Document:

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                                                                   EXHIBIT 10.19

                     [METACREATIONS CORPORATION LETTERHEAD]

 June 25,1999

 Chris Gentile
 17 Harbourton-Ridge Drive
 Pennington, New Jersey 08534
 Via Federal Express

        Re:    Director of Metastream.com Productions with MetaCreations

Dear Chris:

We are pleased to offer you the full time, regular position of Director of
MetaStream.com Productions with MetaCreations Corporation, commencing on or
about June 29, 1999, in our Princeton office. In this capacity you will be
responsible for the management and production of all MetaStream.com productions
that are client specific. You will report to and work under the direction of Bob
Rice, Vice President of Business Development.

You will be based in our Princeton office until such time as MetaCreations opens
an office in the New York area, at which time you will transfer to that office.
Our team is excited that you will be joining us.

You will be an exempt, salaried employee and your starting base compensation
shall be $10,416.67 per month, earned semi-monthly and payable on the 15th and
last day of each month. This compensation will be reviewed annually. Your status
will be that of an introductory employee during the first ninety (90) days of
your employment with MetaCreations. You will be eligible for any benefit
programs which are generally available to all employees, including health
insurance and our 401(k) plan. You will also be eligible to accrue vacation at
the rate of three (3) weeks annually, beginning on your first day of employment.
Additionally, you will be set up to participate in the AT&T One Rate plan for
your cellular phone, at the Company rate of $90 dollars per month, which amount
shall be reimbursed to you each month.

Corporate Headquarters
498 Seventh Avenue, Ste. 1810
New York, NY, 10018
212-201-0800

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In addition, you will be eligible to receive a bonus based on new production
business you generate and on new Metastream licensing deals that are negotiated
and entered, after you commence employment. The bonus will be structured as:

        -       Two and one-half percent (2.5%) of any new production business
                you bring in during the first year of your employment. New
                business is clients that are not existing MetaCreations' clients
                or target types of business. and,

        -       Two and one-half percent (2.5%) of any MetaStream licensing
                agreements that begin negotiations and are executed following
                the commencement of your employment, after such agreement reach
                an aggregate net revenue to the Company of three million dollars
                ($3,000,000) each year. MetaStream licensing agreements include
                agreements for content creation and custom engineering, with
                related licensing income.

This bonus will be capped at one hundred thousand dollars ($100,000) annually
and will be paid upon the Company's collection of amounts owed to it under
agreements entered that are subject to this bonus. Any questions regarding which
agreements are subject to this bonus should be forwarded to your direct
supervisor, Bob Rice, and will be finally resolved by the Chief Financial
Officer of MetaCreations.

Additionally, MetaCreations will recommend to the Board of Directors that you be
granted a stock option entitling you to purchase 50,000 shares of the common
stock of the Company at the fair market value on the date of the grant as
determined by the Board. Options granted will vest at 25%of the total grant one
year from the date of any grant and, thereafter, the balance shall vest at a
rate of 1/36th of the balance per month. Said options shall be subject to the
Company 's then operative Stock Option Plans.

The Company is aware of and acknowledges that you maintain an outside business
called MC Squared Incorporated (MC2). While employed by MetaCreations, the
Company expects that you will devote your full time and attention, and best
efforts to the business of MetaCreations. In accepting employment with
MetaCreations, you acknowledge and warrant that MC2 will not compete, directly
or indirectly, or interfere with the business of MetaCreations, and that your
involvement with MC2 will not interfere with your duties to the Company. All
questions regarding potential conflicts or interference will be directed to the
General Counsel of MetaCreations, who will review each matter and respond in
writing as to whether the Company considers such matter to be competitive or
likely to cause interference.

Nothing in the grant of options or otherwise in this offer of employment should
be construed as a guarantee of continued employment for any set period of time.
As with all MetaCreations employees, either party may end the employment
relationship at any time, with or without cause. Employment at MetaCreations is
strictly at the will of each of the parties.

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This offer, and the Confidentiality Agreement, represent the entire agreement
between you and MetaCreations regarding your employment with the Company, and
supersede any previous oral and written agreements. This offer is expressly
contingent upon your supplying proof of your ability to work in the United
States in compliance with the Immigration Reform and Control Act of 1986, within
three days of your commencement date.

In acceptance of this position, please sign and return a copy of this letter,
together with a signed copy of Metacreations' standard Employee Invention,
Copyright and Secrecy Agreement.

We are delighted that you will be joining MetaCreations Corporation. I know I
speak for the rest of the team in saying that we are looking forward to working
with you as your bring your unique and significant skills to the Company. If you
have any questions, please feel free to call me.

Sincerely,                                                Accepted:

Kari Zeni                                                 ------------------
Director of Human Resources                               Chris Gentile<PAGE>   1
                                                                   EXHIBIT 10.24

                    AGREEMENT FOR PURCHASE AND SALE OF ASSETS
                                  BY AND AMONG
                           METACREATIONS CORPORATION,
                                COREL CORPORATION
                                       AND
                            COREL CORPORATION LIMITED
                                 MARCH 24, 2000

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                    AGREEMENT FOR PURCHASE AND SALE OF ASSETS

        THIS AGREEMENT FOR PURCHASE AND SALE OF ASSETS (the "AGREEMENT") is made
as of March 24, 2000, (the "EFFECTIVE DATE") by and among:

        MetaCreations Corporation, a Delaware corporation, with its principal
offices at 6303 Carpinteria Ave., Carpinteria, California 93013 ("SELLER");

        Corel Corporation Limited, a wholly-owned subsidiary of Corel (as
defined below) incorporated under the laws of Ireland with its registered office
c/o Arthur Cox, Earlsfort Center, Earlsfort Terrance, Dublin 2, Ireland ("CCL");
and

        Corel Corporation, a corporation continued under the laws of Canada with
its principal offices at The Corel Building, 1600 Carling Avenue, Ottawa, Canada
K1Z 8R7 ("COREL");

        Corel and CCL are sometimes referred to herein collectively as "BUYER."

                                 R E C I T A L S

      A. Seller develops and markets computer graphics software, including its
         painting tool, "Painter", its plug-in applications, "KPT(R)", and its
         three dimensional landscape and object creation software, "Bryce(R)".

      B. CCL is in the business of developing, localizing, manufacturing,
         marketing, distributing and providing technical and customer support on
         a worldwide basis, excluding Canada, for, among other purposes,
         computer graphics and other software owned by or licensed to it for
         such purposes.

      C. Corel is in the business of developing, manufacturing, marketing and
         distributing software and providing technical and customer support
         within Canada, for, among other purposes, computer graphics and other
         software owned by or licensed to it for such purposes.

      D. Seller is willing to sell and license all of its assets relating to
         Painter, KPT and Bryce, and Buyer is willing to purchase and accept a
         license to such assets and to assume Seller's liabilities as described
         herein, as further described in this Agreement.

      E. Capitalized terms shall have the definitions specified herein.

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                                    AGREEMENT

        NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, it is agreed as follows:

1.      CERTAIN DEFINITIONS

        Capitalized terms shall have the definitions specified herein. The
following terms shall have the following meanings:

        1.1     "ACQUIRED SOFTWARE" means all right, title and interest in the
software programs listed on SCHEDULE 1.1, including, without limitation, all
source code and object code (including manufacturing-ready masters), related
flow charts, program descriptions, program listings, layouts, schematics,
engineering and design drawings, technical support information, diagrams and
other documentation depicting or specifying the designs and components of all
the software programs, libraries, reports, drafts, models, prototypes, test and
other data and programs, and all related documentation and information,
comprising and related to the versions of the software programs existing as of
the Closing Date and all preceding versions of and works in progress and future
releases of such software programs under development as of the Closing Date in
any media or format and for all language versions and hardware platforms,
software platforms and operating environments whether sold separately or bundled
with other applications. Acquired Software does not include the Excluded
Software.

        1.2     "ACQUIRED PATENT RIGHTS" means all right, title and interest in
and to all patents, patent applications and invention disclosures which relate
substantially to the Purchased Assets and which are set forth on SCHEDULE 1.2,
including, without limitation, any patents, reissues, divisionals,
continuations, continuation-in-part, extensions, filing priorities and related
patent rights based on the patents, patent applications and invention
disclosures set forth on Schedule 1.2.

        1.3     "AFFILIATE" means, with respect to any Person, any other Person
who directly or indirectly controls, is controlled by, or is under direct or
indirect common control with, such Person, and includes any Person in like
relation to an Affiliate. A Person shall be deemed to control a Person if such
Person possesses, directly or indirectly, 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; and the term
"controlled" shall have a similar meaning.

        1.4     "ASSUMED OBLIGATIONS" shall have the meaning set forth in
SECTION 4.1.

        1.5     "BUSINESS" means the business carried on by the Seller in
connection with the development, acquisition, marketing, licensing, sublicensing
and distribution of the Acquired Software, as such business has been conducted
by the Seller.

        1.6     "BUSINESS RECORDS" means all business, accounting and financial
records and any

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of Seller's analysis, logs, books, records, files, summaries or descriptions of
contracts, agreements or rights, supplier lists and files, product component
lists, and all sales literature and sales aids, pictures, negatives, camera
ready proofs, product catalogs, product sheets and documentation, product
displays, advertising, marketing and promotional materials, manuals (in hard
copy, electronic format and film), computer and electronic data processing
materials and correspondence relating to the Business, and any of Seller's
copies of sales and customer records relating to the Business.

        1.7     "BUYER CLOSING DOCUMENT(s)" shall have the meaning set forth in
SECTION 12.3

        1.8     "BUYER INDEMNITEES" means the following Persons:

                (a)     Buyer;

                (b)     Buyer's current and future Affiliates;

                (c)     the respective Representatives of the Persons referred
                        to in clauses (a) and (b) above; and

                (d)     the respective successors and assigns of the Persons
                        referred to in clauses (a) and (b) and (c) above.

        1.9     "CLOSING" and "CLOSING DATE" shall have the meanings set forth
in ARTICLE 5.

        1.10    "CONTRACTS" means all contracts, agreements, engagements,
licenses and open purchase orders placed with Seller relating to the Acquired
Software, all warranties extended and representations made to Seller by third
parties, and all rights, remedies, setoffs, allowances, rebates, discounts and
credits granted to Seller by third parties relating to the Acquired Software,
together with all claims, causes of action and rights of Seller now existing or
hereafter arising out of such contracts or the performance thereof, all
warranties and representations made to Seller by third parties under such
contracts, and all rights, remedies, setoffs, allowances, rebates, discounts and
credits granted to Seller by third parties in relation to such contracts. To the
extent that such Contracts relate to other software programs as well as Acquired
Software, the parties will cooperate with each other to accord each other the
rights under such contracts that relate to the appropriate products.

        1.11    "CONTENT CONTRACTS" means any and all agreements entered into
between the Seller and one or more third parties relating to the development of,
sale or license to Seller or acquisition by Seller, of Acquired Software or
Third Party Materials, as listed in SCHEDULE 1.11.

        1.12    "CUSTOMER LIST ASSETS" means all of Seller's data bases,
customer lists, registration cards (whether current or prior) and customer
account histories for customers or prospective customers of the Business,
including, without limitation, all currently existing data regarding such
customers and all other marketing, promotional and sales information, whether
stored in written form, magnetic or electronic media or in any other form, that
have been or now are related to the Business or that have been or now are used,
developed or purchased in connection with the Business.

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        1.13    "DERIVATIVE WORK" means any translation, incorporation into
other products, materials or application, adaptation, modification, extension,
upgrade, improvement, compilation, abridgment or other form in which the
Acquired Software may be recast, transformed or adapted where such Derivative
Work would infringe any intellectual, proprietary, moral, privacy, publicity, or
industrial property rights, including, without limitation, audiovisual
copyrights, in the Acquired Software.

        1.14    "DOMAIN NAMES"means the domain names listed in SCHEDULE 1.14.

        1.15    "EMPLOYEES" shall have the meaning set out in SECTION 7.24.

        1.16    "ENCUMBRANCES" shall have the meaning set forth in SECTION 2.1.

        1.17    "ENTITY" means any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.

        1.18    "EXCLUDED ASSETS" shall have the meaning set forth in SECTION
2.3.

        1.19    "EXCLUDED SOFTWARE" means the computer software listed on
SCHEDULE 1.19 and all right, title and interest therein.

        1.20    "GOVERNMENTAL BODY" means any: (a) nation, state, commonwealth,
province, territory, county, municipality, district or other jurisdiction of any
nature; (b) federal, state, provincial, local, municipal, foreign or other
government; or (c) governmental or quasi-governmental authority of any nature
(including, without limitation, any governmental division, department, agency,
commission, instrumentality, official, organization, unit, body, or Entity and
any court or other tribunal).

        1.21    "INDEMNIFIED PARTY" means any Buyer Indemnitee or Seller
Indemnitee.

        1.22    "INTELLECTUAL PROPERTY ASSETS" means all right, title and
interest, including, without limitation, worldwide intellectual and industrial
property rights, and all moral rights and rights of publicity, of Seller
constituting, embodied in or pertaining to the Acquired Software, Acquired
Patent Rights, Trademarks and Domain Names, including without limitation,
copyrights (whether registered or unregistered) (including audiovisual
copyrights), copyright applications, trademark rights, trademark applications,
service marks and names, logos or slogans (together with the goodwill related
thereto), domain name applications, Trade Secrets, patents, patent applications,
inventions and the right to seek patents with respect thereto, moral rights,
mask works, designs and design rights, technologies (including without
limitation, all registrations, rights to register or apply for registration,
renewals, reissues, divisions, continuations, continuations-in-part,
modifications, extensions, reversions, moral rights, mask works and design

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rights and any registrations or applications therefor), all waivers and
assignments of moral rights, all rights of privacy or publicity and all rights
to enforce such rights or interests in any work, and all other proprietary
rights or other intellectual property or intangible assets and any rights to use
or exploit the foregoing.

        1.23    "LEGAL PROCEEDING" means any action, suit, litigation,
arbitration proceeding (including, without limitation, 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 Body or any
arbitrator or arbitration panel.

        1.24    " LOSS" means and includes any and all liability, loss, provable
lost profit, damage, claim, expense, cost, fine, fee, penalty, obligation or
injury including, without limitation, those resulting from any and all actions,
suits, proceedings, demands, assessments, judgments, award or arbitration,
together with reasonable costs and expenses including, without limitation, the
reasonable attorneys' fees and other legal costs and expenses relating thereto
less any proceeds from insurance payable to the party as a result of the
occurrence of such Loss.

        1.25    "NET RECEIPTS" means amounts invoiced by Buyer in connection
with the licensing, sale or other commercial exploitation of the Acquired
Software, less (i) volume rebates, sales returns, and price protection credits
against amounts invoiced (ii) returns (iii) any federal, provincial, state or
foreign sales, excise or other taxes or tariffs imposed on the Products (not
including any tax based on Buyer's net income), and (iv) royalties or other
license fees paid to third parties in connection with the use or commercial
exploitation of the Acquired Software (excluding royalties or licensing fees
paid to Seller under this Agreement). Net Receipts shall not include amounts
invoiced in connection with the licensing, sale or other commercial exploitation
of Buyer's "CorelDRAW" or "Corel Photo-Paint" products that include all, or
portions of, the Acquired Software.

        1.26    "NON-TRANSFERABLE THIRD PARTY AGREEMENTS" shall have the meaning
set out in sub-paragraph 2.5(d)(ii).

        1.27    "PERMITS" means all permits, approvals, certifications,
licenses, variances and waivers held or owned, or required to be held or owned,
by Seller related to the Purchased Assets (other than in connection with the
Permitted Encumbrances), the lack of which would reasonably be expected to
materially and adversely affect the business, properties or financial condition
of the Business.

        1.28    "PERSON" means any individual, Entity or Governmental Body.

        1.29    "PROPRIETARY RIGHTS AGREEMENTS" means all of Seller's rights
(including, without limitation, rights relating to past infringement) to enforce
for the protection of the Intellectual Property Assets any and all agreements or
licenses (i) entered into for the protection of rights associated with the
Intellectual Property Assets, or (ii) between Seller and its consultants (or the

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third party persons or entities from whom it has assigned or obtained any of the
Intellectual Property Assets), developers or other third parties relating to the
Intellectual Property Assets, including, without limitation, any such rights
assigned to or obtained by Seller in connection with Seller's direct or indirect
acquisition (whether by purchase, license or otherwise) of any of the
Intellectual Property Assets (to the extent that such agreements or licenses
relate to the Intellectual Property Assets).

        1.30    "PURCHASED ASSETS" shall have the meaning set forth in SECTION
2.2.

        1.31    "REPRESENTATIVES" means officers, directors, employees, legal
counsel, and accountants.

        1.32    "SELLER CLOSING DOCUMENT(s)" shall have the meaning set forth in
SECTION 12.1.

        1.33    "SELLER INDEMNITEES" shall mean the following Persons:

                (a)     Seller;

                        (b)     Seller's current and future Affiliates;

                        (c)     the respective Representatives of the Persons
                                referred to in clauses (a) and ( b) above; and

                        (d)     the respective successors and assigns of the
                                Persons referred to in clauses (a) and (b) and
                                (c) above.

        1.34    "SHARED USE" means currently used or necessary to the continued
operation of both (i) the business associated with the Purchased Assets and the
Acquired Software and (ii) the business to be retained by Seller.

        1.35    "THIRD PARTY AGREEMENTS" shall have the meaning set forth in
SECTION 2.5.

        1.36    "THIRD PARTY MATERIALS" means the specific third party owned or
controlled software or content used and/or distributed by Seller in connection
with the Acquired Software, as listed on SCHEDULE 1.36.

        1.37    "TRADEMARKS" means all right, title and interest of Seller in
and to the trademarks, in both word and graphic design form (whether registered
or unregistered) and trademark applications each as specified on SCHEDULE 1.37,
and the goodwill associated therewith.

        1.38    "TRADE SECRETS" means all non-public information, trade secret
rights and know-how of Seller used in connection with the Business, including,
without limitation, business plans, customer lists, pricing, and sales
information relating to the Business.

        1.39    "WARRANTY CLAIM" means a claim made by either the Seller, Corel
or CCL based on or with respect to the inaccuracy or non-performance or
non-fulfillment or breach of any representation, covenant or warranty made by
the other party contained in this Agreement, or

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contained in any document or certificate given in order to carry out the
transactions contemplated hereby.

        2.      PURCHASE AND SALE OF ASSETS.

        2.1     AGREEMENT TO SELL AND PURCHASE ASSETS. Subject to the terms and
conditions of this Agreement, and in reliance on the representations, warranties
and covenants set forth in this Agreement,

                (a) Seller agrees to sell, assign, transfer and convey to CCL at
the Closing, and CCL agrees to purchase and acquire from Seller at the Closing,
all of Seller's right, title and interest in and to all of the Purchased Assets,
excluding the rights thereto in and for Ireland (the island of Ireland excluding
the six northern counties) ("IRELAND") and Canada;

                (b) Seller agrees to sell, assign, transfer and convey to CCL at
the Closing, and CCL agrees to purchase and acquire from Seller at the Closing,
all of Seller's right, title and interest in and to all of the Purchased Assets
as they relate to the rights thereto in and for Ireland; and

                (c) Seller agrees to sell, assign, transfer and convey to Corel
at the Closing and Corel agrees to purchase and acquire from Seller at the
Closing all of Seller's right, title and interest in and to all of the Purchased
Assets as they relate to the rights thereto in and for Canada.

        The Purchased Assets will be sold, assigned, transferred and conveyed to
CCL and Corel (as the case may be) on the Closing Date, free and clear of all
mortgages, pledges, liens, security interests, encumbrances, charges, title
retention, conditional sale or other security arrangements or similar claims
("ENCUMBRANCES"), except for the following (which are individually and
collectively referred to as the "PERMITTED ENCUMBRANCES"): the Encumbrances
listed on SCHEDULE 2.1 hereto; Encumbrances comprised of or related to the
Required Consents; Encumbrances not substantial in amount and that do not
detract in any significant respect from or interfere with the present use of any
of the Purchased Assets; and Encumbrances either created by Buyer after the
Closing or created by third parties after the Closing (which were not in
existence as of the Closing Date) and allowed to be suffered after the Closing
by Buyer.

        2.2     PURCHASED ASSETS. For purposes of this Agreement, "PURCHASED
ASSETS" means, collectively,

        All Acquired Software, Acquired Patent Rights, Intellectual Property
Assets, Content Contracts (except as listed in SCHEDULE 2.2(d)), Contracts
listed in Schedule 2.2 (excluding those contracts that Buyer notifies Seller in
writing Buyer does not wish to acquire (the "EXCLUDED CONTRACTS")), Business
Records, Customer List Assets, Permits, Proprietary Rights Agreements and other
assets listed in Schedule 2.2 for worldwide purposes excluding Ireland and
Canada.

        All Acquired Software, Acquired Patent Rights, Intellectual Property
Assets, Content

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Contracts (except as listed in SCHEDULE 2.2), Contracts (excluding the Excluded
Contracts), Business Records, Customer List Assets, Permits, Proprietary Rights
Agreements and other assets listed in SCHEDULE 2.2, with respect to Ireland.

        All Acquired Software, Acquired Patent Rights, Intellectual Property
Assets, Content Contracts (except as listed in SCHEDULE 2.2), Contracts
(excluding the Excluded Contracts), Business Records, Customer List Assets,
Permits, Proprietary Rights Agreements and other assets listed in SCHEDULE 2.2,
with respect to Canada.

        Notwithstanding anything to the contrary contained herein, the Purchased
Assets shall not include the Excluded Assets.

        2.3     EXCLUDED ASSETS. For the purposes of this Agreement, "EXCLUDED
ASSETS" means, collectively, those assets and rights of Seller listed on
SCHEDULE 2.3 . Excluded Assets will include, without limitation, all sales and
distribution Contracts that are not solely for the distribution of the Acquired
Software. With respect to sales and distribution Contracts that relate both to
Acquired Software and other products of Seller, Buyer will, as subcontractor to
Seller, assume the obligation to fulfill product orders for, and other
obligations related to, the Acquired Software under such Contracts, including
but not limited to technical and customer support and upgrade obligations, with
product purchases and support at the pricing, if any, specified in such
Contracts (if not priced separately, Seller and Buyer will agree on a price for
product purchases based on an allocation among the products such Contract covers
based on the suggested retail purchase price of the products) and Buyer will be
entitled to the revenue generated from the sale of such Acquired Software after
the Closing. If any such Contracts provide for payments for support, upgrade or
other similar obligations after the Closing Date, Seller and Buyer shall agree
on the amount of such payments to be made to Buyer based on an appropriate
allocation among the products such Contract covers. Seller and Buyer will
cooperate to transition to Buyer that portion of such Contracts that relates to
the Acquired Software as promptly as practicable following the Closing.

        2.4     ASSET TRANSFER; PASSAGE OF TITLE; DELIVERY.

                (a) Title Passage and Delivery. Upon Closing, title to the
Purchased Assets shall pass as follows and the Purchased Assets shall be
delivered to Buyer as follows:

                        (i) Title to and possession of the Purchased Assets
which are for use everywhere in the world except Canada and Ireland shall be
delivered to CCL by electronic transfer.

                        (ii) Title to and possession of the Purchased Assets
which are for use solely in Ireland shall be delivered to CCL by electronic
transfer.

                        (iii) Title to and possession of the Purchased Assets
which are for use solely in Canada shall be delivered to Corel by electronic
transfer.

                                      -9-
<PAGE>   10

                (b) Instruments of Conveyance. The execution of this Agreement
shall not operate as an effective conveyance, assignment and transfer of the
Purchased Assets and the Assumed Obligations at the Closing as contemplated
herein. In order to effectuate the assignment, transfer and conveyance of the
Purchased Assets and assumption of the Assumed Obligations pursuant to the terms
and conditions hereof, each party shall at the Closing deliver or cause to be
delivered to the other parties such bills of sale, assignments, assumptions and
instruments of conveyance as reasonably requested by such other parties, as well
as such other instruments of conveyance as counsel for Buyer or Seller may
reasonably deem necessary or desirable (both at and after Closing) to effect or
evidence the transfers contemplated hereby.

        2.5     ASSIGNMENT OF THIRD PARTY AGREEMENTS.

                (a) Assignment. Upon the Closing, Seller shall assign to Buyer
(to the extent required by this Agreement) Seller's rights, and Buyer shall
assume from Seller, Seller's obligations under the Contracts, Proprietary Rights
Agreements and other third party agreements listed in SCHEDULE 2.5 (the "THIRD
PARTY AGREEMENTS") or shall make such other arrangements as are provided in
SECTION 2.5 OR 9.1. Before the Closing, unless waived in writing by Buyer,
Seller shall obtain the consent of each third party whose consent is required or
shall make the notice to each third party whose notice is required as a
condition to Closing as designated in SCHEDULE 2.5 (the "REQUIRED CONSENTS").
Seller and Buyer shall cooperate and work together to obtain such consents by,
among other things, taking the actions set forth in SCHEDULE 2.5B.

                (b) Reasonable Efforts to Obtain Other Consents; Cooperation.
Seller shall use its commercially reasonable efforts to obtain the consent of
all third parties whose consent is required in connection with the assignment to
Buyer of Third Party Agreements but is not a Required Consent. Seller hereby
consents to Buyer, during the period prior to Closing, contacting the other
party to each Third Party Agreement to seek consent to the assignment of such
agreement or to negotiate a new agreement directly between such third party and
Buyer. If the consent to assignment to all other Third Party Agreements has not
been obtained by Closing, Seller and Buyer shall cooperate and work together to
obtain such consents.

                (c) Sharing of Costs. Seller and Buyer shall each pay one-half
of any incremental cost associated with obtaining assignment to Buyer of the
Third Party Agreements. For purposes of this Section 2.5(c), "cost" shall mean
(i) any aggregate incremental cost incurred by Buyer under each Third Party
Agreement through the remaining term thereof minus (ii) any aggregate
incremental savings to Buyer under each Third Party Agreement through the
remaining term thereof. Notwithstanding the foregoing, in no event shall Buyer
be required to pay more than One Hundred Thousand US Dollars ($100,000.00 USD)
for any such incremental costs.

                (d) No Deemed Assignment. Nothing in this Agreement shall be
construed as an assignment, license, transfer or conveyance of, or an attempt to
assign, license, transfer or convey, any Third Party Agreement if:

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                        (i) such Third Party Agreement is not assignable,
licensable, transferable or conveyable without the consent of a third party (if
such consent has not been obtained) and such assignment, license, transfer or
conveyance or attempted assignment, license, transfer or conveyance would
constitute a breach of such Third Party Agreement (the "NON-TRANSFERABLE THIRD
PARTY AGREEMENTS"); or

                        (ii) the remedies for the enforcement of such Third
Party Agreement available to Seller would not pass to Buyer (also the
"NON-TRANSFERABLE THIRD PARTY AGREEMENTS").

        Seller, to the extent permitted by applicable laws, shall be deemed to
have promised to assign, license, transfer or convey all Non-Transferable Third
Party Agreements to Buyer as of the Closing Date and shall complete the
assignment, license, transfer and conveyance of all Non-Transferable Third Party
Agreements immediately upon, but only upon, obtaining, if ever, the required
third party consent. Nothing in this Agreement shall be construed as the
assignment, assumption, license, transfer, conveyance, novation or delivery of
any Non-Transferable Third Party Agreement until such time as delivery and
assumption is actually consummated, whether by execution of an assignment in
relation thereto or by manifest and clear expression of delivery. To the extent
an attempted assignment or assumption of any Non-Transferable Third Party
Agreements would be ineffective or would adversely affect the rights or increase
the obligations of Seller or Buyer with respect to any such Non-Transferable
Third Party Agreements so that Buyer would not, in fact, receive all such
rights, or assume the obligations of Seller with respect thereto as they exist
prior to such attempted assignment or assumption, then Seller shall promptly pay
over to Buyer any monies collected by or paid to or for Seller in respect of any
Non-Transferable Third Party Agreement, net of any royalties, payment
obligations to third parties, or similar expenses paid or incurred by Seller
relating to such Non-Transferable Third Party Agreement, and Seller and Buyer
shall cooperate with each other in creating reasonable alternate arrangements
that provide Buyer, to the extent reasonably practicable, the same net economic
benefit that Buyer would have received if the Non-Transferable Third Party
Agreements had been assigned, assumed, licensed, transferred or conveyed on the
Closing Date (which arrangements may include, without limitation, sublease,
agency, management, indemnity or payment arrangements and enforcement at the
cost and for the benefit of Buyer of any and all rights of Seller against an
involved third party), to provide for or impose upon Buyer the benefits of such
Non-Transferable Third Party Agreements or the obligations of such
Non-Transferable Third Party Agreements, as the case may be, and any transfer or
assignment to Buyer by Seller of any such asset, or any assumption by Buyer of
any such Assumed Obligation, which shall require such consent or authorization
of a third party that is not obtained, shall be made subject to such consent or
authorization being obtained. In no event shall the foregoing be construed to
constitute an assignment, assumption, license, transfer, conveyance or novation
of the Non-Transferable Third Party Agreements where such an assignment,
assumption, license, transfer or conveyance would constitute a breach or result
in the loss or diminution of the Non-Transferable Third Party Agreement. Seller
shall not dissolve, wind-up or otherwise cease existence as a corporation until
the earliest of the completion of the assignment, assumption, license, transfer
and conveyance of all Non-Transferable Third Party Agreements to Buyer or until
Seller and Buyer agree to alternative arrangements for such Non-Transferable
Third Party Agreements.

        (e) Buyer shall indemnify and save Seller harmless from and against all
losses, expenses,

                                      -11-
<PAGE>   12

costs or damages of every nature and kind whatsoever (including attorneys fees
and costs) which Seller or its officers, employees or agents may suffer as a
direct result of any claims, actions or proceedings ("CLAIMS") brought by a
party to any such Non-Transferable Third Party Agreement arising out of Seller's
performance after the Closing Date of such Non-Transferable Third Party
Agreement pursuant to the provisions of Section 2.5(d)(ii), except for Claims
arising out of the negligence or fraud of, or actions not authorized by the
provisions of Section 2.5(d)(ii) by, Seller or any of its officers, employees or
agents; provided, however, that in no event shall the amounts paid by Buyer
pursuant to the foregoing, together with any indemnification payments made by
Buyer pursuant to Section 13, exceed the Cap as defined in Section 13.2. Seller
shall indemnify and save Buyer harmless from and against all losses, expenses,
costs or damages of every nature and kind whatsoever (including attorneys fees
and costs) which Buyer or its officers, employees or agents may suffer as a
direct result of any Claims brought by a party to any such Non-Transferable
Third Party Agreement arising out of the negligence or fraud of, or actions not
authorized by the provisions of Section 2.5(d)(ii) by, Seller or any of its
officers, employees or agents in connection with performance after the Closing
Date of any such Non-Transferable Third Party Agreement; provided, however, that
in no event shall the amounts paid by Seller pursuant to the foregoing, together
with any indemnification payments by Seller pursuant to Section 13, exceed the
Cap as defined in Section 13.3.

        2.6     INTENTIONALLY LEFT BLANK

        2.7     SHARED ACCESS AND RIGHTS. On the terms and conditions of this
Section 2.7, the parties shall have the following rights to certain Purchased
Assets, subject to the non-competition obligations set forth in SECTION 9.12:

        (a) Business Records and Customer List Assets. Both Buyer and Seller
shall be entitled to copy and use, subject to the terms and conditions of this
Agreement, those Business Records and Customer List Assets that are Shared Use.
Seller and Buyer shall cooperate in good faith to determine which party shall
retain the original and which party shall receive a copy of the Business Records
and Customer Lists Assets, provided that, in general, original Business Records
and Customer List Assets shall be delivered to the party to whom such Business
Records and/or Customer List Assets primarily relate and provided further that
each party shall have access to all original Business Records to the extent
reasonably required for purposes of compliance with law. To the extent that
either Buyer or Seller requires access to an original Business Record or
Customer List Asset that is Shared Use which has been delivered to the other
party, Buyer and Seller agree to allow such party and its representatives
reasonable access to the original.

        2.8     GRANT OF LICENSE. Seller shall enter into software license
agreements regarding the Excluded Software and substantially in the forms
attached hereto as EXHIBITS D-1, D-2 AND D-3 with each of Corel and CLL (the
"COREL LICENSE" and "CCL LICENSEs", respectively) .

                                      -12-
<PAGE>   13

PURCHASE PRICE.

In consideration of the sale, transfer, conveyance and assignment of the
Purchased Assets to CCL and Corel, CCL and Corel shall pay Seller the aggregate
purchase price (the "PURCHASE PRICE") paid as follows:

3.1     DELIVERIES ON CLOSING DATE.

        (a)     Delivery to Seller. On the Closing Date Buyer shall pay Seller
US$2,000,000 (the "INITIAL CASH PAYMENT"), by wire transfer of funds to Seller.
Seller shall provide Buyer with wire transfer instructions on or before such
date.

        3.2     DELIVERY ON JUNE 30, 2000. On June 30, 2000, or such earlier
date as may be agreed upon by the parties, Buyer shall pay Seller US$2,000,000
by wire transfer of funds to Seller. Seller shall provide Buyer with wire
transfer instructions on or before such date.

        3.3     DELIVERY ON SEPTEMBER 30, 2000. On September 30, 2000, or such
earlier date as may be agreed upon by the parties, Buyer shall pay Seller
US$2,000,000 by wire transfer of funds to Seller. Seller shall provide Buyer
with wire transfer instructions on or before such date.

        3.4     DELIVERY ON DECEMBER 31, 2000. On December 31, 2000, or such
earlier date as may be agreed upon by the parties, Buyer shall pay Seller
US$2,000,000 by wire transfer of funds to Seller. Seller shall provide Buyer
with wire transfer instructions on or before such date.

        3.5     DELIVERY ON JANUARY 31, 2001. On January 31, 2001, or such
earlier date as may be agreed upon by the parties, Buyer shall pay Seller
US$2,000,000 by wire transfer of funds to Seller. Seller shall provide Buyer
with wire transfer instructions on or before such date.

        3.6     ROYALTY PAYMENTS.

        (a)     In addition to the payments set out above, for a period of two
(2) years from the Closing Date, Buyer shall pay to Seller an amount equal to
five (5%) percent of Net Receipts, up to a maximum of US$2,500,000 in aggregate.

        (b)     Buyer shall pay royalties to Seller on a quarterly basis within
forty-five (45) days following the end of each calendar quarter and shall
include, with each payment of royalties, a report specifying the aggregate
royalties earned during the period.

        (c)     Buyer will maintain, in accordance with generally accepted
accounting principles, complete and accurate books and records in respect of its
marketing and distribution of the Acquired Software and the fees and other
amounts received therefor.

        (d)     For a period of three (3) years from the Closing Date, Seller
shall have the right no more often than once per twelve (12) month period, upon
reasonable notice to Buyer, to appoint an independent third party to examine
Buyer's relevant books and records in order to verify Buyer's compliance with
the terms of this Agreement. Any such audit shall be at the expense of

                                      -13-
<PAGE>   14

Seller unless the audit reveals an underpayment by Buyer of greater than 5%, in
which case Buyer shall reimburse Seller for the reasonable costs of the audit.

        (e)     Seller shall not release version 6.03 of the Painter software
product in the interim period between the date of execution of this Agreement
and the Closing Date; provided that the Closing Date is on or before March 31,
2000 .

        3.7     RESPONSIBILITY FOR PAYMENT. Notwithstanding anything to the
contrary contained herein, the parties acknowledge and agree that pursuant to
internal arrangements between CCL and Corel, CCL and Corel have agreed that CCL
shall pay 94% of the Purchase Price and Corel shall pay 6% of the Purchase
Price; provided, however, that as between Buyer and Seller, CCL and Corel shall
be jointly and severally liable for Buyer's obligations under this Agreement.

        3.8     LATE PAYMENT. Any late payments shall bear interest as and from
the date of default at the rate of 1.5% per month.

4.0     OBLIGATIONS ASSUMED.

        4.1     ASSUMPTION OF OBLIGATIONS. Buyer agrees, upon consummation of,
and effective as of, the Closing Date, to assume those, and only those,
obligations of Seller expressly listed on SCHEDULE 4.1 attached hereto (the
"ASSUMED OBLIGATIONS").

        4.2     LIABILITIES AND OBLIGATIONS NOT ASSUMED. Except as expressly set
forth in Schedule 4.1, Buyer shall not assume or become obligated in any way to
pay any liabilities, debts or obligations of Seller or its business. All
liabilities, debts and obligations of Seller not expressly assumed by Buyer
hereunder are hereinafter referred to as the "NONASSUMED LIABILITIES."
Non-Assumed Liabilities shall include, without limitation, the following: (i)
obligations or liabilities of Seller to the extent they relate to Excluded
Assets; (ii) any liabilities or obligations of Seller or its affiliates now or
hereafter arising from or with respect to (a) the termination by Seller of the
employment of any current or future employees of Seller or any of its
affiliates, (b) any other claims brought against Seller arising from Seller's
employment of any person, (c) any existing or future employee benefit plans of
Seller or any of its affiliates whether or not under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), (d) any present or future
obligations or liabilities of Seller or any of its affiliates to existing or
future employees of Seller or any of its affiliates under applicable laws
respecting employment and employment practices, terms and conditions of
employment, and wages and hours, including without limitation, state
unemployment or disability laws or regulations, the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), or the Federal Worker
Adjustment and Retraining Act ("WARN"), Title VII of the Civil Rights Act of
1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act,
Older Workers' Benefit Protection Act, the Equal Pay Act of 1963, as amended,
the Americans with Disabilities Act, the Family and Medical Leave Act, the
National Labor Relations Act, the Fair Labor Standards Act, (e) any overtime
pay, wages, salary, vacation or severance pay obligations of Seller or any of
its affiliates, and (f) any contracts, agreements or arrangements between Seller
or its affiliates and any contractor, consultant, or sales

                                      -14-
<PAGE>   15

representative which are not Assumed Obligations; (iii) all trade accounts and
operating costs payable and accrued liabilities of the Business incurred in the
ordinary course of the routine daily affairs of the Business, which shall be
paid by Seller; (iv) any obligations relating to Seller's real estate leases;
and (v) any insurance premiums under any insurance policy of Seller relating to
the Business.

        4.3     NO OBLIGATIONS TO THIRD PARTIES. Assumption by Buyer of any
liabilities or obligations of Seller pursuant to this Agreement or any Buyer
Closing Document (as defined in SECTION 12.3 below) shall in no way expand the
rights or remedies of third parties against Buyer as compared to the rights and
remedies such parties would have against Seller if the Closing were not
consummated.

5.      CLOSING.

        The consummation of the purchase and sale of the Purchased Assets and
the assumption of the Assumed Obligations contemplated hereby (the "CLOSING")
will take place at the offices of the Seller in Scotts Valley, California, at
the earliest practicable date after all of the conditions to closing set forth
in this Agreement have been satisfied or waived in writing, or at such other
time or date, and at such other place, of such other means of exchanging
documents, as may be agreed to by the parties hereto (the date of the Closing
referred to herein as the "CLOSING DATE").

6.      REPRESENTATIONS AND WARRANTIES OF BUYER.

Buyer hereby represents and warrants to Seller that, except as set forth in the
Schedules to this Agreement, all of the following statements are true, accurate
and correct:

        6.1     ORGANIZATION, GOOD STANDING AND QUALIFICATION. Corel and CCL are
each corporations duly organized and validly existing under the laws of Canada
and Ireland, respectively; Corel is in good standing under the laws of Ontario;
and each such corporation has all requisite corporate power and authority to
carry on its business as now conducted and to enter into this Agreement and the
transactions contemplated hereby. Each of Corel and CCL is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure to so qualify would have an adverse effect on Buyer's ability to
consummate the transactions contemplated by this Agreement.

        6.2     AUTHORIZATION. All corporate action on the part of each of Corel
and CCL and their respective officers and directors necessary for the
authorization, execution and delivery of this Agreement and the Buyer Closing
Documents, the performance of all obligations of Buyer hereunder and thereunder,
has been taken, and this Agreement and the Buyer Closing Documents constitute
the valid and legally binding obligations of Corel and/or CCL as the case may
be, enforceable in accordance with their respective terms, except (i) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws
of general application affecting enforcement of creditors' rights generally and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies. Buyer's Boards

                                      -15-
<PAGE>   16

of Directors have approved the transactions contemplated by this Agreement and
the Buyer Closing Documents. No approval of Corel's shareholders is required to
effect the transactions contemplated by this Agreement or by the Buyer Closing
Documents.

        6.3     GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
Buyer is required in connection with the consummation of the transactions
contemplated by this Agreement.

        6.4     LITIGATION. There is no action, suit, proceeding or
investigation pending or currently threatened against the Buyer that questions
or affects the validity of this Agreement or the Buyer Closing Documents, or the
right or ability of the Buyer to enter into this Agreement or the Buyer Closing
Documents or to consummate the transactions contemplated hereby or thereby.
Buyer is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality that could reasonably be expected to have a material adverse
effect on Buyer's business or ability to consummate the transactions
contemplated hereby. There is no action, suit, proceeding or investigation by
Buyer currently pending or threatened or that Buyer intends to initiate related
to the transactions contemplated hereby.

        6.5     COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
performance of this Agreement and the Buyer Closing Documents and the
consummation of the transactions contemplated hereby and thereby will not result
in any violation or default of any provision of Buyer's charter documents, or of
any instrument, judgment, order, writ or decree that could reasonably be
expected to have a material adverse effect on Buyer's business or ability to
consummate the transactions contemplated hereby or, to the best of Buyer's
knowledge, any violation or default of any provision of any federal or state
statute, rule or regulation applicable to Buyer that could reasonably be
expected to have a material adverse effect on Seller or on Buyer's business or
ability to consummate the transactions contemplated hereby.

        6.6     BROKERAGE AND FINDER'S FEES. Neither Buyer nor any of its
affiliates has employed any broker, finder or agent, or agreed to pay or
incurred any brokerage fee, finder's fee or commission with respect to the
transactions contemplated by this Agreement, or dealt with anyone purporting to
act in the capacity of a broker, finder or agent with respect thereto as a
result of which any claim for a fee can be asserted against Seller.

        6.7     DISCLOSURE. To Seller's knowledge, this Agreement, the Seller
Closing Documents and other information delivered in connection herewith or
therewith, taken as a whole, do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated herein or therein or
necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading.

7.      REPRESENTATIONS AND WARRANTIES OF SELLER.

                                      -16-
<PAGE>   17

        Seller hereby represents and warrants to Buyer that, except as set forth
in the Schedules to this Agreement, all of the following statements are true,
accurate and correct.

        7.1     ORGANIZATION, GOOD STANDING AND QUALIFICATION. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
own and use its assets, to carry on its business as now conducted and to enter
into this Agreement and the transactions contemplated hereby. Seller is duly
qualified to transact business and is in good standing in the State of
California and each other jurisdiction in which the failure to so qualify would
have a material adverse effect on the Purchased Assets.

        7.2     AUTHORIZATION. All corporate action on the part of Seller, its
officers and directors necessary for the authorization, execution and delivery
of this Agreement and the Seller Closing Documents, and the performance of all
obligations of Seller hereunder and thereunder, has been taken, and this
Agreement and the Seller Closing Documents constitute valid and legally binding
obligations of Seller, enforceable in accordance with their respective terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies. Seller's Board of Directors has approved the transactions contemplated
by this Agreement and the Seller Closing Documents. No approval of Seller's
stockholders is required to effect the transactions contemplated by this
Agreement or the Seller Closing Documents.

        7.3     GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
Seller is required in connection with the consummation of the transactions
contemplated by this Agreement.

        7.4     LITIGATION. Except as set forth on SCHEDULE 7.4 hereto, there is
no action, suit, proceeding or investigation pending, or to the knowledge of
Seller, currently threatened against Seller. The foregoing includes, without
limitation, actions, suits, proceedings or investigations pending, or to the
knowledge of Seller, threatened against Seller (or any reasonable basis therefor
known to Seller for any such action, suit, proceeding or investigation to be
initiated within the foreseeable future) involving the employment or prior
employment of any of Seller's employees, their use in connection with Seller's
business of any information or techniques allegedly proprietary to any of their
former employers, or their obligations under any agreements with prior
employers. Seller is not a party or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or government agency or
instrumentality that could reasonably be expected to have a material adverse
effect on the Purchased Assets. There is no action, suit, proceeding or
investigation by Seller currently pending or that Seller intends to initiate.

        7.5     COMPLIANCE WITH OTHER INSTRUMENTS. Seller is not in violation or
default of any provision of its Certificate of Incorporation or Bylaws, or of
any instrument, judgment, order, writ or decree to which it is a party or by
which it is bound and, to its knowledge, of any

                                      -17-
<PAGE>   18

provision of any federal or state statute, rule or regulation applicable to
Seller. The execution, delivery and performance of this Agreement and the Seller
Closing Documents and the consummation of the transactions contemplated hereby
and thereby will not (other than in connection with any Permitted Encumbrances)
(i) result in any such violation or default, (ii) 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 material loan, note, indenture, mortgage, deed
of trust, security agreement, lease, contract, license or other agreement to
which Seller is a party or by which Seller or any of the Purchased Assets is
bound, (iii) to the best of Seller's knowledge, violate any laws, statute, rule
or regulation or order, writ, judgment, injunction or decree of any court,
administrative agency or government body, or (iv) result in the creation of any
Encumbrance upon the Purchased Assets or the suspension, revocation, impairment,
forfeiture, or nonrenewal of any Permit.

        7.6     PROPRIETARY INFORMATION. It is Seller's standard practice to
require that every employee and contractor execute a proprietary information and
inventions agreement. Each employee and contractor involved with the development
of the Acquired Software, or Purchased Assets whose failure to execute a
proprietary information and inventions agreement could reasonably be expected to
have a material adverse effect on the Purchased Assets or Buyer's ability to
commercially exploit the Purchased Assets has a executed a proprietary
information and inventions disclosure agreement substantially in the form
attached hereto as SCHEDULE 7.6.

        7.7     RELATED-PARTY TRANSACTIONS. Except to set forth on SCHEDULE 7.7,
no officer or director of Seller, member of his or her immediate family or
affiliate thereof is a party to or has an interest in any contract or agreement
included in the Purchased Assets or Assumed Obligations.

        7.8     PERMITS. Seller has all Permits necessary for the commercial
exploitation of the Acquired Software worldwide, the lack of which could
reasonably be expected to materially and adversely affect the business,
properties, prospects or financial condition of the Purchased Assets, each of
which is described in SCHEDULE 7.8 hereto. The Permits described in Schedule 7.8
include all franchises, permits, licenses and similar authority related to the
Purchased Assets and all Permits necessary to transfer the Purchased Assets to
CCL and Corel as contemplated by this Agreement. Seller is not in default in any
material respect under any of such permits.

        7.9     ENVIRONMENTAL AND SAFETY LAWS. To Seller's knowledge, neither
Seller nor any of the office space currently occupied by Seller (the
"FACILITIES") has violated, or is in violation of, any federal, state or local
law, ordinance or regulation relating to industrial hygiene, occupational health
and safety, disposal of Hazardous Materials (as defined below) or the
environmental conditions on the Facilities, including but not limited to, soil
and ground water conditions that could reasonably be expected to have a material
adverse effect on the Purchased Assets. Seller has not used, generated,
manufactured or stored on or under any part of the Facilities, or transported to
or from any part of the Facilities, any Hazardous Materials in violation of
CERCLA (as defined below) or any other applicable state or federal environmental
law. Seller has no knowledge of any presence, disposals, releases or threatened
releases of any

                                      -18-
<PAGE>   19

Hazardous Materials on, from or under any part of the Facilities. For purposes
of this Section, "HAZARDOUS MATERIALS" means any hazardous or toxic substance,
material or waste that is regulated or defined as a "hazardous substance,"
"pollutant," "contaminant," "toxic chemical," "hazardous material," "toxic
substance" or "hazardous chemical" or similar hazardous substance under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), or any other similar state or federal law, statute,
ordinance, rule or regulation having a scope of purpose similar to that of
CERCLA.

        7.10    PURCHASED ASSETS. Seller has good and marketable title to all of
the Purchased Assets, free and clear of all Encumbrances, except for Permitted
Encumbrances. Subject to restrictions related to the Permitted Encumbrances,
title to all the Purchased Assets is freely transferable from Seller to CCL or
Corel, as applicable, without obtaining the consent or approval of any person or
party. Seller is not restricted by any Seller Agreement (as defined in SECTION
7.18) from licensing, sublicensing or redistributing the Acquired Software
anywhere in the world in any media or by any means. Except for failure to obtain
consent to assignments under the Non-Transferable Third Party Agreements, the
validity and effectiveness of each Seller Agreement will not be affected by the
transfer thereof to Buyer under this Agreement, and all such Seller Agreements
are assignable to Buyer without a consent from any third party, except for the
Non-Transferable Third Party Agreements. There is no element necessary for the
commercial exploitation of the Acquired Software that is not included in the
Purchased Assets or that has not been otherwise licensed to Buyer by Seller.

        7.11    TAX RETURNS, PAYMENTS AND ELECTIONS. At the Closing, there will
be no federal, state, or local tax liens against or any unsatisfied liability
for taxes of any kind imposed on or levied with respect to any of the Purchased
Assets to be transferred hereunder other than liens for any such taxes which
have not become due and payable. Seller has paid or will pay, when due, any
federal, state or local taxes accruing prior to the Closing Date with respect to
the Purchased Assets or Seller's business which, if unpaid, may result in a
liability of Buyer or an Encumbrance against any of the Purchased Assets. As a
result of the consummation of the transactions contemplated by this Agreement,
Buyer shall not become liable for any parachute payments, as defined in Section
280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "CODE"). All
documents to which Seller is a party, which relate to the Purchased Assets and
which are subject to stamp duty in Ireland (other than documents deliverable
pursuant to this Agreement or in connection with the transactions contemplated
by this Agreement), have been duly stamped and the appropriate stamp duty paid.

        7.12    SALES LEVELS; RETURNS AND COMPLAINTS. The written information
Seller has provided to Buyer regarding the Acquired Software sales levels for
the past twenty-four (24) months is true and accurate in all material respects.
Seller has not received any material written complaints (other than such
complaints as have been resolved prior to the date of this Agreement) from
customers concerning the Acquired Software or related services, nor has it had
any returns of Acquired Software since January 1, 2000 in excess of Seller's
reserves established as of December 31, 1999, nor does Seller know of any
reasonable basis for a specific customer complaint or a product return that
could reasonably be expected to have a material adverse effect

                                      -19-
<PAGE>   20

on the Purchased Assets taken as a whole. Seller has not received written
notice, and has no specific reason to believe (other than as the result of
announcement or consummation of the transactions contemplated by this Agreement)
that any customer will terminate its relationship, decrease the volume of
purchases or stop purchasing or licensing the Acquired Software after the
Closing.

        7.13    PRODUCTS IN CHANNEL. SCHEDULE 7.13 sets forth a report compiled
from third party sources and used by Seller in the ordinary course of business
to estimate channel inventories, setting forth the month-end aggregate dollar
volume of Acquired Software in the distribution channel for December 1999,
January 2000, February 2000 and through March 6, 2000.

        7.14    FINANCIAL CONDITION. Seller is now, and after Closing will be,
solvent and able to pay its obligations as they become due. The audited
financial statements of Seller for the year ended December 31, 1998, and the
unaudited financial statements for the fiscal quarters ending March 31, 1999,
June 30, 1999 and September 30, 1999 (the "SELLER FINANCIAL STATEMENTS")
provided to Buyer as SCHEDULE 7.14 are true and accurate and fairly present the
financial condition of Seller as of such dates and the results of operations of
Seller for such period. The financial records relating to the Business have been
provided to Buyer and have been prepared in a manner that is consistent with
Seller's internal business and financial accounting methods, which internal
business and financial accounting methods are in accordance with generally
accepted accounting principles.

        7.15    INTELLECTUAL PROPERTY. SCHEDULES 1.1, 1.2, 1.14 AND 1.37 are
collectively an accurate and complete list of all the Intellectual Property
Assets owned or under development by Seller that are related to the Acquired
Software, Acquired Patents, Trademarks and Domain Names and with respect to
patents, trademarks, domain names, service marks, copyrights, and mask work
registrations, lists the application and registration number, date of
application or date of registration and country of filing for each such right,
if any. Seller has, and at Closing will transfer or cause to be transferred to
Buyer, sufficient title and ownership of all right, title and interest necessary
for or used in the commercial exploitation of the Purchased Assets worldwide
without conflict with or infringement of the rights of others which conflict or
infringement could reasonably be expected to have a material adverse effect on
the Purchased Assets.

                (a) Except as specified on SCHEDULE 7.15, Seller is the sole and
exclusive owner of the Intellectual Property Assets, except for Permitted
Encumbrances, and to the best of its knowledge, is the sole and exclusive owner
of the Acquired Patent Rights. There are no outstanding options, licenses, or
agreements of any kind to which Seller is a party relating to the Intellectual
Property Assets, nor is Seller bound by or a party to any options, licenses or
agreements of any kind with respect to the Intellectual Property of any other
person or entity, other than the Contracts. Seller has not received any written
or, to its knowledge, oral communications alleging that Seller has violated, or
that the transactions contemplated by this Agreement could violate, any of the
intellectual property rights of any other person or entity.

                (b) Seller is not aware that any of its employees is obligated
under any contract (including, without limitation, licenses, covenants or
commitments of any nature) or other

                                      -20-
<PAGE>   21

agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would conflict with the use by Buyer of the
Intellectual Property Assets, or that would interfere with the ability of Buyer
to use, license or sell the Intellectual Property Assets. Each employee of
Seller has executed a confidentiality agreement with Seller agreeing to maintain
the confidentiality of confidential or proprietary information of Seller and the
confidential or proprietary information of third parties received by Seller.
Neither the execution nor delivery of this Agreement or the Seller Closing
Documents will conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any of such employees is now obligated. To Seller's
knowledge, the operation of the Business does not require the use of any
inventions of any of Seller's past or present employees or consultants made
prior to their employment by Seller.

        7.16    INTENTIONALLY LEFT BLANK.

        7.17    INTENTIONALLY LEFT BLANK.

        7.18    AGREEMENTS. SCHEDULE 7.18 hereto lists all material Proprietary
Rights Agreements, Contracts and all other agreements, understandings and
commitments of Seller related to the Purchased Assets, whether written or oral
(other than oral agreements to employ employees of Seller) ("SELLER
AGREEMENTS"). Seller is not in violation, breach or default of any contract or
agreement included in the Assumed Obligations or any other material Seller
Agreements listed in SCHEDULE 7.18. Seller has delivered or made available to
Buyer for review a true and correct copy of each written contract or agreement
included in the Purchased Assets and has provided a written summary of any
material verbal contracts and agreements relating to the Purchased Assets.

        7.19    SOFTWARE. SCHEDULE 1.1 is an accurate and complete listing of
all software programs included in the Acquired Software, including the language
in which they are written and the type of operating systems and hardware
platform(s) on which they run. Seller has sole ownership of the Acquired
Software, free and clear of any Encumbrance, except for Permitted Encumbrances.
No rights or waiver of rights (including moral rights) of any third party are
necessary to market, license, sell, modify, update and/or create Derivative
Works with respect to, and otherwise to conduct the Business with respect to,
the Acquired Software. Except for general business third party software which is
readily and currently commercially available and which is not embedded in or
necessary to run any of the Acquired Software, no other software is required to
operate the Acquired Software.

                (a)     Seller maintains machine-readable master-reproducible
copies, properly documented source code and source code listings, technical
documentation and user manuals for the most current releases or versions of each
software program included in the Acquired Software and for all earlier releases
or versions thereof currently being supported by Seller; in each case, the
machine-readable copy substantially conforms to the corresponding source code
listing; such software program is written in the programming language set forth
on SCHEDULE 1.1, for use on the operating system(s) and hardware set forth in
SCHEDULE 1.1; such software program can be

                                      -21-
<PAGE>   22

maintained and modified by reasonably competent programmers familiar with such
language, hardware and operating systems; and in each case, the software program
operates substantially in accordance with the user manual and product
specifications therefor without material operating defects. The documentation,
manuals flow charts and other materials which Seller is transferring or
licensing hereunder documents in reasonable detail all of the functions of the
Acquired Software and are sufficient and adequate to provide for their use by
end-users. Buyer acknowledges that Seller has given Buyer full opportunity to
carefully review and examine the source code and other technological information
relating to the Acquired Software; and Buyer acknowledges and agrees that it is
comfortable with the documentation contained in such source code.

                (b)     Seller has used reasonably diligent efforts to obtain
and maintain its ownership of the Acquired Software, including, without
limitation, registration of the Acquired Software with the appropriate
governmental authorities. Seller has not disclosed the source code for any of
the Acquired Software or other confidential or proprietary information
constituting, embodied in or pertaining to the Acquired Software to any person
and has used reasonably diligent efforts to prevent such disclosure, other than
disclosure of such source code to employees or independent contractors of
Seller, in each case pursuant to valid and binding agreements with such persons
or entities reasonably designed to protect the confidentiality of, and Seller's
intellectual property rights in, the Acquired Software; which agreements are in
full force and effect. Seller has not distributed, received or made available
Acquired Software except pursuant to the Contracts. No licensees of Seller are
permitted to use or distribute the Acquired Software except pursuant to valid
written license agreement, a form of which has been provided to Buyer.

        7.20    BREACHES AND DEFAULTS. Each Seller Agreement is a valid and
binding agreement of Seller, enforceable by Seller in accordance with its terms
in all material respects, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies, and
Seller does not have any knowledge that any Seller Agreement is not a valid and
binding agreement of the other party or parties thereto. Seller has fulfilled
all material obligations required pursuant to the Seller Agreements to have been
performed by Seller on its part prior to the date hereof. Seller is not in
material violation or breach of, or default under any Seller Agreement. To the
knowledge of Seller, there is no existing breach or default by any other party
to any Seller Agreement which could entitle Seller to terminate the Seller
Agreement, and no event has occurred which with the passage of time or giving of
notice or both could constitute a default by such other party, result in a loss
of rights or result in the creation of any lien, charge or Encumbrance (other
than Permitted Encumbrances) thereunder or pursuant thereto. The validity and
effectiveness of each Seller Agreement will not be affected by the transfer
thereof to Buyer under this Agreement and all such Agreements are assignable to
Buyer without consent, except as indicated on Schedule 2.5. True, correct and
complete copies of all Seller Agreements have previously been delivered or made
available by Seller to Buyer.

        7.21    INFRINGEMENT. None of the Purchased Assets has materially
violated or

                                      -22-
<PAGE>   23

infringed upon, or is materially violating or infringing upon, any software,
copyright, patent, trade secret or other intellectual or proprietary right
(other than patent rights) of any third party. SCHEDULE 7.21 contains a complete
list of all written correspondence, communications, notices, claims and
proceedings by third parties alleging any right, title or interest in or to the
Purchased Assets, or asserting that the Purchased Assets violate or infringe in
any respect the proprietary rights of others. There are no claims pending or, to
the knowledge of Seller, threatened by any third party against Seller (i)
alleging that Seller's ownership, sale, licensing, possession or use of, or
disclosure or transfer to Buyer of, the Purchased Assets infringes upon or
constitutes an unauthorized use of the intellectual property rights of any third
party or (ii) challenging or questioning Seller's ownership of, or the validity
or effectiveness of, Seller's ownership of, the Purchased Assets, nor, to the
knowledge of Seller, is there any basis for, any such claim. Seller has no
disputes with or claims against any third party for infringement by such third
party of any Intellectual Property Assets (except for disputes against third
party software distributors that may be infringing one or more of the Patents
described in SCHEDULE 1.2). Seller has taken reasonable and commercially prudent
steps to protect its right, title and interest in and to or its right to use (as
applicable) such Intellectual Property Assets. To the best knowledge of Seller,
no third party is violating or infringing upon, or has violated or infringed
upon at any time, any of the Intellectual Property Assets (except for disputes
against third party software distributors that may be infringing one or more of
the Patents described in SCHEDULE 1.2). Except as otherwise disclosed in
SCHEDULE 2.1, none of the Intellectual Property Assets is owned by or registered
in the name of any current or former owner, shareholder, partner, director,
executive, officer, employee, salesperson, agent, customer, representative or
contractor of Seller nor does any such person have any interest therein or right
thereto, including but not limited to the right to royalty payments. SCHEDULES
1.1, 1.2, 1.14, 1.36, 7.15, 7.18 list all Intellectual Property Assets, Domain
Names, Seller Agreements and the Acquired Software necessary or important for
Buyer to commercially exploit the Purchased Assets.

        7.22    CUSTOMER CONTRACTS. Seller has not entered into any contractual
obligation to release any additional version or upgrade of the Acquired
Software.

        7.23    ADVANCES AND DEPOSITS. SCHEDULE 7.23 sets forth all advances or
deposits from customers for Acquired Software to be shipped, or services to be
performed related to the Acquired Software, after the Closing Date which have
been received by Seller as of the date hereof.

        7.24    EMPLOYEE MATTERS. Seller will deliver to Buyer at Closing a list
of the names and titles of all persons currently and directly employed in the
Business (the "EMPLOYEES"), together with the amount of their current
compensation and their service date.

        7.25    LABOR AND EMPLOYEE RELATIONS. Seller is not bound by or subject
to (and none of its assets or properties is bound by or subject to) any written
or oral, express or implied, contract, commitment or arrangement with any labor
union, and no labor union has requested or, to Seller's knowledge, has sought to
represent any of the employees, representatives or agents of its business. There
is no strike or other labor dispute involving Seller, pending, or to Seller's
knowledge,

                                      -23-
<PAGE>   24

threatened, that could have a material adverse effect on Seller's assets,
properties, financial condition, operating results, or business, nor is Seller
aware of any labor organization activity involving its employees.

        7.26    BROKERAGE AND FINDER'S FEES. Neither Seller nor any of its
affiliates has employed any broker, finder or agent, or agreed to pay or
incurred any brokerage fee, finder's fee or commission with respect to the
transactions contemplated by this Agreement, or dealt with anyone purporting to
act in the capacity of a broker, finder or agent with respect thereto as a
result of which any claim for a fee can be asserted against Buyer or the
Purchased Assets, except for Alliant Partners, whose fees and expenses shall be
paid by Seller pursuant to an agreement between Seller and Alliant Partners.

        7.27    DISCLOSURE. To Seller's knowledge, this Agreement, the Seller
Closing Documents and other information delivered in connection herewith or
therewith, taken as a whole, do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated herein or therein or
necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading.

        7.28    YEAR 2000 COMPLIANCE. Without limiting any other warranty or
obligation specified in this Agreement, Seller expressly warrants to Buyer that
the Purchased Assets are and at all times will be Year 2000 Compliant. "Year
2000 Compliant" means that the Purchased Assets will not, as a result of
processing data containing dates in the year 2000 and any preceding and
following years, fail to initiate and operate and to correctly store, represent
and process (including sort) all dates (including single and multi-century
formulas and leap year calculations) when the date being used is in the year
2000, or in a year preceding or following the year 2000; nor cause or result in
an abnormal termination or ending of operations.

8.      COVENANTS OF BUYER.

        8.1     SELLER CONFIDENTIAL INFORMATION. For the purposes of this
Agreement, "CONFIDENTIAL INFORMATION" means all copies of financial information,
marketing and sales information, pricing, marketing plans, business plans,
financial and business projections, manufacturing processes and procedures,
formulae, methodologies, inventions, product designs, product specifications,
source code, customer lists, customer data, drawings, and other confidential
and/or proprietary information. Confidential information of Seller disclosed to
Buyer in the course of negotiating or performing the transaction contemplated by
this Agreement ("SELLER CONFIDENTIAL INFORMATION") will be held in confidence
and not used or disclosed by Buyer until the expiration of five (5) years after
the Closing Date and will be promptly destroyed by Buyer or returned to Seller
upon Seller's written request to Buyer; provided, however, that from and after
the Closing, Seller Confidential Information shall not include any information
or assets included in or related to the Purchased Assets. Buyer's employees,
affiliates and shareholders will not be given access to Seller Confidential
Information except on a "need to know" basis. Buyer shall take reasonable
precautions to protect the Seller Confidential Information from disclosure,
including such measures as Buyer take with respect to their own confidential
information. It is

                                      -24-
<PAGE>   25

agreed that Seller Confidential Information will not include information that:
(a) (with respect to information received from Seller) Buyer can demonstrate was
known to Buyer, as the case may be, prior to receipt of such information from
Seller; (b) is disclosed to Buyer by a third party having the legal right to
disclose such information and who owes no obligation of confidence to the
Seller; (c) is now, or later becomes part of the general public or industry
knowledge, other than as a result of a breach of this Agreement by Buyer; or (d)
Buyer can demonstrate was independently developed by Buyer without the use of
any Seller Confidential Information.

        8.2     TRANSFER TAXES. The Buyer shall bear the burden of any stamp
duty tax or any other non-U.S. sales, use or other tax (except for taxes based
on Seller's income) imposed in connection with the consummation of the
transactions contemplated by this Agreement. Buyer and Seller shall each bear
the burden of any other U.S. sales, use and other taxes (except for taxes based
on Seller's income) imposed in connection with the consummation of the
transactions contemplated by this Agreement, in the manner imposed on each of
them by law, as the case may be. The Seller and the Buyer agree to cooperate in
good faith with each other, and to use their commercially reasonable efforts, to
minimize the taxes described in this SECTION 8.2.

        8.3     FURTHER ASSURANCES. From and after the Closing Date, Buyer shall
promptly execute and deliver such further assignments, assumptions, endorsements
and other documents as Seller may reasonably request for the purpose of
effecting the transfer of Seller's title to or right to use the Purchased Assets
to CCL and Corel and/or carrying out the provisions and intent of this Agreement
and the Buyer Closing Documents.

        8.4     COOPERATION IN LITIGATION. In the event of any litigation
against Seller that relates to any Assumed Obligation or the Business, Buyer
agrees to cooperate at Seller's sole cost and expense in Seller's defense of
such litigation as required by law or as otherwise reasonably requested by
Seller, including making Buyer's retained employees reasonably available to the
extent that doing so would not unduly interfere with Buyer's business.

        8.5     UPDATING AND DISTRIBUTION OF PRODUCT. Buyer agrees to produce at
least one full upgrade of the Bryce and KPT products during the eighteen (18)
month period from Closing. Buyer shall also use commercially reasonable efforts
to produce at least one full upgrade of the Painter product during the same time
period. For the purposes of this Section 8.5, a "full upgrade" means a change to
the left of the decimal place in the version number of the product.

        8.6     SURVIVAL OF COVENANTS. The covenant set forth in Section 8.1
shall survive the termination of this Agreement for any reason. Each of the
covenants set forth in Sections 8.2 to 8.6, inclusive, or otherwise made by
Buyer in this Agreement shall survive the Closing.

9.      COVENANTS OF SELLER.

Seller covenants and agrees with Buyer as follows:

        9.1     CARRY ON BUSINESS IN ORDINARY COURSE. From the Effective Date to
the Closing

                                      -25-
<PAGE>   26

Date, Seller will carry on its business related to the Purchased Assets in the
ordinary course consistent with Seller's past practices. Seller agrees to use
reasonable efforts to protect and preserve the Purchased Assets and to preserve
the goodwill of its customers, suppliers and others having business relations
with its Business. Without limiting the generality of the foregoing, without
Buyer's prior written consent, Seller shall not:

                (a)     engage in any transaction that is inconsistent with any
representation or warranty of Seller set forth herein, or the transactions
contemplated hereby, or could reasonably be expected to cause a material breach
of any representation or warranty that would have a material adverse effect on
the Purchased Assets taken as a whole;

                (b)     sell, transfer, convey, assign, lease, license or
otherwise dispose of any of the Purchased Assets, or cancel, rescind, waive,
release, fail to renew or forgive any material contracts or claims of Seller
except, in each case, in the ordinary course of its Business consistent with
Seller's past practices, prior to December, 1999;

                (c)     mortgage, pledge, subject to a lien, or grant a security
interest in, or otherwise encumber, any of the Purchased Assets; or

                (d)     ship units of Acquired Software into its distribution
channel at a rate in excess of US$ 300,000 per month without Buyer's consent,
which will not be unreasonably withheld so long as such shipments will not
significantly increase the inventory of Acquired Software in the channel at
Closing.

        9.2     ACCESS TO INFORMATION. From the Effective Date to the Closing
Date, Seller will afford to the representatives of Buyer, including, without
limitation, its counsel and auditors, access, at the Seller's offices in Scotts
Valley, CA, to any and all of the Purchased Assets and information with respect
thereto (except for attorney-client privileged information) to the end that
Buyer may have a reasonable opportunity to make such a full investigation of the
Purchased Assets and of the Acquired Software in advance of the Closing Date as
Buyer shall reasonably desire, and the officers of Seller will confer with
representatives of Buyer and will furnish to Buyer, either orally or by means of
such records, documents and memoranda as are available or reasonably capable of
preparation, such information as Buyer may reasonably request, and Seller will
furnish to Buyer's auditors all consents and authority that they may reasonably
request in connection with any examination of Buyer.

        9.3     CONSENT OF THIRD PARTIES. Prior to and after the Closing Date,
Seller shall take the actions set forth in SECTION 2.5 to obtain the consent in
writing of all persons necessary to permit Seller to assign and transfer all of
the Purchased Assets (including but not limited to the Third Party Agreements)
to Buyer, free and clear of all Encumbrances (other than the Assumed
Obligations) and to perform its obligations under, and to conclude the
transactions contemplated by, this Agreement.

        9.4     ERIC WENGER. Prior to the Closing Date, Seller shall take all
commercially

                                      -26-
<PAGE>   27

reasonable action to obtain the waiver in writing of Eric Wegner of his right to
terminate the software license agreement between him and Seller (as successor in
interest), dated July 1, 1994.

        9.5     FURTHER ASSURANCES. From and after the Closing Date, Seller
shall promptly execute and deliver to Buyer any and all such further
assignments, endorsements and other documents as Buyer may reasonably request
for the purpose of effecting the transfer of Seller's title to or, as
applicable, right to use, the Purchased Assets to CCL and Corel and/or carrying
out the provisions and intent of this Agreement and the Seller Closing
Documents.

        9.6     CONFIDENTIAL INFORMATION.

         (a) Buyer Confidential Information. Confidential information of Buyer
disclosed to Seller in the course of negotiating or performing the transaction
contemplated by this Agreement ("BUYER CONFIDENTIAL INFORMATION") will be held
in confidence and not used or disclosed by Seller until the expiration of five
(5) years after the Closing Date and will be promptly destroyed by Seller or
returned to Buyer upon Buyer's written request to Seller. Seller's employees,
affiliates and shareholders will not be given access to Buyer Confidential
Information except on a "need to know" basis. Seller shall take reasonable
precautions to protect the Buyer Confidential Information from disclosure,
including, without limitation, such measures as Seller take with respect to
their own confidential information. It is agreed that Buyer Confidential
Information will not include information that: (a) (with respect to information
received from Buyer) Seller can demonstrate was known to Seller, as the case may
be, prior to receipt of such information from Buyer; (b) is disclosed to Seller
by a third party having the legal right to disclose such information and who
owes no obligation of confidence to the Buyer; (c) is now, or later becomes part
of the general public or industry knowledge, other than as a result of a breach
of this Agreement by Seller; or (d) Seller can demonstrate was independently
developed by Seller without the use of any Buyer Confidential Information.

         (b) Confidential Information Related to Purchased Assets. From and
after the Closing, Seller will not retain, use or disclose any Confidential
Information included in or relating to the Purchased Assets, and Seller shall
take reasonable actions and precautions to ensure that such Confidential
Information is not retained, used or disclosed by Seller's employees, affiliates
or shareholders.

        9.7     COOPERATION IN LITIGATION. In the event of any litigation
against Buyer that relates to any Assumed Obligation or the Business conducted
before the Closing Date, Seller agrees to cooperate at Buyer's sole cost and
expense in Buyer's defense of such litigation as required by law or as otherwise
reasonably requested by Buyer, including making Seller's retained employees
reasonably available to the extent that doing so would not unduly interfere with
Seller's business.

        9.8     MAIL AND COMMUNICATIONS. Seller will promptly deliver to Buyer
the original of any mail or other communication received by Seller pertaining to
the Purchased Assets, including, without limitation, orders from customers for
items of Acquired Software.

                                      -27-
<PAGE>   28

        9.9     INTENTIONALLY LEFT BLANK.

        9.10    TRANSFER TAXES. Seller shall pay and promptly discharge, and
Buyer harmless from any loss or expense associated with, any Irish stamp tax
imposed on any licenses or sublicenses between Seller and CCL.

        9.11    NON-SOLICITATION. (a) From and after the Effective Date for a
period of five (5) business days, or the termination of this Agreement in
accordance with its terms, Seller shall not, and shall use its best efforts to
see that its directors do not, and shall not permit its officers, employees,
representatives, investment bankers, agents and affiliates to, directly or
indirectly, (i) solicit, initiate or engage in discussions or negotiations with
any Person, encourage submission of any inquiries, proposals or offers by, or
take any other action intended or designed to facilitate the efforts of any
Person, other than Buyer, relating to the possible acquisition of the Acquired
Software or the Purchased Assets (or any material portion thereof) (with any
such efforts by any such person referred to as an "ACQUISITION PROPOSAL"),(ii)
provide any non-public information with respect to Seller, or afford any access
to the properties, books or records of Seller, to any Person other than Buyer,
relating to a possible Acquisition Proposal by any Person other than Buyer,
(iii) make or authorize any statement, recommendation or solicitation in support
of any possible Acquisition Proposal by any person, other than by Buyer, or (iv)
enter into an agreement with any Person, other than Buyer, providing for a
possible Acquisition Proposal. Notwithstanding the foregoing, if contacted by a
Person who expresses interest in purchasing all, or a portion of, the Acquired
Software or Purchased Assets, Seller may, during the five (5) business day
period set out above, inform such Person that Seller has entered into a
conditional asset purchase agreement with respect to the Acquired Software and
Purchased Assets and that Seller may be interested to engaging in further
discussions with such person once the five (5) business day period has expired.

        (b) Seller shall be responsible for any breach of this Section by any of
its subsidiaries or affiliated entities and its and their directors, officers,
employees, representatives, investment bankers, agents and affiliates.

        9.12    NON-COMPETITION. From the Closing Date until December 31, 2003,
Seller shall not release, market, sell or distribute any product that competes,
in any significant way, with any of the Purchased Assets; provided, however,
that as to any company into which Seller merges or which otherwise succeeds to
Seller's obligation pursuant to this section ("Acquiring Company"), this shall
only restrict the Acquiring Company from using any of Seller's assets or
technology from competing, in any significant way, with any of the Purchased
Assets.

        9.13    SURVIVAL OF COVENANTS. Each of the covenants set forth in
Sections 9.3 through 9.10, inclusive, or otherwise made by Seller in this
Agreement shall survive the Closing. The covenants set forth in Section 9.6
above shall, in addition, survive the termination of this Agreement for any
reason.

                                      -28-
<PAGE>   29

10.     COVENANTS AND AGREEMENTS RELATED TO EMPLOYEES.

        10.1    OFFERS OF EMPLOYMENT. At any time after the Closing, Buyer shall
be entitled to make written offers of employment to Employees currently involved
in the commercial exploitation of the Purchased Assets. Those Employees who
accept such offers and report to work for Buyer shall hereinafter collectively
be referred to as the "TRANSFERRED Employees." Seller hereby consents to the
hiring of such Transferred Employees by Buyer and waives, with respect to the
employment by Buyer of such Transferred Employees, any claims or rights Seller
may have against Buyer or any such Transferred Employee under any
non-competition agreement that relates to the Purchased Assets, any
confidentiality agreement that relates to the Purchased Assets or any employment
agreement in effect at the Closing Date.

        10.2    EMPLOYMENT TAXES. Seller shall be responsible for any
withholding or employment taxes with respect to all Seller's Employees
attributable to periods of service ending on or before such Employee's
termination of employment with Seller ("TERMINATION Date") and shall be
responsible for filing all federal, state and local employment tax returns with
respect to such Employees attributable to periods of service ending on or before
such Employees' Termination Date.

        10.3    WARN COMPLIANCE. In the event that Seller effects a reduction or
cessation of the operations or workforce that exists to service or support
Purchased Assets prior to or subsequent to the Closing, Seller shall perform and
undertake all acts as may be necessary to comply with the applicable provisions
of Federal Worker Adjustment and Retraining Act ("WARN") and other laws.

        10.4    CONTRACT OBLIGATIONS. Seller shall be responsible for any
liability for any employment contract or employment contractual obligations
(including, without limitation, responsibility for any bonuses accrued or
payable with respect to any period ending on or before a Transferred Employee's
Termination Date) to Transferred Employees entered into prior to such
Transferred Employee's Termination Date that accrue or become payable on or
before such Transferred Employee's Termination Date. Seller shall be responsible
for any liability with respect to any claims of discrimination under state or
federal law that accrue or arise on or before such Transferred Employee's
Termination Date. For purposes of this ARTICLE 10, "HIRE DATE" shall mean the
date upon which a Transferred Employee reports to Buyer for work as an employee
of Buyer. Buyer shall be responsible for any liability for any employment
contract or employment contractual obligations to Transferred Employees entered
into on or after such Transferred Employee's Hire Date.

        10.5    SEVERANCE PAYMENTS. Seller is responsible for the severance
liability, if any, with respect to any Employees who do not become Transferred
Employees. Seller is also responsible for the severance liability, if any,
arising by virtue of Transferred Employees leaving the employment of Seller to
become employees of Buyer.

        10.6    NO SOLICITATION OF FORMER EMPLOYEES. Except as provided by law
and except for general solicitation, for a period of one year after the Closing
Date, Seller shall not solicit any

                                      -29-
<PAGE>   30

Transferred Employee to terminate his employment with Buyer or to become an
employee of Seller, without the prior written consent of Buyer.

        10.7    NO RIGHTS CONFERRED UPON EMPLOYEES. Nothing in this ARTICLE 10
shall confer any rights or remedies on any Employee and no Employee shall be a
third party beneficiary with respect to any covenant in this Agreement.

11.     CONDITIONS OF CLOSING.

        11.1    CONDITIONS OF BUYER OBLIGATIONS. The obligations of Buyer
hereunder shall be subject to the satisfaction and fulfillment of each of the
following conditions, except that Buyer may expressly waive any or all of the
conditions in writing:

                (a)     No Seller Fundamental Impairment. Between the date
hereof and the Closing Date, there shall not have occurred any "Seller
Fundamental Impairment". For purposes of this subsection, "Seller Fundamental
Impairment" shall mean a fundamental impairment to the Assets hereunder
resulting from any breach of any representation or warranty of Seller between
the date hereof and the Closing Date of such severity that it is likely to
fundamentally impair the Assets and result in a Damages of US$ 1 million or
more. Impairments to the value of the Assets resulting from (A) general changes
in economic conditions, (B) conduct of Buyer, or (C) announcement of the
transactions contemplated by this Agreement or statements or announcements made
by Seller or Buyer pursuant to this Agreement, shall not be deemed to constitute
a Seller Fundamental Impairment.

                (b)     Compliance. As of the Closing Date, Seller shall have
complied in all material respects with, and shall have fully performed, in all
material respects, all conditions, covenants and obligations of this Agreement
imposed on Seller and required to be performed or complied with by Seller at, or
prior to, the Closing Date except where such failure will not have a Material
Adverse Effect on the Assets taken as a whole.

                (c)     Closing Deliveries. Seller shall have delivered, and
Buyer shall have received, the deliveries described in SECTION 12.1.

                (d)     Consents. Seller shall have received all consents from
third parties required under the Required Consents listed on SCHEDULE 2.5 or
shall have made alternative arrangements acceptable to Buyer, which shall not
unreasonably withhold its acceptance.

                (e)     No Litigation. There shall not be an injunction,
judgment, order, decree, ruling or charge in effect preventing or delaying
consummation of any of the transactions contemplated by this Agreement or the
other Transaction Documents.

                (f)     Eric Wegner. Seller shall have obtained a written waiver
from Eric Wegner ("Wegner") waiving Wegner's right to terminate the license
agreement between Wegner and Seller (as a successor in interest) dated July 1,
1994, or shall have made alternative arrangements acceptable to Buyer, which
shall not unreasonably withhold it acceptance.

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<PAGE>   31

                (g)     Consultant Agreements. Buyer shall have received the
consultant agreements substantially in the form of EXHIBITS C-1, C-2 AND C-3
hereto executed by each of Mark Zimmer, Tom Hedges and John Derry

        11.2    CONDITIONS TO SELLER'S OBLIGATIONS. The obligations of Seller
hereunder shall be subject to the satisfaction and fulfillment of each of the
following conditions, except that Seller may expressly waive any or all of the
conditions in writing:

                (a)     Compliance. As of the Closing Date, Buyer shall have
complied in all material respects with, and shall have fully performed, the
terms, conditions, covenants and obligations of this Agreement imposed on Buyer
to be performed or complied with by Buyer at, or prior to, the Closing Date.

                (b)     Closing Deliveries. Buyer shall have delivered, and
Seller shall have received, the deliveries described in SECTION 12.3 hereof.

                (c)     No Litigation. There shall not be an injunction,
judgment, order, decree, ruling, or charge in effect preventing or delaying
consummation of any of the transactions contemplated by this Agreement or the
other related documents.

                (d)     Acceptance by Buyer. Buyer has accepted fulfillment of
the Conditions of Closing of Seller as set out in SECTION 11.1 herein on or
before April 10, 2000.

12.     CLOSING DELIVERIES.

        12.1    DELIVERY OF SELLER'S CLOSING DOCUMENTS. At the Closing, Seller
shall execute and deliver to Buyer the following documents (the "SELLER CLOSING
DOCUMENTS") signed by an authorized officer of Seller on behalf of Seller:

                (a)     Assignment Agreements. Corel Assignment Agreements in
the form of EXHIBIT A-1 and CCL Assignment Agreements in the form of EXHIBITS
A-2 AND A-3 attached hereto;

                (b)     License Agreements. The Corel License in the form of
EXHIBIT D-1 and the CCL License in the form of EXHIBIT D-2, D-3.

                (c)     Instruments of Conveyance. Such specific assignments and
other instruments of conveyance as Buyer or Buyer's counsel may reasonably
request prior to the execution of this Agreement.

                (d)     Board Resolutions. A certified copy of the resolutions
of the board of directors of Seller authorizing the execution and delivery by
Seller of this Agreement, and all related agreements, and the consummation of
the transactions contemplated hereby and thereby.

                                      -31-
<PAGE>   32

                (e)     Officer's Certificate. A certificate executed by an
authorized officer of Seller certifying that the representations and warranties
contained in Article 7 are true and correct in all material respects as of the
Closing Date and that Seller has fully performed in all material respects all of
its pre-closing commitments hereunder.

        12.2    ADDITIONAL CLOSING DELIVERIES. At the Closing, in addition to
the Seller Closing Documents, Seller shall deliver or cause to be delivered to
Corel or CCL, as appropriate, the following:

                (a)     Purchased Assets. The Purchased Assets;

                (b)     Good Standing Certificates. Good standing certificates
                        for Seller from the Secretary of State and taxing
                        authorities of the State of California.

                (c)     Employees. List of Seller's Employees as set out in
                        SECTION 7.24.

        12.3    DELIVERY OF BUYER CLOSING DOCUMENTS. At the Closing, Corel or
CCL, as appropriate, shall cause to be delivered to Seller the following
documents (the "BUYER CLOSING DOCUMENTS") signed by an authorized officer of the
applicable entity:

                (a)     Assumption Agreements. The Corel and CCL Assumption
Agreements in substantially the form attached hereto as EXHIBITS B-1, B-2 AND
B-3 (the "ASSUMPTION AGREEMENT");

                (b)     License Agreements. The Corel License in the form of
EXHIBIT D-1 and the CCL Licenses in the form of EXHIBIT D-2, D-3;

                (c)     Board Resolutions. A certified copy of the resolutions
of the board of directors of each of Corel and CCL authorizing the execution and
delivery by such entity of this Agreement, and all related agreements, and the
consummation of the transactions contemplated hereby and thereby;

                (d)     Officer's Certificate. A certificate executed by an
authorized officer of each of Corel and CCL certifying that the representations
and warranties contained in Article 6 are true and correct in all material
respects as of the Closing Date and that Buyer has fully performed in all
material respects all of its pre-closing commitments hereunder; and

        12.4    ADDITIONAL BUYER CLOSING DELIVERIES. At the Closing, in addition
to the Buyer Closing Documents, Corel or CCL, as appropriate, shall cause to be
delivered to Seller the following:

                (a)     Cash. The Initial Cash Payment.

13      SURVIVAL OF WARRANTIES, WARRANTY CLAIMS AND INDEMNIFICATION.

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<PAGE>   33

        13.1    SURVIVAL OF WARRANTIES. Subject to SECTION 14.3, all
representations and warranties made by Seller, or Buyer, herein, or in any
certificate, schedule or exhibit delivered pursuant hereto, shall survive the
Closing for a period of twenty-four (24) months after the Closing Date; provided
that all representations and covenants relating to taxes or tax liens in
SECTIONS 7.11 shall survive until the expiration of the applicable statute of
limitations (including extensions).

        13.2    LIMITATION ON WARRANTY CLAIM(S) BY SELLER.

                (a) The Seller shall not be entitled to make a Warranty Claim if
the Seller has been advised in writing or otherwise has actual knowledge prior
to Closing of the inaccuracy, nonperformance, nonfulfilment or breach which is
the basis for such Warranty Claim and the Seller completes the transactions
hereunder notwithstanding such inaccuracy, nonperformance, nonfulfilment or
breach.

                (b) The amount of any Losses which may be claimed by the Seller
pursuant to a Warranty Claim shall be calculated to be the cost or loss to the
Seller after giving effect to:

                        (i)     any insurance proceeds available to the Seller
                                in relation to the matter which is the subject
                                of the Warranty Claim, and

                        (ii)    the value of any related, determinable tax
                                benefits realized, or to be realized within a
                                two (2) year period following the date of
                                incurring such cost or loss, by the Seller in
                                relation to the matter which is the subject of
                                the Warranty Claim.

                (c) Seller shall not be entitled to make any Warranty Claim
until such time as the total amount of all Losses (including, without
limitation, the Losses directly arising from such inaccuracy or breach and all
other Losses arising from any other inaccuracies in or breaches of any
representations, warranties, covenants or obligations) that have been directly
suffered or incurred by the Seller exceeds One Hundred Thousand Dollars
($100,000). Notwithstanding the foregoing, in the event the total amount of all
such Losses exceed One Hundred Thousand Dollars ($100.000), Buyer's liability
shall not include the initial One Hundred Thousand Dollar ($100,000) amount.
Except in the event of a breach by Buyer of the confidentially provisions set
out in Section 8.1 (to which the limitation in this Section 13.2 shall not
apply), the maximum aggregate liability of the Buyer in respect of all Warranty
Claims by the Seller will be limited to $2,000,000.

        13.3    LIMITATION ON WARRANTY CLAIM(S) BY BUYER

                (a)     The Buyer shall not be entitled to make a Warranty Claim
if the Buyer has been advised in writing or otherwise has actual knowledge prior
to Closing of the inaccuracy, nonperformance, nonfulfilment or breach which is
the basis for such Warranty Claim and the Buyer completes the transactions
hereunder notwithstanding such inaccuracy, nonperformance,

                                      -33-
<PAGE>   34

nonfulfilment or breach.

                (b)     The amount of any Losses which may be claimed by the
Buyer pursuant to a Warranty Claim shall be calculated to be the cost or loss to
the Buyer after giving effect to:

                        (i)     any insurance proceeds available to the Buyer in
                                relation to the matter which is the subject of
                                the Warranty Claim, and

                        (ii)    the value of any related, determinable tax
                                benefits realized, or to be realized within a
                                two (2) year period following the date of
                                incurring such cost or loss, by the Buyer in
                                relation to the matter which is the subject of
                                the Warranty Claim.

                (c)     Buyer shall not be entitled to make any Warranty Claim
until such time as the total amount of all Losses (including, without
limitation, the Losses directly arising from such inaccuracy or breach and all
other Losses arising from any other inaccuracies in or breaches of any
representations, warranties, covenants or obligations) that have been directly
suffered or incurred by the Buyer exceeds One Hundred Thousand Dollars
($100,000). Notwithstanding the foregoing, in the event the total amount of all
such Losses exceed One Hundred Thousand Dollars ($100,000), Seller's liability
shall not include the initial One Hundred Thousand Dollar ($100,000) amount.
Except in the event of a breach by Seller of the confidentially provisions set
out in SECTION 9.6 (to which the limitation in this SECTION 13.3 shall not
apply), the maximum aggregate liability of the Seller in respect of all Warranty
Claims by the Buyer will be limited to $2,000,000.

        13.4    INDEMNIFICATION BY SELLER.

                (a) Subject to the provisions and limitations set forth in this
Article 13, Seller shall hold harmless, defend, indemnify and pay for the
defense of each of the Buyer Indemnitees from and against, and shall compensate
and reimburse each of the Buyer Indemnitees for, any Losses which are suffered
or incurred by any of the Buyer Indemnitees, or to which any of the Buyer
Indemnitees may otherwise become subject (regardless of whether or not such
Losses relate to any third-party claim) and which arise from or as a result of,
or are connected with:

                        (i) any breach of any covenant of Seller contained in
Articles 2, 9, 10, 12, 13, or 16 or in the Seller Closing Documents;

                        (ii) any inaccuracy or untruth of any representation or
warranty of Seller made herein or in the Seller Closing Documents;

                        (iii) the Non-Assumed Liabilities;

                        (iv) the operations and business of Seller after the
Closing (other than such operations that are for the benefit or account of
Buyer, are contemplated by this Agreement, or are requested by Buyer)

                                      -34-
<PAGE>   35

                        (v) any demand, claim, debt, suit, cause of action or
proceeding made or asserted by a shareholder, creditor, receiver, or trustee in
bankruptcy of Seller asserting that the transfer of the Purchased Assets to
Buyer hereunder constitutes an improper bulk sale or bulk transfer or that
Seller or Buyer did not comply with applicable bulk sale or bulk transfer laws;

                        (vi) any matter arising out of or relating to any matter
disclosed or required to be disclosed on SCHEDULE 7.4 or SCHEDULE 7.18, except
for any such Losses that arise out of or result from any claim, action or
proceeding by a third party (other than Seller or its affiliates) against Buyer
arising out of or resulting from Buyer's conduct after the Closing (and not
conduct before the Closing by any Seller Indemnitee) relating to such matters;

                        (vii) any violation by Seller of, or failure by Seller
to comply with, any law, ruling, order, decree, regulation or zoning,
environmental or permit requirement applicable to Seller or the Purchased
Assets, whether or not any such violation or failure to comply has been
disclosed to Buyer;

                        (viii) any product liability claim relating to the
Acquired Software products manufactured or sold by or on behalf of Seller prior
to the Closing Date;

                        (ix) any tax liabilities or obligations of Seller which
are not otherwise covered by sections 8.2 and 9.10;

                        (x) any claims against, or liabilities or obligations
of, Seller with respect to (i) any employee benefit plan (as defined in ERISA)
offered by Seller or (ii) violations of law relating to any Employee's services
with the Seller.

                (b)     The obligations of indemnification by the Seller
pursuant to Section 13.4(a) are:

                        (i) subject to the limitations referred to in Section
13.1 with respect to the survival of the representations and warranties by the
Seller;

                        (ii) subject to the limitations referred to in Section
13.3 ; and

                        (iii) subject to the provisions of Sections 13.6, 13.7,
13.8 and 13.9.

        13.5    INDEMNIFICATION BY BUYER.

                (a) Subject to the provisions and limitations set forth in this
Article 13, Corel and CCL shall jointly and severally hold harmless, defend,
indemnify and pay for the defense of each of the Seller Indemnitees from and
against, and shall compensate and reimburse each of the Seller Indemnitees for,
any Losses which are suffered or incurred by any of the Seller Indemnitees or to
which any of the Seller Indemnitees may otherwise become subject (regardless of
whether or not

                                      -35-
<PAGE>   36

such Losses relate to any third-party claim) and which arise from or as a result
of, or are connected with:

                        (i) any breach by Buyer of any covenant made herein or
in any Buyer Closing Documents;

                        (ii) any inaccuracy or untruth of any representation or
warranty of Buyer made herein or in the Buyer Closing Documents;

                        (iii) the failure of Buyer to timely pay or perform any
of the Assumed Obligations; or

                        (iv) Buyer's distribution or other use, after the
Closing, of the Acquired Software, except to the extent the Loss arises out of a
breach of a representation and warranty of Seller; PROVIDED HOWEVER, that
nothing in this SECTION 13 shall impose on Buyer any duty to indemnify Seller
for any of the Non-Assumed Liabilities.

                (b)     The obligations of indemnification by the Buyer pursuant
to Section 13.5(a) are:

                        (i) subject to the limitations referred to in Section
13.1 with respect to the survival of the representations and warranties by the
Buyer;

                        (ii) subject to the limitations referred to in Section
13.2; and(iii) subject to the provisions of Sections 13.6, 13.7, 13.8 and 13.9.

        13.6    NOTICE OF CLAIM. If an Indemnified Party becomes aware of a
claim or Legal Proceeding in respect of which indemnification is provided for
pursuant to either of Section 13.4 or 13.5, as the case may be, the Indemnified
Party shall promptly give written notice of the claim or Legal Proceeding to the
Indemnifying Party. Such notice shall specify whether the claim or Legal
Proceeding arises as a result of a claim by a Person against the Indemnified
Party (a "THIRD PARTY CLAIM") or whether the claim does not so arise (a "DIRECT
CLAIM"), and shall also specify with reasonable particularity (to the extent
that the information is available):

        (a)     the factual basis for the claim; and

        (b)     the amount of the claim, if known, the basis thereof and
                documentation supporting the same.

If, through the fault of the Indemnified Party, the Indemnifying Party does not
receive notice of any claim or Legal Proceeding in time effectively to contest
the determination of any liability susceptible of being contested, then the
liability of the Indemnifying Party to the Indemnified Party under this Article
shall be reduced by the amount of any Losses incurred by the Indemnifying Party
resulting from the Indemnified Party's failure to give such notice on a timely
basis.

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<PAGE>   37

        13.7    DIRECT CLAIMS. In the case of a Direct Claim, the Indemnifying
Party shall have 30 days from receipt of notice of the claim within which to
make such investigation of the claim as the Indemnifying Party considers
necessary or desirable. For the purpose of such investigation, the Indemnified
Party shall make available to the Indemnifying Party the information relied upon
by the Indemnified Party to substantiate the claim, together with all such other
information as the Indemnifying Party may reasonably request, provided, however,
that the Indemnifying Party agrees at all times to maintain the confidentiality
of such information. If both parties agree at or before the expiration of such
60 day period (or any mutually agreed upon extension thereof) to the validity
and amount of such claim, the Indemnifying Party shall immediately pay to the
Indemnified Party the full agreed upon amount of the claim, failing which the
matter shall be referred to binding arbitration in accordance with Article 15.

        13.8    THIRD PARTY CLAIMS. In the case of a Third Party Claim, the
Indemnifying Party shall have the right, at its expense, to participate in or
assume control of the negotiation, settlement or defense of the claim or Legal
Proceeding and, in such event, the Indemnifying Party shall reimburse the
Indemnified Party for all of the Indemnified Party's out-of-pocket expenses as a
result of such participation or assumption. If the Indemnifying Party elects to
assume such control, the Indemnified Party shall have the right to participate
in the negotiation, settlement or defense of such Third Party Claim and to
retain counsel to act on its behalf, provided that the fees and disbursements of
such counsel shall be paid by the Indemnified Party unless the Indemnifying
Party consents to the retention of such counsel at its expense. If the
Indemnifying Party, having elected to assume such control, thereafter fails to
defend the Third Party Claim within a reasonable time, the Indemnified Party
shall be entitled to assume such control and the Indemnifying Party shall be
bound by the results obtained by the Indemnified Party with respect to such
Third Party Claim and shall solely bear all reasonable expenses associated with
the defense of such Third Party Claim. If either Party makes a payment,
resulting in settlement of the Third Party Claim, which precludes a final
determination of the merits of the Third Party Claim and the Indemnified Party
and the Indemnifying Party are unable to agree whether such payment was
unreasonable in the circumstances having regard to the amount and merits of the
Third Party Claim, then such dispute shall be referred to and finally settled by
binding arbitration in accordance with Article 15.

        13.9    SETTLEMENT OF THIRD PARTY CLAIMS. If the Indemnifying Party
fails to assume control of the defense of any Third Party Claim, the Indemnified
Party shall have the exclusive right to contest, settle or pay the amount
claimed and the Indemnifying Party shall be bound by the results obtained by the
Indemnified Party with respect to such Third Party Claim and shall solely bear
all reasonable expenses associated with the defense of such Third Party Claim.
Whether or not the Indemnifying Party assumes control of the negotiation,
settlement or defense of any Third Party Claim, neither party shall settle any
Third Party Claim without the written consent of the other party, which consent
shall not be unreasonably withheld or delayed; provided, however, that the
liability of such party shall be limited to the proposed settlement amount if
any such consent is not obtained for any reason within a reasonable time after
the request therefor.

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<PAGE>   38

        13.10   PERIOD FOR MAKING CLAIMS. A claim for indemnification under this
ARTICLE 13:

                (a) must be brought, if at all, at any time within twenty-four
(24) months after the Closing Date, with respect to any claim or claims for
indemnification under Section 13.4(a)(ii) or 13.5(a)(ii) except that a claim for
indemnification may be brought at any time up to thirty (30) days after the
expiration of the applicable statute of limitations period (including
extensions) with respect to any claim for indemnification relating to or based
upon the provisions of Section 7.11 (Taxes);

                (b) may be brought at any time within any applicable statute of
limitations with respect to any claims or claims for indemnifications under the
provisions of this Article 13 other than Sections 13.4(a)(ii) or 13.5(a)(ii);
and

                (c) may be brought at any time within five (5) years after the
Closing for breach of Seller's covenants regarding Confidential Information
under Section 9.6 and for breach of Buyer's covenants regarding Confidential
Information under Section 8.1.

        13.11   EXCLUSION. The limitations set forth in SECTIONS 13.2(c),
13.3(c) AND 13.10 shall not apply to any claim for indemnification based on this
ARTICLE 13 which arises out of or results from the fraud of Buyer or Seller.

14.     TERMINATION.

        14.1    MUTUAL AGREEMENT. This Agreement may be terminated prior to
Closing at any time on or prior to the Closing Date, by mutual written consent
of the Buyer and Seller. If this Agreement so terminates, it shall become null
and void and have no further force or effect, except as provided in Section
14.3.

        14.2    TERMINATION BY REASON OF BREACH. This Agreement may be
terminated by any party if any time prior to Closing there shall occur a
material breach of any of the representations, warranties or covenants of the
other party or the failure by the other party to perform any condition or
obligation hereunder of such severity as would excuse the non-breaching party's
obligation to close under Article 12 (conditions to closing), and such breach or
failure is not remedied within fifteen (15) days after delivery of written
notice thereof to the breaching party.

        14.3    SURVIVAL. If this Agreement is terminated and the transactions
contemplated hereby are not consummated, this Agreement shall become void and of
not further force and effect; except for the provisions of Article 1, this
Section 14.3 and the confidentiality provisions set out in Sections 8.1 and 9.6;
and provided, further, that none of the parties hereto shall have any liability
for speculative, indirect, unforeseeable or consequential damages resulting from
any legal action relating to this Agreement or any termination of this
Agreement.

15.     ARBITRATION.

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<PAGE>   39

        15.1    ARBITRATION. Except for Buyer's or Seller's right to seek
injunctive relief in order to prevent unauthorized use or disclosure of Buyer or
Seller Confidential Information, any dispute hereunder ("Dispute") shall be
settled by means of the procedures set forth in this ARTICLE 15. Each party
shall give notice to the other party of any Dispute. Promptly upon delivery of
such notice, a designated senior officer for each of Buyer and Seller (which
representative may be changed by a party by means of a notice delivered to the
other party) shall meet and attempt in good faith to resolve the Dispute on a
mutually satisfactory basis. If such the parties are unable to resolve the
Dispute within 60 days after delivery of the notice of a Dispute, then the
Dispute shall be settled by arbitration in Palo Alto, California, and, except as
herein specifically stated, in accordance with the Commercial Dispute Resolution
Procedures of the American Arbitration Association ("AAA Rules") then in effect.
However, in all events, these arbitration provisions shall govern over any
conflicting rules which may now or hereafter be contained in the AAA Rules. Any
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction over the subject matter thereof. The arbitrator shall have
the authority to grant any equitable and legal remedies that could be available
in any judicial proceeding instituted to resolve a Dispute. The parties shall
use their best efforts to select an arbitrator within 30 days and to resolve the
Dispute within 60 days.

        15.2    COMPENSATION OF ARBITRATOR. Any such arbitration will be
conducted before a single arbitrator who will be compensated for his or her
services at a rate to be determined by the parties or by the American
Arbitration Association, but based upon reasonable hourly or daily consulting
rates for the arbitrator in the event the parties are not able to agree upon his
or her rate of compensation.

        15.3    SELECTION OF ARBITRATOR. In the absence of agreement by the
parties, the American Arbitration Association will have the authority to select
an arbitrator from a list of arbitrators who are lawyers familiar with contract
law and with the software industry; provided, however, that such lawyers cannot
work for a firm then performing services for either party.

                (a) Payment of Costs. Seller and Buyer will each pay 50% of the
initial compensation to be paid to the arbitrator in any such arbitration and
50% of the costs of transcripts and other normal and regular expenses of the
arbitration proceedings; provided, however, that the prevailing party in any
arbitration will be entitled to an award of reasonable attorneys' fees and
costs, and all costs of arbitration, including those provided for above, will be
paid by the losing party, and the arbitrator will be authorized to make such
determinations.

                (b) Burden of Proof. For any Dispute submitted to arbitration,
the burden of proof will be as it could be if the claim were litigated in a
judicial proceeding.

                (c) Award. Upon the conclusion of any arbitration proceedings
hereunder, the arbitrator will render findings of fact and conclusions of law
and a written opinion setting forth the basis and reasons for any decision
reached and will deliver such documents to each party to this Agreement along
with a signed copy of the award.

                                      -39-
<PAGE>   40

                (d) Terms of Arbitration. The arbitrator chosen in accordance
with these provisions will not have the power to alter, amend or otherwise
affect the terms of these arbitration provisions or the provisions of this
Agreement.

                (e) Exclusive Procedures. Except as specifically otherwise
provided in this Agreement, arbitration will be the sole and exclusive dispute
resolution procedure of the parties for any Dispute arising out of this
Agreement.

16.     TRANSITION ISSUES

        16.1    TRANSITION SERVICES. Seller agrees to provide certain technical
support, customer service, manufacturing or production assistance to Buyer as
described herein (the "Transition Services") in order to facilitate the orderly
transition of the marketing and distribution of the Acquired Software from
Seller to Buyer. This Article 16 sets out the scope of the Transition Services
to be provided by Seller and the terms and conditions under which such services
shall be provided. Each party will work in good faith to facilitate a smooth and
successful transition as soon as practicable, with the expectation that in most
or many cases transition to Buyer will not take the entire transition period.
However, Seller will make transition support available to Buyer for the full
period of time set out below. Seller and Buyer shall each appoint one designated
representative who shall act as the point of contact with respect to Transition
Services.

                (a) Customer Service.

                        (i) Until June 30, 2000, Seller shall continue to
respond to first level customer service inquires in the United States and Canada
for the Acquired Software. Seller shall have the discretion to use any employee
or contractor to perform such services; provided that the level of service is at
least equivalent to the current level of service offered by Seller. For the
purposes of this Section 16.1(a)(i), "first level customer service inquires"
shall mean all of the customer services currently provided by Modus Media,
including, without limitation, order and delivery inquiries. Seller shall
provide these services to Buyer at no cost.

                        (ii) Up to and including April 30, 2000, Seller shall
continue to respond to second level customer service inquires in the United
States and Canada for the Acquired Software. Seller shall have the discretion to
use any employee or contractor to perform such services; provided that the level
of service is at least equivalent to the current level of service offered by
Seller. For the purposes of this Section 16.1(a)(ii), "second level customer
service inquires" shall mean all of the customer services currently provided by
MetaCreations' Customer Services Department in Scotts Valley, California,
including, without limitation, responding to questions regarding rebates,
missing product, faulty product and the like. Seller shall also use commercially
reasonable efforts to respond to customer service requests from authorized
distributors that originate outside of the United States and Canada, and that
are forwarded to MetaCreations' Scotts Valley Office (either telephonically or
e-mail). Seller shall provide these services to Buyer at no cost.

                (b) Technical Support. Up to and including May 19, 2000 Seller
shall continue to

                                      -40-
<PAGE>   41

respond to all first and second level technical support inquires in the United
States, Canada, Germany, Austria and Switzerland for the Acquired Software in
accordance with its existing practices and policies. In addition, up to and
including June 30, 2000, Seller shall continue to respond to all technical
support inquiries from customers who have entered into annual support agreements
with Seller. Seller shall have the discretion to use any employee or contractor
to perform such services; provided that the level of service is at least
equivalent to the current level of service offered by Seller. For the purposes
of this Section 16.1(b) "first level technical support" and "second level
technical support" shall mean all of the technical support services currently
provided by MetaCreations' Support Department in Scotts Valley, California and
by Software Spectrum in Dublin, Ireland, including, without limitation,
technical product inquiries. Seller shall also use commercially reasonable
efforts to respond to technical support questions from authorized distributors
that originate outside of the United States and Canada, and that are forwarded
to MetaCreations' Scotts Valley Office (either telephonically or e-mail). Seller
shall provide these services to Buyer at no cost.

                (c)     Toll and Toll-Free Phone Numbers and E-mail. Up to and
including June 30, 2000, all customer support and technical support toll and
toll-free phone numbers and e-mail addresses will remain active and be
maintained by Seller. During such period of time, Buyer and Seller shall
cooperate to re-direct such phone numbers and e-mail addresses as necessary. On
or about June 30, 2000 all such toll and toll-free phone numbers and e-mail
addresses will be re-directed to Buyer's customer service and technical support
centres, or will provide customers with a voice or e-mail message indicating how
they can contact Buyer customer or technical support personnel.

                (d)     On-line Sales. Up to and including April 30, 2000,
Seller shall continue to receive and process on-line web orders for the Acquired
Software. After such time, and up to and including June 30, 2000, Seller shall
continue to publish product descriptions and other marketing material for the
Acquired Software and provide contact information for Modus Media, from whom
customers can order copies of the Acquired Software.

                (e)     Sales Revenue. All revenue associated with the sale of
Acquired Software, whether by Vendor or its contractors, following the Closing
Date, will be for the account of Seller. Within thirty (30) days after the end
of each month in which sales are made by Vendor or its contractors, Seller will
send to Buyer a written summary of the number of copies of the Acquired Software
shipped to customers and a check for the revenues generated from such sales.
Buyer and Seller will cooperate to ensure that each copy of Acquired Software
sold after the Closing Date includes some type of identifier indicating that the
product is being marketed and published by Buyer.

                (f)     Engineering Support. Up to and including April 20, 2000,
Seller shall provide Buyer with reasonable engineering technical support in
respect of the Acquired Software to assist Buyer in the implementation of the
Acquired Software for Buyer's purposes. Between April 21 and April 30, 2000,
Seller shall provide Buyer with a minimum of two (2) days of engineering
technical support for such purposes. In the event that Buyer requests any of
Seller's personnel to

                                      -41-
<PAGE>   42

travel to Buyer's headquarters in Ottawa, Canada, Buyer shall reimburse Seller
for all reasonable travel and accommodation expenses incurred by such personnel.

                (g)     Seller Web Sites. From July 1, 2000 until one (1) year
after the Closing Date, Seller shall provide the following items on
www.metacreations.com or any successor web site thereto: (i) product
descriptions for the Acquired Software; (ii) notice to the customer of the
acquisition by Buyer of the Acquired Software; (iii) contact information for
Seller; and (iv) implement and maintain a link to a web site to be designated by
Buyer where customers can order copies of the Acquired Software.

        16.2    Distribution Channel. Buyer and Seller agree that it is intended
that channel inventory of Acquired Product at the Closing Date will sell through
and be absorbed by customers at the earliest possible time. To facilitate the
transition in the distribution channel, Seller and Buyer agree to cooperate as
follows:

                (a)     Product Position Announcement. Buyer will publicly
announce concurrently with the announcement of the closing of this Agreement
that if a customer buys a current version of Acquired Software from Seller,
Buyer will, subject to proof of purchase and applicable time limits, provide the
same upgrade privileges has currently a exist in accordance with their terms has
set forth in section 16 and will honor Seller's support commitments as described
in SCHEDULE 16.

                (b)     Exchanges with Seller. If a distributor of Seller, under
the terms of its distribution contract with Seller, returns units of Acquired
Software to Seller after the Closing in exchange for units of other Acquired
Software, Buyer will provide Seller without charge with requested units to
satisfy Seller's obligation to exchange such units.

                (c)     Exchanges. If a distributor that has a distribution
contract with Seller returns to Buyer units of Acquired Software purchased prior
to Closing in exchange for other Acquired Software or in exchange for Buyer
labeled Acquired Software, Buyer will, after notice to and approval by Seller,
not to be unreasonably delayed, provide such replacement units provided they are
not in excess of the return/exchange rate specified in such distributor's
contract.

                (d)     Alternate Product. If a distributor of Seller, under the
terms of its distribution contract with Seller, returns Acquired Software to
either Seller or Buyer and does not desire to exchange such Acquired Software
for other Acquired Software, then Seller shall provide such distributor with
some other Seller product and Buyer shall have no obligation with respect
thereto.

                (e)     Returns for Credit. If a distributor of Seller, under
the terms of its distribution contract with Seller, returns Acquired Software to
Seller for credit and will not accept any other product in exchange for such
Acquired Software, then upon receipt of the returned Acquired Software, Buyer
shall reimburse Seller for its costs of goods sold for such Acquired Software,
up to a maximum, in aggregate of US$1,000,000. Seller shall invoice Buyer for
such amounts on a calendar quarterly basis and Buyer shall make such payments
within thirty (30) days

                                      -42-
<PAGE>   43

of receiving such invoices.

17.     MISCELLANEOUS.

        17.1    ANNOUNCEMENTS; PUBLICITY. As soon as possible after the Closing
Date, Seller and Buyer shall issue a joint press release acceptable to both with
respect to the transactions contemplated by this Agreement. Without the prior
written consent of the other, which consent shall not be unreasonably withheld,
prior to the Closing, neither Seller nor Buyer shall make any other public
announcement regarding the transactions; and with respect to any announcement
that any of the parties is required by the Securities Act or regulations
thereunder, the Ontario Securities Act, the Toronto Stock Exchange or the Nasdaq
Stock Market - National Market to issue, such party shall, to the extent
possible under the circumstances, review the necessity for and the timing and
content of, the announcement with the other party before issuing the
announcement.

        17.2    RELIANCE BY BUYER. Notwithstanding the right of Buyer or Seller
to investigate each other, and notwithstanding any knowledge determined or
determinable by Buyer or Seller, as applicable, as a result of such
investigation, each party shall have the unqualified right to rely upon, and
have relied upon, each of the representations and warranties made by the other
Party in this Agreement or pursuant hereto.

        17.3    EXPENSES. Whether or not the transactions contemplated by this
Agreement are consummated, each of the parties hereto shall bear its own
expenses (including without limitation attorneys' fees) in connection with the
negotiation and consummation of the transaction contemplated hereby.

        17.4    NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and hand delivered, sent by facsimile, sent by
certified first class mail, postage pre-paid, or sent by nationally recognized
express courier service. Such notices and other communications will be
effective: (a) upon receipt if hand delivered; (b) five (5) days after mailing
if sent by mail; and (c) one (1) day after dispatch if sent by facsimile (with
electronic acknowledgment of successful transmission) or express courier,
addressed as follows:

                (a)    to Seller:
                       MetaCreations Corporation
                       6303 Carpinteria Ave.
                       P.O. Box 1324Carpinteria, California  93014-1324
                       Attention:  Bruce A. Telkamp :
                       Telephone:  805-566-6223
                       Facsimile:  805-566-6384

                (b)    If to Buyer, to each of:

                                      -43-
<PAGE>   44

                       Corel Corporation Limited
                       c/o Arthur Cox
                       Earlsfort Center,
                       Earlsfort Terrance
                       Dublin 2, Ireland
                       Attention:  Managing Partner
                       Telephone:  011-353-1-618-0000
                       Facsimile:  011-353-1-618-0618

                       Corel Corporation
                       The Corel Building
                       1600 Carling Avenue
                       Ottawa, Canada  K1Z 8R7
                       Attention:  General Counsel
                       Telephone:  (613) 728-8200
                       Facsimile:  (613) 761-1057

        17.5    ENTIRE AGREEMENT; CAPTIONS. This Agreement, the Exhibits and
Schedules hereto (which are incorporated herein by reference) and the agreements
to be executed and delivered in connection herewith on the date hereof or on the
Closing Date, together constitute the entire agreement and understanding between
the parties and there are no other agreements or commitments with respect to the
transactions contemplated herein. This Agreement supersedes any term sheet,
prior offer, agreement or understanding between the parties with respect to the
transactions contemplated hereby, including the Non-Disclosure Agreement between
Seller and Corel dated January 20, 2000 which the parties shall deem terminated
as of the Closing Date. The captions in this Agreement are for convenience only
and shall not be considered a part of or affect the construction or
interpretation of any provision of this Agreement.

        17.6    AMENDMENT; WAIVER. Any term or provision of this Agreement may
be amended only by a writing signed by Seller and Buyer. The observance of any
term or provision of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a writing
signed by the party to be bound by such waiver. No waiver by a party of any
breach of this Agreement will be deemed to constitute a waiver of any other
breach or any succeeding breach.

        17.7    NO THIRD PARTY BENEFICIARIES. Nothing expressed or implied in
this Agreement is intended, or shall be construed, to confer upon or to give any
person, firm or corporation, other than the parties hereto, any rights or
remedies under or by reason of this Agreement.

        17.8    ASSIGNMENT. This Agreement may not be assigned by any party
hereto without the prior written consent of each other party; except that Corel,
CCL or MetaCreations each may assign in whole or in part this Agreement (and/or
all related agreements) to one or more parent, subsidiary or affiliate entities,
or by operation of law or in connection with any merger,

                                      -44-
<PAGE>   45

consolidation or sale of all or substantially all Buyer's assets, or, as to
Corel and CCL, in connection with any sale or transfer of any portion or all of
the Purchased Assets, or any similar transaction and Seller may, prior to the
Closing, designate an entity controlled by or under common control with Seller
to be the recipient of the consideration to be delivered to Seller under SECTION
3 hereof; provided, that in each case the assignee agrees in writing to assume
the assignor's obligations relating to the agreement (or portion thereof) being
assigned.

        17.9    BENEFIT AND BURDEN. This Agreement shall be binding upon, shall
inure to the benefit of, and be enforceable by and against, the parties hereto
and their respective successors and permitted assigns.

        17.10   GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of California (excluding
application of any choice of law doctrines that could make applicable the law of
any other state or jurisdiction) and, where appropriate, applicable federal law.

        17.11   SEVERABILITY. If any provision of this Agreement is for any
reason and to any extent deemed to be invalid or unenforceable, then such
provision shall not be voided but rather shall be enforced to the maximum extent
then permissible under then applicable law and so as to reasonably effect the
intent of the parties hereto, and the remainder of this Agreement will remain in
full force and effect.

        17.12   CONSTRUCTION. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event of 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
arise favoring of disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement.

        17.13   EXECUTION. For the convenience of the parties, this Agreement
may be executed in counterparts, each of which shall be deemed an original but
both of which together shall constitute one and the same instrument, and this
Agreement may be executed and delivered by facsimile.

        17.14   CURRENCY. Unless otherwise indicated, all references in this
Agreement to "$" or "dollars" shall mean United States dollars.

        17.15   ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated among the Purchased Assets in the manner provided in SCHEDULE 17.15
(the "ALLOCATION STATEMENT"). The Seller and the Buyer shall prepare and file
all appropriate forms and documents in accordance with the allocations reflected
in the Allocation Statement.

        17.16   TIME OF ESSENCE. The parties agree that time is of the essence
in the performance of the parties' respective obligations under this Agreement.

                                      -45-
<PAGE>   46

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -46-
<PAGE>   47

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement by their duly authorized representatives as of the date first set
forth above.

SELLER:                                   BUYER:METACREATIONS CORPORATION
"COREL"
                                          COREL CORPORATION
Signature:                                Signature:
           --------------------------                ---------------------------
Name:                                     Name:
      -------------------------------           --------------------------------
Title:                                    Title:
       ------------------------------            -------------------------------

                                          Signature:
                                                     ---------------------------
                                          Name:
                                                --------------------------------
                                          Title:
                                                 -------------------------------

                                          "CCL"

                                          COREL CORPORATION LIMITED

                                          Signature:
                                                     ---------------------------
                                          Name:
                                                --------------------------------
                                          Title:
                                                 -------------------------------

           SIGNATURE PAGE TO AGREEMENT FOR PURCHASE AND SALE OF ASSETS

<PAGE>   48

<TABLE>
<CAPTION>
      EXHIBITS

<S>                    <C>
           A-1               Corel Assignment Agreement
           A-2               CCL Assignment Agreement - excluding Ireland and Canada
           A-3               CCL Assignment Agreement - Ireland
           B-1               Corel Assumption Agreement
           B-2               CCL Assumption Agreement - excluding Ireland and Canada
           B-3               CCL Assumption Agreement - Ireland
           C-1               Consultant Agreement - Mark Zimmer
           C-2               Consultant Agreement - Tom Hedges
           C-3               Consultant Agreement - John Derry
           D-1               Corel License
           D-2               CCL License - excluding Ireland and Canada
           D-3               CCL License - Ireland

      SCHEDULES

           1.1               Acquired Software
           1.2               Acquired Patent Rights
           1.11              Content Contracts
           1.14              Domain Names
           1.19              Excluded Software
           1.36              Third Party Materials
           1.37              Trademarks
           2.1               Permitted Encumbrances
           2.2               Purchased Assets
           2.3               Excluded Assets
           2.5               Third Party Agreements and Required Consents
           4.1               Assumed Obligations
           7.4               Litigation
           7.6               Proprietary Information and Inventions Agreement
           7.7               Related-Party Transactions
           7.8               Permits
           7.13              Products in Channel
           7.14              Seller Financial Statements
           7.15              Intellectual Property
           7.18              Seller Agreements
           7.21              Infringement
           7.23              Advances and Deposits
           16                Seller's Support Commitments
           17.15             Allocation Statement
</TABLE>

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