6.2.2 the amount of the Claim, or, if an amount is not then determinable, an approximate and reasonable estimate of the likely amount of the Claim. 6.3 PROCEDURE FOR INDEMNIFICATION 6.3.1 COREL INDEMNIFIED PARTY'S CLAIMS. With respect to Corel Indemnified Party's Claims, following receipt of notice from the Corel Indemnified Party of a Claim, the Stockholder Representative will have 30 days to make any investigation of the Claim as the Stockholder Representative considers necessary or desirable. For the purpose of that investigation, the Corel Indemnified Party will make available to the Stockholder Representative and its authorized representatives the information relied upon by the Corel Indemnified Party to substantiate the Claim. If the Corel Indemnified Party and the Stockholder Representative agree at or prior to the expiration of that 30 day period (or any mutually agreed upon extension of that period) to the validity and amount of the Claim, the applicable Jasc Stockholder(s) will immediately pay to the Corel Indemnified Party the full agreed upon amount of the Claim. If the Corel Indemnified Party and the Stockholder Representative do not agree within that period (or any mutually agreed upon extension of that period), the Corel Indemnified Party and the Jasc Stockholders agree that the Corel Indemnified Party will be entitled to bring an action in a court of law to recover the full amount of the Claim and any costs incidental to the action. 6.3.2 THIRD PARTY CLAIMS. 6.3.2.1 With respect to any Third Party Claim, the applicable Jasc Stockholder(s) will have the right, at their own expense, to participate in or assume control of the negotiation, settlement or defense of the Third Party Claim and, in that event, the Jasc Stockholder(s) will reimburse the Corel Indemnified Party for all the Corel Indemnified Party's out-of-pocket expenses as a result of that participation or assumption. If the Jasc Stockholder(s) elect to assume that control, the Corel Indemnified Party will cooperate with the Jasc -55Stockholders, will have the right to participate in the negotiation, settlement or defense of the Third Party Claim at its own expense and will have the right to disagree on reasonable grounds with the selection and retention of counsel, in which case counsel satisfactory to the Jasc Stockholders and the Corel Indemnified Party will be retained by the Jasc Stockholders. 6.3.2.2 If the applicable Jasc Stockholders, having elected to assume control as contemplated in section 6.3.2.1 then fail to defend the Third Party Claim within a reasonable time, the Corel Indemnified Party will be entitled to assume control and the applicable Jasc Stockholders will be bound by the results obtained by the Corel Indemnified Party with respect to the Third Party Claim. 6.4 ADDITIONAL RULES AND PROCEDURES The obligation of the Jasc Stockholders to indemnify the Corel Indemnified Parties in respect of Claims will also

be subject to the following: 6.4.1 Any Claim arising as a result of a breach of a representation or warranty contained in sections 3.1 or 3.2 will be made not later than the date on which, pursuant to section 3.6, that representation or warranty terminated. 6.4.2 The Jasc Stockholders' obligation to indemnify the Corel Indemnified Parties will only apply if the Claims (including the latest Claim made but excluding Claims set out in section 6.4.4), in total, exceed $250,000 net of insurance proceeds and tax benefits, at which time the full amount of all of those Claims will be indemnifiable under this Agreement. 6.4.3 The total amount payable by the Jasc Stockholders (either through the Escrow Fund or directly) in respect of Claims under this Article will not exceed $6.0 million. 6.4.4 Notwithstanding section 6.4.3, there will be no limit on the amounts payable under this Article with respect to any Claim (1) based on the gross negligence or fraud of a Jasc Stockholder or the Corporation or (2) arising from a breach of a representation and warranty contained in one or more of sections 3.1.1.1, 3.1.1.3, 3.1.2, 3.1.3, 3.1.5, 3.1.6(a), 3.1.24, 3.2.3, 3.2.4 and 3.2.5 and Sections 1.3, 1.4 and 1.5 of the Jasc Stockholder Signature Page, and or a breach of a covenant contained in sections 5.11 or 8.3. For greater certainty, amounts payable in connection with any Claim which, pursuant to this section 6.4.4, is not subject to any limit, will not be aggregated with any other Claims that are subject to the limits set out in section 6.4.3. 6.4.5 In the event that any Third Party Claim is of a nature that the Corel Indemnified Party is required by applicable Law to make a payment to any Person (a "THIRD PARTY") with respect to the Third Party Claim before the completion of settlement negotiations or related Proceedings, the Corel Indemnified Party may make that payment and the applicable Jasc Stockholder(s) will, promptly after demand by the Corel Indemnified Party, reimburse the Corel Indemnified Party for any such payment. If the amount of any liability of the Corel Indemnified Party under the Third Party Claim in respect of which that payment was made, as finally determined, is less than the amount which was paid by the applicable Jasc Stockholder(s) to the Corel Indemnified Party, the Corel Indemnified Party will, promptly after receipt of the difference from the Third Party, pay the amount of that difference to the applicable Jasc Stockholder(s). 6.4.6 Except in the circumstance contemplated by sections 6.4.5 and 6.3.2.2 and whether or not the applicable Jasc Stockholder(s) assume control of the negotiation, settlement or defense of any -56Third Party Claim, the Corel Indemnified Party will not negotiate, settle, compromise or pay any Third Party Claim except with the prior written consent of the Stockholder Representative (which consent will not be unreasonably withheld), unless that settlement includes an unconditional release of the Corel Indemnified Party and the applicable Jasc Stockholder(s). 6.4.7 The Corel Indemnified Party will not permit any right of appeal in respect of any Third Party Claim to terminate without giving the Stockholder Representative notice of the Third Party Claim and an opportunity to contest the Third Party Claim. 6.4.8 The Corel Indemnified Party and the Jasc Stockholders will cooperate fully with each other with respect to Third Party Claims, will keep each other fully advised with respect to those claims (including supplying copies of all relevant documentation promptly as it becomes available) and will keep informed about and be prepared to discuss the Third Party Claim with the other and with counsel at all reasonable times. 6.4.9 Notwithstanding section 6.3.2, the Jasc Stockholders will not settle any Third Party Claim or conduct any related Proceeding in a manner which would, in the opinion of the Corel Indemnified Party, acting reasonably, have a material adverse impact on the Merger Subsidiary, Corel, the Surviving Corporation or the Business. 6.4.10 Any payment by any Jasc Stockholder under this Agreement will be treated for tax purposes as an adjustment to the Transaction Consideration.

6.5 ESCROW AGREEMENT Claims will be satisfied first out of, and to the extent of, the Escrow Fund (if then still in existence) in accordance with the terms of the Escrow Agreement and thereafter by recourse directly to the applicable Jasc Stockholders. For greater certainty, payments to a Corel Indemnified Party from the Escrow Fund will be comprised of both cash and Corel Common Shares, allocated pro rata based upon the ratio of cash to Corel Common Shares in the Escrow Fund at the time of that payment. The Escrow Agreement will provide for the payment, on the date which is 18 months after the Closing Date, to each Jasc Stockholder of an amount equal to the remaining balance of that Jasc Stockholder's portion of the Escrow Fund, if any, less amounts in respect of which a Corel Indemnified Party has asserted Claims as provided in and subject to the terms and conditions of this Agreement and the Escrow Agreement. The Escrow Agreement will further provide that the portion of the Escrow Fund which is comprised of Corel Common Shares will be valued at $5.0 million for the duration of the term of the Escrow Fund (and that value will be proportionately reduced to the extent that Claims are satisfied by the payment from the Escrow Fund of Corel Common Shares) for the purpose of satisfying Claims. 6.6 LIMITATION OF REMEDIES A Corel Indemnified Party's sole and exclusive remedy with respect to any and all Claims relating to the subject matter of this Agreement (including Claims for breaches of representations, warranties, covenants, and agreements contained in this Agreement) will be pursuant to the indemnification provisions set out in this Article 6. In furtherance of the foregoing, each Corel Indemnified Party hereby waives, to the fullest extent permitted under applicable Law, any and all rights, claims, and causes of action of that Corel Indemnified Party against the Corporation and the Jasc Stockholders as a matter of equity or under or based upon any Law or arising under or based upon common law or otherwise, except to the extent specifically provided in this Article 6. -57ARTICLE 7 CLOSING 7.1 LOCATION AND TIME OF THE CLOSING The Closing will take place at the Time of Closing on the Closing Date at the offices of Merger Subsidiary's Counsel in New York. 7.2 DELIVERIES AT THE CLOSING At the Closing, immediately following the consummation of the Asset Sale as contemplated by section 2.1.1 and subject to section 2.12, each Jasc Stockholder will deliver the share certificates representing that Jasc Stockholder's Jasc Shares and all other documents as are required or contemplated to be delivered by the Jasc Stockholders pursuant to this Agreement, and Corel and the Merger Subsidiary will pay the Total Adjusted Merger Cash Consideration, will deliver share certificates representing the Total Merger Equity Consideration and will deliver all other documents required or contemplated to be delivered by Corel and/or the Merger Subsidiary pursuant to this Agreement. ARTICLE 8 GENERAL MATTERS 8.1 PUBLIC NOTICES No press release or other announcement concerning the Transaction will be made by the Jasc Stockholders, the Corporation, the Merger Subsidiary or Corel without, in the case of those to be made by the Jasc Stockholders or the Corporation, the prior written consent of Corel, and in the case of those to be made by the Merger Subsidiary or Corel, without the prior written consent of the Stockholder Representative (which consent, in either case, will not be unreasonably withheld). The Principal Stockholders will assist the Merger Subsidiary and/or Corel in informing the personnel and management of the Corporation of the change in the ownership of the Corporation; provided always that those communications will be made only by or with the prior approval of the Merger Subsidiary and/or Corel.

8.2 STOCKHOLDER REPRESENTATIVE Unless this Agreement explicitly provides to the contrary, each of the Jasc Stockholders agree that the Stockholder Representative is authorized on behalf of that Jasc Stockholder to do all acts under this Agreement on behalf of that Jasc Stockholder which the Jasc Stockholder could do itself, including accepting notices, granting consents, approvals or waivers, entering into amendments and executing and delivering all documents specified to be executed and delivered by "the Jasc Stockholders" (as opposed to by "each Jasc Stockholder" or "each of the Jasc Stockholders"). In furtherance of the foregoing authority, each of the Jasc Stockholders hereby appoints the Stockholder Representative as the Jasc Stockholders true and lawful attorney with full power and authority in the Jasc Stockholder's place and stead to act in the capacity set out above in this section. 8.3 EXPENSES 8.3.1 The Jasc Stockholders, on the one hand (and as further specified in section 5.11), and Corel and the Merger Subsidiary, on the other hand, will be responsible for the expenses (including fees and expenses of legal advisers, accountants, brokers, investment bankers (including, for greater certainty, commissions and fees due to Goldsmith Agio Helms as referenced in section 3.5) -58and other professional advisers) incurred by them, respectively, (and, in the case of the Jasc Stockholders, including those expenses incurred by or on behalf of the Corporation) in connection with the negotiation and settlement of this Agreement and the consummation of the Transaction (provided, however, that the Jasc Stockholders may cause the Corporation, prior to the Time of Closing, to satisfy any of those expenses (but not including those set out in sections 5.11.5 or 5.11.6) incurred by them or by or on behalf of the Corporation). 8.3.2 Notwithstanding section 8.3.1 and as further specified in section 5.11, any filing fees payable in connection with any filings made under the HSR Act will be shared equally between the Jasc Stockholders (or the Corporation if the Jasc Stockholders cause the Corporation to satisfy those fees prior to the Time of Closing), on the one hand, and Corel and the Merger Subsidiary, on the other hand. 8.3.3 Notwithstanding section 8.3.1, if the Closing does not occur, the Jasc Stockholders will, or will cause the Corporation to, reimburse Corel and the Merger Subsidiary for their reasonable and documented out-of-pocket expenses related to investigating and consummating the Transaction (including the negotiating and drafting of this Agreement), including the fees and expenses of professional advisors (but excluding investment banking fees), up to a maximum of $250,000; provided that Corel and the Merger Subsidiary will only be entitled to those reimbursed expenses if the Corporation and/or the Jasc Stockholders have, prior to July 7, 2005, entered into a written agreement with respect to an alternate transaction that would result in a change of control of the Corporation, in which event, the reimbursement will be due and payable upon entering into that written agreement to the alternate transaction. 8.3.4 If, following the Closing Date, Corel and/or the Jasc Stockholders receive notice that a Stockholder Expense was not satisfied in full prior to the Effective Time pursuant to section 5.11, the party receiving that notice shall inform the other party of the deficiency within 3 Business Days of receipt. Within 5 Business Days of delivery of the notice, to the extent not otherwise addressed in section 5.11, the Jasc Stockholders will pay to Corel the amount by which the applicable Stockholder Expense was not satisfied prior to the Effective Time (the "STOCKHOLDER EXPENSE ADJUSTMENT AMOUNT"). Each of the Jasc Stockholders will pay to Corel cash equal to a pro rata portion of the Stockholder Expense Adjustment Amount based upon the Jasc Stockholder's Ownership Percentage. If the entire Stockholder Expense Adjustment Amount is not paid by the Jasc Stockholders within the 5 Business Day period, the unpaid balance of the Stockholder Expense Adjustment Amount will be satisfied by a cash payment from the Escrow Fund and each Jasc Stockholder that did not make its required payment during the 5 Business Day period will make a cash payment to the Escrow Fund equal to that Jasc Stockholder's pro rata share of the Stockholder Expense Adjustment Amount (based upon the Jasc Stockholder's Ownership Percentage), all in accordance with the terms of the Escrow Agreement. Notwithstanding the foregoing, the Jasc Stockholders will have no obligation to satisfy any Stockholder Expense Adjustment Amount to the extent that Stockholder Expense Adjustment Amount has been included in the Closing Working Capital Amount such that the Closing Balance Sheet or the related working papers specifically identifies that particular accrual as relating to the particular Stockholder Expense Adjustment Amount. Any dispute under

this section 8.3.4 shall be handled in accordance with the dispute resolution procedures described in section 2.11. -598.4 ASSIGNMENT Except as provided in this section, no party may assign its rights or benefits under this Agreement. The Merger Subsidiary may, at any time prior to the Time of Closing: 8.4.1 assign all (but not less than all) of its rights and benefits under this Agreement to any Affiliate of the Merger Subsidiary who delivers to the Jasc Stockholders an instrument in writing executed by the assignee confirming that it is bound by and will perform all of the obligations of the Merger Subsidiary under this Agreement as if it were an original signatory; and 8.4.2 assign, and each of Corel and/or Holdings may assign, all or a portion of its rights and benefits under this Agreement by way of security to any Person who provides financing to the Merger Subsidiary or its Affiliates; provided that no assignment contemplated above will relieve the Merger Subsidiary, Corel or Holdings, as the case may be, of its obligations under this Agreement. In the event of an assignment contemplated above pursuant to section 8.4.1, any reference in this Agreement to "Merger Subsidiary" will be deemed to include the assignee. After the Closing, each of Corel and/or the Surviving Corporation may assign its rights and benefits under this Agreement to any Person who purchases all or substantially all of the shares of the Merger Subsidiary or all or substantially all of the assets of the Surviving Corporation. The provisions of this Agreement will be binding upon and inure to the benefit of the parties to this Agreement and their respective heirs, representatives, successors and assigns. 8.5 NOTICES Any notice or other communication required or permitted to be given under this Agreement will be in writing and will be given by prepaid mail, by facsimile, e-mail or other means of electronic communication or by handdelivery as provided below. Any such notice or other communication, if mailed by prepaid mail at any time other than during a general discontinuance of postal service due to strike, lockout or otherwise, will be deemed to have been received on the fourth Business Day after its post marked date, or if sent by facsimile, e-mail or other means of electronic communication, will be deemed to have been received on the earlier of the Business Day following the sending or the acknowledgement of receipt by the recipient, or if delivered by hand will be deemed to have been received at the time it is delivered to the applicable address noted below either to the individual designated below or to an individual at that address having apparent authority to accept deliveries on behalf of the addressee. Notice of change of address will also be governed by this section. In the event of a general discontinuance of postal service due to strike, lock-out or otherwise, notices or other communications will be delivered by hand or sent by facsimile, e-mail or other means of electronic communication and will be deemed to have been received in accordance with this section. Notices and other communications will be addressed as follows: (a) if to the Corporation or the Jasc Stockholders: c/o the Stockholder Representative, Robert V. Voit 18422 Bearpath Trail Eden Prairie, Minnesota 55347 -60Attention: Robert V. Voit E-mail: bobvoit@yahoo.com with a copy to the Jasc Counsel at:

with a copy to the Jasc Counsel at: Faegre & Benson LLP 2200 Wells Fargo Center 90 South Seventh Street Minneapolis, Minnesota 55402
Attention: Kris Sharpe Telecopier number: (612) 766-1600 E-mail: ksharpe@faegre.com

(b) if to the Merger Subsidiary or Corel at: Corel Corporation (if in respect of the Merger Subsidiary, "c/o Corel Corporation") 1600 CarlingAve. Ottawa, Ontario K1Z 8R7
Canada Attention: Chris DiFrancesco, Vice President, Legal & General Counsel Telecopier Number: (613)725-2691 E-mail: christopher.difrancesco@corel.com

with a copy to the Merger Subsidiary's Counsel at: Torys LLP 237 Park Avenue New York, New York 10017
Attention: Darren Sukonick Telecopier number: (212)682-0200 E-mail: dsukonick@torys.com

The failure to send or deliver a copy of a notice to the Merger Subsidiary's Counsel or Jasc Counsel, as the case may be, will not invalidate any notice given under this section. 8.6 TIME OF ESSENCE Time is of the essence of this Agreement. 8.7 CONSENT TO JURISDICTION The parties hereby consent to the non-exclusive jurisdiction of the United States Court for the Southern District of New York in connection with any civil action concerning any controversy, dispute or claim arising out of or relating to this Agreement or any Related Agreement, or the breach of -61this Agreement or any Related Agreement unless that court would not have subject matter jurisdiction thereof, in which event the parties hereby consent to the non-exclusive jurisdiction of the Supreme Court of the State of New York, County of New York, and each party further agrees that the service of process or of any other papers upon them or any of them by registered or certified mail at their respective addresses set out in section 8.5 will be deemed good, proper and effective service upon them. 8.8 WAIVER OF JURY TRIAL

EACH OF THE PARTIES WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF ANY PARTY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH OF THE PARTIES HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION WILL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES MAY FILE A COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS EVIDENCE OF THE CONSENT OF THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 8.9 NO THIRD-PARTY BENEFICIARIES This Agreement will be binding upon and inure solely to the benefit of the parties and their permitted assigns and nothing in this Agreement, whether express or implied, is intended to or will confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 8.10 FURTHER ASSURANCES Each of the parties will promptly do, make, execute, deliver, or cause to be done, made, executed or delivered, all further acts, documents and things as the other party to this Agreement may reasonably require from time to time for the purpose of giving effect to this Agreement and will use reasonable efforts and take all steps as may be reasonably within its power to implement to their full extent the provisions of this Agreement. 8.11 COUNTERPARTS This Agreement may be signed in counterparts and each counterpart will constitute an original document and those counterparts, taken together, will constitute one and the same instrument. Counterparts may be delivered by facsimile, e-mail or other means of electronic communication.

IN WITNESS WHEREOF the parties to this Agreement have executed this Agreement as of the date first written above. JASC SOFTWARE, INC.
By: /s/ Robert V. Voit -----------------------------------Name: Robert V. Voit Title: Chairman

COREL JS ACQUISITION, INC.
By: /s/ Christopher Nicholson -----------------------------------Name: Christopher Nicholson Title: Authorized Signatory

COREL CORPORATION
By: /s/ Christopher Nicholson -----------------------------------Name: Christopher Nicholson Title: Authorized Signatory

COREL HOLDINGS CORPORATION
By: /s/ Christopher Nicholson -----------------------------------Name: Christopher Nicholson Title: Authorized Signatory

WITNESS

ROBERT V. VOIT

/s/ JENNIFER KEELER -------------------------------------

/s/ ROBERT V. VOIT ----------------------------------------

BY: JENNIFER KEELER [Signature page to the Agreement and Plan of Merger]

WITNESS

JONATHAN C. ORT

/s/ JENNIFER KEELER ------------------------------------BY: JENNIFER KEELER

/s/ JONATHAN C. ORT ----------------------------------------

WITNESS

KRIS TUFTO

/s/ JENNIFER KEELER -------------------------------------

/s/ KRIS TUFTO ----------------------------------------

BY: JENNIFER KEELER [Signature page to the Agreement and Plan of Merger]

JASC STOCKHOLDER SIGNATURE PAGE This signature page is executed pursuant to the Agreement and Plan of Merger among Corel Corporation, Corel JS Acquisition, Inc., Jasc Software, Inc. and the Principal Stockholders dated as of October 25, 2004 (the "AGREEMENT"). All capitalized terms used in this signature page have the meanings given to them in the Agreement. The undersigned Jasc Stockholder represents and warrants to the Merger Subsidiary and Corel as follows and acknowledges that the Merger Subsidiary and Corel are relying upon the following representations and warranties in connection with the Transaction: 1.1 COREL COMMON SHARES. With respect to the Corel Common Stock, the Jasc Stockholder: 1.1.1 understands that those shares have not been and will not be registered under the Securities Act, and that the issuance of those shares is being made in reliance on a private placement exemption; 1.1.2 is acquiring those shares for its own account; 1.1.3 acknowledges those shares are not freely transferable; 1.1.4 has had the opportunity to ask all questions and to obtain all other information from the Merger Subsidiary and Corel as it has deemed necessary in connection with its decision to acquire those shares; and 1.1.5 acknowledges that it is not acquiring those shares as a result of any "general solicitation" or "general

advertising," as those terms are used in Regulation D under the Securities Act. 1.2 NO FOREIGN PERSON. The Jasc Stockholder that is acquiring shares forming part of the Total Equity Consideration is not a foreign person within the meaning of Section 1445(f)(3) of the Code. 1.3 INCORPORATION AND STATUS OF THE JASC STOCKHOLDER. If an Entity, the Jasc Stockholder is duly formed and validly existing under the laws of its jurisdiction of formation. 1.4 POWER OF THE JASC STOCKHOLDER AND DUE AUTHORIZATION. If an Entity, the Jasc Stockholder has all necessary power and capacity to enter into, and to perform its obligations under, this Agreement. Each of this Agreement and each of the Related Agreements to which the Jasc Stockholder is a party has been duly authorized by the Jasc Stockholder. This Agreement has been duly executed and delivered by the Jasc Stockholder and is a valid and binding obligation of the Jasc Stockholder, enforceable in accordance with its terms, subject to the usual exceptions as to bankruptcy and the availability of equitable remedies. At the Time of Closing, each of the Related Agreements to which the Jasc Stockholder is a party will be duly executed and delivered by the Jasc Stockholder and will be valid and binding obligations of the Jasc Stockholder, enforceable in accordance with their respective terms, subject to the usual exceptions as to bankruptcy and the availability of equitable remedies, provided that (i) no representation as to enforceability is made with respect to the agreements described in section 4.1.6 of the Agreement, and (ii) the enforceability of the indemnification provisions contained in Schedule B to the Corel Minority Shareholders' Agreement may be limited by applicable federal or state securities laws. 1.5 TITLE TO, AND RIGHT TO SELL, PURCHASED SHARES. The Jasc Stockholder is the sole registered and beneficial owner of those Jasc Shares set out opposite the Jasc Stockholder's name on Schedule 3.1.3 with good and marketable title to those Jasc Shares, free of all Charges. There are no subscriptions, warrants,

options, calls, or other rights or Contracts to which the Corporation or any Jasc Stockholder is subject to or bound which in any way limit or restrict the consummation of the Transaction (specifically in respect of that Jasc Stockholder's Jasc Shares) and there are no shareholders agreements, pooling agreements, voting trusts or other Contracts with respect to the voting of the Jasc Shares other than as set out in Schedule 3.1.3. At or prior to the Time of Closing, those agreements and restrictions will have been complied with or terminated (and evidence in form and substance satisfactory to the Merger Subsidiary to that effect will have been provided to the Merger Subsidiary). 1.6 NO CONTRAVENTION BY JASC STOCKHOLDERS. None of the entering into of this Agreement or any Related Agreement, the consummation of the Transaction or the performance by the Jasc Stockholder of that Jasc Stockholder's other obligations under this Agreement or any Related Agreement to which it is a party (a) will contravene, breach or result in any default under (1) if the Jasc Stockholder is an Entity, the certificate of incorporation, by-laws, constating documents or other organizational documents of that Jasc Stockholder, (2) any license, permit, order, judgment, decree or Law to which the Jasc Stockholder is a party or by which it may be bound or (b) contravenes, breaches or results in any default under, or conflicts with or will conflict with or results in or will result in any modification of any of the terms of or results in or will result in the termination of or the creation of any Charge, acceleration right or other right pursuant to the terms of any Contract to which the Jasc Stockholder is a party or by which it may be bound or will in any way affect the continuation, validity or effectiveness of any such Contract. 1.7 APPOINTMENT OF STOCKHOLDER REPRESENTATIVE. Each Jasc Stockholder designates and appoints Robert V. Voit as the Stockholder Representative under this Agreement and authorizes the Stockholder Representative to take such actions on behalf of such Jasc Stockholder under this Agreement, including, but not limited to, accepting notices, reviewing information provided to the Stockholder Representative and executing the certificate required in section 4.1.1 on behalf of each Jasc Stockholder, together with all such powers as are reasonably incidental thereto. The Stockholder Representative may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken, or omitted to be taken, by it in good faith in accordance with the advice of such counsel, accountants or experts. The Stockholder Representative shall not be liable for actions he takes or fails to take in the absence of his own gross negligence or willful misconduct.

1.8 The undersigned Jasc Stockholder acknowledges that: 1.8.1 the Jasc Stockholder has received a copy of the Agreement and each of the Related Agreements to which it is or will be a party (the "TRANSACTION AGREEMENTS"); 1.8.2 the Jasc Stockholder has had sufficient time to review and consider the Transaction Agreements and the transactions contemplated by the Transaction Agreements thoroughly; 1.8.3 the Jasc Stockholder has read and understands the terms of the Transaction Agreements and the Jasc Stockholder 's obligations under the Transaction Agreements; 1.8.4 the Jasc Stockholder has been given an opportunity to obtain independent legal advice, or other advice as the Jasc Stockholder may desire, concerning the interpretation and effect of the Transaction Agreements and the transactions contemplated by the Transaction Agreements, and by signing this Jasc Stockholder Signature Page the Jasc Stockholder has either obtained advice or voluntarily waived the Jasc Stockholder's opportunity to receive that advice; 1.8.5 the Agreement is entered into voluntarily by the Jasc Stockholder; and

1.8.6 the Jasc Stockholder is a "Jasc Stockholder" for all purposes of the Agreement and is bound by and subject to all rights and obligations of Jasc Stockholders under the Agreement.
/s/ Jennifer Keeler -----------------------------------Signature of Witness /s/ Laura J. Voit ----------------------------------------Signature of Jasc Stockholder or Authorized Signatory Laura J. Voit Name of Jasc Stockholder (please print or type)

Jennifer Keeler Name of Witness (please print or type) 7905 Fuller Road, Eden Prairie, MN 55344 Address of Witness (please print or type)

----------------------------------------Name and Title of Authorized Signatory (if the Jasc Stockholder is not an individual)

1.8.6 the Jasc Stockholder is a "Jasc Stockholder" for all purposes of the Agreement and is bound by and subject to all rights and obligations of Jasc Stockholders under the Agreement.
/s/ Jennifer Keeler -----------------------------------Signature of Witness /s/ Robert V. Voit GRANTOR ----------------------------------------Signature of Jasc Stockholder or Authorized Signatory Robert V. Voit GRAT Name of Jasc Stockholder (please print or type)

Jennifer Keeler Name of Witness (please print or type) 7905 Fuller Rd, Eden Prairie, MN 55344 Address of Witness (please print or type)

GRANTOR Name and Title of Authorized Signatory (if the Jasc Stockholder is not an individual)

1.8.6 the Jasc Stockholder is a "Jasc Stockholder" for all purposes of the Agreement and is bound by and

1.8.6 the Jasc Stockholder is a "Jasc Stockholder" for all purposes of the Agreement and is bound by and subject to all rights and obligations of Jasc Stockholders under the Agreement.
/s/ Jennifer Keeler -----------------------------------Signature of Witness /s/ Joseph J Fromn ----------------------------------------Signature of Jasc Stockholder or Authorized Signatory Joseph J Fromn Name of Jasc Stockholder (please print or type)

Jennifer Keeler Name of Witness (please print or type) 7905 Fuller Rd, Eden Prairie, MN 55344 Address of Witness (please print or type)

----------------------------------------Name and Title of Authorized Signatory (if the Jasc Stockholder is not an individual)

1.8.6 the Jasc Stockholder is a "Jasc Stockholder" for all purposes of the Agreement and is bound by and subject to all rights and obligations of Jasc Stockholders under the Agreement.
/s/ Jennifer Keeler -----------------------------------Signature of Witness /s/ Susan K. Dub ----------------------------------------Signature of Jasc Stockholder or Authorized Signatory Susan K. Dub Name of Jasc Stockholder (please print or type)

Jennifer Keeler Name of Witness (please print or type) 7905 Fuller Rd, Eden Prairie, MN 55344 Address of Witness (please print or type)

----------------------------------------Name and Title of Authorized Signatory (if the Jasc Stockholder is not an individual)

1.8.6 the Jasc Stockholder is a "Jasc Stockholder" for all purposes of the Agreement and is bound by and subject to all rights and obligations of Jasc Stockholders under the Agreement.
/s/ Jennifer Keeler -----------------------------------Signature of Witness /s/ Harold A. Fagley ----------------------------------------Signature of Jasc Stockholder or Authorized Signatory HAROLD A. FAGLEY Name of Jasc Stockholder (please print or type)

Jennifer Keeler Name of Witness (please print or type) 7905 Fuller Rd, Eden Prairie, MN 55344 Address of Witness (please print or type)

----------------------------------------Name and Title of Authorized Signatory (if the Jasc Stockholder is not an individual)

EXHIBIT A

See Tab 8

EXHIBIT B

September __, 2004 [NAME] [ADDRESS] [CITY, STATE, ZIP] Re: Consent to Jasc/Corel Transaction Ladies and Gentlemen: We are writing to give notice, and to the extent it is required to obtain your consent, in connection with the [agreement title] (the "Agreement) between you and Jasc Software, Inc. ("Jasc"). THE TRANSACTIONS - Jasc and Corel Corporation ("Corel") are proposing to enter into a transaction that provides for (1) the transfer of certain of Jasc's assets to Corel or a wholly owned subsidiary of Corel and (2) the merger of a wholly owned subsidiary of Corel into Jasc, which will result in Jasc becoming a wholly owned subsidiary of Corel. Following the merger, Corel may desire to transfer the Agreement to another one of its wholly owned subsidiaries (a "Corel Transfer") and/or assign all or a portion of its rights and benefits under the Agreement as security to any person who provides financing to Corel or its subsidiaries. On completion of the transaction and subject to receiving any necessary consent, either Corel or a wholly owned subsidiary of Corel (the "Resulting Counterparty") will be entitled to receive all the benefits and be obligated to pay amounts payable and discharge all other obligations and liabilities under the Agreement. You will be entitled to enforce the Agreement directly against the Resulting Counterparty, in respect of its obligations and liabilities under the Agreement, as if that entity had executed and delivered the Agreement instead of Jasc (as it existed prior to the merger). YOUR CONSENT- To the extent that the Agreement (1) entitles you to terminate; (2) requires you to receive notice of the transactions; and/or (3) requires your prior written consent to the transactions, we request that you: - acknowledge receiving notice of the transactions; - waive any rights to terminate the Agreement upon a change of control and/or a Corel Transfer; and - consent to the transactions (including a Corel Transfer and/or grant of security interests). PLEASE INDICATE YOUR CONSENT, AND YOUR ACKNOWLEDGEMENT THAT THE AGREEMENT WILL CONTINUE IN FULL FORCE AND EFFECT FOLLOWING THE TRANSACTIONS DESCRIBED ABOVE, BY SIGNING BELOW ON THE ENCLOSED COPY OF THIS LETTER AND RETURNING THE SAME TO THE UNDERSIGNED BY FAXING IT TO JENNIFER KEELER, CORPORATE COUNSEL AT JASC AT FAX NUMBER (952) 937-1664 NO LATER THAN _____________, SEPTEMBER ______, 2004. Jasc has always valued its business relationship with you. Corel, in becoming Jasc's new owner, wishes to continue this important relationship in the future. Thank you for your help with this matter. If you have any questions, please call the undersigned at (952) 294-[2355]. Very truly yours, [Kris Tufto]

[President and Chief Executive Officer] Corel, and any wholly owned subsidiary of Corel that may be a party to the Agreement, agrees to continue to be bound by the Agreement.
Date: September __, 2004 [COREL CORPORATION] [Name] [Title]

The undersigned hereby consents to the transactions described above.
Date: September __, 2004 [__________________________]

By ------------------------------------Name ----------------------------------Its ------------------------------------

SCHEDULE 1.1.11

FINANCIAL STATEMENTS Jasc Software, Inc. Years Ended December 31, 2003 and 2002

Jasc Software, Inc. Financial Statements Years Ended December 31, 2003 and 2002 CONTENTS
Report of Independent Auditors.............................................. Financial Statements Balance Sheets.............................................................. Statements of Income........................................................ Statement of Changes in Stockholders' Equity................................ Statements of Cash Flows.................................................... Notes to Financial Statements............................................... 2 4 5 6 7 1

(ERNST & YOUNG LOGO)

- ERNST & YOUNG LLP 220 South Sixth Street, Ste 1400 Minneapolis, MN 55402-4509 Report of Independent Auditors

- Phone:(612)343-1000 www.ey.com

The Board of Directors Jasc Software, Inc.

We have audited the accompanying balance sheets of Jasc Software, Inc. as of December 31, 2003 and 2002, and the related statements of income, changes in stockholders' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Jasc Software, Inc. as of December 31, 2003 and 2002, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP January 30, 2004

A Member Practice of Ernst & Young Global 1 Jasc Software, Inc. Balance Sheets
DECEMBER 31 ------------------------2003 2002 --------------------ASSETS Current assets: Cash and cash equivalents Accounts receivable (less allowances for uncollectible accounts and product returns totaling $2,033,000 in 2003 and $613,000 in 2002) Note receivable Inventories Prepaid expenses Total current assets Property and equipment: Equipment and software Leasehold improvements

$

867,667

$

802,375

7,935,331 60,000 1,161,846 1,139,067 ----------11,163,911 3,545,408 236,019 ----------3,781,427 (3,046,287) ----------735,140 -43,324 52,150 588,547 ----------$12,583,072 ===========

7,055,901 -460,392 335,234 ----------8,653,902 3,218,391 236,019 ----------3,454,410 (2,581,881) ----------872,529 30,000 55,113 73,009 663,042 ----------$10,347,595 ===========

Less accumulated depreciation and amortization

Restricted cash Deposits Other assets, net Acquired technology, net Total assets

2
DECEMBER 31

DECEMBER 31 ------------------------2003 2002 --------------------LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued compensation and withholdings Accrued profit sharing Accrued distributor discounts Accrued royalties Accrued rebates Other accrued liabilities Customer deposits Current portion of capital lease obligation Total current liabilities Capital lease obligation, less current portion Stockholders' equity: Preferred stock, $0.01 par value: Authorized shares - 5,000,000 Issued and outstanding - none Common stock, $0.01 par value: Authorized shares - 10,000,000 Issued and outstanding shares - 4,405,000 Additional paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity

$ 2,359,889 1,054,531 -812,759 574,608 784,039 576,804 100,666 2,500 ----------6,265,796 4,146

$

802,949 619,390 257,159 538,892 466,082 514,451 832,426 225,895 -----------4,257,244 --

--

--

44,050 1,511,700 4,757,380 ----------6,313,130 ----------$12,583,072 ===========

44,050 1,511,700 4,534,601 ----------6,090,351 ----------$10,347,595 ===========

See accompanying notes. 3 Jasc Software, Inc. Statements of Income
YEAR ENDED DECEMBER 31 ------------------------2003 2002 --------------------$32,841,317 $27,292,756 6,736,000 5,076,938 --------------------26,105,317 22,215,818 5,078,809 10,497,309 6,797,173 727,584 ----------23,100,875 ----------3,004,442 (755) 12,240 (34,804) 389,623 ----------366,304 ----------$ 3,370,746 =========== 4,282,741 8,203,931 7,501,652 777,525 ----------20,765,849 ----------1,449,969 (36,716) 3,514 84,329 350,218 ----------401,345 ----------$ 1,851,314 ===========

Net sales Cost of goods sold Gross profit Operating expenses: General and administrative Marketing and selling Product development Profit sharing compensation

Income from operations Interest expense Interest income Other (expense) income Foreign currency gain

Net income

See accompanying notes. 4 Jasc Software, Inc. Statement of Changes in Stockholders' Equity
COMMON STOCK ------------------SHARES AMOUNTS --------------4,405,000 $44,050 ------------------4,405,000 44,050 ------------------4,405,000 $44,050 ========= ======= ADDITIONAL PAID-IN CAPITAL ---------$1,511,700 -----------1,511,700 -----------$1,511,700 ==========

Balance, December 31, 2001 Distribution to stockholders Net income Balance, December 31, 2002 Distribution to stockholders Net income Balance, December 31, 2003

RETAINED EARNINGS ----------$ 4,284,778 (1,601,491) 1,851,314 ----------4,534,601 (3,147,967) 3,370,746 ----------$ 4,757,380 ===========

TOTAL ----------$ 5,840,528 (1,601,491) 1,851,314 ----------6,090,351 (3,147,967) 3,370,746 ----------$ 6,313,130 ===========

See accompanying notes. 5 Jasc Software, Inc. Statements of Cash Flows
YEAR ENDED DECEMBER 31 ------------------------2003 2002 --------------------OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Loss (gain) on sale of property and equipment Changes in operating assets and liabilities: Accounts receivable Inventories Prepaid expenses Restricted cash Deposits Accounts payable Accrued liabilities Customer deposits Net cash provided by operating activities INVESTING ACTIVITIES Purchases of property and equipment Acquisition of technology Proceeds from sale of property and equipment Net cash used in investing activities FINANCING ACTIVITIES Net payments under line of credit Distributions to stockholders Payments on obligation under capital lease Net cash used in financing activities $ 3,370,746 $ 1,851,314

655,443 351 (939,430) (701,454) (803,833) 30,000 11,789 1,556,940 574,341 (125,229) ----------3,629,664

888,125 (388) (2,049,782) 133,058 (204,602) 30,000 43,099 145,378 1,547,278 68,350 ----------2,451,830

(324,631) (90,000) 100 ----------(414,531)

(181,192) (52,821) -----------(234,013)

-(3,147,967) (1,874) ----------(3,149,841)

(670,702) (1,601,491) (189,243) ----------(2,461,436)

Net increase (decrease) in cash Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the year for interest Property and equipment acquired through capital lease obligation

----------65,292 802,375 ----------$ 867,667 =========== $ 755 =========== $ 8,520 ===========

----------(243,619) 1,045,994 ----------$ 802,375 =========== $ 36,716 =========== $ -===========

See accompanying notes. 6 Jasc Software, Inc. Notes to Financial Statements December 31, 2003 1. BUSINESS ACTIVITY Jasc Software, Inc. (the Company) designs, develops, markets, and sells general-use computer software throughout the world. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REVENUE RECOGNITION The Company accounts for the licensing of software in accordance with American Institute of Certified Public Accountants Statement of Position 97-2, Software Revenue Recognition, as amended. The Company recognizes revenue when (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the sales prices is fixed or determinable; and (iv) collectibility is reasonably assured. The Company recognizes revenue upon shipment of its product in the United States from its distributors to retailers and upon shipment to master representatives, internationally. The Company has several retailers in the United States which operate on a consignment basis, where revenue is recognized at the time the retailer sells the Company's product to the end customer. The Company has two international master representatives with whom it does business on a royalty basis, in which profits are shared and recognized as royalty revenue at the time the master representative sells the Company's product to the end customer. Royalty revenue of $3,890,368 and $3,368,593 is included in net sales in 2003 and 2002, respectively. The Company offers product right of return terms to certain customers. This right of return is accounted for in accordance with Financial Accounting Standards Board Statement of Financial Accounting Standards (SFAS) No. 48, Revenue Recognition When Right of Return Exists, with returns estimated based on historical activity and reflected as a reduction of revenues. SHIPPING AND HANDLING COSTS The Company classifies costs incurred for shipping in costs of goods sold. Any shipping costs billed to customers are included in revenue. 7 Jasc Software, Inc.

Notes to Financial Statements (continued) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) CASH AND CASH EQUIVALENTS The Company considers all investments with an original maturity of 90 days or less when purchased to be cash equivalents. The carrying cost of cash equivalents at December 31, 2003 and 2002, approximates fair value. INVENTORIES Inventories are valued at the lower of cost or market. Cost is determined on a first-in, first-out basis. Inventories consist of materials and finished goods. EQUIPMENT AND LEASEHOLD IMPROVEMENTS Equipment and leasehold improvements are recorded at cost and depreciated using the straight-line method over three to seven years. The Company leases equipment under capital leases. Amortization of these leased assets is included in depreciation expense. IMPAIRMENT OF LONG-LIVED ASSETS The Company evaluates its long-lived assets for impairment losses when indicators of impairment are present by comparing the undiscounted cash flows to the assets' carrying amount. An impairment loss is recorded if necessary. STOCK-BASED COMPENSATION At December 31, 2003, the Company has A stock-based employee compensation plan which is described more fully in Note 8. The Company accounts for this plan under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. No stock-based employee compensation cost is reflected in net income for 2003 and 2002, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income if the Company had applied the fair value recognition provisions of 8 Jasc Software, Inc. Notes to Financial Statements (continued) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) SFAS No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation.
2003 ---------$3,370,746 2002 ---------$1,851,314

Net income, as reported Deduct: total stock-based employee compensation expense determined under fair-value-based method for all awards Pro forma net income

(139,188) ---------$3,231,558 ==========

(74,623) ---------$1,776,691 ==========

The fair value of these options was estimated at the date of grant using the minimum value option pricing model. The minimum value option pricing model is used by nonpublic companies and excludes stock price volatility of the

stock in the calculation of fair value of the option. The following assumptions were used for options granted in 2003: risk-free interest rate of 4.06%; dividend yield of 0%; and an expected life of the option of ten years. The fair value of options granted in 2003 and 2002 was $0.66 and $1.26 per share, respectively. ADVERTISING Advertising costs are expensed as incurred and totaled $2,217,687 and $1,418,174 in 2003 and 2002, respectively, and are included as marketing and selling expense in the statements of income. PRODUCT DEVELOPMENT Product development expenditures are charged to operations as incurred. SFAS No. 86, Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed, requires capitalization of certain software development costs subsequent to the establishment of technological feasibility and until the product is generally available for sale. Costs incurred by the Company during this phase have been immaterial. Therefore, the Company has not capitalized any software development costs through December 31, 2003. 9 Jasc Software, Inc. Notes to Financial Statements (continued) 2. SUMMARY of SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) OTHER ASSETS Other assets include patent costs that are being amortized over five years. The accumulated amortization as of December 31, 2003 and 2002, was $52,150 and $31,290, respectively. ACQUIRED TECHNOLOGY In 2003 and 2002, the Company acquired the technology of certain products. The cost is being amortized over five years. The accumulated amortization as of December 31, 2003 and 2002, was $312,277 and $147,782, respectively. INCOME TAXES The Company has elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. Under those provisions, the stockholders of an S corporation are taxed on their proportionate share of the Company's taxable income. As a result, no provision for federal taxes has been included in the financial statements. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. RECLASSIFICATION A certain prior year amount has been reclassified to conform to the current year financial statement presentation. 10 Jasc Software, Inc. Notes to Financial Statements (continued)

Notes to Financial Statements (continued) 3. COMMITMENTS ROYALTIES The Company has entered into various licensing agreements requiring royalty payments ranging from 0.65% to 50% of specified product sales. During 2003 and 2002, the Company recorded royalty expense of $1,771,700 and $1,389,814, respectively, which is included in costs of goods sold in the statements of income. LEASES The Company leases its office and warehouse space under a noncancelable operating lease agreement. The current operating lease is effective until December 31, 2008. Minimum future lease obligations under this lease, excluding operating costs, are as follows for the years ending December 31:
2004 2005 2006 2007 2008 $ 415,654 423,819 432,726 440,891 449,797 ---------$2,162,887 ==========

The Company is required to maintain a letter of credit to secure its operating lease. The amount required at December 31, 2003 and 2002, was $30,000. The Company has a certificate of deposit on hand at a bank for this letter of credit. This amount has been reported as restricted cash in the balance sheet in 2002 and as cash and cash equivalents in 2003 as it becomes unrestricted in January 2004. Rent expense for the years ended December 31, 2003 and 2002, was $1,002,198 and $979,648, respectively. 4. FINANCING AGREEMENTS The Company has a line of credit agreement totaling $3,000,000 available for borrowings at prime (4.00% at December 31, 2003) through September 15, 2004. Borrowings under the agreement are secured by essentially all assets. The agreement contains certain restrictive covenants. The Company was in compliance with the covenants at December 31, 2003. 11 Jasc Software, Inc. Notes to Financial Statements (continued) 5.401 (K) PIAN The Company has a qualified 401(k) plan covering all employees meeting the eligibility requirements. The Company made matching contributions of $346,874 and $455,158 for the years ended December 31, 2003 and 2002, respectively. 6. PROFIT SHARING PLAN The Company has a nonqualified profit sharing plan covering all employees meeting eligibility requirements. A fixed percentage of the Company's operating income is paid out each quarter in the form of taxable distributions. Total expenses under the plan during 2003 and 2002 were $727,584 and $777,525, respectively. 7. SIGNIFICANT CONCENTRATIONS

One customer accounted for 16% of revenue for the year ended December 31, 2003. Two customers accounted for 11% and 10% of revenue for the year ended December 31, 2002. 8. STOCK OPTIONS The Company has a 1997 Omnibus Stock Plan (the Plan), pursuant to which 1,025,000 shares of common stock are reserved for issuance of incentive or nonqualified stock options to employees, directors, and consultants. The number of shares, exercise price, and option term are to be determined by a committee designated by the Board of Directors. The options generally vest over five years and expire in ten years. Stock option activity is summarized as follows:
WEIGHTED AVERAGE OPTION PRICE PER SHARE -----------$3.76 3.75 3.75 3.76 3.75 3.75 3.76

Balance at December 31, 2001 Granted Canceled Balance at December 31, 2002 Granted Canceled Balance at December 31, 2003

OPTIONS OUTSTANDING ----------476,358 60,000 (136,566) -------399,792 20,000 (1,652) -------418,140 ========

12 Jasc Software, Inc. Notes to Financial Statements (continued) 8. STOCK OPTIONS (CONTINUED) The options outstanding at December 31, 2003 expire at various dates through 2013 and have a weighted average contractual life remaining of 5.55 years. The exercise price of the outstanding options range from $3.75 to $3.90 per share. The number of options exercisable as of December 31, 2003 and 2002, was 318,381 and 245,441, respectively, at a weighted average exercise price of $3.76 per share. 13 SCHEDULE 1.1.29

COREL CORPORATION CONSOLIDATED FINANCIAL STATEMENTS NOVEMBER 30, 2003 AUDITOR'S REPORT We have audited the consolidated balance sheet of Corel Corporation as at November 30, 2003 and the related consolidated statements of operations, shareholders' equity and cash flows for the period from December 1, 2002 through August 28, 2003, and for the period from August 29, 2003 through November 30, 2003. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards

We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at November 30, 2003, and the results of its operations and its cash flows for the period from December 1, 2002 through August 28, 2003, and for the period from August 29, 2003 through November 30, 2003, in accordance with generally accepted accounting principles in Canada.
PricewaterhouseCoopers LLP Chartered Accountants Ottawa, Canada January 27, 2004

CONSOLIDATED BALANCE SHEETS (in thousands of US$)

Audited NOVEMBER 30, 2003 Successor -----------ASSETS Current assets: Cash and cash equivalents Restricted cash Short-term investments Accounts receivable Trade Other Inventory Prepaid expenses Total current assets Investments Capital assets Intangible assets Goodwill Deferred financing charge Total assets LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities Operating line of credit Current portion of term loan payable Income taxes payable Deferred revenue Total current liabilities Deferred revenue Term loan payable Future income tax liability Subordinated debt Total liabilities Commitments and contingencies SHAREHOLDERS' EQUITY Share capital Contributed surplus Predecessor Successor Retained earnings Predecessor deficit Successor deficit

Unaudited AUGUST 29, 2003 Successor -----------

Audited NOVEMBER 30, 2002 Predecessor -----------

$

18,495 1,830 5,993

$

14,222 1,867 8,972

$

18,874 1,558 56,952

12,583 104 313 1,244 --------40,562 4,899 46,515 8,480 528 --------$ 100,984 =========

18,075 791 163 3,857 --------47,947 5,536 50,937 8,480 552 --------$ 113,452 =========

19,958 250 191 2,786 --------100,569 8,590 7,944 13,824

--------$ 130,927 =========

$

21,383

$

2,619 6,085 6,822 --------36,909 1,204 7,303 16,973 --------62,389 =========

21,661 3,000 1,904 5,658 3,600 --------35,823 790 8,096

$

22,552

5,685 8,875 --------37,112 879 806

16,973 --------61,682 =========

--------38,797 =========

$

66,001 271,241 49,676

$

70,147 271,241 49,676

$ 405,124 4,990

(339,294) (9,029) ---------

(339,294) ---------

(317,984) ---------

Total shareholders' equity Total liabilities and shareholders' equity

--------38,595 --------$ 100,984 =========

--------51,770 --------$ 113,452 =========

--------92,130 --------$ 130,927 =========

(See accompanying Notes to Consolidated Financial Statements.)

Consolidated Statements OF OPERATIONS (in thousands of US$)
FOR THE PERIODS -----------------------------AUGUST 29, 2003 DECEMBER 1, THROUGH 2002 THROUGH NOVEMBER 30, AUGUST 28, 2003 2003 Successor Predecessor -------------------------$23,806 $ 85,386 2,644 12,222 -------------21,162 73,164 8,622 4,078 3,642 7,995 4,833 1,138 27,699 14,270 12,669 28,463 9,391

Sales Cost of sales Gross profit Expenses: Sales Marketing Research and development General and administration Depreciation and amortization Restructuring charge Impairment of goodwill Write-down of technology Gain on foreign exchange

YEAR ENDED NOVEMBER 30, 2002 Predecessor ----------$ 126,701 14,543 --------112,158 38,802 27,227 23,583 41,906 20,216 49,896 17,781 (1,797) --------217,614 --------(105,456) (149) 1,790 --------(103,815) (8,581) 1,190 --------$ (96,424) =========

Loss from operations Loss on investments Write-down of investments Interest income (expense) Loss before the undernoted Income tax (recovery) expense Share of loss on equity investments Net loss

(641) ------29,667 ------(8,505)

(206) ------(8,711) 318 ------$(9,029) =======

(1,330) -------91,162 -------(17,998) (48) (7,400) 1,383 -------(24,063) (3,895) 1,142 -------$(21,310) ========

(See accompanying Notes to Consolidated Financial Statements.)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (in thousands of US$ except share data)
NUMBER OF SHARES (000S) ----------------------COMMON PREFERRED --------------PREDECESSOR EQUITY Balance at November 30, 2001 Issuance of common shares pursuant to stock options Issuance of common shares for acquisition of SoftQuad Net loss 80,709 37 11,072 -----------24,000 CONTRIBUTED SURPLUS ----------4,990

SHARE CAPITAL ------------388,193 97 16,834 ---------

--------

Balance at November 30, 2002 Issuance of common shares pursuant to stock options Transfer to contributed surplus Balance of Microsoft accrual Conversion of Series A Preferred Net loss Opening balance at August 28, 2003 Shares converted to 3.5 Corel New Common Shares Shares converted 1 for 1 to New Series 'A" Pfd shares Shares cancelled on capital reorganization Closing balance at August 28, 2003 Balance at November 30, 2003

91,818 ------70

24,000 ------

$ 405,124 --------69 (265,296)

$ 4,990 --------

265,296 955

13,610 ------105,498 ------(12,500)

(13,610) -----10,390 -------------139,897 --------(49,367) (20,780) (69,750) ---------------271,241 --------

(10,390) (92,998) ------------

-------271,241 -------271,241 --------

SUCCESSOR EQUITY Shares converted from Predecessor equity Comprehensive revaluation of assets Balance at August 28, 2003 Acquisition costs Net loss Balance at November 30, 2003

43,750 ------43,750 -------

10,390 -----10,390 ------

70,147 --------70,147 --------(4,146) --------$ 66,001 --------49,676 -------49,676 --------

------43,750 -------

-----10,390 ------

-------$ 49,676 --------

(See accompanying Notes to Consolidated Financial Statements.)

CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of US$)
FOR THE PERIODS -----------------------------AUGUST 29, 2003 DECEMBER 1, THROUGH 2002 THROUGH NOVEMBER 30, AUGUST 28, 2003 2003 Successor Predecessor -------------------------Operating activities: Net loss Items which do not involve cash or cash equivalents: Depreciation Amortization Bad debt expense Impairment of goodwill Write down of assets Future income taxes Loss on investments Write down of long term investments Loss on capital assets Share of loss of equity investments Changes in operating assets and liabilities: Restricted cash Accounts receivable Inventory Prepaid expenses Accounts payable and accrued liabilities Income taxes payable Deferred revenue Net cash provided by (used in) operating activities Financing activities: Issuance of common shares $ (9,029) 661 4,422 327 $(21,310) 3,321 6,919 755

YEAR ENDED NOVEMBER 30, 2002 Predecessor ----------$(96,424) 6,359 16,027 596 49,896 17,781 (10,148) 149 136 1,190 1,473 (221) 608 (998) (6,696) 936 (406) -------(19,742) -------97

(139) 48 7,400 67 1,142 37 5,852 (150) 2,613 (278) 427 3,636 -------8,518 -------(309) (2,364) 28 (1,071) (457) (27) 1,861 -------(4,136) -------69

Repayments of operating line of credit Acquisition costs Acquisition by Vector Net cash provided by (used in) financing activities Investing activities: Purchase of investments Redemption of short-term investments Purchase of capital assets Proceeds on disposal of assets Acquisition of SoftQuad Software, Ltd. Acquisition of Micrografx, Inc., Net cash provided by investing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

(3,078) (4,146) -------(7,224) -------(47,158) -------(47,089) --------------97 -------(43) 21,185 (3,236) (3,631) (680) -------13,595 -------(6,050) 24,924 -------$ 18,874 ========

2,979

47,980 (1,440) 33

-------2,979 -------4,273 14,222 -------$ 18,495 ========

-------46,573 -------(4,652) 18,874 -------$ 14,222 ========

(See accompanying Notes to Consolidated Financial Statements.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION All dollar amounts included herein are expressed in thousands of US$ unless otherwise noted Certain per share information is expressed in units of US$ unless otherwise noted. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada ("Canadian GAAP"). The Company was acquired by Vector Capital ("Vector"), a venture capital company based out of California, on August 28, 2003. The Company accounted for the acquisition by allocating the purchase price paid by Vector to the Company's net assets (push-down accounting). Because of the application of push-down accounting, the consolidated financial statements for the periods ended prior to August 29, 2003 (Predecessor) are not comparable to the consolidated financial statements for the periods ended after August 28, 2003 (Successor) (Note 11). Certain comparative figures in the consolidated financial statements have been reclassified to conform to the current year presentation. NATURE OF OPERATIONS Founded in 1985, Corel Corporation is a technology company specializing in content creation tools and business process management. Corel products are available for users of most PCs, including International Business Machines Corporation and IBM-compatible PCs. BASIS OF CONSOLIDATION The consolidated financial statements include the accounts of Corel and its wholly-owned subsidiaries ("Corel"). All material intercompany transactions and balances have been eliminated. Corel follows the equity method of accounting for investments in other companies where it holds 20% or more of the outstanding voting shares and has the ability to exert significant influence. Under the equity method, Corel records its initial investment at cost and records its pro rata share of earnings or losses of equity investments in its results of operations. DIFFERENTIAL REPORTING The Successor Company, with the unanimous consent of its shareholders, has elected to prepare its financial statements in accordance with Canadian generally accepted accounting principles, using the differential reporting options available to non-publicly accountable enterprises described below from the date of acquisition:

(a) Income taxes The Company has elected to apply the differential reporting measurement option allowed for income taxes to account for income taxes using the taxes payable method. (b) Goodwill The Company has elected to apply the differential reporting measurement option allowed for goodwill and other intangible assets to elect to test goodwill for impairment only when an event or circumstance occurs that indicates that the fair value of a reporting unit may be less than its carrying amount. Goodwill represents the excess of the purchase price of acquired companies over the estimated fair value of the tangible and intangible net assets acquired and is not amortized. ESTIMATES AND ASSUMPTIONS Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities. Examples of estimates include the provisions for sales returns and bad debts, the length of product cycles and related capital asset lives. Actual results may differ from these estimates. SOFTWARE REVENUE RECOGNITION Corel recognizes revenue from packaged software and licence fees when the software is delivered, when there is persuasive evidence that an arrangement exists, when the fee is fixed and determinable, and when collection is probable. Sales to distributors are subject to agreements allowing various rights of return and price protection. Corel establishes provisions for estimated future returns, exchanges and price protection. When telephone support is included for a limited time (post contract support or "PCS", generally for 90 days) together with the licence fee, the entire licence fee is recognized upon delivery of the product and the insignificant costs to provide the support are accrued. When support is provided together with an annual licensing fee, the entire fee is deferred and recognized ratably over the term of the licence agreement since Corel does not have vendor-specific objective evidence of fair

market value of this PCS. Revenue from professional services and other services are recognized as the services are delivered. RESEARCH AND DEVELOPMENT COSTS Research costs are expensed as incurred. Development costs related to software products developed for sale are expensed as incurred unless they meet the criteria for deferral under generally accepted accounting principles. CASH AND CASH EQUIVALENTS Cash includes cash equivalents, which are investments that are highly liquid and have terms to maturity of three months or less at the time of acquisition. Cash equivalents typically consist of commercial paper, term deposits and banker's acceptances issued by major North American banks, and corporate debt. Cash and cash equivalents are carried at cost, which approximates their fair value. SHORT-TERM INVESTMENTS Short-term investments are investments that are generally held to maturity and have terms greater than three months at the time of acquisition. Short-term investments typically consist of commercial paper, Government of Canada Treasury Bills and banker's acceptances. Short-term investments are carried at cost plus accrued interest, which approximates their fair value.

RESTRICTED CASH Corel maintains restricted cash in investments with major financial institutions as security against certain financial obligations. FINANCIAL INSTRUMENTS Corel utilizes certain derivative financial instruments to enhance its ability to manage foreign currency exchange rate risk, which exists as part of its ongoing operations. Gains and losses are recognized when realized. INVENTORY Inventory of product components is valued at the lower of average cost and replacement cost. Finished goods are valued at the lower of average cost and net realizable value. LONG LIVED ASSETS Capital assets are recorded at cost. Amortization of licences commences with the market release of each new software product and version. Depreciation and amortization are calculated using the following rates and bases:
Capital assets Furniture and equipment Computer equipment Research and development equipment Leasehold improvements Intangible assets Technology Intangible assets are amortized over their useful life, generally 3 years, unless the life is determined to be indefinite, in which case no amortization is taken. The greater of: a) the ratio that current gross revenues bear to the total of current gross revenues and anticipated future gross revenues or, b) the straight line method over the remaining economic life, generally estimated to be three to five years 20 - 33.3% declining balance 33.3% straight line 20 - 50% declining balance Straight line over the term of the lease

Licences, purchased software, deferred royalties

Corel regularly reviews the carrying value of its long lived assets. If the carrying value of its long lived assets exceeds the amount recoverable, a write-down is charged to the consolidated statement of operations to reflect the fair value of the assets.

FOREIGN CURRENCY The functional currency of Corel and its subsidiaries, which are accounted for as integrated foreign operations, is the US dollar. Monetary assets and liabilities denominated in foreign currencies are remeasured at the closing period-end rates of exchange. The gains or losses resulting from the remeasurement of these amounts have been reflected in earnings in the respective periods. Non-monetary items and any related amortization of such items are measured at the rates of exchange in effect when the assets were acquired or obligations incurred. All other income and expense items have been remeasured at the average rates prevailing during the respective periods. INVESTMENT TAX CREDITS Investments tax credits, which are earned as a result of qualifying research and development expenditures, are recognized and applied to reduce research and development expense in the year in which the expenditures are

made and their realization is reasonably assured. FISCAL 2002 - INCOME TAXES Corel accounted for income taxes under the asset and liability method. Under this method, future tax assets and liabilities are recognized for the estimated tax recoverable or payable, which would arise if assets were recovered and liabilities settled at the financial statement carrying amounts. Future tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. Changes to these balances are recognized in income in the period in which they occur. 2. INVENTORY
AS AT NOVEMBER 30 ----------------------2003 2002 Successor Predecessor ------------------$226 $118 87 73 ------$313 $191 ==== ====

Product components Finished goods

3. INVESTMENTS
AS AT NOVEMBER 30 ----------------------2003 2002 Successor Predecessor ------------------Equity investments Hemera Technologies, Inc. LinuxForce, Inc. $ $8,116 192 -----8,308

Investments recorded at cost, including GraphOn Corporation --$ ===

282 -----$8,590 ======

HEMERA TECHNOLOGIES, INC. On July 17, 2000, Corel purchased a 23% interest in Hemera Technologies, Inc. ("Hemera"), a privately held company. As consideration for these shares, Corel transferred its GraphicCorp division and related assets to Hemera. As of the effective date of the transaction, the fair value of the GraphicCorp division and its related assets was estimated at $9.7 million and the shares were valued at this amount. No gain or loss was recognized on the transfer. During fiscal 2001, Hemera received additional financing, which resulted in Corel's interest in Hemera being diluted to 21%. Corel's share of Hemera's operating results have been incorporated into the statement of operations. Due to the continued losses experienced by Hemera, the Company wrote of the balance of the investment in the third quarter of fiscal 2003.

LINUXFORCE, INC. In December 1999, Corel purchased, and currently maintains, a 33% interest in LinuxForce, Inc., a privately held company, for cash. Corel's share of LinuxForce, Inc.'s operating results was nominal in fiscal 2003 and 2002. Due to LinuxForce's continued losses and limited resources of funding, the Company wrote off the balance of the investment in the third quarter of fiscal 2003.

INVESTMENTS RECORDED AT COST Corel owns 1,193,824 shares of common stock of GraphOn Corporation ("GraphOn"). Corel has accounted for the cost of this investment under the first-in, first-out method. GraphOn's most recent audited financial statements included a "going-concern note" which raises substantial doubt on the company's ability to continue as a going concern without further funding. GraphOn's cash reserves have continued to deteriorate over the subsequent two quarters. Accordingly, the Company wrote off its investment in GraphOn in fiscal 2003. 4. LONG LIVED ASSETS
NOVEMBER 30, 2003 Successor ---------------------ACCUMULATED COST AMORTIZATION -----------------Capital assets Furniture and equipment Computer equipment Research and development equipment Leasehold improvements $13,764 33,726 12,389 1,965 ------61,844 56,945 ------$ 4,899 ======= $11,860 32,034 11,168 1,883 ------56,945 NOVEMBER 30, 2002 Predecessor ----------------------ACCUMULATED COST AMORTIZATION ------------------$ 13,888 84,205 12,389 2,340 -------112,822 104,878 -------$ 7,944 ======== $ 11,623 80,217 10,896 2,142 -------104,878

Less: Accumulated amortization Net book value

Intangible assets Licences and purchased software Technology

Less: Accumulated amortization Net book value

11,138 49,652 ------60,790 14,275 ------$46,515 =======

10,137 4,138 ------14,275

27,121 31,625 -------58,746 44,922 -------$ 13,824 ========

25,188 19,734 -------44,922

FISCAL 2002 TECHNOLOGY WRITE-DOWN In fiscal 2002, circumstances suggested the possible impairment of technology. An independent valuation of the majority of Corel's intangible assets indicated an impairment in value existed. The independent valuator relied primarily on the income approach, under which fair market value is a function of the future revenue expected to be generated by an asset, net of all allocable expenses. The income approach focuses on the income-producing capability of the developed software and the core technology, and best represents the present value of the future economic benefits expected to be derived. Corel prepared a valuation on the intangible assets not covered in the independent valuator's report. This valuation resulted in a total write off of $17.8 million, which included a writeoff of technology acquired from SoftQuad Software, Ltd. ("Softquad") of $11.0 million and technology acquired from Micrografx, Inc. ("Micrografx") of $6.7 million. The technology write-offs were non cash charges to income. 5. FISCAL 2002 IMPAIRMENT OF GOODWILL In fiscal 2002, circumstances suggested that Corel's goodwill was impaired and that its carrying amount may not be recoverable. Following a review, Corel determined that the impairment loss to be recognized was the full carrying amount. The total non cash charge was $49.9 million consisting of $36.3 million associated with the acquisition of Micrografx and $13.6 million associated with SoftQuad.

6. SOFTQUAD ACQUISITION On March 15, 2002, Corel completed the acquisition of all of the issued and outstanding stock of SoftQuad, a

Canadian-based developer of XML-enabling technologies and commerce solutions for e-Business. Corel's consolidated statements of operations reflect the results of operations of SoftQuad from the date of acquisition. The aggregate purchase price paid was approximately $18.1 million, including 11,071,833 common shares of Corel at a value of $16.9 million. The components of the aggregate purchase price were as follows (in thousands)
Common shares Other costs of acquisition Total purchase price $16,897 1,226 ------$18,123 =======

Other costs of acquisition include professional fees and other costs directly related to the acquisition. The purchase price has been allocated to identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as follows:
Cash Other current assets Core technology Developed software Property and equipment Future tax liabilities Bridge loan from Corel Other liabilities Net assets acquired Total purchase price Goodwill 771 839 4,456 10,858 161 (5,957) (2,150) (4,488) ------4,490 18,123 ------$13,633 ======= $

The estimates of fair value were determined by Corel's management based on information furnished by the management of SoftQuad and an independent valuation of developed software and in-process research and development projects. To determine the fair market value of the core technology and the developed software, Corel considered the three traditional valuation approaches: the cost approach, the market approach and the income approach. The independent valuator relied primarily on the income approach, under which fair market value is a function of the future revenue expected to be generated by an asset, net of all allocable expenses. The income approach focuses on the income-producing capability of the developed software and the core technology, in arriving at the present value of the future economic benefits expected to be derived. UNAUDITED PRO FORMA PREDECESSOR FINANCIAL INFORMATION The following unaudited pro forma financial information gives effect to the acquisition of SoftQuad made by Corel as if the transactions occurred at the beginning of each of the fiscal year ending November 30, 2002. The pro forma financial information below excludes the non-recurring charges related to the goodwill impairment and technology write-down.
YEAR ENDED NOVEMBER 30, 2002 Predecessor -----------$ 128,342 14,559 --------113,783 155,470 --------(41,687)

Sales Cost of sales Gross profit Expenses Operating loss

Interest and other income Net loss

(65,786) --------$(107,473) =========

7. COMMITMENTS AND CONTINGENCIES Corel rents office premises and sponsors various sporting events and venues. At November 30, 2003, the minimum unaccrued commitments under long-term agreements, are as follows:
LEASES -----$3,351 1,745 1,014 542 96 431 -----$7,179 ====== SPONSORSHIP ----------$ 1,090 1,123 1,157 1,191 1,227 12,839 ------$18,627 ======= TOTAL ------$ 4,441 2,868 2,171 1,733 1,323 13,270 ------$25,806 =======

2004 2005 2006 2007 2008 2009 and thereafter

Corel is a party to a number of additional claims arising in the ordinary course of business relating to employment, intellectual property and other matters. Based on its review of the individual matters, Corel believes that such claims, individually, will not have a material adverse effect on its business, financial position or results of operations but, in the aggregate, may have a material adverse effect on its business, financial position or results of operations. Such possible effect cannot be reasonably estimated at this time. 8. LONG TERM DEBT TERM LOAN AND LINE OF CREDIT The Company has a secured term loan with Wells Fargo Foothill for $10.0 million. It is repayable in 42 equal monthly installments of $238 USD beginning January 1, 2004 and is secured by the assets of the Company. Interest of the greater of i) 6.0% or ii) prime plus 3.5% is charged to the daily balance of the loan and paid monthly. The principal payments due in fiscal 2004 are $2,619. Associated with the term loan is a revolving line of credit secured by certain accounts receivable. Wells Fargo Foothill will advance up to $7.5 million subject to the borrowing base availability to the Company. The line of credit expires on August 25, 2006. Any funds advanced on the line of credit are repaid with collections from the related receivables. Interest of the greater of i) 6.0% or ii) prime plus 2.5% is charged to the outstanding daily balance. There is also a letter of credit fee of 2.5% of the undrawn balance charged directly to the line on a monthly basis. As of November 30, 2003 there were no funds advanced on the line of credit. SUBORDINATED DEBT The Company has a note payable to a related party in the amount of $10.0 million that is subordinated in favour of the debt to Wells Fargo Foothill. The note payable matures August 25, 2006, is non-interest bearing and is secured by a general security agreement. The Company has a demand note payable to a related party in the amount of $6,973 million that is subordinated in favour of the debt to Wells Fargo Foothill. Additional advances may be requested by the Company under this agreement and may be fulfilled at the discretion of the lender. The demand note payable is non-interest bearing and is secured by a general security agreement. 9. FINANCIAL INSTRUMENTS

CONCENTRATION OF CREDIT RISK The primary objective of Corel with respect to short-term investments is security of principal. Corel manages its investment credit risk through a combination of the (i) selection of securities with an acceptable credit rating; (ii) selection of term to maturity, which in no event exceeds one year in length; and (iii) diversification of debt issuers. Included in cash, cash equivalents and short-term investments as of November 30, 2003 and November 30, 2002 were corporate debt amounts of $8.0 million and $10.0 million, respectively. These amounts were repaid, in full, at maturity in December 2003 and December 2002, respectively. All of Corel's short-term investments as at November 30, 2003 had maturity dates of less than two months from year end. Corel's cash, cash equivalents and short-term

investments are denominated predominantly in US dollars. Concentration of credit risk, with respect to accounts receivable, is limited due to the diversity of Corel's channel arrangements. Corel has credit evaluation, approval and monitoring processes intended to mitigate potential credit risks. Ingram Micro Inc. accounted for $2.8 million (22.2%) and $8.7 million (43.1%) of accounts receivable at November 30, 2003 and November 30, 2002, respectively. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts for cash and cash equivalents, restricted cash, short-term investments, accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short maturity of these instruments, unless otherwise noted. FOREIGN EXCHANGE FORWARD CONTRACTS Corel manages its financial exposure to certain foreign exchange fluctuations with the objective of minimizing the impact of foreign currency exchange movements on its operations. To meet this objective Corel enters into foreign exchange forward contracts from time to time for terms of less than twelve months. Contracts are with major Canadian chartered banks, and therefore non-performance by a counterparty is considered unlikely. As at November 30, 2003, Corel had US dollar foreign exchange forward contracts with maturity dates from January 9, 2004 to November 26, 2004 to purchase a total of CDN $13.6 million (estimated fair value CDN $14.1 million). As at November 30, 2002, Corel had US dollar foreign exchange forward contracts with maturity dates from December 23, 2002 to August 8, 2003 to purchase a total of CDN $9.7 million (estimated fair value CDN $9.8 million). 10. SHARE CAPITAL COMMON SHARES - PREDECESSOR There were an unlimited number of common shares ("Predecessor Common Shares") authorized at November 30, 2002. On October 30, 2001, Corel completed the acquisition of Micrografx, Inc. The aggregate purchase price paid, including acquisition costs of $1.5 million, was approximately $33.8 million consisting of 6,894,250 Predecessor Common Shares valued at $16.0 million and participation rights valued at $16.3 million, which were settled for cash in October 2002 On March 15, 2002, Corel completed the acquisition of SoftQuad. The aggregate purchase price paid was approximately $18.1 million, consisting of 11,071,833 Predecessor Common Shares valued at $16.9 million and the remaining amount consisting of $1.2 million in acquisition costs. Holders of stock options for Predecessor Common Shares were given the option to elect to receive the amount above the exercise price up to $1.05 ($1.4820 CAD) per share. All stock options not exercised or exchanged,

expired on August 30, 2003. COMMON SHARES - SUCCESSOR On August 28, 2003 Vector purchased the outstanding Predecessor Common Shares of the Company. As part of the Arrangement the Company was authorized to issue an unlimited number of Series B Shares and an unlimited number of Corel New Common Shares. Each of the Predecessor Common Shares that were not held by Vector were converted into one fully paid and non-assessable Corel New Common Share and one Corel Series B share. Vector purchased and subsequently canceled the balance of the Corel New Common Shares for $0.30 per share and the Corel Series B Shares for $0.75 per share. The Predecessor Common Shares held by Vector were converted into 3.5 Corel New Common Shares resulting in 43,750,000 Corel New Common Shares issued and outstanding. PREFERRED SHARES - PREDECESSOR There were an unlimited number of participating, convertible, non-voting, non-redeemable Series "A" preferred shares ("Series "A" preferred shares') authorized at November 30, 2002. The dividend rights were the same as for common shares, other than dividends or other distributions to the extent payable in the form of common shares. Dividends on each full and each fractional Series "A" preferred shares were cumulative.

In the event of liquidation of Corel, the greater of the $5.625 per share purchase price plus all accrued and unpaid dividends, and the amount per share that could be distributed to common shareholders, assuming the conversion of the Series "A" preferred shares, would be distributed to the holders of the preferred shares. If such payment is made, Series A preferred shareholders will have no further claim on assets. On March 24, 2003 Vector acquired 22,890,000 of the Series "A" preferred shares. On August 18, 2003, Vector converted 12,500,000 shares into Predecessor Common Shares. PREFERRED SHARES - SUCCESSOR As a result of the acquisition by Vector, the balance of the Series A Preferred Shares held by Vector (10,390,000 shares) were converted one for one into New Series A preferred shares with the same rights and obligations as the Predecessor Series 'A' Preferred shares.. 11. VECTOR ACQUISITION On August 28, 2003 Vector, including Vector cc Acquisition, Inc. ("Vector cc Acquisition") acquired Corel (see note 10). The Company accounted for the transaction as a business combination by applying push down accounting and consequently revalued its balance sheet to reflect the fair market value of the assets and liabilities of the Company with a corresponding $8.5 million increase to goodwill. Subsequent to the acquisition, Corel Corporation amalgamated with Vector cc Acquisition. The following charts summarizes the changes made to the accounts of the Company as a result of the comprehensive revaluation.
BALANCE BEFORE ADJUSTMENTS -------------$ 16,089 21,817 39,775 12,992 13,420 (26,973) (667) (11,615) -------64,838 ACQUISITION ADJUSTMENTS ----------$ (2,951) BALANCE AFTER ADJUSTMENTS -----------$ 16,089 18,866 39,775 12,992 57,025 (27,319) VECTOR CC ACQUISTION ---------$ (39,775) 12,992 57,025 (27,319) (29,973) (4,390) -------43,290 -------$ 8,480 ======== AMALGAMATED COMPANY ----------$ 16,089 18,866

Cash and cash equivalents Accounts receivable Note receivable Other current assets Long lived assets Other current liabilities Long term debt Future Tax Deferred Revenue Net Assets (excluding Goodwill) Purchase Price Goodwill

43,605 (346) 667 7,225 ------48,200

(29,973) (4,390) -------113,038 121,518 -------$ 8,480 ========

-------(69,748)

PURCHASE PRICE
Series 'A' preferred shares Purchase of employee stock option rights Acquisition costs Corel New Common Shares New Series A preferred shares Net purchase price $ 12,876 753 10,242 27,899 69,748 -------$121,518 ========

12. RESTRUCTURING CHARGE During the three months ended November 30, 2003 the company underwent an organizational rationalization that resulted in the termination of 126 employees. All material amounts relating to this $1,138 charge were paid in the quarter and there were no future service requirements from affected employees.

13. INCOME TAXES Income tax expense (recovery) consists of the following:
Successor ----------------------------9 MONTHS ENDED YEAR ENDED AUGUST 28, NOVEMBER 30, 2003 2002 ------------------------$(4,320) 563 ------(3,757) ------$ 662 905 -------1,567 --------

Predecessor 3 MONTHS ENDED NOVEMBER 30, 2003 -------------Current: Canadian Foreign $222 96 ---318 ----

Future: Canadian Foreign

Income tax expense (recovery)

---$318 ====

(138) ------(138) ------$(3,895) =======

(5,181) (4,967) -------(10,148) -------$ (8,581) ========

The reported income tax provision differs from the amount computed by applying the Canadian statutory rate to income before taxes for the following reasons:
Successor ----------------------------9 MONTHS ENDED YEAR ENDED AUGUST 28, NOVEMBER 30, 2003 2002 ------------------------$(24,075) -------37.0% -------(8,908) 254 6,318 2,826 (253) (4,756) 417 207 $(103,815) --------39.0% --------(40,488) (278) 14,290 17,078

Predecessor 3 MONTHS ENDED NOVEMBER 30, 2003 -------------Income (loss) before income taxes and share of loss of equity Investments: Expected statutory rate Expected tax expense (recovery) Foreign tax rate differences Losses not recognized for tax purposes Non-deductible expenses and non-taxable income Prior years losses Reassessment of prior years Withholding tax on foreign income Other $(8,711) ------37.0% ------(3,223) 85 1,850 1,468 (84) 192 30

500 317

Reported income tax expense (recovery)

------$ 318 =======

-------$ (3,895) ========

--------$ (8,581) =========

As at November 30, 2003, Corel has tax loss carryforwards of approximately $240.0 million, which expire during the years 2006 to 2020. Approximately $13.0 million of these losses acquired with the purchase of Micrografx are restricted in the amount of the loss that may be claimed each year based on U.S. tax loss limitations. Corel also has investment tax credits of approximately $7.0 million which expire during the years 2008 to 2013.

SCHEDULE 1.1.33 See Tab 10

SCHEDULE 1.1.34

COREL CORPORATION CONSOLIDATED BALANCE SHEETS AS OF AUGUST 31, 2004 AND NOVEMBER 30, 2003 (IN '000'S)
AUGUST 31, 2004 --------------ASSETS CURRENT ASSETS Cash and cash equivalents Restricted cash Short term investments Accounts Receivable Trade Other Inventory Prepaids Total Current Assets LONG-LIVED ASSETS Capital assets Intangible assets Goodwill Deferred financing charge TOTAL ASSETS LIABILITIES CURRENT Accounts payable and accrued liabilities Current portion of loans payable Income taxes payable Deferred Revenue Total Current Liabilities LONG-TERM LIABILITIES Long-term portion of loans payable Subordinated debt Deferred revenue Total Liabilities OWNER'S EQUITY Share Capital NOVEMBER 30, 2003 -----------------

18,312 2,076 9,945 12,563 277 156 1,254 ------44,583 ------3,389 32,280 8,834 1,482 ------90,568 =======

18,495 1,830 5,993 12,583 104 313 1,244 ------40,562 ------4,899 46,515 8,480 528 ------100,984 =======

18,018 15,960 5,985 6,941 ------46,904 ------30,600 1,646 ------79,150 -------

21,383 2,619 6,085 6,822 ------36,909 ------7,303 16,973 1,204 ------62,389 -------

Class A common shares Class B common shares Preferred Shares Contributed surplus Retained earnings Predecessor Successor Total Shareholders' equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

8,763 1,527 14,936 320,917 (339,294) 4,569 ------11,418 ------90,568 ========

45,221 20,780 320,917 (339,294) (9,029) ------38,595 ------100,984 ========

COREL CORPORATION OPERATING INCOME STATEMENT (IN THOUSANDS OF US DOLLARS)
SUCCESSOR 9 MONTHS ENDING AUGUST 31, 2004 --------------80,136 6,842 ------73,294 ------27,552 7,567 15,630 3,250 ------53,999 ------19,295 PREDECESSOR 9 MONTHS ENDING AUGUST 31, 2003 --------------85,386 12,222 ------73,164 ------41,969 12,669 28,463 ------83,101 -------9,937

REVENUE COST OF SALES GROSS MARGIN OPERATING EXPENSES Sales and Marketing Research and Development General and Administration Restructuring TOTAL OPERATING EXPENSES NET EBITDA OTHER NON CASH, NON OPERATING EXPENSES Recovery on legal proceedings Depreciation and Amortization Other non-operating gains (losses) Write-down of investments Interest Expense Interest Income Foreign Exchange NET INCOME BEFORE UNDEMOTED Income Taxes Share loss on equity investments NET INCOME

2,895 -13,765 203 -1,311 807 -38 ------8,086 -5,512 ------13,598 =======

-9,391 -48 -7,400 1,383 1,330 -------24,063 -3,895 1,142 -------21,310 =======

NOTE The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada ("Canadian GAAP"). The Company was acquired by Vector Capital ("Vector"), a venture capital company based out of California, on August 28, 2003. The Company accounted for the acquisition by allocating the purchase price paid by Vector to the Company's net assets (push-down accounting). Because of the application of push-down accounting, the consolidated financial statements for the periods ended prior to August 29, 2003 (Predecessor) are not comparable to the consolidated financial statements for the periods ended after August 28, 2003 (Successor)

COREL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE PERIODS ENDING AUGUST 31, 2004 AND 2003 (IN '000'S)
SUCCESSOR 9 MONTHS ENDING AUGUST 31, 2004 --------------13,598 14,314 (18) PREDECESSOR 9 MONTHS ENDING AUGUST 31, 2003 ---------------21,310 10,240 755 -139 48 7,400 67 1,142

Net income/loss Depreciation and amortization Allowance for bad debts Future income taxes Loss on investments Write down of long term investments Loss (gain) on fixed assets Share of loss of equity investments Operating Assets Restricted Cash Accounts Receivable Inventory Prepaids Accounts Payable and Accrued Liabilities Taxes payable Deferred Revenue Cash flow from operations

(453)

(246) 134 156 (10) (3,199) (100) 751 ------24,927 -------

-309 -2,364 28 -1,071 -457 -27 1,861 -------4,136 -------

Financing Repayment of term loan Issuance of common shares Term loan financing Repayment of subordinated debt Paid up capital reduction Purchase by Vector Financing fees incurred Utilization (repayment) of operating line of credit Cash flow from Financing activities Investing Proceeds on disposal of fixed asset Redemption (purchase) of short term investments Purchase long lived assets Cash flow from Investing activities Increase (Decrease) in cash Opening Cash Closing Cash

(11,300) 69 47,500 (16,973) (40,774) (355) (1,101) 438 ------(22,565) ------1,851 (3,952) (444) ------(2,545) ------(183) 18,495 ------18,312 =======

-47,158

-------47,089 ------33 47,980 -1,440 ------46,573 -------4,652 18,874 ------14,222 =======

SCHEDULE 1.1.45 See Tab 5

SCHEDULE 1.1.61

JASC STOCKHOLDER SIGNATURE PAGE This signature page is executed pursuant to the Agreement and Plan of Merger among Corel Corporation, Corel

JS Acquisition, Inc., Jasc Software, Inc. and the Principal Stockholders dated as of_____________, 2004 (the "AGREEMENT"). All capitalized terms used in this signature page have the meanings given to them in the Agreement. The undersigned Jasc Stockholder represents and warrants to the Merger Subsidiary and Corel as follows and acknowledges that the Merger Subsidiary and Corel are relying upon the following representations and warranties in connection with the Transaction: 1.1 COREL COMMON SHARES. With respect to the Corel Common Stock, the Jasc Stockholder: 1.1.1 understands that those shares have not been and will not be registered under the Securities Act, and that the issuance of those shares is being made in reliance on a private placement exemption; 1.1.2 is acquiring those shares for its own account; 1.1.3 acknowledges those shares are not freely transferable; 1.1.4 has had the opportunity to ask all questions and to obtain all other information from the Merger Subsidiary and Corel as it has deemed necessary in connection with its decision to acquire those shares; and 1.1.5 acknowledges that it is not acquiring those shares as a result of any "general solicitation" or "general advertising," as those terms are used in Regulation D under the Securities Act. 1.2 NO FOREIGN PERSON. The Jasc Stockholder that is acquiring shares forming part of the Total Equity Consideration is not a foreign person within the meaning of Section 1445(f)(3) of the Code. 1.3 INCORPORATION AND STATUS OF THE JASC STOCKHOLDER. If an Entity, the Jasc Stockholder is duly formed and validly existing under the laws of its jurisdiction of formation. 1.4 POWER OF THE JASC STOCKHOLDER AND DUE AUTHORIZATION. If an Entity, the Jasc Stockholder has all necessary power and capacity to enter into, and to perform its obligations under, this Agreement. Each of this Agreement and each of the Related Agreements to which the Jasc Stockholder is a party has been duly authorized by the Jasc Stockholder. This Agreement has been duly executed and delivered by the Jasc Stockholder and is a valid and binding obligation of the Jasc Stockholder, enforceable in accordance with its terms, subject to the usual exceptions as to bankruptcy and the availability of equitable remedies. At the Time of Closing, each of the Related Agreements to which the Jasc Stockholder is a party will be duly executed and delivered by the Jasc Stockholder and will be valid and binding obligations of the Jasc Stockholder, enforceable in accordance with their respective terms, subject to the usual exceptions as to bankruptcy and the availability of equitable remedies, provided that (i) no representation as to enforceability is made with respect to the agreements described in section 4.1.6 of the Agreement, and (ii) the enforceability of the indemnification provisions contained in Schedule B to the Corel Minority Shareholders' Agreement may be limited by applicable federal or state securities laws. 1.5 TITLE TO, AND RIGHT TO SELL, PURCHASED SHARES. The Jasc Stockholder is the sole registered and beneficial owner of those Jasc Shares set out opposite the Jasc Stockholder's name on Schedule 3.1.3 with good and marketable title to those Jasc Shares, free of all Charges. There are no subscriptions, warrants, options, calls, or other rights or Contracts to which the Corporation or any Jasc Stockholder is subject to or bound which in any way limit or restrict the consummation of the Transaction (specifically in respect

of that Jasc Stockholder's Jasc Shares) and there are no shareholders agreements, pooling agreements, voting trusts or other Contracts with respect to the voting of the Jasc Shares other than as set out in Schedule 3.1.3. At or prior to the Time of Closing, those agreements and restrictions will have been complied with or terminated (and evidence in form and substance satisfactory to the Merger Subsidiary to that effect will have been provided to the Merger Subsidiary). 1.6 NO CONTRAVENTION BY JASC STOCKHOLDERS. None of the entering into of this Agreement or any Related Agreement, the consummation of the Transaction or the performance by the Jasc Stockholder of that Jasc Stockholder's other obligations under this Agreement or any Related Agreement to which it is a party (a) will contravene, breach or result in any default under (1) if the Jasc Stockholder is an Entity, the certificate of

incorporation, by-laws, constating documents or other organizational documents of that Jasc Stockholder, (2) any license, permit, order, judgment, decree or Law to which the Jasc Stockholder is a party or by which it may be bound or (b) contravenes, breaches or results in any default under, or conflicts with or will conflict with or results in or will result in any modification of any of the terms of or results in or will result in the termination of or the creation of any Charge, acceleration right or other right pursuant to the terms of any Contract to which the Jasc Stockholder is a party or by which it may be bound or will in any way affect the continuation, validity or effectiveness of any such Contract. 1.7 APPOINTMENT OF STOCKHOLDER REPRESENTATIVE. Each Jasc Stockholder designates and appoints Robert V. Voit as the Stockholder Representative under this Agreement and authorizes the Stockholder Representative to take such actions on behalf of such Jasc Stockholder under this Agreement, including, but not limited to, accepting notices, reviewing information provided to the Stockholder Representative and executing the certificate required in section 4.1.1 on behalf of each Jasc Stockholder, together with all such powers as are reasonably incidental thereto. The Stockholder Representative may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken, or omitted to be taken, by it in good faith in accordance with the advice of such counsel, accountants or experts. The Stockholder Representative shall not be liable for actions he takes or fails to take in the absence of his own gross negligence or willful misconduct. 1.8 The undersigned Jasc Stockholder acknowledges that: 1.8.1 the Jasc Stockholder has received a copy of the Agreement and each of the Related Agreements to which it is or will be a party (the "TRANSACTION AGREEMENTS"); 1.8.2 the Jasc Stockholder has had sufficient time to review and consider the Transaction Agreements and the transactions contemplated by the Transaction Agreements thoroughly; 1.8.3 the Jasc Stockholder has read and understands the terms of the Transaction Agreements and the Jasc Stockholder's obligations under the Transaction Agreements; 1.8.4 the Jasc Stockholder has been given an opportunity to obtain independent legal advice, or other advice as the Jasc Stockholder may desire, concerning the interpretation and effect of the Transaction Agreements and the transactions contemplated by the Transaction Agreements, and by signing this Jasc Stockholder Signature Page the Jasc Stockholder has either obtained advice or voluntarily waived the Jasc Stockholder's opportunity to receive that advice; 1.8.5 the Agreement is entered into voluntarily by the Jasc Stockholder; and 1.8.6 the Jasc Stockholder is a "Jasc Stockholder" for all purposes of the Agreement and is bound by and subject to all rights and obligations of Jasc Stockholders under the Agreement.

-------------------------------------Signature of Witness

--------------------------------------Signature of Jasc Stockholder or Authorized Signatory --------------------------------------Name of Jasc Stockholder (please print or type) --------------------------------------Name and Title of Authorized Signatory (if the Jasc Stockholder is not an individual)

-------------------------------------Name of Witness (please print or type) -------------------------------------Address of Witness (please print or type)

SCHEDULE 1.1.98

STOCKHOLDER EXPENSES - HSR - $22,500

- Change in control, net of Kris Tufto loan repayment - $1,515,000, plus associated payroll taxes of $25,782.50 - Faegre & Benson LLP-$175,000 - Eide Bailley - $39,000 - Merchant & Gould - $4,635 - Hensley, Kim & Edgington, LLC - $ 1,590 - Severance Costs (including paid time-off) - Craig Letourneau: $89,723.08; Jon Ort: $96,369.23 (plus associated payroll taxes of $3,135.59) - Goldsmith Agio Helms - $853,033.01 (includes $177,345.35 paid as of September 30, 2004) - Estimated associated payroll taxes in connection with the Corporation's cash out of all unexercised outstanding options under the Jasc Software, Inc. 1997 Omnibus Stock Plan - $42,542.76 - Estimated associated payroll taxes in connection with the exercise of outstanding options expected to be exercised under the Jasc Software, Inc. 1997 Omnibus Stock Plan - $2,912.84 NOTE: The above costs are based on estimates as of the date of signing the Agreement. Expenses of Faegre & Benson, Eide Bailey, Goldsmith Agio Helms and the IP Lawyers and miscellaneous expenses associated with the Transaction will not be known with certainty until the Closing Date.

SCHEDULE 1.1.115 See Tab 9

SCHEDULE 1.1.117

Jasc Software Inc Detailed Bal Sheet
GAAP Adjustments ----------Final 9/30/2004 Balance Sheet ---------------

30/09/2004 ---------ASSETS Current assets: Cash and cash equivalents 12000 AR-TRADE 12003 A/R RECONCILING ITEMS 12048 ALLOWANCE FOR DOUBTFUL A/R 12049 ALLOWANCE FOR SALES RETURNS 12051 ACCRUED ROYALTY REPORTS Accounts receivable 12060 NOTES RECEIVABLE 12010 A/R EMPLOYEE RECEIVABLES Other receivable 13000 INVENTORY 13007 CONSIGNED INVENTORY 13010 INVENTORY OBSOLESCENCE RESERV Inventories

2,531,337 5,786,721 284,276 -81 312 -1,406,601 206,000 ---------4,789,084 ---------215,000 60,000 ---------275,000 ---------1,447,219 35,314 -412,000 ---------1,070,533

-215,000

2.531,337 5,786,721 284,276 -81 312 -1,406,601 206,000 ---------4,789,084 ---------0 60,000 ---------60,000 ---------1,447,219 35,314 -412,000 ---------1,070,533

14002 14003 14004 14005 14006 14007 14008 14009

PREPAID PREPAID PREPAID PREPAID PREPAID PREPAID PREPAID PREPAID

INSURANCE ADVERTISING POSTAGE MAINTENANCE TRAVEL LOCALIZATION DEVELOPMENT LICENSE FEES

Prepaid expenses Total current assets Property 15001 15003 15005 15007 & equipment COMPUTER EQUIPMENT OFFICE EQUIPMENT OFFICE FURNITURE SOFTWARE

---------34,600 249,531 29,483 45,054 0 998,766 339,934 224,652 ---------1,922,020 ---------10,587,974 ---------1,937,035 177,359 457,413 1,094,567 ---------3,666,374 ---------236,019 ---------3,902,393 ----------3,225,452 ---------676,941 ---------13,773 260,000 ---------273,773 ---------899,324 -446,523 115,798 -67,794 ---------500,805 ---------1 140 -140 ---------12,039,494 ==========

---------34,600 249,531 29,483 45,054 0 998,766 339,934 224,652 ---------1,922,020 ---------10,372,974 ---------1,937,035 177,359 457,413 1,094,567 ---------3,666,374 ---------236,019 ---------3,902,393 ----------3,225,452 ---------676,941 ---------13,773 0 ---------13,773 ---------899,324 -446,523 115,798 -67,794 ---------500,805 ---------1 140 -140 ---------11,564,494 ==========

Equipment and software 15011 LEASEHOLD IMPROVEMENTS Total fixed assets 15999 ACCUMULATED DEPRECIATION Net fixed assets Other assets: 16001 DEPOSITS 16005 LONG TERM NOTE RECEIVABLE Other Assets 17001 17002 17010 17011 ACQUIRED TECHNOLOGIES ACCUMULATED AMORTIZATION PATENT ACQUISITION COSTS ACC. AMORT. PATENT COSTS

-260,000

Intangible assets, net of accumulated amortizatio 19100 INVESTMENT IN SUBSIDIARY 19001 INCORPORATION COSTS 19002 INC COSTS ACCUMULATED AMORTZTI Total assets

Jasc Software Inc Detailed Bal Sheet
GAAP Adjustments ----------Final 9/30/2004 Balance Sheet ---------------

30/09/2004 ---------LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: 21000 ACCOUNTS PAYABLE 21005 UNBILLED RECEIVERS Accounts payable 22010 22050 22011 23000 23001 23002 23003 ACCRUED ACCRUED ACCRUED ACCRUED ACCRUED ACCRUED ACCRUED DISTRIBUTION EXPENSES REBATES ROYALTIES PAYROLL VACATION BONUSES COMMISSIONS

1,924,265 236,099 ---------2,160,364 ---------699,005 434,688 279,424 1 622,469 55,471 91,029

1,924,265 236,099 ---------2,160,364 ---------699,005 434,688 279,424 1 622,469 55,471 91,029

23025 ACCRUED PROFIT SHARING 23030 FLEX SPENDING Accrued employee expenses 22000 24001 24002 24003 24010 28001 ACCRUED EXPENSES SALES TAX PAYABLE - MN SALES TAX PAYABLE - CA SALES TAX PAYABLE - OH GST PAYABLE/RECEIVABLE USE TAX PAYABLE

Other accrued expenses Current maturities of long-term debt 25500 CURRENT LEASE OBLIGATION Current maturities of lease payments 29000 CUSTOMER DEPOSITS 29050 DEFERRED REVENUE - I.P. 29051 DEFERRED REVENUE - OTHER Deferred Revenue Total current liabilities 28000 LONG TERM LEASE OBLIGATION Long-term debt Shareholders' equity 31000 COMMON STOCK 32000 APIC 38000 RETAINED EARNINGS 28010 INTERNATIONAL TAX WITHHOLDING 38020 SHAREHOLDER DISTRIBUTIONS Shareholder distributions NET INCOME YTD Retained earnings Total Shareholders' equity Total liabilities and shareholders' equity

-63,392 31,128 ---------736,706 ---------948,972 3,062 2,567 2,472 61,287 7,793 ---------1,026,153 ---------2,725 ---------2,725 ---------88,659 107,013 475,000 ---------670,672 ---------6,009,737 ---------2,073 ---------2,073 ---------44,052 1,512,448 4,757,379 -206,316 -600,027 ----------806,343 ---------520,148 ---------4,471,184 ---------6,027,684 ---------12,039,494 ==========

-63,392 31,128 ---------736,706 ---------948,972 3,062 2,567 2,472 61,287 7,793 ---------1,026,153 ---------2,725 ---------2,725 ---------88,659 107,013 0 ---------195,672 ---------5,534,737 ---------2,073 ---------2,073 ---------44,052 1,512,448 4,757,379 -206,316 -600,027 ----------806,343 ---------520,148 ---------4,471,184 ---------6,027,684 ---------11,564,494 ==========

-475,000

Jasc Software, Inc. September 2004 Income Statement
SEP-04 --------3,570,317 1,174,991 --------2,395,326

Net sales Cost of sales Gross profit Operating expenses: Research and development Sales and marketing General and administrative Profit sharing/stock based compensation Operating expenses before bonus Operating income Other income (expense):

482,230 921,083 329,765 138,245 --------1,871,323 --------524,004 ---------

Interest expense Interest income Other income (expense) State tax filings Total other income and expense Net income before taxes Income tax accrual Net income (loss)

(48) 4,554 27,943 ---------32,449 --------556,452 --------556,452 =========

SCHEDULE 3.1.3 CAPITAL OF THE CORPORATION Authorized: 10,000,000 shares of common stock and 5,000,000 shares of preferred stock. COMMON STOCK OWNERSHIP
Beneficial Owner ---------------Jonathan Craig Ort Laura Jeanne Voit Robert V. Voit GRAT Robert Vincent Voit Kris Tufto Joseph Fromm TOTAL SHARES OUTSTANDING No. of Shares of Common Stock ----------------------------400,000 400,000 400,000 3,200,000 5,000 200 --------4,405,200

COMMON STOCK OPTIONS SUMMARY
EXECUTIVES ---------Kris Tufto Susan Dub Jon Ort Craig Letourneau Karen Drost Harold Fagley SUBTOTAL Total Options Outstanding ------------------------195,000 40,000 40,000 40,000 20,000 20,000 ------355,000

OUTSIDE DIRECTORS ----------------Robert Kill SUBTOTAL

Total Options Outstanding ------------------------16,000 -----16,000

OTHER EMPLOYEES --------------Anderson, Kelly Dolan, Andrew Edwards, ElShaddai Gunderson, Suzann Huberty, Tom McGaughey, Pat Mork, Jim Netzke, Kathy Ransom, Mark Shotts, Russ

Total Options Outstanding ------------------------674 1,000 718 474 6,000 1,392 6,000 384 6,000 6,000

Shotts, Russ Weise, Cheryl (Mary Weise is the successor)* Winkel Cliff SUBTOTAL

6,000 498 6,000 ------35,140 406,140

* Cheryl Weise is the record holder. Cheryl died in September 2004. Mary Weise is the heir to her estate and now the beneficial owner of the options

Certain of the Vendors and holders of options to purchase shares of the Corporation are parties to Shareholder Agreements or Optionholder Agreements that prohibit the transfer of shares of the Corporation in a manner that would cause the Company's S corporation status to terminate. These agreements will terminate prior to the Time of Closing.

SCHEDULE 3.1.7 APPROVALS AND CONSENTS - The filing of a certificate of merger with the State of Minnesota is required to consummate the Merger - Each contract listed in these Schedules that is denoted with a "(Y)" may require the approval or consent of the other party to such contract in connection with the consummation of the Transactions or any subsequent transfers to direct or indirect subsidiaries of Corel. - Revolving Credit Agreement, dated as of November 23, 1998, between the Corporation and Bremer Bank, N.A. (formerly known as Firstar Bank, N.A., which was formerly known as Firstar Bank of Minnesota, N.A.) - Amendment and Waiver No. 1 to Revolving Credit Agreement, dated as of May 19, 1999 - Amendment No. 2 to Revolving Credit Agreement, dated as of September 22, 1999 - Amendment No. 3 to Revolving Credit Agreement, dated as of January 14, 2000 - Amendment No. 4 to Revolving Credit Agreement, dated as of April 19, 2000 - Amendment No. 5 to Revolving Credit Agreement, dated as of June 13, 2000 - Amendment No. 6 to Revolving Credit Agreement, dated as of October 5, 2000 - Amendment No. 7 to Revolving Credit Agreement, dated as of December 20, 2000 - Amendment No. 8 to Revolving Credit Agreement, dated as of June 12, 2001 - Amendment No. 9 to Revolving Credit Agreement, dated as of August 10, 2001 - Amendment No. 10 to Revolving Credit Agreement, dated as of June 12, 2002 - Amendment No. 11 to Revolving Credit Agreement, dated as of June 13, 2003 - Amendment No. 12 to Revolving Credit Agreement, dated as of September 12, 2003 - Amendment No. 13 to Revolving Credit Agreement, dated as of September 15, 2004 Closing Required Consents

1. Customer Agreement, dated June 4, 2004, between MessageLabs, Inc. and the Corporation 2. UnityMail Enterprise License Agreement, dated May 25, 2001, between the Corporation and MessageMedia, Inc. 3. Two Unlimited Copy License Agreements, undated, between the Corporation and Access Softek, Inc. 4. Annual Distribution License Agreement, undated, between the Corporation and AccuSoft Corporation 5. Quicktime 5 Software Distribution Agreement, dated December 7, 2001, between the Corporation and Apple Computer, Inc., as amended August 2003 6. Software License Agreement, dated October 28, 2003, between the Corporation and Bibble Labs, Inc. 7. Embedded Software Agreement, dated May 11, 1999, between Bengt Computer Graphics LLC and the Corporation, including Customer Support Schedule, as amended January 24, 2002 8. License Agreement for Software Development Kit, dated November 17, 1999, between the Corporation and Digimarc Corporation

9. Software Development and License Agreement, dated April 13, 2004, between ECI Technology Solutions and the Corporation, as addended April 13, 2004 10. Software License and Distribution Agreement, effective December 31, 1998, between Enroute, Inc. and Sierra Imaging, Inc., as amended August 16, 2001, as sublicensed to the Corporation pursuant to a Letter Agreement, dated December 3, 2001, among the Corporation, Enroute, Inc. and Sierra Imaging, Inc. 11. Software Distribution Agreement, dated September 23, 2003, between the Corporation and Avery Dennison Office Products (PS Album); Promotional Agreement, dated January 7, 2003, between the Corporation and Avery Dennison Office Products (PSP 8); Promotional Agreement, dated January 28, 2003, between the Corporation and Avery Dennison Office Products (PS Album); Promotional Agreement, dated May 17, 2004, between the Corporation and Avery Dennison Office Products Company 12. License Agreement, dated June 26, 1999, between the Corporation and Microgetics Corporation 13. Distribution Agreement, dated June 9, 1998, between the Corporation and Ingram Micro 14. Navarre Corporation CPD Consignment Agreement, dated April 30, 2001, between the Corporation and Navarre Corporation 15. Direct Sales Agreement, dated January 17, 2003, between the Corporation and Software Spectrum, Inc. 16. Software Distribution Agreement, dated June 19, 1998, between Tech Data Product Management, Inc. and the Corporation 17. Digital Imaging Software License Agreement, dated January 31, 2004, between Dell Products L.P. and the Corporation 18. Source Code License Agreement, dated as of December 14, 2001, among Conexant Systems, Inc., Sierra Imaging, Inc. and the Corporation 19. Kodak Digital Science Reference SDK for the FlashPix Format License Agreement, undated, between the Corporation and Kodak Corporation 20. Online Services Agreement, dated November 12, 2003, between the Corporation and MyPublisher, Inc., as amended October 7, 2004

21. Software License Agreement, dated March 18, 2004, between the Corporation and LC Technology International, Inc. for PhotoRecovery 22. End-User License Agreement, dated March 31, 2004, between the Corporation and InstallShield Software Corporation 23. Computer Software Distribution Agreement dated January 21, 1999 between the Corporation and Navarre 24. License Agreement, undated, between the Corporation and BCGSoft Ltd. (BCG Pro) [click through license] 25. License Agreement, undated, between the Corporation and BCGSoft Ltd. (BCG - not Pro) [click through license] 26. The Corporation will obtain a signed copy of a letter agreement with Shutterfly, Inc. dated October 2004 regarding inclusion of Shutterfly code in the Corporation's products.

SCHEDULE 3.1.11 LIABILITIES AND GUARANTEES - Revolving Credit Agreement, dated as of November 23, 1998, between the Corporation and Bremer Bank, N.A. (formerly known as Firstar Bank, N.A., which was formerly known as Firstar Bank of Minnesota, N.A.) - Amendment and Waiver No. 1 to Revolving Credit Agreement, dated as of May 19, 1999 - Amendment No. 2 to Revolving Credit Agreement, dated as of September 22, 1999 - Amendment No. 3 to Revolving Credit Agreement, dated as of January 14, 2000 - Amendment No. 4 to Revolving Credit Agreement, dated as of April 19, 2000 - Amendment No. 5 to Revolving Credit Agreement, dated as of June 13, 2000 - Amendment No. 6 to Revolving Credit Agreement, dated as of October 5, 2000 - Amendment No. 7 to Revolving Credit Agreement, dated as of December 20, 2000 - Amendment No. 8 to Revolving Credit Agreement, dated as of June 12, 2001 - Amendment No. 9 to Revolving Credit Agreement, dated as of August 10, 2001 - Amendment No. 10 to Revolving Credit Agreement, dated as of June 12, 2002 - Amendment No. 11 to Revolving Credit Agreement, dated as of June 13, 2003 - Amendment No. 12 to Revolving Credit Agreement, dated as of September 12, 2003 - Amendment No. 13 to Revolving Credit Agreement, dated as of September 15, 2004 - Revolving Note issued by the Corporation to Firstar Bank, N.A. (formerly known as Firstar Bank of Minnesota, N.A.) on November 23, 1998 - Revolving Note issued by the Corporation to Firstar Bank, N.A. on September 22, 1999 - Revolving Note issued by the Corporation to Firstar Bank, N.A. on June 13, 2000 - The Corporation has made contributions to a grantor trust to fund its obligations under the Deferred

Compensation Plan for Directors. These amounts are not included on the Corporation's balance sheet. - The Corporation has contingent obligations related to the Jasc YE Bonus Program.

SCHEDULE 3.1.12 INDEBTEDNESS - Revolving Credit Agreement, dated as of November 23, 1998, between the Corporation and Bremer Bank, N.A. (formerly known as Firstar Bank, N.A., which was formerly known as Firstar Bank of Minnesota, N.A.) - Amendment and Waiver No. 1 to Revolving Credit Agreement, dated as of May 19, 1999 - Amendment No. 2 to Revolving Credit Agreement, dated as of September 22, 1999 - Amendment No. 3 to Revolving Credit Agreement, dated as of January 14, 2000 - Amendment No. 4 to Revolving Credit Agreement, dated as of April 19, 2000 - Amendment No. 5 to Revolving Credit Agreement, dated as of June 13, 2000 - Amendment No. 6 to Revolving Credit Agreement, dated as of October 5, 2000 - Amendment No. 7 to Revolving Credit Agreement, dated as of December 20, 2000 - Amendment No. 8 to Revolving Credit Agreement, dated as of June 12, 2001 - Amendment No. 9 to Revolving Credit Agreement, dated as of August 10, 2001 - Amendment No. 10 to Revolving Credit Agreement, dated as of June 12, 2002 - Amendment No. 11 to Revolving Credit Agreement, dated as of June 13, 2003 - Amendment No. 12 to Revolving Credit Agreement, dated as of September 12, 2003 - Amendment No. 13 to Revolving Credit Agreement, dated as of September 15, 2004 - Revolving Note issued by the Corporation to Firstar Bank, N.A. (formerly known as Firstar Bank of Minnesota, N.A.) on November 23, 1998 - Revolving Note issued by the Corporation to Firstar Bank, N.A. on September 22, 1999 - Revolving Note issued by the Corporation to Firstar Bank, N.A. on June 13, 2000

SCHEDULE 3.1.14 DIVIDENDS - The Corporation's Board of Directors has approved a distribution of the Asset Consideration to Jasc Stockholders payable immediately upon receipt by the Corporation of the Asset Sale Consideration.

SCHEDULE 3.1.15

INSIDER INTERESTS - Promissory Note of Kris Tufto, the Corporation's President, dated June 16, 2003 in the aggregate principal amount of $60,000. The Corporation has demanded repayment of the Note upon payment of the amount due to Mr. Tufto under his Change-in-Control Agreement. The amount due under the Note will be offset against the amount payable under the Change-in-Control Agreement. - Joel Ronning, who served as a member of the Corporation's Board of Directors from August 12, 1998 to September 24, 2001, is the Chief Executive Officer of Digital River, Inc. The Corporation is a party to a distribution agreement with Digital River, Inc. - See Schedule 3.1.6. - The Corporation leases a Cadillac Escalade (automobile) that is used primarily by the Corporation's President, including for personal use. - Robert Voit's sister and brother are employees of the Corporation. - Kris Tufto's cousin, Allison Pankratz, is an employee of the Corporation.

SCHEDULE 3.1.16 AS TO CERTAIN CONTRACTS IN AND OUT OF THE ORDINARY COURSE Schedule 3.1.16.1 - Jasc Software, Inc. Retail Service Contract - Best Buy, dated April 14, 2004, between the Corporation and National Retail Services Inc. Schedule 3.1.16.2 - Software Development Agreement, dated February 9, 2004, between the Corporation and Ambient Design, Ltd. - Letter Agreement with Bowne Terms, undated, between Bowne Global Solutions II, Inc. and the Corporation, including all ancillary statements of work - Online Services Agreement, dated November 12, 2003, between the Corporation and MyPublisher, Inc., as amended October 7, 2004 (Y) - Book Publishing Agreement, dated July 25, 2003, between the Corporation and David Huss - Book Publishing Agreement, dated September 15, 2003, between the Corporation and Michelle Shefveland - Retainer Agreement, dated September 8, 2003, between the Corporation and Michelle Shefveland of CottageArts.net - Agreement, dated September 4, 2002, between Global Fulfillment Services, Inc. and the Corporation (Y) - Promotional Agreement, dated January 31, 2003, between the Corporation and Imation Corp. - HP Newsletter Registration Marketing Agreement, dated July 25, 2003, between Hewlett-Packard Europe BV and the Corporation (Y) - Promotional Agreement, dated July 15, 2003, between the Corporation and McGraw-Hill/Osborne Media (Y) - Security Services Agreement, dated December 1, 1999, between Harmon Security Services, Inc., and the

- Security Services Agreement, dated December 1, 1999, between Harmon Security Services, Inc., and the Corporation (Y) - Customer Agreement, dated June 4, 2004, between MessageLabs, Inc. and the Corporation (Y) - Internet Services Agreement, dated April 4, 2002, between US Internet Corp. and the Corporation (Y) - Contract Agreements, dated March 2, 2003, May 7, 2003 and October 23, 2003, between DWJ Television, Inc. and the Corporation (Y) - Services Agreement, dated February 1, 2001, between the Corporation and Bell Telephone Incorporated - Agreement, dated July 12, 2004, between the Corporation and Olson & Co. - Agreement, dated August 19, 2003, between the Corporation and Third Wire - Agreement, dated July 1, 2004, between the Corporation and Wiley Publishing, Inc. - Manifest Mailing System Agreement, dated March 12, 2003, between the U.S. Postal Service and the Corporation Schedule 3.1.16.3

Schedule 3.1.16.4 - End User License Agreement, dated March 31, 2004, between the Corporation and InstallShield Software Corporation (Y) - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and Questar - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and BerniSoft - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and Flaming Pear - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and Connect Distribution sp. z.o.o. - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and CompuTrolley.com - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and ProSoft - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and Avanquest France - Distribution Agreement, dated December 1, 2003, between the Corporation and Gem Distribution Ltd. - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and Communique Software [2003 agreement expired, but the 2004 agreement is unsigned] - International Master Representative Agreement between the Corporation and BroCo software BV [unsigned]

- International Master Representative Agreement between the Corporation and Xpress Soft [unsigned] - International Master Representative Agreement, dated as of December 27, 2002, between the Corporation and H.C. Top Systems B.V. [2003 agreement (signed December 27, 2002) expired, but the 2004 agreement is unsigned] - International Master Representative Agreement between the Corporation and Sector Zero, Productos informaticos SA [unsigned] - International Master Representative Agreement between the Corporation and Daou Data Systems Corp. [unsigned] - International Master Representative Agreement between the Corporation and Qast Systems Solutions Inc. [unsigned] - International Master Representative Agreement between the Corporation and The Bird Group [unsigned] - International Master Representative Agreement between the Corporation and Version, S.A. de CV [unsigned] - International Representative/Repubisher Agreement, executed as of November 15, 2000, between the Corporation and Global Soft Distribution, Limited [2000 agreement expired, but the 2004 agreement is unsigned] - License and Distribution Agreement, dated as of September 15, 2003, between the Corporation and CottageArts.net, LLC (Y)

- Letter Agreement, dated September 15, 2003, between the Corporation and Michelle Shefveland - Programming Services Agreement, dated April 20, 1999, between the Corporation and BAL - Programming Services Agreement, dated February 2, 2000, between the Corporation and BAL, as amended February 21, 2000, May 20, 2000, April 1, 2001, January 16, 2002, March 21, 2003, April 15, 2004 - Representative Agreement, dated June 1, 2004, between the Corporation and CMI Sales, Inc. - Direct Sales Agreement, dated January 17, 2003, between the Corporation and Software Spectrum, Inc. (Y) - Memorandum of Understanding, executed October 9, 2002, between the Corporation and Siemens AG - Memorandum of Understanding, executed March 11, 2003, between the Corporation and Siemens AG - Letter Agreement, dated January 17, 2003, between the Corporation and Sound Vision Inc. - Jasc Authorized Direct Retail Agreement, dated August 22, 2002, between the Corporation and B&H Photo and Video - Market Development Funds Agreement, dated June 1, 2004, between the Corporation and Amazon.com LLC (Y) - Distribution and Licensing Agreement, dated October 24, 2002, between the Corporation and Activision Value Publishing, Inc., as amended October 24, 2003 - International Supplier Agreement, dated July 9, 2002, between the Corporation and Softek International, Inc. - Distribution and Marketing Agreement, dated April 1, 2001, between the Corporation and the Douglas Stewart Company (Y)

- Agreement, dated July 1, 2001, between the Corporation and The McLendon Group, Inc. - Agreement, dated June 1, 2002, between the Corporation and Lienau Associates - Agreement, dated December 4, 2003, between the Corporation and Levin Consulting and Agreement, dated October 7, 2003, between the Corporation and Levin Consulting - Independent Contractor Agreement, dated January 13, 2004, between the Corporation and Test & Automation Consulting, LLC - Independent Contractor Agreement, dated April 1, 2004, between the Corporation and SWAT Solutions - Temporary Agency Agreement, dated June 21, 2004, between the Corporation and The Creative Group and Temporary Agency Agreement, dated September 29, 2004, between the Corporation and The Creative Group - Temporary Agency Agreement, dated August 31, 2004, between the Corporation and The Creative Group (Barb Prindle) - Temporary Agency Agreement, dated August 31, 2004, between the Corporation and The Creative Group (Will Lotzow) - Temporary Agency Agreement, dated August 2, 2004, between the Corporation and Mary Weise - Independent Contractor Agreement, dated June 1, 2004, between the Corporation and Mary Weise, Independent Contractor Agreement, dated August 2, 2004, between the Corporation and Mary Weise and Independent Contractor Agreement, dated September 1, 2004, between the Corporation and Mary Weise

- Temporary Agency Agreement, dated September 8, 2003, between the Corporation and Michelle Shefveland - Master Consulting Agreement, dated _________, between the Corporation and BenchmarkQA, Inc. - Master Consulting Agreement, dated November 20, 2000, between the Corporation and BenchmarkQA, Inc. - Master Consulting Agreement, dated December 18, 2003, between the Corporation and BenchmarkQA, Inc. - Independent Contractor Agreement, dated July 15, 2004, between the Corporation and Josh Thue - Temporary Agency Agreement, dated August 13, 2004, between the Corporation and Ajilon Finance - Temporary Agency Agreement, dated June 20, 2004, between the Corporation and Westaff (USA) Inc.; Temporary Agency Agreement, dated June 27, 2004, between the Corporation and Westaff; Temporary Agency Agreement, dated July 14, 2004, between the Corporation and Westaff (USA), Inc.; Temporary Agency Agreement, dated August 12, 2004, between the Corporation and Westaff (USA), Inc.; Temporary Agency Agreement, dated August 30, 2004, between the Corporation and Westaff; and Temporary Agency Agreement, dated September 14, 2004, between the Corporation and Westaff - Temporary Agency Agreement, dated August 10, 2004, between the Corporation and Abby Blu - Temporary Agency Agreement, dated June 30, 2004, between the Corporation and Remedy Intelligent Staffing, Inc. - Temporary Agency Agreement, dated June 2, 2004, between the Corporation and Spherion, Temporary Agency Agreement, undated, between the Corporation and Spherion and Temporary Agency Agreement, dated August 27, 2004, between the Corporation and Spherion - Temporary Agency Agreement, dated July 8, 2004, between the Corporation and TeamExcel Minneapolis

- Independent Contractor Agreement, dated August 25, 2004, between the Corporation and Jeanmarie Kabala - Temporary Agency Agreement, dated August 19, 2004, between the Corporation and Masterson Personnel and Temporary Agency Agreement, dated September 14, 2004, between the Corporation and Masterson Personnel - Temporary Agency Agreement, dated September 1, 2004, between the Corporation and Superior Services - Green Card Sponsorship Agreement, dated April 10, 2001, between the Corporation and Pei-Lin Yap - Green Card Sponsorship Agreement, dated April 25, 2001, between the Corporation and Satyasai Sanagavarapu - Green Card Sponsorship Agreement, dated May 2, 2001, between the Corporation and Savita Mahabaleshwas - Consulting Agreement, dated September 17, 2003, between the Corporation and Test & Automation Consulting, LLC - Reseller Agreement, dated May 1, 2004, between the Corporation and Digital Workshop

- Independent Contractor Agreement, dated February 28, 2002, between the Corporation and Diane Walker and Independent Contractor Agreement, dated September 16, 2002, between the Corporation and Diane Walker - Independent Contractor Agreement, dated October 1, 2003, between the Corporation and Ambient Design, Ltd.; Independent Contractor Agreement, dated November 5, 2003, between the Corporation and Ambient Design, Ltd.; Independent Contractor Agreement, dated December 22, 2003, between the Corporation and Ambient Design, Ltd. - Letter Agreement, dated July 23, 2004, between the Corporation and Jim Fugelstad - Software Distribution Agreement, dated October 20, 1991, between the Corporation and Micrographics - Master Consulting Services Agreement, effective April 15, 2003, between the Corporation and Gartner, Inc. (Y) - US Master Client Agreement, effective April 1, 1998, between Gartner Group and the Corporation (Y) - Translation Agreement, effective January 17, 2003, between the Corporation and Alpha CRC Ltd. - Independent Contractor Agreement, dated November 8, 2002, between the Corporation and Push Studio, Inc. - Independent Contractor Agreement, dated May 14, 2004, between the Corporation and Posi Photography Inc. - Retail Package Design Proposal Agreement, dated April 6, 2004, between MicroArts, LLC and the Corporation, including addendum - Retail Package Design Proposal Agreement, dated May 5, 2004, between MicroArts, LLC and the Corporation, including addendum - Software Development and License Agreement, dated April 13, 2004, between ECI Technology Solutions and the Corporation, as addended April 13, 2004 (Y) - Independent Contractor Agreement, dated August 3, 2004, between the Corporation and Arvid Axelsson and

Independent Contractor Agreement, dated September 7, 2004, between the Corporation and Arvid Axelsson - Letter Agreement, undated, between the Corporation and Ofoto, Inc. - Temporary Agency Agreement, dated October 6, 2004, between the Corporation and the Bloomington, Minnesota branch of Accountemps, a division of Robert Half International Inc. See Schedule 3.1.17.1 Schedule 3.1.16.5 - Independent Contractor Agreement, dated June 18, 2003, between the Corporation and Solution Design Group - Independent Contractor Agreement, dated February 24, 2003, between the Corporation and Solution Design Group - The Corporation has entered into EULAs with parties for its software. - Electronic Software Distribution Agreement, dated February 18,1998, between the Corporation and Digital River, Inc. (Y) - Summary of Relationship Agreement, undated, between the Corporation and Digital River regarding prepayment of royalties under the Electronic Software Distribution Agreement

- Addendum, dated September 8, 1998, to Electronic Software Distribution Agreement, dated February 18, 1998, between the Corporation and Digital River - Reseller Amendment to Electronic Software Distribution Agreement, dated February 18, 1998, between the Corporation and Digital River - Vendor Agreement (International Agreement), dated December 18, 2002, between the Corporation and Digital River (Y) - Vendor Agreement, dated September 2, 2003, between the Corporation and Digital River, as amended and further amended August 24, 2004 (Y) - The VIGRA Artistic License, undated - Master Software Testing Agreement for Microsoft Compliance Programs at VeriTest, a Service of Lionbridge Technologies, dated May 16, 2000, between the Corporation and VeriTest, as addended - Master Software Testing Agreement for Microsoft Logo Programs at VeriTest, inc., dated May 21,1998, between the Corporation and VeriTest, inc. - International World Wide Web Consortium Participation Agreement, dated January 26, 2000, among Massachusetts Institute of Technology, Institut Rocquencourt, Keio University and the Corporation (Y) - PERFORCE End User License Agreement, last executed December 31, 2001, between the Corporation and Perforce Software, Inc. (Y) - Agreement, dated February 8, 2002, between the Corporation and Ambient Design Limited - Programming Services Agreement, dated October 31, 2002, between the Corporation and Ambient Design Limited - Professional Consulting Services Agreement, dated May 19, 2004, between the Corporation and Ambient

Consulting, LLC - Software Development Agreement, dated February 9, 2004, between the Corporation and Ambient Design, Ltd. - Evaluation Agreement, dated March 25, 2003, between the Corporation and Sonic Solutions and Evaluation Agreement, dated December 3, 2003, between the Corporation and Sonic Solutions - Embedded Software Agreement, dated May 11, 1999, between the Corporation and Bengt Computer Graphics LLC, as amended January 24, 2002 - License Agreement, undated, between BeOpen.com and the Corporation - Software License Agreement, dated October 28, 2003, between the Corporation and Bibble Labs, Inc. (Y) - Quicktime 5 Software Distribution Agreement, dated December 7, 2001, between the Corporation and Apple Computer, Inc., as amended August 2003 (Y) - Beta License Agreement, undated, between the Corporation and AccuSoft Corporation - Netscape Client Software (Browser Suite) End User License Agreement, undated, between the Corporation and Netscape Communications Corporation - Netscape Browser Redistribution Program License Agreement, undated, between the Corporation and Netscape Communications Corporation - License Agreement, dated June 26, 1999, between the Corporation and Microgetics Corporation (Y) - Agreement, dated July 15, 1991, between the Corporation and Micrographics Corporation - Macromedia Player License Agreement, undated, between the Corporation and Macromedia (Y)

- Macromedia Shockwave and Flash Player License Agreement, undated, between Macromedia, Inc. and the Corporation (Y) - Annual Distribution License Agreement, undated, between the Corporation and AccuSoft Corporation (Y) - JPL Image Release, undated, between the Corporation and California Institute of Technology - Kodak Digital Science Reference SDK for the FlashPix Format License Agreement, undated, between the Corporation and Kodak Corporation (Y) - Manufacturing Distribution Agreement, dated August 17, 1998, between the Corporation and IXLA Ltd., as amended November 1, 2001 (Y) - Limited Use License Agreement, dated June 10, 2004, between the Corporation and ISYS - Intelligent System Solutions Corporation - Intel Pentium 4 Processor Platform Enabling Program, dated December 3, 2002, between the Corporation and Intel Americas Inc (Y) - Software License Agreement, dated April 10, 2000, between the Corporation and IMSI (Y) - Xerces-C XML Parser - Apache Software License, version 1.1, undated - Software Development and License Agreement, dated November 8, 2002, between the Corporation and

Enterprise Corporation International, as amended April 13, 2004 - License Agreement for Software Development Kit, dated November 17, 1999, between the Corporation and Digimarc Corporation (Y) - Macromedia Player Licensing Agreement, undated, between Macromedia, Inc. and the Corporation (Y) - Bengt Computer Graphics LLC Embedded Software Agreement, dated May 11, 1999, between Bengt Computer Graphics LLC and the Corporation, including Customer Support Schedule, as amended January 24, 2002 (Y) - Software License Agreement, dated March 18, 2004, between LC Technology International, Inc. and the Corporation (Y) - Software License and Reproduction Agreement, dated August 25, 2003, between the Corporation and Intuit Corporation (Y) - Courseware Licensing Agreement, dated January 7, 2004, between Quessing Courseware Corp. and the Corporation, as amended April 7, 2004 (Y) - Distribution Agreement, dated November 14, 2003, between Corbis and the Corporation (Y) - Software Distribution Agreement, dated June 19, 1998, between Tech Data Product Management, Inc. and the Corporation; Tech Data Electronic Commerce User Agreement and License, undated, between Tech Data Corporation and the Corporation (Y) - Volume Software License Agreement (Corporation form) - Contractual License Program: Agreement to License (Corporation form) - Investment Protection Agreement (Corporation Form) - Software User License Agreement (Academic) (Corporation Form) - 2003 Staples Software Merchandising Terms and Conditions, dated December 29, 2002, between Staples, The Office Superstore, Inc. and the Corporation - Digital Imaging Software License Agreement, dated January 31, 2004, between Dell Products L.P. and the Corporation (Y) - License Agreement, dated October 5, 2004, between the Corporation and Dell Products, L.P. (Y)

- Microgistix/Jasc Software, Inc. Bundled Software License & Distribution Agreement, dated March 12, 2003, between Microgistix Operations, Inc. and the Corporation, as addended March 24, 2003, December 4, 2003, June 4, 2004 and June 15, 2004 (Y) - Permission Agreements, dated August 29, 2000, February 16, 2001 and April 6, 2001, between Premier Press, Inc. (Prima Communications, Inc.) and the Corporation, as amended October 14, 2002 and further amended June 30,2004 (with attached license agreement) - Quick View Plus Software OEM Agreement, dated September 16, 1998, between IntraNet Solutions Chicago, Inc. (aka Inso Chicago Corporation) and the Corporation, as amended March 30, __________ (Y) - Co-Marketing Agreement, dated May 7, 2001, between the Corporation and Alien Skin, LLC (Y) - Digital Image License Agreement, dated February 9, 2004, between Hemera Technologies Inc. and the

Corporation (Y) - License to Incorporated Copyrighted Works, May 3, 2001, between the Corporation and Muska & Lipman Publishing dated (Y) - Certified for Microsoft Windows Logo License Agreement, undated, between Microsoft Corporation and the Corporation (Y), Certified for Microsoft Windows Logo License Agreement, dated June 5, 2000, between Microsoft Corporation and the Corporation (Y), Certified for Microsoft Windows Logo License Agreement, dated August 25, 2000, between Microsoft Corporation and the Corporation (Y) and Certified for Microsoft Windows Logo License Agreement, dated March 23, 2001, between Microsoft Corporation and the Corporation (Y) - Designed for Microsoft Windows Logo License Agreement, undated, between Microsoft Corporation and the Corporation (Y), Designed for Microsoft Windows Logo License Agreement, dated July 30, 1999, between Microsoft Corporation and the Corporation (Y), Designed for Microsoft Windows Logo License Agreement, dated December 22, 1999, between Microsoft Corporation and the Corporation (Y) and Designed for Microsoft Windows Logo License Agreement, dated May 16, 2000, between Microsoft Corporation and the Corporation (including Permission to Release Logo Testing Information to Microsoft Corporation dated May 16, 2000 (Y) - Internet Photo Sharing Agreement, dated March 29, 2001, between the Corporation and BrightCube, Inc. (Y) - Order Agreement, effective November 3, 2003, between eCapital Advisors and the Corporation - Order Agreement, effective February 28, 2003, between Cognos Corporation and the Corporation (Y) - Private Label Marketing Agreement, dated December 8, 1999, between the Corporation and PhotoLoft.com, Inc. (Y) - QVC Mail-in Product Submittal, dated April 10, 2003, between the Corporation and QVC [click through license] - Redistributable Code-Microsoft Merge Modules License Agreement, undated, between the Corporation and Microsoft Corporation [click through license] (Y) - License Agreements, undated, between the Corporation and Python Software Foundation [click through licenses] (Y) - Unlimited Copy License Agreement, undated, between the Corporation and Access Softek, Inc. (Y)

- Publishing Agreement, dated June 7, 1995, between the Corporation and Access Softek, Inc. and Publishing Agreement, dated June 8, 1995, between the Corporation and Access Softek, Inc. - License Agreement, undated, between the Corporation and Microsoft Corporation (MSXML) [click through license] (Y) - License Agreement, undated, between the Corporation and Microsoft Corporation (MFC) [click through license] (Y) - License Agreement, undated, between the Corporation and Microsoft Corporation (MDAC) [click through license] (Y) - License Agreement, undated, between the Corporation and Microsoft Corporation (Internet Explorer) [click through license] (Y) - License Agreement, undated, between the Corporation and Adobe Corporation

(Reader 5.1) [click through license] (Y) - License Agreement, undated, between the Corporation and Xceed Software, Inc. [click through license] (Y must provide notice of transfer within 30 days) - License Agreement, undated, between the Corporation and BCGSoft Ltd. (BCG Pro) [click through license] (Y) - License Agreement, undated, between the Corporation and BCGSoft Ltd. (BCG - not Pro) [click through license] (Y) - TIFF-LZW/GIF-LZW Software Patent License Agreement, dated March 8, 1995, between the Corporation and Unisys Corporation (Y) - Software License and Distribution Agreement, effective December 31, 1998, between Enroute, Inc. and Sierra Imaging, Inc., as amended August 16, 2001, as sublicensed to the Corporation pursuant to a Letter Agreement, dated December 3, 2001, among the Corporation, Enroute, Inc. and Sierra Imaging, Inc. (Y) - Agreement for Purchase of Software Source Code, dated April 15, 1997, between the Corporation and Michael Bradley - Agreement for Purchase of Software Source Code, dated May 2, 1997, between the Corporation and Jeff Becker, doing business as Top Software - Tool Kit License and Sublicense Agreement, undated, between the Corporation and Live Picture, Inc. - The Independent Group's JPEG Software Readme, undated - Limited Use License Agreement, dated June 10, 2004, between the Corporation and ISYS - Intelligent System Solutions Corporation, with Mutual Non-Disclosure Agreement (Y) - Programming Services Agreement, dated June 5, 2002, between the Corporation and Ilya Vladimirovich Razmanov - Programming Services Agreement, dated March 26, 2003, between the Corporation and Ilya Vladimirovich Razmanov - Programming Services Agreement, dated April 26, 2004, between the Corporation and Ilya Vladimirovich Razmanov - Master Subscription Agreement, undated, between the Corporation and salesforce.com [click-through license] (Y) - Order Form for Sales Automation Software, dated May 27, 2004, between the Corporation and salesforce.com - Untitled Contract, dated July 23, 2003, between the Corporation and GfK Marketing Services GmbH & Co. KG (Y)

- Client Agreement, dated February 12, 2003, between the Corporation and Nygard Dimensions - Data Storage and Service Agreement, dated June 10, 1999, between the Corporation and Arcus Data Security, Inc. (Y) - Release Agreement, dated March 2003, between the Corporation and Diane M. Calkins

- Release Agreement, dated July 5, 2004, between the Corporation and Allison Pankratz - Release Agreement, dated June 30, 2004, between the Corporation and Jennifer Kellogg and Release Agreement, dated February 28, 2003, between the Corporation and Jennifer Kellogg - Release Agreement, undated, between the Corporation and Jennifer Keeler - Release Agreement, July 5, 2004, between the Corporation and Shawn Kardell - Release Agreement, September 29, 2004, between the Corporation and James F. Morris - Release Agreement, September 29, 2004, between the Corporation and Steve Eiswirth - Release Agreement, February 26, 2003, between the Corporation and Jeannine Kellogg - Release Agreement, February 26, 2003, between the Corporation and Bill Kellogg - Release Agreement, dated February 25, 2003, between the Corporation and Jason Knutson - Release Agreement, dated March 16, 2003, between the Corporation and Christina Zimmer - Release Agreement, dated March 2, 2003, between the Corporation and Ian Kellogg (signed by Joe Kellogg) - Release Agreement, dated March 2, 2003, between the Corporation and Sarah Kellogg (signed by Joe Kellogg) - Release Agreement, dated January 6, 2003, between the Corporation and Joe Kellogg (signed by Joe Kellogg) - Release Agreement, dated February 16, 2003, between the Corporation and Dominick Bailey (signed by Tony Luna) - Release Agreement, dated May 10, 2004, between the Corporation and Shannon Weber and Release Agreement, dated February 25, 2003, between the Corporation and Shannon Weber - Release Agreement, dated February 27, 2003, between the Corporation and Kristina M. Stewart - Release Agreement, dated September 30, 2004, between the Corporation and Traci Lange - Release Agreement, dated September 30, 2004, between the Corporation and Lee Gilmore (for Alissa and Blake Gilmore) - Release Agreement, dated January 15, 2004, between the Corporation and Sonja Dahl - Release Agreement, dated October 6, 2004, between the Corporation and Douglas Meisner - Release Agreement, dated August 30, 2004, between the Corporation and Jim Fugelstad - Independent Contractor Agreement, dated November 2002, between the Corporation and Michael Medford Photograph - License Agreement, undated, between the Corporation and PictureQuest [click-through license] (Y) - Royalty-Free License Agreement, undated, between the Corporation and Corbis [click-through license] (Y) - Royalty-Free License Agreement, undated, between the Corporation and Getty Images, Inc. [click-through license] (Y)

- License Agreements, undated, between the Corporation and Getty Images, Inc. [click-through licenses] (Y) - Royalty-Free License Agreement, undated, between the Corporation and imageshop b.v. [click- through license] (Y)

- MPEG License for Animation Shop, undated, between the Corporation and MPEG Software Simulation Group (Y) - FreeType Project License 1.2 Agreement, undated, between the Corporation and FreeType [click through license] (Y) - Output variable length bit strings by Jean-loup Gailly [GNU General Public License Version 2, June 1991; click through license] (Y) - Rogue Wave Stingray License (Y) - Xerces-C XML Parser - Apache Software License, Version 1.1 (Y) - Point of Sale License Agreement, date August 27, 1999, between the Corporation and Ingram Micro, Inc. (Y) - Designed for Microsoft Windows Logo License Agreement (PSP8 & Suite) [click through license] (Y) - Designed for Microsoft Windows Logo License Agreement (PSP9 & Studio) [click through license] (Y) Schedule 3.1.16.6 Schedule 3.1.16.7 Schedule 3.1.16.8 - Software Distribution Agreement, dated September 23, 2003, between the Corporation and Avery Dennison Office Products (PS Album); Promotional Agreement, dated January 7, 2003, between the Corporation and Avery Dennison Office Products (PSP 8); Promotional Agreement, dated January 28, 2003, between the Corporation and Avery Dennison Office Products (PS Album); Promotional Agreement, dated May 17, 2004, between the Corporation and Avery Dennison Office Products Company (Y) - Promotional Agreement, dated February 12, 2003, between the Corporation and Shutterfly, Inc. (Y) and Letter Agreement, dated December 12, 2001, between the Corporation, Dell Products L.P. and Shutterfly, Inc.; Dell Acknowledgement, dated March 8, 2001, as amended - Translation Agreement, dated February 25, 2003, between the Corporation and Alpha CRC Ltd. - Translation Agreement, dated December 19, 2003, between the Corporation and Alpha CRC Ltd. - Translation Agreement, dated June 3,2002, between the Corporation and Concorde TEC B.V. - Translation Agreement, dated June 3,2002, between the Corporation and naturalmenteSOGET - Localization Proposals, dated September 10, 2003, August 25, 2003, August 13, 2003, August 25, 2003, August 25, 2003 and November 17, 2003, from Rubric, Inc. See Schedule 3.1.29.8. Schedule 3.1.16.9

- Lease Agreement, undated, between the Corporation and Bennett Material Handling and Forklift lease, undated, between the Corporation and Stearns Bank National Association (Y) - Lease Agreement, dated as of June 7, 2002, between the Corporation and Key Cadillac Oldsmobile

Schedule 3.1.16.10 - eBay Ad Insertion Order Standard Terms and Conditions, dated as of June 12, 2003, between the Corporation and eBay Inc. - eBay Standard Terms and Conditions for AGENCY Insertion Orders, undated, between the Corporation and eBay Inc. - Order for Service, dated May 3, 2004, issued by the Corporation to Return Path, Inc. - Proposal for the Purchase of UnityMail Enterprise License, dated May 16, 2001, between the Corporation and MessageMedia, Inc. - UnityMail Enterprise License Agreement, dated May 25, 2001, between the Corporation and MessageMedia, Inc. (Y) - Letter Agreement, dated June 5, 2002, between the Corporation and Design Guys - Confidential Disclosure Agreement, dated April 18, 2003, between the Corporation and Lexmark International, Inc - Contract, dated December 12, 2002, between the Corporation and Pictos Technologies, Inc. - Trademark and Domain Name Assignment, dated December 10, 2001, between the Corporation and AutoFX Software - Loan Agreement, dated September 1, 2000, between the Corporation and BAL Corp. - Letter of Understanding, dated March 26, 2003, between the Corporation and BAL Corp. - Two Service Agreements, undated, between the Corporation and InfoTrends Research Group, Inc. - Purchase of Service Agreement, dated April 29, 2003, between the Corporation and Opportunity Partners - Internet Services Agreement, dated April 16, 1999, between the Corporation and US Internet Corp. - Invoice from Paul Irmiter Shoots dated October 5, 2000 - Work Proposals, dated July 1, 2003, June 2, 2003, March 13, 2003, June 11, 2003 and May 21, 2003, from Medialocate USA, Inc. - Letter of Understanding, dated March 21, 2003, between the Corporation and Allsorts Distribution Ltd t/as Digital Workshop - Mutual Confidentiality Agreement, dated January 23, 2004, between the Corporation and Ofoto, Inc. - Mutual Confidentiality Agreement, dated September 12, 2004, between the Corporation and PhotoBox Limited - Mutual Confidential Disclosure Agreement, dated May 10, 2000, between the Corporation and Shutterfly.com, Inc.

- Promotion and Rebate Agreement, dated December 22, 2001, between Microsoft Corporation and the Corporation - Limited Use Agreement, dated September 12, 2002, between Oak Technology, Inc. and the Corporation (Y) - In the normal course of its business, the Corporation enters into non-disclosure agreements with other parties. - Dedicated Internet Access and Dedicated Web Hosting Service Agreement between the Corporation and Time Warner Telecom of Minnesota LLC

See Schedule 3.1.25 and Schedule 3.1.29.

SCHEDULE 3.1.17 CERTAIN DISTRIBUTION AGREEMENTS Schedule 3.1.17.1 - Distribution Agreement, dated June 9, 1998, between Ingram Micro Inc. and the Corporation, as amended July 1, 2002* - Master Program Agreement, dated May 22, 2003, between Best Buy Canada Ltd. and the Corporation, as addended June 3, 2003* - Computer Software Distribution Agreement, dated January 21, 1999, between the Corporation and Navarre Corporation* - Navarre Corporation CPD Consignment Agreement, dated April 30, 2001, between the Corporation and Navarre Corporation* - Agreement to Provide Special Marketing and Administration Funds for Office Max, dated May 1, 2000, between the Corporation and Navarre Corporation* - Software Consignment Agreement - Office Depot, dated June 18, 2003, between the Corporation and Navarre Corporation* - Software Consignment Agreement - Staples, dated July 1, 2003, between the Corporation and Navarre Corporation* - Software Consignment Agreement - CompUSA, dated July 1, 2004, between the Corporation and Navarre Corporation* - Marketing Accrual Program Agreement, dated January 1, 2000, between the Corporation and Office Depot, Inc.* - Retail Service Contract - Best Buy, dated April 14, 2004, between the Corporation and National Retail Services Inc.* - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and Questar* - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and BerniSoft* - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and Flaming Pear*

Flaming Pear* - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and Connect Distribution sp. z.o.o.* - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and CompuTrolley.com* - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and ProSoft* - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and Avanquest France* - Distribution Agreement, dated December 1, 2003, between the Corporation and Gem Distribution Ltd.* - International Master Representative Agreement, dated as of January 1, 2004, between the Corporation and Communique Software [2003 agreement expired, but the 2004 agreement is unsigned]*

- International Master Representative Agreement between the Corporation and BroCo software BV [unsigned]* - International Master Representative Agreement between the Corporation and Xpress Soft [unsigned]* - International Master Representative Agreement, dated as of December 27, 2002, between the Corporation and H.C. Top Systems B.V. [2003 agreement (signed December 27, 2002) expired, but the 2004 agreement is unsigned]* - International Master Representative Agreement between the Corporation and Sector Zero, Productos informaticos SA [unsigned]* - International Master Representative Agreement between the Corporation and Daou Data Systems Corp. [unsigned]* - International Master Representative Agreement between the Corporation and Qast Systems Solutions Inc. [unsigned]* - International Master Representative Agreement between the Corporation and The Bird Group [unsigned]* - International Master Representative Agreement between the Corporation and Version, S.A. de CV [unsigned] * - International Representative/Repubisher Agreement, executed as of November 15, 2000, between the Corporation and Global Soft Distribution, Limited [2000 agreement expired, but the 2004 agreement is unsigned]* - Representative Agreement, dated June 1, 2004, between the Corporation and CMI Sales, Inc.* - Distribution and Marketing Agreement, dated April 1, 2001, between the Corporation and the Douglas Stewart Company* - Letter Agreement, dated March 29, 2004, between the Corporation and Office Depot, Inc.* - Reseller Agreement, dated May 1, 2004, between the Corporation and Digital Workshop * - Standard Distribution Agreement, undated, between the Corporation and Academic Distributing, Inc. [unsigned]*

* These agreements may not be terminated by the Corporation on 60 days or less than 60 days written notice without any requirement to pay any amounts, deliver any property, grant any rights or restrict the activities of the Corporation. See Schedule 3.1.16. Schedule 3.1.17.2 - The Corporation makes no representations as to whether termination of the international master representative Contracts may give rise to any obligations under applicable Laws.
MASTER REPRESENTATIVE --------------------Questar EFFECTIVE DATE OF AGREEMENT ---------------January 1, 2004 TERMINATION FOR CONVENIENCE ----------------------90 days written notice FINANCIAL PENALTIES FOR TERMIN -----------------------------------All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of assembly for any packaged for

retail sale. BerniSoft January 1, 2004 90 days written notice All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of assembly for any packaged for retail sale. All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of assembly for any packaged for retail sale. All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of assembly for any packaged for retail sale. All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of assembly for any packaged for retail sale. All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of assembly for any packaged for retail sale. All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of assembly for any packaged for retail sale. All complete product may be returned Corporation for full credit for the net of rebates, and/or price protect All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in

Flaming Pear

January 1, 2004

90 days written notice

Connect Distribution sp. z.o.o

January 1, 2004

90 days written notice

CompuTrolley.com

January 1, 2004

90 days written notice

ProSoft

January 1, 2004

90 days written notice

Avanquest France

January 1, 2004

180 days written notice

Gem Distribution - UK

December 1, 2003

90 days written notice

Communique Software

unsigned

Previous agreement expired December 31, 2003; operating under unsigned

the actual cost of assembly for any packaged for

agreement; previous agreement did not provide for termination without cause BroCo Software unsigned - 2004 agreement has been executed by BroCo, but not countersigned by the Corporation per instructions from Vector unsigned Previous agreement expired December 31, 2003; operating under unsigned agreement; previous agreement did not provide for termination without cause Previous agreement expired December 31, 2003; operating under unsigned agreement; previous agreement did not provide for termination without cause Previous agreement expired December 31, 2003; operating under unsigned agreement; previous agreement did not provide for termination without cause No 2003 agreement; new MR in 2004; working under verbal agreement and purchase orders

retail sale.

All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of assembly for any packaged for retail sale.

Xpress Soft

All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of assembly for any packaged for retail sale.

H.C. Top Systems B.V.

December 27, 2002

All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of assembly for any packaged for retail sale.

Sector Zero, Productos informaticos SA

unsigned

All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of assembly for any packaged for retail sale. All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of

Daou Data Systems Corp.

unsigned

No 2003 agreement; new MR in 2004; working under verbal agreement

and purchase orders

assembly for any product packaged fo sale. All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of assembly for any packaged for retail sale. All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of assembly for any packaged for retail sale.

Qast Systems Solutions Inc.

unsigned

No 2003 agreement; new MR in 2004; working under verbal agreement and purchase orders

The Bird Group

unsigned

Previous agreement expired December 31, 2003; operating under unsigned agreement; previous agreement did not provide for termination without cause 2002 MR (agreement terminated by the Corporation); working under Verbal agreement and purchase orders

Version, S.A. de CV

unsigned

All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of assembly for any packaged for retail sale.

Global Soft (aka P&A, Inc.)

November 15, 2000

Agreement expired December 31, 2003; operating under unsigned agreement; previous agreement did not provide for termination without cause

All unsold inventory must be returne Corporation. The Corporation will pa representative for any inventory and the actual cost of the inventory, in the actual cost of assembly for any packaged for retail sale.

SCHEDULE 3.1.20 LEASED REAL PROPERTY The Corporation leases approximately 74,224 square feet located at the Fuller Road Business Center, 7905 Fuller Road, Eden Prairie, Minnesota. - Lease Agreement, dated as of August 19, 1998, between the Corporation and Liberty Property Limited Partnership - Amendment to Lease Agreement, dated as of March 6, 2003, between the Corporation and Liberty Property Limited Partnership

SCHEDULE 3.1.22 TITLE TO ASSETS Schedule 3.1.22.1 Bremer Bank (successor to Firstar Bank of Minnesota, N.A.) has filed a blanket security interest in connection with the revolving credit facility (No. 2097079 filed January 1, 1999, No. 2001131071 filed August 15, 2001 and #2003876236 filed September 17, 2003). Schedule 3.1.22.3 The Corporation has in the past corrected defects in initial releases of the versions of its products, which resulted in sending a modified version to customers.

SCHEDULE 3.1.23 ENVIRONMENTAL MATTERS None.

SCHEDULE 3.1.25 EMPLOYMENT MATTERS Schedule 3.1.25.1 - Employment Agreement, dated December 3, 1998, between the Corporation and Robert Voit - Employment Agreement, dated December 15, 1998, between the Corporation and Kris B. Tufto

- Employment Agreement, dated December 3, 1998, between the Corporation and Jon Ort - The Corporation is a party to certain Change-in-Control Agreements listed in Schedule 3.1.6.

Schedule 3.1.25.2
HIRE DATE --------05/23/03 12/30/96 O5/08/00 03/15/04 03/25/98 03/25/02 01/04/99 05/20/02 YEARS OF SERVICE* -------1.33 7.73 4.38 0.52 6.50 2.50 5.72 2.34 STATE EMPLOYED -------MN MN MN MN MN MN MN MN

NAME -----------------Lois Allen Kelly Anderson Troy Bailow Gregory Beltz Jodie Blashack Gary Borthwick Diane Calkins David Carley

Christopher Chase Marsha Chose Jodi Chromey Tami Coyle Sonja Dahl David Dean John Diebel Sarah Dietl Andrew Dolan Karen Drost Gregory Drozdek Susan Dub Joseph Dwyer Elshaddai Edwards Robert Egelston Steve Eiswirth Dana Evans Harold Fagley Wenlei Fang Steven Favorito Evan Francen Nathan Gaida

02/24/04 12/30/02 04/24/00 08/06/04 08/31/98 01/25/99 08/06/01 12/01/03 04/17/97 01/07/03 03/25/02 04/01/02 05/13/02 08/19/96 09/14/98 07/16/98 06/08/04 6/24/2002 01/31/00 06/02/03 03/10/00 06/07/99

0.58 1.73 4.41 0.13 6.06 5.66 3.13 0.81 7.44 1.71 2.50 2.48 2.36 8.10 6.02 6.19 0.29 2.25 4.64 1.31 4.54 5.30

MN MN MN MN MN MN MN MN MN MN MN MN MN MN MN MN MN MN MN MN MN MN

TITLE ----------------Receptionist QA Engineer-I Sr. SE - Level II QA Engineer - II Customer Care Manager Technical Support Rep Customer Service Associate Principal Software Engineer QA Engineer - II Operations Manager Copywriter Hr Generalist - I Web User Interface Dev. Technical Support Rep Graphic Artist - Level II Int. Program Manager Manager Creative Services Dir. of Corp Communication Technical Support Rep - II Chief Financial Officer Sr.SE - II Product Manager Sr. SE - Level II Tech Writer Volume Licensing Rep Director of PD Lead Internet Technologies Eng. Financial Analyst Network Services Manager Installation/ Release Engineer II PR & Events Coordinator Director of Sales Director of Technical Alliances Senior Product Manager N.A. Fulfillment Coordinator Principal Software Engineer Sr. Product

BASE ----------$ 25,773.00 $ 59,160.00 $ 96.663.00 $ 65.000.00 $ 70.200.00 $ 35,984.00 $ 38.022.00 $101.200.00

INCREASE 03 ----------$ 22,815.00 $ 59,160.00 $ 83.000.16 $ 70,200.00 $ 34,945.34 $ 36,214.19 $ 84,000.00

INCREASE ---------

$ 90,000.

$ 92,000.

$ 65,000.00 $ 49,665.00 $ 47,619.00 $ 45,000.00 $ 67,200.00 $ 46,278.00 $ 57,200.00 $ 70,000.00 $ 77,023.20 $120,000.00 $ 41,602.00 $165,000.00 $ 90,750.00 $ 81,132.00 $104,286.00 $ 62,000.00 $ 50,000.00 $155,000.00 $ 80,000.00 $ 61,812.00 $ 89,250.00 $ 66,000.00

$ 45,150.00 $ 39,000.00 $ 50,778.00 $ 44,076.90 $ 55,000.32 $ 43,290. $ 58,640.

$ 70,200.00

$ 73,008.

$ 36,193.39 $140,000.16 $ $ $ $ 78,750.00 69,942.24 99,320.16 58,000.08 $ 82,500. $ 81,132. $104,286. $ 62,000.

$140,000.16 $ 68,250.00 $ 61,200.00 $ 77,896.08 $ 55,650.24 $ 71,662.

$ 81,000. $ 60,000.

Kelly Gillitzer Mike Goin Dixon Gould

03/04/04 05/22/00 03/01/99

0.55 4.34 5.56

MN MN MN

$ 45.000.00 $114,640.00 $125,000.00 $111,300.24 $109,000.08 $114,640. $113,000.

Michael Greenhalgh Suzanne Gunderson

O8/25/03 09/14/94

1.08 10.03

MN MN

$120,000.00 $ 40,950.00 $ 39,000.00 $ 40,950.

Dan Hagler

11/17/03

0.85

MN

$110,000.00

$ 88,000.08

Bonnie Hollenhorst

10/26/98

5.91

MN

$ 96,000.00

$ 96,000.00

Pat Holt Thomas Huberty James Huggett Misty Hunter Michael Hussey Donovan Isdahl Scott Jensen Scott Johnson Shawn Kardell Jennifer Keeler

12/16/02 12/30/96 06/16/03 06/30/03 03/15/04 04/01/02 02/28/00 04/03/00 05/08/02 03/15/01

1.77 7.73 1.27 1.23 0.52 2.48 4.57 4.47 2.38 3.52

MN MN MN MN MN MN MN MN MN MN

Marketing Mgr. Webiste Program Mgr. Sr. SE - Level II QA Engineer-II Customer Service Associate Customer Service Associate Sr. SE - Level I Sr. SE - Level I Mgr. OF Int. S&M Graphic Designer Corporate Counsel YEAR END BONUS POTENTIAL TOTAL ----------

$ 70,000.00 $ 98,000.00 $ 63,000.00 $ 34,321.00 $ 31,200.00 $ 85,000.00 $ 93,600.00 $ 93,000.00 $ 54,000.00 $132,500.00

$ 60,000.00 $ 98,000.16 $ 34,321.32

$ 70,000.

$ 70,000.08 $ 83,500.08 $ 80,500.32 $ 50,000.16 $112,24O.32

$ 77,000. $ 90,000. $ 88,000. $ 54,000. $121,500.

NAME -----------------Lois Allen Kelly Anderson Troy Barlow Gregory Beltz Jodie Blashack Gary Borthwick Diane Calkins David Carley

INCREASE 04 ----------25,772.50 96,662.64

INCREASE 04 -----------

5,000.00 35,985.38 38,023.86

BONUS PAID 2003 ---------$ 139.42 $ 1,250.00 $ 1,500.00 $ 0.00 $ 187.00

BONUS 2004 PTD ---------

4,000.00

$

250.00 5,000.00

$ 2,200.00

Christopher Chase Marsha Chose Jodi Chromey Tami Coyle Sonja Dahl David Dean John Diebel Sarah Dietl Andrew Dolan Karen Drost Gregory Drozdek Susan Dub Joseph Dwyer Elshaddai Edwards Robert Egelston Steve Eiswirth Dana Evans Harold Fagley Wenlei Fang Steven Favorito Evan Francen Nathan Gaida

49,665.12 47,619.12 67,200.00 46,281.78 57,200.16 5,000.00 77,023.20 30,000.00 37,649.45 165,000.00 $41,601.60 90,000.00

$ 2,041.66

200.00 179.55 224.94

$ $ $ $

250.00 175.00 189.47 202.50

239.62 250.00

$ 5,000.00

20,250.00 200.00

$ 1,250.00 $ $ $ $ 1,972.50 9,010.00 2,000.00 1,000.00

70,000.00 4,000.00 12,000.00 149.99 250.00

27,500.00

5,000.00 155,000.16 80,000.16 61,812.00 89,250.00 66,000.00 $ $ 47.00 100.00 90,000.00 $20,199.97

40,000.00

$ 1,500.00

200.00

Kelly Gillitzer Mike Goin Dixon Gould 140,000.00 125,000.16 $16,500.00 $ 135.00 40,000.00 10,000.00

Michael Greenhalgh Suzanne Gunderson

120,000.00

70,000.00

$

978.72

5,000.00

$ 1,956.25

Dan Hagler

110,000.16

$

250.00

Bonnie Hollenhorst Pat Holt Thomas Huberty James Huggen Misty Huntett Michael Hussey Donovan Isdahl Scott Jensen Scott Johnson Shawn Kardell Jennifer Keeler 85,000.08 93,600.00 93,000.00 132,500.16

23,125.00 10,000.00

$12,620.00 $ 7,500.00 $ 1,959.99 $174.98

14,000.00 2,600.00 134.50 199.98

15,000.00 45,000.00

$ 1,989.49 $ 1,750.00 $ 5,000.00 $ 250.00 $ 372.22

3,500.00 4,000.00 7,687.47 40,250.00 PROFIT SHARING 2004 --------$ 210.86 $ 537.12 $ 836.51 $ 32.70 $ 646.10 $ $ $ 345.84 388.37 876.80

NAME -----------------Lois Allen Kelly Anderson Troy Barlow Gregory Beltz Jodie Blashack Gary Borthwick Diane Calkins David Carley

YEAR END BONUS ---------

COMMISSION 2003 ----------

COMMISSION PTD 04 ----------

COMMISSION 2004 ----------

PROFIT SHARING 2003 ---------$ 702.34 $ 4,346.02 $ 6,630.73 $ 4,358.40 $ 2,538.90 $ 2,905.88 $ 6,569.65

5,000.00

Christopher Chase Marsha Chose Jodi Chromey Tami Coyle Sonja Dahl David Dean John Diebel Sarah Dietl Andrew Dolan Karen Drost Gregory Drozdek Susan Dub Joseph Dwyer Elshaddai Edwards Robert Egelston Steve Eiswirth Dana Evans Harold Fagley Wenlei Fang Steven Favorito Evan Francen Nathan Gaida 90,000.00 30,000.00 5,000.00 2,433.28 5,775.00

$ 2,372.65 $ 3,168.99 $ 4,074.21 $ 3,438.55 $ 4,223.74

$ $ $ $ $ $ $

65.36 401.88 398.43 589.04 422.57 522.16 343.71 704.87

$ 5,391.00 $40,488.34 $ 2,727.49 $44,886.86 $ $ $ $ 1,232.15 13,360.00 $44,886.86 $ 5,410.84 $ 1,709.96 $ 6,131.81 $ 4,399.48 6,137.26 5,494.00 7,627.26 4,515.58

$

$

339.08

22,000.00

$ $ $ $

786.26 746.72 965.65 570.63

5,000.00 90,000.00

$ $ $ $

697.16 560.69 785.00 552.23

Kelly Gillitzer Mike Goin Dixon Gould 40,000.00 31,907.02 28,130.55 46,430.00 $10,999.53 $ 8,555.98

$

36.03

$1,409.90 $1,067.65

Michael Greenhalgh

70,000.00

$ 1,097.41

$1,069.77

Suzanne Gunderson

$ 2,807.78

$

380.92

Dan Hagler

$

584.58

Bonnie Hollenhorst Pat Holt Thomas Huberty James Huggett Misty Hunter Michael Hussey Donovan Isdahl Scott Jensen Scott Johnson Shawn Kardell Jennifer Keeler

18,500.00 10,000.00 6,657.71 17,909.00

$ 6,824.22 $ 3,488.30 $ 7,158.74 $ 1,630.43 $ 751.42

$ $ $ $ $ $

872.18 584.46 879.73 579.84 305.87 16.40

15,000.00 45,000.00

25,117.04

23,890.42

35,065.97

$ $ $ $ $

5,648.48 6,701.34 7,930.77 3,839.75 8,058.17

$ 708.69 $ 828.34 $1,122.52 $ 538.03 $1,118.26

NAME ---Douglas Keller Jennifer Kellogg Jessica Knutson

HIRE DATE -------12/01/03 11/05/01 02/14/00

YEAR OR SERVICE* -------0.81 2.88 4.61

STATE EMPLOYED -------MN MN MN

Brian Kruse

09/03/02

2.05

MN

Diana Kutz Heather Lane Traci Lange Tiffany Lavigne Craig Letourncau Bruce Lindbloom

05/15/00 04/29/02 09/25/00 12/27/00 03/22/99 08/18/03

4.36 2.40 3.99 3.74 5.51 1.10

MN MN MN MN MN MN

Gage Lockhart Savita Mahabaleshwar John-Erich Mantius

10/25/99 06/18/01 08/11/98

4.91 3.26 6.12

MN MN MN

Scott Martell Patrick McGaughey Doug Meisner Uriel McMillan Jeffrey Michaud James Mork James Morris Wade Mueller Kathy Netzke Steve Neumeyer Jason Opsahl Jon Ort Darnell Otterson Nancy Peterson Richard Radach Jon Radke

09/01/00 08/09/95 08/19/02 05/21/98 08/05/02 07/07/97 02/18/02 05/08/00 01/13/97 01/02/02 02/08/99 03/01/94 07/20/98 04/12/99 12/01/03 06/30/04

4.06 9.13 2.09 6.34 2.13 7.21 2.59 4.38 7.69 2.72 5.62 10.57 6.18 5.45 0.81 0.23

OH MN MN MN MN MN MN MN MN MN MN MN MN MN MN MN

TITLE ---------------QA Engineer II Sr. Product Marketing Mgr. Sr. Graphic Designer Principal Software Engineer HR Representative Executive Assistant Tech Writer Accountant - II VP Channels & Bus. Devel Imaging Engineering Scientist Technical Support Applications Engineer Director International Sales DirectorBusiness Devlop Sr. SE-Level I Sr. Product Manager QA Engineer - I Engineering Manager Principal SE II Engineering Manager Sr. User Experience Eng. Distribution Associate SE-Level II Controller CTO QA Engineer - I QA Engineer - II Web Developer QA Engineer - II

BASE ----------$ 65,000.00 $ 90,000.00 $ 55,000.00

INCREASE 03 -----------

$ 78,120.00 $ 42,700.08

$108,100.00

$ 94,000.32

$ 55,000.00 $ 55,000.00 $ 55,000.00 $ 48,400.00 $145,800.00 $120,000.00

$ 38,000.16 $ 52,000.08 $ 50,830.56 $ 48,400.08 $145,800.24

$ 44,554.00 $ 88,200.00 $116,844.00

$ 44,555.31 $ 84,000.24 $109,200.00

$129,203.00 $ 87,360.00 $110,160.00 $ 52,500.00 $141,750.00 $125,000.00 $111,300.00 $ 91,000.00 $ 33,280.00 $ 68,000.00 $ 95,000.00 $156,600.00 $ 49,700.00 $ 66,800.00 $ 65,000.00 $ 60,000.00

$120,750.00 $ 83,200.08 $ 90,000.24 $ 42,000.24 $135,000.24 $115,000.08 $ 90,000.00 $ 68,000.16 $ 31,201.20 $ 55,000.32 $ 72,000.24 $156,600.24 $ 45,150.00 $ 63,600.24

Mark Ransom Russell Rhode Chad Rockvoy Andrew Rogers Betsy Rolland Satya Sanagavarapu Michael Schmidt David Schroers John Seals Melvin Shannon Abe Shoberg Russell Shotts Gary Showalter Jason Smith Rebocca Sowada Shawn Spensley

06/23/97 04/28/00 10/12/98 05/07/01 06/16/03 04/11/01

7.25 4.40 5.95 3.38 1.27 3.45

MN MN MN MN MN MN

07/06/98 04/24/00 06/17/02 07/31/00 05/22/00 11/12/96 06/30/04 01/02/01 01/20/03 02/16/04

6.22 4.41 2.27 4.15 4.34 7.86 0.23 3.72 1.67 0.60

MN MN MN MN MN MN MN MN MN MN

Anders Stadheim Maria Stockham

01/12/99 09/30/02

5.70 1.98

MN MN

John Strasser Adam Tetz

11/17/03 09/29/03

0.85 0.98

MN MN

Cheryl Theuninck Brian Thomas

08/02/04 10/21/02

0.14 1.92

MN MN

Jon Thompson Julie Toman

06/07/04 04/15/02

0.29 2.44

MN MN

Sr. SE-Level II Sr. SE-Level II Principal Se - I Technical Support Rep QA Engineer - II Business Applications Mgr. Sr. SE-Level I Sr. SE-Level II Web Team Lead Technical Support Rep. QA Engineer - I Principal SE Sr. QA Engineer Installation Engineer QA Enginnering Manager Ntnl Reseller Channel Mgr. Sr. SE-Level II Direct Mrktg Program Mgr. Associate Network Admin. Alliance Marketing Specialist Technical Alliance Mgr. Sr. Fulfillment Oprtns Mgr. Production Manager Director of Direct Marketing

$112,000.00 $111,500.00 $105,000.00 $ 37,440.00 $ 77,000.00 $ 98,500.00

$108,150.24 $104,000.16 $ 92,650.32 $ 35,985.38

$ 87,150.24

$ $ $ $

90,500.00 95,000.00 82,500.00 39,313.51

$ $ $ $

84,000.24 83,200.08 75,000.24 37,795.05

$ 50,000.00 $135,574.00 $ 75,000.00 $ 55,000.00 $ 96,300.00 $ 80,000.00

$ 39,000.00

$ 48,000.24

$ 98,700.00 $ 90,000.00

$ 87,000.24 $ 80,000.40

$ 46,000.00 $ 62,000.00

$ 90,000.00 $ 95,000.00 $ 90,000.24

$ 50,000.00 $113,473.00 $101,000.16

NAME ---Douglas Keller Jennifer Kellogg Jessica Knutson

INCREASE 03 -----------

INCREASE 03 -----------

INCREASE 04 -----------

INCREASE 04 -----------

YEAR END BONUS POTENTIAL TOTAL ----------

BONUS PAID 2003 ---------$ 180.00 $10,410.00 $ 3,500.00

$ 90,000.00 $ 44,835.12 47,973.60 $ 55,000.08

27,500.00

Brian Kruse

$108,100.08

$ 2,234.50

Diana Kutz Heather Lane Traci Lange Tiffany Lavigne Craig Letourncau Bruce Lindbloom

$ 45,000.00

$ 55,000.08 55,000.00

$ 2,225.00 $ 3,000.00 $ 1,000.00 180,000.00 $ 250.00

$ 55,000.08

Gage Lockhart Savita Mahabaleshwar John-Erich Mantius $ 88,200.00 $116,844.00 140,000.00 $ 250.00

$15,223.50

Scott Martell Patrick McGaughey Doug Meisner

$129,203.04 $ 87,360.00 $102,000.00

105,000.00

$20,500.00 $ 2,000.00 $13,000.00

110,160.00

23,125.00

Uriel McMillan Jeffrey Michaud James Mork James Morris Wade Mueller Kathy Netzke Steve Neumeyer Jason Opsahl Jon Ort Darnell Otterson Nancy Peterson Richard Radach Jon Radke Mark Ransom Russell Rhode Chad Rockvny Andrew Rogers Betsy Rolland Satya Sanagavarapu Michael Schmidt David Schroers John Seals Melvin Shannon Abe Shoberg Russell Shotts Gary Showalter Jason Smith Rebocca Sowada Shawn Spensley

$ 50,000.16 $141,750.00 $120,750.00 $ 95,400.00 $ 85,000.08 $125,000.16 $105,000.00

52,500.00

$ 1,199.50 $15,000.00 $ 2,000.00

111,300.00 91,000.08 33,281.28

$ 3,200.00 $ 1,750.00 $ 1,550.00 $ 1,311.60 50,000.00 $50,000.00 $ 1,250.00 $ 1,000.00 $ 140.00 $ 2,250.00 $ 2,000.00 $ 2,000.00

$ 63,000.00 $ 85,000.08 $ 49,700.16

68,000.16 95,000.16

66,800.16

$112,000.08 $108,250.08

111,500.16 105,000.00 37,441.44 77,000.00 98,500.08

$

249.98

$ 91,507.20

$ 95,000.16

$ 90,500.16 $ 89,000.16 $ 82,500.00

95,000.16 39,313.51

$ 2,000.00 $ 1,632.50

$ 45,000.00

50,000.16

$ 1,274.99 $ 2,000.00 $ 1,224.50 $ 3,225.00 10,100.00

$ 51,500.16

55,000.08 96,300.00

Anders Stadheim Maria Stockham

$ 94,000.08 $ 90,000.00

98,700.00 15,000.00

$ 1,999.99 $ 8,744.98

John Strasser Adam Tetz 11,000.00

Cheryl Theuninck Brian Thomas $ 95,000.16 10,000.00

Jon Thompson Julie Toman $108,070.08 113,473.00 105,000.00 $15,000.00

NAME ---Douglas Keller Jennifer Kellogg Jessica Knutson

BONUS 2004 PTD ---------

YEAR END BONUS ----------

COMMISSION 2003 ----------

COMMISSION PTD 04 ----------

COMMISSION 2004 ----------

PROFIT SHARING 2003 --------------

PROFIT SHA 2004 ---------$ 319.1 $ $ 772.2 416.9

17,040.00 249.99

22,000.00

$ 5,935.97 $ 3,379.65

Brian Kruse

5,000.00

$ 7,218.73

$

954.9

Diana Kutz Heather Lane

10,000.00 5,250.00

$ 3,616.88 $ 3,731.73

$ $

506.2 454.6

Traci Lange Tiffany Lavigne Craig Letourncau Bruce Lindbloom

70,000.00

180,000.00

$ 3,899.70 $ 2,767.37 $44,886.86 $ 1,359.82

$ $

507.8 417.6

$1,104.4

Gage Lockhart Savita Mahabaleshwar John-Erich Mantius

167.48

$ 3,291.90 $ 6,557.60

$ $

401.3 811.7

40,000.00

40,000.00

40,166.46

34,123.38

59,614.44

$10,960.46

$1,572.2

Scott Martell Patrick McGaughey Doug Meisner Uriel McMillan Jeffrey Michaud James Mork James Morris Wade Mueller Kathy Netzke Steve Neumeyer Jason Opsahl Jon Ort Darnell Otterson Nancy Peterson Richard Radach Jon Radke Mark Ransom Russell Rhode Chad Rockvny Andrew Rogers Betsy Rolland Satya Sanagavarapu Michael Schmidt David Schroers John Seals Melvin Shannon Abe Shoberg Russell Shotts Gary Showalter Jason Smith Rebocca Sowada Shawn Spensley

20,000.00

30,000.00

23,459.41

28,599.22

40,447.50

$10,754.52 $ 6,413.21 $ 7,555.27 $ 3,468.86 $10,367.30 $ 8,831.40

$1,496.8 $ 819.5 $1,013.8 $ 460.1 $1,332.3 $1,167.0 $ $ $ $ $ $ $ $ 974.3 782.3 289.2 593.6 782.3 481.0 544.8 319.1

23,500.00 2,500.00 202.50

18,500.00

5,000.00 249.98 175.00 194.98 249.98 250.00

$ 7,084.22 $ 5,775.73 $ 2,353.71 $ 4,640.31 $ 6,153.81 $44,886.86 $ 3,491.97 $ 4,884.16

50,000.00

200.00

$ $ $ $

8,403.19 8,133.14 6,128.98 2,524.60

$1,030.8 $ 996.3 $ 459.3 $ 310.7 $ $ 549.2 874.3

$ 1,782.71 $ 6,855.70

$ $ $ $

6,593.05 6,592.04 5,759.62 2,807.89

$ $ $ $

832.9 819.1 815.0 350.9

$ 3,196.12 $10,358.47 2,500.00 15,247.49 1,700.00 6,700.00 10,692.09 30,000.00 $ 3,877.59 $ 4,668.58

$ 414.1 $1,247.7 $ $ $ 483.6 842.3 110.5

Anders Stadheim Maria Stockham

4,000.00 2,749.98

15,000.00

7,666.67

8,787.18

20,307.84

$ 7,050.76 $ 6,356.22

$ $

876.7 868.2

John Strasser Adam Tetz

249.98 5,164.50 13,000.00

$ $

275.2 582.9

Cheryl Theuninck Brian Thomas $ 6,265.74 $ 853.2

Jon Thompson Julie Toman 20,250.00 30,000.00 26,863.79 34,677.97 55,659.57 $ 9,604.36 $1,381.1

NAME ---Quan Truong

HIRE DATE -------09/18/00

YEARS OF SERVICE* -------4.01

STATE EMPLOYED -------MN

Kris Tuflo** Neelima Uppalapati Allison Pankratz

03/05/98 01/01/02 10/08/98

6.55 2.72 5.96

MN MN MN

Curtis Voit Kim Voit

06/23/03 03/16/98

1.25 6.52

MN MN

Robert Voit Ryan Waltrip Peter Ward Shannon Weber James Williams LaDonna Williams CliffWinkel Amelia Winslow Travis Wolfe

04/01/91 05/12/98 01/18/99 02/05/01 11/16/98 05/10/04 09/29/97 09/07/04 04/15/02

13.48 6.37 5.68 3.63 5.85 0.37 6.98 0.04 2.44

MN MN MN MN MN MN MN MN MN

Pei-Lin Yap Krzysztof Zaklika

07/01/99 03/29/99

5.23 5.49

MN MN

TITLE ---------------Internet Applications Engnr CEO/President Applications Engineer Product Marketing Manager Shipping Associate Customer Care Admin. Assoc. Chairman QA Engineer -Level I Principal SE Retail Channel Manager Network Administrator Sr. QA Engineer Principal SE Accountant II/AP Technical Support Supervisor QA Engineer - II External Development Mgr.

BASE ----------$ 70,019.00

INCREASE 03 -----------$ 67,980.24

INCREASE 0 ---------$ 70,019.0

$270,000.00 $ 88,200.00 $ 55,000.00

$ 216,000.24 $ 80,000.40 $ 46,000.08

$250,000.0 $ 84,000.0 $ 50,000.1

$ 12,480.00 $ 36,462.00 $ 36,463.80

$320,000.00 $ 56,070.00 $137,500.00 $ 66,924.00 $ 50,000.00 $ 78,000.00 $125,000.00 $ 44,000.00 $ 54,600.00

$ 240,000.24 $ 51,480.00 $ 133,090.32 $ 58,500.00 $ 45,000.24

$320,000.1 $ 53,400.0 $134,500.0 $ 60,840.0 $ 50,000.1

$ 111,300.24 $ 41,601.60

$120,000.0 $ 52,000.0

$ 58,465.00 $142,567.00

$ 53,150.40 $ 138,415.44

$ 58,465.2 $142,567.2

NAME ---Quan Truong

INCREASE 03 -----------

INCREASE 04 -----------

INCREASE 04 -----------

YEAR END BONUS POTENTIAL TOTAL ----------

BONUS PAID 2003 ---------$ 100.00

BONUS 2004 PTD -------1,000.00

YEAR END BONUS ---------

Kris Tuflo** Neelima Uppalapati Allison Pankratz

$270,000.00 88,200.00 55,000.08

90,000.00

$90,000.00 $ 183.64 $ 1,750.00

90,000.00 165.00 10,000.00

12,500.00

Curtis Voit Kim Voit

$

500.00

Robert Voit Ryan Waltrip Peter Ward Shannon Weber James Williams LaDonna Williams Cliff Winkel Amelia Winslow Travis Wolfe

56,070.00 137,500.08 66,924.00

$ 1,125.00 $ 2,199.50 $ 5,400.00

17,000.00

8,350.00

17,000.00

250.00 $125,000.16 54,600.00 $ 2,000.00 $ 175.00

Pei-Lin Yap Krzysztof Zaklika

$ 1,450.00

3,000.00

NAME ---Quan Truong

COMMISSION 2003 ----------

COMMISSION PTD 04 ----------

COMMISSION 2004 ----------

PROFIT SHARING 2003 -------------$ 5,225.95

PROFIT SHARING 2004 -------------$ 644.44

Kris Tuflo** Neelima Uppalapati Allison Pankratz

$89,773.72 $ 5,641.33 $ 3,564.09

$ $

784.72 471.46

Curtis Voit Kim Voit

$

275.08

$ $

139.34 316.95

$ 2,548.19

Robert Voit Ryan Waltrip Peter Ward Shannon Weber James Williams LaDonna Williams Cliff Winkel Amelia Winslow Travis Wolfe

$89,773.72 $ 4,014.99 $10,293.76 $ 3,540.38 $ 3,427.63

$

491.48

$1,237.91 $ 559.96 $ 444.09

$ 8,645.94 $ 2,993.73

$1,151.47 $ 456.31

Pei-Lin Yap Krzysztof Zaklika

$ 4,081.68 $10,792.40

$ 572.34 $1,312.15

* Years of service is listed as of September 15, 2004. ** Also received $4,515.00 for auto insurance in each of 2003 and 2004.

Schedule 3.1.25.3 The Corporation is a party to certain Change-in-Control Agreements listed in Schedule 3.1.6. The Corporation has accrued or paid all earned bonuses, but not has not accrued any unearned bonuses under the Jasc YE Bonus Program. Schedule 3.1.25.4 The Corporation is a party to certain Change-in-Control Agreements listed in Schedule 3.1.6. Schedule 3.1.25.6 The Corporation may not have such agreements from employees that ceased to be employees prior to September 2001. Robert Voit, Jon Ort and Kris Tufto are not parties to the standard forms because the relevant provisions are included in their employment agreements. There are generally two generations of the Corporation's form agreements. The Corporation has provided a copy of each individual's agreement to Corel and Merger Subsidiary.

SCHEDULE 3.1.26 EMPLOYEE PLANS - 401(k) and Profit Sharing Plan (adopted 4/10/1996), effective 1/1/1996, as amended - Restatement of Company's 401(k) Plan, effective 1/1/2000

- Restatement of Company's 401(k) Plan, effective 12/3/2001 - Restatement of Company's 401(k) Plan, adopted 1/1/2003 - Jasc Software, Inc. 1997 Executive Stock Plan, adopted 12/1/1997 - terminated 10/27/1998 - Non-statutory Stock Option Agreement - Jasc Software, Inc. 1997 Omnibus Stock Plan, adopted 12/19/1997, as amended. - Incentive Stock Option Agreement - Employee - Incentive Stock Option Agreement - Executive - Non-statutory Stock Option Agreement - Employee - Non-statutory Stock Option Agreement - Executive - Non-Statutory Stock Option Agreement - Non-Employee Director - Jasc Software, Inc. Cafeteria Plan, adopted effective 1/1/1999 - Jasc Software, Inc. Deferred Compensation Plan for Directors, adopted and approved 12/21/2000 - Employee Profit Sharing Plan - UNUM Life Insurance Company of America Life Insurance Plan - Jefferson Pilot Financial Life and AD&D Insurance - Jefferson Pilot Financial Short-Term Disability and Long-Term Disability Plans - Tuition payment program - Medica Choice Select - Medica Elect - Delta Dental Benefit Plan - Short-Term and Long-Term Disability - Bonus program letter agreements (see the 2004 bonus columns in 3.1.25.2)

SCHEDULE 3.1.28 INSURANCE
INSURER ------Chubb RISKS COVERED ------------Worldwide Property Insurance AMOUNT OF COVERAGE -----------------Blanket Personal Property, A/R, Papers $6,000,000 Business Income $500,000 Personal Property in Transit $25,000 Personal Property any Location $100,000 Property on Exhibition $50,000 General Aggregate Products/Completed Operations Advertising Injury & Personal Injury Each Occurrence limit Damage to Rented Premises $2,000,000 $2,000,000 $1,000,000 $1,000,000 $1,000,000

Chubb

Worldwide General Liability Insurance

Medical Expense limit $10,000 Employee Benefits liability: aggregate limit $3,000,000 each claim limit $1,000,000 deductible $1,000 Information & Network Technology: aggregate $2,000,000 deductible $50,000 Chubb International Auto Liability Excess Liability Medical expenses - each Non-owned Autos - Damage Threshold Amount Benefit Bodily Injury by Accident Bodily Injury by Disease Bodily Injury by Disease Repatriation: Each Employee Policy Limit Liability Personal Injury Protection Physical Damage: Comprehensive Deductible Collision Deductible Hired Car: Comprehensive Deductible Collision Deductible Physical Damage Limit less, subject Underinsured Motorist Uninsured Motorist Bodily Injury by Accident Bodily Injury by Disease Bodily Injury by Disease $1,000,000 $10,000 $10,000 (agg.) $10,000 $1,000,000 (ea.) $1,000,000 (agg.) $1,000,000 (ea.) $250,000 $500,000 $1,000,000 Statutory $500 $500 $500 $500 ACV or Cost of Repair, whic to the deductible $1,000,000 $1,000,000. $5000,000 (ea.) $500,000 (agg.) $500,000 (ea.)

Chubb

International Workers Compensation

Chubb

Automobile Insurance

Chubb

Workers Compensation

Chubb

Umbrella Insurance

Excess Coverage over Aggregate limit $5,000,000 Umbrella Coverage limit $5,000,000 Products/Complete Operations limit $5,000,000 Advertising Injury & Personal Injury $5,000,000 Each Occurrence limit $5,000,000

Chubb

Crime Coverage

Employee Theft Premises In Transit Forgery Computer Fraud Funds Transfer Fraud ($25,000 deductible per loss) Limit of liability for policy period

$400,000 $400,000 $400,000 $400,000 $400,000 $400,000

Carolina Casualty Insurance Company

Management Liability Insurance

$2,000,000 subject to a Pri Exclusion effective 5/1/04 applies a limit of $1,000,0 acts prior to 5/1/04 and re after 5/1/04

INSURER ------UNUM Life Insurance Company of America

RISKS COVERED ------------Life Insurance Plan

AMOUNT OF COVERAGE -----------------Life Insurance Plan Amount of Life Insurance - Employee $10,000 benefit uni Amount of Life Insurance - Spouse $5,000 benefit units Amount of Life Insurance - Children $2,000 benefit unit Accidental Death & Dismemberment Amount of Life Insurance - Employee $10,000 benefit uni Amount of Life Insurance - Spouse $5,000 benefit units Amount of Life Insurance - Children $2,000 benefit unit Repatriation Benefit Up to $5,000 Education Benefit $100,000 (maximum) Amount of Personal Life Insurance AD&D Insurance Principal Sum $50,000 $50,000

Jefferson Pilot Financial

Life and AD&D Insurance

SCHEDULE 3.1.29 INTELLECTUAL PROPERTY All of the representations and warranties in Schedule 3.1.29 are qualified by reference to the Corporation's enduser and volume licenses issued pursuant to license agreements in the ordinary course of the Business. Schedule 3.1.29.1 PATENTS: PATENT COUNSEL: HENSLEY KIM & EDGINGTON; CONTACT: RICHARD HOLZER LEE & HAYES (FOR THOSE NOTED BELOW WITH AN ASTERISK (*) AFTER THE TITLE
TITLE ----Adaptive Region Editing Tool Assisted Adaptive Region Editing Tool Assisted Adaptive Region Editing Tool Adaptive Sampling Region for a Region Editing Tool Method for Removing Defects from Images Histogram Adjustment Features for Use in Imaging Technologies Correction of "Red-eye" Effects in Images Assisted Scratch Removal Detection of Lines in Images Fine Moire Correction in Images Moire Correction in Images Removal of Block Encoding Artifacts Manual Correction of an Image Color Automatic Contrast Enhancement Automatic Saturation Adjustment Automatic Color Balance Iterative Fisher Linear Discriminant Analysis* Iterative Fisher Linear Discriminant Analysis* Aspect Ratio Preserving Perspective Transform* Method and Apparatus for Correction of Perspective Distortion* A Selection Tool Using Color Region and Edge Information* Method and Apparatus for Selection an Object in an Image* COUNTRY ------US (Utility) US (Provisional) US (Utility) US (Utility) US (Utility) US (Utility) US (Utility) US (Utility) US (Utility) US (Utility) US (Utility) US (Utility) US (Utility) US (Utility) US (Utility) US (Utility) US (Provisional) US (Utility) US (Provisional) US (Utility) US (Provisional) US (Utility) APPLICATION NUMBERS ------------------10/781,572 60/545,654 Not yet available 10/940,596 09/900,506 09/899,577 FILING DATE ----------2/17/2004 2/17/2004 9/20/2004 9/14/2004 7/6/2001 7/5/2001 S Pending - Missing assignment filed Pending New Pending - Filed w 9/14/04 Pending - Respons action filed 8/6/ Pending - An offi received and a re 12/23/04. Pending - Respons requirement filed Pending Pending Pending - No offi Pending - Issue f 11/9/04; continua Pending Pending - No offi Pending 10/14/04; Pending 10/14/04; Pending Issue f continu Issue f continu No offi

09/899,572 09/900,479 09/897,736 09/899,503 09/897,716 09/897,765 09/897,769 09/900,744 09/900,441 09/897,768 60/545,652 10/888,441 60/545,655 10/878,984 60/545,653 10/886,937

7/5/2001 7/6/2001 7/2/2001 7/5/2001 7/2/2001 7/2/2001 7/2/2001 7/6/2001 7/6/2001 7/2/2001 2/17/2004 7/9/2004 2/17/2004 6/28/2004 2/17/2004 7/8/2004

No action pending Notice of missing formal action due No action pending Awaiting notice o No action pending Notice of missing formal papers due

TRADEMARKS: TRADEMARK COUNSEL: FAEGRE & BENSON LLP, CONTACT: PATRICIA REDDING
REGISTRATION REGISTRATION

COUNTRY ------AFTER SHOT EUROPEAN UNION JAPAN UNITED STATES IMAGE EXPERT CANADA EUROPEAN UNION EUROPEAN UNION JAPAN MEXICO UNITED STATES IMAGECOMMANDER UNITED STATES IMAGEROBOT UNITED STATES JASC ARGENTINA BRAZIL CANADA CHILE EUROPEAN UNION JAPAN MEXICO UNITED STATES VENEZUELA

REFERENCE NO. ------------245814 246488 240849

DATE FILED ---------4/11/2002 4/12/2002 2/6/2002

APPLICATION NO. --------------002649283 2002-030117 76/367,492

REGISTRATION DATE ------------

REGISTRATION NO. ------------

STATUS ---------ABANDONED

1/17/2003 6/24/2003

4638175 2,730,488

ABANDONED REGISTERED

246652 246621 249166 246569 248870 243565

8/19/1997 2/13/1997 7/10/2002 4/1/1997 9/2/1997 10/1/1996

854,052 000457143 002781466 H09-101285 306431 75/175,059

10/26/1999 5/3/2003

TMA518671 000457143

REGISTERED REGISTERED ABANDONED

3/31/2000 2/24/1998 2/8/2000

4372092 570408 2,315,168

REGISTERED REGISTERED REGISTERED

220064

2/14/1994

74/489,264

3/5/1996

1,959,599

ABANDONED

220065

3/12/1997

75/256,160

ABANDONED

214698 214699 220059 214700 220061 212641 214701 220066 214702

10/9/1998 1/8/1999 12/17/1997 1/29/1999 5/22/1997 7/7/1998 10/6/1998 2/6/1997 3/2/1999

2180537 821345478 0864,475 439,539 550483 10-57718 349452 75/237,624 2940/1999

1/25/2000 2/17/2004 4/28/1999 4/26/2001 5/22/1997 3/31/2000 10/18/1999 9/28/1999 11/2/1999

1771868 821345478 TMA511,210 594,940 550483 4372132 628945 2,280,283 P-216,224

REGISTER ED REGISTER ED REGISTER ED REGISTER ED REGISTER ED REGISTER ED REGISTER ED REGISTER ED REGISTER ED

JASC MEDIA PRESENTER UNITED STATES 212434

7/1/1998

75/511,881

ABANDON ED

JASC SOFTWARE & DESIGN CANADA 242391 EUROPEAN UNION JAPAN UNITED STATES 242392 242393 242390

11/28/2000 12/14/2000 12/12/2000 6/26/2000

1084254 002014314 2000-133483 76/077,208

1/6/2004 1/7/2002 8/10/2001 3/25/2003

TMA598,597 002014314 4498011 2,699,238

REGISTER ED REGISTER ED REGISTER ED REGISTER ED

MEDIA MECCA UNITED STATES

220067

6/28/1994

74/543,383

ABANDON ED

PAINT SHOP PRO PHOTO ALBUM UNITED STATES 302482 PAINT SHOP PRO ARGENTINA

10/28/2002

78/179,063

PENDING

214703

10/9/1998

2180538

1/25/2000

1.771.869

REGISTERED

BRAZIL CANADA CHILE EUROPEAN UNION JAPAN MEXICO UNITED KINGDOM UNITED STATES VENEZUELA

214704 220060 214705 220062 212640 214706 220063 216315 214707

1/8/1999 1/27/1998 1/29/1999 5/19/1997 7/7/1998 10/6/1998 12/7/1994 2/3/1999 3/5/1999

821345486 0867,542 439.540 543413 10-57719 349453 2004112 75/633,592 3311/1999

5/14/2002 10/15/1999 8/23/1999 10/6/1998 9/10/1999 4/23/1999 11/1/1996 12/3/2002 11/2/1999

821345486 517.985 546.579 543413 4313533 606668 2004112 2,655264 P-216.265

REGISTERED REGISTERED REGISTERED REGISTERED REGISTERED REGISTERED REGISTERED REGISTERED REGISTERED

PAINT SHOP PRO (JAPANESE) JAPAN 212639 PHOTOEXPERT EUROPEAN UNION JAPAN THE POWER TO CREATE UNITED STATES TRAJECTORY PRO UNITED STATES WEBDRAW ARGENTINA BRAZIL CANADA CHILE EUROPEAN UNION JAPAN MEXICO UNITED STATES VENEZUELA

7/7/1998

10-57720

9/10/1999

4313534

REGISTERED

245265 246515

3/13/2002 4/12/2002

002616258 2002-030116 1/31/2003 4642555

ABANDONED REGISTERED

220068

7/30/1996

75/142,439

1/13/1998

2,128,336

REGISTERED

T32059USOO

2/28/2000

75/950,125

ABANDONED

242395 242396 242397 242398 242399 242400 242401 242394 242402

5/9/2001 5/9/2001 5/8/2001 5/8/2001 5/8/2001 5/8/2001 5/9/2001 11/9/2000 5/8/2001

2337738 823909131 1102145 527.240 002207553 2001-41172 484547 78/034,599 7516/2001

11/7/2002

1,894.088

ABANDONED ABANDONED ABANDONED

11/21/2001

609.184

REGISTERED ABANDONED

12/21/2001 7/27/2001 7/29/2003

44531974 708099 2,744,809

REGISTERED REGISTERED REGISTERED ABANDONED

NAME OF LICENSED SOFTWARE THIRD PARTY LICENSES ------------------------Image Expert Software Independent JPEG Group - Release of 6b ImageGear2001 Quicktime 5 and 6.5 Embedded Software Software License Agreement SDK ECI Software Development Kodak SDK for FlashPix Visual Studio Redistribution EULA Macromedia Player Macromedia Shockwave Xerces-C XML Parser - Apache Software License Version 1.1 (Xerces) Python License 1.6/2.0, 2.2.1, 2.3.2 and 2.3.3

LICENSOR -------Sierra Imaging, Inc., a subsidiary of Conexant Systems, Inc. Independent JPEG Group AccuSoft Apple Bengt Computer Graphics LLC Bibble Labs, Inc. Digimarc Corporation ECI Kodak Agreement Microsoft Macromedia Macromedia Apache Software

SOURCE CODE IN POSSESSION ------------------------Yes No No No No No No No No No No No No

Beopen.com

No

Microgetics (use of images) nttdocomo (use of imode mark) Access Softek MSXML Live Picture Tool Kit (through PSP7) Micrographics World Wide Web Consortium Participation Agreement Digital Camera Interface SDK 1.0 InstallShield JPL Image Release Agreement Netscape Client Software Netscape Browser Shutterfly Enroute Ofoto PhotoBox Microsoft MDAC license Microsoft MFC License Microsoft XML license Microsoft Internet Explorer Xceed FTP Library Adobe Acrobat Reader FreeType Project License version 1.2 BCG Soft BCGPro PhotoRecovery MyPublisher Luminere Xerces XML Output variable length bit strings Stingray libraries

Microgetics nttdocomo Access Softek Microsoft Live Picture Tool Kit Micrographics World Wide Web Consortium Participation Agreement IXLA InstallShield California Institute of Technology Netscape Netscape Conexant/Sierra Imaging Conexant/Sierra Imaging Ofoto PhotoBox Microsoft Microsoft Microsoft Microsoft Xceed Adobe FreeType BCG BCG LC Technology International, Inc. MyPublisher, Inc. IMSI Apache Software Jean-loup Gailly Rogue Wave

No No No No No No No No No No No No No No No No No No No No No No No Yes Yes No No Yes Yes Yes No

Related Agreements: - The Independent Group's JPEG Software Readme, undated

- Source Code License Agreement, dated as of December 14, 2001, among Conexant Systems, Inc., Sierra Imaging, Inc. and the Corporation - Annual Distribution License Agreement, undated, between the Corporation and AccuSoft Corporation - Quicktime 5 Software Distribution Agreement, dated December 7, 2001, between the Corporation and Apple Computer, Inc., as amended August 2003 - Embedded Software Agreement, dated May 11, 1999, between the Corporation and Bengt Computer Graphics LLC, as amended January 24, 2002 - Software License Agreement, dated October 28, 2003, between the Corporation and Bibble Labs, Inc. - License Agreement for Software Development Kit, dated November 17, 1999, between the Corporation and Digimarc Corporation - Software Development and License Agreement, dated April 13, 2004, between ECI Technology Solutions and the Corporation, as addended April 13, 2004 - Kodak Digital Science Reference SDK for the FlashPix Format License Agreement, undated, between the Corporation and Kodak Corporation - Redistributable Code-Microsoft Merge Modules License Agreement, undated, between the Corporation and Microsoft Corporation [click through license] - License Agreement, undated, between the Corporation and Microsoft Corporation (MSXML) [click through

license] - License Agreement, undated, between the Corporation and Microsoft Corporation (MFC) [click through license] - License Agreement, undated, between the Corporation and Microsoft Corporation (MDAC) [click through license] - License Agreement, undated, between the Corporation and Microsoft Corporation (Internet Explorer) [click through license] - Macromedia Player License Agreement, undated, between the Corporation and Macromedia - Macromedia Shockwave and Flash Player License Agreement, undated, between Macromedia, Inc. and the Corporation - Xerces-C XML Parser - Apache Software License, version 1.1, undated - License Agreements, undated, between the Corporation and Python Software Foundation [click through licenses] - License Agreement, dated June 26, 1999, between the Corporation and Microgetics Corporation - Unlimited Copy License Agreement, undated, between the Corporation and Access Softek, Inc. - Publishing Agreement, dated June 7, 1995, between the Corporation and Access Softek, Inc. and Publishing Agreement, dated June 8, 1995, between the Corporation and Access Softek, Inc. - Software Distribution Agreement, dated October 20, 1991, between the Corporation and Micrographics - Agreement, dated July 15, 1991, between the Corporation and Micrographics Corporation - International World Wide Web Consortium Participation Agreement, dated January 26, 2000, among Massachusetts Institute of Technology, Institut Rocquencourt, Keio University and the Corporation - Manufacturing Distribution Agreement, dated August 17, 1998, between the Corporation and IXLA Ltd., as amended November 1, 2001 - End User License Agreement, dated March 31, 2004, between the Corporation and InstallShield Software Corporation - JPL Image Release, undated, between the Corporation and California Institute of Technology - Netscape Client Software (Browser Suite) End User License Agreement, undated, between the Corporation and Netscape Communications Corporation - Netscape Browser Redistribution Program License Agreement, undated, between the Corporation and Netscape Communications Corporation - Promotional Agreement, dated February 12, 2003, between the Corporation and Shutterfly, Inc. and Letter Agreement, dated December 12, 2001, between the Corporation, Dell Products L.P. and Shutterfly, Inc.; Dell Acknowledgement dated March 8, 2001, as amended - License Agreement, dated October 5, 2004, between the Corporation and Dell Products, L.P. (Y) - Software License and Distribution Agreement, effective December 31, 1998, as amended August 16, 2001, between Enroute, Inc. and Sierra Imaging, Inc., as sublicensed to the Corporation pursuant to a Letter Agreement, dated December 3, 2001, among the Corporation, Enroute, Inc. and Sierra Imaging, Inc.

- Tool Kit License and Sublicense Agreement, undated, between the Corporation and Live Picture, Inc. - Redistributable Code-Microsoft Merge Modules License Agreement, undated, between the Corporation and Microsoft Corporation [click through license]

- License Agreement, undated, between the Corporation and Xceed Software, Inc. (No consent required Corel must provide notice of transfer within 30 days) - License Agreement, undated, between the Corporation and Adobe Corporation (Reader 5.1) [click through license] - License Agreement, undated, between the Corporation and BCGSoft Ltd. (BCG Pro) [click through license] - License Agreement, undated, between the Corporation and BCGSoft Ltd. (BCG - not Pro) [click through license] - Software License Agreement, dated March 18, 2004, between the Corporation and LC Technology International, Inc. - Online Services Agreement, dated November 12, 2003, between the Corporation and MyPublisher, Inc., as amended October 7, 2004 - Output variable length bit strings by Jean-loup Gailly [GNU General Public License Version 2, June 1991; click through license] - Rogue Wave Stingray License [click through license] - Xerces-C XML Parser - Apache Software License, Version 1.1 [click through license] EVALUATION LICENSES
Sonic AuthorScript Sonic AuthorScript SDK and PrimoSDK AccuSoft ImageGear Version 13 ISYS Sonic Sonic AccuSoft ISYS

Related Agreements: - Evaluation Agreement, dated March 25, 2003, between the Corporation and Sonic Solutions and Evaluation Agreement, dated December 3, 2003, between the Corporation and Sonic Solutions - Limited Use License Agreement, dated June 10, 2004, between the Corporation and ISYS - Intelligent System Solutions Corporation - Beta License Agreement, undated, between the Corporation and AccuSoft Corporation DEVELOPMENT AGREEMENTS - Software Development Agreement, dated February 9, 2004, between the Corporation and Ambient Design, Ltd. - Independent Contractor Agreement, dated October 1, 2003, between the Corporation and Ambient Design, Ltd. - Independent Contractor Agreement, dated November 5, 2003, between the Corporation and Ambient Design, Ltd.

- Independent Contractor Agreement, dated December 22, 2003, between the Corporation and Ambient Design, Ltd. - Agreement, dated February 8, 2002, between the Corporation and Ambient Design Limited - Programming Services Agreement, dated October 31, 2002, between the Corporation and Ambient Design Limited - Professional Consulting Services Agreement, dated May 19, 2004, between the Corporation and Ambient Consulting, LLC - Software Development Agreement, dated February 9, 2004, between the Corporation and Ambient Design, Ltd. - Agreement for Purchase of Software Source Code, dated April 15, 1997, between the Corporation and Michael Bradley - Agreement for Purchase of Software Source Code, dated May 2, 1997, between the Corporation and Jeff Becker, doing business as Top Software - Programming Services Agreement, dated June 5, 2002, between the Corporation and Ilya Vladimirovich Razmanov - Programming Services Agreement, dated March 26, 2003, between the Corporation and Ilya Vladimirovich Razmanov - Programming Services Agreement, dated April 26, 2004, between the Corporation and Ilya Vladimirovich Razmanov - Programming Services Agreement, dated April 20, 1999, between the Corporation and BAL - Programming Services Agreement, dated February 2, 2000, between the Corporation and BAL, as amended February 21, 2000, May 20, 2000, April 1, 2001, January 16, 2002, March 21, 2003, April 15, 2004 - License and Distribution Agreement, dated as of September 15, 2003, between the Corporation and CottageArts.net, LLC (Y) - Retainer Agreement, dated September 8, 2003, between the Corporation and Michelle Shefveland of CottageArts.net

- Book Publishing Agreement, dated September 15, 2003, between the Corporation and Michelle Shefveland - Reseller Agreement, dated May 1, 2004, between the Corporation and Digital Workshop INCLUDABLES - Online Services Agreement, dated November 12, 2003, between the Corporation and MyPublisher, Inc., as amended October 7, 2004 - Software License Agreement, dated March 18, 2004, between the Corporation and LC Technology International, Inc. for PhotoRecovery TESTING - Master Software Testing Agreement for Microsoft Compliance Programs at VeriTest, a Service of Lionbridge Technologies, dated May 16, 2000, between the Corporation and VeriTest, as addended

- Master Software Testing Agreement for Microsoft Logo Programs at VeriTest, inc., dated May 21, 1998, between the Corporation and VeriTest, inc. - Independent Contractor Agreement, dated January 13, 2004, between the Corporation and Test & Automation Consulting, LLC LICENSE TO - Software Distribution Agreement, dated October 20, 1991, between the Corporation and Micrographics ANIMATION SHOP LICENSES - JPEG Working Group - Kodak Digital Science Reference SDK for the FlashPix Format License Agreement, undated, between the Corporation and Kodak Corporation - MPEG License for Animation Shop, undated, between the Corporation and MPEG Software Simulation Group The Corporation has the following domain names: Aftershot.com Aftershot.net Aftershots.com Aftershots.net Aftershot.us Aftershot.info Aftershot.eu AnimationShop.info DarkRoomPlus.com DarkRoomPro.com FotoExpert.de ImageExpert.eu ImageExpert.us lmageRobot.com ImageRobot.info Jasc.biz Jasc.ca Jasc.ch Jasc.co.il Jasc.com Jasc.co.nz Jasc.co.za Jasc.de Jasc.eu Jasc.lu Jasc.nl Jasc.us JascSoftware.biz JascSoftware.com JascSoftware.net

JascSoftware.org JascSoftware.co.uk JascPaintShopPro.co.uk MediaCenterPlus.com

PaintShopPro.com PaintShopPro.biz PaintShopPro.de PaintShopPro.eu PaintShopPro.us PaintShopPro.co.uk PaintShopAlbum.com PaintShopPhotoAlbum.com PaintShopPocketAlbum.com PaintShopProAlbum.com PaintShopProPhotoAlbum.com PhotoExpert.de PSAlbum.com PSP8.com PSP9.com PSPAlbum.com PSPAlbum.com StudioAvenue.com StudioJasc.com Webdraw.eu Webdraw.us wwwjasc.com Schedule 3.1.29.2 See Schedule 3.1.16. Schedule 3.1.29.4 The Corporation recently released Paint Shop Pro 9. As is customary, most newly released Software programs have some defects that are identified within the first several months of use and are corrected by the Corporation's creation and issuance of a modified version of the program. Schedule 3.1.29.8 Material Licensed Software: - The Independent Group's JPEG Software Readme, undated [click through license; no consent to assignment needed] - Source Code License Agreement, dated as of December 14, 2001, among Conexant Systems, Inc., Sierra Imaging, Inc. and the Corporation - Annual Distribution License Agreement, undated, between the Corporation and AccuSoft Corporation - Quicktime 5 Software Distribution Agreement, dated December 7, 2001, between the Corporation and Apple Computer, Inc., as amended August 2003 - Embedded Software Agreement, dated May 11, 1999, between the Corporation and Bengt Computer Graphics LLC, as amended January 24, 2002 - Software License Agreement, dated October 28, 2003, between the Corporation and Bibble Labs, Inc. - License Agreement for Software Development Kit, dated November 17, 1999, between the Corporation and Digimarc Corporation - Software Development and License Agreement, dated April 13, 2004, between ECI Technology Solutions and the Corporation, as addended April 13, 2004

- Kodak Digital Science Reference SDK for the FlashPix Format License Agreement, undated, between the Corporation and Kodak Corporation - Redistributable Code-Microsoft Merge Modules License Agreement, undated, between the Corporation and Microsoft Corporation [click through license; no consent to assignment needed] - License Agreement, undated, between the Corporation and Microsoft Corporation (MSXML) [click through license] - License Agreement, undated, between the Corporation and Microsoft Corporation (MFC) [click through license] - License Agreement, undated, between the Corporation and Microsoft Corporation (MDAC) [click through license]

- License Agreement, undated, between the Corporation and Microsoft Corporation (Internet Explorer) [click through license] - Macromedia Player License Agreement, undated, between the Corporation and Macromedia [click through license; no consent to assignment needed] - Macromedia Shockwave and Flash Player License Agreement, undated, between Macromedia, Inc. and the Corporation [click through license; no consent to assignment needed] - Xerces-C XML Parser - Apache Software License, version 1.1, undated [click through license; no consent to assignment needed] - License Agreements, undated, between the Corporation and Python Software Foundation [click through licenses; no consent to assignment needed] - License Agreement, dated June 26, 1999, between the Corporation and Microgetics Corporation - Unlimited Copy License Agreement, undated, between the Corporation and Access Softek, Inc. - Publishing Agreement, dated June 7, 1995, between the Corporation and Access Softek, Inc. and Publishing Agreement, dated June 8, 1995, between the Corporation and Access Softek, Inc. - Software Distribution Agreement, dated October 20, 1991, between the Corporation and Micrographics - Agreement, dated July 15, 1991, between the Corporation and Micrographics Corporation - End User License Agreement, dated March 31, 2004, between the Corporation and InstallShield Software Corporation - Software License and Distribution Agreement, effective December 31, 1998, as amended August 16, 2001, between Enroute, Inc. and Sierra Imaging, Inc., as sublicensed to the Corporation pursuant to a Letter Agreement, dated December 3, 2001, among the Corporation, Enroute, Inc. and Sierra Imaging, Inc. - Online Services Agreement, dated November 12, 2003, between the Corporation and MyPublisher, Inc., as amended October 7, 2004 - Software License Agreement, dated March 18, 2004, between the Corporation and LC Technology International, Inc. for PhotoRecovery - Redistributable Code-Microsoft Merge Modules License Agreement, undated, between the Corporation and Microsoft Corporation [click through license]

- License Agreement, undated, between the Corporation and Microsoft Corporation (MSXML) [click through license] - License Agreement, undated, between the Corporation and Microsoft Corporation (MFC) [click through license] - License Agreement, undated, between the Corporation and Microsoft Corporation (MDAC) [click through license] - License Agreement, undated, between the Corporation and Microsoft Corporation (Internet Explorer) [click through license] - License Agreement, undated, between the Corporation and Xceed Software, Inc. [no consent required-- Corel must provide notice of transfer within 30 days] - License Agreement, undated, between the Corporation and Adobe Corporation (Reader 5.1) [click through license; no consent needed] - License Agreement, undated, between the Corporation and BCGSoft Ltd. (BCG Pro) [click through license; no consent needed] - License Agreement, undated, between the Corporation and BCGSoft Ltd. (BCG - not Pro) [click through license; no consent needed] - License and Distribution Agreement, dated as of September 15, 2003, between the Corporation and CottageArts.net, LLC [no consent needed] - Retainer Agreement, dated September 8, 2003, between the Corporation and Michelle Shefveland of CottageArts.net [no consent needed] - Book Publishing Agreement, dated September 15, 2003, between the Corporation and Michelle Shefveland [no consent needed] - Software Development Agreement, dated February 9, 2004, between the Corporation and Ambient Design, Ltd. [no consent needed] - Independent Contractor Agreement, dated October 1, 2003, between the Corporation and Ambient Design, Ltd. [no consent needed] - Independent Contractor Agreement, dated November 5, 2003, between the Corporation and Ambient Design, Ltd. [no consent needed]

- Independent Contractor Agreement, dated December 22, 2003, between the Corporation and Ambient Design, Ltd. [no consent needed] - Agreement, dated February 8,2002, between the Corporation and Ambient Design Limited [no consent needed] - Programming Services Agreement, dated October 31, 2002, between the Corporation and Ambient Design Limited [no consent needed] - Professional Consulting Services Agreement, dated May 19, 2004, between the Corporation and Ambient Consulting, LLC [no consent needed] - Software Development Agreement, dated February 9, 2004, between the Corporation and Ambient Design, Ltd. [no consent needed]

- Programming Services Agreement, dated June 5, 2002, between the Corporation and Ilya Vladimirovich Razmanov [no consent needed] - Programming Services Agreement, dated March 26, 2003, between the Corporation and Ilya Vladimirovich Razmanov [no consent needed] - Programming Services Agreement, dated April 26, 2004, between the Corporation and Ilya Vladimirovich Razmanov [no consent needed] - Programming Services Agreement, dated April 20, 1999, between the Corporation and BAL [no consent needed] - Programming Services Agreement, dated February 2, 2000, between the Corporation and BAL, as amended February 21, 2000, May 20, 2000, April 1, 2001, January 16, 2002, March 21, 2003, April 15, 2004 [no consent needed] - Software License Agreement, dated April 10, 2000, between the Corporation and IMSI [no consent needed] - Intel Pentium 4 Processor Platform Enabling Program, dated December 3, 2002, between the Corporation and Intel Americas Inc [no consent needed] - TIFF-LZW/GIF-LZW Software Patent License Agreement, dated March 8, 1995, between the Corporation and Unisys Corporation [no consent needed] - License Agreement, undated, between the Corporation and BCGSoft Ltd. (BCG Pro) [click through license; no consent needed] - License Agreement, undated, between the Corporation and BCGSoft Ltd. (BCG - not Pro) [click through license; no consent needed] - Agreement for Purchase of Software Source Code, dated May 2, 1997, between the Corporation and Jeff Becker, doing business as Top Software [no consent needed] - FreeType Project License 1.2 Agreement, undated, between the Corporation and FreeType [click through license, no consent needed] Schedule 3.1.29.9 See Schedule 3.1.29.1 Schedule 3.1.29.11 The Corporation does not have any obligation to escrow its source code, but it does have the right to require some third parties to escrow Licensed Source Code for the benefit of the Corporation. Schedule 3.1.29.12 The Corporation's rights to the Proprietary Intellectual Property, to the Key Software Programs and to the Proprietary Software may, from to time, be infringed by piracy that ordinarily occurs in the software industry. Schedule 3.1.29.13 See Schedule 3.1.32. Schedule 3.1.29.14 See Schedule 3.1.32.

Schedule 3.1.29.15 The Corporation's delivery of documents, agreements and information to Corel in the course of negotiating the Agreement may have breached the Corporation's confidentiality obligations under agreements to which the Corporation is a party. Schedule 3.1.29.16 Each contract listed in these Schedules that is denoted with a "(Y)" may require the approval or consent of the other party to such contract in connection with the consummation of the Transactions or any subsequent transfers to direct or indirect subsidiaries of Corel. Schedule 3.1.29.18 See Schedule 3.1.32. Schedule 3.1.29.19 - Source Code License Agreement, dated December 14, 2001, between Conexant Systems, Inc., Sierra Imaging, Inc. and the Corporation Schedule 3.1.29.20 - Output variable length bit strings by Jean-loup Gailly [GNU General Public License Version 2, June 1991; click through license] - Xerces-C XML Parser - Apache Software License [Xerces XML]

SCHEDULE 3.1.30 PERMITS, REGISTRATIONS AND ELECTIONS
PERMIT -----Defense Logistics Agency Trading Partner Program EXPIRATION DATE ---------------

SCHEDULE 3.1.32 LITIGATION AND OTHER PROCEEDINGS AND WARRANTY CLAIMS Compression Labs On April 23, 2004, Compression Labs Inc. initiated litigation against 31 companies for infringement of United States Patent No. 4,698,672 in the United States District Court for the Eastern District of Texas, Marshall Division. Compression Labs has retained Jenkens & Gilchrist and The Roth Law Firm to represent it in the litigation. The Corporation has been named a defendant in the suit. The other defendants are: Adobe Systems Incorporated, Agfa Corporation, Apple Computer Incorporated, Axis Communications Incorporated, Canon USA, Concord Camera Corporation, Creative Labs Incorporated, Dell Incorporated, Eastman Kodak Company, Fuji Photo Film Co U.S.A, Fujitsu Computer Products of America, Gateway Inc., Hewlett-Packard Company, International Business Machines Corp., JVC Americas Corporation, Kyocera Wireless Corporation, Macromedia Inc., Matsushita Electric Corporation of America, Oce' North America Incorporated, Onkyo Corporation, PalmOne Inc., Panasonic Communications Corporation of America, Panasonic Mobile Communications Development Corporation of USA, Ricoh Corporation, Riverdeep Incorporated (d.b.a.

Broderbund), Savin Corporation, Thomson S.A., Toshiba Corporation and Xerox Corporation. The Corporation has retained Merchant & Gould P.C., an intellectual property law firm, to represent it in this litigation. An Answer to the April 2004 complaint was filed July 6, 2004 and answers to interrogatories are due October 17, 2004. The Corporation's patent counsel is currently evaluating all aspects of the matter and is working with other defendants to form a joint defense team. The Corporation requested indemnification from AccuSoft. AccuSoft supplied the Corporation with a jpeg SDK starting in June 2002. AccuSoft has responded to the Corporation's request by letter dated July 7, 2004 and indicated that if the Corporation complies with the terms of the Annual Distribution License Agreement, undated, between the Corporation and AccuSoft, it will indemnify the Corporation. MIT and EFI vs. Jasc Software. Inc. The Corporation was one of 214 defendants in a patent litigation lawsuit filed by Massachusetts Institute of Technology and Electronics for Imaging, Inc. ("EFI") alleging infringement of U.S. Patent No. 4,500,919. Merchant & Gould P.C. was retained to represent the Company. On August 30, 2003, the Corporation and EFI entered into a settlement agreement whereby the Corporation paid EFI $250,000 for the patent at issue. On September 11, 2003, the Agreed Motion to Dismiss was signed by the court. During the course of the settlement discussions, EFI mentioned that they may have additional patents for which they believe the Corporation may require a license. Toshiba Corporation About July 1998, Toshiba Corporation of Japan advised Met's Corporation, a reseller in Japan, of possible infringement by the Corporation's Paint Shop Pro software program. After discussion in Japan between the Corporation and Toshiba, the Corporation sent a letter to Toshiba, on or about February 11, 2000, stating that the Corporation was unwilling to sign a proposed settlement agreement. The Corporation has not received any further communication from Toshiba since that time.

Hewlett-Packard On March 19, 2002, Disco Vision Associates, Inc. ("DVA") notified Hewlett-Packard Company ("HP") that DVA believes certain Corporation-supplied products infringe DVA's United States Patent No. 4,694,286. On August 4, 2004, HP notified that Corporation of DVA's accusation and requested indemnification from the Corporation. Labor Matters Brian Thomas: Thomas was employed in the shipping and fulfillment area of the Corporation. By letter dated September 16, 2004, Thomas notified the Corporation of his resignation effective October 8, 2004. Thomas claimed that he was entitled to certain bonuses from the Corporation, alleged he was treated unfairly by the Corporation and implied that the Corporation had asked him to falsify records. The Corporation denies any wrongdoing against Thomas and denies that it has withheld payment of any compensation owed to him. On September 21, 2004, Thomas sent a letter "notifying Jasc Software of pending litigation to be filed against the Company ... for compensation that is owed [to Thomas] as part of [his] employment at Jasc and for costs of litigation." The Corporation has not received any additional information regarding Thomas' alleged claims and, to its knowledge, no lawsuit has yet been commenced. Debra Rubbelke: Rubbelke has not threatened any litigation against the Corporation, but has in the past had a lawyer contact the Corporation regarding her alleged disability and the Corporation's efforts to provide reasonable accommodations. Rubbelke's employment with the Corporation was terminated on September 17, 2004 due to insubordinate and unprofessional behavior. She has requested a statement of the reason for termination of her employment and has filed an unemployment compensation claim. Other than the unemployment compensation

claim, no claims have been asserted or threatened to date. Editions WSKA SA The Corporation and Editions WSKA SA were parties to that certain International Master Representative Agreement dated May 21, 2001, including a Representative License Agreement. Pursuant to the terms of the Master Agreement and the License Agreement, the Corporation appointed WSKA as its representative to market certain of the Corporation's graphics and multimedia software products in a designated sales territory. The corporation requested arbitration of its claims against WSKA, which included a claim for non-payment of outstanding invoices in the total amount of (euro)170,232.59 or $210,264.52. The Corporation served a Notice of Claim on WSKA. WSKA did not formally respond to the Notice of Claim, but informally asserted certain defenses and counterclaims and set-offs against the Corporation's claim. The Corporation and Editions WSKA SA entered into a Settlement Agreement and Release on March 26, 2004. WSKA SA's last payment was September 22, 2004 for $5,000. WSKA SA has made all payment due under the note as of the date of this Disclosure Schedule. Their next payment is due October 10, 2004. Digital Workshop The Corporation and Digital Workshop (Group) Ltd f/d/a Allsorts Distribution Ltd t/as Digital Workshop ("Digital Workshop") were parties to that certain International Master Representative

Agreement, dated December 12, 2002, pursuant to which the Corporation appointed Digital Workshop as its representative to market certain of the Corporation's graphic and multi-media software products in a designated sales territory. Pursuant to this master representative agreement, the Corporation delivered products to Digital Workshop and Digital Workshop was to pay royalties to the Corporation for the sale of these products, which were never paid. On May 1, 2004, the Corporation and Digital Workshop entered into a Settlement Agreement and Release pursuant to which Digital Workshop is to pay the Corporation an aggregate of $500,000 plus accrued interest pursuant to the terms of a promissory note issued by Digital Workshop to the Corporation on May 1, 2004. Digital Workshop's last payment was October 1, 2004 for $16,808.22. Digital Workshop has made all payment due under the note as of the date of this Disclosure Schedule. Their next payment is due November 1, 2004. On May 1, 2004, the parties entered into a reseller agreement. On June 1, 2004, the parties mutually agreed to terminate the master representative agreement. Casio In December 2002, Casio sought payments for a license under certain of its Japan patent numbers 2,134,277 and 2,808,590. Casio sought approximately $217,000 for purported royalties due through December 2002, and further payments thereafter based on a percentage of sales. The Corporation retained Merchant & Gould P.C. and Japanese patent counsel to assess the infringement allegations. Japanese patent counsel analyzed and responded to Casio's charges. Japanese counsel concluded that there was no infringement, explained the basis for that position to Casio's counsel, and told Casio's counsel that the Corporation owed no royalties as a result. On March 20, 2003, the Corporation's Japanese counsel met with representatives of Casio. On April 1, 2003, the Corporation's Japanese counsel sent a letter to Casio responding to a letter from Casio on March 14, 2003. On November 21, 2003, Casio sent a letter to the Corporation offering a non-exclusive license to three of their Japanese patents in exchange for a 30 million yen payment plus a 5% excise tax. On December 12, 2003, Japanese counsel sent a letter to Casio's counsel again informing Casio's counsel of the Corporation's belief that it does not infringe or owe any money to Casio. Japanese counsel invited Casio to show why they disagreed with their Japanese counsel's analysis, and indicated further negotiations would not be fruitful unless Casio explained their infringement position. Casio never responded to this request. QED Intellectual Property Ltd. In January 1999, the Corporation received a letter from QED Intellectual Property Ltd. ("QED") alleging the Corporation's infringement of certain patents owned by Cintel Inc. ("Cintel") for which QED has been appointed worldwide licensing agent. In February 1999, the Corporation requested information from QED regarding which

patent claims, if any, QED asserts are infringed and the basis for any such assertion of infringement. Later that same month QED stated that "it would appear that the color corrections made in Paint Shop Pro utilize the inventions claimed in one or more of the claims of US Patents 4410908 and 4862251." The letter does not identify which claims are allegedly infringed, or the basis for such allegations. The letter further indicates additional patents which QED believes are highly relevant to the Corporation's business, but for which no allegations of infringement are being made. Finally, QED proposed a license fee of 2%

of the sales price of infringing products, to be backdated to May 1995. The Corporation never responded to QED or received any further communication from QED. MetaCreations Corporation The Corporation received a letter dated March 24, 1999, from counsel for MetaCreations Corporation ("MetaCreations") stating that the Corporation's Paint Shop Pro product appears to infringe United States Patent No. 5,767,860. The Corporation retained the law firm of Schwegman, Lundberg, Woessner & Kluth, P.A. to represent it in connection with this matter. On August 26, 1999. Mark Litman, an attorney with Schwegman, issued a non-infringement opinion in favor of the Corporation. On September 3, 1999, the Corporation wrote a letter to MetaCreations' counsel stating that the Corporation believes that Paint Shop Pro and its picture tubes do not infringe the patent in question. Additional correspondence between the parties occurred. On or about November 19, 1999, the Corporation sent a request for additional technical information to MetaCreations. The Corporation has not been contacted by MetaCreations since that letter. Adobe Systems Incorporated In November 1999, the Corporation received a letter from counsel for Adobe Systems Incorporated ("Adobe") alleging that the Corporation's Postscript Renderer product infringed Adobe's POSTSCRIPT trademark. In a letter dated December 2, 1999, the Corporation informed counsel for Adobe that such use was with Adobe's knowledge and consent as evidenced by Adobe's promotion of this product on Adobe's own web site. In addition, the Corporation informed counsel for Adobe that, in any event, the Corporation had previously decided to discontinue its Postscript Renderer product. The Corporation has not received any further communications from Adobe regarding this issue. The Corporation received a letter from counsel for Adobe, dated December 28, 1999, alleging that the trade dress for the Corporation's Paint Shop Pro product infringes the trade dress for Adobe's Photoshop product. This letter also stated that the Corporation's use of the trademark PAINT SHOP PRO "may infringe" Adobe's PHOTOSHOP trademark; however, the letter did not actually allege trademark infringement or demand that the Corporation stop using its PAINT SHOP PRO trademark. The letter further stated that Adobe was changing its own trade dress to something that is "significantly different from ... JASC's infringing packaging," and therefore "Adobe intends to take no further action with regard to JASC's past infringement relating to the Photoshop(R) and Paint Shop Pro products." In light of the absence of any actual claims or demands, the Corporation responded to counsel for Adobe by letter dated January 13, 2000, in which it simply requested that all future correspondence be directed to Faegre & Benson LLP, counsel to the Corporation, rather than to the Corporation. Neither Faegre & Benson LLP nor the Corporation have received any further communications from Adobe on this matter. Nina J. Kuch Nina J. Kuch, through her counsel, asserted to the Corporation that some of its products infringe United States Patent No. 4,878,843. At least three sets of correspondence have occurred between counsel for Kuch and the Corporation, the last occurring in February 2002. Mark A. Litman & Associates, P.A. provided an opinion to the Corporation that the asserted claims of the Kuch patent are invalid under 35 USC 102(a) or 35 USC 103(a).

MicroBasic Matter On February 7, 2003, the Corporation served MicroBasic GmbH of Oberhaching Germany ("MicroBasic") with a Notice of Claim that requested arbitration of the Corporation's claims against MicroBasic for, amongst other

a Notice of Claim that requested arbitration of the Corporation's claims against MicroBasic for, amongst other matters, approximately $500,000 for graphics and multimedia software products delivered to MicroBasic for which no payment has been made. On March 3, 2003, the Corporation delivered a settlement demand to MicroBasic, whose response acknowledged its receipt and requested additional time for its consideration. On November 25, 2003, the Corporation obtained an arbitration award against MicroBasic in the amount of (euro) 498,122.95, plus fees and expenses of (euro)125,000, plus interest and other costs. An insolvency proceeding was filed against MicroBasic on January 7, 2004. As a result, interest on the amounts due to the Corporation under the arbitration award ceased accruing on January 6, 2004. Claims against MicroBasic had to be filed with the insolvency administrator by March 22, 2004. The Corporation has submitted a claim in the amount of (euro)623,192.19, which the insolvency administrator denied on May 4, 2004. Walker Art Center On the box for Paint Shop Pro v.7, the Corporation included a picture of "Spoon and Cherry", a copyrighted artwork. The Corporation spoke with the Walker Art Center, owner of "Spoon and Cherry" and agreed to cease using the picture on its boxes. Namo Interactive On August 28, 2002, the Corporation received a letter from Cascabel Research LLC alleging that Namo WebEditor, a product distributed by the Corporation in the United States for Namo Interactive USA, Inc., infringed Cascabel Research LLC's intellectual property rights. On August 23, 2002, the Corporation notified Cascabel Research LLC indicating that the Corporation does not own Namo WebEditor and indicating the Cascabel Research LLC should contact Namo Interactive USA, Inc. regarding its letter. On October 8, 2002, the Corporation notified Namo Interactive USA, Inc. of this correspondence and requested indemnification from Namo Interactive USA, Inc. The Corporation has received no further correspondence on this matter.

SCHEDULE 3.1.35 BANK ACCOUNTS, ETC.
AUTHORIZED SIGNATORIES -----------Robert Voit Kris Tufto Susan Dub Robert Voit Susan Dub Jason Opsahl

BANK NAME --------Bremer Bank

ADDRESS -------------------------360 Cedar Street St. Paul, MN 55101

ACCOUNT NUMBERS -----------------------Checking: 873536592 Cash Management: 6626063 Lockbox: 6355043277 Checking: 100-439-9 Investment: 160001299

Royal Bank of Canada

Dixie & Meyerside Branch 6240 Dixie Road Mississauga, ON L5T 1A6 131 Edgware Road London, England W2 2HT

Barclays Bank PLC

Sterling: 30959243 Euros: 62496344

Robert Voit Kris Tufto

SCHEDULE 3.1.37 CONDUCT OF BUSINESS Previously in the Corporation's history (prior to approximately December 2002), the Corporation published some software for games and utilities, which, during the last 5 years, included Namo, Quick View Plus, SkyMap, Illuminations, Pixel3D, Smart Address, Ornamatica and an arcade game pack.

SCHEDULE 3.3.4 CONSENTS None.

SCHEDULE 3.4.3 CAPITALIZATION
NUMBER THE CORPORATION IS AUTHORIZED TO ISSUE ------------------unlimited

CLASS ----Class A Common Shares

NUMBER OF SHARES ISSUED AND OUTSTANDING --------------------------------43,750,000 Class A Common Shares issued to Vector CC Holdings, SRL 92,997,891 Class B Common Shares issued to Corel Holdings, L.P., held as nominee for Vector CC Holdings III, SRL Nil 10,390,000 Series A Preferred Shares issued to Vector CC Holdings, SRL

Class B Common Shares

unlimited

Preferred Shares First series of the Series A Preferred Shares

unlimited 10,390,000

There are 12,800,000 common shares reserved for issuance pursuant to the Corel Share Option and Phantom Share Unit Plan dated December 1, 2003. To date, options to purchase 3,375,150 common shares have been granted by Corel.

SCHEDULE 3.4.6 CONSENTS Consent required pursuant to the First Amended and Restated Loan and Security Agreement by and among Corel Holdings, L.P., Corel, Corel Inc., Wells Fargo Foothill, Inc. and Cornell Place, LLC dated as of June 28, 2004.

SCHEDULE 4.1.1 See Tab 26

SCHEDULE 4.1.2.1 See Tab 33

SCHEDULE 4.1.2.2 See Tab 34

SCHEDULE 4.1.6 See Tab 17

SCHEDULE 4.2.2.1 See Tab 31

SCHEDULE 4.2.2.2 See Tab 32

SCHEDULE 5.3 NEGATIVE COVENANTS - The Corporation will request that option holders waive the 30-day notice period of the Fundamental Change under the 1997 Omnibus Stock Plan. - The Corporation may amend the Jasc Software, Inc. 1997 Omnibus Stock Plan to allow optionees to exercise options by way of a net exercise. - The Corporation will offset the amount due under the Note issued by Kris Tufto from the amount paid to him under his Change-in-Control Agreement. - The Corporation has agreed to terminate the employment of, and pay severance to, Jon Ort and Craig Letourneau prior to the Closing Date. - The Corporation's Board of Directors has approved a distribution of the Asset Consideration to Jasc Stockholders payable immediately upon receipt by the Corporation of the Asset Sale Consideration. - The Corporation intends to enter into the following agreements: - Co-Branding and Advertising Agreement between the Corporation and Ofoto b.v. - License and Distribution Agreement between the Corporation and P. & A. America, Inc. - Distribution Agreement between the Corporation and Gem Distribution Ltd. - Independent Contractor Agreement between the Corporation and Jim Fugelstad - Letter Agreement between the Corporation and Ofoto, Inc. - New Deal Summary between the Corporation and Encore USA / Riverdeep Interactive - Standard Distribution Agreement between the Corporation and Academic Distributing, Inc. - Distribution Agreement between the Corporation and Take-Two Interactive Software Inc. - Agreement between the Corporation and EJ Enterprises - Amendment to Vendor Agreement, dated September 2, 2003, between the Corporation and Digital River, as

- Amendment to Vendor Agreement, dated September 2, 2003, between the Corporation and Digital River, as amended - Software Evaluation Agreement between the Corporation and Ligos Corporation - Internet Services Agreement between the Corporation and US Internet Corp. - Services Linking Agreement between the Corporation and Sonic Solutions - Memo and Agreement between the Corporation and Olson & Company - Public Relations Consulting Agreement between the Corporation and Kingswood Consulting - Letter of Intent between the Corporation and AccuSoft Corporation - Agreement between the Corporation and Vector OEM Content Limited - Dedicated Internet Access and Dedicated Web Hosting Service Agreement between the Corporation and Time Warner Telecom of Minnesota LLC, as addended

SCHEDULE 5.10.2 See Tab 11

Exhibit 2.2 TORYS DRAFT DATE 4/3/06

STOCK PURCHASE AGREEMENT By and Among VECTOR CC HOLDINGS IV, SRL and WINZIP COMPUTING LLC and CAYMAN LTD. HOLDCO and COREL CORPORATION April -, 2006

TABLE OF CONTENTS
PAGE

Article I Section 1.01 Section 1.02

PURCHASE AND SALE OF SHARES................................................. Purchase and Sale of WinZip Shares................................. Cancellation of WinZip Options; Issuance of Corel Options..........

---1 1 2

Article II Section 2.01

CONSIDERATION............................................................... Consideration......................................................

2 2

Article III Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section 3.01 3.02 3.03 3.04 3.05 3.06 3.07 3.08 3.09 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24

REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE SELLER......... Organization and Qualification..................................... Authority; Binding Nature of Agreement............................. No Conflict........................................................ Capitalization; Title to Shares.................................... Financial Statements............................................... Absence of Undisclosed Liabilities................................. Absence of Certain Changes......................................... Litigation......................................................... Compliance with Laws............................................... Title to Assets.................................................... Real Property...................................................... Intellectual Property.............................................. Contracts.......................................................... Governmental Authorizations........................................ Tax Matters........................................................ Employee Matters................................................... Environmental Matters; Health and Safety........................... Related Party Transactions......................................... Material Relationships............................................. Sales Policies; Warranties......................................... Brokers and Finders................................................ Additional Representations and Warranties of the Seller............ Material Misstatements or Omissions................................ Exclusive Representations and Warranties...........................

3 3 3 4 4 4 5 5 6 6 7 7 8 11 12 12 13 15 16 16 16 16 16 16 17

Article IV Section Section Section Section Section 4.01 4.02 4.03 4.04 4.05

REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE PURCHASER...... Authority; Binding Nature of Agreement............................. Non-Contravention.................................................. Due Incorporation; Good Standing................................... Corel Shares....................................................... Additional Representations and Warranties of the Purchaser.........

17 17 18 18 18 18

-iTABLE OF CONTENTS (Continued)
PAGE ---19 19 19 19 19 19 20

Article V Section Section Section Section Section Section 5.01 5.02 5.03 5.04 5.05 5.06

ADDITIONAL COVENANTS AND AGREEMENTS OF THE SELLER AND WINZIP HOLDINGS....... Publicity.......................................................... Confidential Information........................................... Brokers and Finders................................................ Certain Filings.................................................... Company Information................................................ Further Assurances.................................................

Article VI Section 6.01 Section 6.02 Section 6.03

ADDITIONAL COVENANTS AND AGREEMENTS OF THE PURCHASER........................ Brokers and Finders................................................ Certain Filings.................................................... Nondisclosure......................................................

20 20 20 20

Section 6.03 Section 6.04

Nondisclosure...................................................... Further Assurances.................................................

20 21

Article VII Section Section Section Section Section Section Section Section Section 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09

CERTAIN OTHER AGREEMENTS.................................................... Use of Name........................................................ Certain Tax Matters................................................ Access to Information.............................................. Conduct of Business Until Closing.................................. Negative Covenants................................................. Non-Solicitation................................................... Goodwill........................................................... Restricted Property................................................ Termination........................................................

21 21 21 22 22 23 23 24 24 24

Article VIII Section 8.01 Section 8.02

CLOSING..................................................................... Time and Place of Closing.......................................... Conditions to Closing..............................................

24 24 25

Article IX Section Section Section Section 9.01 9.02 9.03 9.04

INDEMNIFICATION............................................................. Indemnification of the Purchaser................................... Indemnification of the Seller...................................... Survival of Representations and Warranties......................... Additional Indemnification Provisions..............................

27 27 28 29 29

Article X

MISCELLANEOUS............................................................... Expenses........................................................... Notices............................................................ Entire Agreement...................................................

30 30 30 31

Section 10.01 Section 10.02 Section 10.03

- ii TABLE OF CONTENTS (Continued)
PAGE ---31 31 32 32 32 32 32 32 33 33

Section Section Section Section Section Section Section Section Section Section

10.04 10.05 10.06 10.07 10.08 10.09 10.10 10.11 10.12 10.13

Severability....................................................... Successors and Assigns............................................. Governing Law...................................................... Waiver of Jury Trial............................................... Counterparts....................................................... Effect of Investigations........................................... Waivers............................................................ No Third-Party Beneficiaries....................................... Construction....................................................... Preparation of Document............................................

ANNEXES Annex A - Definitions Annex B - WinZip Holdings Capitalization Annex C - Corel Options EXHIBITS Exhibit A - Form of Corel Option Exhibit B - Form of Registration Rights Agreement Exhibit C - Form of Lockup Agreement

SCHEDULES Seller Disclosure Schedule - iii THIS STOCK PURCHASE AGREEMENT made April -, 2006 by and among Cayman Ltd. Holdco, a Cayman Islands corporation ("WinZip Holdings"); Vector CC Holdings IV, SRL, a Barbados corporation (the "Seller"), the owner of all of the issued and outstanding shares of all classes of capital stock of WinZip Holdings (collectively, the "WinZip Shares"); Corel Corporation, a corporation existing pursuant to the federal laws of Canada (the "Purchaser"); and, for the purposes of Section 1.02 only, WinZip Computing LLC, a Delaware limited liability company and an indirect, wholly-owned subsidiary of WinZip Holdings ("WinZip Computing"). Capitalized terms used herein and not defined in the specific Section in which they are used shall have the meanings assigned to such terms in Annex A. W I T N E S S E T H: WHEREAS, the Company is engaged in the business of developing, selling, marketing and distributing compression utility software, including, without limitation, the Software Product (such activities and all incidental or related businesses of the Company being herein referred to as the "Business"); WHEREAS, the Seller is the holder of the number of WinZip Shares set forth opposite the Seller's name in Column C on Annex B, which WinZip Shares constitute all of the issued and outstanding shares of all classes of capital stock of WinZip Holdings; WHEREAS, the persons set forth in Column A on Annex C (the "WinZip Optionholders") are the holders of certain options to purchase membership interests of WinZip Computing (the "WinZip Options"), which WinZip Options were granted pursuant to the WinZip Computing LLC 2005 Class B Unit Option Plan (the "WinZip Option Plan") and constitute all outstanding options to purchase membership interests of WinZip Computing; WHEREAS, the Purchaser desires to acquire from the Seller, and the Seller desires to sell to the Purchaser, all of the WinZip Shares on the terms and subject to the conditions hereinafter set forth; and WHEREAS, pursuant to the terms of the WinZip Option Plan, the transactions contemplated in this Agreement shall collectively constitute a "Corporate Transaction" and accordingly, the WinZip Options shall be converted into options to purchase common shares of the Purchaser (the "Corel Options"). NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth and intending to be legally bound, the Parties hereby agree as follows: ARTICLE I PURCHASE AND SALE OF SHARES Section 1.01 Purchase and Sale of WinZip Shares. Subject to the terms and conditions of this Agreement and on the basis of the representations, warranties, covenants and agreements herein contained, at the Closing, the Seller shall sell, assign and convey to the

Purchaser, free and clear of all Liens, and the Purchaser shall purchase, acquire and accept from the Seller, all of the WinZip Shares. Section 1.02 Cancellation of WinZip Options; Issuance of Corel Options. Subject to the terms and conditions of this Agreement and on the basis of the representations, warranties, covenants and agreements herein contained: (a) on or prior to the Closing, each of the Seller and WinZip Computing shall take, and shall cause each WinZip Optionholder to take, all actions as may be necessary to cancel each of the WinZip Options;

(b) at the Closing, the Seller shall deliver to the Purchaser the certificates or other documentation evidencing each of the WinZip Options, each marked "cancelled"; and (c) at the Closing, the Purchaser shall grant to each WinZip Optionholder 0.087325 Corel Options for each WinZip Option surrendered by such WinZip Optionholder and delivered to the Purchaser pursuant to Section 1.02(b), such that the Purchaser shall deliver to each WinZip Optionholder the number of Corel Options set forth in Column C on Annex C, in each case upon the terms set forth in Columns D and E on Annex C, by delivering an option certificate, in the form attached as Exhibit A, to each such WinZip Optionholder (or to the Seller, on behalf of each WinZip Optionholder). WinZip Computing hereby agrees and affirms that, in accordance with the terms of the WinZip Option Plan: (i) the Corel Options to be issued to each WinZip Optionholder pursuant to this Agreement and the WinZip Option Plan preserve the economic value of the WinZip Options to be surrendered by such WinZip Optionholder; and (ii) the terms associated with the Corel Options to be issued to each WinZip Optionholder pursuant to this Agreement and the WinZip Option Plan are substantially equivalent to or better than the terms associated with the WinZip Options to be surrendered by such WinZip Optionholder. ARTICLE II CONSIDERATION Section 2.01 Consideration. (a) In consideration of the sale, assignment and conveyance of all of the WinZip Shares by the Seller to the Purchaser at the Closing, the Purchaser shall issue or cause to be issued to the Seller four million three hundred twenty-two thousand five hundred eighty-six (4,322,586) common shares of the Purchaser (as adjusted pursuant to Section 2.02 (if applicable) the "Corel Shares"), in accordance with Section 2.01(b) (the Corel Shares are sometimes referred to collectively herein as the "Consideration"). The Parties hereby agree that each Corel Share shall be valued for all purposes of this Agreement at a value equal to the per-share IPO offering price (the "Per Share Consideration"). (b) Issuance of the Corel Shares. At the Closing, the Purchaser shall issue and deliver to the Seller a certificate, in negotiable form, representing the Corel Shares. The delivery of the Corel Shares to the Seller as provided above shall constitute full and final transfer of the Consideration to the Seller. -2ARTICLE III REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE SELLER Except as set forth in the Disclosure Schedule, the Seller represents and warrants, to and for the benefit of the Purchaser Indemnified Parties for purposes of Article IX, only as to the matters expressly set forth in this Article III. Disclosure of an item anywhere on the Disclosure Schedule shall be deemed to be disclosure of such item with respect to, and therefore to qualify each representation and warranty contained in, each Section and subsection in this Article III where such qualification is reasonably apparent from the text of the disclosure; provided, however, that for purposes of determining whether the Seller has committed a fraudulent breach of a representation or warranty, such qualification need not be reasonably apparent from the text of the disclosure. Representations and warranties shall be deemed to be qualified by the items set forth in the Disclosure Schedule even if they do not expressly use the phrase "except as set forth in Part ___ of the Disclosure Schedule" (or phrases of similar import). Notwithstanding any other provisions of this Article III, the only representations and warranties made by the Seller relating, directly or indirectly, to intellectual property assets or intellectual property issues (including the Owned Intellectual Property), including, but not limited to, any agreements, licenses, liabilities, ownership, performance, software "bugs", design flaws, security vulnerabilities, warranties as to merchantability, fitness for a particular purpose, or suitability of software, title or infringement issues, or rights or authority or any other matters relating thereto, are made in Section 3.13 hereof. The inclusion of any direct or indirect reference to intellectual property assets or issues, or rights or authority relating thereto, in any Part of the Disclosure Schedule shall not be deemed to have the effect or to imply that any provision of this Article III (other than Section 3.13) contains representations and warranties pertaining to intellectual property assets or issues.

Section 3.01 Organization and Qualification. Each WinZip Entity is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has full power and authority to own its properties and to conduct the businesses in which it is now engaged. Each WinZip Entity is in good standing in each other jurisdiction wherein the failure to qualify or to be in good standing could reasonably be expected to result in a Material Adverse Effect. Except as set forth on Part 3.01 of the Disclosure Schedule, WinZip Holdings does not have any subsidiaries, own any capital stock or other proprietary interest, directly or indirectly, in any other Person, nor have any agreement with any Person to acquire any such capital stock or other proprietary interest. Accurate and complete copies of the articles of incorporation, including all amendments thereto and restatements thereof, and by-laws (or other similar organizational documents, as applicable) of each WinZip Entity and of the corporate minutes and the stock record books of each WinZip Entity have been delivered to the Purchaser. Complete and accurate records with respect to the issuance, transfer, redemption and cancellation of all shares of capital stock are set forth in such stock record books. Section 3.02 Authority; Binding Nature of Agreement. The Seller and WinZip Holdings have all power, capacity and authority necessary to enter into and to perform their obligations under this Agreement and each Transaction Document to which they are party. This Agreement and each Transaction Document constitutes the legal, valid and binding obligation of -3the Seller and WinZip Holdings, enforceable against the Seller and WinZip Holdings in accordance with their terms, subject to (i) Laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) Laws governing specific performance, injunctive relief and other equitable remedies. Section 3.03 No Conflict. Neither the execution and delivery of this Agreement or any Transaction Document by WinZip Holdings and the Seller, nor, the performance by WinZip Holdings and the Seller pursuant hereto or thereto, will (a) violate the certificate of incorporation, bylaws or other similar organizational documents of any WinZip Entity, (b) result in a violation or breach of, or permit any third party to rescind any term or provision of, or constitute a default under, any indenture, mortgage, deed of trust or other Contract, license or other agreement to which the Seller, the Company or any other WinZip Entity is a party or by which either of them, or any of the property or assets of the Company or any other WinZip entity, is bound, or create any Lien upon any of the property or assets of the Company or any other WinZip Entity, (c) violate any Law, order, award, judgment, or decree applicable to or binding on the Seller, the Company or any other WinZip Entity, or any permit, license or approval of any Governmental Authority which is material to the operation of the business, or (d) require any notice to, or consent, approval, order or authorization of, or the registration, declaration or filing with, any Governmental Authority or other third party. Section 3.04 Capitalization; Title to Shares. (a) The authorized and outstanding shares of each class of capital stock of WinZip Holdings are as set forth on Part 3.04(a) of the Disclosure Schedule. As of the Closing Date, the Seller will own all of the shares of stock set forth opposite the Seller's name in Column C on Annex B, free and clear of all Liens (including any restriction on the right to vote, sell or otherwise dispose of such shares). As of the Closing Date, the Seller will have the unrestricted right to transfer the WinZip Shares to the Purchaser and, upon transfer of the WinZip Shares to the Purchaser hereunder, the Purchaser shall acquire good, valid and marketable title to the WinZip Shares, free and clear of all Liens. The WinZip Shares constitute all of the outstanding shares of capital stock of all classes of WinZip Holdings. All of the WinZip Shares have been duly and validly authorized and issued, are fully paid and non-assessable. WinZip Holdings, either directly or indirectly, owns all of the issued and outstanding shares of capital stock (or other equity interests, as applicable) of each other WinZip Entity, including, without limitation, the Company. (b) Other than the WinZip Options, there are no outstanding subscriptions, warrants, options, calls, commitments or other rights or agreements to which any WinZip Entity is subject to or bound relating to the issuance, sale, transfer or redemption of shares of stock or other securities of any WinZip Entity. Section 3.05 Financial Statements. The Company has delivered to the Purchaser the following financial statements (the "Financial Statements"): (i) the unaudited Balance Sheet of the Company as of February 28, 2006 and the audited Balance Sheets of the Company as of November 30, 2003, 2004 and 2005, (ii) the unaudited

Statement of Operations of the Company for the fiscal quarter ended February 28, 2006 and the audited Statements of Operations of the Company for the fiscal years ended November 30, 2003, 2004 and 2005, -4(iii) the unaudited Statement of Cash Flow of the Company for the fiscal quarter ended February 28, 2006 and the audited Statements of Cash Flow for the fiscal years ended November 30, 2003, 2004 and 2005, and (iv) the unaudited Statement of Changes in Shareholder's Equity of the Company for the fiscal quarter ended February 28, 2006 and audited Statements of Changes in Shareholders' Equity of the Company for the fiscal years ended November 30, 2003, 2004 and 2005. The Financial Statements (i) are accurate and complete in all material respects and present fairly in all material respects the financial position of the Company as of the respective dates thereof and the results of operations of the Company for the periods covered thereby, and (ii) have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis throughout the periods covered. Section 3.06 Absence of Undisclosed Liabilities. The Company does not have any liabilities or obligations; either accrued, contingent or otherwise, which are not reflected in this Agreement or the Disclosure Schedule, except as have been incurred in the Ordinary Course of Business since November 30, 2005. As of the Closing, the WinZip Entities, on a consolidated basis, will have Net Debt of no more than sixteen million five hundred thousand dollars ($16,500,000). Section 3.07 Absence of Certain Changes. Since November 30, 2005, except as described in Part 3.07 of the Disclosure Schedule or as contemplated by this Agreement, no WinZip Entity has: (a) suffered any change in its financial condition, assets, liabilities, net worth or business from that shown on the Balance Sheet that, either individually or in the aggregate, has had a Material Adverse Effect; (b) suffered any damage, destruction or loss, whether or not covered by insurance, which has had a Material Adverse Effect; (c) declared or made or agreed to declare or make any distributions of any assets of any kind whatsoever to any shareholder (or other holder of equity interests, as applicable) as a dividend, in redemption or as the purchase price of any of the capital stock or other equity interests of such WinZip Entity or in discharge or cancellation, whether in part or in whole, of any indebtedness (whether in payment of principal, interest or otherwise) owing to any of them, or for any other purpose, except the payment of normal compensation and the reimbursement of bona fide business expenses in the Ordinary Course of Business; (d) issued or sold, or contracted to issue or sell, any shares or other securities or any securities convertible into, or exchangeable for, shares of stock, or securities, warrants, options or rights to purchase any of the foregoing; (e) mortgaged, pledged, hypothecated or otherwise encumbered any of its material assets, tangible or intangible; (f) sold or Transferred any of its assets, property or rights; or canceled or agreed to cancel any of its debts or claims, except for fair value, in the ordinary course of business; -5(g) suffered any change in its Business, its relationships with customers, or its contracts with customers or suppliers which has had, or would reasonably be expected to have, a Material Adverse Effect; provided, however, that for purposes of determining whether the Seller has committed a fraudulent breach of this Section 3.07(g), the phrase "or would reasonably be expected to have," shall be disregarded; (h) incurred any commitment (through negotiations or otherwise) or any liability to any labor organization, or been involved in any labor dispute; (i) materially increased the amount of its indebtedness, obligations or liabilities; (j) entered or agreed to enter into any agreement or arrangement granting any preferential rights to purchase a

(j) entered or agreed to enter into any agreement or arrangement granting any preferential rights to purchase a material part of its assets, property or rights; (k) placed any orders for materials, merchandise or supplies in exceptional or unusual quantities based upon past operating practices or accepted orders from customers under conditions relating to price, terms of payment, time or delivery, or like matters materially different from the conditions regularly and usually specified on acceptance of orders for similar merchandise from customers similarly situated; (l) made any change in the accounting practices or methods followed by it; or (m) entered into any other transaction other than in the Ordinary Course of Business, or been involved in any event or experienced any condition of any character, that, either individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect; provided, however, that for purposes of determining whether Seller has committed a fraudulent breach of this Section 3.07(m), the phrase "or would reasonably be expected to have," shall be disregarded. Section 3.08 Litigation. There is no action, suit or proceeding pending or, to the Seller's knowledge, threatened, at law, in equity, by way of arbitration or before any Governmental Authority, (i) against the Seller or WinZip Holdings relating to or affecting the Business or assets of the Company, (ii) against the Company, (iii) against any other WinZip Entity, or (iv) seeking to prevent or postpone the consummation of any of the Transactions. To the Seller's knowledge, there are no existing facts or conditions which might give rise to any charge, claim, litigation, proceeding, or investigation by any third party which would reasonably be expected to have a Material Adverse Effect, nor are there any facts or conditions which might give rise to any order of condemnation, appropriation or other taking of any of the assets of the Company. Section 3.09 Compliance with Laws. The Company has all necessary licenses, permits and other approvals of Governmental Authorities necessary to operate the Business as now conducted, each of which licenses, permits and approvals is in good standing, the Company has conducted the Business, and properly filed all necessary reports, in accordance with applicable Laws the violation of which would reasonably be expected to have a Material Adverse Effect. -6Section 3.10 Title to Assets. The Company owns, and has good, valid and marketable title to, all assets purported to be owned by it, including all assets reflected on the Balance Sheet, and all of such assets are owned by the Company free and clear of any Encumbrances, except for any lien for current Taxes not yet due and payable. There are no assets that are material to the Business of the Company that are being leased to the Company (other than real property). As indicated in the introductory paragraph to this Article 3, the Parties acknowledge that this Section 3.10 does not apply in any respect to Intellectual Property. Section 3.11 Real Property. (a) The Company does not own, and has never owned, any real property. (b) Part 3.11 of the Disclosure Schedule lists: (i) the street address of each parcel of real property leased by the Company as tenant, together with, to the extent leased by the Company, all buildings and other structures, facilities or improvements currently located thereon, all fixtures, systems, equipment and items of personal property of the Company attached or appurtenant thereto, and all easements, licenses, rights and appurtenances relating to the foregoing (the "Leased Real Property"), (ii) the identity of the lessor, lessee and current occupant (if different from lessee) of each such parcel of Leased Real Property, (iii) the term (referencing applicable renewal periods) and rental payment terms of the leases (and any subleases) pertaining to each such parcel of Leased Real Property, and (iv) the current use of each such parcel of Leased Real Property. (c) Except as described on Part 3.11 of the Disclosure Schedule, there is no material violation of any Law (including, without limitation, any building, planning or zoning Law) relating to any of the Leased Real Property. The Seller has made available to the Purchaser true and correct copies of each deed for each parcel of Leased Real Property, to the extent available, and all the title insurance policies, title reports, surveys, certificates of

occupancy, environmental reports and audits, appraisals, permits, other title documents and other documents relating to or otherwise affecting the Leased Real Property, the operation of the Business thereon or any other uses thereof, in each case to the extent any such document is in any WinZip Entity's possession. The Company is in peaceful and undisturbed possession of each parcel of Leased Real Property and there are no contractual or legal restrictions that preclude or restrict the ability to use the premises for the purposes for which they are currently being used. To the Seller's knowledge, all existing water, sewer, steam, gas, electricity, telephone and other utilities required for the use, occupancy and operation of the Leased Real Property are adequate for the conduct of the Business as it has been and currently is conducted. To the Seller's knowledge, there are no material latent defects or material adverse physical conditions affecting the Leased Real Property or any of the facilities, buildings, structures, improvements, fixtures, fixed assets and personalty of a permanent nature annexed, affixed or attached to, located on or forming part of the Leased Real Property. Except as set forth on Part 3.11 of the Disclosure Schedule, the Company has not leased or subleased any parcel or any portion of any parcel of Leased Real Property to any other Person, nor has the Company assigned its interest under any lease or sublease listed on Part 3.11 of the Disclosure Schedule to any third party. (d) The Seller has, or has caused to be, delivered to the Purchaser correct and complete copies of all leases and subleases listed on Part 3.11 of the Disclosure Schedule and -7any and all ancillary documents pertaining thereto. With respect to each of such leases and subleases, except as otherwise set forth on Part 3.11 of the Disclosure Schedule: (i) such lease or sublease, together with all ancillary documents, is legal, valid, binding, enforceable and in full force and effect and represents the entire agreement between the respective landlord and tenant with respect to such property; (ii) such lease or sublease will not cease to be legal, valid, binding, enforceable and in full force and effect on terms identical to those currently in effect as a result of the consummation of the Transactions, nor will the consummation of the Transactions constitute a breach or default under such lease or sublease or otherwise give the landlord a right to terminate such lease or sublease; (iii) with respect to each such lease or sublease: (A) neither the Seller nor any WinZip Entity has received any notice of cancellation or termination under such lease or sublease and no lessor has any right of termination or cancellation under such lease or sublease except in connection with the default of the Company thereunder, (B) neither the Seller nor any WinZip Entity has received any notice of a breach or default under such lease or sublease, which breach or default has not been cured, and (C) the Company has not granted any other Person any rights, adverse or otherwise, under such lease or sublease; and (iv) neither the Company nor to the knowledge of the Seller any other party to such lease or sublease, is in breach or default thereunder in any material respect, and, to the knowledge of the Seller, no event has occurred that, with notice or lapse of time, would constitute such a breach or default or permit termination, modification or acceleration under such lease or sublease. (e) There are no condemnation proceedings or eminent domain proceedings of any, kind pending or, to the knowledge of the Seller, threatened against any of the Leased Real Property. (f) All the Leased Real Property is occupied under a valid and current certificate of occupancy or similar permit, the Transactions will not require the issuance of any new or amended certificate of occupancy and, to the knowledge of the Seller, there are no facts that would prevent the Leased Real Property from being occupied after the Closing in the same manner as immediately prior to the Closing. (g) All improvements on the Leased Real Property constructed by or on behalf of the Company or, to the knowledge of the Seller, constructed by or on behalf of any other Person were constructed in compliance with all applicable Laws (including, but not limited to, any building, planning or zoning Laws) affecting such Leased Real Property.

Section 3.12 Intellectual Property. (a) Part 3.12 of the Disclosure Schedule contains a complete and accurate list of all Registered Owned Intellectual Property and specifies, where applicable, the jurisdictions in which each such item of Registered Owned Intellectual Property has been issued or registered and lists any pending proceedings or actions before any court, tribunal (including the United -8States Patent and Trademark Office or equivalent authority anywhere in the world) related to any of the Registered Owned Intellectual Property. (b) Except as disclosed on Part 3.12 of the Disclosure Schedule, all necessary registration, maintenance and renewal fees currently due in connection with Registered Owned Intellectual Property have been made and all necessary documents, recordations and certificates in connection with such Registered Owned Intellectual Property have been filed with the relevant patent, copyright, trademark or other authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of maintaining such Registered Owned Intellectual Property. There are no actions that must be taken by the Company within sixty (60) days after the date hereof, including the payment of any registration, maintenance or renewal fees or the filing of any documents, applications or certificates for the purposes of maintaining, perfecting or preserving or renewing any Registered Owned Intellectual Property. (c) All the Owned Intellectual Property is owned by the Company free and clear of any Encumbrance and, except as set forth on Part 3.12 of the Disclosure Schedule, none of the Owned Intellectual Property infringes on the Intellectual Property of any other Person; provided, however, that, in the case of trademarks, the representations and warranties set forth in the first sentence of this Section 3.12(c) are made to the knowledge of the Seller. To the knowledge of the Seller, and except as set forth on Part 3.12 of the Disclosure Schedule, no Person is using any Intellectual Property that infringes upon the Owned Intellectual Property. (d) Notwithstanding anything to the contrary contained herein, the Company makes no representations or warranties concerning Patents except as expressly set forth in this Section 3.12(d): (i) The Company does not own, and has never owned, any Patents. (ii) Except as set forth in Part 3.12 of the Disclosure Schedule, the Company has not received any written or oral claims from the holders of Patents (or their representatives) alleging that one or more of the Company's products infringe(s) on such, holders' Patents. (e) Part 3.12 of the Disclosure Schedule contains a complete and accurate list of all Licensed Intellectual Property, other than "shrink wrap" and similar widely available commercial software. With respect to each of the licenses and sublicenses pursuant to which the Company licenses Licensed Intellectual Property from another Person: (i) such license or sublicense is legal, valid, binding, enforceable and in full force and effect and represents the entire agreement between the respective licensor and licensee with respect to the subject matter of such license or sublicense; (ii) such license or sublicense will not cease to be legal, valid, binding, enforceable and in full force and effect on terms identical to those currently in effect as a result of the consummation of the Transactions, nor will the consummation of the Transactions constitute a breach or default under such license or sublicense or otherwise give the licensor or sublicensor a right to terminate such license or sublicense; -9(iii) with respect to each such license or sublicense: (A) the Company has not received any notice of cancellation or termination under such license or sublicense, and (B) the Company has not received any notice of a breach or default by the Company under such license or sublicense, which breach or default has not been cured;

(iv) neither the Company, nor to the knowledge of the Seller, any other party to such license or sublicense is in breach or default in any material respect under such license or sublicense; (v) no claims have been made in writing against the Company alleging that any Licensed Intellectual Property is being licensed, sublicensed or used in violation of any Intellectual Property of any Person; and (vi) to the knowledge of the Seller, and except as set forth on Part 3.12 of the Disclosure Schedule, no Person is using any Intellectual Property that infringes upon the Licensed Intellectual Property. For purposes of this Section 3.12(e)(vi), "Licensed Intellectual Property" shall be deemed to exclude "shrink wrap" and similar widely available commercial software. (f) Except for non-exclusive license grants of the Software Product in the Ordinary Course of Business, and except as set forth on Part 3.12 of the Disclosure Schedule, the Company has not Transferred ownership of or granted any license of or right to use any Owned Intellectual Property to any other Person. Part 3.12 of the Disclosure Schedule briefly describes the types of agreements pursuant to which the Company grants licenses relating to the Software Product to other Persons, how such licenses are customarily entered into, and certain material terms of such licenses. Part 3.12 of the Disclosure Schedule also sets forth a complete and accurate list of the Company's current signed resale and e-commerce agreements. Except as set forth in Part 3.12 of the Disclosure Schedule, the Company has provided to the Purchaser complete and accurate copies of all of its site licenses that were entered into with terms that differed from the then current standard site license terms. (g) Upon the Closing, the Company shall continue to own or possess, or own or possess adequate and enforceable licenses, sublicenses or other rights to use, without payment of any fee other than fees disclosed in Part 3.12 of the Disclosure Schedule, all the Owned Intellectual Property and Licensed Intellectual Property. (h) The Owned Intellectual Property and the Licensed Intellectual Property constitute all the Intellectual Property currently used in, and necessary in the conduct of, the Business and there are no other items of Intellectual Property that are material to the Company or the Business; provided, however, that nothing contained herein shall be construed as a representation or warranty by the Seller that any item of Owned Intellectual Property or Licensed Intellectual Property that is not included in the Software Product (including without limitation any Internal-Use-Only IP) can be licensed or sold by the Company without infringing on the Intellectual Property of any other Person, or that no other Person is infringing on it. (i) To the extent that any Intellectual Property has been developed or created for the Company by an employee or consultant, the Company has a written agreement with such - 10 Person with respect thereto and the Company thereby has obtained ownership of, and is the exclusive owner of, all such Intellectual Property by operation of law or by valid assignment. (j) Except as set forth on Part 3.12 of the Disclosure Schedule, the Company has taken reasonable steps to protect the Company's rights in the Company's confidential information and trade secrets that it wishes to protect or any trade secrets or confidential information of third parties provided to the Company, and, without limiting the foregoing, the Company has and enforces a policy requiring each employee and contractor to execute a proprietary information/confidentiality agreement substantially in the form provided to the Purchaser and all current and former employees and contractors of the Company have executed such an agreement, except where the failure to do so is not reasonably expected to be material to the Company. Part 3.12 of the Disclosure Schedule briefly describes certain measures the Company has taken, or not taken, to protect the value and confidentiality of its Intellectual Property. (k) The Company has made available to the Purchaser accurate and complete copies of the Company's records relating to known "bugs" in the Software Product. The Seller is not making any representations or warranties to the Purchaser concerning the potential consequences of any or all of such "bugs," or the merchantability, fitness for a particular purpose, accuracy or completeness, or responses or results of the Software Product, or the

absence of any program defects or design flaws in the Software Product, including, without limitation, defects or design flaws that may create or result in security vulnerabilities. Annex B to the Disclosure Schedule contains additional background information concerning certain "bugs" and product performance issues. (l) Part 3.12 of the Disclosure Schedule describes the Company's current privacy and upgrade statements. (m) The Company's license agreements contain a complete and accurate description of the Company's warranty policies. Section 3.13 Contracts. (a) In Part 3.13(a) of the Disclosure Schedule are identified: (i) each Company Contract relating to the employment of, or performance of services by, any employee or consultant; (ii) each Company Contract imposing any material restriction on the Company's right or ability to (A) compete with, (B) acquire any product, asset or service from, (C) sell any product or asset to, (D) perform any services for or (E) transact business with, any other Person; (iii) each Company Contract with any WinZip Entity (other than the Company); - 11 (iv) any current Company advertising agreements pursuant to which the Company has made payments in excess of $125,000 within the last three months or expects to make payments in excess of $125,000 within the next three months; and (v) any other Company Contract (other than license grants of the Software Product) that involves the future payment or delivery of cash or other consideration by or to the Company in an amount in excess of $50,000 in any future calendar year. (b) Contracts described in the preceding clauses "(i)" through "(v)" are referred to in this Agreement as "Material Contracts." (c) Except as set forth in Part 3.13(c) of the Disclosure Schedule: (i) all Company Contracts are valid and in effect and the Company is not in default under any such Company Contract, and to the Seller's knowledge, no other party thereto is in default; and (ii) neither the Seller nor any WinZip Entity has received notice of default under any Company Contract, and the Seller knows of no event that has occurred which (after notice and lapse of time or both) would become a breach or default under, or otherwise permit unilateral modification, cancellation, acceleration or termination of any such Company Contract. Section 3.14 Governmental Authorizations. Part 3.14 of the Disclosure Schedule identifies each material Governmental Authorization held by the Company. Each such Governmental Authorization is valid and in full force and effect and, collectively, such Governmental Authorizations constitute all Governmental Authorizations necessary to enable the Company to conduct its Business as it is currently conducted, in each case except where the absence or invalidity of any such Governmental Authorizations would not reasonably be expected to have a Material Adverse Effect. Section 3.15 Tax Matters. (a) All Tax Returns required to be filed by or on behalf of any WinZip Entity with any Governmental Authority with respect to any taxable period ending on or before the Closing Date (the "Company Returns") (i) have been or will be filed on or before the applicable due date (including any extensions of such due date), and (ii) have been or will be accurately and completely prepared in all material respects in compliance with all applicable Laws. All amounts, if any, shown on the Company Returns to be due on or before the Closing Date have been or will be paid. The Seller has delivered to the Purchaser accurate and complete copies of all Company Returns filed since December 31, 2001 and before the Closing Date that have been requested by the Purchaser.

(b) Part 3.15(b) of the Disclosure Schedule identifies all examinations or audits of any Company Return filed after December 31, 2001 and any extension or waiver requested or currently in effect. The Seller has delivered to the Purchaser copies of all audit reports by a Governmental Authority and similar documents (to which any WinZip Entity has access) relating to the Company Returns filed after December 31, 2001. (c) No claim or Legal Proceeding is pending or, to the Seller's knowledge, has been threatened against or with respect to any WinZip Entity in respect of any Tax. There are no unsatisfied liabilities for Taxes with respect to any written notice of deficiency or similar - 12 written document received by any WinZip Entity with respect to any Tax. There are no Liens for Taxes upon any of the assets of the Company, except liens for current Taxes not yet due and payable. No WinZip Entity is required to include any adjustment in taxable income for any tax period (or portion thereof) ending after the Closing Date pursuant to Section 481 of the Code as a result of transactions or events occurring, or accounting methods employed, prior to the Closing. (d) Except as set forth in Part 3.15(d) of the Disclosure Schedule, there is no agreement, plan, arrangement or other Contract covering any current or former employee or independent contractor of the Company that could give rise to the payment of any amount that would not be deductible pursuant to Section 280G or Section 162 of the Code. (e) Notwithstanding anything to the contrary set forth herein, the representations and warranties set forth in this Section 3.15 do not apply to (i) state income and sales and use Taxes or (ii) city or local Taxes. (f) No WinZip Entity has any liability for the Taxes of any Person under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor, by contract or otherwise. (g) Except as set forth in Part 3.15(g) of the Disclosure Schedule, the Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party. Section 3.16 Employee Matters. (a) Except as described on Part 3.16 of the Disclosure Schedule, the Company does not have any written or oral contracts of employment with any employee of the Company, and the Company is not a party to or subject to any collective bargaining agreements and has not been a party to or subject to any collective bargaining agreement or collective bargaining plan during the last five (5) years. The Company is not a party to any pending or, to the Seller's knowledge, threatened labor dispute affecting the Business. The Company has complied in all material respects with all applicable Laws relating to the employment of labor, including but not limited to the provisions thereof relative to wages, hours, collective bargaining, payment of Social Security, unemployment and withholding taxes, and ensuring equality of opportunity for employment. The Company is not liable for any arrears of wages or any Taxes or penalties for failure to comply with any of the foregoing. The Company has not entered into and is not obligated to enter into any agreement relating to the payment of vacation pay to any employee and the Company does not have any obligation to any employees to provide them with pay for vacation time, except for vacation pay payable in the Ordinary Course of Business. A true and correct statement of the names, employment status, and rates of compensation (including salaries, wages, commissions and bonuses), and accrued paid absence time of all employees of the Company, is set forth on Part 3.16 of the Disclosure Schedule. The Company has paid all remuneration (including 2005 employment and incentive bonuses) due and owing to employees. (b) Part 3.16 of the Disclosure Schedule sets forth a correct and complete list of every stock option, stock purchase, stock appreciation right, bonus, deferred or current - 13 compensation, excess benefits, profit sharing, pension, thrift, savings, retirement, severance, sickness, accident,

medical, disability, hospitalization, vacation, insurance or other plan,, agreement, arrangement, commitment or practice which provides benefits to or for or on behalf of any one, or more employees of the Company (including former employees) or their beneficiaries (collectively, "Employee Benefit Plans"). The Seller has delivered to the Purchaser true, correct and complete copies of all Employee Benefit Plans in effect on the date of this Agreement, all descriptions thereof, all trust agreements or other funding arrangements (including insurance or group annuity contracts) relating thereto, and all amendments thereto. (c) Except as listed on Part 3.16 of the Disclosure Schedule, no employee benefit plan exists which covers or is maintained for the benefit of any of the employees of the Company or to which the Company is required to make contributions on account of any employees of the Company. With respect to each Employee Benefit Plan, the Seller has delivered to the Purchaser true, complete and correct copies of (i) the latest plan description and all modifications thereto, (ii) the last three (3) financial statements for each Employee Benefit Plan and the related trusts and other funding arrangements (including insurance and group annuity contracts), and (iii) any filings, determinations or qualification letters or rulings filed with, or issued by, a Governmental Authority. No Employee Benefit Plan or any related trust owns any securities issued by the Company or any other Person. No Taxes (or interest or penalties with respect thereto) are due or owing with respect to any Employee Benefit Plan. (d) Each Employee Benefit Plan which is intended to qualify for special Tax treatment, including Tax deferral (a "Qualified Plan"), has received a favorable determination letter from the applicable Governmental Authority. Each amendment to a Qualified Plan or a related trust has, where required, been determined by the applicable Governmental Authority not to adversely affect the qualified status of such Qualified Plan or the Tax exempt status of the related trust. No event has occurred which would cause the loss of the Tax exempt status of any related trust, or the imposition of any Tax liability or penalty in connection with any Qualified Plan or a related trust. (e) There are no actions, suits, arbitrations or claims pending or, to the knowledge of the Seller, threatened against any Employee Benefit Plan. Each Employee Benefit Plan is in compliance in all material respects with all requirements of applicable Laws and has been administered in all material respects in accordance with its terms and with applicable Laws. (f) No Employee Benefit Plan provides benefits (including, without limitation, death, health or medical benefits (whether or not insured)) with respect to current or former employees of the Company beyond their retirement or other termination of service with the Company, other than (i) coverage mandated by applicable Law, (ii) deferred compensation benefits in accordance with the rules of the relevant Employee Benefit Plan, or (iii) benefits the full cost of which are borne by the current or former employees (of their beneficiaries) in accordance with the Employee Benefit Plan. (g) The Company has not terminated an Employee Benefit Plan. - 14 Section 3.17 Environmental Matters; Health and Safety. (a) There are no outstanding or, to the Seller's knowledge, threatened actions, claims, proceedings, determinations or judgments by any party, including but not limited to any Governmental Authority, against or involving the Company in any manner arising under any national, international, federal, state, local or other environmental, health or safety law, regulation, order or requirement or requiring the remediation or removal of an existing condition, or substance. The Company has not received any notice of, nor is the Seller aware of, any outstanding or threatened orders, determinations or notices of violation issued by any Governmental Authority administering environmental or health and safety laws in connection with ownership of or operation by the Company of the Business which have not been complied with or resolved to the satisfaction of such Governmental Authority. (b) The Business is being and has been operated in all material respects in compliance with all applicable national, international, federal, state, and local environmental or health and safety laws, regulations and ordinances governing the Company and the Business including, but not limited to, all discharges into or onto the soil and/or the ground or surface water, emissions into the ambient air, and generation, accumulation, labeling, transportation, handling, treatment, storage and disposal of waste material or process by-products (including solid, hazardous or

toxic waste or substances, if any) or removal of any existing condition or substance. The Company has complied in all material respects with all notice, record keeping and reporting requirements imposed by any Governmental Authority and any informational requests or demands arising under any national, international, federal, state, local or other environmental or health and safety laws. (c) The Leased Real Property has been operated by the Company in a manner consistent with the representations of paragraphs (a), (b) and (e) of this Section 3.17. (d) All real properties formerly owned, leased or rented by the Company for the Business were owned, operated and utilized by the Company consistent with the representations of paragraphs (a), (b) and (e) of this Section 3.17. (e) The Company has not released, disposed of or caused or permitted the disposal of any Hazardous Substances upon any of the Real Property or any of the real properties from which the Company has conducted its Business. The Company has not, directly or indirectly, disposed of any Hazardous Substances off-site. (f) There are no pending or, to the Seller's knowledge, threatened actions, claims, proceedings or judgments against the Company by any present or former officers, agents or employees of the Company alleging or involving personal injury or damage as a result of violation of any national, international, federal, state, local or other environmental or health and safety Laws or otherwise involving environmental conditions under which such persons were employed nor, to the Seller's knowledge, is there a basis for commencing any such action, claim or proceeding. - 15 (g) To the Seller's knowledge, each of the real properties owned, leased or rented by the Company are free of all asbestos, asbestos-containing materials, polychlorinated biphenyls and all Hazardous Substances. Section 3.18 Related Party Transactions. To the Seller's knowledge, no WinZip Entity (other than the Company) has any direct or indirect interest in any material asset used in the Business or in any Material Contract. No WinZip Entity (other than the Company) has any material indebtedness owing to or from the Company. Section 3.19 Material Relationships. To the Seller's knowledge, no supplier, distributor, consultant or programmer for the Company or material current customer of the Company (defined for this purpose as a customer subject to a Company Contract that involves the future payment or delivery of cash or other consideration to the Company by such customer in an amount in excess of $75,000 in any future calendar year under such Company Contract) has notified the Company of an intention to terminate or substantially reduce its existing business relationship with the Company where such termination or reduction has had, or would reasonably be expected to have, a Material Adverse Effect. Section 3.20 Sales Policies; Warranties. Part 3.20 of the Disclosure Schedule briefly describes the Company's current policy with respect to returns and refunds. Section 3.21 Brokers and Finders. Neither any WinZip Entity nor the Seller has entered into any contract with respect to the payment of any brokerage fees, commissions or finders' fees in connection with the Transactions. Section 3.22 Additional Representations and Warranties of the Seller. (a) Access to Data. The Seller has had an opportunity to discuss the Purchaser's business, management and financial affairs with the Purchaser's management, and it has been given access to copies of documents, which it has requested. (b) No Reliance on Certain Types of Advice. The Seller is not relying on the Purchaser for advice with respect to tax considerations, the suitability of its investment in the Purchaser or legal or economic considerations. (c) Marketability. The Seller understands that the Purchaser is closely held and that, until such time as the IPO shall have been consummated and the Corel Shares registered pursuant to the Registration Rights Agreement, there will be no public market for resale of the Corel Shares. It understands that it is possible that a market for

the Corel Shares will not ever develop. As a consequence, the Seller understands that it may not be able to liquidate its investment in the Purchaser, even in the event of an emergency. The Seller also understands that, for the foregoing reasons, the Corel Shares may not be readily accepted as collateral for a loan. Section 3.23 Material Misstatements or Omissions. No representation or warranty expressly made by the Seller in this Agreement or in the Disclosure Schedule contains any untrue statement of a material fact, or omits a material fact necessary to make the statement of facts contained therein, in light of the circumstances in which they were made, not materially misleading. - 16 Section 3.24 Exclusive Representations and Warranties. Except as expressly set forth in this Article III, the Seller is not making any representations or warranties to the Purchaser concerning the Company, any other WinZip Entity or the Business, and therefore with the exception of such express representations and warranties the Purchaser is acquiring WinZip Holdings on an "as is, where is" basis. Without limiting the generality of the foregoing, except as expressly set forth in this Article III, (i) the Seller makes no implied representations or warranties of any kind, (ii) the Seller makes no representations or warranties of any kind concerning matters occurring after the Closing Date, including but not limited to the financial performance of the Company after the Closing Date, (iii) the Seller makes no representations or warranties of any kind relating, directly, or indirectly, to intellectual property assets or intellectual property issues (including the Owned Intellectual Property), including, but not limited to, any agreements, licenses, liabilities, ownership, performance, software "bugs", design flaws, security vulnerabilities, warranties as to merchantability, fitness for a particular purpose, or suitability of software, title or infringement issues, or rights or authority or any other matters relating thereto, and (iv) neither written communications or verbal statements made by any officer, employee, agent, advisor or consultant of the Seller or any WinZip Entity, nor information furnished or set forth or obtained elsewhere, whether orally or in writing, or pursuant to any due diligence investigation, shall be deemed a representation or warranty of any kind and the Purchaser may not rely on any such written communications, verbal statements or information. ARTICLE IV REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE PURCHASER The Purchaser represents and warrants to the Seller as follows: Section 4.01 Authority; Binding Nature of Agreement. The Purchaser has all power, capacity and authority necessary to enter into and to perform its obligations under this Agreement and each Transaction Document. This Agreement and each Transaction Document constitutes the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to (i) Laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) Laws governing specific performance, injunctive relief and other equitable remedies. - 17 Section 4.02 Non-Contravention. Neither the execution and delivery of this Agreement or any Transaction Document by the Purchaser nor the performance by the Purchaser pursuant hereto or thereto, will (a) violate the Purchaser's Articles of Incorporation or bylaws, (b) result in a violation or breach of, or permit any third parry to rescind any term or provision of, or constitute a default under, any indenture, mortgage, deed of trust or other Contract, license or other agreement to which the Purchaser is a party or by which the Purchaser or any of the Purchaser's property or assets is bound, (c) violate any Law, order, award, judgment, or decree applicable to or binding upon the Purchaser, or any permit, license or approval of any Governmental Authority, or (d) require any notice to, or consent, approval, order or authorization of, or the registration, declaration or filing with, any Governmental Authority or other third party. Section 4.03 Due Incorporation; Good Standing. The Purchaser is a corporation duly continued and validly existing under the federal laws of Canada and has all necessary, power and authority: (i) to conduct its business in the manner currently being conducted; (ii) to own and use its assets in the manner they are currently owned and used; and (iii) to consummate the Transactions.

used; and (iii) to consummate the Transactions. Section 4.04 Corel Shares. All of the Corel Shares have been duly and validly authorized and issued and are fully-paid and non-assessable. None of the Corel Shares are reserved for any purpose. All of the Corel Options have been duly and validly authorized and issued. Sufficient common shares of the Purchaser have been reserved for issuance pursuant to the Corel Options. Section 4.05 Additional Representations and Warranties of the Purchaser. (a) Access to Data. The Purchaser has had an opportunity to discuss the Company's Business, management and financial affairs with the Company's management, and it has been given access to copies of documents, which it has requested. (b) No Reliance on Certain Types of Advice. The Purchaser is not relying on the Seller for advice with respect to tax considerations, the suitability of its investment in WinZip Holdings and in the Company or legal or economic considerations. (c) Marketability. The Purchaser understands that WinZip Holdings is closely held and that there is no public market for resale of the WinZip Shares. It understands that it is possible that a market for the WinZip Shares will not ever develop. As a consequence, the Purchaser understands that it may not be able to liquidate its investment in the WinZip Shares, even in the event of an emergency. The Purchaser also understands that, for the foregoing reasons, the WinZip Shares may not be readily accepted as collateral for a loan. - 18 ARTICLE V ADDITIONAL COVENANTS AND AGREEMENTS OF THE SELLER AND WINZIP HOLDINGS The Seller and WinZip Holdings hereby covenant and agree as follows: Section 5.01 Publicity. WinZip Holdings and the Seller covenant and agree that any and all publicity (whether written or oral) and notices to third-parties concerning the Transactions shall be subject to the prior written approval of the Purchaser. The Seller shall assist the Purchaser in informing the personnel and management of the Company of the change in the ownership of the Company; provided always that such communications shall be made only by or with the prior approval of the Purchaser. Section 5.02 Confidential Information. The Seller acknowledges that after the Closing the Purchaser and the Company could be irreparably damaged if confidential information of the Company or the Business were disclosed to or utilized on behalf of any Person other than the Purchaser and its Affiliates, and the Seller covenants and agrees that it shall not, following the Closing Date, without the prior written consent of the Purchaser, disclose (or permit to be disclosed) or use (or permit to be used) in any way any such information, unless (a) compelled to disclose such confidential information by Law and, in any such event, the Seller gives the Purchaser prompt written notice of any such requirement prior to any such disclosure; (b) such confidential information is available to the public through no fault of the Seller; or (c) such confidential information becomes available to the Seller from a third-party who is under no confidential or fiduciary obligation to the Purchaser or the Company with respect to such confidential information. Section 5.03 Brokers and Finders. The Purchaser shall not have any obligation to pay any fees, expenses or other compensation to any Person dealt with by the Seller or any WinZip Entity in connection with this Agreement and the Transactions; any such fees, expenses and other compensation shall be the sole responsibility of the Seller; and the Seller hereby agrees to indemnify and save the Purchaser and each WinZip Entity harmless from any and all Losses arising from any claim for any such fees, expenses or other compensation. Section 5.04 Certain Filings. The Seller and WinZip Holdings shall make, and shall cause each other WinZip Entity to make, all filings with Governmental Authorities that are required to be made by the Seller, WinZip Holdings or any other WinZip Entity to carry out the Transactions. The Seller and WinZip Holdings agree to

assist, and shall cause each other WinZip Entity to assist, the Purchaser in making all such filings, applications and notices as may be necessary or desirable in order to obtain the authorization, approval or consent of any Governmental Authority which reasonably may be required in connection with the consummation of the Transactions. Section 5.05 Company Information. In addition to taking the actions specified in Section 7.03, at the Closing, and thereafter upon the Purchaser's request, the Seller shall furnish any and all information in its possession about each WinZip Entity relating to periods ending on or prior to the Closing Date (collectively, "Company Information"), including - 19 company descriptions and financial information, that the Purchaser may reasonably request in connection with or as a result of the consummation of the Transactions. Section 5.06 Further Assurances. The Seller and WinZip Holdings agree to, and agree to cause each other WinZip Entity to, execute and deliver such additional documents and instruments, and perform such additional acts, as the Purchaser reasonably may request to effectuate or carry out and perform all the terms, provisions and conditions of this Agreement and the Transactions and to effectuate the intent and purposes hereof. ARTICLE VI ADDITIONAL COVENANTS AND AGREEMENTS OF THE PURCHASER Section 6.01 Brokers and Finders. The Seller shall have no obligation to pay any fees, expenses or other compensation to any Person dealt with by the Purchaser in connection with this Agreement and the Transactions; any such fees, expenses and other compensation shall be the sole responsibility of the Purchaser; and the Purchaser hereby agrees to indemnify and save the Seller harmless from any and all Losses arising from any claim for any such fees, expenses or other compensation. Section 6.02 Certain Filings. The Purchaser shall make or cause to be made all filings with Governmental Authorities that are required to be made by the Purchaser to carry out the Transactions. The Purchaser agrees to assist each WinZip Entity and the Seller in making all such filings, applications and notices as may be necessary or desirable in order to obtain the authorization, approval or consent of any Governmental Authority which reasonably may be required in connection with the consummation of the Transactions. Section 6.03 Nondisclosure. (a) The Purchaser agrees not to, and will cause its representatives and Affiliates not to, except as required by Law, at any time disclose (i) the purchase price contemplated by the Original Stock Purchase Agreement, (ii) the contents of the Original Stock Purchase Agreement or the other agreements referred to therein, or (iii) the identity of the seller pursuant to the Original Stock Purchase Agreement. In the event that the Purchaser or any such representative or Affiliate becomes legally compelled to disclose any such information, including, without limitation, in connection with the IPO, the Purchaser shall provide the Seller with prompt written notice of such requirement so that the Seller may seek a protective order or other remedy or waive compliance with this Section 6.03(a). In the event that such protective order or other remedy is not obtained, or the Seller waives compliance with this Section 6.03(a), the Purchaser shall furnish only that portion of such confidential information which is legally required to be provided and take all commercially reasonable steps to obtain assurances that confidential treatment will be accorded such information as may be reasonably determined by the Seller to be "sensitive". (b) Notwithstanding the foregoing, the preceding paragraph shall not apply to (i) any information that, at the time of disclosure, is publicly available and was not disclosed in breach of this Agreement or the Original Stock Purchase Agreement by the Purchaser or the - 20 Seller, or their representatives or Affiliates, and (ii) communications in the Ordinary Course of Business with

Seller, or their representatives or Affiliates, and (ii) communications in the Ordinary Course of Business with investors that hold an interest, directly or indirectly, in the Purchaser. The Purchaser agrees and acknowledges that remedies at Law for any breach of its obligations under this Section 6.03(b) are inadequate and that in addition thereto the Seller shall be entitled to seek equitable relief, including injunction and specific performance, in the event of any such breach, without the necessity of demonstrating the inadequacy of money damages. Section 6.04 Further Assurances. The Purchaser agrees to execute and deliver such additional documents and instruments, and perform such additional acts, as the Seller reasonably may request to effectuate or carry out and perform all the terms, provisions and conditions of this Agreement and the Transactions and to effectuate the intent and purposes hereof. ARTICLE VII CERTAIN OTHER AGREEMENTS Section 7.01 Use of Name. The Seller acknowledges that the Company owns the name "WinZip", and any and all variants thereof and all other trade names, trademarks or service marks under which the Company has ever conducted its Business. The Seller agrees that the Seller has no right to use or otherwise exploit such names and further agrees that the Seller has no right to use any such names together or separately. Section 7.02 Certain Tax Matters. (a) The Seller shall be responsible for all transfer, excise, stamp, sales, use, recording or similar taxes or fees arising out of the sale, assignment and conveyance of the WinZip Shares by the Seller. The Seller shall make any filings associated therewith required under applicable Law. (b) The Purchaser shall cause each WinZip Entity to file when due all Tax Returns that are required to be filed by such WinZip Entity following the Closing Date. (c) After the Closing Date, the Purchaser and the Seller shall: (i) assist in all reasonable respects (and cause their respective Affiliates to assist) the other Parties in preparing any Tax Returns which such Party is responsible for preparing and filing in accordance with this Section 7.02; (ii) cooperate in all reasonable respects in preparing for any audits of, or disputes with taxing authorities regarding, and Tax Returns of, any WinZip Entity; (iii) make available to the other and to any taxing authority as reasonably requested all information, records and documents relating to Taxes of any WinZip Entity, except to the extent determined by counsel for the Party involved to be privileged or work product; - 21 (iv) provide timely notice to the other in writing of any pending or threatened tax audit or assessments of any WinZip Entity for any taxable periods; and (v) furnish the other with copies of all correspondence received from any taxing authority in connection with any tax audits or information request with respect to any such taxable period. Section 7.03 Access to Information. WinZip Holdings will give, and the Seller shall cause WinZip Holdings to give, between the date hereof and the Closing, full access to the premises, assets, books, accounts, tax returns, contracts, commitments, records and personnel of each of the WinZip Entities to the Purchaser and its accountants, legal advisers and representatives during normal business hours and furnish the Purchaser and its representatives with all such information relating to the Business and the Company's affairs and assets as the Purchaser may reasonably request. Section 7.04 Conduct of Business Until Closing.

Except as expressly provided in this Agreement or with the prior written consent of the Purchaser, prior to the Closing the Company and each other WinZip Entity shall, and the Seller will cause the Company and each other WinZip Entity to: (a) operate the Business (including, without limitation, the payment of payables and the collection of receivables) only in the ordinary course, consistent with past practice and, to the extent consistent with that operation, use best efforts to preserve its business organization, including the services of its officers and employees, and its business relationships with customers, suppliers and others having business dealings with it; (b) maintain all its assets, whether owned or leased, in good condition and repair and maintain insurance upon all its assets comparable in amount, scope and coverage to that in effect on the date of this Agreement; (c) satisfy all salary or bonus obligations to employees, as incurred up until and including the Closing Date (including, without limitation, all declared and owing 2005 bonus payments); (d) maintain its books, records and accounts in the ordinary course on a basis consistent with past practice (including the recording and/or treatment of accounts receivable and payable); and (e) do or refrain from doing all acts and things in order to ensure that the representations and warranties in Article III remain true and correct in all material respects at the Closing Date (except for any representations and warranties which are qualified by materiality in Article III, which representations and warranties are to be strictly true and correct) as if those representations and warranties were made at and as of the Closing Date, and to satisfy or cause to be satisfied the conditions in Section 8.02(a) which are within its control. - 22 Section 7.05 Negative Covenants. Except as expressly provided in this Agreement or with the prior written consent of the Purchaser, prior to the Closing, no WinZip Entity shall, and the Seller shall ensure that no WinZip Entity shall: (a) amend its certificate of incorporation, by-laws, constating documents or other organizational documents; (b) merge or consolidate with, or acquire all or substantially all the shares or assets of, any Person; (c) Transfer, lease, license, sell or otherwise dispose of any of its assets, other than inventory in the Ordinary Course of Business, consistent with past practice; (d) terminate any employee or alter any employee compensation, benefits or other terms and conditions of employment (provided that the Purchaser's consent to such an action may not be unreasonably withheld); (e) declare or pay any dividends (whether in cash, in property or otherwise) or make any other distributions of any kind in respect of its capital stock (or other equity interests, as applicable), other than one or more cash dividends not to exceed, individually or in the aggregate, seven million five hundred thousand dollars ($7,500,000) at anytime after February 21, 2006, or purchase, redeem or otherwise acquire or dispose of or issue any shares of capital stock (or other equity interests, as applicable) or any notes, bonds or other securities of any kind; (f) otherwise incur any debt or liabilities outside of the Ordinary Course of Business; (g) make any payments outside of the Ordinary Course of Business, including, without limitation, any payments to Affiliates or payments in respect of debts or liabilities (other than trade liabilities incurred in the Ordinary Course of Business and scheduled debt repayments); or (h) without limiting the generality of this Section 7.05, change the Company's pricing policies, announce new products, or enter into, renew, amend or terminate significant Contracts. Section 7.06 Non-Solicitation.

Neither the Seller (including its directors, officers, employees and agents) nor any WinZip Entity shall initiate, encourage, cooperate with, provide non-public information to or participate in any discussions with any third party (other than their professional advisors) regarding the Transactions or any other proposed financing of any WinZip Entity or sale of any WinZip Entity's securities or assets, and the Seller and each WinZip Entity shall immediately terminate any such discussions currently in progress. If, prior to the earlier of the Closing and the termination of this Agreement, the Seller or any WinZip Entity receives an inquiry concerning a proposed transaction that could be inconsistent with the Transactions, then the Seller or such - 23 WinZip Entity shall immediately notify the Purchaser of that event and provide the Purchaser with a copy of that proposal (if in writing) or a summary of that inquiry (if oral). Section 7.07 Goodwill. The Seller and each WinZip Entity covenants and agrees that the Seller and such WinZip Entity shall not take or omit to take any action which could directly or indirectly impair the goodwill of the Company or any other WinZip Entity or the Business or the business reputation or good name of the Company or any other WinZip Entity. Section 7.08 Restricted Property. For a period of one (1) year following the Closing Date, the Seller agrees not to Transfer the Restricted Property to any Person, including, without limitation, the fund or funds or other Persons holding an interest in the Seller or any other Affiliates. Section 7.09 Termination. This Agreement may be terminated and the Transactions may be abandoned at any time prior to the Closing by: (a) mutual written agreement of the Purchaser and the Seller; (b) either the Purchaser or the Seller, by written notice to the other, if the Transactions have not been consummated prior to the Drop Dead Date (provided that the right to terminate this Agreement under this Section 7.09(b) will not be available to any Party whose failure to fulfill any of its obligations under this Agreement has been the cause of or resulted in the failure to consummate the Transactions by the Drop Dead Date); or (c) either the Purchaser or the Seller, by written notice to the other, if there will be any applicable Law that makes the consummation of the Transactions illegal or otherwise prohibited or if any order of a Governmental Authority of competent jurisdiction restrains or prohibits the consummation of the Transactions, and that order becomes final and non-appealable. Sections 5.03, 6.01, 6.03 and 10.01 of this Agreement shall survive the termination of this Agreement pursuant to this Section 7.09. ARTICLE VIII CLOSING Section 8.01 Time and Place of Closing. The closing of the Transactions (the "Closing") shall be held at 10:00 a.m. (New York time) on the Business Day on which all of the Conditions to Closing described in Section 8.02 have been fully satisfied or waived by the appropriate Party or Parties or such other date as may be mutually agreed upon by the Parties, which date shall in no event be later than April 21, 2006 (the "Drop Dead Date"), unless such date has been extended by mutual agreement of the Parties (the "Closing Date"), at the offices of Torys LLP, 237 Park Avenue, New York, NY or such other place as may be agreed to in writing. - 24 -

Section 8.02 Conditions to Closing. At the Closing: (a) The Seller shall have: (i) delivered the WinZip Shares to the Purchaser by delivering one or more certificates in negotiable form representing the WinZip Shares. The certificates evidencing the WinZip Shares shall be (A) duly endorsed in blank or accompanied by duly executed instruments of transfer duly endorsed in blank; and (B) accompanied by any necessary documentary or stock transfer stamps or taxes attached and cancelled. Upon the Closing all rights, title and interest in and to the WinZip Shares shall immediately vest in the Purchaser; (ii) delivered to the Purchaser the certificates or other documentation evidencing each of the WinZip Options, each marked "cancelled" in accordance with Section 1.02(b); (iii) delivered to the Purchaser a certificate executed by the Seller, in form and substance reasonably acceptable to the Purchaser, confirming that (a) the representations and warranties of the Seller made in or pursuant to this Agreement are true and correct in all material respects (except for any representations and warranties which are qualified by materiality in Article III, which representations and warranties are to be strictly true and correct) on the Closing Date with the same force and effect as if made at and as of the Closing Date, (b) the covenants contained in this Agreement to be performed by the Seller and any WinZip Entity at or prior to the Closing Date have been performed in all material respects, and (c) neither the Seller nor any WinZip Entity is in breach of any agreement on its part contained in this Agreement; (iv) delivered to the Purchaser the Registration Rights Agreement, executed by the Seller; (v) delivered to the Purchaser the Lockup Agreement, executed by the Seller; (vi) delivered to the Purchaser evidence, in form and substance reasonably satisfactory to the Purchaser, of the repayment in full of the WFF Indebtedness; (vii) delivered, or caused to be delivered, to the Purchaser all consents required pursuant to any Contract, Permit or from any Governmental Authority as a result of the entering into and performance of this Agreement; (viii) delivered to the Purchaser evidence of the resignations of each of the directors and officers of WinZip Holdings and each other WinZip Entity designated by the Purchaser to the Seller; (ix) delivered to the Purchaser evidence that the WinZip Entities, on a consolidated basis, have Net Debt of no more than sixteen million five hundred thousand dollars ($16,500,000); and - 25 (x) delivered to the Purchaser all documents reasonably requested by the Purchaser relating to the existence of the Seller and WinZip Holdings, and the due authorization and consummation of the Transactions and all other actions and proceedings taken at or before the Closing in connection with the performance by the Seller and WinZip Holdings of their obligations under this Agreement, which documents shall be in form and substance reasonably satisfactory to the Purchaser. (b) The Purchaser shall have: (i) delivered the Corel Shares to the Seller in accordance with Section 2.01(b) by delivering a certificate in negotiable form representing the Corel Shares. Upon the Closing, subject to Section 7.08, all rights, title and interest in and to the Corel Shares shall immediately vest in the Seller; (ii) delivered to the Seller the aggregate number of Corel Options set forth in Column C on Annex C, in each case upon the terms set forth in Columns D and E on Annex C, by delivering an option certificate, in the form attached as Exhibit A, in the name of each of the WinZip Optionholders to the Seller in accordance with Section 1.02(d);

(iii) delivered to the Seller the Registration Rights Agreement, executed by the Purchaser; (iv) delivered to the Seller all documents reasonably requested by the Seller relating to the existence of the Purchaser, and the due authorization and consummation of the Transactions and all other actions and proceedings taken at or before the Closing in connection with the performance by the Purchaser of its obligations under this Agreement, which documents shall be in form and substance reasonably satisfactory to the Seller. (c) In addition, the Closing shall be expressly conditioned upon the occurrence of the following events: (i) the IPO shall have been consummated; (ii) no material adverse or prospective adverse change in the condition (financial or otherwise), results of operation, assets, properties, Business or prospects of any WinZip Entity shall have occurred; (iii) no fire, war, strike, riot, labor dispute, technical failure or act of God shall have occurred (1) that restrains or prohibits the Company for a period of at least five (5) Business Days from carrying on in any material respect the Business as the Business is being carried on at the date of this Agreement, or (2) has or would reasonably be expected to have a Material Adverse Effect on the Business, assets, financial condition, results of operations or prospects of the Company and/or the Business or which would materially and adversely effect the consummation of the Transactions; (iv) no Laws shall have been enacted that restrain or prohibit the Company from carrying on the Business as the Business is being carried on at the date of this Agreement; and - 26 (v) no proceeding shall be pending by any Person to restrain or prohibit (1) the consummation of the Transactions, or (2) the Company from carrying on the Business as the Business is being carried on at the date of this Agreement. ARTICLE IX INDEMNIFICATION Section 9.01 Indemnification of the Purchaser. (a) The Seller (A) hereby agrees to defend, indemnify, and hold harmless the Purchaser, each WinZip Entity and each of their respective Affiliates, and each of their respective directors, managers, officers, employees, representatives, agents, successors and assigns (individually, and collectively, the "Purchaser Indemnified Parties") against and in respect of any and all Losses caused by or resulting or arising from (i) the breach by WinZip Holdings or the Seller of any of their covenants or agreements hereunder or under any of the Transaction Documents (limited, in the case of WinZip Holdings, to breaches occurring at or before Closing); and (ii) the breach or inaccuracy of any of the representations or warranties made by the Seller herein (including in any Exhibit or Schedule) or in any Transaction Document. (b) The Purchaser Indemnified Parties shall promptly after any of them becomes aware of any circumstance which might reasonably be expected to become the subject matter of a claim to be made by any of them against the Seller under this Agreement (a "Purchaser Claim"), advise the Seller in writing of such circumstance, and shall provide the Seller, from time to time, such information that the Seller shall reasonably request in connection therewith; provided that any delay or failure to so advise the Seller shall not relieve the Seller from any liability except to the extent that the defense of such Purchaser Claim is prejudiced by such delay or failure. The Purchaser shall have exclusive control and discretion in the conduct of the defense of any such matter, however, the Seller shall not be required to make any indemnification hereunder with respect to any amounts paid in settlement except to the extent the Seller have approved the terms thereof, acting reasonably. The Seller shall have the right to employ separate counsel in any action brought in respect of any matter which is or may be the subject of a Purchaser Claim for indemnification hereunder, and shall have the right to participate in the defense thereof, but the fees and expenses related thereto, including fees and expenses of counsel, shall be at the expense of the Seller.

(c) Notwithstanding anything to the contrary contained herein, the liability of the Seller to Purchaser Indemnified Parties with respect to claims for indemnification pursuant to Section 9.01(a) is subject to the following: The Seller shall not be liable to Purchaser Indemnified Parties with respect to claims for indemnification pursuant to this Section 9.01: (i) (A) to the extent that the dollar value of the amounts indemnifiable for such breaches exceeds an aggregate of the product of (i) ninety-three thousand - 27 two hundred thirty-eight (93,238) multiplied by (ii) the Per Share Consideration (the "General Indemnity Cap"); and (B) unless and until the aggregate amounts indemnifiable for such breaches exceeds the product of (i) twentythree thousand two hundred ninety-nine (23,299) multiplied by (ii) the Per Share Consideration (the "Threshold"), at which time all such amounts (including those below the Threshold) shall be indemnifiable (subject to the General Indemnity Cap). (ii) The limitations set forth in Section 9.01(c)(i)(A) above shall not apply with respect to fraud or to claims respecting breaches of the representations and warranties set forth in Section 3.04 (Capitalization; Title to Shares), and Section 3.15 (Tax Matters) (collectively, the "Seller Specified Representations"), provided that, for the purposes of the application of this Section 9.01(c)(i)(B)(ii) only (i.e., not for purposes of the use of the defined term "Seller Specified Representations" elsewhere in this Agreement), the term "Seller Specified Representations" shall not include representations and warranties in Section 3.04 which apply to the Seller Tax Reorganization, which representations and warranties, for the avoidance of doubt, shall be subject to the Threshold and the General Indemnity Cap; (iii) unless such claim is asserted in writing on or prior to the applicable Survival Expiration Date, if any. (d) Purchaser Claims shall be satisfied first by recourse to the Restricted Property and thereafter by cash payments from Seller to Purchaser. For the avoidance of doubt, in full or partial settlement of any Purchaser Claims, the Seller shall surrender out of the Restricted Property first (i) any cash that forms part of the Restricted Property, and, thereafter, (ii) a number of Corel Shares equal to a fraction, the numerator of which shall be the remaining aggregate dollar amount payable under such Purchaser Claim and the denominator of which shall be the Per Share Consideration, as set forth in Section 2.01 (rounding down to the nearest whole share). Section 9.02 Indemnification of the Seller. (a) The Purchaser hereby agrees to defend, indemnify, and hold harmless the Seller and its Affiliates, and each of their respective directors, managers, officers, employees, representatives, agents, successors and assigns (individually, and collectively, the "Seller Indemnified Parties") against and in respect of any and all Losses caused by or resulting or arising from (i) the breach by the Purchaser of any of its covenants or agreements hereunder or under any of the Transaction Documents; and (ii) the breach or inaccuracy of any of the representations or warranties made by the Purchaser herein (including in any Exhibit or Schedule) or in any Transaction Documents. (b) The Seller Indemnified Parties shall promptly after any of them becomes aware of any circumstance which might reasonably be expected to become the subject matter of a claim to be made by any of them against the Purchaser under this Agreement (a "Seller Claim"), advise the Purchaser of such circumstance, and shall afford the Purchaser, from time to time, such information as the Purchaser shall reasonably request in connection therewith; - 28 -

provided that any delay or failure to so advise the Purchaser shall not relieve the Purchaser from any liability except to the extent that the defense of such Seller Claim is prejudiced by such delay or failure. (c) Notwithstanding anything to the contrary contained herein, the Purchaser shall not be liable to Seller Indemnified Parties with respect to claims for indemnification for breaches of representations and warranties hereunder pursuant to Section 9.02(a): (i) to the extent that the aggregate of all amounts indemnifiable hereunder exceeds the General Indemnity Cap, except that the foregoing limitations shall not apply with respect to fraud or to claims respecting breaches of the representations and warranties set forth in Section 4.04 Corel Shares, (collectively, the "Purchaser Specified Representations"); (ii) unless and until the aggregate amounts indemnifiable for such breaches exceeds the Threshold, at which time all such amounts (including those below the Threshold) shall be indemnifiable (subject to the General Indemnity Cap); and (iii) unless such claim is asserted in writing on or prior to the applicable Survival Expiration Date, if any. (d) Seller Claims shall be satisfied exclusively by cash payments from Purchaser to Seller. Section 9.03 Survival of Representations and Warranties. The representations and warranties of the Parties contained herein shall expire on the first anniversary of the Closing Date; notwithstanding any investigation at any time made by or on behalf of any Party, and shall not survive beyond such period, provided that if written notice is properly given under this Article IX with respect to any matter allegedly the subject of this Article IX prior to such period, the obligations under this Article IX shall continue in force and effect indefinitely until the applicable claim is finally resolved and provided further that the Seller Specified Representations and the Purchaser Specified Representations shall survive for the applicable statute of limitations or applicable period of reassessment (for each date, the applicable "Survival Expiration Date"). Section 9.04 Additional Indemnification Provisions. (a) Except in the case of fraud, from and after the Closing, the provisions of this Article IX shall be the exclusive basis for the assertion of claims against, or the imposition of liability on, any Party in respect of the Transactions, including any breach or alleged breach of this Agreement in each case other than claims for specific performance. (b) As used herein, "Losses" means any and all losses, claims, assessments, demands, damages, liabilities, diminution in value, obligations, costs and expenses, including without limitation, reasonable fees and disbursements of counsel sustained or incurred by the Purchaser Indemnified Parties (or any of them) or the Seller Indemnified Parties (or any of them), as the case may be, in any action, dispute, claim or proceeding between any of the Purchaser Indemnified Parties, on the one hand, and any of the Seller Indemnified Parties, on the other hand, or involving a third-party claim against any of the Purchaser Indemnified Parties or any of the Seller Indemnified Parties, as the case may be, and other reasonable out of pocket - 29 costs and expenses incurred in connection with investigating, preparing or defending any action, suit or proceeding, commenced or threatened, or any claim whatsoever. (c) Any payment by the Purchaser or the Seller under this Agreement, other than the issuance of the Corel Shares, shall be treated for tax purposes as an adjustment to the Consideration. (d) No Purchaser Indemnified Person shall be required to make any claim against any other Person or to take any other action to pursue any claim hereunder against any of the Seller Indemnifying Persons. None of the Seller Indemnifying Persons shall be entitled to any indemnification, right of contribution, right of subrogation or other right of recovery from any WinZip Entity in connection with any claim made by any Purchaser Indemnified Person against the Seller Indemnified Persons (or any of them), hereunder, all of which are expressly waived and released by each of the Seller Indemnified Persons.

ARTICLE X MISCELLANEOUS Section 10.01 Expenses. Except as otherwise specifically provided herein, each Party shall pay its own expenses incidental to negotiations, preparation of agreements and the Closing; provided that the Purchaser shall pay reasonable expenses incurred by the Seller in connection with the IPO. Section 10.02 Notices. All notices, requests or instructions hereunder shall be in writing and delivered personally, sent by telecopy, sent by federal Express or other nationally recognized overnight carrier, or sent by registered or certified mail, postage prepaid, as follows: (a) If to the Seller: Vector CC Holdings IV, SRL c/o Corporate Services Limited Erin Court Bishop's Court Hill St. Michael, Barbados Telecopy No.: 436-7057 with a copy to: Vector Capital Corporation 456 Montgomery St., 19th Floor San Francisco, CA 94104 Attention: Dewey Chambers Telecopy No.: (415) 293-5100 (b) If to WinZip Holdings: Cayman Ltd. Holdco - 30 c/o Walkers SPV Limited Walker House, Mary Street, P.O. Box 908GT George Town, Grand Cayman Cayman Islands with a copy to the Purchaser at the address set forth in Section 10.02(c). (c) If to the Purchaser: Corel Corporation 1600 Carling Avenue Ottawa, Ontario K17 8R7 Canada Attention: Christopher DiFrancesco Telecopy No.: (613) 725-2691 Any of the above addresses may be changed at any time by notice given as provided above; provided, however, that any such notice of change of address shall be effective only upon receipt. All notices, requests or instructions given in accordance herewith shall be deemed received on the date of delivery, if hand delivered, telecopied or by overnight courier, and five (5) Business Days after the date of mailing, if mailed by registered or certified mail. Section 10.03 Entire Agreement. This Agreement (including the Annexes, Exhibits and Schedules) and the documents referred to herein (including, for greater certainty, the Transaction Documents) contain the entire agreement among the Parties with respect to the Transactions and supersedes all prior agreements, understandings, negotiations and discussions, whether written or oral, of the Parties, and no amendment or modification hereof shall be effective unless in writing and signed by the Party against which it is sought to be enforced. Section 10.04 Severability. If one or more of the provisions of this Agreement are held to be unenforceable under applicable law, such provisions shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provisions were so excluded and shall be enforceable in accordance with its terms. Section 10.05 Successors and Assigns. (a) This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the

Parties. (b) No Party may assign any of its rights, interests or obligations under this Agreement without the written approval of the Seller in the case of the Purchaser, and the Purchaser in the case of the Seller; provided, however, that the Purchaser may assign any and all of its rights and interests hereunder (i) to any Affiliate; (ii) in connection with a sale of all or substantially all of the assets of the Purchaser or any of its corporate parents, or direct or indirect consolidated subsidiaries; or (iii) to any bank or other financial institution which has extended credit to the Purchaser or any of its Affiliates. Any attempted assignment in violation of this Section 10.05(B) shall be null and void. - 31 Section 10.06 Governing Law. The validity of this Agreement and of any of its terms or provisions, as well as the rights and duties of the Parties under this Agreement, shall be construed pursuant to and in accordance with the laws of the State of New York, without regard to the conflicts of laws provisions thereof. Section 10.07 Waiver of Jury Trial. EACH OF THE PARTIES WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF ANY PARTY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH OF THE PARTIES HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES MAY FILE A COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS EVIDENCE OF THE CONSENT OF THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. Section 10.08 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Any counterpart or other signature hereupon or upon a Transaction Document delivered by facsimile shall be deemed for all purposes as constituting good and valid execution and delivery of this Agreement or the Transaction Document, as applicable, by such Party. Section 10.09 Effect of Investigations. Any due diligence review, audit or other investigation or inquiry undertaken or performed by or on behalf of the Purchaser shall not limit, qualify, modify or amend the representations, warranties and covenants of, and indemnities by, the Seller made or undertaken pursuant to this Agreement and the Transaction Documents, irrespective of the knowledge and information received (or which should have been received) therefrom by Purchaser. Section 10.10 Waivers. The failure of any Party at any time or times to require performance of any provision hereof shall in no manner affect its right at a later time to enforce the same. No breach of any term, covenant, representation or warranty contained in this Agreement shall be effective unless in writing, and no waiver in any one or more instances shall be deemed to be a further or continuing waiver of any such breach in other instances or a waiver of any other breach of any other term, covenant, representation or warranty. Section 10.11 No Third-Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the Parties and their permitted assigns and nothing herein, whether express or implied, is intended to or shall confer upon any other Person (other than Purchaser Indemnified Parties and Seller Indemnified Parties) any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. - 32 Section 10.12 Construction. (a) Unless the context otherwise requires: (i) "or" is not exclusive; (ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (iii) terms defined in this Agreement in their singular or plural forms have correlative meanings when used herein in their plural or singular forms, respectively; (iv)

plural forms have correlative meanings when used herein in their plural or singular forms, respectively; (iv) pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require; (v) any date specified for any action that is not a Business Day shall be deemed to mean the first Business Day after such date; (vi) a reference to a Person includes its successors and permitted assigns; (vii) the word "including" shall mean "including without limitation"; (viii) except where otherwise expressly provided, all references herein to dollar amounts shall mean United States dollars; (ix) any reference to any federal, state, local or foreign statute or law shall be to such statute or law as amended at the applicable time, and shall be deemed also to refer to all rules and regulations promulgated thereunder at the applicable time; and (x) the inclusion of headings and a table of contents in this Agreement is for convenience of reference only and shall not affect the construction or interpretation hereof. Section 10.13 Preparation of Document. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall rise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. *** - 33 IN WITNESS WHEREOF, this Agreement has been duly executed by the Parties as of the date first above written. COREL CORPORATION: By Name:

Title: VECTOR CC HOLDINGS IV, SRL: By Name:

Title: CAYMAN LTD. HOLDCO: By Name:

Title: For the purposes of Section 1.02 only: WINZIP COMPUTING LLC: By Name:

Title: - 34 Annex A Definitions Definitions. Capitalized terms used in this Agreement shall have the following meanings: "AFFILIATE" shall mean, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with such Person. For the purposes of this definition, "control" when used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership, directly or indirectly, of more than 10% of the voting or equity securities or other interests of any such Person and/or by contract or otherwise; and the terms "affiliated," "controlling" and "controlled" have meanings correlative to the foregoing. "AGREEMENT" shall mean this Stock Purchase Agreement, including the preamble, recitals and all Annexes, Exhibits and Schedules, and all amendments or restatements, as permitted, and the expressions "hereof", "herein", "hereto", "hereunder", "hereby" and similar expressions refer to this Stock Purchase Agreement; and unless otherwise indicated, references to "preamble", "recitals", "Article", "Section", "Exhibit" or "Schedule" mean the preamble, recitals or the specified Article, Section, Exhibit or Schedule of this Agreement. "BALANCE SHEET" shall mean the unaudited balance sheet of the Company as of February 28, 2006, a true and correct copy of which has been delivered to the Purchaser. "BENEFIT PLANS" shall have the meaning set forth in Section 3.20. "BUSINESS" shall have the meaning set forth in the recitals. "BUSINESS DAY" shall mean a day other than a Saturday or Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close. "CLOSING" shall have the meaning set forth in Section 8.01. "CLOSING DATE" shall have the meaning set forth in Section 8.01. "CODE" shall mean the Internal Revenue Code of 1986, as amended. "COMPANY" shall mean, collectively, WinZip Computing and WinZip International, and, for the purposes of Article III only, unless the context shall otherwise require, includes all predecessor entities of WinZip Computing and WinZip International. "COMPANY CONTRACT" shall mean any Contract of which the Seller is aware to which the Company is a party or, to the Seller's knowledge, by which the Company is bound. "COMPANY INFORMATION" shall have the meaning set forth in Section 5.05. A-1 "COMPANY RETURNS" shall have the meaning set forth in Section 3.15. "CONSIDERATION" shall have the meaning set forth in Section 2.01(a). "CONTRACTS" shall mean any agreement, contract, subcontract or other legally binding commitment or

undertaking, whether written or oral. "COREL SHARES" shall have the meaning set forth in Section 2.01(a). "DROP DEAD DATE" shall have the meaning set forth in Section 8.01. "EMPLOYEE BENEFIT PLANS" shall have the meaning set forth in Section 3.16(b). "ENCUMBRANCES" shall mean Lien, pledge, security interest, right of first refusal, preemptive right or community property interest. "ENVIRONMENTAL LAWS" shall mean all federal, state, local and foreign laws, rules and regulations relating to environmental health and safety matters, the pollution or protection of the environment (including ambient air, surface water, ground water, land surface or subsurface strata) or the protection of human health and safety from environmental hazards, including laws, rules and regulations relating to emissions, discharges, releases or threatened releases of Hazardous Substances, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances. "FINANCIAL STATEMENTS" shall have the meaning set forth in Section 3.05. "GAAP" shall mean United States generally accepted accounting principles, as in effect from time to time, consistently applied. "GENERAL INDEMNITY CAP" shall have the meaning set forth in Section 9.01(c)(i)(A). "GOVERNMENTAL AUTHORITY" shall mean the collective reference to any court, tribunal, government, or governmental or administrative agency, authority or instrumentality, federal, state or local, or domestic or foreign, or any arbitrator having competent jurisdiction over the matter or matters in question. "GOVERNMENTAL AUTHORIZATION" shall mean any: (a) permit, license, certificate, franchise, permission, clearance, registration, qualification or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Law; or (b) right under any Contract with any Governmental Authority. "HAZARDOUS SUBSTANCES" shall mean any chemical, compound, material or substance that is defined, listed in, or otherwise classified pursuant to, any of the Environmental Laws as a "hazardous substance", "hazardous material", "hazardous waste", "toxic substance" or "toxic pollutant", (2) petroleum, natural gas, natural gas liquids, liquefied natural gas, synthetic gas usable for fuel and drilling fluids, produced waters, and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources and A-2 (3) any "medical waste" as defined in any of the Environmental Laws or the disposition of which is regulated by any law, ordinance or regulation. "INTELLECTUAL PROPERTY" shall mean any or all of the following: (i) all Patents; (ii) all inventions (whether patentable or not), invention disclosures, improvements, trade secrets, proprietary information, know how, technology, technical data and customer lists, and all documentation relating to any of the foregoing; (iii) all copyrights, copyright registrations and applications therefor and all other rights corresponding thereto throughout the world; (iv) all industrial designs and any registrations and applications therefor throughout the world; (v) all trade names, logos, common law trademarks and service marks; trademark and service mark registrations and applications therefor and all goodwill associated therewith throughout the world; (vi) all databases and data collections and all rights therein throughout the world; (vii) all computer software, including all source code, object code, firmware, development tools, files, records and data, all media on which any of the foregoing is recorded, all web addresses, sites and domain names, and (viii) all documentation related to any of the foregoing.

"INTERNAL-USE-ONLY IP" shall mean software that is used in the conduct of the Company's business as it is currently conducted, but is not included in the Software Product. Examples of Internal-Use-Only IP include, without limitation, (i) the Company's database system, (ii) the software that the Company uses to track downloads, and (iii) the Company's e-mail management software. "IPO" shall mean the initial public offering of approximately - common shares of the Purchaser in the United States and in Canada by the Purchaser and certain shareholders of the Purchaser. "KNOWLEDGE" as used with respect to WinZip Holdings and/or the Seller means the actual knowledge of any executive officer of WinZip Holdings and/or the Seller, as appropriate. "LAW" shall mean any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority, including, without limitation, federal securities laws. "LEASED REAL PROPERTY" shall have the meaning specified in Section 3.11. "LEGAL PROCEEDING" shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, inquiry, audit, examination or investigation commenced, brought, conducted or heard by or before, or otherwise involving, any court or other Governmental Authority or any arbitrator or arbitration panel. "LOCKUP AGREEMENT" shall mean the Lockup Agreement, in the form attached hereto as Exhibit C. "LICENSED INTELLECTUAL PROPERTY" shall mean all Intellectual Property that is licensed or sublicensed to the Company by a third party. A-3 "LIENS" shall mean all liens, mortgages, charges, security interests, covenants, easements, restrictions, adverse claims or other encumbrances of any kind whatsoever and howsoever arising. "LOSSES" shall have the meaning set forth in Section 9.04(b). "MATERIAL CONTRACTS" shall have the meaning set forth in Section 3.13(b). "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the businesses, properties, assets, condition (financial or other), results of operations and/or prospects of any WinZip Entity and/or the Business. "NET DEBT" shall mean long-term indebtedness of the WinZip Entities, on a consolidated basis, minus cash. "ORDINARY COURSE OF BUSINESS" shall mean the ordinary course of business of the Company, consistent with past practice. "ORIGINAL STOCK PURCHASE AGREEMENT" shall mean that certain Stock Purchase Agreement dated as of January 18, 2005 pursuant to which Vector WZ Holdings, Ltd., a Cayman Islands corporation acquired all of the issued and outstanding securities of WinZip Computing, Inc., a Connecticut corporation. "OWNED INTELLECTUAL PROPERTY" shall mean all Intellectual Property that is owned by any of the WinZip Entities. "PARTY" shall mean each of the parties to this Agreement. "PATENTS" shall mean all United States and foreign patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof. "PER SHARE CONSIDERATION" shall have the meaning set forth in Section 2.01(a).

"PERMITS" shall have the meaning set forth in Section 3.17(b). "PERSON" shall mean any individual, partnership, venture, unincorporated association, organization, syndicate, corporation, limited liability company or other entity, trust, or trustee, executor, administrator or other legal or personal representative, or Governmental Authority. "PURCHASER" shall have the meaning set forth in the preamble. "PURCHASER CLAIM" shall have the meaning set forth in Section 9.01(b). "PURCHASER INDEMNIFIED PARTIES" shall have the meaning set forth in Section 9.01(a). "PURCHASER SPECIFIED REPRESENTATIONS" shall have the meaning set forth in Section 9.02(c)(i). A-4 "QUALIFIED PLAN" shall have the meaning set forth in Section 3.16(d). "REAL PROPERTY" shall have the meaning set forth in Section 3.11. "REGISTERED INTELLECTUAL PROPERTY" shall mean all United States, international and foreign: (i) Patents; (ii) registered trademarks, applications to register trademarks, intent-to-use applications, or other registrations or applications related to trademarks; (iii) registered copyrights and applications for copyright registration; and (iv) any other Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued by, filed with, or recorded by, any state, government or other public legal authority. "REGISTERED OWNED INTELLECTUAL PROPERTY" shall mean Owned Intellectual Property that is Registered Intellectual Property. "REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights Agreement, in the form attached hereto as Exhibit B. "RESTRICTED PROPERTY" shall mean the Restricted Shares, together with all dividends (whether cash, stock or otherwise) or other distributions made or paid in respect of such Restricted Shares after the Closing Date. "RESTRICTED SHARES" shall mean ninety-three thousand two hundred thirty-eight (93,238) Corel Shares. "SECURITIES ACT" shall have the meaning set forth in Section 4.05(a). "SELLER" shall have the meaning set forth in the preamble. "SELLER CLAIM" shall have the meaning set forth in Section 9.02(b). "SELLER INDEMNIFIED PARTIES" shall have the meaning set forth in Section 9.02(a). "SELLER SPECIFIED REPRESENTATIONS" shall have the meaning set forth in Section 9.01(c)(i). "SELLER TAX REORGANIZATION" shall mean any or all structuring steps undertaken by the Seller and/or its Affiliates in respect of the WinZip Entities subsequent to January 18, 2005. "SOFTWARE PRODUCT" shall mean the English-language version of the WinZip software product that is delivered by the Company to the customer on a distribution diskette (or the downloadable equivalent thereof) in the form in which it was delivered at any time prior to the date of this Agreement (including any beta versions that were released to the public).

"SURVIVAL EXPIRATION DATE" shall have the meaning set forth in Section 9.03. "TAX RETURNS" shall mean any return, report, document, statement or form required to be filed with respect to any Taxes (including any schedules required to be attached thereto), A-5 including information returns, claims for refund, amended returns and declarations of estimated Tax. "TAXES" shall mean any tax (including any income tax, franchise tax, capital gains tax, gross receipts tax, valueadded tax, surtax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including any customs duty), deficiency or fee, and any related charge or amount (including any fine, penalty or interest), imposed, assessed or collected by or under the authority of any Governmental Authority. "THRESHOLD" shall have the meaning set forth in Section 9.01(c)(i)(B). "TRANSACTION DOCUMENTS" shall mean, collectively, the agreements, instruments, certificates and other documents delivered pursuant hereto or otherwise in connection herewith, including, without limitation, the Registration Rights Agreement and the Lockup Agreement. "TRANSACTIONS" shall mean, collectively, the transactions contemplated by this Agreement and the Transaction Documents. "TRANSFER" shall mean to directly or indirectly transfer, sell, assign, hypothecate, pledge, encumber, mortgage, charge, grant a security interest in, exchange, gift, bequest or otherwise dispose of or enter into any other arrangement by which possession, legal title, beneficial ownership or the right to receive proceeds or benefits of or from the subject matter passes from one Person to another, or to the same Person in a different capacity, whether or not voluntary and whether or not for value, and any agreement to effect any of the foregoing, and the words "Transferred", "Transferring" and similar words have corresponding meanings. "WFF CREDIT AGREEMENT" shall mean that certain Credit Agreement, dated as of June 29, 2005, by and among WinZip International, as Borrower, WinZip Holdings, as Parent Guarantor, Wells Fargo Foothill, Inc., as Arranger and Administrative Agent, and the Lenders signatory thereto. "WFF INDEBTEDNESS" shall mean any indebtedness or other obligation of any WinZip Entity under the WFF Credit Agreement and related documentation. "WINZIP COMPUTING" shall have the meaning set forth in the preamble. "WINZIP ENTITIES" shall mean, collectively, WinZip Holdings and each direct or indirect subsidiary of WinZip Holdings set forth on Part 3.01 of the Disclosure Schedule, including, without limitation, WinZip Computing and WinZip International. "WINZIP HOLDINGS" shall have the meaning set forth in the preamble. "WINZIP INTERNATIONAL" shall mean WinZip International, LLC, a Delaware limited liability company. "WINZIP OPTION PLAN" shall have the meaning set forth in the recitals. A-6 "WINZIP OPTIONS" shall have the meaning set forth in the recitals. "WINZIP OPTIONHOLDERS" shall have the meaning set forth in the preamble. "WINZIP SHARES" shall have the meaning set forth in the preamble.

A-7 Annex B WinZip Holdings Capitalization
A B C NO. OF SHARES OF STOCK HELD BY SUCH SHAREHOLDER ----------D PERCENTAGE INTEREST IN APPLICABLE CLASS ----E

SHAREHOLDER -----------

CLASS OF STOCK HELD BY SUCH SHAREHOLDER -----------

PERCENTAGE INTEREST --------

B-1 Annex C Corel Options
A B C D EXERCISE PRICE OF COREL OPTIONS ------E OTHER MATERI TERMS OF COR OPTIONS -------

WINZIP OPTIONHOLDER ------------

NUMBER OF WINZIP OPTIONS --------------

NUMBER OF COREL OPTIONS -------------

C-1
Exhibit 3.1 (GRAPHIC) Industry Canada CERTIFICATE OF CONTINUANCE CANADA BUSINESS CORPORATIONS ACT COREL CORPORATION Name of corporation-Denomination de la societe I hereby certify that the above-named corporation was continued under section 187 of the Canada Business Corporations Act, as set out in the attached articles of continuance. Industrie Canada CERTIFICAT DE PROROGATION LOI CANADIENNE SUR LES SOCIETES PAR ACTIONS 434590-8 Corporation number-Numero de la societe

Je certifie que la societe susmentionnee a ete prorogee en vertu de l'article 187 de la Loi canadienne sur les societes par actions, tel qu'il est indique dans les clauses de prorogation ci-jointes.

/s/ Richard G. Shaw ------------------------------------Richard G. Shaw Director - Directeur CANADA (GRAPHIC)

January 27, 2006 / le 27 janvier 2006 Date of Continuance - Date de la prorogation

(GRAPHIC) Industry Canada

Industrie Canada

Canada Business

Loi canadienne sur les

FORM 11 ARTICLES OF CONTINUANCE

FORMULE 11 CLAUSES DE PROROGATION

Corporations Act

societes par actions

(SECTION 187)

(ARTICLE 187)

1 - Name of the Corporation COREL CORPORATION 2 - The province or territory in Canada where the registered office is to be situated PROVINCE OF ONTARIO 3 - The classes and the maximum number of shares that the corporation is authorized to issue

Denomination sociale de la societe

La province ou le territorie au Canada ou se situera le siege social

Categories et le nombre maximal d'actions que la societe est autorisee a emettre

an unlimited number of Common Shares and an unlimited number of Preferred Shares, issuable in series, the rights, privileges, restrictions and conditions of which are set out on the attached Schedule A 4 - Restrictions, if any, on share Restrictions sur le transfert des transfers actions, s'il y a lieu See attached Schedule B
5 - Number (or minimum and maximum number) of directors minimum number of one: maximum number often 6 - Restrictions, if any, on business the corporation may carry on None 7 - (1) If change of name effected, previous name (1) S'il y a changement de denomination sociale, indiquer la denomination sociale anterieure (2) Details de la constitution Limites imposees a I'activite commerciale de la societe, s'il y a lieu Nombre (ou nombre minimal et maximal) d'administrateurs

(2) Details of incorporation

Certificate and Articles of Amalgamation of Corel Corporation and 1679043 Ontario Limited under the Business Corporation Act (Ontario) dated December 1, 2005 to form Corel Corporation. 8 - Other provisions, if any Autres dispositions, s'il y a lieu The directors may appoint one or more additional directors, who shall hold office for a term expiring not later than the close of the next annual meeting of the shareholders, but the total number of directors so appointed may not exceed one third of the number of directors elected at the previous annual meeting of shareholders.
Date Signature 7 - Capacity of - En qualite de

January 27, 2006

/s/ Darren Sukonick ----------------------------

Assistant Secretary

For Departmental Use Only A I'usage du ministere seulement Corporation No. N(degrees) de la societe IC 3247 (2001/11)

Printed Name - Non et lettres moulees Darren Sukonick

DSG 03/2002 CANADA (GRAPHIC)

SCHEDULE A 1. PREFERRED SHARES The Preferred Shares, as a class, shall be designated as Preferred Shares and shall have attached thereto the following rights, privileges, restrictions and conditions: 1.1 Directors' Right to Issue in One or More Series The Preferred Shares may be issued at any time or from time to time in one or more series. Before any shares of a series are issued, the board of directors of the Corporation shall fix the number of shares that will form such series and shall, subject to the limitations set out in the Articles, determine the designation, rights, privileges, restrictions and conditions to be attached to the Preferred Shares of such series, the whole subject to the filing with the Director (as defined in the Canada Business Corporations Act (the "Act")) of Articles of Amendment containing a description of such series including the rights, privileges, restrictions and conditions determined by the board of directors of the Corporation. 1.2 Ranking of the Preferred Shares The Preferred Shares of each series shall rank on a parity with the Preferred Shares of every other series with respect to dividends and return of capital and shall be entitled to a preference over the Common Shares of the Corporation and over any other shares ranking junior to the Preferred Shares with respect to priority in payment of dividends and in the distribution of assets in the event of the liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, or any other distribution of the assets of the Corporation among its shareholders for the purpose of winding up its affairs. If any cumulative dividends, whether or not declared, or declared non-cumulative dividends or amounts payable on return of capital are not paid in full in respect of any series of the Preferred Shares, the Preferred Shares of all series shall participate rateably in respect of such dividends in accordance with the sums that would be payable on such shares if all such dividends were declared and paid in full, and in respect of such return of capital in accordance with the sums that would be payable on such return of capital if all sums so payable were paid in full; provided, however, that if there are insufficient assets to satisfy in full all such claims as aforesaid, the claims of the holders of the Preferred Shares with respect to return of capital shall be paid and satisfied first and any assets remaining thereafter shall be applied towards the payment and satisfaction of claims in respect of dividends. The Preferred Shares of any series may also be given such other preferences not inconsistent with the rights, privileges, restrictions and conditions attached to the Preferred Shares as a class over the Common Shares of the Corporation and

over any other shares ranking junior to the Preferred Shares as may be determined in the case of such series of Preferred Shares. 1.3 Voting Rights Except as hereinafter referred to or as required by law or unless provision is made in the Articles relating to any series of Preferred Shares that such series is entitled to vote, the holders of the Preferred Shares as a class shall not be entitled as such to receive notice of, to attend or to vote at any meeting of the shareholders of the Corporation. 1.4 Amendment With Approval of Holders of Preferred Shares The rights, privileges, restrictions and conditions attached to the Preferred Shares as a class may be added to, changed or removed but only with the approval of the holders of the Preferred Shares given as hereinafter specified. 1.5 Approval of Holders of the Preferred Shares

The approval of the holders of the Preferred Shares to add to, change or remove any right, privilege, restriction or condition attaching to the Preferred Shares as a class or in respect of any other matter requiring the consent of the holders of the Preferred Shares may be given in such manner as may then be required by law, subject to a minimum requirement that such approval be given by resolution signed by all the holders of the Preferred Shares or passed by the affirmative vote of at least 2/3 of the votes cast at a meeting of the holders of the Preferred Shares duly called for that purpose. The formalities to be observed with respect to the giving of notice of any such meeting or any adjourned meeting, the quorum required therefor and the conduct thereof shall be those from time to time prescribed by the by-laws of the Corporation with respect to meetings of shareholders, or if not so prescribed, as required by the Act as in force at the time of the meeting. On every poll taken at every meeting of the holders of the Preferred Shares as a class, or at any joint meeting of the holders of two or more series of Preferred Shares, each holder of Preferred Shares entitled to vote thereat shall have one vote in respect of each $1.00 of the issue price of each Preferred Share held. COMMON SHARES The holders of the Common Shares shall be entitled to vote at all meetings of shareholders of the Corporation except meetings at which only the holders of the Preferred Shares as a

class or the holders of one or more series of the Preferred Shares are entitled to vote, and shall be entitled to one vote at all such meetings in respect of each Common Share held. After payment to the holders of the Preferred Shares of the amount or amounts to which they may be entitled, the holders of the Common Shares shall be entitled to receive any dividend declared by the board of directors of the Corporation and to receive the remaining property of the Corporation upon dissolution.

SCHEDULE B No shares of the Corporation may be transferred without either: (a) the approval of the directors of the Corporation expressed by a resolution passed at a meeting of the board of directors or by an instrument or instruments in writing signed by a majority of the directors; or (b) the approval of the holders of at least a majority of the shares of the Corporation entitling the holders thereof to vote in all circumstances (other than holders of shares who are entitled to vote separately as a class) for the time being outstanding expressed by a resolution passed at a meeting of the holders of such shares or by an instrument or instruments in writing signed by the holders of a majority of such shares.

Exhibit 3.2 (GRAPHIC) CANADAIAN FLAG
Industry Canada CERTIFICATE OF AMENDMENT CANADA BUSINESS CORPORATIONS ACT Industrie Canada CERTIFICAT DE MODIFICATION LOI CANADIENNE SUR LES SOCIETES PAR ACTIONS

COREL CORPORATION

434590-8

Name of corporation-Denomination de la societe I hereby certify that the articles of the above-named corporation were amended: a) under section 13 of the Canada Business Corporations Act in accordance with the attached notice;

Corporation number-Numero de la societe

Je certifie que les statuts de la societe susmentionnee ont ete modifies:

[ ]

a)

en vertu de l'article 13 de la Loi canadienne sur les societes par actions, conformement a l'avis ci-joint; en vertu de l'article 27 de la Loi canadienne sur les societes par actions, tel qu'il est indique dans les clauses modificatrices ci-jointes designant une serie d'actions; en vertu de l'article 179 de la Loi canadienne sur les societes par actions, tel qu'il est indique dans les clauses modificatrices ci-jointes; en vertu de l'article 191 de la Loi canadienne sur les societes par actions, tel qu'il est indique dans les clauses de reorganisation ci-jointes;

b)

under section 27 of the Canada Business Corporations Act as set out in the attached articles of amendment designating a series of shares;

[ ]

b)

c)

under section 179 of the Canada Business Corporations Act as set out in the attached articles of amendment;

[X]

c)

d)

under section 191 of the Canada Business Corporations Act as set out in the attached articles of reorganization;

[ ]

d)

/s/ Richard G. Shaw ------------------------------------Richard G. Shaw Director - Directeur

MARCH 31, 2006 / LE 31 MARS 2006 Date of Amendment - Date de modification

(GRAPHIC) CANADAIAN FLAG

(GRAPHIC) CANADAIAN FLAG
INDUSTRY CANADA CANADA BUSINESS CORPORATIONS ACT INDUSTRIE CANADA LOI CANADIENNE SUR LES SOCIETES PAR ACTIONS FORM 4 ARTICLES OF AMENDMENT (SECTIONS 27 OR 177) FORMULAIRE 4 CLAUSES MODIFICATRICES (ARTICLES 27 OU 177)

1 -- Name of the Corporation - Denomination sociale de is societe COREL CORPORATION 2 -- Corporation No. - No de la societes 434590-8 3 -- The articles of the above-named corporation are amended as follows:

Las statuts de la sociate mentinnee cl-dessus sont modifies de la facon sulvante: The articles of the Corporation are amended to: 1. Change each 11.710548 issued and outstanding Common Shares into 1 Common Share (the "Reverse Share Split"), and any fractional Common Share resulting from the Reverse Share Split shall be rounded up to the nearest whole Common Share. 2. Delete the following from section 4 of the certificate and articles of continuance of the Corporation dated January 27, 2006; "No shares of the Corporation may be transferred without either: (a) the approval of the directors of the Corporation expressed by a resolution passed at a meeting of the board of directors or by an instrument or instruments in writing signed by a majority of the directors; or (b) the approval of the holders of at least a majority of the shares of the Corporation entitling the holders thereof to vote in all circumstances (other than holders of shares who are entitled to vote separately as a class) for the time being outstanding expressed by a resolution passed at a meeting of the holders of such shares or by an instrument or instruments in writing signed by the holders of a majority of such shares.".
Signature Printed Name - Nom en lettres moultes 4 - Capacity of - En qualite de 5 - Te

/s/ Darren Sukonick ----------------------

Darren Sukonick

Authorized officer

416-86

FOR DEPARTMENTAL USE ONLY (GRAPHIC) CANADAIAN FLAG

Exhibit 3.3 BY-LAW NO. 1 OF COREL CORPORATION (THE "CORPORATION") 1. INTERPRETATION 1.1 Expressions used in this By-law shall have the same meanings as corresponding expressions in the Canada Business Corporations Act (the "Act"). 2. FINANCIAL YEAR 2.1 Until changed by the directors, the financial year of the Corporation shall end on the last day of November in each year. 3. DIRECTORS 3.1 Number. The number of directors shall be not fewer than the minimum and not more than the maximum provided in the articles. At each election of directors the number elected shall be the number of directors then in office unless the directors or the shareholders otherwise determine. 3.2 Quorum. A quorum of directors shall be a majority or, such greater or lesser number as the directors or

shareholders may from time to time determine. 3.3 Calling of Meetings. Meetings of the directors shall be held at such time and place as the Chair of the Board, the President or any two directors may determine. 3.4 Notice of Meetings. Notice of the time and place of each meeting of directors shall be given to each director by telephone not less than 48 hours before the time of the meeting or by written notice not less than four days before the date of the meeting, provided that the first meeting immediately following a meeting of shareholders at which directors are elected may be held without notice if a quorum is present. Meetings may be held without notice if the directors waive or are deemed to waive notice. 3.5 Meeting by Telephonic or Electronic Facility. If all the directors of the Corporation consent, a meeting of directors or of a committee of directors may be held by means of a telephonic, electronic or other communication facility that permits all persons participating in the meeting to communicate adequately with each other, and a director participating in a meeting by such means is deemed to be present at that meeting. -23.6 Chair. The Chair of the Board, or in the Chair's absence the President if a director, or in the President's absence a director chosen by the directors at the meeting, shall be chair of any meeting of directors. 3.7 Voting at Meetings. At meetings of directors each director shall have one vote and questions shall be decided by a majority of votes. In case of an equality of votes the chair of the meeting shall have a second or casting vote. 4. COMMITTEES 4.1 Committees of Directors. The directors may appoint from among their number one or more committees of directors and delegate to them any of the powers of the directors except those which under the Act a committee of directors has no authority to exercise. 4.2 Audit Committee. The directors shall appoint from among their number an audit committee composed of not fewer than three directors, a majority of whom are not officers or employees of the Corporation or any affiliate of the Corporation. The audit committee shall review the financial statements of the Corporation and shall report thereon to the directors of the Corporation before such financial statements are approved by the directors. The auditor of the Corporation is entitled to receive notice of every meeting of the audit committee and, at the expense of the Corporation, to attend and be heard thereat; and, if so requested by a member of the audit committee, shall attend every meeting of the committee held during the term of office of the auditor. The auditor of the Corporation or any member of the audit committee may call a meeting of the committee. 4.3 Transaction of Business. The powers of a committee appointed by the directors may be exercised at a meeting at which a quorum is present or by resolution in writing signed by all members of the committee entitled to vote on that resolution at a meeting of the committee. Meetings of a committee may be held at any place in or outside Canada. 4.4 Procedure. Unless otherwise determined by the directors each committee shall have power to fix its quorum and to regulate its procedure, including the power to adopt a committee charter. Unless otherwise determined by each committee, a majority of the committee members shall constitute a quorum. -35. OFFICERS 5.1 General. The directors may from time to time appoint a Chair of the Board, a President, one or more VicePresidents, a Secretary, a Treasurer and such other officers as the directors may determine. 5.2 Chair of the Board. The Chair of the Board, if any, shall be appointed from among the directors and when present shall be chair of meetings of directors and shareholders and shall have such other powers and duties as the directors may determine.

the directors may determine. 5.3 President. Unless the directors otherwise determine the President shall be the chief executive officer of the Corporation and shall have general supervision of its business and affairs and in the absence of a Chair of the Board shall be chair of meetings of directors and shareholders when present. 5.4 Vice-President. A Vice-President shall have such powers and duties as the directors or the chief executive officer may determine. 5.5 Secretary. The Secretary shall give required notices to shareholders, directors, auditors and members of committees, act as secretary of meetings of directors and shareholders when present, keep and enter minutes of such meetings, maintain the corporate records of the Corporation, have custody of the corporate seal and shall have such other powers and duties as the directors or the chief executive officer may determine. 5.6 Treasurer. The Treasurer shall keep proper accounting records in accordance with the Act, have supervision over the safekeeping of securities and the deposit and disbursement of funds of the Corporation, report as required on the financial position of the Corporation, and have such other powers and duties as the directors or the chief executive officer may determine. 5.7 Assistants. Any of the powers and duties of an officer to whom an assistant has been appointed may be exercised and performed by such assistant unless the directors or the chief executive officer otherwise direct. 5.8 Variation of Duties. The directors may, from time to time, vary, add to or limit the powers and duties of any officer. -45.9 Term of Office. Each officer shall hold office until the officer's successor is elected or appointed, provided that the directors may at any time remove any officer from office but such removal shall not affect the rights of such officer under any contract of employment with the Corporation. 6. INDEMNIFICATION AND INSURANCE 6.1 Indemnification of Directors and Officers. The Corporation shall indemnify a director or officer, a former director or officer or a person who acts or acted at the Corporation's request as a director or officer, or in a similar capacity of another entity, and the heirs and legal representatives of such a person to the fullest extent permitted by the Act. 6.2 Insurance. The Corporation may purchase and maintain insurance for the benefit of any person referred to in the preceding section to the extent permitted by the Act. 7. SHAREHOLDERS 7.1 Quorum. A quorum for the transaction of business at a meeting of shareholders shall be one person present and being, or representing by proxy, shareholders holding in the aggregate not less than 20% of the issued shares entitled to be voted at the meeting. If within half an hour from the time set for a general meeting, a quorum is not present, the meeting, if convened by requisition of shareholders, shall be dissolved; but otherwise it shall stand adjourned to the same day in the next week at the same time and place without any requirement to give notice of the adjourned meeting to shareholders. If at the adjourned meeting a quorum is not present within half an hour from the time set for the meeting, the person or persons present and being, or representing by proxy, one or more shareholders entitled to attend and vote at the meeting shall constitute a quorum. 7.2 Casting Vote. In case of an equality of votes at a meeting of shareholders the Chair of the meeting shall have a second or casting vote. 7.3 Scrutineers. The Chair at any meeting of shareholders may appoint one or more persons (who need not be shareholders) to act as scrutineer or scrutineers at the meeting.

7.4 Electronic Meetings and Voting. If the directors or shareholders call a meeting of shareholders, they, as the case may be, may determine that the meeting of shareholders shall be held entirely by means of a telephonic, electronic or other communication facility that permits all participants -5to communicate adequately with each other during the meeting, and any vote at that meeting of shareholders shall be held entirely by means of that communication facility 8. DIVIDENDS AND RIGHTS 8.1 Declaration of Dividends. Subject to the Act, the directors may from time to time declare dividends payable to the shareholders according to their respective rights and interests in the Corporation. 8.2 Payment. A dividend payable in money shall be paid by electronic funds transfer or by cheque to the order of each registered holder of shares of the class or series in respect of which it has been declared and shall be paid by electronic funds transfer as directed by such holder and, if paid by cheque, shall be mailed by prepaid ordinary mail to such registered holder at the address of such holder in the Corporation's securities register, unless such holder otherwise directs. In the case of joint holders the cheque shall, unless such joint holders otherwise direct, be paid to the order of all of such joint holders and shall be paid by electronic funds transfer as directed by such joint holders and, if paid by cheque, shall be mailed to them at their address in the Corporation's securities register. The payment by electronic funds transfer or mailing of such cheque as aforesaid, unless the same is not paid on due presentation, shall satisfy and discharge the liability for the dividend to the extent of the sum represented thereby plus the amount of any tax which the Corporation is required to and does withhold. 8.3 Non-Receipt of Cheques. In the event of non-receipt of any dividend cheque by the person to whom it is sent as aforesaid, the Corporation shall issue to such person a replacement cheque for a like amount on such terms as to indemnity, reimbursement of expenses and evidence of non-receipt and of title as the directors may from time to time prescribe, whether generally or in any particular case. 8.4 Unclaimed Dividends. Any dividend unclaimed after a period of six years from the date on which the same has been declared to be payable shall be forfeited and shall revert to the Corporation. 9. EXECUTION OF INSTRUMENTS 9.1 Deeds, transfers, assignments, agreements, proxies and other instruments may be signed on behalf of the Corporation by any one director or any one officer holding the position of Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Secretary or an Executive Vice President. -610. NOTICE 10.1 A notice mailed to a shareholder, director, auditor or member of a committee shall be deemed to have been received at the time it would be delivered in the ordinary course of mail unless there are reasonable grounds for believing that the shareholder or director did not receive the notice or the document at that time or at all. 10.2 Electronic Delivery. Provided the addressee has consented in writing or electronically in accordance with the Act and the regulations thereunder, the Corporation may satisfy the requirement to send any notice or document referred to in section 10.1 by creating and providing an electronic document in compliance with the Act and the regulations under the Act. An electronic document is deemed to have been received when it enters the information system designated by the addressee or, if the document is posted on or made available through a generally accessible electronic source, when the addressee receives notice in writing of the availability and location of that electronic document, or, if such notice is sent electronically, when it enters the information system designated by the addressee. 10.3 Accidental omission to give any notice to any shareholder, director, auditor or member of a committee or

10.3 Accidental omission to give any notice to any shareholder, director, auditor or member of a committee or non-receipt of any notice or any error in a notice not affecting the substance thereof shall not invalidate any action taken at any meeting held pursuant to such notice. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

RESOLVED THAT the foregoing by-law is made a by-law of the Corporation by the signatures hereto of all the directors of the Corporation pursuant to the Canada Business Corporations Act, as of January 27, 2006.
/s/ Alexander Slusky ---------------------------------------Alexander Slusky

/s/ Douglas McCollam ---------------------------------------Douglas McCollam

/s/ Ian Giffen ---------------------------------------Ian Giffen

/s/ Steven Cohen ---------------------------------------Steven Cohen

/s/ Amish Mehta ---------------------------------------Amish Mehta

RESOLVED THAT the foregoing by-law is made a by-law of the Corporation by the signatures hereto of all the directors of the Corporation pursuant to the Canada Business Corporations Act, as of January 27, 2006. VECTOR CC HOLDINGS, SRL
By: /s/ Alexander Slusky -----------------------------------Name: Alexander Slusky Title: Manager

COREL HOLDINGS, L.P., acting by its General Partner, VECTOR CAPITAL PARTNERS II INTERNATIONAL, LTD.
By: /s/ Alexander Slusky -----------------------------------Name: Alexander Slusky Title: Director

/s/ Robert V. Voit ---------------------------------------Robert V. Voit, as Trustee

/s/ Randy Eisenbach

/s/ Randy Eisenbach ---------------------------------------Randy Eisenbach

Exhibit 4.1 REGISTRATION RIGHTS AGREEMENT BY AND AMONG COREL CORPORATION AND THE STOCKHOLDERS NAMED HEREIN DATED AS OF _______, 200[6]

TABLE OF CONTENTS
PAGE ---1 5 15 17 22

ARTICLE I ARTICLE II ARTICLE III ARTICLE IV ARTICLE V

DEFINITIONS................................................ REGISTRATION RIGHTS........................................ REPRESENTATIONS, WARRANTIES AND AGREEMENTS................. INDEMNIFICATION AND CONTRIBUTION........................... MISCELLANEOUS..............................................

-iREGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (this "Agreement"), dated as of _____, 200[6], is entered into by and among Corel Corporation, a Canadian corporation (the "Company"), Vector Capital Partners II International, Ltd. and Vector CC Holdings SRL (the "Demand Holders") and the persons listed on Annex A hereto (the "Piggyback Holders," and together with the Demand Holders, the "Stockholders")) RECITALS WHEREAS, the Company is offering to sell its common shares in an initial public offering ("IPO") registered under the Securities Act of 1933, as amended, pursuant to a registration statement on Form F-1, File No. 333_____ (the "IPO Registration Statement") in the United States and pursuant to a long form prospectus, including any amendments or supplements thereto, in the English and French languages, in Canada (the "Canadian IPO Prospectus"); WHEREAS, in connection with the IPO the Company intends to effect a _____ for-one reverse stock split (the "Reverse Split") and issue common shares to one or more of the Demand Holders (or their designated Affiliates)

as consideration for the Company's acquisition (the "Acquisition") of Cayman Limited Holdco, a holding company that owns WinZip, formed in the Cayman Islands; WHEREAS, the Demand Holders will own _____ common shares of the Company immediately prior to the initial closing of the IPO, after giving effect to the Reverse Split and the Acquisition, (the "Demand Shares"); WHEREAS, the Piggyback Holders will collectively own _____ common shares of the Company immediately prior to the initial closing of the IPO, after giving effect to the Reverse Split (the "Piggyback Shares" and, together with the Demand Shares, the "Shares"); WHEREAS, the Stockholders have certain registration rights with respect to the Shares currently owned by them, which are set forth in Section 2.5 and Schedule B of the Amended and Restated Minority Shareholders Agreement dated as of _____ by and among the Company, the Stockholders and the trustee ("Existing Registration Rights"); and WHEREAS, in contemplation of the IPO, the parties have agreed to terminate and replace the Existing Registration Rights with the respective rights and obligations set forth in this Agreement. NOW, THEREFORE, in consideration of the premises, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I DEFINITIONS Section 1.01 Definitions. The following terms, as used in this Agreement, shall have the following meanings: "Affiliate" shall mean, with respect to a specified Person, any other Person, other than the Company or any of its Subsidiaries, that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the specified Person. For purposes of this definition, the term "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with") shall mean, with respect to any Person, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. "Blackout Periods" shall have the meaning set forth in Section 2.01(a). "Canadian Prospectus" shall mean a prospectus (including a short form prospectus) prepared in accordance with applicable Canadian Securities Laws for the purpose of qualifying securities for distribution on any province or territory of Canada "Canadian IPO Prospectus" shall have the meaning set forth in the recitals. "Canadian Securities Laws" shall mean statutes and regulations applicable to the trading of securities in any province or territory of Canada, including applicable rules, policy statements and blanket rulings and orders promulgated by Canadian securities regulatory authorities. "Commission" shall mean the United States Securities and Exchange Commission. "Common Shares" shall have the meaning set forth in the recitals. "Company" shall have the meaning set forth in the preamble. "Demand Holder" shall have the meaning set forth in the preamble, provided, the term "Demand Holder" shall

also include any Permitted Transferee of a Demand Holder that holds Registrable Securities with a fair market value of at least $[500,000]. "Demand Request" shall have the meaning set forth in Section 2.01(a). "Exchange Act" shall mean the United States Securities Exchange Act of 1934, as amended. -2"Existing Registration Rights" shall have the meaning set forth in the preamble. "IPO" shall have the meaning set forth in the recitals. "IPO Date" shall mean the date of the first closing of the initial sale of Common Shares in an initial public offering. "IPO Participants shall have the meaning set forth in Section 2.04(b). "IPO Registration Statement" shall have the meaning set forth in the recitals. "Maximum Number" shall have the meaning set forth in Section 2.01(b). "Other Securities" shall have the meaning set forth in the definition of Registrable Securities. "Piggyback Holder" shall have the meaning set forth in the preamble, provided, the term "Piggyback Holder" shall also include any Permitted Transferee of a Piggyback Holder that holds Registrable Securities. "Permitted Transferees" shall mean, with respect to any Holder, such Holder's Affiliates. "Person" shall mean any individual, corporation, partnership, joint venture, limited liability company, joint-stock company, association, unincorporated organization, trust or other entity, including any government or any political subdivision, agency or instrumentality thereof. "Preliminary Prospectus" shall mean any preliminary prospectus that may be included in any Registration Statement. "Prospectus" or "prospectus" shall mean the prospectus included in any registration statement filed under the Securities Act or filed pursuant to Canadian Securities Laws (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act or the Canadian Securities Law equivalent thereof), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such registration statement, and by all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. "Public Offering" shall mean the offer of Common Shares on a broadly distributed basis in the United States and/or Canada, not limited to sophisticated investors, pursuant to a firm-commitment or best-efforts underwriting arrangement. -3"Registrable Securities" shall mean all or any portion of the Common Shares owned by any Stockholder from time to time during the term of this Agreement. As to any particular Registrable Securities, such Common Shares shall cease to be Registrable Securities when: (i) a registration statement with respect to the sale of such Common Shares shall have become effective under the Securities Act or when a prospectus has been receipted under applicable Canadian Securities Laws and such Common Shares shall have been disposed of under such registration statement or pursuant to such Prospectus, (ii) such Common Shares shall have been sold pursuant to Rule 144 or equivalent provisions under Canadian Securities Laws, as applicable, (iii) such securities shall have otherwise been transferred or disposed of, and subsequent transfer or disposition of such Common Shares shall

otherwise been transferred or disposed of, and subsequent transfer or disposition of such Common Shares shall not require their registration or qualification under the Securities Act, Canadian Securities Laws or any state, territorial or provincial securities laws or similar laws then in force or (iv) such Common Shares shall have been repurchased by the Company or otherwise shall cease to be outstanding. If as a result of any reclassification, stock split, stock dividend, bonus issue, business combination, exchange offer or other transaction or event, any capital stock, evidences of indebtedness, warrants, options, rights or other securities (collectively, "Other Securities") are issued or transferred to any Stockholder in respect of Registrable Securities held by such holder, references herein to Registrable Securities, Shares and Common Shares, shall, as the context requires, be deemed to include such Other Securities. "Registration Expenses" shall mean any and all expenses incident to the performance of or compliance with any registration or marketing of securities pursuant to Article 2, including: (i) the fees, disbursements and expenses of the Company's counsel and accountants in connection with this Agreement and the performance of the Company's obligations hereunder (including the expenses of any annual audit letters and "cold comfort" letters required or incidental to the performance of such obligations); (ii) all expenses, including filing fees, in connection with the preparation, printing and filing of the registration statement, any preliminary prospectus or final prospectus, any other offering document and amendments and supplements thereto and the mailing and delivering of copies thereof to any underwriters and dealers; (iii) the cost of printing and producing any agreements among underwriters, underwriting agreements, selling agreements and any other documents in connection with the offering, sale or delivery of the securities to be disposed of; (iv) all expenses in connection with the qualification of the securities to be disposed of for offering and sale under provincial, territorial or state securities laws, including the fees and disbursements of counsel for the underwriters or the Stockholders in connection with such qualification and in connection with any blue sky and legal investment surveys, including the cost of printing and producing any such blue sky or legal investment surveys; (v) the filing and legal fees incident to securing any required review by the National Association of Securities Dealers, Inc. and/or Canadian securities regulatory authorities; (vi) transfer agents' and registrars' fees and expenses and the fees and expenses of any other agent or trustee appointed in connection with such offering; (vii) all security engraving and security printing expenses; (viii) all fees and expenses payable in connection with the listing of the securities on any securities exchange or automated inter-dealer quotation system; (ix) any other fees and disbursements of underwriters customarily paid by the issuers of securities, but excluding -4underwriting discounts and commissions and transfer taxes, if any; (x) the costs and expenses of the Company and its officers relating to analyst or investor presentations or any "road show" undertaken in connection with the registration and/or marketing of any Registrable Securities; and (xi) other reasonable out-of-pocket costs, fees and expenses, including the fees and expenses of one outside legal counsel retained by the Stockholders. "register," "registered" and "registration" shall refer to a registration effected by preparing and filing a registration statement of the Company under the Securities Act and the effectiveness of such registration statement. In addition, unless inconsistent with the context: (i) the term "registration" and any reference to the act of registering include the qualification under Canadian Securities Laws of a Canadian Prospectus in respect of a distribution of the Registrable Securities; the term "registered" as applied to the Registrable Securities, includes a distribution of Registrable Securities so qualified; the term "registration statement" includes a Canadian Prospectus; (iv) any reference to a registration statement having become effective, or similar references, shall include a Canadian Prospectus for which a final receipt has been obtained from the relevant Canadian securities regulatory authorities; and (v) the provisions of this Agreement shall be applied to any proposed distribution of securities hereunder in any province or territory of Canada or to which the prospectus requirements under any Canadian Securities Laws shall otherwise apply. "Rule 144" shall mean Rule 144 (or any successor provisions) under the Securities Act. "Rule 415 Offering" means an offering on a delayed or continuous basis pursuant to Rule 415 (or any successor rule to similar effect) under the Securities Act. "Securities Act" shall mean the United States Securities Act of 1933, as amended, including all rules and regulations thereunder.

"Selling Stockholder" shall mean a Stockholder included in a relevant Registration Statement. "Stockholder" shall have the meaning set forth in the preamble, provided, the term "Stockholder" shall also include any Permitted Transferee of a Stockholder that holds Registrable Securities from time to time. ARTICLE II REGISTRATION RIGHTS Section 2.01 (a) Demand Rights. At any time, and from time to time, on or after the IPO Date, a Demand Holder shall have the right to require the Company to effect the registration under the Securities Act and/or applicable Canadian Securities Laws for a Public Offering of all or part of such Demand Holder's Registrable Securities (a "Demand Registration"), by delivering to the Company written notice naming, if -5applicable, the Demand Holders whose Registrable Securities are to be included in such registration (collectively, the "Demanding Holders"), specifying the number of Registrable Securities to be included in such registration and the intended method of distribution thereof (which requested method of disposition may be a Rule 415 Offering and/or the Canadian Securities Law equivalent thereof, including National instrument 44-102) (the "Demand Request"). Upon receipt of such Demand Request, the Company shall comply with Section 2.05. (b) Limitations and Conditions. The Company's obligations pursuant to Section 2.01(a) above are subject to the following limitations and conditions: (i) the Company shall not be obligated to fulfill the requirements or effect or maintain a registration referred to therein (A) during any period of time (not to exceed ninety (90) days in the aggregate with respect to each request) when the Company has determined to proceed with a Public Offering for its own account and, in the good faith judgment of the managing underwriter thereof, the fulfillment of such requirements or such filing would have an adverse effect on such Public Offering, (B) during any period of time (not to exceed sixty (60) days with respect to each request) when the Company is in possession of material non-public information that the board of directors of the Company has in its good faith judgment determined could materially and adversely affect a material business situation, financing transaction or negotiation affecting the Company, (C) during the 90-day period following the effectiveness of any previous registration statement or (D) during the 180-day period following the effectiveness of the IPO Registration Statement, except, in the case of clause (D) hereof, as permitted under Section 2.4 hereof or with the prior written consent of Morgan Stanley & Co. Incorporated ("Morgan Stanley")(the periods of time referred to in clauses (A), (B), (C) and (D) hereof being hereinafter referred to as "Blackout Periods"); provided that the aggregate period of time during which the Company shall be relieved from its obligation to effect a registration pursuant to Section 2.01(b)(i), shall in no event, except in the case of clause (D), exceed ninety (90) consecutive days with respect to each request; provided, further, that, in the case of a Blackout Period pursuant to clause (A) hereof, the Blackout Period shall earlier terminate upon the completion or abandonment of the relevant Public Offering; provided, further, that in the case of a Blackout Period pursuant to clause (B) hereof, the Blackout Period shall commence upon the delivery of notice to the Stockholders and shall terminate upon the earlier of: (i) public disclosure by the Company or public admission by the Company of such material nonpublic information or (ii) such time as such material nonpublic information shall be publicly disclosed or such time that the Company is no longer in possession of material nonpublic information; provided, further, that in the event the Stockholders are notified of the initiation of a Blackout Period pursuant to clause (B) hereof, the Stockholders shall cease and desist from effecting any further sales pursuant to an effective registration statement or a receipted prospectus during such Blackout Period; provided, further, that in the case of a Blackout Period pursuant to clauses (A), (B), (C) or (D) hereof, the Company shall furnish to the Demand Holder, upon request, a certified resolution of the -6Company's board of directors to the effect that an event permitting a Blackout Period has occurred; provided,

further, that the Company shall not be entitled to exercise its rights under clause (B) hereof more than one (1) time in any twelve (12) month period; and provided, further, if the Demand Holder withdraws its Demand Request pursuant to Section 2.01(e), such request shall not be considered a Demand Request for purposes of Section 2.01(a) and such Demand Request shall be of no further effect; (ii) the number of Common Shares to be sold in any such Public Offering shall not exceed the maximum number which the managing underwriter thereof considers in good faith to be appropriate based on market conditions and other relevant factors, including pricing and the proportion of Common Shares being sold by the Company and by such holders (the "Maximum Number"); and (iii) the Registrable Securities to be offered pursuant to such request have an aggregate offering price of at least US $[100,000] (based on the then current market price on the date of delivery of the Demand Request). (c) Number of Demands. Any Demand Holder may exercise its rights under Section 2.01(a): (x) on an unlimited number of occasions with respect to registration statements on Form F-3 or S-3 and/or any Canadian Securities Law equivalent thereof (or any successors thereto) from such time that the Company becomes eligible to use such forms; and (y) on not more than three occasions after the date hereof with respect to registration statements on Form F-1 or S-1 and/or any Canadian Securities Law equivalent thereof (or any successors thereto); provided that the Company shall not be obligated to effect more than one registration of Registrable Securities in any 90-day period. (d) Ineffective Demands. A request by a Demand Holder that the Company effect a registration shall not be considered a Demand Request if: (i) the registration statement relating thereto does not become effective; (ii) after it has become effective such registration statement (or the use of the Prospectus contained in such registration statement) is (A) interfered with by any stop order, injunction or other order or requirement of the Commission, Canadian securities regulators or other governmental agency or court for any reason other than a misrepresentation or an omission by any Demand Holder or (B) delayed, withdrawn, suspended or terminated and, in each case, as a result thereof, at least 80% of the Registrable Securities requested to be registered cannot be completely distributed in accordance with the plan of distribution set forth in the related registration statement; or (iii) the conditions to closing specified in any purchase agreement or underwriting agreement entered into in connection with such registration are not satisfied or waived other than because of some act or omission by such Demand Holder. (e) Withdrawal of Demands. Any such Demanding Holder delivering a Demand Request shall have the right, at any time prior to the effective date of the registration statement relating to such Demand Request, to withdraw such Demand -7Request without liability to such Demanding Holder, by giving written notice to the Company. (f) Selection of Underwriters. In the event that any registration pursuant to Section 2.01(a) shall involve, in whole or in part, an underwritten offering, the Demanding Holders shall select the lead managing underwriter or underwriters and bookrunner or bookrunners for such underwritten offering (after consultation with the Company), as well as counsel for the Selling Holders, with respect to such registration; provided, that the Company shall have the right to appoint other syndicate members with the consent of the Demanding Holders not to be unreasonably withheld. (g) Inclusion of Non-Stockholders. Subject to Section 2.10, the Company shall have the right to cause the registration of additional equity securities for sale for the account of any Person that is not a Stockholder (including the Company and any directors, officers or employees of the Company) in any registration of Registrable Securities requested by the Stockholders; provided that the number of Registrable Securities to be included in such registration (including those sought by the Stockholders) shall not exceed the Maximum Number; and provided, further, that in all cases, the Demand Holders shall have priority over any such other Person. Section 2.02 (a) "Piggy-Back" Rights. If the Company proposes to register any of its Common Shares, any other equity

securities or securities convertible into or exchangeable for its equity securities under the Securities Act and/or applicable Canadian Securities Laws (including, without limitation, in connection with a Demand Request), whether or not for sale for its own account, in a manner that would permit registration of Registrable Securities for sale for cash to the public under the Securities Act and/or applicable Canadian Securities Laws, the Company shall give written notice of such proposal at least thirty (30) days before the anticipated filing date, to each Stockholder. In the event that the Company elects to file a "universal shelf" registration statement or the Canadian Securities Law equivalent thereof which registers any of the classes of securities referred to in the first sentence of this Section 2.02(a), the Company shall take such steps as would permit the shelf registration statement to be used to permit secondary sales by the Stockholders and shall give written notice of any proposal to make an offering off the shelf registration statement of any class of securities referred to in the first sentence of this Section 2.02(a) at least ten (10) days before, and, if practicable, up to thirty (30) days before, the anticipated offering date, to each Stockholder. Such notices, as applicable, shall specify at a minimum the intended method of distribution of such Common Shares or other securities, the number of Common Shares or other securities proposed to be registered or offered, the proposed filing date of such registration statement or offering date in the case of a shelf takedown, any proposed means of distribution of such Common Shares or other securities and the proposed managing underwriter, if any. Subject to Section 2.03, upon the written request of a Stockholder (the "Piggyback Request"), given within fifteen (15) days after the transmittal of any such written notice by email or facsimile confirmed by mail (which request shall specify the Registrable Securities intended to be disposed of by such Stockholder), the Company -8will include in the prospectus with respect to such Public Offering, or any prospectus supplement in the case of a shelf takedown, the number of the Registrable Securities referred to in such Stockholder's request; provided, that, any participation in such Public Offering by such Stockholder shall be on substantially the same terms as the Company's participation therein; and provided, further, that the number of Registrable Securities to be included in any such Public Offering shall not exceed the Maximum Number. (b) Withdrawal of Request. Any such Stockholder shall have the right to withdraw a request to include Registrable Securities in any Public Offering pursuant to Section 2.02(a), without any liability of such Stockholder by giving written notice to the Company of its election to withdraw such request at any time prior to the proposed effective date of such registration statement. (c) Exception to Piggyback Rights. The Company shall not be required to effect any registration of Registrable Securities under Section 2.02(a) incidental to the registration of any equity securities on a Form S-8, Form S-4 or Form F-4 or any similar registration under Canadian Securities Laws (or any successors thereto). Section 2.03 Allocation of Securities Included in a Public Offering. If the registration referred to in Section 2.01 (a) and Section 2.02(a) is to be a Public Offering and the managing underwriter thereof advises the Company and the Selling Holders in writing that the number of Common Shares sought to be included in such Public Offering (including those sought to be offered by the Company and those sought to be offered by the Selling Holders) exceeds the Maximum Number, the Common Shares to be included in such Public Offering shall be allocated pursuant to the procedures of this Section 2.03. (a) Demand Allocation. If a registration or Public Offering is effected pursuant to Section 2.01(a), the number of Registrable Securities included in such registration shall be allocated: (x) first, pro rata among the Demand Holders, and (y) second, pro rata among all of the other Selling Holders on the basis of the relative number of the Registrable Shares then held by each such Selling Holder (with any number in excess of a Selling Holder's request reallocated among the remaining Selling Holders in a like manner) or in such manner as shall be designated by the Selling Holders. (b) Piggyback Allocation. If a registration or Public Offering is effected pursuant to Section 2.02(a): the number of Registrable Securities included in such registration shall be allocated: (x) first, to securities sought to be included at the request of the Company ("Company Securities"), (y) second, among the Demand Holders up to the full number of the Registrable Securities included in the Piggyback Request, in excess of the number of Company Securities, to the nearest extent possible on a pro rata basis, and (y) third, among the other Selling Holders up to the full number of the Registrable Securities included in the Piggyback Request, in excess of the number of Company Securities, to the nearest extent possible on a pro rata basis.

Section 2.04 (a) IPO Participation. The Company shall register for resale the Registrable Securities held by the Stockholders listed on Annex B hereto (the -9"IPO Participants") in the amounts set forth next to their respective names on Annex B (allocated between the firm commitment underwritten offering and the over-allotment option, as set forth on Annex B) on the IPO Registration Statement and the Canadian IPO Prospectus, provided, such number of Registrable Securities may be reduced and/or re-allocated between the firm commitment underwritten offering and the over-allotment option [on a pro rata basis] in the sole discretion of the Company. (b) Conditions to IPO Participation. As a condition to inclusion of any Registrable Securities for resale under the IPO Registration Statement and/or the Canadian IPO Prospectus, each IPO Participant must: (x) execute and comply with the terms and provisions of an underwriting agreement in form and substance reasonably satisfactory to the Company and customary for transactions of this type;(y) execute and comply with the terms and provisions of a custody agreement and irrevocable power of attorney in form and substance reasonably satisfactory to the Company and customary for transactions of this type, and (z) provide the Company and counsel with such documents, certificates, resolutions and representations as may be reasonably requested in connection with satisfying the conditions to closing the IPO (including any closing of the over-allotment option) pursuant to the IPO underwriting agreement. Section 2.05 (a) Requirements with Respect to Registration. Subject to Section 2.06, if and whenever the Company is required by the provisions hereof to register any Registrable Securities under the Securities Act and/or Canadian Securities Laws, including receipt of a Demand Request pursuant to Section 2.01(a), the Company shall comply with the provisions of this Section 2.05. The Company shall prepare and file with the Commission and/or applicable Canadian securities regulatory authorities as expeditiously as possible (and, in the case of a Demand Request, no more than sixty (60) days after receipt of such Demand Request) a Registration Statement with respect to such Registrable Securities and use its best efforts to cause such Registration Statement to become and remain effective; provided, however, that, as far in advance as practicable before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Company shall furnish to and afford each Selling Holder and the managing underwriter(s), if any, a reasonable opportunity to review and comment on copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed, and the Company shall make any corrections reasonably requested by a Selling Holder with respect to such information before filing such registration statement or Prospectus or any amendments or supplements thereto. (b) Maintaining Compliance and Effectiveness. The Company shall prepare and file with the Commission and/or applicable Canadian securities regulatory authorities as expeditiously as possible such amendments and supplements to such registration statement and the prospectus used in connection therewith and take such action as may be necessary to keep such registration statement current and effective for a period of not less than one hundred eighty (180) days (or such shorter period which shall terminate when all of such Registrable Securities have been disposed of), and to comply with the provisions of the Securities Act and/or applicable Canadian Securities Laws with -10respect to the disposition of such Registrable Securities during such period in accordance with the intended methods of disposition set forth in such registration statement. (c) Notification of Certain Events. The Company shall promptly notify each Selling Holder (A) when the registration statement or any amendment or supplement thereto has been filed, and, with respect to the registration statement or any post-effective amendment thereto, when the same has become effective or receipted, as applicable, (B) of any request by the Commission or by any other regulatory body or other body having jurisdiction relating to such offering for amendments or supplements to the registration statement or the Prospectus or for additional information, (C) of any order issued or threatened by the Commission and/or applicable Canadian securities regulatory authorities suspending the effectiveness of such registration statement or

preventing or suspending the use of a prospectus or (D) of the issuance of any notification or order with respect to the suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction or the initiation of any proceedings for such purpose. The Company shall use its best efforts to prevent the issuance of any such order referred to in (C) or (D) and, if any such order is issued, shall use its best efforts to obtain the withdrawal of any such order at the earliest possible moment. The Company shall promptly notify each Selling Holder and the managing underwriter(s), if any, in writing at any time when a Prospectus is required to be delivered under the Securities Act and/or applicable Canadian Securities Laws of the happening of any event as a result of which the Prospectus included in such registration statement, as then in effect, contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and the Company shall promptly prepare and furnish to each Selling Holder a reasonable number of copies of any supplement or amendment to such Prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. (d) Other Qualifications. The Company shall use its best efforts to register or qualify the Registrable Securities covered by such registration statement under the state, local provincial and territorial securities or blue sky laws of such jurisdictions in the United States and Canada as the Selling Holders or the managing underwriter(s) shall reasonably request, and do any and all other acts and things that may be reasonably necessary or advisable to enable each Selling Holder and underwriter to consummate the disposition of the Registrable Securities in such jurisdictions; provided, however, that in no event shall the Company be required (A) to qualify to do business as a foreign corporation in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph, or (B) to execute or file any general consent to service of process in any such jurisdiction. The Company shall use its best efforts to cause all Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities in the United States and Canada as may be necessary to enable the Selling Holders to consummate the disposition of such Registrable Securities. -11(e) Listing. The Company shall use its best efforts to cause all Registrable Securities covered by such registration statement to be (A) listed on the Nasdaq and the Toronto Stock Exchange and (B) listed or qualified for trading on any other stock exchange or quotation service on which the Company's outstanding Common Shares are listed or qualified for trading; provided that the applicable listing requirements are satisfied no later than the effective date of such registration statement. (f) Documents to be Delivered. The Company shall furnish to each Selling Holder and each underwriter, if any, of the Registrable Securities covered by such registration statement such number of copies of (A) such registration statement and each amendment and supplement thereto (in each case including all exhibits), including conformed copies, (B) the Prospectus included in such registration statement (including each preliminary prospectus), in conformity with the requirements of the Securities Act and/or applicable Canadian Securities Laws, (C) such documents incorporated by reference in such registration statement or Prospectus, and (D) such other documents as such Selling Holder or such underwriter, if any, may reasonably request, and a copy of any and all transmittal letters or other correspondence to or received from the Commission and/or applicable Canadian securities regulatory authorities or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering. (g) Opinions and Comfort Letters. In connection with an underwritten offering of Registrable Securities, the Company shall (A) cause opinions of counsel to the Company (which counsel and opinions shall be reasonably satisfactory to the managing underwriter(s)), to be delivered to the underwriters and the Selling Holders covering the matters customarily covered in opinions requested in underwritten offerings by selling security holders and (B) cause "cold comfort" letters and updates thereof (which letters and updates shall be reasonably satisfactory to the managing underwriter(s)) from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired or owned by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement), to be delivered to each of the underwriters and the Selling Holders of such Registrable Securities included in such underwritten offering, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with underwritten offerings by

selling security holders. (h) Earnings Statement. The Company shall comply with all applicable rules and regulations of the Commission and/or applicable Canadian securities regulatory authorities and make generally available to security holders earnings statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act or applicable Canadian Securities Laws) not later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (A) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a Public Offering and (B) if not sold to underwriters in such an offering, -12commencing on the first day of the fiscal quarter of the Company after the effective date of a registration statement, which statements shall cover said 12-month periods. (i) Cooperation on Regulatory Filings. The Company shall cooperate with each Selling Holder and the managing underwriter, if any, participating in the disposition of such Registrable Securities in connection with any filings required to be made with the National Association of Securities Dealers, Inc. and/or applicable securities regulatory authorities in Canada. (j) Cooperation in Marketing. The Company shall use its best efforts to cooperate as requested by the Selling Holders in customary marketing efforts undertaken in connection with the Registrable Securities, including sending appropriate officers of the Company to attend any "road shows" and investor and rating agency presentations scheduled in connection with any such registration. (k) Share Certificates. The Company shall furnish for delivery in connection with the closing of any offering of Registrable Securities pursuant to a registration effected pursuant to Section 2.01(a) or Section 2.02(a) unlegended certificates representing ownership of the Registrable Securities being sold in such denominations as shall be requested by each Selling Holder or the underwriters. (l) General Cooperation. The Company shall enter into any other customary agreements and take such other actions as are reasonably required in order to expedite or facilitate the disposition of any Registrable Securities or otherwise. (m) Condition to Company's Obligation. It shall be a condition precedent to the obligation of the Company to take any action with respect to any Registrable Securities that the holder thereof, shall furnish to the Company such information regarding such holder, the Registrable Securities and any other Company securities held by such holder as the Company shall reasonably request and as shall be required in connection with the action taken by the Company. (n) Actions Upon Notice of Certain Events. Each holder of Registrable Securities agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.04(c), such Stockholder will forthwith discontinue disposition of Registrable Securities until such Stockholder's receipt of the copies of the supplemented or amended prospectus contemplated by Section 2.04(c), and, if so directed by the Company such Stockholder will deliver to the Company (at the Company's expense) all copies (including, without limitation, any and all drafts), other than permanent file copies, then in such Stockholder's possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice. In the event that the Company shall give any such notice, the period mentioned in Section 2.04(b) shall be extended by the greater of (A) three months, or (B) the number of days during the period from and including the date of the giving of such notice pursuant to Section 2.04(c) to and including the date when each holder of Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by Section 2.04(c). -13Section 2.06 Transfers; Rights of Transferee of Registrable Securities. Each Stockholder agrees not to make any transfer of all or any portion of the Registrable Securities unless:

Each Stockholder agrees not to make any transfer of all or any portion of the Registrable Securities unless: (a) there is then in effect a registration statement under the Securities Act and/or applicable Canadian Securities Laws covering such proposed transfer and such transfer is made in accordance with such registration statement; (b) such transfer is made in accordance with Rule 144 or equivalent provisions under Canadian Securities Laws; or (c) such transfer shall not require any registration or qualification under the Securities Act or Canadian Securities Laws. Notwithstanding the foregoing, a Stockholder may transfer all or a portion of the Registrable Securities to a Permitted Transferee, and such Permitted Transferee shall be deemed a Stockholder hereunder. The transferring Stockholder shall provide notice to the Company of any such transfer stating the name and address of such Permitted Transferee and identifying the number of Registrable Securities transferred. Section 2.07 Registration Expenses. Except as otherwise provided herein, the Company shall pay all Registration Expenses with respect to any particular offering (or proposed offering). Section 2.08 Underwriting; Due Diligence. (a) Underwriting Agreements. If requested by the underwriters for any underwritten offering of Registrable Securities pursuant to a registration requested under Section 2.01 or Section 2.02, the Company shall enter into an underwriting agreement with such underwriters for such offering, which agreement will contain such representations and warranties and covenants by the Company and such other terms and provisions as are customarily contained in underwriting agreements, including indemnification and contribution provisions substantially to the effect and to the extent provided in Article 4, and agreements as to the provision of opinions of counsel and accountants' letters to the effect and to the extent provided in Section 2.04(g). The Selling Holders on whose behalf the Registrable Securities are to be distributed by such underwriters shall be parties to any such underwriting agreement and the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters, shall also be made to and for the benefit of such Selling Holders. Such underwriting agreement shall also contain such representations and warranties by such Selling Holders and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions on the part of selling stockholders, including, without limitation, custody agreements (including irrevocable powers of attorney) and indemnification and contribution provisions substantially to the effect and to the extent provided in Article 4. -14(b) Access to Information. In connection with the preparation and filing of each Registration Statement registering Registrable Securities under the Securities Act or applicable Canadian Securities Laws pursuant to Section 2.01 or Section 2.02 or pursuant to Section 2.08, upon reasonable notice the Company shall give the Selling Holders and the underwriters, if any, and their respective counsel and accountants, such reasonable and customary access to its books, records and properties and such opportunities to discuss the business and affairs of the Company with its officers and the independent public accountants who have certified the financial statements of the Company as shall be necessary, in the opinion of such Selling Holders and such underwriters, or their respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act or applicable Canadian Securities Laws; provided that such Selling Holders and the underwriters, and their respective counsel and accountants shall use their reasonable best efforts to coordinate any such investigation of the books, records and properties of the Company and any such discussions with the Company's officers and accountants so that all such investigations occur at the same time and all such discussions occur at the same time. Section 2.09 Unregistered Offerings. The parties hereto hereby agree that, in the event that the Company or one or more Demand Holders propose to make an offering or a sale to a strategic purchaser of Common Shares, any other equity securities or securities convertible or exchangeable for equity securities of the Company (other than an acquisition by the Company financed through the issuance of Common Shares) that is exempt from, or not subject to, the registration

requirements of the Securities Act and/or the prospectus requirements under applicable Canadian Securities Laws, the Company and management shall reasonably cooperate with such Demand Holders(s) and their advisers in performing due diligence and marketing such offering to potential investors. Section 2.10 Registration Rights of Other Persons. Prior to the date on which the Stockholder holds Registrable Securities representing less than 50% of the outstanding Common Shares of the Company, the Company may not, without the prior written consent of the Demand Holders, grant to any other Person the right to request a registration of securities of the Company under the Securities Act or Canadian Securities Laws; provided that, if any such written consent is given, the terms of any such right granted or issued shall not be more favorable to such Person than the terms of this Agreement or, any more favorable terms shall also be granted to the Demand Holders. On and after such date the Company may grant to any other Person the right to request a registration of securities of the Company under the Securities Act and/or Canadian Securities Laws, or the right to be included as a Selling Holder in connection with any registration of Registrable Securities; provided that, any such rights may not be exercised by any Person prior to the second anniversary of the IPO Date and provided, further, that the proviso in the preceding sentence is complied with. -15Section 2.11 Termination of Existing Registration Rights; Inconsistent Agreements. The Company and each Stockholder acknowledge and agree that this Agreement shall effectively terminate and replace the Existing Registration Rights and any and all prior agreements to which the Company and such Stockholder are a party with respect to the subject matter hereof. The Company and each Stockholder acknowledge and agree that any rights, privileges and/or obligations of the parties under the Existing Registration Rights or any other prior agreement with respect to the matters set forth herein shall be terminated and shall be of no further force and effect as of the date of this Agreement. The Company shall not hereafter enter into any agreement with respect to its securities which is inconsistent with, violates or diminishes the rights granted to the Stockholders in this Agreement. ARTICLE III REPRESENTATIONS, WARRANTIES AND AGREEMENTS Section 3.01 Company Representations, Warranties and Agreements. The Company represents and warrants to, and agrees with, each Stockholder that: (a) The Company has all requisite corporate power and authority to execute, deliver, and perform this Agreement. This Agreement has been duly authorized, executed, and delivered by the Company. No consent, authorization, approval, order, license, certificate, or permit of or from, or declaration or filing with, any United States federal, state, local, or other governmental authority or any court or other tribunal is required by the Company for the execution, delivery or performance of this Agreement by the Company (except filings under the Securities Act and/or Canadian Securities Laws which will be made and any consents under state, local, provincial or territorial securities or blue sky laws which will be obtained). (b) The Company shall not enter into any transaction involving the issuance or transfer by any other Person of Other Securities to a Stockholder, or any merger or consolidation in which it is not the surviving Person or any sale, lease or other transfer of all or substantially all the assets of the Company, unless effective provision is made for the assumption by such other Person, jointly and severally with the Company if the Company shall remain in existence, of all of the obligations of the Company hereunder, and in the case of any such issuance or transfer, the registration of such Other Securities on the same basis as the registration of the other Registrable Securities hereunder. (c) The execution and delivery of this Agreement by the Company does not, and the consummation of the transactions contemplated hereby will not, violate, conflict with, or result in a breach of any provision of, or

constitute a default (with or -16without notice or lapse of time or both) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination, cancellation, or acceleration of any obligation or the loss of a material benefit under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of the Company or any of its subsidiaries pursuant to any provisions of (A) the articles of incorporation, by-laws or similar governing documents of the Company or any of its subsidiaries, (B) any statute, law, ordinance, rule, regulation, judgment, decree, order, injunction, writ, permit or license of any governmental authority applicable to the Company or any of its subsidiaries or any of their respective properties or assets or (C) any note, bond, mortgage, indenture, deed of trust, license, franchise, permit, concession, contract, lease or other instrument, obligation or agreement of any kind to which the Company or any of its subsidiaries is a party or by which it or any of its properties or assets may be bound or affected as soon as the conditions can be so satisfied. (d) The Company covenants that it will file any reports required to be filed by it under the Securities Act, the Exchange Act and Canadian Securities Laws, will make available "adequate current public information concerning the Company within the meaning of paragraph (c) of Rule 144 and that it will take such further action as any Stockholder may reasonably request, all to the extent required from time to time to enable such Stockholder to sell Registrable Securities without registration pursuant to the available exemptions under the Securities Act and/or Canadian Securities Laws. Upon the request of any Stockholder, the Company will deliver to it a written statement as to whether it has complied with such requirements. Section 3.02 Stockholder Representations, Warranties and Agreements. Each Stockholder represents and warrants to, and agrees with, the Company, that: (a) If such Stockholder is an entity, it is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization and has all requisite power and authority to execute, deliver, and perform this Agreement. This Agreement has been duly authorized by such Stockholder and has been duly executed and delivered by it. (b) Neither Stockholder nor any of its Affiliates will take, directly or indirectly, during the term of this Agreement, any action designed to stabilize (except as may be permitted by applicable law) or manipulate the price of any security of the Company. (c) Stockholder shall promptly furnish to the Company upon the Company's request any and all information as may be required by, or as may be necessary or advisable to comply with the provisions of, the Securities Act, the Exchange Act, and/or applicable Canadian Securities Laws in connection with the preparation and filing of any Registration Statement pursuant hereto, or any amendment or supplement thereto, or any Preliminary Prospectus or Prospectus included therein and/or filed with Canadian securities regulators. -17Section 3.03 Survival of Representations and Agreements. All representations, warranties, covenants and agreements contained in this Agreement shall be deemed to be representations, warranties, covenants and agreements at the effective date of each Registration Statement contemplated by this Agreement, and such representations, warranties, covenants and agreements shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Company, any Stockholder, or any other Person and shall survive termination of this Agreement. ARTICLE IV INDEMNIFICATION AND CONTRIBUTION Section 4.01 Indemnification and Contribution.

Section 4.01 Indemnification and Contribution. (a) Indemnification by the Company. In the event of any registration of any Registrable Securities under the Securities Act and applicable Canadian Securities Laws pursuant to this Agreement, the Company will, and it hereby does, indemnify and hold harmless, to the full extent permitted by law, each Selling Holder, their directors and officers, employees, stockholders, general partners, limited partners, members, advisory directors and managing directors (and directors, officers, stockholders, general partners, limited partners, members, advisory directors, managing directors and controlling persons thereof), each other person who participates as an underwriter in the offering or sale of such securities and each other person, if any, who controls, is controlled by or is under common control with any such Selling Holder or any such underwriter within the meaning of the Securities Act and Canadian Securities Laws, against any and all losses, claims, damages or liabilities, joint or several, and expenses (including any amounts paid in any settlement effected with the Company's consent) to which such Selling Holder, any such director, or officer, employee, stockholder, general or limited partner, member, or advisory or managing director or any such underwriter or controlling person may become subject under the Securities Act and Canadian Securities Laws, state securities or blue sky laws, common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) or expenses arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained, on the effective date thereof, in any registration statement under which such Registrable Securities were registered under the Securities Act and applicable Canadian Securities Laws, any prospectus (including each preliminary prospectus) contained therein, or any amendment or supplement thereto or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of a prospectus (including each preliminary prospectus), in light of the circumstances under which they are made), and the Company will reimburse each such Selling Holder and each such director, officer, employee, general partner, limited partner, advisory director, managing director or underwriter and controlling person for any legal or any other expenses reasonably incurred by them as such expenses are incurred in connection with investigating or defending such loss, claim, liability, action or proceeding; provided that the Company shall not be liable in -18any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement or amendment or supplement thereto or in any such prospectus (including each preliminary prospectus) in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by such Selling Holder or such director, officer, employee, general or limited partner, managing director or underwriter specifically stating that it is for use in the preparation thereof; provided, further, that the Company shall not be required to indemnify any such person if such untrue statement or omission or alleged untrue statement or omission was contained or made in any preliminary prospectus and corrected in the final prospectus or any amendment or supplement thereto and the final prospectus does not contain any other untrue statement or omission or alleged untrue statement or omission of a material fact that was the subject matter of the related proceeding and any such loss, liability, claim, damage or expense suffered or incurred by such indemnified person resulted from any action, claim or suit by any person who purchased Registrable Securities which are the subject thereof from such indemnified person and it is established in the related proceeding that such indemnified person failed to deliver or provide a copy of the final prospectus (as amended or supplemented) to such person with or prior to the confirmation of the sale of such Registrable Securities sold to such person if required by applicable law, unless such failure to deliver or provide a copy of the final prospectus (as amended or supplemented) was a result of noncompliance by the Company with this Agreement or as a result of the failure of the Company to provide such final prospectus. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of each Selling Holder or any such director, officer, employee, general partner, limited partner, managing director, underwriter or controlling person and shall survive the transfer of such securities by any Selling Holder. (b) Indemnification by Selling Holders and Underwriters. The Company may require, as a condition to including Registrable Securities in any registration statement filed pursuant to this Agreement, that the Company will have received an undertaking reasonably satisfactory to it from any Selling Holder or any underwriter to indemnify and hold harmless the Company and its directors, officers, employees, controlling persons and all other prospective sellers and their respective directors, officers, general and limited partners, managing directors, and their respective controlling persons, against any and all losses, claims, damages or liabilities, joint or several, and

expenses (including any amounts paid in any settlement effected with the consent of the applicable Selling Holder and underwriter) to which the Company and its directors, officers, employees, controlling persons or any other prospective sellers and their respective directors, officers, general and limited partners, managing directors, and their respective controlling persons may become subject under the Securities Act and Canadian Securities Laws, state securities or blue sky laws, common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) or expenses arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained, on the effective date thereof, in any registration statement under which such Registrable Securities were registered under the -19Securities Act or applicable Canadian Securities Laws, any prospectus (including each preliminary prospectus) contained therein, or any amendment or supplement thereto or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of a prospectus (including each preliminary prospectus), in light of the circumstances under which they are made), and the applicable Selling Holder and underwriter will reimburse the Company and its directors, officers, employees, controlling persons and all other prospective sellers and their respective directors, officers, general and limited partners, managing directors, and their respective controlling persons for any legal or any other expenses reasonably incurred by them as such expenses are incurred in connection with investigating or defending such loss, claim, liability, action or proceeding; provided that any Selling Holder and any underwriter shall only be liable in any such case if any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement or amendment or supplement thereto or in any such prospectus (including each preliminary prospectus) in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by such Selling Holder or any such underwriter specifically stating that it is for use in the preparation thereof; provided, further, that such Selling Holder or underwriter shall not be required to indemnify the Company if such untrue statement or omission or alleged untrue statement or omission was contained or made in any preliminary prospectus and corrected in the final prospectus or any amendment or supplement thereto and the final prospectus does not contain any other untrue statement or omission or alleged untrue statement or omission of a material fact that was the subject matter of the related proceeding and is covered by such Selling Holder's or underwriter's obligation under this Section 6.2 and any such loss, liability, claim, damage or expense suffered or incurred by the Company resulted from any action, claim or suit by any person who purchased Registrable Securities or other securities of the Company which are the subject thereof from the Selling Holder or the Company or another holder and it is established in the related proceeding that a copy of the final prospectus (as amended or supplemented) was delivered or provided to such person with or prior to the confirmation of the sale of such Registrable Securities sold to such Person if required by applicable law. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any such director, officer, employee or controlling person or other indemnified person. No Selling Holder shall be liable under any indemnity provided pursuant to this Agreement for any amounts exceeding the product of the purchase price per Registrable Security and the number of Registrable Securities being sold pursuant to such registration statement or prospectus by such Selling Holder. (c) Notices of Claims, Etc. Promptly after receipt by an indemnified party hereunder of written notice of the commencement of any action or proceeding with respect to which a claim for indemnification may be made pursuant to this Agreement, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party, promptly give written notice to the latter of the commencement of such action; provided that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under this Agreement, -20except to the extent that the indemnifying party is actually materially prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist in respect of such claim, the indemnifying party will be entitled to participate in and, jointly with any other indemnifying party similarly notified, to assume the defense thereof, to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party for

election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof, unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties arises in respect of such claim after the assumption of the defense thereof or a court of competent jurisdiction determines that the indemnifying party is not vigorously defending such action or proceeding. An indemnifying party will not be subject to any liability for any settlement made without its consent (which consent shall not be unreasonably withheld). No indemnifying party will consent to entry of any judgment or enter into any settlement of any pending or threatened proceeding which (i) does not include as an unconditional term thereof the giving by the claimant or plaintiff to all indemnified parties of a release from all liability in respect to such claim or litigation, (ii) involves the imposition of equitable remedies or the imposition of any non-financial obligations on such indemnified party or (iii) otherwise adversely affects such indemnified party, other than as a result of the imposition of financial obligations for which such indemnified party will be indemnified hereunder. Notwithstanding anything to the contrary contained herein, an indemnifying party will not be obligated to pay the fees and expenses of more than one counsel (together with local counsel) for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel or counsels (together with the fees of local counsel). (d) Contribution. If the indemnification provided for in this Article 4 shall for any reason be unavailable or insufficient to an indemnified party in respect of any loss, liability, cost, claim or damage referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, cost, claim or damage (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party or parties on the other hand from the offering or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the indemnified party or parties on the one hand and the indemnifying party or parties on the other hand in connection with the offering shall be -21deemed to be in the same respective proportions as the net proceeds from the offering (before deducting expenses) and the total underwriting discounts and commissions received by the underwriters, in each case as set forth in the table on the cover of a prospectus, bear to the aggregate public offering price of the securities. The relative fault of the indemnified and indemnifying parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnified or indemnifying parties and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by an indemnified party as a result of the loss, cost, claim, damage or liability, or action in respect thereof, referred to above in this paragraph (d) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. The Company and the Selling Holders agree that it would not be just and equitable if contribution pursuant to this Article 4 were determined by pro rata allocation (even if the underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. Notwithstanding any other provision of this Article 4, no Selling Holder shall be required to contribute any amount in excess of the amount by which the net proceeds of the offering received by such Selling Holder exceed the amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. Each Selling Holder's obligations to contribute pursuant to this Section 4.01(d) are several in the proportion that the net proceeds of the offering received by such Selling Holder bears to the total net proceeds of the offering received by all the Selling Holders and not joint. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act or applicable Canadian Securities Laws) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (e) Indemnification and contribution similar to that specified in the preceding paragraphs of this Article 4 (with

appropriate modifications) shall be given by the Company, the Selling Holders with Registrable Securities included in such registration and the underwriters with respect to any required registration or other qualification of securities under any state law or regulation or governmental authority. (f) The obligations of the parties under this Article 4 shall be in addition to any liability which any party may otherwise have to any other party. ARTICLE V MISCELLANEOUS Section 5.01 Remedies. In the event of breach by any party of any of its obligations under this Agreement, the other parties, in addition to being entitled to exercise all rights provided -22herein or granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Stockholder agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by the Company or such Stockholder, as the case may be, of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, the Company or such Stockholder, as the case may be, shall waive the defense that a remedy at law would be adequate. No failure or delay on the part of the Company or any Stockholder in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. Section 5.02 Amendments; Waivers and Termination. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, without the written consent of the Company and a majority of the Demand Holders. Section 5.03 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, by electronic mail or facsimile (in each case, receipt of which is confirmed) or mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): if to the Company, to: Corel Corporation 1600 Carling Avenue Ottawa, Ontario Canada K1Z8R7 Attention: General Counsel, with a copy to:

if to a Stockholder, to the address for such Stockholder set forth in the share register maintained by the Company, as amended from time to time. Section 5.04 Interpretation. When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement

When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. -23Section 5.05 Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. Section 5.06 Entire Agreement; No Third Party Beneficiaries. This Agreement (including the documents and the instruments referred to herein) (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, and (b) is not intended to confer upon any Person other than the parties hereto and their respective successors and permitted assigns, any rights or remedies hereunder. Section 5.07 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the [State of New York] applicable to contracts to be performed entirely within such State. Section 5.08 Severability. Wherever possible, each provision hereof shall be interpreted in such a manner as to be valid, legal and enforceable under applicable law, but in case any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such provision shall be ineffective to the extent, but only to the extent, of such invalidity, illegality or unenforceability without invalidating or rendering unenforceable the remainder of this Agreement, unless such a construction would be unreasonable or materially impair the rights of any party hereto. Section 5.09 Successors and Assigns. All covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and permitted assigns of the parties hereto whether so expressed or not. This Agreement shall not be assignable by the Company or the Stockholder except to a Permitted Transferee. Section 5.10 Canadian Offering. Although this Agreement has been drafted in contemplation of an IPO involving a Public Offering in both the United States and Canada, the Company may, in its sole discretion, decide not to proceed with the Canadian Public Offering. In the event that no Public Offering in Canada is consummated at the time of the IPO or at any relevant time under this Agreement, the Company's Common Shares are no longer actively traded on the TSX, all provisions in this Agreement that relate to the registration -24of Registrable Securities in Canada, including without limitation, references to Canadian Securities Laws, the Canadian Prospectus, Canadian securities regulatory authorities and the Toronto Stock Exchange, shall be of no force and effect and this Agreement shall be interpreted for all purposes as if such provisions did not exist.. Section 5.11 Use of Terms. This Agreement contemplates the filing of Registration Statements under the Securities Act and prospectuses under Canadian Securities Laws on numerous occasions involving various offers of securities. In connection with

under Canadian Securities Laws on numerous occasions involving various offers of securities. In connection with such Registration Statements and prospectuses, there may be identified therein one or more underwriters through which securities are to be offered on behalf of the Company or the Stockholder, or both, pursuant to either a "firm-commitment" or "best-efforts" arrangement, and, in the case where there is more than one underwriter, one or more of the underwriters may be designated as the "manager" or "representative" or the "co-managers" or "representatives" of the several underwriters. Accordingly, all references herein to an "underwriter" or "underwriters" are intended to refer to a "principal underwriter" (as defined in Rule 405 under the Securities Act) and to provide for those transactions in which securities may be offered by or through one or more underwriters, and not to imply that any of the transactions contemplated hereby is conditioned in any manner whatsoever on the participation therein by one or more underwriters on behalf of any party. -25IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. By: Name: Title: By: Name: Title: By: Name: Title: By: Name: Title: By: Name: Title: By: Name: Title: -26ANNEX A PIGGYBACK HOLDERS -27ANNEX B IPO PARTICIPANTS
REGISTRABLE SECURITIES TO BE INCLUDED IN IPO FIRM COMMITMENT PORTION ----------------------REGISTRABLE SECURITIES TO BE INCLUDED IN IPO OVER-ALLOTMENT OPTION ----------------------

NAME ----

-28  

Exhibit 4.2

  

  

  

Exhibit 4.2

  

  

  

   Exhibit 10.2 EXECUTIVE EMPLOYMENT AGREEMENT Effective June 17, 2005 (this "AGREEMENT") BETWEEN: COREL CORPORATION, a corporation existing under the laws of the Province of Ontario

(the "CORPORATION") - and DAVID C. DOBSON, an individual currently residing in the State of Connecticut (the "EXECUTIVE") WHEREAS the Corporation wishes to employ the Executive and the Executive wishes to become an employee of the Corporation; AND WHEREAS the Corporation and the Executive agree that it is desirable to enter into this Agreement to specify the terms and conditions of the Executive's employment with the Corporation; NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Corporation and the Executive agree as follows. 1. INTERPRETATION 1.1 DEFINITIONS. In this Agreement, the following capitalized terms have the following meanings: (a) "AFFILIATE" means an affiliated entity and as defined in Ontario Securities Commission Rule 45-501 and "controlled" has the meaning given in that Rule, as amended or replaced from time to time, and "affiliated" has a corresponding meaning. (b) "BASE GRANT" has the meaning set out in Section 3.4. (c) "BOARD" means the board of directors of the Corporation. (d) "CHANGE OF CONTROL" means: (1) any transaction or series of transactions, whether by way of consolidation, amalgamation, merger, reorganization or plan of amalgamation involving the Corporation, with or into any other person (other than Vector);

Corel Corporation Executive Employment Agreement Page 2 of 15 (2) any transfer, conveyance, sale, lease, exchange or otherwise of all or substantially all of the assets of the Corporation, to any other person (other than Vector); and (3) the lawful acquisition, directly or indirectly and by any means whatsoever, by any person, or by a group of persons acting jointly or in concert, of that number of voting shares of the Corporation, which is 35% or more of the total voting shares issued and outstanding immediately after such acquisition, unless Vector continues to hold a number of voting shares which represents a greater percentage than the first-mentioned person or group of persons. Provided that an initial public offering of the Corporation, whether or not a Qualified IPO, shall not be a Change of Control. (e) "COMPETING ENTITIES" has the meaning set out in Section 7.1. (f) "EBITDA" has the meaning set out in Section 3.2. (g) "GOOD REASON" means the occurrence of any of the following events without the written consent of the Executive:

(1) a reduction by the Corporation in the Executive's salary; (2) the taking of any action by the Corporation which would, in the aggregate, materially adversely affect the Executive's participation in or materially reduce the Executive's incentive compensation, pension, life insurance, health, accident, disability benefits or other benefits in plans in which the Executive is participating; (3) any breach by the Corporation of any of its material obligations contained in this Agreement which remains uncured for more than 10 days after the Executive provides written notice of the breach to the Corporation; and; (4) a material adverse reduction of the Executive's responsibilities or reporting relationships. (h) "IPO GRANT" has the meaning set out in Section 3.5. (i) "IPO LOAN" has the meaning set out in Section 4.3. (j) "LOAN" has the meaning set out in Section 4.3. (k) "NON-IPO LOAN" has the meaning set out in Section 4.3. (l) "PLAN" means the Corel Corporation Share Option and Phantom Share Unit Plan dated December 1, 2003 as amended from time to time. (m) "QUALIFIED IPO" has the meaning set out in Section 3.5. (n) "REASONABLE NOTICE PERIOD" means:

Corel Corporation Executive Employment Agreement Page 3 of 15 (1) if the Executive's employment is terminated prior to the first anniversary of the Start Date, eighteen months; and (2) if the Executive's employment is terminated on or after the first anniversary of the Start Date, the greater of 12 months or the period from the Termination Date to the date that is 18 months from the first anniversary of the Start Date. (O) "SALARY" has the meaning set out in Section 3.1. (p) "SHARES" means Class A common shares of the Corporation. (q) "TERMINATION DATE" means the Executive's last day of active employment and does not include any period of statutory or reasonable notice or any period of deemed employment and "terminate" and "terminated" have corresponding meanings. (r) "VECTOR" means any entity or fund Affiliated with, or managed directly or indirectly by, Vector Capital Corporation or its Affiliates, or any other entity controlled, directly or indirectly, by any such entities or funds. 1.2 HEADINGS, SECTIONS AND PLURAL. The inclusion of headings in this Agreement is for convenience of reference only and shall not affect its construction or interpretation. Throughout this Agreement, whenever required by context, words importing the singular include the plural and vice versa. In this Agreement, references to "Sections" or to "Schedules" are references to sections in or schedules to this Agreement, unless expressly stated otherwise. 1.3 DEDUCTIONS AND WITHHOLDINGS. The payments to the Executive set out in this Agreement are subject to applicable deductions and withholdings. 1.4 BENEFIT CONTRIBUTIONS AND PARTICIPATION. The Corporation's contributions to, the Executive's participation in, and any conversion of, the group benefit plans as set out in this Agreement are

subject to the terms and conditions of the benefit plans, and changes to or cancellations of such plans over time, as may be made with such notice to the Executive as is practical in the circumstances, and in the sole discretion of the Corporation. 1.5 CURRENCY. Unless otherwise indicated, all dollar amounts referred to in this Agreement are in Canadian currency. 1.6 PREVAILING AGREEMENT. In the event of any inconsistencies between this Agreement and the Plan, the provisions in this Agreement supersede the Plan to the extent of such inconsistencies. 2. TERM AND DUTIES 2.1 START DATE. The Corporation agrees to employ the Executive and the Executive agrees to become employed with the Corporation on the terms and conditions set out in this Agreement commencing on a date which is no later than June 27, 2005 (the "START DATE"), The terms and conditions of employment set out in this Agreement are conditional upon the Executive starting work with the Corporation on the Start Date.

Corel Corporation Executive Employment Agreement Page 4 of 15 2.2 POSITION. The Executive will serve in an executive capacity as the Chief Executive Officer of the Corporation and in such other capacities as may be agreed upon by the Corporation and the Executive from time to time. The Executive will report to the Board. 2.3 DUTIES. The Executive will perform the duties customarily performed in his position including, without limitation, regularly reporting his activities and the results thereof to the Board. The Executive agrees to serve as a director and/or officer of the Corporation and its Affiliates as requested by the Corporation in good faith and without compensation other than as set out in Section 3, The Executive will work primarily from the Corporation's head office in Ottawa, Ontario, but understands and agrees that he will be required to travel frequently throughout the world as the business needs of the Corporation require. 2.4 GOOD FAITH. The Executive shall devote his full business time and attention to the affairs of the Corporation and will use his best efforts, skills and abilities to honestly, faithfully, diligently and in good faith promote the Corporation's best interests, and he shall not have any interests that conflict with those of the Corporation. The Executive shall observe and abide by the policies of the Corporation in effect from time to time. 2.5 THIRD PARTY OBLIGATIONS. The Executive represents and warrants that he honestly and reasonably believes after proper enquiry, that his obligations under this Agreement will not breach any obligations the Executive owes to third parties, including any of the Executive's former employers and that at the date hereof, he is not aware of any claims or threatened claims that he has breached any such obligations in connection with his obligations under this Agreement. 2.6 WORK STATUS. The Executive will be required to work in Canada and may be requested by the Board to work in the United States and internationally, as needed and determined by the Board. The Executive represents and warrants that he is legally entitled to work in Canada. 3. COMPENSATION 3.1 BASE SALARY. The Corporation agrees to pay the Executive an annual base salary of $415,000, payable in accordance with the Corporation's payroll practices in effect from time to time, subject to annual review and to increase as determined by the Board ("SALARY"). 3.2 DISCRETIONARY BONUS. The Executive will be eligible to participate in the Corporation's annual bonus plan with a target bonus of 100% of Salary for the achievement of all targets. Any bonus payment is subject to achievement by the Executive of the performance targets established by the Board in consultation with the Executive before the start of each fiscal year. Currently, the performance targets are based on a combination of revenue targets and target earnings before interest, tax, depreciation and amortization ("EBITDA"). The Executive's individual weighting of revenue and EBITDA targets for 2005 are set out on Schedule "A". To be

eligible for the bonus payment, the Executive must have been actively employed throughout the fiscal year in respect of which his performance was assessed, unless provided otherwise in this Agreement. Notwithstanding the above, the Executive will be eligible for a pro-rated bonus in his first fiscal year of employment proportionate to his length of active employment in that year, with a minimum guaranteed bonus for the Executive's first part fiscal year of employment of $250,000. 3.3 SHARE BASED COMPENSATION PLAN PARTICIPATION. The Executive will be eligible to participate in the Plan and such other share based incentive plans or similar plans as may be

Corel Corporation Executive Employment Agreement Page 5 of 15 established for senior executives by the Corporation. All options granted to the Executive, including the Base Grant of options and the IPO Grant of options are governed by the terms and conditions of the Plan, including any restrictions on exercise of options and any requirements to agree to conditions, restrictions or agreements set out in the Plan, except with respect to the vesting terms, which are governed by this Agreement. Except as expressly provided in Section 5.3 of this Agreement or pursuant to the Plan, no share based compensation may vest on or after the Termination Date. 3.4 BASE GRANT OF OPTIONS. On the Start Date, the Corporation will grant to the Executive options to acquire 3,718,258 Shares of the Corporation (the "BASE GRANT"), subject to the terms and conditions set out in this Agreement and the Plan. The Base Grant of options will have an exercise price of 10 Cent in USD per Share. The Base Grant of options will be exercisable as to 25% on and after the Start Date (the "VESTED BASE GRANT") and as to additional 6.25% on and after the end of each quarter commencing after the first anniversary of the Start Date and for 10 years from the date of grant. 3.5 IPO GRANT OF OPTIONS. On the Start Date, the Corporation will grant to the Executive options to acquire 929,565 Shares of the Corporation (the "IPO GRANT"), subject to the terms and conditions set out in this Agreement and the Plan. The IPO Grant of options will have an exercise price of 10 Cent in USD per Share. The IPO Grant of options will be exercisable on the Start Date and for 8 years after an initial public offering of the Corporation that yields proceeds to the Corporation of not less than $75 million (a "QUALIFIED IPO"). 3.6 VESTED BASE GRANT AND IPO GRANT. The Vested Base Grant of options and the IPO Grant of options are subject to the following terms and conditions. If the Executive's Termination Date, as defined in the Plan, occurs prior to the first anniversary of the Start Date, the Corporation may, but is not required to, repurchase any or all Shares issued to the Executive on the exercise of the Vested Base Grant of options for an amount equal to 10 Cent in USD per Share and the unexercised portion of the Vested Base Grant of options will immediately expire. If the Executive's Termination Date occurs prior to a Qualified IPO or if a Qualified IPO is not completed on or before the second anniversary of the Start Date, the Corporation may, but is not required to, repurchase any or all Shares issued to the Executive on the exercise of the IPO Grant of options for an amount equal to 10 Cent in USD per Share and the unexercised portion of the IPO Grant of options will immediately expire. 3.7 PAYMENTS FOR DISTRIBUTIONS ON BASE GRANT OF OPTIONS AND IPO GRANT OF OPTIONS. If dividends or other distributions are paid on Shares of the Corporation at a time when the Executive holds unexercised options under the BASE Grant of options or the IPO Grant of options, the Corporation will provide the Executive with a payment equivalent to distributions the Executive would have been eligible to receive had the Base Grant of options and the IPO Grant of options held by the Executive been fully exercised, provided, however, that at any time after the IPO Grant of options is forfeited, the Executive shall not be entitled to a payment in respect of any dividends or other distributions in respect of the IPO Grant of options. 4. EXPENSES, BENEFITS AND VACATION 4.1 GENERAL EXPENSES. THE Corporation will reimburse the Executive for his reasonable and approved business expenses, including travel expenses, incurred by him in connection with the performance of his duties under this Agreement, upon providing appropriate receipts

Corel Corporation Executive Employment Agreement Page 6 of 15 satisfactory to the Corporation and in accordance with the Corporation's policies in effect from time to time. 4.2 RELOCATION EXPENSES. The Executive agrees to relocate to Canada and thereafter to maintain his fulltime residence in Canada for the duration of his employment. The Corporation will reimburse the Executive for the reasonable relocation expenses incurred by him to relocate himself and his family to Canada, upon providing appropriate receipts satisfactory to the Corporation and in accordance with the Corporation's policies, to a maximum total of $40,000. 4.3 LOAN. The Corporation will make a loan to the Executive in the amount of $562,500 with interest compounded annually at the prime rate of interest provided by the Royal Bank of Canada to its customers and secured against the Base Grant of options or any Shares issuable upon exercise thereof (the "LOAN"). $312,500 of the Loan (the "IPO LOAN") and interest thereon will be forgiven on the earlier of (1) the completion of a Qualified IPO of the Corporation or (2) the first filing of a registration statement with respect to a Qualified IPO of the Corporation. $250,000 of the Loan (the "NON-IPO LOAN"), plus interest thereon shall be repaid by the Executive on or before the earlier of (1) the completion of a Qualified IPO of the Corporation or (2) the first filing of a registration statement with respect to a Qualified IPO of the Corporation. Payments pursuant to Section 3.7 shall be applied to repayment of the Non-IPO Loan, plus interest thereon, until the Non-IPO Loan is repaid in full. In the event any amount of the Non-IPO Loan and interest thereon, remains outstanding on the date of a Qualified IPO, it shall be repaid in full in cash, at the Executive's election, with any balance outstanding repaid by the cancellation of vested Base Grant of options and/or IPO Grant of options valued by subtracting the exercise price from the fair market value of a Share at the relevant date. The whole outstanding amount of the Loan and of the interest thereon is immediately due and payable on the Termination Date and first by applying any payments to be made to the Executive pursuant to Article 5 of this Agreement to repayment and second by the cancellation of vested Base Grant of options and/or IPO Grant of options valued by subtracting the exercise price from the fair market value of a Share at the relevant date and third by cash payment by the Executive save and except that in the event that the Executive's employment is terminated by the Corporation without cause or by the Executive for Good Reason, any amount outstanding of the IPO Loan shall be forgiven. 4.4 BENEFIT PLANS. The Executive will be eligible to participate in the group benefit plans available to employees of the Corporation from time to time, subject to Section 1.4. To the extent permitted by the insurers, the Corporation will request the waiver of the waiting periods and pre-existing condition limitations for participating in the benefit plans. 4.5 VACATION. The Executive will be entitled to four weeks of vacation time per year to be taken at times that are consistent with the business interests of the Corporation, and in accordance with the Corporation's vacation policies. The Executive may carry forward up to four weeks of vacation time to subsequent vacation years, provided that in each vacation year the Executive takes at least the minimum vacation time required under the Ontario Employment Standards Act, 2000 as amended. 4.6 FEES. The Corporation will reimburse the Executive for legal advice in connection with completing this Agreement to a maximum of $6,250 upon the Executive providing appropriate receipts satisfactory to the Corporation.

Corel Corporation Executive Employment Agreement Page 7 of 15 5. TERMINATION 5.1 TERMINATION BY EXECUTIVE. The Executive may terminate his employment with the Corporation (other than for Good Reason) at any time by providing the Corporation with two months of notice in writing. Whether or not, upon receipt of the Executive's resignation, the Corporation terminates the Executive's employment before the date the resignation was to be effective, the Corporation will, in full satisfaction of its obligations to the Executive: (a) pay the Executive's Salary and vacation pay accrued until the date the resignation is or was to be effective; (b) reimburse the outstanding expenses properly incurred by the Executive until the date his employment ceases; (c) continue its contributions to the group benefit plans until the date the resignation is or was to be effective, subject to

Section 1.4; and continue the vesting of the Base Grant of options to the date the resignation is or was to be effective. 5.2 TERMINATION BY CORPORATION FOR CAUSE. The Corporation may terminate the Executive's employment at any time with cause and without prior notice or any further obligations by the Corporation, and the Executive will be ineligible for any bonus or pro-rated bonus payment. On the termination of the Executive's employment for cause, the Corporation will, in full satisfaction of its obligations to the Executive, pay the Executive's Salary and vacation pay accrued until the Termination Date and reimburse the outstanding expenses properly incurred by the Executive until the Termination Date. 5.3 TERMINATION BY CORPORATION WITHOUT CAUSE OR RESIGNATION BY THE EXECUTIVE FOR GOOD REASON. The Corporation may terminate the Executive's employment at any time, without cause and the Executive may resign for Good Reason, on providing written notification. If the Corporation terminates the Executive's employment without cause or the Executive resigns for Good Reason and the Executive signs and delivers to the Corporation a full and final release of the Corporation and its Affiliates and all directors thereof, in the form attached to this Agreement as Schedule "B", the Corporation will, in full satisfaction of its obligations to the Executive and regardless of any other income that the Executive may earn in mitigation: (a) Pay the Executive's Salary and vacation pay accrued until the Termination Date and reimburse the Executive's outstanding expenses properly incurred until the Termination Date; (b) Pay the Executive a bonus pursuant to Section 3.2 pro-rated for the portion of the year prior to the Termination Date calculated at 100% of target performance; (c) Pay on-going Salary payments for the Reasonable Notice Period from the Termination Date based on the Executive's Salary in effect at the Termination Date, in accordance with the Corporation's payroll practices; (d) Continue to make contributions in respect of the Executive to the Corporation's group benefit plans for the Reasonable Notice Period from the Termination Date to the extent permitted by such plans, provided that, to the extent such contributions may not be continued, the Corporation shall pay to the Executive the cost to the Corporation of such contributions as if the Executive remained employed by the Corporation; (e) Authorize the Executive to exercise the vested share based compensation held by the Executive until 90 days after the Termination Date, or for such longer period as is provided in the Plan. All share based compensation that is not vested as at the Termination Date shall be forfeited, except that if the Executive's employment is

Corel Corporation Executive Employment Agreement Page 8 of 15 terminated in accordance with this Section 5.3 prior to the first anniversary of the Start Date, 464,738 of the Base Grant of options shall be vested as of the Termination Date. 5.4 DEATH OF THE EXECUTIVE. Upon the death of the Executive, this Agreement automatically terminates without notice or any further obligations by the Corporation. Upon the death of the Executive, the Corporation will, in full satisfaction of its obligations: (a) pay the outstanding accrued Salary and vacation pay accrued until the date of the Executive's death; (b) reimburse the expenses properly incurred by the Executive up to the date of his death; (c) pay the Executive a bonus pursuant to Section 3.2, pro-rated for the portion of the year prior to the Executive's date of death assigning target performance was achieved; and (d) if the Executive's death occurs prior to the second anniversary of the Start Date, the Base Grant of Options will continue to vest until the second anniversary of the Start Date. 5.5 CONSEQUENCES OF TERMINATION. The termination of the Executive's employment for any reason, including resignation and termination with cause and without cause, terminates any officer positions the Executive may hold with the Corporation or any of its Affiliates and the Executive agrees to immediately resign as a director of the Corporation and any of its Affiliates and to sign any documentation necessary to give effect to this Section 5.5.

5.6 CONVERSION OF BENEFITS ON TERMINATION. On the earlier of the termination of Executive's participation in the group benefit plans or the cessation of his employment for any reason, the Executive may be eligible to convert the group insured benefits to private coverage within 30 days, without evidence of insurability. The Executive is responsible for promptly arranging for any conversion options he may have or obtaining alternate benefits if he chooses to do so. 5.7 COMPLIANCE WITH LAWS. The Executive's entitlements under this Section 5 are provided in full satisfaction of the Executive's entitlements to notice of termination, pay in lieu of notice, and severance pay, if any, under the Ontario Employment Standards Act, 2000, under this Agreement, at common law or otherwise. 5.8 CHANGE OF CONTROL. In the event that there is a Change of Control and not less than 6 months following the Change of Control, the Executive's employment is terminated for any reason other than for cause, he resigns for Good Reason or he resigns for any reason the share based compensation awarded to the Executive shall become fully exercisable on the earlier of the Date of Termination and the date that is 6 months after the Change of Control and shall otherwise be governed by the terms of the Plan. 6. CONFIDENTIAL INFORMATION AND RETURN OF PROPERTY 6.1 CONFIDENTIALITY OBLIGATION. The Executive covenants and agrees that he shall not, at any time during his employment with the Corporation or any time thereafter, without the prior written consent of the Corporation, directly or indirectly, communicate, reveal or disclose, in any manner, to anyone, or use for any purpose other than in carrying out his duties under this Agreement in furtherance of the Corporation's business interests, any confidential or proprietary information concerning, or learned as a result of his employment with, the Corporation or its predecessors, successors, Affiliates or related companies including, without limitation, information concerning their assets, businesses, affairs, pricing, costs, technical information, financial information, plans or opportunities, manufacturing, processes, sales and distribution, marketing, research and development, customers, suppliers or employees.

Corel Corporation Executive Employment Agreement Page 9 of 15 6.2 RETURN OF PROPERTY. Upon ceasing to be employed by the Corporation or upon request of the Corporation at any time, the Executive shall return to the Corporation all property belonging to the Corporation or its predecessors, successors, Affiliates or related companies including, without limitation, all documents in any format whatsoever including electronic format, that is in his possession or control, and the Executive agrees not to retain any copies of such property in any format whatsoever including electronic format. 7. NON-COMPETITION 7.1 COMPETING ENTITIES. In this Agreement, "COMPETING ENTITIES" means Microsoft, the Star Office Division of Sun Microsystems, Adobe, Macromedia, Quark, Intervideo, Pinnacle Systems, Sonic Solutions, Autodesk, the Lotus Division of IBM, ULEAD, Sigmaflow or ACD Systems or any of their successors, and, on notice to the Executive, other entities that the Corporation may add to this definition, from time to time before the termination of the Executive's employment, acting in good faith after consultation with the Executive, whose business consists of developing or marketing word processing, spreadsheet, presentation, process management, flowcharting, digital imaging or graphics software, which the Corporation determines is in competition with its business. 7.2 COMPETITIVE ACTIVITIES. The Executive covenants and agrees that, while employed with the Corporation and for 24 months thereafter, the Executive shall not, directly or indirectly, in any manner whatsoever including, without limitation, either individually, or in partnership, jointly or in conjunction with any other person, or as employee, principal, agent, consultant, director, shareholder, lender or otherwise: (a) be engaged in or by any Competing Entities in order to provide products or services similar to the products and services provided by the Corporation; (b) have any financial or other interest including, without limitation, an interest by way of royalty or other compensation arrangements, in or in respect of any Competing Entities, excluding the ownership of not more than

1 % of the issued shares of a corporation, the shares of which are listed on a recognized stock exchange or traded in the over-the-counter market in Canada or the United States, which carries on a business that competes with the Corporation or its Affiliates; or (c) advise, lend money to or guarantee the debts or obligations of any Competing Entities. 8. NON-SOLICITATION 8.1 EMPLOYEE AND CONTRACTOR NON-SOLICITATION. The Executive covenants and agrees that, while employed with the Corporation and for 24 months thereafter, the Executive shall not induce or solicit or attempt to induce or solicit, or assist any person to induce or solicit any employee of the Corporation or its Affiliates or any contractor who regularly provides services to the Corporation or its Affiliates, or assist or encourage any employee of the Corporation or its Affiliates or any contractor who regular who regularly provides services to the Corporation or its Affiliates to accept employment or engagement elsewhere that competes with the business of the Corporation or its Affiliates.

Corel Corporation Executive Employment Agreement Page 10 of 15 9. PROPRIETARY AND MORAL RIGHTS 9.1 PROPRIETARY RIGHTS. The Executive recognizes the Corporation's proprietary rights in the tangible and intangible property of the Corporation and acknowledges that Executive has not obtained or acquired and shall not obtain or acquire any rights, title or interest, in any of the property of the Corporation or its predecessors, successors, Affiliates or related companies including, without limitation, any writing, communications, manuals, documents, instruments, contracts, agreements, files, literature, data, technical information, know-how, secrets, formulas, products, methods, procedures, processes, devices, apparatuses, trademarks, trade names, trade styles, service marks, logos, copyrights, patents, inventions, discoveries, whether or not protected by patent or copyright, which the Executive may have conceived or made, or may conceive or make, either alone or in conjunction with others, and related to the business of the Corporation or its predecessors, successors, Affiliates or related companies (collectively, the "MATERIALS"). The Executive agrees that during his employment with the Corporation and any time afterwards all Materials shall be the sole and exclusive property of the Corporation. 9.2 WAIVER OF MORAL RIGHTS. The Executive irrevocably waives to the greatest extent permitted by law, for the benefit of and in favour of the Corporation, all the Executive's moral rights whatsoever in the Materials including, without limitation, any right to the integrity of any Materials, any right to be associated with any Materials and any right to restrict or prevent the modification or use of any Materials in any way whatsoever. The Executive irrevocably transfers to the Corporation all rights to restrict any violations of moral rights in any of the Materials including, without limitation, any distortion, mutilation or other modification. 9.3 ASSIGNMENT OF RIGHTS. If the Executive has acquired or does acquire, however, any right, title or interest in any of the Materials or in any intellectual property rights relating to the Materials, the Executive irrevocably assigns all such right, title and interest throughout the world exclusively to the Corporation including, without limitation, any renewals, extensions or reversions relating thereto and any right to bring an action or to collect compensation for past infringements. 9.4 REGISTRATIONS. The Corporation will have the exclusive right to obtain copyright registrations, letters patent, industrial design registrations, trade-mark registrations or any other protection in respect of the Materials and the intellectual property rights relating to the Materials anywhere in the world. At the expense and request of the Corporation, the Executive shall, both during and after the Executive's employment with the Corporation, execute all documents and do all other acts necessary in order to enable the Corporation to protect its rights in any of the Materials and the intellectual property rights relating to the Materials. 10. REMEDIES
10.1 DEFENCES. The Executive agrees that all restrictions in Sections 6, 7, 8 and 9 are necessary and fundamental to the protection of the business carried on by the Corporation and that all such restrictions are reasonable and valid, and the Executive waives all defences of the

Executive to the strict enforcement thereof by the Corporation. 10.2 INJUNCTIVE RELIEF. The Executive acknowledges that a breach by the Executive of any of his obligations in Sections 6, 7, 8 and 9 will result in the Corporation suffering irreparable harm, which cannot be calculated or fully or adequately compensated by recovery of damages alone. Accordingly, the Executive agrees that the Corporation shall be entitled to interim and

Corel Corporation Executive Employment Agreement Page 11 of 15 permanent injunctive relief without proof of actual damages, specific performance and other equitable remedies, in addition to any other relief to which the Corporation may become entitled. 11. OBLIGATIONS NOT EXHAUSTIVE
11.1 FIDUCIARY. THE Executive acknowledges that the obligations contained in Sections 6, 7, 8 and 9 are in addition to any obligations that the Executive may now or hereafter owe to the Corporation, at law, in equity or otherwise. Nothing contained in this Agreement is a waiver, release or reduction of any fiduciary obligations that the Executive owes to the Corporation. GENERAL SURVIVAL. Sections 6, 7, 8, 9, 10, 11 and this Section 12.1 survive the termination of this Agreement and the Executive's employment for any reason whatsoever. SEVERABILITY. If any provision of this Agreement is declared void or unenforceable, such provision shall be deemed severed from this Agreement to the extent of the particular circumstances giving rise to such declaration, and such provision as it applies to other persons and circumstances and the remaining terms and conditions of this Agreement shall remain in full force and effect. ENTIRE AGREEMENT. This Agreement, including the attached Schedules and the documents referenced therein, constitutes the entire agreement between the Corporation and the Executive on the subject-matter herein and it supersedes all prior agreements and understandings, whether written or oral. There are no representations, warranties or collateral agreements on the subject-matter herein that exist outside of this Agreement. AMENDMENTS. This Agreement may only be amended by written agreement executed by the Corporation and the Executive. However, changes to the Executive's position, duties, vacation, benefits and compensation, over the course of time, do not affect the validity or enforceability of Sections 5, 6, 7, 8 and 9. GOVERNING LAW. This Agreement shall be governed by, and construed and interpreted in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein. The Corporation and the Executive each irrevocably attorns to the exclusive jurisdiction of the courts of Ontario and the courts of Ontario shall have the sole and exclusive jurisdiction to entertain any action arising under this Agreement. ASSIGNMENT THE Corporation may assign this Agreement, and it enures to the benefit of the Corporation, its successors or assigns. INDEPENDENT LEGAL ADVICE. The Executive acknowledges that he has been encouraged to obtain independent legal advice regarding the execution of this Agreement, and that he has either obtained such advice or voluntarily chosen not to do so, and hereby waives any objections or claims he may make resulting from any failure on his part to obtain such advice. WAIVER. No waiver of any of the provisions of this Agreement shall be effective or binding, unless made in writing and signed by the party purporting to give the same. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other

12. 12.1

12.2

12.3

12.4

12.5

12.6

12.7

12.8

Corel Corporation Executive Employment Agreement

Page 12 of 15

provisions, whether or not similar, nor shall such waiver constitute a continuing waiver, unless expressly stated otherwise. 12.9 EFFECTIVE DATE. This Agreement is effective the date it is made. IN WITNESS WHEREOF this executive employment agreement has been executed

by the Corporation and the Executive effective on the date first written above. COREL CORPORATION
/s/ Amish Mehta -------------------------------PER: AMISH MEHTA /s/ David C. Dobson -------------------------------DAVID C. DOBSON

Corel Corporation Executive Employment Agreement Page 13 of 15 SCHEDULE "A" EBITDA TARGETS FOR 2005 The Fiscal Year 2005 target would be a combination of Revenue (40%) and EBITDA (60%). The targets and associated payouts (full year) are as follows: REVENUE - 40% of 2005 Target Bonus
TARGET USD -----------$ 90,000,000 $120,000,000 $150,000,000 $165,000,000 $180,000,000 ACCOMPLISHMENT -------------60% 80% 100% 110% 120%

No incentive below 50% 100% 135% 170%

EBITDA - 60% OF 2005 TARGET BONUS
TARGET USD ----------$31,860,000 $42,480,000 $53,100,000 $64,080,000 ACCOMPLISHMENT -------------60% 80% 100% 120%

No incentive below 100% 150% 200%

Corel Corporation Executive Employment Agreement Page 14 of 15 SCHEDULE "B"

FULL AND FINAL RELEASE I, DAVID C. DOBSON, on my own behalf and that of my heirs, executors and assigns, in consideration of the terms and conditions set out in my Agreement with Corel Corporation ("COREL") dated June __, 2005, payments made to me pursuant to those terms and conditions and other good and valuable consideration, the sufficiency of which is hereby acknowledged, do hereby release and forever discharge Corel, its subsidiaries, parents, predecessors, successors, related companies, affiliates, divisions and their present and former directors, officers, representatives, shareholders, owners, employees, administrators, agents and lawyers (collectively, the "RELEASEES") jointly and severally, from any and all actions, causes of action, covenants, contracts, claims, demands, complaints, proceedings, grievances, damages, costs or loss of any nature or kind, past, present or future arising out of or in any way relating to or connected with my hiring, my employment with Corel or the termination of my employment, stock options or other share based incentive plans and benefit plans. I do hereby declare and acknowledge that the consideration set out above satisfies all obligations of the Releasees, arising from or out of my hiring, my employment with Corel or the termination of my employment, stock options or other share based incentive plans and benefit plans including, without limitation, any obligations under the Ontario Employment Standards Act, 2000, as amended, the Ontario Human Rights Code, as amended and the Ontario Workplace Safety and Insurance Act, 1997, as amended, or any similar legislation in any other jurisdiction . I covenant and undertake that I will not file or advance any claims or complaints under the Ontario Employment Standards Act, 2000, as amended including claims in respect of pay in lieu of notice and severance pay, the Ontario Human Rights Code, as amended, and the Ontario Workplace Safety and Insurance Act, 1997, as amended, or any similar legislation in any other jurisdiction, arising out of my hiring, my employment with Corel or the termination of my employment, stock options or other share based incentive plans and benefit plans. And for the said consideration, I further agree not to make any claim or take any other proceedings against any person, entity, corporation, partnership or Crown in which any claim could or does arise with respect to any matters which may have arisen between the parties to this release up to the present time, concerning and relating to any action I may have as against any other party as a result of my hiring, my employment with Corel or termination of my employment, stock options or other share based incentive plans and benefit plans. Notwithstanding the foregoing, I do not release my rights and entitlements set out in Section 5 of the Agreement or any right or entitlement I may have to indemnity or to enforce any indemnity as a director or officer of Corel or its affiliates or to benefits under any policy of directors and officers insurance. And for said consideration I further agree to save harmless and indemnify the Releasees from and against any and all claims, charges, taxes, penalties or demands made by the Canada Revenue Agency, its predecessors or successors, or any similar governmental authority in any other jurisdiction, requiring any of the Releasees to pay any amounts under the Income Tax Act (Canada) and other duly recognized federal, provincial and local taxing authorities in respect of income tax payable by me in excess of the income tax previously withheld, and from and against any and all claims, charges, taxes or penalties and demands made on behalf of or related to Employment Insurance or Canada Pension Plan under the applicable statutes and regulations, or any other similar

Corel Corporation Executive Employment Agreement Page 15 of 15 legislation in any other jurisdiction, with respect to any amounts which may, in the future, be found to be payable by any of the Releasees with respect to the payment of the consideration referred to above. It is understood and agreed that the giving of the consideration set out above is deemed to be no admission of liability whatsoever on the part of the Releasees and, in fact, any liability is expressly denied. I will not say, publish or do any act or thing that disparages or casts the Releasees in any unfavourable light, or which could result in injury to their reputation. Except to the extent required by applicable law, I will make no public statements or announcements regarding my past employment with Corel or any of the matters set forth herein without first consulting with Corel and obtaining its prior written approval as to the timing and content of the proposed statements or announcements. Notwithstanding the foregoing, I understand that I may disclose particulars of my past employment with Corel and my termination therefrom in a bona fide job search or application for government employment insurance benefits.

And I hereby declare that I have read and fully understand this release. I have had the opportunity to seek independent legal advice. I understand that this release contains a full and final release of any claims, which I have or may have relating to my hiring, my employment with Corel and the termination of my employment, stock options or other share based incentive plans and benefit plans. I voluntarily accept the said consideration for the purpose of making full and final compromise, adjustment and settlement of all claims as set out above. IN WITNESS WHEREOF, I, DAVID C. DOBSON set my hand and seal hereto this _________________________ day of ________________________________, 200_.
SIGNED, SEALED AMD DELIVERED in the presence of __________________________________ Witness Signature __________________________________ Witness Name ) ) ) ) ) ) ) )

_________________________________ DAVID C. DOBSON

Exhibit 10.3 December 12, 2003 PRIVATE & CONFIDENTIAL Mr. Doug McCollam 178 Main Road Hudson, Quebec JOP 1H0 Dear Doug, We are excited by prospect of you joining our team and helping to lead Corel Corporation (the "Company") through the challenging and exciting times ahead of us. The company is pleased to offer you the position of Chief Financial Officer, effective January 19,2004 on the terms set out below. 1. REMUNERATION 1.1 Your base salary will be CDN $250,000 per annum. 1.2 The Company is prepared to pay you a target bonus of 100% of the base salary in additional bonus payments based upon meeting financial targets. For fiscal year 2004, the financial target shall be based upon a 100% bonus payable upon the attainment of EBITDA of US $27M. There shall be no bonus payable in the event EBITDA is less the US $15M. At EBITDA of US $15M or higher the bonus shall be calculated in a linear manner with no maximum. Provided that this agreement is signed and returned on or before 5:00 p.m on Saturday December 13, 2003 and provided you commence your duties with the Company on or before Monday January 19, 2004, there shall be no pro rata reduction in the 2004 bonus by reason of your having commenced employment following the start of the 2004 Fiscal years. EBITDA target of .27M is before impact of bonus expense. 1.3 For fiscal yean following 2004, the Company shall set financial and other targets at its discretion. Notwithstanding, for fiscal year 2005 the financial targets set for you shall not be higher than the financial targets set for the CEO of the Company. 1.4 Your salary will be reviewed annually. 2. EQUITY 1.1 The Company will grant you options/phantom options units covering 0.5% of the outstanding common stock

1.1 The Company will grant you options/phantom options units covering 0.5% of the outstanding common stock of the company at a strike price of US $0.10 per option and based upon a valuation of the Company at the amount paid by Vector for the acquisition of the Company. The options will be subject to vesting and other terms as defined in the Company's Phantom Option Plan. Page 2 2. BENEFITS 2.1 You are entitled to participate in the Company's existing benefit plan. The Company's Group Insurance Benefits, including Life Insurance, Short Term and Long-Term Disability Benefits, and Extended Health and Dental Benefits will be made available to you and your eligible dependents upon commencement of employment. The Company reserves the right to amend, cost share, or, terminate these benefits from time to time. In the event that you purchase extended or enhanced benefits under any of the plans, the Company shall reimburse the premiums paid by you to a maximum amount of CDN $2,000 per annum. 2.2 You shall be entitled to four weeks annual vacation, in addition to statutory holidays, subject to the Company's policies regarding vacation carry-over and pay-out. 3. TRANSITION EXPENSES 3.1 The Company will assist you in your transition to Ottawa as follows: a) reimburse you up to $700 per week for documented accommodation, meal and travel expenses until you obtain rental accommodations or until the expiration of 10 weeks, whichever is earlier; b) beginning once you obtain rental accommodations, reimburse you up to CDN $1,500 per month for documented rental accommodation expenses (i.e. rent and utilities) and mileage expense between Montreal and Ottawa. c) provide you with a one-time CDN $20,000 allowance to be disbursed as you deem appropriate to cover one time costs associated with your move to Ottawa and other first year expenses associated with your transition from your old employer to the Company. 4. CONFIDENTIALITY OBLIGATIONS 4.1 You acknowledge that, that during the course of your employment with the Company, you will acquire confidential information, including information concerning the names and affairs of clients, information concerning products, trade secrets and information concerning the market for products sold by the Company and the marketing strategies of the Company, all of which you hereby acknowledge to be confidential and protectable property of the Company (collectively, the "Confidential Information"). 4.2 You agree, during the term of your employment with the Company or thereafter, unless required by law that you will not disclose to any person or use any Confidential Information which you may have acquired in the course of or incidental to your employment with the Company. 5. NON-SOLICITATION OBLIGATIONS 5.1 You agree that, during the period of employment with the Company and, in the event of the termination of your employment for any reason whatsoever, within one year of the date of such PAGE 3 termination either indirectly or directly, by any means, in any capacity, approach, solicit, or contact in the course of being engaged in a business competitive with the Company or attempt to direct away from the Company: (a) any client or potential client referred to you by the Company during the term of your employment with the Company and

Company and (b) any client or potential client made known by you by the Company in during the term of your employment, or in any manner assist any person in any of the foregoing activities. 5.2 You agree that, during the period of your employment by the Company and, in the event of the termination of your employment, for a period of one year to not directly of indirectly attempt or agree to recruit, train or solicit any person employed by the Company to provide services to yourself or any person who engages in a business similar to the business of the Company or in any manner assist any person in any of the foregoing activities. 6. SEVERANCE PROVISIONS 6.1 (a) If the Company releases you for cause, or you cease your employment relationship with the Company as a result of a voluntary decision on your part, no severance or notice payments will be payable. (b) If your employment is terminated in any other circumstances, your will be entitled to receive the greater of: (i) such payments and benefits as are required by the minimum standards set out in the applicable employment standards legislation; or (ii) one month notice or at the Company option payment of one month of base salary, for each completed year of service or part thereof, not to exceed 3 months; which, in either case, you acknowledge and agree is in satisfaction of and substitution for any and all statutory and common law rights, including without limitation, any right to reasonable notice of termination. (c) In the event you decide to voluntarily leave the employ of the Company you will provide the Company with 45 days written notice prior of such voluntary termination. 7. TRANSITION 7.1 Commencing January 19, 2004 you will be responsible for the finance, legal, facilities and the application side of the MIS group with the Company. Thereafter, the remaining G&A functions of the Company shall be transitioned to your responsibility at such time and in such manner as deemed appropriate by the Company. Notwithstanding, it is acknowledged that it is the Company's intention (but not its commitment) that all G & A responsibilities shall be transitioned to you by the end of Q3 of fiscal year 2004. 8. GENERAL 8.1 If any provision or any severable part of any provision of this Agreement is determined to be void or unenforceable, it will not be deemed to affect or impair the validity of any other provision or part of any provision in this Agreement and each such provision and part thereof is PAGE 4 deemed to be separate and distinct and, to the fullest extent permitted by law, such void or unenforceable provision or part of the provision will be severed, and will be deemed to be of no further force and effect. 8.2 This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario, applicable therein. 8.3 You acknowledge and agree that this Agreement and all attachments contain the entire agreement between you and the Company concerning the subject matter hereof and supercedes all prior representations, agreements, negotiations, discussions and undertakings, written or oral, between you and the Company. This Agreement may only be amended, modified or supplemented by written agreement signed by both you and the President on behalf of the Company. It is indeed a pleasure to extend this offer on behalf of Corel Corporation. We wish you every success in your

new position. Please indicate your acceptance of this offer by signing a copy of this letter and returning to me by 5:00 p.m. on Saturday December 13,2003, otherwise, this offer letter shall expire at 5:00 p.m. on Saturday, December 13, 2003. Yours truly,
/s/ AMISH MEHTA ------------------------------------AMISH MEHTA INTERIM CEO COREL CORPORATION

I accept the terms of employment as stated above.
/s/ Doug McCollam ------------------------------------Doug McCollam

DEC 13, 2003 Date

Exhibit 10.4 EMPLOYMENT AGREEMENT THIS AGREEMENT is made as of the 13th day of May, 2005 BETWEEN: COREL INC. (the "Corporation") - AND RANDY EISENBACH (the "Executive") RECITAL: WHEREAS The Corporation and the Executive wish to enter into this Agreement to set out the rights and obligations of each of them respecting the Executive's continued employment with the Corporation. AND WHEREAS this Agreement shall replace and supersede all previous employment agreements including the Employment Agreement dated December 1, 2004. NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Corporation and the Executive agree as follows: 1. DEFINITIONS In this Agreement, 1.1 "Accommodation and Travel Expenses" means the amounts referred to in sections 4.2, 4.3 and 4.4; 1.2 "Agreement" means this agreement as it may be amended from time to time;

1.3 "Affiliate" has the meaning attributed to such term in the Business Corporations Act (Ontario) as the same may be amended from time to time and any successor legislation thereto, and includes an Associate;

1.4 "Associate" has the meaning attributed to such term in the Business Corporations Act (Ontario) as the same may be amended from time to time and any successor legislation thereto; 1.5 "Benefits" has the meaning set out in section 6; 1.6 "Board" means the Board of Directors of Corel Corporation; 1.7 "Business" means the bus iness development, marketing or sale of computer software for office productivity or graphics; 1.8 "Commencement Date" means May 13, 2005; 1.9 "Confidential Information" means all information, intellectual property (including trade secrets) and facts relating to and used or proposed to be used in the Business of the Corporation and its Affiliates, acquired by the Executive during any period in which the Executive was affiliated with the Corporation in the capacity of an employee, director or shareholder which is confidential based upon its nature or the circumstances surrounding its disclosure, and includes, without limiting the generality of the foregoing, information: (i) relating to the Corporation's or an Affiliate's products and services or to the Corporation's or a Affiliate's research and development projects or plans; (ii) relating to the Corporation's or an Affiliate's trade secrets, technology, patentable and unpatentable inventions, discoveries, processes, test procedures and results, records, specifications, data, formulations, know-how, samples, specimens, manufacturing processes and regulatory information; (iii) relating to the Corporation's or an Affiliate's business policies, strategies, operations, finances, plans or opportunities, including the identity of, or particulars about, the Corporation's or an Affiliate's clients or suppliers; 1.10 "Date of Termination" has the meaning set out in section 7.1 of this Agreement; 1.11 "Disability" means the mental or physical state of the Executive such that: (i) subject to applicable human rights legislation, due to illness, disease, mental or physical disability or similar cause, the Executive cannot substantially perform his duties as an employee, officer or director of the Corporation or any of its Subsidiaries, as applicable;

(ii) a court of competent jurisdiction has declared the Executive to be mentally incompetent or incompetent to manage his affairs; (iii) the Executive is eligible for, has applied for, and has been accepted for long-term disability benefits under the Corporation's long-term disability plan; or (iv) an attorney pursuant to a continuing power of attorney for personal care or similar instrument is appointed to manage the affairs of the individual due to the Execctive's mental incompetence; 1.12 "Just Cause" means: (i) theft, fraud, dishonesty or willful misconduct by the Executive involving the property, business or affairs of the Corporation, or the carrying out of the Executive's duties; (ii) the breach by the Executive in any material respect of the Executive's employment agreement; or (iii) any other conduct that would be determined by the courts of Texas to constitute misconduct;

(iii) any other conduct that would be determined by the courts of Texas to constitute misconduct; 1.13 "Good Reason" means any of the following, unless consented to by the Executive: (i) a material reduction in the Executive's titles, reporting relationships, powers, authority, duties or responsibilities; or (ii) a material reduction in the Executive's annual base salary, benefits and perquisites. 1.14 "Salary" has the meaning set out in section 3.1. 2. EMPLOYMENT OF THE EXECUTIVE 2.1 The Corporation shall continue to employ the Executive, and the Executive shall continue to serve the Corporation, in the position of Chief Operating Officer of the Corporation for the Term of this Agreement subject to termination pursuant to section 7; 2.2 While employed by the Corporation: (a) The Executive shall report to the Chief Executive Officer of Corel Corporation and the Board and shall perform such duties, have such responsibilities and exercise such powers and authorities as are

assigned to him by the Chief Executive Officer and the Board from time to time; and (b) The Executive shall devote the whole of his business time, attention and ability to the Business; (c) The Executive shall work on a remote basis from Dallas, Texas, however Executive acknowledges that he will be required to spend up to 50% of his time traveling to the Minneapolis, UK, and Ottawa offices to attend to meetings required to run the business. (d) For as long as the Executive remains ordinarily resident in Texas and submits US tax returns accordingly, the Corporation agrees that it will cover costs incurred to calculate any incremental cross border employment tax obligations incurred by Executive by virtue of his employment with the Corporation and that the Corporation will make such payments as are required to compensate the Executive for any such incrementalobligation such that the Executive's after tax compensation is equalized to the level as if Executive had worked 100% of the time in Texas. 2.3 This Agreement replaces all previous agreements between the Executive and the Corporation (and its Affiliates, Associates and their predecessors and assignors) and the Executive hereby expressly waives all rights he would otherwise have under any such previous agreements, including the right to any severance benefits, benefits on change of control, and, for the period following March 1, 2005, any salary or incentive compensation, under said previous agreements. 3. REMUNERATION Commencing and effective as of the Commencement Date, the remuneration of the Executive for services hereunder shall be as follows: 3.1 The Executive shall receive an annual gross salary (before deduction for income taxes and other required deductions) of USD $260,000, which shall be reviewed periodically and which may be increased at the discretion of the Board (the "Salary"), payable in accordance with the policy of the Corporation for payments of salary to senior management. The Salary shall be effective March 1, 2005; 3.2 The Executive shall also be eligible for an incentive bonus component of USD $130,000, (subject to statutory withholdings and deductions). The incentive bonus shall prorated for the fiscal year 2005 and will be based upon the successful realization of targets set on a periodic basis by Corporation. The incentive bonus shall be effective from March 1, 2005. The terms and conditions related to the calculation of the incentive bonus component,

including the calculation of any payment of same prior to or

following termination, shall be governed in accordance the incentive bonus plan. All payments in respect of 3.1 and 3.2 will be made by bank credit transfer. 3.3 The Executive acknowledges that the granting of options is made only to full time employees, solely at Corporation's discretion and subject to the terms and conditions of any grant and of Corporation's stock option plan in effect, from time to time. 3.4 The Executive shall be entitled to participate in benefits as are enjoyed from time to time generally by Employees in accordance with the established practices and policies of the Corporation as the Corporation may in its absolute discretion create from time to time. In this regard, the Corporation acknowledges having received a description of the benefits in force as of the date hereof. 4. EXPENSES. 4.1 The Corporation shall reimburse the Executive for all reasonable out-of-pocket expenses incurred by the Executive while employed by the Corporation in the performance of his duties under this Agreement (including attendance at industry, financing and other conferences relevant to the Executive's performance of his duties hereunder), in accordance with the Corporation's policy for reimbursement of expenses, upon presentation of receipts or such other supporting documentation as the Corporation may reasonably require 4.2 The Corporation shall provide accommodation in Ottawa of the Executive's choosing, for the sole use by the Executive and his family, subject to the following. The Corporation shall offset the first $3,000 CDN per month for costs incurred for Executive's accommodation, utilities and furniture, Should a furnished accommodation not be available, Corporation shall provide a one-time reimbursement of $10,000 CDN to be used by the Executive to furnish suitable accommodations and the offset described above shall reduce to $2,500 CDN per month. Except as provided for in the foregoing, any additional expense related to the accommodation and furniture shall be borne by the Executive. 4.3 The Executive shall be reimbursed for travel expenses for family members who join or accompany the Executive on business related trips and to return there from, including travel to and from Ottawa, to a maximum of USD $10,000 per calendar year.

4.4 The Executive shall be reimbursed for ground transportation costs incurred while in Ottawa to a maximum of $500 CDN per month. 5. VACATION The Executive shall be entitled while employed by the Corporation to 4 weeks vacation with pay per year, in accordance with its normal practices. Vacation shall be taken by the Executive at such time as may be reasonably acceptable to the Corporation having regard to its operations. 6. BENEFITS While the Executive is employed by the Corporation, the Corporation shall provide to the Executive the benefits made generally available to its senior executives, save and except any long term incentive, profit sharing, option or similar plan, other than as expressly set out in this Agreement (the "Benefits"). The Benefits shall be provided in accordance with and subject to the terms and conditions of the applicable fund, plan or arrangement relating thereto in effect from time to time. 7. TERMINATION 7.1 The employment of the Executive shall terminate or be terminable:

(a) by retirement or resignation on not less than 1 months written notice, of the Executive; (b) by the Corporation at any time on written notice to the Executive for Just Cause; (c) by the Corporation or the Executive at any time on written notice because of the occurrence of Disability; (d) automatically upon the death of the Executive; (e) by the Corporation at any time on written notice without Just Cause; (f) by the Executive on written notice for Good Reason; or (g) by the Executive, within six (6) months of the hire date of a new CEO, and on three (3) months written notice from the Executive. 8. PAYMENTS ON TERMINATION OF EMPLOYMENT 8.1 If the employment of the Executive is terminated for retirement or resignation, pursuant to section 7.1 (a), the Executive will receive payment

for Salary, incentive bonus, and accrued but unused vacation owing on the Date of Termination 8.2 If the employment of the Executive is terminated for Just Cause, pursuant to section 7.1 (b), the Executive will receive payment for Salary and accrued but unused vacation owing on the Date of Termination. 8.3 If the employment of the Executive is terminated at any time by the Corporation for Disability pursuant to section 7.1(c), by the death of the Executive pursuant to section 7.1 (d) without Just Cause pursuant to section 7.1(e), or by resignation for Good Reason pursuant to section 7.1(f), the following provisions shall apply conditional on the Executive (or the Executive's legal representative in the case of termination by reason of death) providing a full and final release to the Corporation in the form attached hereto as Schedule A: (a) The Corporation shall pay to the Executive, immediately following the Date of Termination, if not already paid, the Executive's Salary owing at the Date of Termination and any accrued but unused vacation in accordance with the Corporation's policy, (b) The Corporation shall pay to the Executive forthwith following the Date of Termination, a lump sum payment in USD equivalent (less deduction for income taxes and other required deductions) to six (6) month's annual Salary. (c) The Executive shall continue to receive health benefits to the extent the Corporation is permitted by the terms of the relevant benefit plan(s) to provide such health benefits for six (6) months following the date of termination and, to the extent the Corporation is not so permitted, the Corporation shall make a payment equal to the cost to the Corporation of such benefits for said period; (d) The Corporation shall reimburse expenses incurred by the Executive on or prior to the Date of Termination for which the Executive would be entitled to reimbursement but for the termination of his employment hereunder; (e) The Executive shall continue to be reimbursed and/or receive, as the case may be, the Accommodation and Travel Expenses, to the extent that same are incurred, for six (6) months following the date of termination; and (f) The Executive is not obligated to mitigate his damages or to seek alternative employment. The payments refereed to in section 8.3 shall not be reduced if the Executive obtains alternate employment following termination.

8.4 If the employment of the Executive is terminated by at any time by the Executive, pursuant to section 7.1(g), the following provisions shall apply conditional on the Executive providing the requisite notice and executing a full

the following provisions shall apply conditional on the Executive providing the requisite notice and executing a full and final release to the Corporation in the form attached hereto as Schedule A: (a) The Corporation shall pay to the Executive, immediately following the Date of Termination, if not already paid, the Executive's Salary owing at the Date of Termination and any accrued but unused vacation in accordance with the Corporation's policy, (b) The Corporation shall pay to the Executive forthwith following the Date of Termination, a lump sum payment in USD equivalent (less deduction for income taxes and other required deductions) to three (3) month's annual Salary. (c) The Executive shall continue to receive health benefits to the extent the Corporation is permitted by the terms of the relevant benefit plan(s) to provide such health benefits for three (3) months following the date of termination and, to the extent the Corporation is not so permitted, the Corporation shall make a payment equal to the cost to the Corporation of such benefits for said period; (d) The Corporation shall reimburse expenses incurred by the Executive on or prior to the Date of Termination for which the Executive would be entitled to reimbursement but for the termination of his employment hereunder; (e) The Executive shall continue to be reimbursed and/or receive, as the case may be, the Accommodation and Travel Expenses, to the extent that same are incurred, for three (3) months following the date of termination; and (f) The Executive is not obligated to mitigate his damages or to seek alternative employment. The payments refereed to in section 8.4 shall not be reduced if the Executive obtains alternate employment following termination. 8.5 The Executive acknowledges and agrees that the provisions of this section 8 are in satisfaction of and substitution for any and all statutory and common law rights, including without limitation, any right to reasonable notice of termination.

9. RESIGNATION AS A DIRECTOR AND OFFICER On the Executive ceasing to be an employee of the Corporation for any reason, the Executive shall forthwith resign as a director and officer of the Corporation and all of its Affiliates (unless such position is established through a shareholder agreement or other contractual right). 10. NON-COMPETITION AND NON-SOLICITATION 10.1 The Executive shall not, during his employment and for the period ending 12 months after the Date of Termination, directly or indirectly in any manner whatsoever including either individually, or in partnership, jointly or in conjunction with any other person, or as principal, agent, owner, consultant, contractor, executive, officer, director, advisor or shareholder: (a) be engaged in any undertaking; (b) have any financial or other interest (including an interest by way of royalty or compensation arrangements) in or in respect of the business of any person which carries on a business; or (c) advise, render or provide services to, lend money to or guarantee the debts or obligations of any person which carries on a business; in any province of Canada or any state of the United States, if, at the relevant time, the Corporation is carrying on business in such state or province, which is the same as or which competes in any material respect with the Business or any material part thereof carried on by the Corporation or any of its Affiliates on the Date of Termination or within the preceding 6 months; 10.2 The Executive shall not, during his employment and for the period ending 24 months after the Date of

Termination, directly or indirectly employ or retain as an independent contractor any employee of the Corporation or any of its Affiliates or induce or solicit, or attempt to induce, any such person to leave his or her employment; 10.3 Nothing in this Agreement shall prevent the Executive from owning not more than 5% of any class of securities of an entity, the securities of which are listed on a recognized stock exchange or traded in the over the counter market in Canada, which carries on a business which is the same as or which competes with the business of the Corporation or any of its Affiliates. 11. CONFIDENTIALITY 11.1 The Executive agrees that all Confidential Information is the property of the Corporation or its Affiliates and that he shall keep the Confidential Information secret and confidential and shall not use (other than in

connection with his employment with the Corporation or any of its Affiliates) or disclose to any person, directly or indirectly, any Confidential Information at any time hereafter, provided, however, that nothing in this section shall preclude the Executive from disclosing or using Confidential Information if: (a) the Confidential Information is available to the public or in the public domain at the time of such disclosure or use, without breach of this Agreement; (b) disclosure is required to be made by any law, regulation, governmental body, or authority or by court order; or (c) disclosure is made to a court or other governmental regulatory or arbitral body which is determining the rights of the parties under this Agreement; 11.2 The Executive acknowledges and agrees to return to the Corporation, upon the termination of his employment under this Agreement all records, books, samples, paper, notes or other documents or assets belonging to the Corporation or any Affiliate or relating to their business and to return any written Confidential Information; 11.3 The Executive further acknowledges and agrees that the obligations under this section 11 and shall exist and continue in full force and effect notwithstanding any breach or repudiation, or alleged breach or repudiation, of or termination of this Agreement by the Corporation; 11.4 For greater certainty, the Corporation acknowledges that this section 11 is not intended to apply to the skill, expertise, know-how and experience of the Executive gained in the performance of his employment or with respect to any skill, expertise, know-how and experience the Executive obtained prior to or outside his employment or directorship duties with the Corporation. 12. INTELLECTUAL PROPERTY The Executive hereby assigns the Corporation his entire right, title and interest in any invention, work or formula, whether patentable or not or copyrightable or not, which is conceived or made solely by the Executive or jointly by the Executive and any other person or persons prior to termination of the Executive's employment and which relates in any manner to the Business, research or other activities of the Corporation or which is suggested by or results from any task assigned to or performed by the Executive on behalf of the Corporation. The Executive covenants and agrees that (i) he shall promptly disclose to the Corporation any invention or work covered by this paragraph, (ii) if requested by the Corporation, he shall promptly execute a specific assignment of title to the Corporation for such invention or work, and (iii) he shall take all reasonable actions necessary to assist the Corporation, at the Corporation's expense, to

secure patent or copyright protection in the United States, Canada and in foreign countries.

13. REMEDIES The Executive acknowledges that a breach or threatened breach by the Executive of any provision of any of sections 10, 11 or 12 of this Agreement shall result in the Corporation and/or its Affiliates suffering irreparable harm which cannot be calculated or fully or adequately compensated by the recovery of damages alone. Accordingly, the Executive agrees that the Corporation and/or its Affiliates shall be entitled to (and the Executive shall not argue or take a position that the Corporation or any Affiliate shall not suffer irreparable harm) interim, interlocutory and permanent injunctive relief, specific performance and other equitable remedies, in addition to any other relief to which the Corporation and/or its Affiliates may become entitled. 14. NOTICE Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be given by facsimile or other means of electronic communication or by delivery by hand as hereinafter provided. Any such notice or other communication, if mailed by registered mail, shall be deemed to have been received on the day such mail is delivered by the post office, or if sent by facsimile or other means of electronic communication, shall be deemed to have been received on the business day following the sending, or if delivered by hand shall be deemed to have been received at the time it is delivered to the applicable address noted below either to the individual designated below or to an individual at such address having apparent authority to accept deliveries on behalf of the addressee. Notice of change of address shall also be governed by this section. In the event of a general discontinuance of postal service due to strike, lock-out or otherwise, notices or other communications shall be delivered by hand or sent by facsimile or other means of electronic communication and shall be deemed to have been received in accordance with this section. Notices and other communications shall be addressed as follows: (a) if to the Executive: Randy Eisenbach 7402 Sugarbush Garland, TX 75044 (b) if to the Corporation: Corel Corporation 1600 Carling Avenue Ottawa, Ontario KIZ 8R7 Attention: General Counsel Telecopier No: (613) 725-2691

15. ASSIGNMENT This Agreement shall be assignable by the Corporation, but shall not be assignable by the Executive. 16. INVALIDITY OF PROVISIONS Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof. 17. ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this Agreement. There are no warranties, representations or agreements between the parties in connection with the subject matter of this Agreement except as specifically set forth or referred to in this Agreement. No reliance is placed on any representation, opinion, advice or assertion of fact made by the Corporation or its directors, officers and agents to the Executive, except to the extent that the same has been reduced to writing and included

as a term of this Agreement. Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such representation, opinion, advice or assertion of fact, except to the extent aforesaid. 18. WAIVER, AMENDMENT Except as expressly provided in this Agreement, no amendment or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. No waiver of any provision of this Agreement shall constitute a waiver of any other provision nor shall any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided. 19. CURRENCY All amounts in this Agreement shall be paid in currency expressly noted. For payments to be received under this agreement in US Dollars, in the event that the Executive's compensation or other remuneration or reimbursement of these US Dollar amounts are required to transferred to a Canadian payroll system or otherwise paid in any currency other than US Dollars, the Executive shall receive an amount in such other currency taking into consideration the then prevailing exchange rate applicable to US currency conversion from the other currency. 20. GOVERNING LAW This Agreement shall be governed by and construed in accordance with the laws of Texas.

21. SEVERABILITY AND JUDICIAL MODIFICATION IF any provision of this Agreement is held by a court or arbitration panel of competent jurisdiction to be enforceable only if modified, such holding shall not affect the validity of the remainder of this Agreement, the balance of which shall continue to be binding upon the parties hereto with any such modification to become a part hereof and treated as though originally set forth in this Agreement. The parties further agree that any such court or arbitration panel is expressly authorized to modify any such unenforceable provision of this Agreement in lieu of severing such unenforceable provision from this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the offending provision, adding additional language to this Agreement, or by making such other modifications as it deems warranted to carry out the intent and agreement of the parties as embodied herein to the maximum extent permitted by law. The parties expressly agree that this Agreement as so modified by the court or arbitration panel shall be binding upon and enforceable against each of them. In any event, should one or more of the provisions of this Agreement be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions hereof, and if such provision or provisions are not modified as provided above, this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had never been set forth herein. 22. COUNTERPARTS This Agreement may be signed in counterparts and each of such counterparts shall constitute an original document and such counterparts, taken together, shall constitute one and the same instrument. Counterpart signature pages may be delivered by facsimile. 23. ACKNOWLEDGEMENT Each of the Corporation and the Executive acknowledges that: (a) he or it has had sufficient time to review and consider this Agreement thoroughly; (b) he or it has read and understands the terms of this Agreement and his or its obligations hereunder; (c) he or it was afforded the opportunity to retain independent legal advice concerning the interpretation and effect of this Agreement; and (d) this Agreement is entered into voluntarily and without any pressure.

IN WITNESS WHEREOF the parties have executed this Agreement as of the date first written above.

(c) he or it was afforded the opportunity to retain independent legal advice concerning the interpretation and effect of this Agreement; and (d) this Agreement is entered into voluntarily and without any pressure. IN WITNESS WHEREOF the parties have executed this Agreement as of the date first written above. COREL INC.
BY: /s/ Amish Mehta ------------------------------------

SIGNED, SEALED & DELIVERED IN THE PRESENCE OF

/s/ Gail Oxley

) ) ) ) )

/s/ Randy Elsenbach

------------------------------------) ---------------------------------------WITNESS GAIL OXLEY WITNESS NAME (PRINTED) ) ) ) ) EXECUTIVE

Exhibit 10.5 (COREL LOGO) EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT is made as of the 1 day of January 2003 between Corel Corporation, 1600 Carting Ave., Ottawa, Ontario, Canada, K1Z 8R7 ("the Employer") and Amanda Bedborough of Pharos, Fishery Road, Bray, Berks SL6 1UN ("the Employee"). WHEREAS the Employer and the Employee wish to enter into an agreement ("this Agreement" which includes Appendix A hereto) pursuant to which the Employee will provide the Employee's services to the Employer as set out below, and the Employer will hire and retain the services of the Employee as an employee of the Employer. IT IS AGREED that, in consideration of the mutual covenants and agreements set out below, the parties hereby mutually covenant and agree as follows: 1. EMPLOYMENT TERM 1.1 The employment under this Agreement ("the Employment") shall commence 1st January 2003. That date from which the Employee's period of continuous employment will be calculated for statutory purposes shall be 1st October 2001, Subject to Clause 13 below, the Employment shall be for an indefinite term. 2. EMPLOYMENT-DUTIES 2.1 The Employee is employed by the Employer on a full-time basis as Executive Vice President, Europe, the Middle East and Africa (EMEA) Operations reporting to the Chief Executive Officer. The Employee's normal

duties include supervision of sales, marketing and finance functions for Employer in EMEA. In addition to the Employee's normal duties, the Employee may be required to undertake other duties from time to time with reasonable notice 2.2 During the Employment, the Employee shall devote the Employee's full time, attention and skill to the business and affairs of the Employer and any Associated Employer (as defined herein and including, without limitation, Corel UK Limited. Corel GmbH and Corel S.A.R.L.) for whom the Employee is required to perform the duties and responsibilities set out in this Agreement. Furthermore, during the Employment the Employee shall not, without the prior written consent of the Employer, directly or indirectly carry on or be engaged concerned or interested in any other business, trade, occupation or activity which interferes with the Employment or which is for the benefit of any person, corporation or enterprise whose business interests are either competitive or in conflict with those of the Employer or any Associated Employer. 2.3 The Employee shall comply with all policies, rules or codes of conduct of the Employer or any Associated Employer that are applicable to the Employee from time to time and as amended by the Employer in its absolute discretion. In particular, the Employee will comply with the policies applicable to her from time to time in relation to entering into any contract or similar commitment or signing any document in the name of or on behalf of the Employer or any Associated Employer and is excluded from doing so other than as authorised. Corel Corporation Corporate Headquarters, 1600 Carling Ava., Ottawa, Ontario, Canada K1Z 8R7 Tel.:1613-728-8200) Fax: 1-613-728-9790 www.corel.com

3. HOURS OF WORK 3.1 The Employee's normal hours of work are 37.5 hours per week but the Employee is required to work such additional hours and/or more flexible hours (that is, different start and finish times) for no additional remuneration as may be necessary for the proper performance of the Employee's duties and the proper functioning of the business. 3.2 To the extent necessary, the Employee agrees with the Company that the limit on the Employee's working time of not more than an average of 48 hours per week over a 17 week period imposed by r.4(1) Working Time Regulations 1998 shall not apply during the Employment subject to the right of the Employee to terminate the agreement provided for in this Clause 3.2 on three (3) months' written notice to the Employer given at any time. 4. PLACE OF WORK 4.1 The Employee's normal place of work shall be the Corel UK limited offices at Sapphire Court, Bell Street, Maidenhead, Berkshire SL6 1BU, or any such place of business of the Employer or Associated Employer as the Employer may reasonably determine from time to time within a 30 mile radius of the normal place of work. The Employee shall be required to travel both inside and outside of the UK in connection with the performance of the Employee's duties. 5. SALARY AND BENEFITS 5.1 In consideration of all services rendered by the Employee in the course of the Employment, the Employee shall receive a gross annual salary of L140,000 ("Base Salary"), subject to statutory withholdings and deductions. Base Salary shall be paid by equal monthly instalments on the 25th of each month in arrears by credit transfer. Base Salary shall be reviewed annually by the Employer and may (if at all) be increased from time to time by such amount as the Employer may in its absolute discretion decide and notify to the Employee in writing. 5.2 In addition to Base Salary, the Employee will be eligible for an incentive bonus of L95,000 based upon the successful realization of certain revenue, pre-tax operating income and/or other targets to be established each year in advance by the Employer. Notwithstanding the foregoing, the Employee acknowledges that Incentive Bonus shall be governed by a separate written agreement (the "Compensation Plan") between the Employee and the Employer which shall supercede and replace the provisions referred to in this Section 5.2 without the need for any amendment to this Agreement. The Employee agrees to execute such Compensation Plan upon its receipt. Thereafter, the Employee agrees to execute such further Compensation Plans, as they may be amended from time

to time, at the request of the Employer 5.3 Employee may receive a separate annual bonus at the sole and absolute discretion of the Employer's Board of Directors. The Employee acknowledges that she has no expectation to any bonus in any year, that the payment of said bonus for one or more years shall not affect the absolute discretion exercisable by the Board regarding any future bonus and that said discretion shall not be effected by any representation to the contrary.

5.4 The Employee shall, in accordance with the Employer's established practices and policies as amended from time to time, be eligible to participate in such additional benefit schemes as the Employer may in its discretion provide from time to time. The Employee's entitlement under any such schemes shall be subject to the scheme rules in force from time to time. 5.5 The Employee may be invited to participate in such stock, stock option or similar incentive plans as Employer may in its absolute discretion determine from time to time. The Employee's rights under any such plan shall be subject to the rules of such plan as amended by the Employer from time to time and do not form part of the Employee's rights under this contract. 5.6 The Employee acknowledges having received a description of the benefit schemes (other than salary, incentive bonus and discretional annual bonus) in force as of the date of this Agreement and further acknowledges that except as set out in this Agreement, the Employee is entitled to no further benefits. The Employer reserves the right in its absolute discretion to vary or discontinue the provision of any and all benefits provided under this Agreement. 5.7 The Employer may at its discretion provide the Employee with a car allowance of L1300 per month which shall be reviewed periodically by the Employer at its sole discretion. Such allowance shall be paid at the same time as Salary is paid and subject to any statutory withholdings or deductions. 5.8 The Employer will reimburse the Employee for all petrol receipts, both business mileage and personal mileage. The personal mileage will be subject to appropriate tax legislation and requirements. 6. PENSION ARRANGEMENTS 6.1 The Employee is eligible to receive Employer pension contributions to a person pension plan 75% subject to the "allowable maximum" as defined under the Income and Corporation Taxes Act, as said plan may be amended from time to time. The Employer reserves the right to cease Employer contributions to the Plan by giving the Employee three months' written notice. 6.2 A contracting-out certificate is not currently in force in respect of the Employee's Employment. 7. EXPENSES 7.1 The Employer shall reimburse the Employee in respect of out-of-pocket expenses properly and reasonably incurred by the Employee wholly, exclusively and necessarily in or about the performance of the Employee's duties provided that any expense claim is supported by satisfactory documentation and made in accordance with the Employer's expenses policy in force from time to time.

8. HOLIDAY 8.1 The Employee shall be entitled to 30 working days' paid annual holiday (which accrues at the rate of 2.50 days per complete month of service) to be taken at times approved of by and agreed in advance with the Chief Executive Officer, in addition to the usual public and bank holidays. The holiday year is 1 January to 31 December inclusive in each year. No more than 10 days may normally be taken at one time. A maximum of 5 days holiday may be carried forward from one holiday year to the next but only with the prior written approval of the Chief Executive Officer and provided it is taken by 31 March in the holiday year to which it has been carried forward. The Employer may exceptionally agree to other arrangements regarding the carry forward of holiday prior to the end of the relevant holiday year, which arrangements will be in writing and signed by both parties.

prior to the end of the relevant holiday year, which arrangements will be in writing and signed by both parties. 8.2 Subject to relevant law, any accrued holiday entitlement, which is not taken or carried forward in accordance with Clause 9.1, will lapse and the Employee will not be entitled to payment in lieu thereof. 8.3 Holiday entitlement in the holiday years in which the Employment starts or ends shall be calculated at the rate of 2.50 for each complete month of employment. 8.4 Upon termination of the Employment, the Employee's accrued holiday entitlement will be calculated pro rata to the date of termination in accordance with Clause 9.3 above and the appropriate amount will be paid to the Employee, or if holiday days have been taken in excess of the Employee's accrued entitlement, the Employer will deduct an amount in respect of the excess from the Employee's final payment of wages. 8.5 The Employer may require the Employee to take any accrued but untaken holiday in any period during which the Employee is not required to perform any duties or at any time after either party has served notice of termination. 9. INCAPACITY DUE TO SICKNESS OR INJURY 9.1 As soon as possible on the first day of absence, the Employee must notify the Employer by telephone of the fact of absence due to sickness or injury, indicate the nature of sickness or injury and, if possible, how long the Employee is likely to be absent. If the Employee is unable to use the telephone, the Employee should ask someone else to do this on the Employee's behalf. 9.2 For absences of up to 7 successive calendar days, the Employee will be required to complete and sign a selfcertification form upon the Employee's return to work (but the Employer reserves the right to require the Employee to provide a doctor's certificate to substantiate the reasons for absence). 9.3 For absences of 8 successive calendar days or more, the Employee will be required to submit a medical certificate provided and signed by a doctor or a hospital in respect of that period of absence. Thereafter, medical certificates must be provided on a weekly basis.

9.4 The Employer will pay Statutory Sick Pay ("SSP") where the Employee qualifies for it subject to and in accordance with the relevant statutory rules that apply from time to time. The Employee's qualifying days for SSP purposes are Monday to Friday inclusive of both days. 9.5 There is no general entitlement to Employer sick pay. However, the Employer may at its sole discretion pay the Employee an ex gratia allowance ("sickness allowance") of an amount equal to the Employee's Salary less SSP and/or any social security benefits recoverable by the Employee. Any sickness allowance that the Employer decides to pay will, generally, be paid for a period of up to 3 months in aggregate in any 12 month period, the first day of absence being the first day of the 12 month period for calculating the accumulation of benefit. The payment period may be extended, exceptionally, either at an amount equal to full sickness pay or some lesser rate, entirely at the discretion of the Employer. 9.6 In the event of sickness or injury being caused by negligence or any third party and the Employee being paid sickness allowance by the Employer during any period of absence attributable to such sickness or injury, the Employee will take all reasonable steps to claim damages in respect thereof. Sickness allowance will be regarded as a loan to be repaid in the event of a successful claim. 10. MEDICAL EXAMINATION During the Employment, the Employer may require the Employee to be examined by a medical practitioner nominated by the Employer at its expense. 11. DATA PROTECTION 11.1 The Employee hereby acknowledges that the Employee has signed the Employer's Personal Data Consent

Form ("the Consent Form") by which the Employee consents to the processing, disclosure and transfer of personal data and sensitive personal data provided by the Employee to the Employer or any Associated Employer in accordance with legal requirements and including without limitation the specific purposes identified in the Consent Form. 11.2 In addition, the Employee agrees to treat any personal data relating to other employees or customers of the Company or Associated Employer to which the Employee has access in the course of the Employment, in accordance with all legal requirements. In particular, the Employee will not use such data other than in connection with and to the extent necessary for the purposes of the Employment. Any infringement could result in the invoking of disciplinary proceedings against the Employee. 12. TERMINATION 12.1 No notice or any payment in lieu of notice will be given where the Employer is entitled to dismiss the Employee on a summary basis. The Employer reserves the right to suspend the Employee with pay from duty in connection with the investigation of summary dismissal grounds. Without prejudice to the generality of this Clause 13.1, the Employer may terminate the Employment with immediate effect at any time if the Employee;

12.1.1 commits any serious or persistent breach or non-observance of any of the terms, conditions or stipulations contained in this Agreement or any of the policies, rules or codes of conduct of the Employer or any regulatory body in force and as amended from time to time; 12.1.2 is guilty of gross misconduct or gross negligence in connection with or affecting the business or affairs of the Employer or any Associated Employer form which the Employee is required to perform duties; 12.1.3 is guilty of conduct which brings or is likely to bring the Employee or the Employer or any Associated Employer into disrepute; 12.1.4 is convicted of an arrestable offence (other than an offence under road traffic legislation for which a noncustodial penalty is imposed); or 12.1.5 engages in any act which, directly or indirectly, results in the Executive being unable to travel freely and without difficulty between the United Kingdom, any member of the EEC, the United States and Canada. 12.2 The Employment may be terminated by mutual agreement of the parties in writing, in which event the Employee shall continue to accrue and receive the Salary and benefits up to the agreed date of termination. 12.3 The Employment will automatically terminate without the need for prior advance notice or payment in lieu of notice upon the Employee attaining the age of 65 if the Employee is still employed by the Employer immediately before the Employee's 65th birthday. 12.4 The Employment will automatically terminate by operation of law in the event of the death of the Employee. 12.5 Without limitation to the termination provisions of 13.1, 13.2, 13.3, 13.4, and 13.7, the Employment may also be terminated with notice. The Employment may be terminated by the Employee giving three (3) months written notice. The Employment may be terminated by the Employer giving twelve (12) months written notice. In the event there is a Change of Control (as defined in Schedule A hereto) and the Employer terminates the Employment with notice under this Clause 13.5 during the period beginning one (1) month prior to the Change of Control and ending six (6) months following the change of control, the Employer shall be required to provide eighteen (18) months written notice (instead of the aforementioned twelve (12) months written notice). The Company reserves the right at its absolute discretion to terminate the Employment under this Clause 13.5 by paying Base Salary and benefits (as defined at Clause 5.1 above), and no more, for the length of the notice period specified above in lieu of notice. The Employment may be terminated by the Employer giving 12 months' written notice in the following situations: 13.5.1 the Parent Company and its subsidiaries, taken as a whole, cease to operate as a going concern;

13.5.2 any action by the Corporation without the Executive's consent that constitutes constructive termination of the Executive's employment with the Corporation, including (i) any material reduction in the Executive's titles, reporting relationships, powers, authority, duties or responsibilities; (ii) any reduction in the Executive's base salary; or (iii) any material reduction in the value of the Executive's employee group insurance or health benefit plans and programmes; 13.5.3 the Corporation fails to pay, when due, any amount payable by it to the Executive pursuant to this Agreement; 13.5.4 any term of the Executive's employment with the Corporation is changed without the Executive's consent in any proceedings under any bankruptcy, reorganization, arrangement, dissolution, winding-up or liquidation statute or law of any jurisdiction, including the Companies' Creditors Arrangement Act (Canada). 12.6 On termination of the Employment for whatever reason and howsoever arising, the Employee shall immediately: 12.6.1 Deliver up to the Employer all property, documents including without limitation notes, memoranda, correspondence and other material on which data or information is recorded or stored and confidential or other information of the Employer, any Associated Employer or any other third party which has been entrusted to the Employer which is under the Employee's control or possession and the Employee will not retain any copies of the same; 12.6.2 Repay all outstanding debts or loans due to the Employer or any Associated Employer and the Employer is hereby authorised to deduct from any of the Employee's wages a sum in repayment of all or any part of such debts or loans; and 12.6.3 Execute written resignations from any and all positions held with Employer and any Associated Employer. 12.7 For the avoidance of doubt, none of the provisions of this Agreement shall relieve the Employee from the Employee's duty to mitigate any and all damages resulting from the termination of Employment for whatever reason and howsoever arising. 13. GARDEN LEAVE 13.1 The Employer may at any time notwithstanding any other provision of this Agreement, direct that: 13.1.1 the Employee performs no duties; and/or 13.1.2 the Employee refrain from contacting any customer, clients, advertisers, suppliers, agents, professional advisers, brokers or employees of the Employer or any Associated Employer; and/or

13.1.3 the Employee does not enter all or any premises belonging to the Employer or any Associated Employer. 13.2 Any suspension or exclusion of the Employee in accordance with 14.1 shall be for a period of 9 months and during such period the Employee's Base Salary and car allowance and non salary related benefits and no more, shall continue to be paid or provided by the Employer. During any period of notice, suspension or exclusion, the Employee must continue to comply without exception with all the Employee's obligations under this Agreement including Clause 2.3, 13.3 The Employer reserves the right to require the Employee to take any accrued holiday entitlement during any period that the Employee is directed to perform no duties and/or not to enter any premises of the Employer of Associated Employer pursuant to this Clause 14. 14. MISCELLANEOUS

14.1 The Employee hereby warrants that, by virtue of entering into this Agreement, the Employee is not and will not be in breach of any express or implied terms of any contract, court order, any agreement with a third a party which has created or could create any third party rights, or of any other obligations legally binding upon him which are or could become inconsistent with the Employee's obligations under this Agreement. The Employee further agrees that the Employee will fully disclose to the Employer at the Employee's earliest opportunity any such prior contract, court order, agreements or other legal obligation as well as any claims made or notices provided by a third party which allege any such agreement or interest. 14.2 The Employee undertakes and agrees that after the termination of the Employee's employment hereunder and prior to entering into any contractual relationship with any other party to serve as an officer, director, employee, partner, advisor, joint-venturer or in any other capacity with any other business, undertaking, association, partnership, firm, enterprise or venture, the Employee shall disclose to such other party the terms of this Agreement. 14.3 There are no collective agreements applicable to the Employment. 14.4 The Employer shall be entitled at any time during the Employment or on its termination to deduct from the Employee's wages or any other sums due to the Employee from the Employer any monies due from the Employee to the Employer in respect of any overpayment of any kind made to the Employee or in respect of any debt or other sum due from the Employee. 15. DEFINITIONS AND INTERPRETATION 15.1 In this Agreement unless the context otherwise requires: "ASSOCIATED EMPLOYER" means any company which is a holding company or a subsidiary of the Employer or a subsidiary of the Employer's holding company and "holding company" and "subsidiary" shall have the meanings given by s.736 Companies Act 1985 as amended from time to time;

"INTELLECTUAL PROPERTY" includes without limitation all improvements, inventions, know-how and discoveries, technology, letters patent, copyrights, computer programs, utility models, design rights, trade marks, service marks, documentation, processes, techniques or procedures in any way related to the Employer's business which are developed, invented, or written by the Employee alone or together with others, applications for registration of any of the foregoing and the right to apply for them in any part of the world, and including all derivative works during the course of the Employment, or at any time using the Employer's confidential information. 15.2 This Agreement, contains the entire understanding and agreement between the parties with respect to the Employment and supersedes any and all subsisting agreements arrangements representations and undertakings (written or oral, express or implied) relating to the Employment which such agreements, arrangements representations and undertakings shall be deemed to have been terminated by mutual consent. Both parties hereby release and forever discharge the other of and from all manner of actions, causes of action, claims and demands whatsoever under or in respect of any such prior agreements and representations. 15.3 Except as provided herein, no amendment or variation of any of the provisions of this Agreement shall be valid unless made in writing and signed by each of the parties. The Employer reserves the right to make reasonable changes to any of the terms of this Agreement with reasonable notice. 15.4 This Agreement and the rights and obligations of the parties hereunder shall be governed by and construed in accordance with the English law and is subject to the exclusive jurisdiction of the English Courts. 15.5 Any reference in this Agreement to a person shall where the context permits include a reference to a body corporate and to any unincorporated body of persons. 15.6 Any word in this Agreement which denotes the singular shall where the context permits include the plural and vice versa and any word in this Agreement which denotes to the masculine gender shall where the context permits include the feminine and/or the neuter genders and vice versa.

15.7 Any reference in this Agreement to a statutory provision shall be deemed to include a reference to any statutory amendment modification or re-enactment of it. 16. SEVERABILITY 16.1 In the event that any provision of this Agreement or part thereof shall be deemed void, invalid, illegal or unenforceable by a court or other lawful authority of competent jurisdiction, this Agreement shall continue in force with respect to the enforceable provisions and all rights accrued under the enforceable provisions shall survive any such declaration. 17. NOTICES 17.1 Any consent, approval, notice, request, or demand required or permitted to be given under this Agreement by one party to the other shall be in writing to be effective and

shall be deemed to have been sufficiently served by one party on the other if it is delivered personally, sent via facsimile or is sent by registered or recorded delivery prepaid post (air mail if overseas) addressed to the Employers registered office for the lime being, or the Employee's last know address or facsimile number. 17.2 Any consent, approval, notice, request or demand aforesaid if delivered personally (for example, if left with an adult person at the above address of the Employee and if left with the receptionist at the above address of the Employer) or faxed shall be deemed to have been given on the date of such delivery or facsimile. Any notice sent by post shall be deemed (in the absence of evidence of earlier receipt) to be received two (2) days after posting (six (6) if sent by air mail) and in proving the time such notice was sent it shall be sufficient to show that the envelope containing it was properly addressed, stamped and posted. 18. NON WAIVER 18.1 The parties acknowledge and agree that a failure by either party to enforce any particular provision of this Agreement shall not be considered a waiver of any of its rights and will not release the other party of any responsibility for performance under this Agreement. IN WITNESS whereof the parties have duly executed this Agreement as of the date first above written.
Signed: /s/ A. J. BEDBOROUGH ----------------------------Name: A. J. BEDBOROUGH Title: EUP, EMEA OPERATIONS

Signed: /s/ Derek Burney ----------------------------Name: Derek Burney Title: Chief Executive Office

FOR AND ON BEHALF OR COREL UK LIMITED

APPENDIX A CONFIDENTIALITY, POST TERMINATION UNDERTAKINGS, OWNERSHIP OF PROPERTY, INVENTIONS, DISCOVERIES, INDUSTRIAL DESIGNS, ETC. A1 CONFIDENTIALITY A1.1 The Employee agrees to hold in strict confidence the business and affairs of the Employer or any Associated Employer and any of their customers or clients. The Employee shall not (other than in the proper

Associated Employer and any of their customers or clients. The Employee shall not (other than in the proper performance of the Employee's duties or with the prior written consent of the Employer or unless ordered by a court of competent jurisdiction), at any time either during the Employment or after its termination, directly or indirectly disclose or communicate to any third party or use for the Employee's own benefit or the benefit of any third party other than the Employer or any Associated Employer any confidential information which may come to the Employee's knowledge in the course of the Employment and the Employee shall during the continuation of the Employment use best endeavours to prevent the unauthorised publication or misuse of any confidential information, subject to such restriction ceasing to apply in accordance with Clause A1.4 below. A1.2 For the avoidance of doubt and without prejudice to the generality of Clause A1.1 above the following is a non-exhaustive list of matters which in relation to the Employer and Associated Employers are considered confidential and must be treated as such by the Employee: A1.2.1 Information disclosed in confidence to the Employer or any Associated Employer by or on behalf of a customer or client or prospective customer or client; A1.2.2 Information respecting the identity of any customer or client of the Employer or any Associated Employer; A1.2.3 Information otherwise disclosed to the Employer on a confidential basis by third parties; and A1.2.4 Information otherwise identified to the Employee us confidential information of the Employer or by its nature confidential including without limitation any part of the Employer's computer systems, software source code, system logic, systems, marketing plans, patents, trade secrets, know-how, technical expertise, financial information, product information, customer information, remuneration packages and other information relating to the business of the Employer, whether verbal or written, regardless of the form or medium, with respect to the business of the Employer, as well as all proprietary and other information of a confidential nature which is provided to the Employer by third parties.

A1.3 The Employee's obligations of confidence described at Clause A1.1 above include, without limiting the generality of the foregoing: A1.3.1 Refraining from copying the Employer's or any Associated Employer's confidential information without the Employer's prior written permission or as required by the Employee's duties; A1.3.2 Refraining from removing the Employer's or any Associated Employer's confidential information from the Employer's premises without the written permission of the Employer unless so required by the duties of the Employee's role; A1.3.3 Immediately returning upon request the confidential information of the Employer or any Associated Employer's in the possession or control of the Employee; Al.3.4 Taking every reasonable step to prevent third parties from examining and/or making copies of any documents or papers (whether in electronic or hard copy form) prepared by the Employee or that come into the Employee's possession or under the Employee's control by reason of the Employment; A1.3.5 Using the Employee's best efforts to follow all security policies of the Employer or any Associated Employer's. A1.4 The Employee's obligations of confidence described above will not apply to information which: A1.4.1 Enters the public domain other than by breach of obligations of confidence owed by the Employee; A1.4.2 Rightfully received by the Employee, outside of the course of the Employment, from a third party without confidentiality limitations. A1.5 The mingling of confidential Information with information that falls within one or more of the exceptions

above shall not impair the status of, or obligations of confidence and non-use respecting, the confidential parts. A1.6 The Employee agrees to promptly advise the Employer of any information known to the Employee prior to the commencement of the Employment which could be considered confidential information but which the Employee considers to be excluded from the provisions of this Agreement. The Employee further agrees to disclose any information which the Employee believes is qualified by this paragraph before acting upon it. A2 POST TERMINATION UNDERTAKINGS A2.1 For the purposes of this Clause A2: "THE BUSINESS" means the development and marketing of software owned or marketed by the Employer or any Associated Employer (including without limitation productivity software such as word-processing, presentation, spreadsheet, process management and database applications as well as graphics application, desktop publishing application

software and XML) or the provision of consulting, maintenance, support or training services in connection with such software by the Employer or any Associated Employer at the date of termination of the Employment and with which the Employee has been concerned to a material extent in the 12 months immediately preceding such termination; and "ASSOCIATED EMPLOYER" means any Associated Employer in respect of which the Executive has carried out material duties in the period of 12 months prior to the date of termination of the Employment. A2.2 The Employee undertakes that the Employee will not, either during the Employment or for the period of 6 months after the termination of the Employment, without the prior written consent of the Employer either alone or jointly with or on behalf of any person directly or indirectly: A2.2.1 solicit or entice away or endeavour to solicit or entice away from the Employer or any Associated Employer any person who at the date of termination of the Employment is employed or engaged by the Employer or any Associated Employer and (i) is employed or engaged in a sales and/or marketing capacity and with whom the Employee has had material contact during the course of the Employment or (ii) is directly managed by or reports to the Employee (in both cases whether or not such person would commit a breach of contract by so doing); A2.2.2 in connection with the carrying on of any business in competition with the Business approach, canvass or solicit or cause to be approached canvassed or solicited for orders in respect of any services provided and/or any goods sold by the Employer or and Associated Employer any third party who or which at the date of termination of the Employment or at any time during the period of 12 months prior to that date is a customer or customer or client of the Employer or any Associated Employer and with whom or which the Employee shall have had dealings during the course of the Employment, or who or which became a customer or client of the Employer or any Associated Employer within six (6) months after the termination of the Employment and in respect of whom or which the Employee shall have had material involvement with the marketing effort in respect of such customer or client during the course of the Employment; A2.2.3 in connection with the carrying on of any business in competition with the Business do business with any person who or which has at any time during the period of 12 months immediately preceding the date of termination of the Employment done business with the Employer or any Associated Employer as and with whom or which the Employee shall have had dealings during the course of the Employment or who has done business with the Employer or Associated Employer within six (6) months after the termination of the Employment and in respect of whom or which the Employee shall have had material involvement with the marketing effort in respect of such person during the course of the Employment.

A2.3 The Employee covenants with the Employer that the Employee will not for the period of 6 months after the termination of the Employment without the prior written consent of the Employer either alone or jointly with or on behalf of any person directly or indirectly carry on or set up or be employed or engaged by or otherwise assist in

behalf of any person directly or indirectly carry on or set up or be employed or engaged by or otherwise assist in or be interested in any capacity (save as a shareholder of not more than two (2) percent in aggregate of any class of shares, debentures or other securities of any company which are quoted on or dealt in any recognised investment exchange) in any business anywhere within the EEC which is in competition with the Business. A2.4 The Employee agrees to notify the Employer immediately of any offer of employment or engagement or arrangement made with or to the Employee which may give rise to a breach of one or more of the covenants contained in Clauses A2.2 and A2.3 ("a notifiable offer") and further undertakes that on receipt of a notifiable offer the Employee will immediately inform the third party or parties responsible for the notifiable offer of the existence of those covenants. A2.5 The periods during which Clauses A2.2 and A2.3 are expressed to operate shall each be reduced by such period as the Employee shall have complied with a direction to perform no duties and/or not to enter all or any premises of the Employer or any Associated Employer pursuant to Clause 14. A2.6 The undertakings contained in Clauses A2.2 and A2.3 are intended to be separate and severable and enforceable as such. A3 OWNERSHIP OF PROPERTY A3.1 The Employee agrees that during the term of the Employment and at any time after the termination of the Employment, any and all equipment devices or other property provided to the Employee by the Employer shall remain the property of the Employer. The foregoing shall include all property (whether in electronic or hard copy form) including without limitation computers, peripherals, software, cellular phones and any other equipment. A3.2 On request by the Employer, and in any event upon termination of the Employment howsoever arising and for whatever reason, the Employee shall immediately return to the Employer any and all of the foregoing property and shall return to the Employer any other property which has been leased or rented by the Employer for use by the Employee. A3.3 The Employee hereby agrees that in the event that the Employee does not return any and all of the foregoing property, the Employee will pay to the Employer a sum equal to the fair market value of the property as reasonably determined by the Employer. The Employee authorises the Employer in such cases to set off and/or deduct such amount from the Employee's final payment of wages or any other sums due to the Employee from the Employer. In the event that such amount exceeds the Employees final payment of wages and other sums due to the Employee, the Employee agrees to make a payment to the Employer of an amount equal to the outstanding excess. A4 INVENTIONS, DISCOVERIES, INDUSTRIAL DESIGNS, ETC.

A4.1 If at any time during the Employment the Employee makes or discovers or participates in the making or discovery of any Intellectual Property including (without limitation): A4.1.1 Conceiving or making any invention or discovery, whether patentable or not; A4.1.2 Becoming the author of any design capable of being protected as an industrial design, design patent or other design protection; A4.1.3 Becoming the author of any work in which copyright may exist; A4.1.4 Developing any confidential information which may be capable or being protected as a trade secret; which relates to or is capable of being used in the business of the Employer or any Associated Employer, the Employee shall (subject to the relevant provisions of the Patents Act 1977, the Registered Designs Act 1949 and the Copyright Designs and Patents Act 1988) immediately disclose and deliver up to the Employer full details, information, documents and other things (in whatever form or media) related thereto and at the request and expense of the Employer shall do all things which may be necessary or desirable for obtaining appropriate forms

of protection In such parts of the world as may be specified by the Employer and for vesting all rights in such Intellectual Property in the Employer, any Associated Employer or a company nominated by the Employer. A4.2 The Employee hereby irrevocably appoints the Employer to be the Employee's agent in the Employee's name and on the Employee's behalf to sign any instrument, execute or do any act and generally to use the Employee's name for the purpose of giving to the Employer or its nominee the full benefit of the provisions of this Clause A4 and in favour of any third party a certificate in writing signed by any director or the secretary of the Employer that any instrument or act falls within the authority conferred by this Clause A4.2 shall be conclusive evidence that such is the case. A4.3 The Employee hereby waives all of the Employee's moral rights (as defined in the Copyright Designs and Patents Act 1988) in respect of any acts of the Employer or acts of third parties done with the Employer's authority in relation to any Intellectual Property which is the property of the Employer by virtue of Clause A4.1. A4.4 The Employee acknowledges that from time to time, the Employer uses the image, likeliness, voice or other representation of its employees in connection with the production of corporate reports, advertising and promotional materials and training videos. The Employee hereby agrees that if, during the course of the Employment, the Employee participates in such productions, the Employer may use the Employee's image, likeness, voice or other representation in perpetuity, in all media and in all territories for the purposes described above without further compensation to the Employee. A4.5 All rights and obligations under this Clause A4 in respect of Intellectual Property made or discovered by the Employee during the Employment shall continue in full force and effect after the termination of the Employment and shall be binding upon the Employee's personal representatives.

A4.6 The Employee acknowledges that any and all Intellectual Property created by the Employee during the course of the Employment shall vest in and be owned by and constitute the property of the Employer and to the extent that they do not automatically so vest in part consideration of the monies received by the Employee pursuant to this Agreement the Employee hereby assigns and transfers with full title guarantee such Intellectual Property. A5 CHANGE OF CONTROL "CHANGE OF CONTROL" means the occurrence of any of the following events: A5.1.1 the Employer is merged, or consolidated or reorganized into or with another corporation or other legal person in any transaction or series of related transactions (other than a transaction to which only the Employer and one or more of its subsidiaries are parties) and as a result of such merger, consolidation or reorganization, less than 51 % of the combined voting power of the outstanding voting securities of the surviving entity or person immediately after such transaction or series of related transactions, are held in the aggregate by persons or entities who were holders of voting securities of the Employer immediately prior to such transaction; A5.1.2 the Employer sells all or substantially all of its assets to any other corporation or other legal person in any sale or series of related sales (other than a transaction to which only the Employer and one or more of its subsidiaries are parties); A5.1.3 the Employer's Board of Directors approves the distribution to the Employer's shareholders of all or substantially all of the Employer's net assets, or the Employer's Board of Directors, shareholders or a court of competent jurisdiction approves the dissolution or liquidation of the Employer; or A.5.1.4 any other transactions or series of related transactions occur which have substantially the same effect as the transactions specified in any of the preceding clauses (other than transactions to which only the Employer and one or more of its subsidiaries are parties).
Signed: /s/ A. J. BEDBOROUGH

Signed: /s/ A. J. BEDBOROUGH ---------------------------Name: A. J. BEDBOROUGH Title: EVP EMEA OPERATIONS

Signed: /s/ Derek Burney ---------------------------Name: Derek Burney Title: Chief Executive Officer

FOR AND ON BEHALF OF COREL CORPORATION

(COREL LOGO) Waiver as Appendix to Employment Contract dated 1st January 2003 I, Amanda Bedborough, hereby confirm that upon signature of this employment contract, I cede any right to sue Corel Corporation or any of its subsidiaries regarding reasons for unfair dismissal when notice of termination is paid as stands in Article 12 of the attached employment contract.
Signed: /s/ Amanda Bedborough ---------------------------Amanda Bedborough Date: 23/04/03

Exhibit 10.6 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT is made as of 20th day of January, 2005. BETWEEN: COREL CORPORATION (hereinafter referred to as the "Employer") OF THE FIRST PART - and JACQUELINE A. MAARTENSE (hereinafter referred to as the "Employee") OF THE SECOND PART WHEREAS the Employer and the Employee wish to enter into an agreement pursuant to which the Employee will provide the Employee's services to the Employer as hereinafter set forth, and the Employer will hire and retain the services of the Employee as an employee of the Employer. NOW THEREFORE in consideration of the premises and mutual covenants and agreements hereinafter contained, the parties hereto hereby mutually covenant and agree as follows:

1. EMPLOYMENT a. The Employee is employed on a full-time basis as EXECUTIVE VICE PRESIDENT GLOBAL PRODUCT MARKETING AND COMMUNICATIONS. b. The Employee is employed on a full-time basis for the Employer and it is understood that the hours of work involved will vary and may be irregular. The Employee acknowledges that this clause constitutes agreement to work such hours. c. The Employee acknowledges and hereby agrees to carry out all lawful instructions given to the Employee by the Employer. d. The Employee acknowledges and hereby agrees to observe all policies of the Employer as the Employer may in its absolute discretion create from time to time and to perform all services associated with the position herein. e. The Employee acknowledges and agrees that during the currency of this agreement, the Employee shall devote the Employee's full-time and skill to the duties and responsibilities contemplated herein and shall not be engaged in any other employment in any other capacity or any other activity that interferes with the provision of the services contemplated herein or that is for the benefit of any person, corporation or enterprise whose business interests are either competitive or in conflict with those of the Employer. -22. EMPLOYMENT TERM Subject to being terminated pursuant to the provisions of paragraph 5 hereof, the term of this agreement shall be indefinite commencing on JANUARY 21, 2005. 3. SALARY AND BENEFITS a. For all services rendered by the Employee in the course of the employment hereunder, the Employee shall receive a gross annual salary of CDN $300,00.00(subject to statutory withholdings and deductions). The said salary is to be paid at such times and in such fashion as is in keeping with the ordinary practices and policies of the Employer. b. Employee will also be eligible for an incentive bonus component of CDN $100,000.00 (subject to statutory withholdings and deductions) based upon the successful realization of targets set on a periodic basis by Employer. TO CLARIFY AND WITHOUT LIMITATION TO SECTION 11 HEREIN, THIS AMOUNT REPLACES ALL PROFIT SHARING COMMITMENTS REFERRED TO IN THE OFFER LETTER DATED OCTOBER 25, 2004. All payments will be made by bank credit transfer. c. Employee shall be reimbursed, in accordance with Employer's policies and procedures, up to CDN $3,500.00 per month for payments made by Employee for house and car rental in Ottawa. Said rental payment reimbursement shall continue until May 31, 2005 and thereafter cease. The Employee shall be entitled to reimbursement of relocation expenses for the moving of Employee's household to Ottawa to a maximum 25,000 US$ d. The Employee shall be entitled to participate in such additional benefits as are enjoyed from time to time generally by Employees in accordance with the established practices and policies of the Employer as the Employer may in its absolute discretion create from time to time. In this regard, the Employee acknowledges having received a description of the benefits in force as of the date hereof. e. Employee acknowledges that the granting of options is made only to full time employees, solely at Employer's discretion and subject to the terms and conditions of any grant and of Employer's stock option plan in effect, from time to time. f. The Employee acknowledges that except as hereinafter set out, there are no further benefits and that changes may be made to the current benefit program(s), from time to time, by the Employer, as the Employer may in its

absolute discretion decide without the necessity of an amendment hereto. 4. VACATION The Employee shall be entitled to vacation in accordance with the Executive Vacation Plan, with the annual accrual beginning at 5 weeks per year. The Employee shall take the Employee's vacation entitlement in each 12 month period and shall not accrue more than one year's vacation entitlement from one 12 month period to the next. Without in any way limiting the generality of the foregoing, and subject to compliance with the Employment Standards Act, S.0.2000, c. 41 as amended, any vacation entitlement not taken in the appropriate 12 -3month period or the year following shall be lost unless specific arrangements are made between the parties, which arrangements are to be confirmed in writing and signed by each of the parties hereto prior to the expiration of the said period, 5. TERMINATION This agreement and the employment of the Employee hereunder may be terminated in the following manner: A. TERMINATION BY THE EMPLOYER i. This agreement may be terminated effective at any time for cause by the Employer giving notice in writing of such termination to the Employee. If this agreement and the employment of the Employee hereunder is so terminated pursuant to this clause (i), the Employee shall receive any statutory benefits to which the Employee shall be entitled and shall continue to accrue and receive the Employee's said annual salary and benefits through to the date of termination indicated in the termination notice and no more. ii. Between February 3, 2005 and November 1, 2005, this agreement and the employment of the Employee hereunder may be terminated at any time by the Employer by providing the Employee a payment equal to nine (9) months base salary or a payment of base salary that would have been paid during the months not yet worked between February 1, 2005 and November 1, 2005, whichever is greater. In addition, the Employer will provide payment for the equivalent number of months of pro rata bonus, as well as maintain the Employee's benefits for said period. However, if maintaining benefits is not possible, the Employer will pay to the Employee an amount equal to the cost of such benefits, grossed up so that the after tax value of the payments is equal to the cost of the benefits. The Employee acknowledges that the foregoing provisions are in satisfaction of and substitution for any and all statutory and common law rights, including without limitation, any right to reasonable notice of termination. iii. After November 1, 2005, this agreement and the employment of the Employee hereunder may be terminated at any time by the Employer giving to the Employee such notice, or payment in lieu thereof, equal to nine (9) months of base salary in lieu of notice, plus one (1) month of salary for each completed year of employment, to maximum payment of twelve (12) months salary. In addition, the Employer will provide payment for the equivalent number of months of pro rata bonus payout, as well as maintain the Employee's benefits for said period. However, if maintaining benefits is not possible, the Employer will pay to the Employee an amount equal to the cost of such benefits, grossed up so that the after tax value of the payments is equal to the cost of the benefits. The Employee acknowledges that the foregoing provisions are in satisfaction of and substitution for any and all statutory and common law rights, including without limitation, any right to reasonable notice of termination. iv. For the purposes of (ii) and (iii) above, the "pro rata bonus' payment to the Employee shall be the greater of (a) the pro rata bonus calculated assuming the targets would have been achieved at the 100% level; or (b) the pro rata bonus calculated at the -4actual percentage of target achieved as of the effective date of termination. b. TERMINATION BY THE EMPLOYEE

This agreement and the employment of the Employee hereunder may be terminated at any time by the Employee giving to the Employer 1 weeks notice. In the event the Employee terminates employment in accordance with the foregoing and, in addition, both (i) Good Reason exists for Employee terminating employment; and (ii) cause does not exist for Employer to terminate Employee's employment, then the Employee shall receive the termination the payments as described in subsections 5 a (ii) or (iii) above, as the case may be. For the purposes of this subparagraph "Good Reason" means (i) the material reduction or material modification of Employees's authority, duties, title, salary, employee benefits or responsibilities without Employee's prior written consent, or (ii) any requirement that Employee move her principal place of employment from the Ottawa Area. c. RENTAL ACCOMMODATION REIMBURSEMENT In the event that: (i) the Employee enters into a 1 year lease in respect of rental accommodations in Ottawa prior to May 31,2005; and (ii)the Employee's employment is terminated by the Employer pursuant to section 5(a)(ii) or (iii) above or is terminated by Employee for Good Reason pursuant to section 5(b) above, during the first year of said 1 year lease; and (iii) the Employee is unable to terminate or otherwise mitigate Employee's obligations to pay rent for the period between the effective date of termination and the end of the 1 year lease, then, in such a case, (iv) the Employer shall reimburse the Employee for the actual cost of rental payments made by the Employee to a maximum of CDN$2085 per month for the balance of the first year of the 1 year lease. Notwithstanding the foregoing, the Employee shall take reasonable steps as directed by the Employer to mitigate any obligations under the remainder of the lease by negotiating an early termination of the lease with the lessor or by attempting to sublet the premises, and, in either case, the Employer shall be entitled to reduce its obligations under this section 5 (c) to the extent of any mitigation obtained. d. TERMINATION BY MUTUAL AGREEMENT This agreement and the employment of the Employee hereunder may be terminated by mutual agreement of the parties hereto in writing, in which event the Employee shall continue to accrue and receive the Employee's said annual salary and benefits through to the date of termination reached pursuant to such mutual agreement. e. TERMINATION BY DEATH This agreement and the employment of the Employee hereunder shall be automatically terminated by the death of the Employee. All compensation to the Employee shall cease at the Employee's death. F. EFFECT of TERMINATION ON STOCK OPTIONS Upon termination all stock options shall be treated in accordance with the provisions of -5the Employer's option plan, as same may be amended from time to time. Employee acknowledges that for the purposes of said plan the effective date of termination is the date specified in the notice (a and b above), established by mutual agreement (c above) or the date of death (d above) and shall not be affected by the subsequent decision of any Court or other body that the termination was improper, unlawful, unfair, without sufficient notice or otherwise deficient in any respect. Notwithstanding the foregoing and the terms and conditions of the option plan, if, prior to Employees one year anniversary of employment: (i) Employee is terminated without just cause or Employee terminates employment with Good Reason (in accordance with subsection 5 b above); AND (ii) the Employer completes a public offering, is acquired by another entity or is merged with another entity such

that following said merger less than 50% of the shares of the merged entity are owned by persons who previously owned the shares of the Employer; THEN upon the occurrence of the latter of (i) and (ii), the Employer shall, at its option, either: (iii) cause 25% of the initial grant of Employees options to immediately vest; OR (iv) pay Employee the cash equivalent of the fair market value of 25% of the initial grant of Employees options (i.e. the fair market value of the shares less the option price). 6. CONFIDENTIALITY, NON-DISCLOSURE AND NON-COMPETITION a. The Employee agrees to hold in strict confidence the business and affairs of the Employer and each of its customers/clients. The Employee agrees that during the term of this agreement or any renewal thereof or at any time thereafter, the Employee will not directly or indirectly disclose to any third party or use for any purpose other than that of the Employer without the prior written approval of the Employer, the following: i. Information disclosed to the Employer by or on behalf of a customer/client prospective customer/client; ii. Information respecting the identity of any customer/client of the Employer; iii. Information otherwise disclosed to the Employer on a confidential basis by third parties, and iv. Information otherwise identified to the Employee as confidential information of the Employer including without limitation any part of the Employer's computer systems, software source code, system logic, systems, marketing plans, patents, trade secrets, know-how, technical expertise, financial information, product information, customer information, remuneration packages and other information relating to the business of the Employer, whether verbal or written, regardless of the form or medium, with respect to the business of the Employer, as well as all proprietary and other information of a confidential nature which is provided to the Employer by third parties. -6b. The Employee's obligations of confidence described above include, without limiting the generality of the foregoing: i. Refraining from copying the Employer's confidential information without the Employer's prior written permission or as required by the Employee's duties. ii. Refraining from removing the Employer's confidential information from the Employer's premises without the written permission of the Employer. iii. Immediately returning upon request the confidential information of the Employer in the possession or control of the Employee. iv. Taking every reasonable step to prevent third parties from examining and/or making copies of any documents or papers (whether in electronic or hard copy form) prepared by the Employee or that come into the Employee's possession or under the Employee's control by reason of the Employee's employment hereunder; v. Using the Employee's best efforts to follow all security policies of the Employer, and vi. Upon termination of this agreement, turning over to the Employer all documents or papers (whether in electronic or hard copy form) and any other materials in the Employee's possession or under the Employee's control that relate to the business of the Employer or its customers/clients. c. The Employee's obligations of confidence described above do not apply to information which is

i. available to the public other than by breach of obligations of confidence owed by the employee; ii. rightfully received by the Employee, outside of the course of the Employee's employment, from a third party without confidentiality limitations; iii. independently developed by the Employee without recourse to any confidential information of the Employer or its customers/clients; or iv. known to the Employee prior to first receipt of the same in the course of the Employee's employment. The mingling of confidential information with information that falls within one or more of the exceptions above shall not impair the status of, or obligations of confidence and non-use respecting, the confidential parts. d. The Employee agrees to promptly advise the Employer of any information known to the Employee prior to the Employee's employment with the Employer which could be -7considered confidential information but which the Employee considers to be excluded from the provisions of this agreement. The Employee further agrees to disclose any information which the Employee believes is qualified by this paragraph before acting upon it. e. The Employee acknowledges that the Employee has a fiduciary obligation to the Employer and the Employee agrees that the Employee will not during the Employee's employment with the Employer or within 12 months thereafter, directly or indirectly: i. hire or attempt to obtain the withdrawal from the Employer or its affiliates of any of their respective Employees or consultants; ii. approach, solicit, service or deal with any customer/client, potential customer/client or maturing business opportunity of the Employer or its affiliates in order to attempt to direct any such customer/client, potential customer/client or maturing business opportunity away from the Employer or its affiliates; iii. solicit or divert any business away from the Employer or its affiliates; iv. induce or persuade any customer/client, potential customer/client, supplier, agent or other person under contract or otherwise associated or doing business with the Employer or its affiliates to reduce or alter any such association or business with the Employer or its affiliates; or v. otherwise interfere or attempt to interfere with any of the contractual, business or economic relationships of the Employer or its affiliates with other parties. f. The Employee agrees that the Employee will not either: i. during the Employee's employment with the Employer; or ii. within 6 months thereafter serve as an executive, officer, director, employee or in any advisory capacity with any competitor, in whole or in part, of the Employer, or either individually or in partnership or jointly or in conjunction with any person or person's firm, trust, partnership, association, syndicate or corporation, as principal, agent, shareholder, trustee or in any other matter whatsoever otherwise carry on or be engaged in or be concerned with any person or persons, firm, trust, partnership, association, syndicate or corporation which is a competitor, in whole or in part, of the Employer, except as a shareholder holding less than two percent of the outstanding shares or securities of any such corporation whose shares or securities are listed and posted for trading on a stock exchange recognized for such purpose by the Ontario Securities Commission. Notwithstanding the foregoing, if such competitor has two or more divisions located at different addresses then this paragraph will not prohibit the Employee from becoming engaged in a division that neither develops nor markets software competitive with the software owned or

marketed by the Employer nor provides services that are competitive with the services provided by the Employer provided further that in such case all other obligations of the Employee under this agreement shall continue to apply. For the purposes of this clause 6 f., a competitor is Microsoft and/or Adobe product lines -8that compete directly with the Employer's products. g. The Employee acknowledges that a breach of any of the foregoing provisions will give rise to irreparable harm and injury non-compensable in damages. Accordingly, the Employer or such other party may seek and obtain injunctive relief against the breach or threatened breach of the foregoing provisions, in addition to any other legal remedies which may be available. The Employee further acknowledges and agrees that the enforcement of a remedy hereunder by way of injunction will not prevent the Employee from earning a reasonable livelihood. The Employee further acknowledges and agrees that the covenants contained herein are necessary for the protection of the Employer's legitimate business interests and are reasonable in scope and content. The Employee further agrees to notify the Employer immediately of any breach of the Employee's obligations under this agreement which comes to the attention of the Employee. h. The provisions of this paragraph shall survive the termination of the employment relationship herein and shall be enforceable not withstanding the existence of any claim or cause of action of the Employee against the Employer whether predicated upon this agreement or otherwise. 7. OWNERSHIP OF PROPERTY a. The Employee agrees that during the term of his employment with the Employer and thereafter any and all equipment, devices or other property provided to the Employee by the Employer shall remain the property of the Employer. The foregoing shall include all property (whether in electronic or hard copy form) including without limitation computers, peripherals, software, cellular phones and any other equipment; b. Upon termination of this agreement, the Employee shall immediately return to the Employer any and all of the foregoing property and shall return to the Employer any other property which has been leased or rented by the Employer for use by the Employee. 8. INVENTIONS, DISCOVERIES, INDUSTRIAL DESIGNS, ETC. a. If, during the term of this agreement or any renewal hereof, the Employee should: i. Conceive or make any invention or discovery, whether patentable or not; ii. Become the author of any design capable of being protected as an industrial design, design patent or other design protection; iii. Become the author of any work in which copyright may exist; iv. Develop any confidential information which may be capable or being protected as a trade secret; and if such invention, discovery, design, work or confidential information relates in any way -9to the business of the Employer or any affiliated entity, such invention, discovery, industrial design, work or confidential information shall be the sole and exclusive property of the Employer or any affiliated entity. The Employee agrees during the term of his employment with the Employer and thereafter to promptly disclose to the Employer all details and information related thereto and to execute on demand any applications, transfers, assignments, moral rights waivers and other documents as the Employer may consider necessary or advisable for the purpose of vesting in the Employer or its designate full title to and enjoyment of such invention, discovery,

the purpose of vesting in the Employer or its designate full title to and enjoyment of such invention, discovery, industrial design, work or confidential information, and to assist in every way possible in the prosecution of applications for the registration of intellectual property rights relating thereto. b. The foregoing shall apply to all improvements, inventions, know-how and discoveries, technology, patents, copyrightable materials, computer programs, designs, documentation, processes, techniques or procedures in any way related to the Employer's business which are developed, invented, or written by the Employee alone or together with others, including all derivative works during the course of the Employee's employment with the Employer, or at any time using the Employer's confidential information. c. The Employee acknowledges that from time to time, the Employer uses the image, likeliness, voice or other representation of its Employee's in connection with the production of corporate reports, advertising and promotional materials and training videos. The Employee hereby agrees that if, during the course of the Employee's employment with the Employer, the Employee participates in such productions, the Employer may use the Employee's image, likeness, voice or other representation in perpetuity, in all media and in all territories for the purposes described above without further compensation to the Employee. 9. DISCLOSURE a. The Employee acknowledges that the Employee is not a party to any prior agreements which have created, or which could create in any third party rights which are or could become inconsistent with the Employee's obligations herein, and the Employee agrees that the Employee will fully disclose to the Employer at the Employee's earliest opportunity any such prior agreements as well as any claims made or notices provided by a third party which allege any such agreement or interest. b. The Employee undertakes and agrees that after the termination of the Employee's employment hereunder and prior to entering into any contractual relationship with any other party to serve as an officer, director, employee, partner, advisor, joint-venturer or in any other capacity with any other business, undertaking, association, partnership, firm, enterprise or venture, the Employee shall disclose to such other party the terms of this Agreement, 10. APPLICABLE LAW This agreement and the rights and obligations of the parties hereunder shall be construed and governed in accordance with the laws of the Province of Ontario. 11. ENTIRE AGREEMENT This agreement contains the entire understanding and agreement between the parties hereto with respect to the employment of the Employee and the subject matter hereof and any and -10all previous agreements and representations, written or oral, express or implied, between the parties hereto or on their behalf, relating to the employment of the Employee by the Employer and the subject matter hereof, are hereby terminated and cancelled and each of the parties hereto hereby releases and forever discharges the other of and from all manner of actions, causes of action, claims and demands whatsoever under or in respect of any such prior agreements and representations. Except as provided herein, no amendment or variation of any of the provisions of this agreement shall be valid unless made in writing and signed by each of the parties hereto. 12. SEVERABILITY In the event that any provision herein or part thereof shall be deemed void, invalid, illegal or unenforceable by a court or other lawful authority of competent jurisdiction, this agreement shall continue in force with respect to the enforceable provisions and all rights accrued under the enforceable provisions shall survive any such declaration, and any non-enforceable provision shall, to the extent permitted by law, be replaced by a provision which, being valid, comes closest to the intention underlying the invalid, illegal or unenforceable provision.

13. NOTICES Any consent, approval, notice, request, or demand required or permitted to be given by one party to the other shall be in writing (including, without limitation, telex or telecopy communications) to be effective and shall be deemed to have been given on the earlier of receipt or the fifth day after mailing by registered mail as follows: a) If to the Employer, to it at: Corel Corporation 1600 Carling Avenue Ottawa, Ontario K1Z 8R7 b) If to the Employee, at: JACQUELINE MAARTENSE R.R. #1 BOX 4211 PEMBROKE, ONTARIO K8A 6W2 or such other address as may have been designated by written notice. Any consent, approval, notice, request or demand aforesaid if delivered, telexed or telecopied shall be deemed to have been given on the date of such delivery, telex or telecopy transmission. Any such delivery shall be sufficient, inter alia, if left with an adult person at the above address of the Employee in the case of the Employee, and if left with the receptionist at the above address of the Employer in the case of the Employer. The Employer or the Employee may change its or the Employee's address for service, from time to time, by notice given in accordance with the foregoing. 14. NON WAIVER The parties acknowledge and agree that a failure by either party to enforce any particular -11provision of this agreement shall not be considered a waiver of any of its rights and will not release the other party of any responsibility for performance under this agreement. 15. INDEPENDENT LEGAL ADVICE The Employee acknowledges that the Employee is aware that the Employee has the right to obtain independent legal advice before signing this agreement. The Employee hereby acknowledges and agrees that either such advice has been obtained or that the Employee does not wish to seek or obtain such independent legal advice. The Employee further acknowledges and agrees that the Employee has read this agreement and fully understands the terms of this agreement, and further agrees that all such terms are reasonable and that the Employee signs this agreement freely, voluntarily and without duress. IN WITNESS WHEREOF the parties hereto have duly executed this agreement as of the date first above written. ) COREL CORPORATION )
) ) ) ) ) Per: /s/ Amish Mehta ----------------------------------Amish Mehta, CEO

/s/ Gail Oxley ) -----------------------------------Gail Oxley, VP - Human Resources

/s/ Jacqueline A. Maartense ---------------------------------------Jacqueline A. Maartense

Exhibit 10.7 COREL CORPORATION SHARE OPTION AND PHANTOM SHARE UNIT PLAN DECEMBER 1, 2003 (AS AMENDED JUNE 29, 2005)

TABLE OF CONTENTS
SECTION 1. INTERPRETATION AND ADMINISTRATIVE PROVISIONS............................ 1.01 Purpose.......................................................... 1.02 Definitions...................................................... 1.03 Administration................................................... 1.04 Governing Law.................................................... 1.05 Common Shares Reserved for Issuance.............................. SECTION 2. UNITS................................................................... 2.01 Grant of Units................................................... 2.02 Vesting of Units................................................. 2.03 Exercise Price................................................... 2.04 Prohibition on Transfer or Assignment of Units................... 2.05 Termination, Retirement, Death or Resignation.................... 2.06 End of Participation............................................. 2.07 Acceleration of Exercise of Units................................ 2.08 Agreements....................................................... SECTION 3. EXERCISE OF UNITS....................................................... 3.01 Exercise of Options.............................................. 3.02 Exercise of Phantom Share Units.................................. 3.03 Phantom Share Unit Payment....................................... 3.04 Discretionary Issuance of Shares................................. 3.05 No Exercise of Options Prior to IPO.............................. 3.06 No Exercise of Phantom Share Units Outside of Window............. 3.07 Termination of Options and Phantom Share Units................... SECTION 4. GENERAL................................................................. 4.01 Capital Adjustments.............................................. 4.02 Non-Exclusivity.................................................. 4.03 Unfunded Plan.................................................... 4.04 Successors and Assigns........................................... 4.05 Amendment and Termination........................................

1 1 1 3 3 3

4 4 4 4 4 5 5 5 6

6 6 6 6 6 7 7 7

7 7 8 8 8 8

-ii4.06 4.07 4.08 4.09 4.10 4.11 4.12 No Special Rights................................................ Other Employee Benefits.......................................... Rights Prior to Exercise......................................... Compliance with Legislation...................................... Tax Consequences................................................. No Liability..................................................... Effective Date................................................... 9 9 9 9 9 10 10

COREL CORPORATION SHARE OPTION AND PHANTOM SHARE UNIT PLAN SECTION 1. INTERPRETATION AND ADMINISTRATIVE PROVISIONS 1.01 PURPOSE The purposes of this Plan are to (i) support the achievement of the Corporation's performance objectives, (ii) ensure that interests of key persons are aligned with the success of the Corporation, and (iii) provide compensation opportunities to attract, retain and motivate employees to promote the long-term success of the Corporation and its subsidiaries. 1.02 DEFINITIONS For the purposes of this Plan, the following terms have the following meanings: "BOARD" means the board of directors of the Corporation; "COMMITTEE" means any committee of the Board appointed by the Board from time to time to administer this Plan; "COMMON SHARE" means a common share in the capital of the Corporation; "CORPORATION" means Corel Corporation; "DISABILITY" means the mental or physical state of the Participant such that: (i) the Board determines that the Participant is unable, due to illness, disease, mental or physical disability or similar cause, to substantially perform his or her duties with the Corporation or a Participating Company for any consecutive 3 month period or for any period of 6 months (whether or not consecutive) in any consecutive 12 month period and that there is no reasonable prospect of the Participant returning to active employment at the end of such period; (ii) a court of competent jurisdiction has declared the Participant to be mentally incompetent or incapable of managing his or her affairs or has appointed a guardian of the property of the Participant; or (iii) an attorney pursuant to a continuing power of attorney for property or similar instrument manages the affairs of the Participant due to the Participant's mental incapacity. -2"ELIGIBLE PERSON" means any employee, officer or consultant of a Participating Company (and includes any such person who is on a leave of absence authorized by a Participating Company) or any trust settlement or other arrangement under which such an employee, officer or consultant can or may benefit; provided however that such trust settlement or other arrangement shall cease to be an Eligible Person contemporaneously with the employee, officer or consultant ceasing to be an Eligible Person; "EXERCISE DATE" means the date on which an Eligible Person gives notice to the Corporation that the Eligible Person wishes to exercise an Option or a Phantom Share Unit; "EXERCISE PRICE" means the exercise price of an Option or Phantom Share Unit as determined by the Committee at the date of grant and as modified pursuant to the terms of this Plan;

"FAIR MARKET VALUE" means, prior to an IPO, fair market value of a Common Share as determined by the Board in its absolute discretion at the relevant time and, following an IPO, means the weighted average trading price of a Common Share on the principal stock exchange on which the Common Shares are traded for the 5 trading days immediately preceding the applicable day; "IPO" means an initial public offering of the Common Shares; "JUST CAUSE" mean "Cause" or "Just Cause" as defined in any agreement between the Participant and the Participating Employer and, in the absence of such definition, has the meaning given to it by the courts of Ontario from time to time; "OPTION" means a right granted to an Eligible Person to purchase a Common Share of the Corporation pursuant to the terms of this Plan; "PARTICIPANT" means any person to whom a Unit has been granted; "PARTICIPATING COMPANY" means Corel Corporation and such of its subsidiaries as are designated by the Board from time to time; "PHANTOM SHARE UNIT" means a right granted to an Eligible Person to receive, on the terms set out in this Plan, a payment equal to the Fair Market Value of a Common Share as at the Exercise Date minus the Exercise Price of the Phantom Share Unit; "PHANTOM SHARE UNIT PAYMENT" has the meaning set out in section 3.02; "PLAN" means the Share Option and Phantom Share Unit Plan of the Corporation dated as of the date hereof; "RETIREMENT" means the retirement of a Participant at or after the earlier of the date the Participant is entitled to an undeferred pension under the registered pension plan of a Participating Company, or the date the Participant attains the age of 65; -3"TERMINATION DATE" means the date a Participant ceases to be an Eligible Person; and "UNIT" means an Option together with a Phantom Share Unit. Where the context so requires, words importing the singular number include the plural and vice versa, and words importing the masculine gender also include the feminine and neuter genders. 1.03 ADMINISTRATION Subject to the Committee reporting to the Board on all matters relating to this Plan and obtaining approval of the Board for those matters required by the Committee's mandate, this Plan will be administered by the Committee which has the sole and absolute discretion to: (i) grant Units to Eligible Persons; (ii) determine the exercise price, vesting, terms, limitations, restrictions and conditions upon such grants; (iii) interpret and administer this Plan; (iv) establish, amend and rescind any rules and regulations relating to this Plan (subject to obtaining any required regulatory approval); and (iv) make any other determinations that the Committee deems necessary or desirable for the administration of this Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in this Plan, in the manner and to the extent the Committee deems, in its sole and absolute discretion, necessary or desirable (subject to obtaining any required regulatory approval). Any decision of the Committee with respect to the administration and interpretation of this Plan shall be conclusive and binding on the Participants. At any time during which the Board has not appointed a Committee, the Board shall perform all the responsibilities and have all of the powers and duties of the Committee. 1.04 GOVERNING LAW This Plan is to be governed by and interpreted in accordance with the laws of the Province of Ontario.

1.05 COMMON SHARES RESERVED FOR ISSUANCE The Corporation hereby reserves 14,800,000 Common Shares for issuance under this Plan. Any Common Share subject to an Option that, for any reason, has been cancelled or terminated without having been exercised, will again be available for issuance under this Plan. Under no circumstances may this Plan, together with all of the Corporation's other previously established or proposed share compensation arrangements, result, at any time, in the number of shares reserved for issuance pursuant to Options to any one person exceeding 5% of the outstanding issue. -4SECTION 2. UNITS 2.01 GRANT OF UNITS The Committee may grant Units only to Eligible Persons. 2.02 VESTING OF UNITS (a) Units granted must be exercised no later than 10 years after the date of grant or such shorter period as the Committee may require. (b) The Committee may determine when any Unit will become exercisable and may determine that the Unit will be exercisable in installments. In the absence of any other determination (including, without limitation, in a Participant's employment agreement), Units will become exercisable as follows: (i) as to 25% on the first anniversary of the date of grant; and (ii) as to an additional 25%, at the end of the second, third and fourth anniversaries of the date of grant, provided that unless the Committee expressly provides to the contrary, Units which are not exercisable prior to a Participant's Termination Date shall not become exercisable thereafter. Any period of statutory or common law notice of termination of employment or any period of deemed employment following a Participant's last day of active employment shall not be recognized for vesting or any other purpose under this Plan. 2.03 EXERCISE PRICE The Exercise Price of a Unit granted pursuant to this Plan shall be determined by the Committee at the date of grant, shall not be less than the Fair Market Value per Common Share calculated with reference to the date of grant and shall be the same for both the Option component and the Phantom Share Unit component of the Unit. 2.04 PROHIBITION ON TRANSFER OR ASSIGNMENT OF UNITS WITHOUT CONSENT No Participant may deal with any Unit or any interest in it or transfer or assign any Unit now or hereafter held by the Participant without the express written consent of the Committee. A purported transfer or assignment of any Unit without the express written consent of the Committee will not be valid and the Corporation will not issue any Common Share upon the attempted exercise of a transferred or assigned Unit. If express written consent of the Committee is given to the transfer or assignment of any Unit and such transfer or assignment takes place consequent upon such written consent the Unit will continue in full force and effect. -52.05 TERMINATION, RETIREMENT, DEATH OR RESIGNATION (a) If a Participant ceases to be an Eligible Person as a result of a resignation of employment, each Unit held by

the Participant which is exercisable as at the Termination Date may be exercised during the period ending 30 days after the Termination Date after which all unexercised Units held by the Participant will expire. (b) If a Participant ceases to be an Eligible Person as a result of a termination of employment without Just Cause, each Unit held by the Participant which is exercisable as at the Termination Date may be exercised during the period ending 90 days after the Termination Date after which all unexercised Units held by the Participant will expire. This provision will apply with effect as at the Participant's last day of active employment. Any period of statutory or common law notice of termination of employment or any period of deemed employment following a Participant's last day of active employment shall not be recognized for exercise or any other purposes under this Plan. (c) If a Participant ceases to be an Eligible Person as a result of a termination of employment for Just Cause, each Unit held by the Participant (whether exercisable or not) will cease to be exercisable on the Termination Date. (d) If a Participant ceases to be an Eligible Person as a result of a Retirement or a Disability, each Unit held by the Participant which is exercisable as at the Termination Date may be exercised during the period ending 36 months after the Termination Date after which all unexercised Units held by the Participant will expire. (e) If a Participant ceases to be an Eligible Person as a result of a death, each Unit held by the Participant as at the date of death which is exercisable as at the date of death may be exercised by the Participant's legal representatives during the period ending 12 months after the date of death after which all unexercised Units held by the Participant will expire. (f) Notwithstanding the foregoing, no Unit may be exercised after its stated expiration. 2.06 END OF PARTICIPATION At the time a Participant ceases to hold Units which are or may become exercisable, the Participant ceases to be a Participant. 2.07 ACCELERATION OF EXERCISE OF UNITS Notwithstanding any other provisions of this Plan, the Committee may at any time give written notice to all Participants advising that their respective Units are all immediately exercisable and may be exercised only within 30 days of such written notice or such other period as determined by the Committee and not thereafter and that all rights of the -6Participants under any Units not exercised within such period will terminate at the expiration of such period. 2.08 AGREEMENTS Each grant of Units must be confirmed by an agreement in the form attached as Schedule A signed by the Corporation and by the Participant acknowledging that the Participant agrees to be bound by the terms of this Plan. SECTION 3. EXERCISE OF UNITS 3.01 EXERCISE OF OPTIONS In order to exercise an Option, the Participant must file with the Secretary of the Corporation a completed Notice of Exercise in the form attached as Schedule B. The Exercise Price of each Common Share purchased under an Option must be paid in full by bank draft or certified cheque at the time of exercise. Upon receipt of a Notice of Exercise and payment in full and subject to the terms of this Plan, the Common Share in respect of which the Option is exercised will be duly issued as fully paid and non-assessable. 3.02 EXERCISE OF PHANTOM SHARE UNITS

In order to exercise a Phantom Share Unit, the Participant must file with the Secretary of the Corporation a completed Notice of Exercise in the form attached as Schedule B. Upon receipt of the Notice of Exercise and subject to the terms of this Plan, the Corporation shall make a payment to the Participant equal to the Fair Market Value of a Common Share, minus the Exercise Price multiplied by the number of Phantom Share Units exercised (a "Phantom Share Unit Payment"). 3.03 PHANTOM SHARE UNIT PAYMENT The Committee may, in its absolute discretion, elect to pay all or any portion of a Phantom Share Unit Payment in four equal installments over the 12-month period following receipt of the completed Notice of Exercise. 3.04 DISCRETIONARY ISSUANCE OF SHARES (a) The Committee may, in its absolute discretion, elect to satisfy the exercise of a Phantom Share Unit by issuing Common Shares as if the Participant had elected to exercise the Option Component of a Unit rather than the Phantom Share Unit Component of the Unit. Prior to an IPO, the Committee may, in its absolute discretion, elect to repurchase Common Shares by payment to the Participant equal to the Fair Market Value of the Common Shares. (b) If any Common Shares are issued pursuant to section 3.04(a) prior to an IPO, as a condition to such issuance, each Participant eligible to receive Common Shares -7may be required, at the sole discretion of the Corporation, to enter into an agreement in the form prescribed by the Corporation which provides for, among other things, (i) restrictions on transfers of Common Shares held by the Participant; (ii) obligations of the Participant to dispose of Common Shares held by the Participant in connection with certain specified transactions; and (iii) the exercise by designated persons of voting rights attached to the Common Shares held by the Participant. The Corporation may require the Participant, at the sole discretion of the Corporation, to enter into the agreement described above prior to the issuance of Common Shares, or at any time subsequent. If the Participant fails to duly enter into such agreement at the request of the Corporation, the Corporation shall not be obligated to issue to the Participant any securities of the Corporation issuable under this Plan, or pay any amounts payable to the Participant under this Plan. 3.05 NO EXERCISE OF OPTIONS PRIOR TO IPO Notwithstanding any other provision of this Plan, the Option component of a Unit does not vest and may not be exercised prior to an IPO. 3.06 NO EXERCISE OF PHANTOM SHARE UNITS OUTSIDE OF WINDOW Notwithstanding any other provision of this Plan, Phantom Share Units may only be exercised during such times as may be specified by the Committee, in its absolute discretion. 3.07 TERMINATION OF OPTIONS AND PHANTOM SHARE UNITS When the Option component of a Unit is exercised, the Phantom Share Unit component of the Unit will be terminated and may not be exercised. When the Phantom Share Unit component of a Unit is exercised, the Option component of the Unit will be terminated and may not be exercised. SECTION 4. GENERAL 4.01 CAPITAL ADJUSTMENTS In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation, spin-off or other distribution (other than normal cash dividends) of the Corporation's assets to shareholders, or any other change in the capital of the Corporation affecting Common Shares, the Committee may make such proportionate

adjustments, if any, as the Committee in its discretion may deem appropriate to reflect such change, with respect to (i) the number or kind of shares, other securities or other property reserved for issuance pursuant to this Plan; (ii) the number or kind of shares, other securities or other property subject to or in respect of which unexercised Units previously granted are exercisable and the Exercise Price of those Units; provided, however, that no substitution or adjustment will obligate the Corporation to issue or sell fractional shares. Provided that, for greater certainty, this section authorizes the -8Corporation if it were to divest a business or division and distribute proceeds of the divestiture to the shareholders of the Corporation, to make reasonable accommodation or financial provision to the holders of Units. 4.02 NON-EXCLUSIVITY Nothing contained herein will prevent the Board from adopting other or additional compensation arrangements for the benefit of any Participant, subject to any required regulatory or shareholder approval. 4.03 UNFUNDED PLAN To the extent any individual holds any rights under this Plan, such rights (unless otherwise determined by the Committee) shall be no greater than the rights of a general unsecured creditor of the Corporation. 4.04 SUCCESSORS AND ASSIGNS This Plan shall be binding on all successors and assigns of the Corporation and a Participant, including without limitation, the legal representative of a Participant, or any receiver or trustee in bankruptcy or representative of the Corporation's or Participant's creditors. 4.05 AMENDMENT AND TERMINATION (a) The Committee may amend, suspend or terminate this Plan or any portion thereof at any time in accordance with applicable legislation, and subject to any required regulatory or shareholder approval. Except as specifically provided for in this Plan, no amendment, suspension or termination may materially adversely affect any Units, or any rights pursuant thereto, granted previously to any Participant without the consent of that Participant. (b) If this Plan is terminated, the provisions of this Plan and any administrative guidelines, and other rules adopted by the Committee and in force at the time of this Plan, will continue in effect as long as a Unit or any rights pursuant thereto remain outstanding. However, notwithstanding the termination of this Plan, the Committee may make any amendments to this Plan or the Units it would be entitled to make if this Plan were still in effect. (c) With the consent of the Participant affected thereby, the Committee may amend or modify any outstanding Unit and, with the consent of a majority of the Participants affected, the Committee may amend or modify the Units held by any group of Participants, in any manner to the extent that the Committee would have had the authority to initially grant the award as so modified or amended, including without limitation, to change the date or dates as of which, or the price at which, a Unit becomes exercisable, subject to the prior approval of the relevant stock exchanges, if any. -94.06 NO SPECIAL RIGHTS Nothing contained in this Plan or in any Units will confer upon any Participant any right to the continuation of the Participant's employment by a Participating Company or interfere in any way with the right of any Participating Company at any time to terminate that employment or to increase or decrease the compensation of the Participant. 4.07 OTHER EMPLOYEE BENEFITS

4.07 OTHER EMPLOYEE BENEFITS The amount of any compensation deemed to be received by a Participant as a result of the exercise of Unit or the sale of Common Shares received upon an exercise of an Option will not constitute compensation with respect to which any other employee benefits of that Participant are determined, including, without limitation, benefits under any bonus, pension, profit-sharing, insurance or salary continuation plan, except as otherwise specifically determined by the Committee. 4.08 RIGHTS PRIOR TO EXERCISE The holder of a Unit is not entitled to be treated as a Shareholder of the Corporation and, in particular, has no right to receive dividends or to vote until the Participant becomes an actual shareholder of the Corporation following exercise of an Option in accordance with the terms of this Plan. 4.09 COMPLIANCE WITH LEGISLATION The Committee may postpone any exercise of any Unit or the issue of any Common Shares pursuant to this Plan for as long as the Committee in its discretion may deem necessary in order to permit the Corporation to effect or maintain qualification of the Common Shares issuable pursuant thereto under the securities laws of any applicable jurisdiction, or to determine that the Common Shares are exempt from that qualification. The Corporation is not obligated by any provision of this Plan or grant hereunder to sell or issue Common Shares in violation of the law of any government having jurisdiction therein. In addition, if the Common Shares are listed on a stock exchange, the Corporation will have no obligation to issue any Common Shares pursuant to this Plan until such Common Shares have been duly listed. 4.10 TAX CONSEQUENCES It is the responsibility of the Participant to complete and file any tax returns which may be required under applicable tax laws within the periods specified in those laws as a result of the Participant's participation in this Plan. Neither the Corporation nor any Participating Company shall be held responsible for any tax or other liabilities or consequences which result from the Participant's participation in this Plan, including any employment related taxes or benefit costs, whether or not such costs are the primary responsibility of the Corporation or any Participating Company. -104.11 NO LIABILITY The Corporation shall not be liable to any Participant for any loss resulting from a decline in the market value of any Common Shares. 4.12 EFFECTIVE DATE This Plan will become effective December 1, 2003.

COREL CORPORATION SHARE OPTION AND PHANTOM SHARE UNIT PLAN SCHEDULE A OPTION AND PHANTOM SHARE UNIT AGREEMENT AND CONFIRMATION [NAME OF EMPLOYEE] (the "Participant") Pursuant to the Corel Corporation Share Option and Phantom Share Unit Plan (the "Plan") effective December 1, 2003 and in consideration of services provided to any Participating Company by the Participant, Corel

1, 2003 and in consideration of services provided to any Participating Company by the Participant, Corel Corporation hereby grants to the Participant _________ Units comprised of ____________ Options to acquire Common Shares of Corel Corporation at an Exercise Price of $_________ per Common Share and __________ Phantom Share Units with an Exercise Price of $_________. All capitalized terms not defined in this agreement have the meaning set out in this Plan. Subject to earlier expiry in accordance with this Plan, the Units shall cease to be exercisable and shall expire on ________________, _______. The Units will vest and become exercisable as follows: (a) as to 25%, at any time during the term of such Unit from and after the first anniversary of the date of grant of the Units; and (b) as to an additional 25%, at any time during the term of such Unit from and after the second, third and fourth anniversaries of the date of grant of the Units, provided that the Option component of a Unit does not vest and may not be exercised prior to an IPO. Corel Corporation and the Participant understand and agree that the granting and exercise of this Unit and the issue of Common Shares are subject to the terms and conditions of this Plan, all of which are incorporated into and form a part of this agreement. Each time the Participant exercises the Option component of a Unit, the Phantom Share Unit component of the Unit will be terminated and may not be exercised. Each time the Participant exercises the Phantom Share Unit component of a Unit, the Option component of the Unit will be terminated and may not be exercised. DATED ______________________, _______. COREL CORPORATION Per: -2I agree to the terms and conditions set out herein and confirm and acknowledge that I have not been induced to enter into this agreement or acquire any Unit by expectation of employment or continued employment with any Participating Company. Signature Name (please print) COREL CORPORATION SHARE OPTION AND PHANTOM SHARE UNIT PLAN SCHEDULE B NOTICE OF EXERCISE TO: COREL CORPORATION Attention: The Secretary Pursuant to the Corel Corporation Share Option and Phantom Share Unit Plan (the "Plan"), the undersigned elects: [ ] to exercise _______ Options to purchase Common Shares and encloses cash or a certified cheque payable to Corel Corporation in the aggregate amount of $______________, being the Exercise Price of $_________ per

Common Share. The undersigned requests that the Common Shares be issued in his or her name as follows in accordance with the terms of this Plan: (Print Name) (Address) OR [ ] to exercise _______ Phantom Share Units to receive a payment equal to the Fair Market Value of a Common Share as at the date hereof minus the Exercise Price of $_________ per Common Share for each Phantom Share Unit exercised. DATED _________________, _______. Signature Name (please print) EXHIBIT 10.8 COREL CORPORATION EQUITY INCENTIVE PLAN Section 1. Purpose. The purposes of this Corel Corporation Equity Incentive Plan (the "Plan") are to encourage selected employees, officers, directors and consultants of, and other individuals providing services to, Corel Corporation (together with any successor, the "Company") and its Affiliates (as defined below) to acquire a proprietary interest in the growth and performance of the Company, to generate an increased incentive to contribute to the Company's future success and prosperity thus enhancing the value of the Company for the benefit of its shareholders, and to enhance the ability of the Company and its Affiliates to attract and retain exceptionally qualified individuals upon whom, in large measure, the sustained progress, growth and profitability of the Company depend. Section 2. Definitions. As used in the Plan, the following terms will have the meanings set out below: "Affiliate" means, with respect to any entity, any entity that, directly or through one or more intermediaries, is controlled by such entity, including any entity in which such entity owns a significant equity interest, as determined by the Committee. "Award" means any Option, Share Appreciation Right, Restricted Share, Restricted Share Unit, Performance Share Unit, or Other Share-Based Award granted under the Plan. "Award Agreement" means any written agreement, contract or other instrument or document evidencing any Award granted under the Plan. "Board" means the Board of Directors of the Company. "Cause", as used in connection with the termination of a Participant's employment, means (1) with respect to any Participant employed under a written employment agreement with the Company or an Affiliate of the Company which agreement includes a definition of "cause," "cause" as defined in that agreement or, if that agreement contains no such definition, a material breach by the Participant of that agreement, or (2) with respect to any other Participant, the failure to perform adequately in carrying out the Participant's employment responsibilities,

including any directives from the Board, or the Participant engaging in behavior in the Participant's personal or business life as to lead the Committee in its reasonable judgment to determine that it is in the best interests of the Company to terminate the Participant's employment. "Code" means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated under it. "Committee" means the Compensation Committee of the Board, provided, however, to the extent deemed necessary or appropriate, a committee other than the Compensation Committee may be designated by the Board to administer the Plan and such other committee may be vested with any of the powers and responsibilities hereunder and shall be -2considered the Committee for any and all of such purposes hereunder. To the extent the Company desires to grant Incentive Stock Options, such committee shall be composed of not less than two directors of the Company, neither of whom shall be employees of the Company or its Affiliates and each of whom shall otherwise be "outside directors" for purposes of Section 162(m) of the Code. To the extent the Company is no longer a "foreign private issuer" as defined in Exchange Act Rule 3b-4 and wishes to have a "Qualified Plan" as defined in Rule 16b-3(b)(4), such committee shall be composed of not less than two directors of the Company, each of whom are "non-employee directors" for purposes of Exchange Act Section 16 and Rule 16b-3 thereunder. "Common Shares" means any or all, as applicable, of the common shares of the Company and any other securities or property as may become the subject of Awards, or become subject to Awards, pursuant to an adjustment made under Section 4(b) of the Plan and any other securities of the Company or any Affiliate or any successor that may be so designated by the Committee. "Consultant" means any consultant of, or other individual providing services to, the Company or any Affiliate, provided that, for purposes of Awards made to individuals in Canada, a consultant means a person that (1) is engaged to provide services to the Company and/or an Affiliate, other than services provided in relation to a distribution of securities, (2) provides the services under a written contract with the Company and/or the Affiliate and (3) spends or will spend a significant amount of time and attention on the affairs and business of the Company and/or the Affiliate. "Control Person" means, with respect to any entity, a person that controls such entity. "Employee" means any employee of the Company or of any Affiliate. "Exchange Act" means the United States Securities Exchange Act of 1934, as amended. "Fair Market Value" means (1) with respect to any property other than the Common Shares, the fair market value of that property determined by those methods or procedures as may be established from time to time by the Committee and (2) with respect to the Common Shares, the closing sale price reported for such Common Shares on the date of reference on the Principal Market. If there is no closing sale price reported on any such date, the Fair Market Value will be determined by the Committee in accordance with the regulations promulgated under Section 2031 of the Code, or by any other appropriate method selected by the Committee. "Good Reason", as used in connection with the termination of a Participant's employment, means (1) with respect to any Participant employed under a written employment agreement with the Company or an Affiliate of the Company, "good reason" or similar term as defined in that written agreement or, if such agreement contains no such definition, a material breach by the Company of that agreement, or (2) with respect to any other Participant, a failure -3by the Company to pay that Participant any amount otherwise vested and due and a continuation of that failure for 30 business days following notice to the Company of that failure.

"Incentive Stock Option" means an option granted under Section 6(a) of the Plan that is intended to meet the requirements of Section 422 of the Code or any successor provision. "insider" has the same meaning as found in the Securities Act (Ontario), as amended, and also includes associates and affiliates of the insider; and "issuances to insiders" includes direct and indirect issuances to insiders. "Non-Qualified Stock Option" means an option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock Option. Any stock option granted by the Committee which is not designated an Incentive Stock Option will be deemed a Non-Qualified Stock Option. "Option" means an Incentive Stock Option or a Non-Qualified Stock Option. "Other Share-Based Award" means any right granted under Section 6(e)(i) of the Plan. "Participant" means any individual granted an Award under the Plan. "Performance Share Unit" means any right granted under Section 6(e) of the Plan. "Person" means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, or government or political subdivision of a government. "Principal Market" means the principal stock exchange, quotation system or other market on which the Common Shares are listed, admitted to trading, posted for trading or quoted upon which has occurred the greatest trading volume of the Common Shares for the six months (or, to the extent the Common Shares have not been listed, admitted to trading, posted for trading or quoted for at least six months, the next longest period since the Common Shares were initially listed, admitted to trading, posted for trading or quoted) prior to the date of reference, provided, however, that to the extent deemed necessary or appropriate, the Principal Market shall be as determined by the Committee in accordance with applicable law, rules and regulations. "Released Securities" means securities that were Restricted Shares but with respect to which all applicable restrictions have expired, lapsed or been waived in accordance with the terms of the Plan or the applicable Award Agreement. "Restricted Shares" means any Common Shares granted under Section 6(c) of the Plan, any right granted under Section 6(c) of the Plan that is denominated in Common Shares or any other Award under which issued and outstanding Common Shares are held subject to certain restrictions. "Restricted Share Unit" means a right to receive a Common Share or the Fair Market Value of a Common Share granted under Section 6(d) of the Plan. -4"Securities Act" means the United States Securities Act of 1933, as amended. "Share Appreciation Right" means any right granted under Section 6(b) of the Plan. "Significant Event" means, unless otherwise defined in an Award Agreement or a written employment agreement between the Company and a Participant (which definition shall govern), the occurrence of any of the following events: (1) a person or group of persons becomes the beneficial owner of securities of the Company constituting 50% or more of the voting power of all outstanding voting securities of the Company, (2) a majority of the Company's Board as of the date of adoption of this Plan (including any successors approved by the then existing Board) cease to constitute a majority of the Board; (3) a merger, consolidation, amalgamation or arrangement of the Company (or a similar transaction) occurs, unless after the event, 50% or more of the voting power of the combined company is beneficially owned by the same person or group of persons as immediately before the event; or (4) the Company's shareholders approve a plan of complete liquidation or winding-up of the Company, or the sale or disposition of all or substantially all the Company's assets (other than a transfer to an Affiliate of the Company); provided that the following shall not constitute a Significant Event: (i) any person or group of persons becoming the beneficial owner of the threshold of securities specified in (1) as a result of the acquisition of

securities by the Company or a subsidiary which, by reducing the number of securities outstanding, increases the proportional number of securities beneficially held by that person or group of persons, (ii) any acquisition of securities directly from the Company in connection with a bona fide financing or series of financings by the Company, (iii) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or its Affiliates or (iv) beneficial ownership by Corel Holdings, L.P., its Affiliates and/or its Control Persons or any increased ownership by any of them. "U.S. Participant" means any Participant residing in the United States or who is a U.S. citizen. Section 3. Administration. (a) The Plan will be administered by the Committee subject to the Committee reporting to the Board as required by the Committee's mandate. (b) Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee will have full power and authority to, subject to the Plan: (1) designate Participants; (2) determine the type or types of Awards to be granted to an eligible Employee or other individual under the Plan; (3) determine the number and classification of Common Shares to be covered by (or with respect to which payments, rights or other matters are to be calculated in connection with) Awards; (4) determine the terms and conditions of any Award; (5) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Common Shares, other securities, other Awards or other property, or canceled, forfeited or suspended, and the method or methods by which -5Awards may be settled, exercised, canceled, forfeited or suspended; (6) determine requirements for the vesting or exercisability of Awards or performance criteria to be achieved in order for Awards to vest, the acceleration of vesting or the waiver of forfeiture or other restrictions on awards; (7) determine whether, to what extent and under what circumstances cash, Common Shares, other securities, other Awards, other property and other amounts payable with respect to an Award under the Plan will be deferred either automatically or at the election of the holder or of the Committee; (8) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (9) establish, amend, suspend or waive any rules and regulations and appoint any agents as it will deem appropriate for the proper administration of the Plan; (10) determine whether awards will be adjusted for dividend entitlements; (11) amend or adjust the terms and conditions of outstanding Awards; (12) implement an Award exchange program, (13) arrange for financing by broker-dealers (including payment by the Company of commissions) and establish award exercise procedures, (14) establish procedures for payment of withholding tax obligations with cash or shares and (15) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. (c) Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award will be within the sole discretion of the Committee, may be made at any time and will be final, conclusive and binding upon all Persons, including the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, any shareholder and any Employee. (d) Any reference in this Plan to the date of termination or cessation or a Participant's employment shall mean the Participant's last day of active employment and shall not include any period of statutory, contractual or reasonable notice or any period of deemed employment. (e) Notwithstanding the foregoing, the maximum number of Common Shares underlying or relating to Awards which may be granted to any one Participant under this Plan in any calendar year will not exceed 500,000 Common Shares, subject to the adjustments provided in Section 4(b), and no Awards under this Plan will be granted after December 31, 2015. (f) Notwithstanding anything to the contrary in this Plan: (i) the maximum number of securities of the Company issuable to insiders at any time under (A) this Plan and (B)

all of the Company's other security based compensation arrangements, shall not exceed ten percent (10%) of the Company's total issued and outstanding securities, subject to the adjustments provided in Section 4(b); and -6(ii) the maximum number of securities of the Company issued to insiders within any one year period under (A) this Plan and (B) all of the Company's other security based compensation arrangements, shall not exceed ten percent (10%) of the Company's total issued and outstanding common shares, subject to the adjustments provided in Section 4(b). Section 4. Common Shares Available for Awards. (a) Common Shares Available. Subject to adjustment as provided in Section 4(b): (i) Calculation of Number of Common Shares Available. The number of Common Shares available for granting Awards under the Plan initially will be 2,850,000 any or all of which Awards may be or may be based on Common Shares, any other related security or any combination. In addition, no more than 500,000 Common Shares may be issued on the exercise of Incentive Stock Options and no more than 700,000 Common Shares may be issued as Restricted Shares. (ii) Shares Becoming Again Available. If, after the effective date of the Plan, any Common Shares covered by an Award granted under the Plan or to which such an Award relates lapses, expires, terminates or is forfeited; are settled in cash; or otherwise terminate or are canceled without the delivery of Common Shares or other consideration, and Common Shares surrendered to the Company as payment of exercise price, withholding tax or as part of an Award exchange program will to that extent again be, or will become, available for granting Awards under the Plan. (iii) Accounting for Awards. For purposes of this Section 4, (A) if an Award is denominated in or based upon Common Shares, the number of Common Shares covered by that Award or to which that Award relates will be counted on the date of grant of that Award against the total number of Common Shares available for granting Awards under the Plan and against the maximum number of Awards available to any Participant; and (B) Awards not denominated in Common Shares may be counted against the total number of Common Shares available for granting Awards under the Plan and against the maximum number of Awards available to any participant in that amount and at such time as the -7Committee determines under procedures adopted by the Committee consistent with the purposes of the Plan; provided, however, that Awards that operate in tandem with (whether granted simultaneously with or at a different time from), or that are substituted for, other Awards may be counted or not counted under procedures adopted by the Committee in order to avoid double counting. Any Common Shares that are delivered by the Company, and any Awards that are granted by, or become obligations of, the Company, through the assumption by the Company or an Affiliate of, or in substitution for, outstanding awards previously granted by an acquired company will, in the case of Awards granted to Participants who are executive officers or directors of the Company, be counted against the Common Shares available for granting Awards under the Plan. (iv) Sources of Common Shares Deliverable Under Awards. Any Common Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Common Shares or of outstanding Common Shares acquired on the open market.

Shares acquired on the open market. (b) Adjustments. In the event that the Committee determines that any dividend or other distribution (whether in the form of cash, Common Shares, other securities or other property), recapitalization, stock split, stock dividend, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Common Shares or other securities of the Company, issuance of warrants or other rights to purchase Common Shares or other securities of the Company, or other similar corporate transaction or event affects the Common Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee will, in any manner as it may deem equitable, adjust any or all of (1) the number and kind of Common Shares (or other securities or property) which thereafter may be made the subject of Awards, (2) the number and kind of Common Shares (or other securities or property) subject to outstanding Awards, and (3) the grant or exercise price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award; provided, however, that the number of Common Shares subject to any Award denominated in Common Shares will always be a whole number. (c) Significant Events. If a Significant Event occurs, and unless otherwise provided in an Award Agreement or a written employment contract between the Company and a Participant and except as otherwise set out in -8this paragraph, the Committee, in its sole discretion, may provide that (1) the successor corporation will assume each Award or replace it with a substitute Award, (2) the Awards will become exercisable or vested in whole or in part upon written notice, (3) the Awards will be surrendered for a cash payment, or (4) any combination of the foregoing will occur. Awards to Participants who are directors of the Company shall automatically become exercisable and vested in full on the occurrence of a Significant Event. If a U.S. Participant is entitled to receive payments that would qualify as excess "parachute payments'" under Section 280G of the Code, those payments may be reduced so that the participant is not subject to the excise tax under Section 4999 of the Code if such a reduction would result in the U.S. Participant receiving a greater after-tax payment. Section 5. Eligibility. Any Employee, including any officer or employee-director of the Company or of any Affiliate, and any Consultant of the Company or any Affiliate will be eligible to be designated a Participant. A non-employee director will be eligible to receive Non-Qualified Stock Options under the Plan. No more than 500,000 Common Shares may be the subject of the total Awards granted to any one Participant in any calendar year. In the case of any "specified employee" who is a U.S. Participant, distributions may not be made prior to the date which is 6 months after the date of separation from service (or, if earlier, the date of death of the Employee). For purposes of the preceding sentence, a specified employee is a key employee (as defined in section 416(i) of the Code without regard to paragraph (5) thereof). Section 6. Awards. (a) Options. The Committee is hereby authorized to grant to eligible individuals options to purchase Common Shares (each, an "Option") which will contain the following terms and conditions and with any additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee determines: (i) Exercise Price. The purchase price per Common Share purchasable under an Option will be determined by the Committee; provided, however, that the exercise price will not be less than one hundred percent (100%) of the Fair Market Value of a Common Share on the date of grant of that Option, or any other price as required under Section 6(a)(iv). (ii) Time and Method of Exercise. Subject to the terms of Section 6(a)(iii), the Committee will determine the time or times at which an Option may be exercised in whole or in part, and the method or methods by which, and the form or forms (including, without limitation, cash, Common Shares, outstanding Awards, or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price) in

-9which, payment of the exercise price with respect thereto may be made or deemed to have been made. (iii) Exercisability Upon Death, Retirement and Termination of Employment. Subject to the condition that no Option may be exercised in whole or in part after the expiration of the Option period specified in the applicable Award Agreement: (A) Subject to the terms of paragraph (D) below, upon the death of a Participant while employed or within three (3) months of retirement or disability as defined in paragraph (B) below, the Person or Persons to whom such Participant's rights with respect to any Option held by such Participant are transferred by will or the laws of descent and distribution may, prior to the expiration of the earlier of: (1) the outside exercise date determined by the Committee at the time of granting the Option, or (2) twelve (12) months after such Participant's death, purchase any or all of the Common Shares with respect to which such Participant was entitled to exercise such Option immediately prior to such Participant's death, and any Options not so exercisable will lapse on the date of such Participant's death; (B) Subject to the terms of paragraph (D) below, upon termination of a Participant's employment with the Company (x) as a result of retirement pursuant to a retirement plan of the Company or an Affiliate or disability (as determined by the Committee) of such Participant, (y) by the Company other than for Cause, or (z) by the Participant with Good Reason, such Participant may, prior to the expiration of the earlier of: (1) the outside exercise date determined by the Committee at the time of granting the Option, or (2) three (3) months after the date of such termination, purchase any or all of the Common Shares with respect to which such Participant was entitled to exercise any Options immediately prior to such termination, and any Options not so exercisable will lapse on such date of termination; (C) Subject to the terms of paragraph (D) below, upon termination of a Participant's employment with the Company under any circumstances not described in paragraphs (A) or (B) above, such Participant's Options will be immediately canceled to the extent not theretofore exercised; -10(D) Upon (i) the death of the Participant, or (ii) termination of the Participant's employment with the Company (x) by the Company other than for Cause (y) by the Participant with Good Reason or (z) as a result of retirement or disability as defined in paragraph (B) above, the Company will have the right to cancel all of the Options such Participant was entitled to exercise at the time of such death or termination (subject to the terms of paragraphs (A) or (B) above) for a payment in cash equal to the excess, if any, of the Fair Market Value of one Common Share on the date of death or termination over the exercise price of such Option for one Common Share times the number of Common Shares subject to the Option and exercisable at the time of such death or termination; and (E) Upon expiration of the respective periods set out in each of paragraphs (A) through (B) above, the Options of a Participant who has died or whose employment has been terminated will be canceled to the extent not theretofore canceled or exercised. (F) For purposes of paragraphs (A) through (D) above, the period of service of an individual as a director or Consultant of the Company or an Affiliate will be deemed the period of employment. (iv) Incentive Stock Options. The following provisions will apply only to Incentive Stock Options granted under the Plan: (A) No Incentive Stock Option will be granted to any eligible Employee who, at the time such Option is granted,

owns securities possessing more than ten percent (10%) of the total combined voting power of all classes of securities of the Company or of any Affiliate, except that such an Option may be granted to such an Employee if, at the time the Option is granted, the exercise price is at least one hundred ten percent (110%) of the Fair Market Value of the Common Shares (determined in accordance with Section 2) subject to the Option, and the Option by its terms is not exercisable after the expiration of five (5) years from the date the Option is granted; and (B) To the extent that the aggregate Fair Market Value of the Common Shares with respect to which Incentive Stock Options (without regard to this subsection) are exercisable for the first time by any individual during any calendar year (under all plans of the Company and its Affiliates) exceeds -11$100,000, such Options will be treated as Non-Qualified Stock Options. This subsection will be applied by taking Options into account in the order in which they were granted. If some but not all Options granted on any one day are subject to this subsection, then such Options will be apportioned between Incentive Stock Option and Non-Qualified Stock Option treatment in such manner as the Committee will determine. For purposes of this subsection, the Fair Market Value of any Common Shares will be determined, in accordance with Section 2, as of the date the Option with respect to such Common Shares is granted. (b) Share Appreciation Rights. The Committee is hereby authorized to grant to eligible Employees "Share Appreciation Rights." Each Share Appreciation Right will consist of a right to receive the excess of (1) the Fair Market Value of one Common Share on the date of exercise or, if the Committee will so determine in the case of any such right other than one related to any Incentive Stock Option, at any time during a specified period before or after the date of exercise over (2) the grant price of the right as specified by the Committee, which will not be less than one hundred percent (100%) of the Fair Market Value of one Common Share on the date of grant of the Share Appreciation Right, which amount will be satisfied in cash or in Common Shares with a Fair Market Value determined as at the applicable date, equal to such amount or in a combination thereof. Subject to the terms of the Plan and any applicable Award Agreement, the grant price, term, methods of exercise, methods of settlement and any other terms and conditions of any Share Appreciation Right granted under the Plan will be as determined by the Committee. The Committee may impose such conditions or restrictions on the exercise of any Share Appreciation Right as it may deem appropriate, provided that Share Appreciation Rights may be payable on a deferred basis only to the extent provided for in the applicable Award Agreement. Share Appreciation Rights may be granted in conjunction with a related Option or separately as a free-standing Share Appreciation Right. (c) Restricted Shares. (i) Issuance. The Committee is hereby authorized to grant to eligible Employees "Restricted Shares" which will consist of the right to receive, by purchase or otherwise, Common Shares which are subject to such restrictions as the Committee may impose (including, without limitation, any limitation on the right to vote such Common Shares or the right to receive any dividend or other right or property), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as the Committee may deem appropriate. -12(ii) Registration. Restricted Shares granted under the Plan may be evidenced in such manner as the Committee may deem appropriate, including, without limitation, book-entry registration or issuance of a share certificate or certificates. In the event any share certificate is issued in respect of Restricted Shares granted under the Plan, that certificate will be registered in the name of the Participant and will bear an appropriate legend referring to the terms, conditions and restrictions applicable to those Restricted Shares. (iii) Forfeiture. Except as otherwise determined by the Committee, upon termination of a Participant's employment for any reason during the applicable restriction period, all of the Participant's Restricted Shares which had not become Released Securities by the date of termination of employment will be forfeited and reacquired by the Company; provided, however, that the Committee may, when it finds that a waiver would be in the best interests of the Company, waive in whole or in part any or all remaining restrictions with respect to the Participant's Restricted Shares. Unrestricted Common Shares, evidenced in any manner as the Committee will deem appropriate, will be issued to the holder of Restricted Shares promptly after those Restricted Shares

deem appropriate, will be issued to the holder of Restricted Shares promptly after those Restricted Shares become Released Securities. (d) Restricted Share Units. The Committee is hereby authorized to grant to eligible Employees "Restricted Share Units" each of which will consist of the right to receive one Common Share or cash equal to the Fair Market Value of one Common Share, subject to the terms of any applicable Award Agreement and which are subject to such restrictions as the Committee may impose which restrictions may lapse separately or in combination at any time or times, in such installments or otherwise, as the Committee may deem appropriate. The Committee may impose any conditions or restrictions on the exercise of Restricted Share Units as it may deem appropriate. The Committee may also grant Restricted Share Units that are designated as "Deferred Share Units", which may have all of the rights and restrictions that may be applicable to Restricted Share Units, except that the Deferred Share Units may not be redeemed for Common Shares or cash equal to the Fair Market Value of Common Shares until the Participant has ceased to hold all offices, employment and directorships with the Company and its Affiliates. (e) Performance Share Units. (i) The Committee is hereby authorized to grant to eligible Employees "Performance Share Units." Each Performance Share Unit will consist of a right, (i) denominated or payable in cash, Common Shares, other securities or other property (including, without -13limitation, Restricted Shares), and (ii) which will confer on the holder thereof rights valued as determined by the Committee and payable to, or exercisable by, the holder of the Performance Share Unit, in whole or in part, upon the achievement of such performance goals during such performance periods as the Committee will establish. (ii) The initial value of a Performance Share Unit will be established by the Committee at the date of grant and, to the extent related to Common Shares, other securities or other property will initially be equal to 100% of the Fair Market Value of a Common Share, such other security or such other property on the date of grant. (iii) Subject to the terms of the Plan and any applicable Award Agreement, the performance goals to be achieved during any performance period, the length of any performance period, the amount of any Performance Share Unit granted, the termination of a Participant's employment and the amount of any payment or transfer to be made pursuant to any Performance Share Unit will be determined by the Committee and by the other terms and conditions of any Performance Share Unit. (iv) The Committee will issue performance goals prior to the commencement of the performance period to which such performance goals pertain. The performance goals may be based upon the achievement of corporationwide, divisional or individual goals, or any other basis determined by the Committee. The Committee may modify the performance goals as necessary to align them with the Company's corporate objectives if there is a subsequent material change in the Company's business, operations or capital or corporate structure. (f) Other Share-Based Awards. The Committee is hereby authorized to grant to eligible Employees "Other Share-Based Awards." Each Other Share-Based Award will consist of a right (1) which is other than an Award or right described in Section 6(a), (b), (c), (d) or (e) above and (2) which is denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Common Shares (including, without limitation, securities convertible into Common Shares) as are deemed by the Committee to be consistent with the purposes of the Plan; provided, however, that such right will comply, to the extent deemed desirable by the Committee, with applicable law. Subject to the terms of the Plan and any applicable Award Agreement, the Committee will determine the terms and conditions of Other Share-Based Awards. Common Shares or other securities delivered pursuant to a purchase right granted under this Section 6(e)(i) will be purchased for such consideration, which may be paid by such method or methods and in such form or forms, -14including, without limitation, cash, Common Shares, other securities, other Awards, other property, or any combination thereof, as the Committee will determine.

combination thereof, as the Committee will determine. (g) General. (i) No Cash Consideration for Awards. Awards may be granted for no cash consideration or for such minimal cash consideration as may be required by applicable law. (ii) Awards May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for any other Award, except that in no event will an Incentive Stock Option be granted together with a Non-Qualified Stock Option in such a manner that the exercise of one Option affects the right to exercise the other. Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from the grant of such other awards. (iii) Forms of Payment Under Awards. Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate upon the grant, exercise or payment of an Award may be made in such form or forms as the Committee will determine, including, without limitation, cash, Common Shares, other securities, other Awards, or other property, or any combination thereof, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments. In accordance with the above, the Committee may elect (1) to pay a Participant (or such Participant's permitted transferee) upon the exercise of an Option in whole or in part, in lieu of the exercise thereof and the delivery of Common Shares thereunder, an amount of cash equal to the excess, if any, of the Fair Market Value of one Common Share on the date of such exercise over the exercise price of such Option for one Common Share times the number of Common Shares subject to the Option or portion thereof so exercised or (2) to settle other sharedenominated Awards in cash. The Committee may provide for financing by broker-dealers (including payment by the Company of commissions) and may establish procedures (including broker-dealer assisted cashless exercise) for payment of withholding tax obligations in cash or in Common Shares. -15(iv) Limits on Transfer of Awards. (A) No award (other than Released Securities), and no right under any such Award, may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant otherwise than by will or by the laws of descent and distribution (or, in the case of Restricted Shares, to the Company) and any such purported assignment, alienation, pledge, attachment, sale or other transfer or encumbrance will be void and unenforceable against the Company or any Affiliate. (B) Each award, and each right under any Award, will be exercisable during the Participant's lifetime only by the Participant or, if permissible under applicable law, by the Participant's guardian or legal representative. (v) Terms of Awards. The term of each Award will be for such period as may be determined by the Committee; provided, however, that in no event will the term of any Option exceed a period of ten years from the date of its grant. (vi) Common Share Certificates. All certificates for Common Shares delivered under the Plan pursuant to any Award or the exercise thereof will be subject to any stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Common Shares are then listed, and any applicable federal, state, provincial or territorial securities laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. (vii) Delivery of Common Shares or Other Securities and Payment by Participant of Consideration. No Common Shares or other securities will be delivered pursuant to any Award until payment in full of any amount required to be paid pursuant to the Plan or the applicable Award Agreement is received by the Company. Such payment may be made by such method or methods and in such form or forms as the Committee will determine, including,

without limitation, cash, Common Shares, other securities, other Awards or other property, or any combination thereof; provided that the combined value, as determined by the Committee, of all cash and cash equivalents and the Fair Market Value of any such Common Shares or other property so tendered to the Company, as of the date of such tender, is at least equal to the full amount required to be -16paid pursuant to the Plan or the applicable Award Agreement to the Company. Section 7. Amendments; Adjustments and Termination. Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award Agreement or in the Plan: (a) Amendments to the Plan. Subject to Section 7(g) and the requirements of applicable law, rules and regulations, the Board may amend, alter, suspend, discontinue, or terminate the Plan without the consent of any shareholder, Participant, other holder or beneficiary of an Award, or other Person; provided, however, that, subject to the Company's rights to adjust Awards under Section 7(e) and (f), any amendment, alteration, suspension, discontinuation, or termination that would impair the rights of any Participant, or any other holder or beneficiary of any Award previously granted, will not to that extent be effective without the consent of that Participant, other holder or beneficiary of an Award, as the case may be; and provided further, however, that notwithstanding any other provision of the Plan or any Award Agreement, without the approval of the shareholders of the Company no amendment, alteration, suspension, discontinuation, or termination will be made that would: (i) increase the total number of Common Shares available for Awards under the Plan, except as provided in Section 4; or (ii) otherwise cause the Plan to cease to comply with any tax or regulatory requirement, including for these purposes any approval or other requirement. (b) Section 409A of the Code. This Plan will be construed and interpreted to comply with Section 409A of the Code to the extent required to preserve the intended tax consequences of this Plan. The Company reserves the right to amend this Plan to the extent it reasonably determines is necessary in order to preserve the intended tax consequences of this Plan in light of Section 409A of the Code and any regulations or guidance under that section. In no event will the Company be responsible if Awards under this Plan result in penalties to a U.S. Participant under Section 409A of the Code. (c) Section 162(m) of the Code. Performance-based awards to U.S. Participants must be made by an independent committee. Awards to any Participant whom the independent committee determines to be a "covered employee" under Section 162(m) of the Code may be subject to restrictions, including the establishment of performance goals, as necessary for the Award to meet the requirements set out in the Code for performancebased compensation. -17(d) Amendments to Awards. The Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any Award previously granted, prospectively or retroactively; provided, however, that, subject to the Company's rights to adjust Awards under Section 7(e) and (f), any amendment, alteration, suspension, discontinuation, cancellation or termination that would impair the rights of any Participant or holder or beneficiary of any Award previously granted, will not to that extent be effective without the consent of the Participant or holder or beneficiary of an Award, as the case may be. (e) Adjustment of Awards Upon Certain Acquisitions. In the event the Company or any Affiliate assumes outstanding employee awards or the right or obligation to make future awards in connection with the acquisition of another business or another corporation or business entity, the Committee may make any adjustments, not inconsistent with the terms of the Plan, in the terms of Awards as it deems appropriate in order to achieve reasonable comparability or other equitable relationship between the assumed awards and the Awards granted

reasonable comparability or other equitable relationship between the assumed awards and the Awards granted under the Plan as so adjusted. (f) Adjustments of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee is hereby authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or non-recurring events (including, without limitation, the events described in Section 4(b) or Section 4(c)) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that those adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. (g) Termination. The Plan will automatically terminate on January 1, 2016 unless we elect to terminate it sooner. Section 8. General Provisions. (a) No Right to Awards. No Employee or other Person will have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Employees, or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each recipient. (b) Delegation. Subject to the terms of the Plan and applicable law, the Committee may delegate to one or more officers or managers of the Company or any Affiliate, or to a committee of such officers or managers, the authority, subject to such terms and limitations as the Committee will -18determine, to grant Awards to, or to cancel, modify, waive rights with respect to, alter, discontinue, suspend, or terminate Awards. (c) Correction of Defects, Omissions, and Inconsistencies. The Committee may correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it will deem desirable to carry the Plan into effect. (d) Withholding. The Company or any Affiliate will be authorized to withhold from any Award granted, from any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to a Participant the amount (in cash, Common Shares, other securities, other Awards, or other property) of withholding, taxes or other amounts payable by the Company, any Affiliate or the Participant and which are due or payable in respect of an Award, its exercise, or any payment or transfer under such Award or under the Plan and to take any other action as may be necessary in the opinion of the Company or Affiliate to satisfy all obligations for the payment of those taxes. Neither the Corporation nor any Participating Company shall be held responsible for any tax or other liabilities or consequences which result from the Participant's participation in this Plan, including any employment related taxes or benefit costs, whether or not such costs are the primary responsibility of the Corporation or any Participating Company. (e) No Limit on Other Compensation Arrangements. Nothing contained in the Plan will prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation arrangements, and those arrangements may be either generally applicable or applicable only in specific cases. (f) No Right to Employment. The grant of an Award will not be construed as giving a Participant the right to be retained in the employ, as an officer or director or as a Consultant of the Company or any Affiliate. Further, the Company or an Affiliate may at any time dismiss a Participant from employment, as an office or director or as a Consultant, , free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement. (g) Governing Law. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan will be determined in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable in Ontario. (h) Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or

unenforceable in any jurisdiction or as to any Person or Award under any law deemed applicable by the Committee, that provision will be construed or deemed amended to conform to -19applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, that provision will be stricken as to that jurisdiction, Person or Award and the remainder of the Plan and any such Award will remain in full force and effect. (i) No Trust or Fund Created. Neither the Plan nor any Award will create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, that right will be no greater than the right of any unsecured general creditor of the Company or any Affiliate. (j) No Fractional Common Shares. No fractional Common Shares will be issued or delivered pursuant to the Plan or any Award, and the Committee will determine whether cash, other securities, or other property will be paid or transferred in lieu of any fractional Common Shares or whether those fractional Common Shares or any rights thereto will be canceled, terminated, or otherwise eliminated. (k) Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Those headings will not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision of the Plan. Section 9. Adoption, Approval, Effective Date and Termination Date of the Plan. The Plan will be adopted by the Board of Directors and the shareholders of the Company prior to the completion of the Company's initial public offering (the "IPO") and will become effective immediately prior to the closing of the IPO.

Exhibit 10.10 FORM OF OFFICER AND DIRECTOR INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT ("Agreement") is made as of this day of , 2006, between Corel Corporation, a corporation existing under the laws of Canada (the "Company"), and (the "Indemnified Party"). WHEREAS, the Indemnified Party is an executive officer/member of the Board of Directors of the Company and in such capacity is performing a valuable service for the Company; and WHEREAS, the by-laws of the Company (the "By-laws") provide for the indemnification of its directors and executive officers to the maximum extent authorized by law; and WHEREAS, Section 124 of the Canada Business Corporations Act (the "CBCA") permits, and in some cases requires, the Company to indemnify individuals who are or were directors and officers of the Company, or who act or acted at the Company's request as directors or officers or in a similar capacity of other entities (an "Other Entity", a term which, for the purposes of this Agreement will include a corporation or other entity that becomes an Other Entity in the future). All such individuals, including those acting in a capacity similar to director and/or officer of an Other Entity, are referred to as "Directors" and "Officers", respectively, and the phrase "Director and Officer" means an individual who is or was either, or both, a Director and/or an Officer; and WHEREAS, the number of lawsuits and shareholders' derivative lawsuits against corporations, their directors and officers has increased in recent years, such lawsuits frequently are without merit and seek damages in amounts having no reasonable relationship to the amount of compensation received by the directors and officers from the corporation, and such lawsuits whether or not meritorious are expensive and time-consuming to defend; and WHEREAS, the Company wishes to have the Indemnified Party continue to serve as a Director and Officer free from undue concern for unpredictable or unreasonable claims for damages by reason of the Indemnified Party's status as a Director and Officer, by reason of the Indemnified Party's decisions or actions on its behalf or by

status as a Director and Officer, by reason of the Indemnified Party's decisions or actions on its behalf or by reason of the Indemnified Party's decisions or actions in another capacity while serving as a Director and Officer; and WHEREAS, the Indemnified Party has expressed reluctance to continue to serve as a Director and Officer without assurances that adequate insurance and indemnification is and will continue to be provided; and WHEREAS, in order to induce the Indemnified Party to continue to serve as a Director and Officer, the Company has determined and agreed to enter into this Agreement with the Indemnified Party;

NOW, THEREFORE, in consideration of the sum of $1.00 now given by the Indemnified Party to the Company, of the Indemnified Party's continued service as a Director and Officer, and of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties agree as follows: 1. Indemnified Party Liability Insurance. (a) Except as provided in (b) below, the Company hereby agrees to use its best efforts to obtain and maintain directors and officers liability insurance for the Indemnified Party for so long as the Indemnified Party shall continue to serve as a Director and Officer and thereafter so long as the Indemnified Party shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that the Indemnified Party was a Director and Officer. (b) The Company shall have no obligation hereunder to obtain or maintain directors and officers liability insurance if, in the reasonable business judgment of the Board of Directors of the Company, such insurance is not reasonably available, the premium costs for such insurance are disproportionate to the amount of coverage provided, or the coverage provided by such insurance is limited, by exclusions or otherwise, so as to provide an insufficient benefit. (c) In all policies of directors and officers liability insurance, the Indemnified Party shall be covered as an insured party in such a manner as to provide the Indemnified Party the same rights and benefits, subject to the same limitations, as are accorded to the Company's executive officer or director most favourably insured by such policies. (d) The Company shall give prompt written notice to the Indemnified Party of any amendment or other change or modification, or any proposed amendment, change or modification, to any policy of directors and officers liability insurance maintained by the Company and covering the Indemnified Party. 2. Indemnification. Subject only to the exclusions set forth in this Agreement, the Company hereby agrees to hold harmless and indemnify the Indemnified Party to the full extent authorized or permitted by Section 124 of the CBCA, including any amendment thereof, or any other statutory provisions authorizing or permitting such indemnification which are adopted after the date hereof. Notwithstanding the foregoing, the Company shall not be required to indemnify the Indemnified Party for any losses to the extent that such losses are covered by directors and officers liability insurance as described in Section 1 above. Without limiting the generality of the foregoing: (a) Third Party Actions. The Company shall hold harmless and indemnify the Indemnified Party if the Indemnified Party was or is a party or is threatened to be made a party to any claim, demand, action, suit, investigation or proceeding, whether civil, criminal, administrative or investigative (other than an action 2 by or in the right of the Company), whether anticipated, threatened, pending, commenced, continuing or completed, and any appeal or appeals therefrom (collectively, "proceedings") by reason of the fact that the Indemnified Party is or was or had agreed to serve (so long as the Indemnified Party actually is serving or did so serve) as a Director and Officer, against any and all costs, charges and expenses actually and reasonably incurred by the Indemnified Party or on the Indemnified Party's behalf in connection with such proceeding.

by the Indemnified Party or on the Indemnified Party's behalf in connection with such proceeding. (b) Suits By or in the Right of the Company or an Other Entity. The Company shall hold harmless and indemnify the Indemnified Party if the Indemnified Party is or was a party or is threatened to be made a party to any proceeding by or in the right of the Company or an Other Entity by reason of the fact that the Indemnified Party is or was or had agreed to be (so long as the Indemnified Party actually is or did become) a Director and Officer against any and all costs, charges and expenses. In respect of an action by or on behalf of the Company or an Other Entity to procure a judgment in its favour to which the Indemnified Party is made a party by reason of being or having been a Director and Officer, indemnification under Section 2, including the making of expense advances under Section 2(e) and Section 6(c), shall be made only after obtaining approval of the court having jurisdiction. (c) Partial Indemnification. If the Indemnified Party is entitled to indemnification under any provision of this Agreement for a portion of the costs, charged and expenses actually and reasonably incurred by the Indemnified Party or on the Indemnified Party's behalf in the investigation, defense, appeal or settlement of such proceeding, but not, however, for the total amount thereof, the Company shall nevertheless indemnify the Indemnified Party for the portion thereof to which the Indemnified Party is entitled. (d) Advancement of Expenses. All costs, charged and expenses incurred by the Indemnified Party or on the Indemnified Party's behalf in defending a proceeding, or in enforcing the Indemnified Party's rights under any provisions of this Agreement, shall be paid by the Company in advance of the final disposition of such proceeding in the manner prescribed by Section 4 hereof. (e) Amendments to Indemnification Rights. The Company shall not adopt any amendment to its Articles of Amendment, as amended (the "Articles") or By-Laws the effect of which would be to deny, diminish or encumber the Indemnified Party's rights to indemnity pursuant to the Articles, By-Laws, the CBCA or any other applicable law as applied to any act or failure to act occurring in whole or in part prior to the date (the "Effective Date") upon which the amendment was approved by the Company's Board of Directors or shareholders, as the case may be. In the event that the Company shall adopt any amendment to the Articles or By-Laws the effect of which is to change the Indemnified Party's rights to indemnity under such instruments, such amendment shall apply only to acts or failures to act occurring entirely after the Effective Date thereof. The Company shall give written notice to the Indemnified Party of any proposal with respect to any such amendment no later than the date such amendment is first presented to the Board of Directors (or any committee thereof) for consideration, and 3 shall provide a copy of any such amendment to the Indemnified Party promptly after its adoption. (f) Indemnification for Expenses as a Witness. To the extent the Indemnified Party is, by reason of the Indemnified Party's status as a Director and Officer, a witness in any proceeding, the Company shall indemnify the Indemnified Party against all costs, charges and expenses in connection therewith. (g) Definition of Costs, Charges and Expenses. "Costs, charges and expenses" shall include: (i) all liabilities, damages, costs, charges and expenses whatsoever that the Indemnified Party may sustain or incur as a result of serving as a Director and Officer in respect of any act, matter, deed or thing whatsoever made, done, committed, permitted or acquiesced in by the Indemnified Party as a Director and Officer, whether before or after the effective date of this Agreement; (ii) an amount paid to settle an action or satisfy a judgment, except in respect of an action to which paragraph (b), above, is applicable; (iii) a fine, penalty, levy or charge paid to any domestic or foreign government (federal, state, provincial, municipal or otherwise) or to any regulatory authority, agency, commission or board of any domestic or foreign government, or imposed by any court or any other law, regulation or rule-making entity having jurisdiction in the relevant circumstances (collectively, a "Governmental Authority"), including as a result of a breach or alleged breach of any statutory or common law duty imposed on directors or officers or of any law, statute, rule or regulation or of any provision of the articles, by-laws or any resolution of the Company or an Other Entity;

(iv) an amount paid to satisfy a liability arising as a result of the failure of the Company or an Other Entity to pay wages, vacation pay and any other amounts that may be owing to employees or to make contributions that may be required to be made to any pension plan, retirement income plan or other benefit plan for employees or to remit to any Governmental Authority payroll deductions, income taxes or other taxes, or any other amounts payable by the Company or an Other Entity; (v) legal costs on a solicitor and his own client basis, including those incurred in enforcing the Indemnified Party's rights under this Agreement, and other fees and expenses of other professionals and experts; and (vi) lost wages in connection with participating in any proceeding, including as a witness. 3. Limitations on Indemnification. An indemnity pursuant to Section 2 hereof shall be paid by the Company only if the Indemnified Party: 4 (a) acted honestly and in good faith with a view to the best interests of either the Company or the Other Entity, as the case may be; and (b) in the case of a criminal or administrative proceeding that is enforced by a monetary penalty, the Indemnified Party had reasonable grounds for believing that the Indemnified Party's conduct was lawful. (referred to collectively as the "Standards of Conduct") 4. Additional Limitations on Indemnification. No indemnity pursuant to Section 2 hereof shall be paid by the Company: (a) on account of the Indemnified Party's conduct which is finally adjudged in a non-appealable decision to have been fraudulent, dishonest or willful misconduct, or a knowing violation of law; (b) on account of the receipt by the Indemnified Party of any personal profit or advantage to which the Indemnified Party is adjudged in a final, non-appealable decision not to be entitled; (c) for costs, charges and expenses incurred by the Indemnified Party, as a plaintiff, in a proceeding against the Company or against directors or other officers of the Company (other than suits brought by the Indemnified Party to enforce the Indemnified Party's rights under any provisions of this Agreement), unless such proceeding is authorized by the Board of Directors or such indemnification is required by law; (d) if a final, non-appealable decision by a court having jurisdiction in the matter shall determine that such indemnification is not lawful; (e) for amounts paid by the Indemnified Party in settlement of any proceeding without the Company's written consent; (f) in respect of any proceeding initiated by the Indemnified Party (i) against the Company or an Other Entity, unless it is brought to establish or enforce any right under this Agreement; (ii) against any Director or Officer unless the Company or the Other Entity, as the case may be, has joined in or consented to the initiation of such proceeding; or (iii) against any other corporation, partnership, trust, joint venture, unincorporated entity or person, unless it is a counterclaim. 5. Successful Defense. Notwithstanding Sections 3 and 4, to the extent that the Indemnified Party has been successful on the merits or otherwise in the defense of any action, suit or proceeding referred to in subsections (a) or (b) of Section 2, or in the defense of any claim, issue or matter therein, the Company shall indemnify the Indemnified Party against any and all expenses (including attorneys' fees) actually and reasonably incurred by the Indemnified Party or on the Indemnified Party's behalf in connection therewith. Dismissal of any action with prejudice, or a settlement not involving any payment or assumption of liability, shall be deemed a successful defense.

5 6. Indemnification Procedures. (a) Notice to the Company. Promptly after receipt by the Indemnified Party of notice of the commencement of any proceeding, the Indemnified Party shall, if a claim in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof. Such notice shall set forth in reasonable detail the events giving rise to such claim and the amount requested, if known. Failure of the Indemnified Party to provide such notice shall not relieve the Company of its obligations under this Agreement except to the extent such failure has a material and adverse effect on the ability of the Company to meet such obligations. (b) Notice to Insurers. If, at the time of receipt of such notice, the Company has directors and officers liability insurance in effect, the Company shall give prompt notice of the commencement of proceeding to the insurers in accordance with the procedures set forth in the respective policies in favour of the Indemnified Party. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnified Party, all losses and expenses payable as a result of such proceeding in accordance with the terms of such policies. (c) Advancement of Expenses. Subject to subsections (d) and (e) below, the costs, charges and expenses reasonably incurred by the Indemnified Party or on the Indemnified Party's behalf in investigating, defending or appealing any proceeding, or in enforcing the Indemnified Party's rights under any provisions of this Agreement, covered by Section 2 above shall be paid by the Company within 20 days of the Indemnified Party's written request therefor even if there has been no final disposition of such proceeding. The Indemnified Party's written request shall provide the Company with a written affirmation of the Indemnified Party's good faith belief that the Indemnified Party is entitled to indemnification under this Agreement, state the amount requested and shall be accompanied by copies of the invoices or other relevant documentation. The Company shall have no obligation to make expense advances to the Indemnified Party unless and until a majority of those members of the Company's Board of Directors who have no interest in the relevant proceeding, authorize the making of such advances to the Indemnified Party. The Board of Directors may, before authorizing expense advances, retain independent counsel or make any inquiries it considers appropriate in the circumstances for the purpose of confirming the Indemnified Party's compliance with the Standards of Conduct and entitlement to indemnity. The Board of Directors shall have discretion in deciding whether or not to authorize such advances, but shall exercise its discretion reasonably, in light of all relevant circumstances, and in good faith. (d) Undertaking to Repay Advances. The Indemnified Party agrees that the Indemnified Party will reimburse the Company for all advances paid by the Company to the Indemnified Party under this Agreement in the event and only to the extent that it shall ultimately be determined that the Indemnified Party was not entitled to be indemnified under this Agreement in respect of those amounts. If requested by the Company, the Indemnified Party will provide a written undertaking to the Company 6 confirming the Indemnified Party's obligations under the preceding sentence as a condition to receiving an expense advance. (e) Assumption of Defense by the Company. Except as otherwise provided below, the Company, jointly with any other indemnifying party similarly notified, will be entitled to assume the defense of any proceeding of which it has been notified by the Indemnified Party pursuant to subsection (a) above, with counsel reasonably satisfactory to the Indemnified Party. After notice from the Company to the Indemnified Party of its election to assume the defense thereof, the Company will not be liable to the Indemnified Party under this Agreement for any legal or other expenses subsequently incurred by the Indemnified Party; provided, however, that the Indemnified Party shall have the right to employ the Indemnified Party's own counsel in such proceeding at the expense of the Company if, at any time after such notice from the Company, (i) the employment of counsel by the Indemnified Party has been authorized by the Company, (ii) the Indemnified Party shall have reasonably concluded based on the advice of counsel that there may be a conflict of interest between the Company and the Indemnified Party in the conduct of such defense, or (iii) the Company shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of the Indemnified Party's counsel shall be subject to reimbursement in accordance with the terms of this Agreement. The Company shall not be entitled to assume the

reimbursement in accordance with the terms of this Agreement. The Company shall not be entitled to assume the Indemnified Party's defense of any proceeding brought by the Company or an Other Entity or as to which the Indemnified Party shall have made the conclusion provided for in clause (ii) above. (f) Determination of Right to Entitlement. (i) In the event that the Indemnified Party incurs liability for any costs, charged and expenses and indemnification is sought under this Agreement, the Company shall pay (or provide for payment if so required by the terms of any judgment or settlement) such amounts within 30 business days of the Indemnified Party's written request therefor unless a determination is made within such 30 business days that the claims giving rise to such request are excluded or indemnification is otherwise not due under this Agreement. Such determination, and any determination required by applicable law as to whether the Indemnified Party has met the standard of conduct required to qualify and entitle the Indemnified Party, partially or fully, to indemnification under Section 2 of this Agreement, shall be made, at the Company's discretion, (1) by the Board of Directors of the Company by a majority vote of the directors who were not parties to such action, suit or proceeding even though less than a quorum, or (2) if such a majority is not obtainable, or even if obtainable a majority of the disinterested directors so directs, by written opinion of independent legal counsel selected by the Company and reasonably satisfactory to the Indemnified Party, or (3) by the Company's shareholders; provided, however, that if a change of control has occurred such determination shall be made by written opinion of independent legal counsel selected by the Indemnified Party or, if requested by the Indemnified Party, by the Company. The term "independent legal counsel" shall mean for this purpose a lawyer or firm of lawyers experienced in matters of corporation law that is not now nor has within the previous three years been retained to represent the Indemnified Party, the Company or any other party to the proceeding giving 7 rise to the claim for indemnification hereunder; provided that "independent legal counsel" shall not include any person who under applicable standards of professional conduct would have a conflict of interest in representing the Indemnified Party or the Company in an action to determine the Indemnified Party's rights under this Agreement. The term "change of control" shall mean: (1) the consummation of any transaction after which any "person" or "group" (as such terms are used in Sections 3(a)(9), 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act")) other than Vector Capital Corporation, related investment funds and co-investors and their affiliates is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities, or possesses the power to vote or control the vote of securities, of the Company representing 30% or more of the combined voting power of the common shares of the Company; or (2) the shareholders of the Company approve a merger or consolidation of the Company with any other corporation or entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 662/3% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets. (ii) Notwithstanding the foregoing, the Indemnified Party may within 60 days after a determination adverse to the Indemnified Party has been made as provided above, or if no determination has been made within 30 business days of the Indemnified Party's written request for payment, any court of competent jurisdiction, or may seek an award in arbitration to be conducted by a single arbitrator pursuant to the rules of the Arbitration Act, 1991 (Ontario), which award shall be deemed final, unappealable and binding, to determine whether the Indemnified Party is entitled to indemnification under this Agreement, and such court or arbitrator, as the case may be, shall thereupon have the exclusive authority to make such determination unless and until such court or arbitrator dismisses or otherwise terminates such action without having made a determination. The court or arbitrator, as the case may be, shall make an independent determination of entitlement irrespective of any prior determination made by the Board of Directors, independent legal counsel or shareholders. In any such action before the court or arbitrator, the Indemnified Party shall be presumed to be entitled to indemnification and the Company shall have the burden of proving that indemnification is not required under this Agreement. All fees and expenses of any arbitrator pursuant to this provision shall be paid by the Company.

(g) Enforcement Expenses. In the event that the Indemnified Party brings suit or takes any other action to enforce the Indemnified Party's rights or to collect monies due under this Agreement, and if the Indemnified Party is successful therein, the Company shall reimburse (to the extent not previously advanced) the Indemnified Party for all of the Indemnified Party's reasonable expenses, including legal fees, in any such suit or action. 8 7. Presumptions/Knowledge. (a) For purposes of any determination hereunder the Indemnified Party will be deemed, subject to compelling evidence to the contrary, to have acted in good faith and in the best interests of the Company. The Company will have the burden of establishing the absence of good faith. (b) The knowledge and/or actions, or failure to act, of any other director, officer, agent or employee of the Company or any other entity will not be imputed to the Indemnified Party for purposes of determining the right to indemnification under this Agreement. (c) The Company will have the burden of establishing that any expense it wishes to challenge is not reasonable. 8. Settlement. The parties wish to encourage the settlement of any proceeding. Accordingly, the parties agree as follows: (a) the Company may, with the prior written consent of Indemnified Party (which consent shall not be unreasonably withheld or delayed), enter into an agreement to settle any proceeding; (b) if the Indemnified Party refuses after requested by the Company, acting reasonably, to give consent to the terms of a proposed settlement which is otherwise acceptable to the Company, the Company may require the Indemnified Party to negotiate or defend the claim independently of the Corporation. In that case, any amount recovered by the claimant in excess of the amount for which settlement could have been made by the Company shall not be recoverable under this Agreement, and the Company will only be responsible for costs, charges and expenses up to the time at which settlement could have been made; (c) the Company shall not be liable for any settlement of any proceeding effected without its prior written consent (which consent shall not be unreasonably withheld or delayed); (d) the Indemnified Party shall have the right to negotiate a settlement in respect of any proceeding, provided that unless the Company has approved the settlement, the Indemnified Party shall pay any compensation or other payment to be made under the settlement and the costs of negotiating and implementing the settlement, and shall not seek indemnity from the Company in respect of such compensation, payment or costs; and (e) the settlement of a proceeding shall not create a presumption that the Indemnified Party did not meet or would not have met the Standards of Conduct. 9. Continuation of Indemnification. The Company's obligations to indemnify the Indemnified Party hereunder shall continue throughout the period the Indemnified Party is a Director and Officer and thereafter so long as the Indemnified 9 Party shall be subject to any possible proceeding by reason of the fact that the Indemnified Party was a Director and Officer. 10. Tax Adjustment. Should any payment made pursuant to this Agreement, including the payment of insurance premiums or any payment made by an insurer under an insurance policy, be deemed to constitute a taxable benefit or otherwise be or become subject to any tax or levy, then the Company shall pay any amount as may be necessary to ensure that the amount received by or on behalf of the Indemnified Party, after the payment of or withholding for such tax, fully reimburses the Indemnified Party for the actual cost, expense or liability incurred by or on behalf of the Indemnified Party.

or on behalf of the Indemnified Party. 11. Successors and Assigns. This Agreement shall be binding upon the Company, its successors and assigns (including any transferee of all or substantially all of its assets and any successor by merger or otherwise by operation of law), and shall inure to the benefit of the Indemnified Party and the Indemnified Party's heirs, personal representatives, executors and administrators and shall be binding upon the Indemnified Party and the Indemnified Party's successors in interest under this Agreement. 12. Rights Not Exclusive. The rights provided hereunder shall not be deemed exclusive of any other rights to which the Indemnified Party may be entitled under any provision of law, Articles of Incorporation, By-law, other agreement, vote of shareholders or of disinterested directors or otherwise, both as to action in the Indemnified Party's official capacity and as to action in any other capacity while occupying any of the positions referred to in the third recital to this Agreement. 13. Subrogation. Upon payment of any amount under this Agreement, the Company shall be subrogated to the extent of such payment to all of the Indemnified Party's rights of recovery therefor and the Indemnified Party shall take all reasonable actions requested by the Company to secure such rights, including, without limitation, execution of all documents necessary to enable the Company to enforce such rights. 14. Severability. In the event that any provision of this Agreement shall be held to be invalid, illegal or unenforceable for any reason, such provision shall be limited or modified in its application to the minimum extent necessary to avoid a violation of law, and, as so limited or modified, such provision and the balance of this Agreement shall be enforceable in accordance with their terms. 15. Integration. This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to the subject matter hereof. 16. Modification. No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by both parties hereto. 17. Notices. All notices given under this Agreement shall be in writing and delivered either (i) personally, (ii) by registered or certified mail (postage prepaid, return receipt requested), (iii) by recognized overnight courier service or (iv) by telecopy (if 10 promptly followed by a copy delivered as provided in clauses (i), (ii) or (iii) above), as follows: If to the Indemnified Party: [NAME]
[ADDRESS] If to the Company: 1600 Carling Avenue Ottawa, Ontario Canada K1P 6L2 Attention: Christopher DiFrancesco Vice President, Legal and General Counsel

Notices hereunder given as provided above shall be deemed to be duly given upon delivery if delivered personally, three business days after mailing if by registered or certified mail, one business day after mailing if by overnight courier service and upon confirmation of transmission if by telecopy. 18. Governing Law. This Agreement shall be interpreted and enforced in accordance with the laws of the Province of Ontario. 11

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written. COREL CORPORATION By: Name:

Title: [INDEMNIFIED PARTY] 12 Exhibit 10.11 LEASE OF OFFICE SPACE DATE: DECEMBER 9, 2003 BETWEEN: CHURCHILL OFFICE PARK LTD. ("Landlord") AND COREL CORPORATION ("Tenant") PREMISES: 1600 Carling Avenue, Suites 100, 200, 220 and 300, Ottawa, Ontario. LANDLORD AND TENANT, in consideration of the covenants herein contained, hereby agree as follows: ARTICLE 1.00 DEFINITIONS 1.01 DEFINITIONS In this Lease: (a) "Annual Rent" means: (i) for the period from the Commencement Date to and including the last day of the Term for Premises B, both the Annual Rent for Premises A and the Annual Rent for Premises B; and (ii) for the balance of the Term, the Annual Rent for Premises A. (b) "Annual Rent for Premises A" means in respect of the following period(s), the following annual amount(s), monthly installment (s) and annual rates calculated on the basis of the Square Feet in Premises A:
Monthly Installment ----------$63,934.73 Annual Square Foot Rate ------------$22.03

Period -----January 1, 2004 to December 31, 2008

Annual Amount ------------$767,216.78

(c) "Annual Rent for Premises B" means in respect of the following period(s), the following annual amount(s), monthly installments) and annual rates calculated on the basis of the Square Feet in Premises B:
Monthly Installment ----------$63,934.73 Annual Square Foot Rate ------------$22.03

Period -----January 1, 2004 to December 31, 2006

Annual Amount ------------$767,216.78

(d) "Article" means an article of this Lease. (e) "Building" has the meaning ascribed thereto in Schedule B. (f) "Business Day" means any day except Saturday, Sunday and statutory holidays in the Province of Ontario. (g) "Commencement Date" means January 1, 2004, being the first day of the Term. (h) "Common Areas" has the meaning ascribed thereto in Schedule B. (i) "Environmental Laws" means any federal, provincial, municipal or local law, ordinance or regulation related to environmental conditions on, under, at, near or about the Land (as defined in Schedule B) or 2 Building, or related to Landlord, Tenant or the Land, air, soil or ground water condition, including without limitation, the generation, storage or disposal of Hazardous Substances (as defined in Section 6.05 of Schedule B), now or hereafter enacted or promulgated by any governmental authority having jurisdiction over Landlord, Tenant, the Land or Building (the "Authorities"). (j) "Event of Default" has the meaning ascribed thereto in Section 19.03 of this Lease. (k) "Fiscal Year" means the period ending on December 31st (all or part of which falls within the Term) or such other period from time to time determined by Landlord. (l) "Lease" means this lease, Schedules A, B, C and, if applicable, D to this Lease, and every properly executed instrument which by its terms amends, modifies or supplements this Lease. (m) "Leasehold Improvements" means the alterations, fixtures and improvements in or serving the Premises made from time to time by or on behalf of Tenant or any prior occupant of the Premises with the exception only of furniture and equipment not in the nature of fixtures. (n) "Normal Business Hours" has the meaning ascribed thereto in Schedule B. (o) "Operating Costs" means the amounts determined in accordance with Section 2.02 of Schedule B. (p) "Other Charges" means amounts payable to Landlord under Article 4.04. (q) "Premises A" means the area on the first and second floors of the Building shown hatched on Schedule A-l having a gross leasable area of approximately 34,826 square feet and shall extend from the upper surface of the structural sub-floor to the lower surface of the suspended ceiling within the boundaries of the Premises as described in Section 3.00 of Schedule B. (r) "Premises B" means the area on the second and third floors of the Building shown hatched on Schedule A-2 having a gross leasable area of approximately 34,826 square feet and shall extend from the upper surface of the structural sub-floor to the lower surface of the suspended ceiling within the boundaries of the Premises as described in Section 3.00 of Schedule B.

(s) "Premises" means: (i) for the period from the Commencement Date to and including the last day of the Term for Premises B, both Premises A and Premises B; and (ii) for the balance of the Term, means Premises A. (t) "Prime" means the rate of interest per annum from time to time announced by Toronto Dominion Bank or its successors and reported to the Bank of Canada as its prime rate for Canadian dollar loans. (u) "Rent" means the aggregate of all amounts payable by Tenant pursuant to any provision of this Lease except under Article 4.03. (v) "Rental Taxes" means any tax or duty imposed upon either Landlord or Tenant which is measured by or based in whole or in part directly upon the Rent payable under this Lease or in respect of the rental or rental value of Premises under this Lease whether existing at the date hereof or hereafter imposed by any governmental authority including, without limitation, goods and services taxes, value added tax, business transfer tax, sales tax, federal sales tax, excise taxes or duties or any tax similar to the foregoing. (w) "Rules and Regulations" means the rules and regulations from time to time made by Landlord and consisting as of the Commencement Date of those listed in Schedule C. (x) "Square Feet in Premises A" means approximately 34,826 square feet to be determined by Landlord in accordance with Section 3.00 of Schedule B. (y) "Square Feet in Premises B" means approximately 34,826 square feet to be determined by Landlord in accordance with Section 3.00 of Schedule B. (z) "Square Feet in the Premises" means: (i) for the period the Commencement Date to and including the last day of the Term for Premises B, the total square footage of the Square Feet in Premises A and the Square Feet in Premises B, being approximately 69,652 square feet; and (ii) for the balance of the Term, the Square Feet in Premises A, being approximately 34,826 square feet; in each case to be determined by Landlord in accordance with Section 3.00 of Schedule B. 3 (aa) "Tenant's Proportionate Share" means the amount determined in accordance with section 2.01(c) of Schedule B. (bb) "Term" means: (i) with respect to Premises A, the Term for Premises A; and (ii) with respect to Premises B, the Term for Premises B. (cc) "Term for Premises A" shall have the meaning ascribed thereto in Article 3.01. (dd) "Term for Premises B" shall have the meaning ascribed thereto in Article 3.01. ARTICLE 2.00 GRANT OF LEASE 2.01 SURRENDER OF PRIOR LEASE. Prior to the Commencement Date, the relationship between Landlord and Tenant was governed by a lease made

as of December 1, 1996 (the "Prior Lease"). Landlord and Tenant have agreed that such lease is to be surrendered and replaced by this Lease. Accordingly, the Prior Lease is hereby surrendered as of midnight on December 31, 2003 (the "Surrender Date"), being the day preceding the Commencement Date of this Lease and shall thereafter be of no further force or effect save and except as provided in this Section 2.01 and in Section 2.02 of this Lease. Notwithstanding the foregoing and any provision of this Lease or the Prior Lease to the contrary, Landlord and Tenant agree that: (a) the surrender of the Prior Lease is without prejudice to the parties' respective covenants and obligations thereunder for the period from December 1, 1996 (being the commencement date of the same) up to and including December 31, 2003, including without limitation, Tenant's obligation to pay for such period all Rent (as defined in the Prior Lease) and additional rent, including without limitation, Operating Expenses, Real Estate Taxes, Tax on Capital and the Electrical Amount (each as defined in the Prior Lease, and together with the Rent, being herein called the "Prior Rent") as contemplated by the Prior Lease, including without limitation, the payment of the adjustments of such amounts pursuant to Section 6.06 of the Prior Lease; (b) Tenant confirms that Landlord is not in breach of any obligation under the Prior Lease, and that it has no claims against Landlord and will not make any claims in respect of any adjustment, readjustment, billings, alleged overpayments of Prior Rent, security deposits, deposits, credits or any other matter relating to the Prior Lease except as expressly provided for in this Section 2.0l(b). Tenant has paid $1,685,062.35 (including $110,237.72 GST) on account of the Prior Rent for the period from January 1, 2004 to and including March 31, 2004. Landlord shall reimburse Tenant $1,685,062.35 (including $110,237.72 GST) for the difference between the Prior Rent for the period from January 1, 2004 to and including March 31, 2004 and the Rent payable in accordance with this Lease for the same three (3) month period (the "Reimbursement Amount"). Such Reimbursement Amount shall be applied by Landlord in payment of the Rent under this Lease as it accrues commencing April 1, 2004; (c) immediately following the Surrender Date, Tenant shall remove all Tenant's personal property and, in accordance with Section 14.04 of the Prior Lease, remove those improvements, alterations, additions and repairs described in Schedule H to this Lease (jointly and severally, the "Prior Improvements") from the premises leased to Tenant pursuant to the Prior Lease (excluding for this purpose, the Premises), and restore such premises to their original condition and repair any damage to such premises or the Building, as the case may be, occasioned by the installation, removal or restoration of such Prior Improvements. Tenant shall complete the removal of its personal property and the Prior Improvements from floors six, seven and eight of the Building by April 18, 2004, and from floors four and five of the Building by May 16, 2004. Such alterations by Tenant shall be carried out in accordance with Section 7.03 of this Lease and Tenant's access to the Land and Building for such purpose shall be subject to, and Tenant shall abide by, all building safety and other rules and regulations relating to the use of the Building, shipping and removing goods, removal of property, and alterations that may be contained in this Lease or may otherwise be communicated to Tenant by Landlord and, in addition, all exculpatory clauses, indemnities and releases contained in this Lease shall bind Tenant in respect of such activity. If Tenant fails to remove its personal property as aforesaid, such personal property shall at the option of Landlord become its property, and may be appropriated, sold, removed, destroyed or otherwise disposed of by Landlord without notice or obligation to compensate Tenant or to account to Tenant, and Tenant shall pay to Landlord on demand all costs incurred by Landlord in connection therewith, plus an administration fee of fifteen percent (15%) of such costs; and (d) Landlord confirms that Tenant is not in breach of any obligation under the Prior Lease and has paid the Prior Rent in accordance with the Prior Lease, and that subject to Tenant's performance of its obligations pursuant to subsection 2.01(c) and its obligation to pay adjustments with respect to the Prior Rent in accordance with the Prior Lease, Landlord has no claims against Tenant and will not make any claims in respect of any other matter relating to the Prior Lease, in being agreed and understood in this regard that Landlord shall be entitled to and Tenant shall pay all adjustments with respect to the Prior Rent in accordance with the Prior Lease. 4 2.02 PRIOR CLAIMS.

Landlord and Tenant agree that although the Prior Lease is by Section 2.01 of this Lease surrendered and is as of the Commencement Date of this Lease of no further force or effect, such surrender shall not apply to any third party claims involving either or both Landlord and Tenant with respect to the Prior Lease or the Land which relate to the period prior to the Commencement Date of this Lease, it being agreed and understood that such claims shall be dealt with in accordance with the applicable provisions of the Prior Lease. Third party claims which relate to the period from and after the Commencement Date of this Lease shall be dealt with in accordance with the applicable provisions of this Lease. Landlord and Tenant represent and warrant to the other party that as of the Commencement Date of this Lease, neither party has actual knowledge of any third party claims arising prior to the Surrender Date relating to the Prior Lease. 2.03 TENANT'S AUTHORITY. Tenant represents and warrants that it has as of the Surrender Date the right, full power and authority to surrender the Prior Lease to Landlord on the conditions contained herein, and that, as of the Surrender Date, Tenant has not executed any other instruments, deeds or other documents (excluding only this Lease) nor entered into any unwritten transactions pursuant to which the Premises (as defined in the Prior Lease), the Prior Lease or the unexpired portion of the term of the Prior Lease, including any renewals or extensions thereof, shall in any way be charged, encumbered, liened, assigned or otherwise transferred or subleased. For the purposes of clarity, the parties acknowledge and agree that the space in the Building occupied by Cafe" Plus and by BMO Nesbitt Burns, respectively, is and always has been occupied pursuant to direct leases between such parties and the Landlord, and not by subleases from the Tenant. 2.04 LANDLORD'S AUTHORITY. Landlord represents and warrants that as of the Surrender Date it has the right, full power and authority to agree to accept Tenant's surrender of the Prior Lease on the conditions contained herein. 2.05 GRANT Landlord hereby demises and leases the Premises to Tenant, and Tenant hereby leases and accepts the Premises from Landlord, in a "then as is" condition, to have and to hold during the Term, subject to the terms and conditions of this Lease. Landlord hereby grants to Tenant a non-exclusive licence throughout the Term subject to control of Landlord and to Landlord's right to alter them in accordance with this Lease to use those parts of the Common Areas providing access to or, in the case of the area above the suspended ceiling to the lower surface of the structural ceiling, servicing the Premises. 2.06 QUIET ENJOYMENT If there has been no Event of Default, Tenant shall be entitled to peaceful and quiet enjoyment of the Premises for the Term without interruption or interference by Landlord or any person claiming through Landlord. 2.07 COVENANTS OF LANDLORD AND TENANT Landlord covenants to observe and perform all of the terms and conditions to be observed and performed by Landlord under this Lease. Tenant covenants to pay the Rent when due under this Lease and to observe and perform all of the terms and conditions to be observed and performed by Tenant under this Lease. 2.08 NET LEASE Tenant acknowledges and agrees that it is intended that the Lease and the Rent payable hereunder are completely net and carefree to Landlord. ARTICLE 3.00 TERM AND POSSESSION 3.01 TERM The Term of this Lease, unless terminated earlier as provided in this Lease, in respect of each of Premises A and Premises B, as the case may be, is as follows:

The Term for Premises A shall be five (5) years beginning on the 1st day of the month of January, 2004 and ending on the last day of the month of December, 2008, unless extended pursuant to Article 21.04 of Schedule D, in which case the Term for Premises A shall end on December 31, 2010. The Term for Premises B shall be three (3) years beginning on the 1st day of the month of January, 2004 and ending on the last day of the month of December, 2006, unless extended pursuant to Article 21.05 of Schedule D, in which case the Term for Premises B shall end on December 31, 2008, unless further extended pursuant to Article 21.06 of Schedule D, in which case the Term for Premises B shall end on December 31, 2010. Where the context requires, the references in this Lease to Term shall mean, the Term in respect of each of the Premises A and B, as applicable, as provided in this Article 3.01. 5 3.02 ACCEPTANCE OF PREMISES Taking possession of all or any part of the Premises by Tenant shall be conclusive evidence as against Tenant that the Premises or such part thereof are in satisfactory condition except for water leaking into the Building and accumulating in the ground floor corridor on the far west side of the Building, which leak Landlord agrees to repair without delay. Landlord also acknowledges that there is a water leak in the Building which leak causes the accumulation of water in the Building's atrium, which area is not a part of the Premises, but which leak Landlord also agrees to repair without delay. ARTICLE 4.00 RENT, OPERATING COSTS AND TAXES 4.01 ANNUAL RENT Subject to the application by Landlord of the Reimbursement Amount pursuant to subsection 2.01(b), Tenant shall pay to Landlord as Annual Rent the amount(s) set out in Article 1.01(a), payable in advance and without notice in monthly installments as set out in Article 1.01 (a), on the Commencement Date and on the first day of each calendar month thereafter during the Term. 4.02 OPERATING COSTS, TAXES AND UTILITIES Tenant shall pay to Landlord, at the times and in the manner provided in Article 4.07, Taxes, utilities and Tenant's Proportionate Share of Operating Costs all as determined under this Lease including Schedule B. 4.03 RENTAL TAXES Tenant shall pay to Landlord all Rental Taxes applicable from time to time. Landlord shall calculate the amount of Rental Taxes payable by Tenant in accordance with the applicable legislation and Tenant shall pay such amount together with monthly installments of Rent. The amount payable by Tenant under this Article 4.03 shall be deemed not to be Rent for the purpose of such calculation but in the event of a failure by Tenant to pay under this Article 4.03, Landlord shall have the same rights and remedies as it has in the Event of Default by Tenant in the payment of Rent. 4.04 OTHER CHARGES Tenant shall pay to Landlord, at the times and in the manner provided in this Lease or, if not so provided, upon demand by Landlord, all amounts (other than those payable under Articles 4.01, 4.02, and 4.03) that are payable by Tenant under this Lease. 4.05 PAYMENT OF RENT - GENERAL All amounts payable by Tenant under this Lease, except that payable under Article 4.03, shall be deemed to be Rent and shall be payable and recoverable as Rent in the manner herein provided, and Landlord shall have all rights against Tenant for default in any such payment as in the case of arrears of Rent. Tenant shall pay to Landlord Rent, in legal tender of the jurisdiction in which the Building is located, without deduction or set-off, as a

covenant independent of all other covenants of Landlord or Tenant in this Lease. Tenant's obligation to pay Rent shall survive the expiration or earlier termination of this Lease. 4.06 RENT - ADJUSTMENT If the Term begins on a day other than the first day of a calendar month or ends on a day other than the last day of a calendar month, the Rent payable for such month shall be prorated on a per diem basis using a three hundred and sixty five (365) day period. 4.07 PAYMENT - OPERATING COSTS AND TAXES (a) Prior to the Commencement Date and not less than fifteen (15) days prior to the beginning of each Fiscal Year thereafter, Landlord shall compute and deliver to Tenant a bona fide estimate of Taxes and Tenant's Proportionate Share of Operating Costs for the appropriate Fiscal Year and without further notice Tenant shall pay to Landlord in monthly installments one-twelfth (1/12th) of such estimate simultaneously with Tenant's payments of Annual Rent. (b) Landlord shall deliver to Tenant within one hundred twenty (120) days after the end of each Fiscal Year a written statement (the "Statement") setting out in reasonable detail the amount of Operating Costs and Taxes for such Fiscal Year and certified by a representative of Landlord. If the amount of Taxes and Tenant's Proportionate Share of Operating Costs actually paid by Tenant to Landlord during such Fiscal Year differs from the amount of Taxes and Tenant's Proportionate Share of Operating Costs payable for such Fiscal Year, Tenant shall pay such difference to Landlord or Landlord shall pay such difference to Tenant, as the case may be, without interest within thirty (30) days after the date of delivery of the Statement. Failure of Landlord to render any statement under this section shall not prejudice Landlord's right to render such Statement thereafter or with respect to any other period, or relieve Tenant from its obligations hereunder. Landlord shall not, however, be permitted to claim against Tenant for any amount not included in a Statement or for any adjustment of any amount included in a Statement (in each case save and except for Taxes) unless such claim is made within eighteen (18) 6 months following the last day of the Fiscal Year to which such Statement pertains, it being agreed and understood in this regard that such limitation shall not apply to Taxes. Landlord's estimate of Operating Costs and Taxes for the calendar year 2004 is $16.77 per square foot. As the foregoing is only an estimate, Landlord makes no representation or warranty as to the amount of the Operating Costs or Taxes. (c) If Tenant disputes the accuracy of any Statement, Tenant shall nevertheless make payment in accordance with the Statement, but the disagreement shall be promptly referred by Landlord for prompt decision to an independent professional consultant, agreed upon by Landlord and Tenant, both acting reasonably, who is qualified by education and experience to make such decision and who shall be deemed to be acting as an expert and not an arbitrator. The consultant's signed determination shall be final and binding on both Landlord and Tenant. Any adjustment required to any previous payment made by Tenant or Landlord by reason of any such determination shall be made within fourteen (14) days thereof, and the party required to pay such adjustment shall bear all costs of the consultant, except that if the amount to be paid is three percent (3%) or less of the amount in dispute, Tenant shall pay all such costs. (d) Tenant may only dispute a Statement and claim a re-adjustment by notice given to Landlord within six (6) months after the date of delivery of the Statement to Tenant. ARTICLE 5.00 USE OF PREMISES 5.01 USE The Premises shall be actively, diligently and continuously used and occupied only as a business office for the business of computer software development, maintenance and sales. Tenant shall operate the business office in a first-class, reputable manner befitting the reputation and image of the Building.

5.02 COMPLIANCE WITH LAWS Tenant shall use and occupy and shall cause the Premises to be used and occupied in a safe, careful and proper manner so as not to contravene any present or future governmental or quasi-governmental laws in force or regulations or orders, including without limitation all applicable Environmental Laws. To the extent Tenant's use or occupancy of the Premises, improvements are necessary to comply with any of the foregoing or with the requirements of insurance carriers, Tenant shall pay to Landlord the entire cost thereof. Tenant will immediately advise Landlord in writing of (i) any and all governmental or regulatory notices, orders and/or actions instituted, completed, or threatened affecting the Premises; and (ii) all claims made or threatened by any third party against Tenant, Landlord or the Premises arising out of Tenant's use or occupancy of the Premises and the Land. 5.03 ABANDONMENT Tenant shall not vacate or abandon the Premises. 5.04 NUISANCE Tenant shall not cause or maintain any nuisance in or about the Premises, and shall keep the Premises free of debris or anything kept in a manner which attracts rodents, vermin and anything of a dangerous, noxious or offensive nature or which could create a fire hazard (through undue load on electrical circuits or otherwise) or undue vibration, heat or noise. 5.05 EXTRAORDINARY INSTALLATIONS Tenant shall not install anything that might affect the integrity or capacity of either the structure or the systems of the Building without the prior written consent of Landlord, which consent may be arbitrarily withheld at Landlord's sole discretion. 5.06 JEOPARDY OF INSURANCE Tenant shall neither do nor omit to do anything that might result in the actual or threatened reduction or cancellation of or material adverse change in the insurance maintained by Landlord in respect of the Building, or, except as permitted in accordance with the terms of this Lease, that it will neither do or omit to do anything that might result in any increase in the premiums for insurance maintained by Landlord in respect of the Building. If the premiums for such insurance are increased as a result of the use or occupancy of the Premises or any article kept on the Premises or any act or omission of Tenant or any person for whom Tenant is in law responsible or any subtenant of the Premises, Tenant shall pay to Landlord the entire amount of such increase, or if any such insurance is actually, or threatened to be, either cancelled, reduced or materially adversely changed by an insurer by reason of the use or occupancy of the Premises, and if Tenant fails to remedy the condition or the use or occupancy giving rise to such actual or threatened cancellation, reduction or change within two (2) Business Days after notice thereof, Landlord may, without limiting its other remedies for the default, either: (a) re-enter and take possession of the Premises forthwith upon notice by Landlord to Tenant of its intention to do so; or 7 (b) enter upon the Premises and remedy the condition, use or occupancy giving rise to such actual or threatened cancellation, reduction or change, and Tenant shall pay to Landlord its costs reasonably incurred doing so forthwith on demand. No such entry by Landlord shall be deemed a re-entry or a breach of Article 2.02 and Landlord shall not be liable for any damage to either the Premises or any property located on the Premises as a result of such entry. ARTICLE 6.00 SERVICES, MAINTENANCE, REPAIR AND ALTERATIONS BY LANDLORD 6.01 OPERATION OF BUILDING

Landlord shall operate and maintain the Building in a first-class, reputable manner befitting the reputation and image of the Building, in accordance with all applicable laws and regulations and with standards from time to time prevailing for similar office buildings in the area in which the Building is located, subject, however,to the limitations occasioned by the design and age of the Building and the capacity of its systems and shall provide the services set out in Articles 6.02, 6.03 and 6.04, subject to such limitations, and shall be entitled to make the alterations set out in Article 6.06. Landlord's costs associated with this Article 6.00 that are properly includable in Operating Costs shall be included. 6.02 SERVICES TO PREMISES Landlord shall provide in the Premises: (a) heat, ventilation and cooling as required for the comfortable use and occupancy of the Premises during Normal Business Hours; (b) janitor services, in accordance with the Building cleaning standards which may change from time to time, provided that Tenant shall leave the Premises in a reasonably tidy condition at the end of each business day; (c) electric power for lighting and small business office equipment (but not lighting or equipment using amounts of power disproportionate to that used by typical office tenants); and (d) replacement of the standard fluorescent tubes, light bulbs and ballasts used in the Building as required from time to time as a result of normal usage. 6.03 BUILDING SERVICES Landlord shall provide in the Building: (a) domestic running water and necessary supplies in washrooms sufficient for the normal use thereof by occupants in the Building; (b) elevator or escalator service if included in the Building; (c) heat, ventilation, cooling, lighting, electric power, domestic running water, and janitor service in those areas of the Building from time to time designated by Landlord for use during Normal Business Hours by Tenant in common with all tenants and other persons in the Building but under the exclusive control of Landlord; (d) a general directory board on which Tenant shall be entitled to have its name shown, provided that Landlord shall have exclusive control thereof and of the space thereon to be allocated to each tenant; (e) maintenance, repair, and replacement as set out in Article 6.04; and (f) building security outside Normal Business Hours. 6.04 MAINTENANCE, REPAIR AND REPLACEMENT Landlord shall operate, maintain, repair and replace the systems, facilities and equipment necessary for the provision of services of Landlord under Articles 6.02 and 6.03 and shall maintain and repair the foundations, structure and roof of the Building and repair damage to the Building which Landlord is obligated to insure against under Article 9.00, provided that: (a) if all or part of such systems, facilities and equipment require maintenance or inspections or are destroyed, damaged or impaired, Landlord shall promptly and diligently complete the necessary repair or replacement, (it being agreed and understood mat Landlord shall have a reasonable time in which to do so), and during the period of repair or replacement shall only be required to maintain such services as are reasonably possible in the circumstances; (b) Landlord shall use reasonable diligence in carrying out its obligations under this Article 6.04, but shall not be liable in any circumstances for any direct, indirect or consequential damages to Tenant or any other person or

property for any failure to do so; 8 (c) no reduction or discontinuance of such services or loss of use of the Premises shall be construed as an eviction of Tenant or (except as specifically provided in this Lease) release Tenant from any obligation under this Lease; and (d) nothing contained herein shall derogate from the provisions of Article 16.00. 6.05 ADDITIONAL SERVICES (a) If from time to time requested in writing by Tenant and to the extent that Landlord is reasonably able to do so, Landlord may elect to provide in the Premises services in addition to those set out in Article 6.02, provided that Tenant shall within thirty (30) days of receipt of any invoices for any such additional service pay Landlord therefor at such reasonable rates as Landlord may from time to time establish. (b) Tenant shall not without Landlord's written consent install in the Premises equipment which generates sufficient heat to affect the temperature otherwise maintained in the Premises by the air conditioning system as normally operated. Landlord may install supplementary air conditioning units, facilities or services in the Premises, or modify its air conditioning system, as may in Landlord's reasonable opinion be required to maintain proper temperature levels, and Tenant shall pay Landlord at the same time and in the same manner as Tenant is required to pay Annual Rent hereunder for the month immediately following delivery to Tenant of the invoice for all the costs thereof reasonably incurred by Landlord in connection therewith, including installation, operation and maintenance expenses plus ten percent (10%) of such costs for overhead. (c) If Landlord shall from time to time reasonably determine that the use of electricity or any other utility or service in the Premises is disproportionate to the use of other typical office tenants, Landlord may separately charge Tenant for the excess costs attributable to such disproportionate use calculated on a consistent and reasonable basis. (d) upon the request of Tenant, Landlord shall install and maintain at Tenant's expense, metering devices for measuring the use of any utility or service in the Premises. Tenant shall pay Landlord within thirty (30) days of receipt of any invoice for the cost of installation and maintenance of such device plus ten percent (10%) of such cost on account of Landlord's overhead. In addition, Landlord may in its sole discretion elect to install and maintain at Landlord's expense, metering devices for measuring the use of any utility or service in the Premises. 6.06 ALTERATIONS BY LANDLORD Landlord may from time to time: (a) make repairs, replacements, changes or additions to the structure, systems, facilities and equipment in the Building (including the Premises) where necessary to serve the Premises or other parts of the Building; (b) make changes in or additions to any part of the Building not in or forming part of the Premises; (c) terminate or amend Tenant's right of use of any of the Common Areas or eliminate or change the location and size of any of the Common Areas or their facilities, provided that access by Tenant to the Premises from the elevator lobbies remains available; (d) retain contractors and employ all personnel, including supervisory personnel and managers, that Landlord considers necessary for the effective maintenance, repair, operation, management and control of the Building; and (e) do and perform such other acts in and to the Building or any of its component parts as Landlord considers reasonable for the proper and efficient maintenance, repair, operation, management and control of the Building, provided that in the course of Landlord's exercise of its rights hereunder, Landlord shall be deemed not to have re-entered the Premises nor to have breached Article 2.02. Landlord shall perform all of its work as

expeditiously as is reasonably possible so as to interfere as little as is reasonably possible with Tenant's use of the Premises. 6.07 ACCESS BY LANDLORD Tenant shall permit Landlord, its agents and consultants to enter the Premises outside Normal Business Hours, and during Normal Business Hours if such entry is necessitated by an emergency or will not unreasonably disturb or interfere with Tenant's use of the Premises, to inspect, to provide services or make repairs, replacements, changes or alterations as set out in this Lease, to take such steps as Landlord may deem necessary, acting as would a reasonable and prudent landlord, for the safety, improvement or preservation of the Premises or the Building, to remedy any nuisance in the Premises, to show the Premises to mortgagees, prospective mortgagees, purchasers, and prospective purchasers and, during the last eighteen (18) months of the Term, to prospective tenants. Except in case of emergency or imminent injury or damage, Landlord shall provide twenty-four (24) hours' notice to Tenant prior to such entry, unless such entry is to perform Landlord's usual maintenance activities in which case Landlord need only telephone Tenant rather than give written notice; but in 9 no case shall any such entry constitute a re-entry by Landlord or an eviction or entitle Tenant to any abatement of Rent. 6.08 ENERGY, CONSERVATION, SAFETY AND SECURITY POLICIES Landlord shall be deemed to have observed and performed the terms and conditions to be performed by Landlord under this Lease, including those relating to the provision of utilities and services, if in so doing it acts in accordance with any directive, policy or request of any governmental or quasi-governmental authority in respect of any energy, conservation, safety or security matter. Tenant shall at the written request of Landlord comply with any such directive, policy or request. ARTICLE 7.00 MAINTENANCE, REPAIR, ALTERATIONS AND IMPROVEMENTS BY TENANT 7.01 CONDITION OF PREMISES Except to the extent that Landlord is specifically responsible therefor under this Lease, Tenant shall maintain and repair the Premises and all Leasehold Improvements therein and keep them in good order and condition, including: (a) repainting and redecorating the Premises and cleaning window coverings and carpets in each case at reasonable intervals; and (b) making repairs, replacements and alterations as needed, including those necessary to comply with the requirements of any governmental or quasi-governmental authority having jurisdiction. In the last eighteen (18) months of the Term, Tenant's obligations pursuant to subsection 7.01(a) shall exclude reasonable wear and tear. 7.02 FAILURE TO MAINTAIN PREMISES If Tenant fails to perform any obligation under Article 7.01, then on not less than ten (10) days notice to Tenant Landlord may enter the Premises and perform such obligation without liability to Tenant for any loss or damage to Tenant thereby incurred, and Tenant shall pay Landlord all costs reasonably incurred in connection therewith, plus fifteen percent (15%) of such cost for overhead and supervision, within ten (10) days of its receipt of Landlord's invoice therefor. 7.03 ALTERATIONS BY TENANT Tenant may from time to time at its own expense install Leasehold Improvements and alter existing Leasehold

Improvements (the "Tenant's Work") provided that: (a) the Tenant's Work shall not commence without the prior written approval of Landlord; (b) Tenant shall have furnished Landlord with two (2) complete sets of professionally prepared working drawings (which shall include any architectural, structural, electrical, mechanical, computer system wiring and telecommunication plans) of the proposed Tenant's Work. Landlord requires that Tenant retain Landlord's base building mechanical, electrical and structural engineering consultants to ensure compatibility of base building systems and the Tenant's Work. If Tenant uses other consultants for the preparation of Tenant's working drawings, then Landlord may elect to retain architects and engineers to review such working drawings for the purpose of approving the proposed Tenant's Work (it being understood that notwithstanding such approval, Landlord shall have no responsibility with respect to the adequacy of such working drawings). Tenant shall pay on demand to Landlord all costs reasonably incurred for the examination of such drawings by either Landlord or an outside consultant plus an amount equal to ten percent (10%) of such costs for overhead; (c) prior to commencement of the Tenant's Work, Landlord shall have approved, acting as would a reasonable and prudent landlord, the contractors and subcontractors and their respective labour affiliations; (d) Tenant shall have provided prior to the commencement of the Tenant's Work, performance and payment bonds as well as proof of workers compensation, all risks, builders' risk, and contractors' public liability and property damage insurance coverage, with Landlord and any mortgagee, as required by Landlord to be named as additional insureds, in amounts with insurers, and in form reasonably satisfactory to Landlord, which shall remain in effect during the entire period in which the Tenant's Work will be carried out; (e) Tenant will deliver a complete list identifying every contractor and sub-contractor, accompanied by an up-todate valid clearance certificate for each of them issued by the appropriate worker compensation, safety and insurance authority and Tenant will not use any contractor or permit the use of any sub contractor that is not identified on the list; (f) Tenant acknowledges that certain Tenant's Work may require modification and interfacing with the base building and its systems and structure. If any proposed Tenant's Work could affect the structure, the exterior walls or the systems of the Building, Landlord may require that any such Tenant's Work be 10 performed by either Landlord or its contractors in which case Tenant shall pay all Landlord's costs, reasonably incurred in connection therewith, plus ten percent (10%) thereof for overhead; (g) Tenant shall have provided to Landlord a copy of the contract for the Tenant's Work and evidence satisfactory to Landlord, acting as would a reasonable and prudent landlord, as to the existence of all necessary permits; (h) Tenant shall perform the Tenant's Work or cause the Tenant's Work to be performed: (i) in accordance with any construction methods and procedures manual for the Building; (ii) in accordance with the plans and specifications submitted to and approved by Landlord, acting as would a reasonable and prudent landlord; (iii) in accordance with any conditions, regulations, procedures or rules imposed by Landlord, acting as would a reasonable and prudent landlord; (iv) in compliance with all applicable laws (including occupational health and safety, and workplace hazardous materials information system requirements and legislation); and (v) in a good and workmanlike and expeditious manner using new materials; (i) Landlord may inspect construction as it proceeds (the onus being on Tenant to advise Landlord whenever any phase has been completed so that an inspection can be made); (j) upon completion of the Tenant's Work, Tenant shall provide Landlord with a complete set of "as built" drawings for the Tenant's Work; and (k) if Tenant fails to observe any of the requirements of this Article, Landlord, acting as would a reasonable and prudent landlord, may require that construction stop and that the Premises be restored to their prior condition

failing which Landlord may do so and Tenant shall pay Landlord's cost plus fifteen percent (15%) thereof for overhead. Any increase in Operating Costs or Taxes attributable to such Tenant's Work shall be borne by Tenant. Notwithstanding the foregoing, Tenant shall not require Landlord's prior written approval with respect to any Tenant's Work the aggregate cost of which is reasonably anticipated not to exceed Five Thousand Dollars ($5,000), provided such Tenant's Work will not affect the structure, exterior walls or systems of the Building (such exempted Tenant's Work being herein called the "Exempted Work"). It is further agreed that Tenant shall not be required to comply with subsection 7.03(b) or to provide performance and payment bonds with respect to the Exempted Work. 7.04 TELEPHONE AND COMPUTER SYSTEMS With Landlord's prior written consent, which may be withheld in Landlord's sole discretion, Tenant may utilize a telecommunication service provider which does not currently service the Building, subject to the provisions of this Lease, including but not limited to the following: (a) the service provider shall execute and deliver Landlord's standard form of license agreement which shall include a provision for Landlord to receive compensation for the use of the space for the service provider's equipment and materials; (b) Landlord shall incur no expense or liability whatsoever with respect to any aspect of the provision of telecommunication services, including without limitation, the cost of installation, service, materials, repairs, maintenance, and interruption or loss of telecommunication service; (c) Landlord must first reasonably determine that there is sufficient space in the risers of the Building for the installation of the service provider's equipment and materials; (d) Tenant shall indemnify and hold harmless Landlord for all losses, claims, demands, expenses, and judgments against Landlord caused by or arising out of, either directly or indirectly, any acts or omissions by the service provider or Tenant or those for whom they are responsible at law; and (e) Tenant shall incorporate in its agreement with its service provider a provision granting the Tenant the right to terminate the service provider agreement if required to do so by Landlord and Landlord shall have the right at any time from time to time during the Term to require Tenant at its expense to exercise the termination right. As part of the Tenant's Work, Tenant shall be responsible for the costs associated with the supply and installation of telephone, computer and other communications equipment and systems and related wiring within the Premises to the boundary of the Premises for hook up or other integration with telephone and other communications equipment and systems of a telephone or other communications service provider, which equipment and systems of the service provider are located or are to be located in the Building pursuant to Landlord's standard form of license agreement. Landlord shall supply space in risers in the Building and space on the floor(s) of the Building in which the Premises are located, the location of which shall be designated by Landlord in its sole discretion, to telecommunication service providers who have entered into Landlord's standard form of license agreement for the purpose, without any cost or expense to Landlord therefor, of permitting installation in such risers and on 11 such floor(s) of telephone and other communications services and systems (including data cable patch panels) to the Premises at a point designated by Landlord. Landlord shall have the right to assume control of cables and other telecommunications equipment in the Building and may designate them as part of the Common Areas.

7.05 LIENS Tenant shall pay before delinquency all costs for Tenant's Work which could result in any lien or encumbrance on the Land or Building, shall keep the title to the Land and the Building free and clear of any lien or encumbrance and shall indemnify and hold harmless Landlord from and against any claim, loss, cost, demand and legal or other expense, whether in respect of any lien or otherwise, arising from the supply of material, services or labour for such work or otherwise. Tenant shall immediately notify Landlord of any such lien or encumbrance in respect of the Tenant's Work of which it has or reasonably should have knowledge, and shall cause the same to be removed or vacated within five (5) Business Days failing which Landlord may take such action as Landlord deems necessary, acting as would a reasonable and prudent landlord, to remove or vacate the same and Tenant shall pay to Landlord on demand the entire cost thereof plus an administration fee of fifteen percent (15%) of such cost. 7.06 SIGNS WITHIN THE PREMISES Any sign, lettering or design in the Premises that is visible from the exterior of the Premises shall be subject to approval by Landlord and shall conform to the uniform pattern of identification signs for tenants in the Building as prescribed by Landlord. Tenant shall not inscribe or affix any sign, lettering or design which is visible from the exterior of the Building. 7.07 REMOVAL OF LEASEHOLD IMPROVEMENTS - EXPIRATION OR TERMINATION OF TERM Subject as hereinafter provided, immediately prior to the expiration of the Term, or immediately following the termination thereof, Tenant shall remove all Leasehold Improvements, personal property and any signs, restore the Premises to the then current base building standard of the Building and repair any damage to the Building or the Premises occasioned by such installation, removal and restoration. Such removal shall be carried out in accordance with Section 7.03, it being agreed and understood in this regard, however, that the fee to be paid by Tenant to Landlord for Landlord's supervision of such work shall be ten percent (10%) of the total cost of such Tenant's Work. Landlord may by notice to Tenant given prior to the expiration of the Term stipulate which Leasehold Improvements are not to be removed. Upon reasonable prior notice from Tenant to Landlord, Landlord agrees to give such notice (stipulating which leasehold improvements are not to be removed) thirty (30) days prior to the expiration of the Term. Upon the expiration or earlier termination of the Term, all personal property of Tenant remaining in the Premises shall at the option of Landlord become its property, and may be appropriated, sold, removed, destroyed or otherwise disposed of by Landlord without notice or obligation to compensate Tenant or to account to Tenant, and Tenant shall pay to Landlord on demand all costs reasonably incurred by Landlord in connection therewith, plus an administration fee of ten percent (10%) of the costs. ARTICLE 8.00 TAXES 8.01 LANDLORD'S TAXES Landlord shall pay before delinquency (subject to Tenant's obligation to pay Operating Costs and Taxes under Article 4.02) every real estate tax, assessment, licence fee and other charge, excepting Tenant's taxes under Article 8.02, which is imposed, levied, assessed or charged by any governmental or quasi-governmental authority having jurisdiction upon or on account of the Land or the Building. 8.02 TENANT'S TAXES Tenant shall pay to the appropriate authority before delinquency every tax, assessment, licence fee, excise and other charge, however described, other than any tax assessed against Tenant pursuant to the Income Tax Act, which is imposed, levied, assessed or charged by any governmental or quasi-governmental authority having jurisdiction upon or on account of: (a) operations at, occupancy of, or conduct of business in or from the Premises by or with the permission of Tenant; and (b) Leasehold Improvements and all property in the Premises that is not owned by Landlord, provided that if Landlord so elects by notice to Tenant, Tenant shall pay to Landlord any amounts payable under

this Article 8.02 in monthly installments and Landlord shall remit such amounts to the appropriate authorities. Notwithstanding the foregoing, Landlord agrees not to exercise such election so long as Tenant punctually pays the Rent as and when required under this Lease. 8.03 RIGHT TO CONTEST Tenant shall not contest the validity or amount of any tax, assessment, licence fee, excise fee and other charge payable under Article 8.01. Tenant shall have the right to contest the validity or amount of any tax, assessment, licence fee, excise fee and other charge payable under Article 8.02, provided that no contest by Tenant may 12 involve the possibility of forfeiture, sale or disturbance of Landlord's interest in the Premises or result in any increase in taxes paid by other tenants in the Building or taxes under Article 8.01 and that upon the final determination of any contest by Tenant, Tenant shall promptly pay the amount found to be due, together with any costs, penalties and interest. Tenant shall indemnify Landlord for any costs, expenses, liabilities or damages, including without limitation increases in taxes which are or may be suffered by Landlord directly or indirectly as a result of such contest. ARTICLE 9.00 INSURANCE 9.01 LANDLORD'S INSURANCE Landlord shall maintain (Landlord's cost of compliance with this Article 9.01 being included in Operating Costs) liability insurance in an amount not less than $5,000,000.00 per occurrence, all risk property insurance on a replacement cost basis, rental income insurance, boiler and pressure vessel insurance, and other insurance on the Building and all property and interest of Landlord in the Building as determined by Landlord with coverage and in amounts that are comparable to coverages typically maintained by the owners of similar buildings in the vicinity of the Building. 9.02 TENANT'S INSURANCE Tenant shall maintain: (a) all risk property insurance in amounts sufficient to fully cover, on a replacement cost basis without deduction for depreciation, all Leasehold Improvements and all property, including without limitation Tenant's inventory, furniture and movable equipment, in the Premises which is not owned by Landlord; (b) if applicable, boiler and machinery insurance on a replacement cost basis to cover Leasehold Improvements and all property in the Premises that is not owned by Landlord; (c) liability insurance on an occurrence basis, against claims for bodily injury, personal injury and property damage in or about the Premises, contractual liability, tenant's legal liability, non-owned automobile liability, and owner's and contractors protective liability, in an amount not less than $5,000,000.00 in respect of each occurrence; (d) business interruption insurance; and (e) any other form of insurance, with terms and in a form, with such amounts and against such risks, as Landlord may in its discretion require, acting as would a reasonable and prudent landlord. Policies for such insurance shall (i) be with an insurer with a minimum AM Best rating of A-, or in the absence of an AM Best rating, an A rating from Standard & Poors, (ii) require at least thirty (30) days' written notice to Landlord of termination and, if available on commercially reasonable terms, at least thirty (30) day's written notice to Landlord of any material alteration to the insurance required under this section 9.02 during the Term, (iii) waive any right of subrogation against Landlord and those for whom Landlord is at law responsible, (iv) contain a provision that Tenant's insurance is primary, (v) not call into contribution any other insurance available to Landlord, (vi) contain a severability of interests clause and a cross-liability clause, where applicable, and (vii) add

Landlord and its mortgagees as additional insureds. If requested by Landlord, Tenant shall from time to time promptly deliver to Landlord evidence satisfactory to Landlord that all premiums thereon have been paid and certificates of insurance confirming the above. If Tenant's policy does not require Tenant's insurer to give Landlord at least thirty (30) days written notice of any material alteration to the insurance required under this section 9.02, Tenant hereby covenants to give Landlord such notice. 9.03 TENANT'S FAILURE TO INSURE Should Tenant fail to maintain the insurance required in Article 9.02, in addition to its rights under Article 19.03, Landlord may elect to obtain the required insurance. Tenant shall upon demand pay to Landlord, as Rent, Landlord's cost of obtaining such insurance. ARTICLE 10.00 INJURY TO PERSON OR PROPERTY 10.01 INDEMNITY BY TENANT (a) Tenant indemnifies and holds harmless Landlord, its directors, officers, shareholders, employees and agents from any and all claims, demands, and costs for damage and injury, including death, to the person or property of any person, firm or corporation, (except for Landlord and its employees) arising out of the Tenant's use of or operations in the Premises, including the Land and Building, except where the damage or injury arises out of the negligence of Landlord, its directors, officers, employees and agents and those for whom in law it is responsible or any other tenant in the Building. (b) Tenant hereby releases Landlord and its directors, officers, shareholders, employees and agents from any and all liability for loss or claim, including all resulting consequential and indirect losses, as a result of loss, damage or injury to the property and persons of Tenant and its employees, or as a result of damages or losses including economic losses relating to damage to the Building or loss of access to the Premises, and whether or not such loss or claim may have arisen out of the negligence of Landlord or those for whom Landlord is in law 13 responsible; and Tenant agrees to indemnify and hold harmless Landlord and its directors, officers, shareholders, employees and agents from any loss, cost, damage, expense, suit, action, and demand relating to such claim or loss, including all resulting consequential and indirect losses and excluding such claims or losses relating to any loss, cost, damage, expense, suit, action, or demand of or by third parties except where such losses relate to suits, actions or claims of third party clients or customers of Tenant. 10.02 INDEMNITY BY LANDLORD (a) Landlord indemnifies and holds harmless Tenant, its directors, officers, shareholders, employees, and agents from any and all claims, demands and costs for damage and injury, including death, to the person or property of any person, firm or corporation, (except for the Tenant and its employees) arising out of the Landlord's operations in the Land and Building, except where the damage or injury arises out of the negligence of Tenant, its directors, officers, employees and those for whom in law it is responsible or any other tenant in the Building. (b) Landlord hereby releases Tenant and its directors, officers, shareholders, employees and agents from any and all liability for loss or claim, including all resulting consequential and indirect losses, as a result of loss, damage or injury to the property and persons of Landlord and its employees and whether or not such loss or claim may have arisen out of the negligence of Tenant or those for whom Tenant is in law responsible; and Landlord agrees to indemnify and hold harmless Tenant and its directors, officers, shareholders, employees and agents from any loss, cost, damage, expense, suit, action, and demand relating to such claim or loss, including all resulting consequential and indirect losses of Landlord, and excluding such claims or losses relating to any loss, cost, damage, expense, suit, action, or demand of or by third parties. 10.03 EXTENDED MEANING Any and all release and indemnity clauses which are included in the Lease for the benefit of Landlord are intended also to benefit the mortgagees and property managers and asset managers of Landlord and the officers, directors,

shareholders, employees, and agents of each one of them, and, for the purposes of such clauses, Landlord is hereby acting as agent or trustee on behalf of and for the benefit of the persons or entities mentioned above. ARTICLE 11.00 ASSIGNMENT, SUBLETTING AND OTHER TRANSFERS 11.01 TRANSFER "Transfer" means all or any of the following, whether by conveyance, written agreement or otherwise, and whether or not by operation of law: an assignment of this Lease by Tenant or any interest in this Lease, in whole or in part, any mortgage, charge, debenture (floating or otherwise), or encumbrance of this Lease or Tenant's interest in this Lease, in whole or in part, a sublease, or sharing or parting with possession of all or any part of the Premises, a change in a partnership if the change results in a change in the' effective control of Tenant and, a transfer or other dealing in respect of all or part of the corporate shares of Tenant or an affiliate of Tenant that results in a change in the effective voting control of Tenant. "Transferor" and "Transferee" have meanings corresponding to this definition of "Transfer" and in the case of a Transfer involving corporate shares, or partnership interests, the "Transferor". is the person or entity with effective control, or voting control before the Transfer and the Transferee is the person or entity with effective control, or voting control after the Transfer. "Special Transfer" means a Transfer to a single Transferee, which single Transferee may include more than one entity (as for example, in the case of a joint venture), of all or substantially all of Corel Corporation's assets, or of all or substantially all of Corel Corporation's share capital, and "Special Transferee" shall have a meaning corresponding to this definition of "Special Transferee". 11.02 LANDLORD'S CONSENT Tenant will not effect or attempt to effect a Transfer without the prior written consent of Landlord which shall not be unreasonably withheld or delayed unless Landlord elects to terminate the Lease pursuant to Article 11.04. Landlord shall be deemed to be acting reasonably in withholding its consent if: (a) the Transfer would violate any covenant or restriction given to any other tenant of the Building; (b) in Landlord's opinion, acting as would a reasonable and prudent landlord: (i) either the financial background or the business history and capability of the proposed Transferee is not satisfactory; (ii) the nature or character of the proposed business of the proposed Transferee is such that it may be reasonably anticipated to harm Landlord's business or reputation or reflect unfavourably on the Building, Landlord, or other tenants of the Building, or the image of any of them, or is unethical, immoral or illegal; (c) the proposed Transferee or any principal of the proposed Transferee or any principal shareholder of the proposed Transferee has a history of defaults under other commercial leases or does not have a satisfactory history of compliance with laws; 14 (d) Landlord at the time has, or will have in the next ensuing three (3) month period, other premises in the Building suitable for leasing to the proposed Transferee; (e) Intentionally Deleted. (f) the proposed Transfer is in favour of any existing tenant or occupant of the Building or of any other building owned or operated by Landlord or any of its affiliates within the city in which the Building is situated; (g) the amount of rent to be paid by the proposed Transferee is less than that provided for in this Lease or the terms of the proposed Transfer are otherwise in any respect more favourable to the proposed Transferee than those of this Lease are to Tenant;

(h) the proposed Transfer is a mortgage, charge or other encumbrance of Tenant's rights or interest under this Lease; (i) an Event of Default on the part of Tenant hereunder has occurred and is continuing; (j) the proposed Transfer is a sublease by an existing sublessee of the Premises or any part thereof; (k) Landlord does not receive sufficient information to enable it to make a determination concerning the matters set out above; or (1) there is any other reasonable ground not stated above for withholding consent. 11.03 PUBLIC CORPORATIONS A Transfer that occurs as the result of a change in control of a Tenant will not require the consent of Landlord if the shares are listed and traded on any recognized stock exchange in Canada or the United States. 11.04 LANDLORD'S TERMINATION RIGHT If Tenant requests Landlord's consent to a Transfer it will provide full particulars concerning the Transfer including without limitation, copies of any written offer, agreement or draft agreement pertaining to the Transfer, payments and any other consideration to be made or provided by the proposed Transferee in consideration for the Transfer, and any other information concerning the proposed Transfer or the financial and business history of the proposed Transferee that Landlord may require. Landlord will within fifteen (15) days (or, in the case of a Special Transfer, within five (5) Business Days) after its receipt of the request for consent and all such information, notify Tenant that either (i) it consents to the Transfer, or (ii) unless the proposed Transfer is a Special Transfer, it elects to cancel this Lease as to the whole or part of the Premises affected by the proposed Transfer, or (iii) it does not consent to the Transfer. If Landlord elects to terminate this Lease, Tenant may, by notice to Landlord given within seven (7) days after receipt of Landlord's notice, withdraw its request for Landlord's consent. In that case, Landlord's election to terminate this Lease will be void. If Tenant fails to withdraw its request for Landlord's consent, Tenant will deliver, in accordance with the provisions of this Lease, vacant possession of the whole or the part, as the case may be, of the Premises affected by the termination on the date specified in Landlord's notice, which date will not be less than thirty (30) days nor more than one hundred and twenty (120) days after the date the notice is given or at the Landlord's option on the date the proposed Transfer is to take effect. If Tenant is required to deliver possession of a part only of the Premises, Tenant will pay all costs incurred in connection with rendering that part functionally separate and suitable for separate use and occupancy, including partitioning and providing entrances and services, plus a sum equal to ten percent (10%) of the costs as an administration fee. For the purpose of clarity, the parties acknowledge and agree that Landlord will not have the right cancel this Lease with respect to a Special Transfer. Further, if Landlord fails to notify Tenant that it consents or does not consent to Tenant's request for a Special Transfer within such five (5) Business Day period, Landlord will be deemed to have denied its consent. 11.05 ACCEPTANCE OF RENT After a Transfer, Landlord may collect Rent from the Transferee and apply the net amount collected to the Rent payable hereunder but no acceptance by Landlord of any payments by a Transferee constitutes a waiver of the requirement for Landlord's consent to the Transfer or an acceptance of the Transferee nor will it release Tenant from its covenants and obligations under this Lease. Any documents evidencing a Transfer may, at Landlord's option, be prepared by Landlord or its solicitors. 11.06 CONDITIONS OF CONSENT Any consent by Landlord to a Transfer will be subject to the following conditions: (a) Tenant will pay to Landlord fifty percent (50%) of any money or other consideration (including without limitation, any amount payable by the Transferee to Tenant in excess of the Annual Rent payable by Tenant under Article 4.01) from time to time paid by any Transferee to Tenant in connection with the Transfer; (b) if Landlord requires, the Transferee shall execute an agreement directly with Landlord agreeing to be bound

by this Lease, and in the case of a sublease the Transferee shall waive any right to obtain relief 15 from forfeiture, to obtain a direct lease from Landlord or to become the tenant of Landlord notwithstanding any statute or law that would otherwise give those rights to sub-tenants; (c) Tenant and each Transferee will be bound by this Lease and any renewal or extension of the Term regardless of whether or when any renewal or extension of the Term of this Lease is made, whether agreed to by Tenant or a Transferee, and regardless of any surrender and new lease that is deemed at law to occur as the result of any renewal or extension of this Lease; it being agreed and understood that Corel Corporation's obligations and liability in this regard shall be limited to the options to extend described in sections 21.04, 21.05 and 21.06 of this Lease, and any other renewals or extensions specifically agreed to in writing by Corel Corporation. The liability of Tenant and each Transferee will continue as though Tenant and each subsequent Transferee had signed each renewal or extension of this Lease. Tenant and each Transferee will also be bound by any amendment of this Lease, regardless of whether or when made, whether agreed to by Tenant or a Transferee, and regardless of any surrender and new lease that is deemed at law to occur as a result of any amendment, in each case, provided such amendment does not increase Tenant's and Transferee's obligations under this Lease. The liability of Tenant and each Transferee will continue as though Tenant and each subsequent Transferee had signed each such amendment of this Lease; (d) Tenant shall pay all legal costs reasonably incurred by Landlord in connection with documents relating to a Transfer or Landlord's consent together with Landlord's reasonable administrative charge for considering a request to consent and, as a condition of considering a request for consent, Landlord may require payment of a reasonable deposit of at least five hundred dollars ($500.00) on account of its costs; (e) if this Lease is disaffirmed, disclaimed, terminated, repudiated, or surrendered (each of these transactions being referred to as an "Early Termination") by any trustee in bankruptcy of a Transferee, by any court appointed officer, or by a Transferee in connection with any insolvency proceedings, Tenant and any Transferee (except the bankrupt or insolvent Transferee) will be considered, on notice from Landlord given within thirty (30) days after the Early Termination, to have entered into a lease with Landlord on the same terms and conditions as are contained in this Lease except that the term of the lease shall commence on the date of the Early Termination and shall expire on the date this Lease would have expired but for the Early Termination; and (f) no consent to a Transfer will be considered as a waiver of the requirement for Landlord's consent in respect of a subsequent Transfer. ARTICLE 12.00 SURRENDER 12.01 POSSESSION Upon the expiration or other termination of the Term, Tenant shall immediately quit and surrender vacant possession of the Premises in substantially the condition in which Tenant is required to maintain the Premises excepting only reasonable wear and tear, damage covered by Landlord's insurance under Article 9.01 and the obligation of Tenant to remove Leasehold Improvements and repair damage to the Premises in accordance with Article 7.07. Upon such surrender, all right, title and interest of Tenant in the Premises shall cease. 12.02 MERGER The voluntary or other surrender of this Lease by Tenant or the cancellation of this Lease by mutual agreement of Tenant and Landlord shall not work as a merger, and shall at Landlord's option either terminate any and all subleases or operate as an assignment to Landlord of all or any subleases or subtenancies. Landlord's option hereunder shall be exercised by notice to Tenant and all known subtenants in the Premises or any part thereof. If this Lease is surrendered by operation of law or otherwise, Tenant will indemnify Landlord against all claims by subtenants or others claiming by or through Tenant in respect of any interest in this Lease. 12.03 PAYMENTS AFTER TERMINATION

No payments of money by Tenant to Landlord after the expiration or other termination of the Term or after the giving of any notice (other than payment in full of arrears of Rent and any accelerated Rent before termination of the Term, when a notice of default has been given) by Landlord to Tenant, shall reinstate, continue or extend the Term or make ineffective any notice given to Tenant prior to the payment of such money. After the giving of notice or the commencement of a suit, or after final judgment granting Landlord possession of the Premises, Landlord may receive and collect any sums of Rent and other amounts payable by Tenant under this Lease, and the payment thereof shall not make ineffective any notice, or in any manner affect any pending suit or any judgment theretofore obtained. 12.04 SURVIVAL OF OBLIGATIONS If Tenant has failed to perform any of its obligations under this Lease, such obligations and the rights of Landlord in respect thereto shall survive the expiration or other termination of the Term. 16 ARTICLE 13.00 HOLDING OVER 13.01 MONTH-TO-MONTH TENANCY If without Landlord's written consent Tenant remains in possession of the Premises after the expiration or other termination of the Term, Tenant shall occupy the Premises, as a month-to-month tenant at a monthly rental equal to twice the Rent determined in accordance with Article 4.00 or such other rental and on such other terms as may be stated in such consent, and such tenancy may be terminated by Landlord at any time upon notice of termination to Tenant. If with Landlord's written consent, which consent Landlord may withhold in its sole discretion, Tenant remains in possession of the Premises after the expiration or other termination of the Term, Tenant shall occupy the Premises, as a month-to-month tenant at a monthly rental equal to 105% of the Rent determined in accordance with Article 4.00, and such tenancy may be terminated by Landlord at any time upon notice of termination to Tenant. 13.02 GENERAL Any overholding by Tenant shall be subject to all other terms and conditions of this Lease except any right of renewal, any exclusive use or other restriction, any option to lease, any right of first refusal and any other preemptive or collateral right, and nothing contained in mis Article 13.00 shall be construed to limit or impair any of Landlord's rights of re-entry or eviction or other rights and remedies or constitute a waiver thereof. ARTICLE 14.00 RULES AND REGULATIONS 14.01 PURPOSE The Rules and Regulations are for the safety, benefit and convenience of all tenants and other persons in the Building. 14.02 OBSERVANCE Tenant shall at all times comply with, and shall cause its employees, agents, licensees and invitees to comply with, the Rules and Regulations. 14.03 MODIFICATION Landlord may from time to time, for the purposes set out in Article 14.01, amend, delete from, or add to the Rules and Regulations, provided that any such modification shall be (i) not inconsistent with any other provision of this Lease; (ii) reasonable and have general application to substantially all tenants in the Building; and (iii) effective only upon delivery of a copy thereof to Tenant at the Premises.

14.04 NON-COMPLIANCE Landlord shall use its reasonable efforts to secure compliance by all tenants of the Building and other persons with the Rules and Regulations from time to time in effect, but shall not be responsible to Tenant for failure of any person to comply with such Rules and Regulations. ARTICLE 15.00 EXPROPRIATION 15.01 EXPROPRIATION Landlord and Tenant will co-operate with each other regarding any expropriation of the Premises or the Building or any part of them so that each receives the maximum award to which it is entitled at law. To the extent any part of the Bui