Document:

<PAGE>

                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of April 18, 2000, by and between SoftQuad Software Ltd., a
Delaware corporation (the "Company"), and Small Caps Online LLC (the "Agent"),
for itself and as agent for the purchasers (the "Purchasers") referred to in the
agency agreement (the "Agency Agreement") of even date herewith by and between
the Company and the Agent.

                             PRELIMINARY STATEMENTS

         In connection with the consummation of the transactions contemplated by
the Agency Agreement, the Company has agreed, upon the terms and subject to the
conditions of the Agency Agreement, to issue and sell to the Purchasers 200,010
units ("Units"), each Unit being comprised of one share of Common Stock, par
value $0.001, in the capital of the Company, and one-half (1/2) of one share
purchase warrant (collectively, the "Share Purchase Warrants") with the
attributes described in the Agency Agreement.

         For the purposes of this Agreement the shares of the Company's Common
Stock forming part of the Units are referred to as the "Unit Shares"; the shares
of the Company's Common Stock underlying the Share Purchase Warrants are called
the "Warrant Shares"; and the Unit Shares and the Warrant Shares are
collectively referred to as the "Shares".

         To induce the Purchasers and the Agent to execute and deliver the
Subscription Agreements, the Company has agreed, pursuant to the terms and
conditions of this Agreement, to provide certain registration rights with
respect to the Shares.

                                    AGREEMENT

         In consideration of the foregoing, the mutual covenants and conditions
set forth in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to become legally bound, hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         As used in this Agreement, the following terms shall have the following
respective meanings:

         "Agency Agreement" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.

         "Agent" shall mean Thomson Kernaghan & Co. Limited.

          "Agreement" shall mean this Registration Rights Agreement, made and
entered into as of April 18, 2000, by and between the Company and the Agent (for
itself and on behalf of the Purchasers).

<PAGE>
                                     - 2 -

         "Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.

         "Common Shares" shall mean shares of the Company's Common Stock.

         "Company" shall mean SoftQuad Software, Ltd., a Delaware corporation.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as in effect from time to time.

         "Filing Deadline" shall have the meaning ascribed to such term in
Section 2.1 of this Agreement.

         "Holder" or "Holders" shall mean (a) a Purchaser, to the extent that
the Purchaser holds Registrable Securities, and (b) any Person holding
Registrable Securities as a transferee of the Purchaser (directly or indirectly,
including subsequent transfers).

         "Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

         "Purchasers" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.

         The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing with the Commission one or more
registration statements covering Registrable Securities in compliance with the
Securities Act that is declared or ordered effective by the Commission.

         "Registrable Securities" shall mean the Shares and any shares of
capital stock issued or issuable with respect to the Securities, as a result of
any stock split, stock dividend, recapitalization, exchange or similar event;
provided, however, that such securities shall cease to be Registrable Securities
when (a) a registration statement with respect to such securities shall have
been declared effective under the Securities Act and such securities shall have
been disposed of pursuant to the registration statement, (b) such securities are
distributed to the public pursuant to Rule 144(k) (or any successor provisions)
promulgated under the Securities Act or (c) such securities shall have ceased to
be outstanding.

         "Registration Deadline" shall have the meaning ascribed to such term in
Section 2.1 of this Agreement.

         "Registration Expenses" shall mean all expenses incurred in order to
comply with Article II hereof, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel for the
Company, reasonable fees and disbursements of one (1) counsel for the Holders,
blue sky fees and expenses, and the expense of any special audits incident to or
required by any such registration, but excluding the compensation of regular

<PAGE>
                                     - 3 -

employees of the Company (which shall be paid in any event by the Company) and
excluding Selling Expenses.

         "Restricted Securities" shall mean Registrable Securities that are
"restricted securities" as defined in Rule 144 under the Securities Act.

          "Securities Act" shall mean the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the Commission
thereunder, all as in effect from time to time.

         "Selling Expenses" shall mean all underwriting discounts and selling
commissions incurred in connection with the sale of securities pursuant to a
registration effected hereunder.

         "Share Purchase Warrants" shall have the meaning ascribed to such term
in the Preliminary Statements to this Agreement.

         "Shares" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.

          "Unit Shares" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.

         "Warrant Shares" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.

         Capitalized terms used in this Agreement and not otherwise defined
herein shall have the respective meanings ascribed to such terms in the Purchase
Agreement.

                                   ARTICLE II
                               REGISTRATION RIGHTS

2.1      MANDATORY REGISTRATION.
         ----------------------

         (a)      The Company shall prepare and file with the Commission within
                  sixty (60) days from the date of this Agreement (the "Filing
                  Deadline") a registration statement or registration statements
                  (as is necessary) on Form SB-2 or Form S-1 covering the
                  issuance and resale of the Shares. Such registration statement
                  shall initially register for resale at least 100% of the
                  Shares. The Company shall use its best efforts to have the
                  registration statement declared effective by the Commission
                  within one hundred and twenty (120) days after the Filing
                  Deadline (the "Registration Deadline"). The Company shall
                  permit the registration statement to become effective within
                  five (5) business days after receipt of a "no review" notice
                  from the Commission. Such registration statement shall be kept
                  current and effective for a period of at least twelve (12)
                  months from the Closing Date.

<PAGE>
                                     - 4 -

2.2      EXPENSES OF REGISTRATION.
         ------------------------

         All Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2.1 shall be borne by the
Company; and all Selling Expenses in connection with such registration,
qualification or compliance shall be borne by the holders of the securities so
registered pro rata on the basis of the number of shares so registered.

2.3      REGISTRATION PROCEDURES.
         -----------------------

         In the case of each registration, qualification or compliance effected
by the Company pursuant to this Article II, the Company will keep the Agent (as
agent for the Holders) advised in writing as to the initiation of each
registration, qualification and compliance and as to the completion thereof. At
its expense, the Company will:

         (a)      prepare and file with the Commission such amendments and
                  supplements to such registration statement and the prospectus
                  used in connection with such registration statement as may be
                  necessary to comply with the provisions of the Securities Act
                  with respect to the disposition of all securities covered by
                  such registration statement;

         (b)      furnish to the Agent (as agent for the Holders) such numbers
                  of copies of a prospectus, including a preliminary prospectus,
                  in conformity with the requirement of the Securities Act, and
                  such other documents as it may reasonably request (including a
                  conformed copy of the registration statement filed with the
                  Commission and any amendments thereto and an original executed
                  underwriting agreement (if any) entered into in connection
                  with such registration) in order to facilitate the disposition
                  of Registrable Securities owned by the Holders;

         (c)      use reasonable efforts to register and qualify the securities
                  covered by such registration statement under such other
                  securities or blue sky laws of one (1) jurisdiction (in
                  addition to those jurisdictions in which the Company has
                  otherwise agreed to so register and qualify such securities)
                  as shall be reasonably requested by the Agent (as agent for
                  the Holders) provided that the Company shall not be required
                  in connection therewith or as a condition thereto to qualify
                  to do business or to file a general consent to service of
                  process in any such states or jurisdictions;

         (d)      in the event of any underwritten public offering, enter into
                  and perform its obligations under an underwriting agreement
                  with the managing underwriter(s) of such offering; each Holder
                  participating in such underwriting shall also enter into and
                  perform its obligations under such underwriting agreement;

         (e)      notify the Agent (as agent for each Holder of Registrable
                  Securities covered by such registration statement) at any time
                  when a prospectus relating thereto is required to be delivered
                  under the Securities Act, of the happening of any event as a
                  result of which the prospectus included in such registration
                  statement, as then in effect, includes an untrue statement of
                  a material fact or omits to state a material fact required to

<PAGE>
                                     - 5 -

                  be stated therein or necessary to make the statements therein
                  not misleading in the light of the circumstances then
                  existing; and

         (f)      furnish, at the request of the Agent (as agent for the Holders
                  requesting registration of Registrable Securities pursuant to
                  this Article II) on the date that such Registrable Securities
                  are delivered to the underwriters for sale in connection with
                  registration pursuant to this Article II, if such securities
                  are being sold through underwriters, or on the date that the
                  registration statement with respect to such securities becomes
                  effective, if such securities are not being sold through
                  underwriters, (i) a copy of any opinion, dated such date, of
                  the counsel representing the Company for the purposes of such
                  registration, addressed to the underwriters of the Company,
                  and (ii) a copy of any letter, dated such date, from the
                  independent accountants of the Company, addressed to the
                  underwriters of the Company.

         Each Holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described in
clause (e) of this Section 2.3, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such Holder's receipt of the copies
of a supplemented or amended prospectus and, if so directed by the Company, such
Holder will deliver to the Company (at the Company's expense), all copies, other
than permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Securities that was in effect prior to such amendment
or supplement. In the event the Company shall give any such notice, the period
set forth in clause (a) of Section 2.1 shall be extended by the number of days
during the period from and including the date of the giving of such notice
pursuant to clause (e) of this Section 2.3 to and including the date when each
seller of Registrable Securities covered by such registration statement shall
have received the copies of a supplemented or amended prospectus.

2.4      INDEMNIFICATION.
         ---------------

         (a)      The Company will indemnify each Holder, each Holder's
                  officers, directors and partners, and each Person controlling
                  such Holder (collectively, "Holder's Parties"), participating
                  in any registration, qualification, or compliance effected
                  pursuant to this Article II with respect to Registrable
                  Securities held by such Holder against all claims, losses,
                  damages and liabilities (or actions in respect thereof),
                  including any of the foregoing incurred in settlement of any
                  litigation, commenced or threatened, to which they may become
                  subject under the Securities Act, the Exchange Act or other
                  federal or state law, arising out of or based on (i) any
                  untrue statement (or alleged untrue statement) of a material
                  fact contained in any prospectus, offering circular or other
                  similar document (including any related registration
                  statement, notification or the like prepared by the Company)
                  incident to any such registration, qualification or
                  compliance, or based on any omission (or alleged omission) to
                  state therein a material fact required to be stated therein or
                  necessary to make the statements therein not misleading, or
                  (ii) any violation by the Company of any federal, state or
                  common law rule or regulation applicable to the Company in

<PAGE>
                                     - 6 -

                  connection with any such registration, qualification or
                  compliance, and will reimburse each such Holder's Parties for
                  any legal and any other expenses reasonably incurred in
                  connection with investigating or defending any such claim,
                  loss, damage, liability or action, as incurred, provided that
                  the Company will not be liable in any such case to the extent
                  that any such claim, loss, damage, liability or expense arises
                  out of or is based on any untrue statement or omission, made
                  in reliance on and in conformity with written information
                  furnished to the Company by such Holder's Parties specifically
                  for use in the preparation thereof.

         (b)      Each Holder will, if Registrable Securities held by such
                  Holder are included in the securities as to which such
                  registration, qualification or compliance is being effected,
                  severally and not jointly, indemnify the Company, each of its
                  directors and officers, and each Person who controls the
                  Company within the meaning of the Securities Act, against all
                  claims, losses, damages and liabilities (or actions in respect
                  thereof) arising out of or based on (i) any untrue statement
                  (or alleged untrue statement) of a material fact contained in
                  any such registration statement, prospectus, offering circular
                  or other similar document, or any omission (or alleged
                  omission) to state therein a material fact required to be
                  stated therein or necessary to make the statements therein not
                  misleading, and will reimburse the Company, such directors,
                  officers, Persons or control Persons for any legal or any
                  other expenses reasonably incurred in connection with
                  investigating or defending any such claim, loss, damage,
                  liability or action, as incurred, in each case to the extent,
                  but only to the extent, that such untrue statement (or alleged
                  untrue statement) or omission (or alleged omission) is made in
                  such registration statement, prospectus, offering circular or
                  other document in reliance upon and in conformity with the
                  written information furnished to the Company by such Holder
                  specifically for use in the preparation thereof, or (ii) any
                  violation by any such Holder of any federal, state or common
                  law rule or regulation applicable to such Holder in connection
                  with the distribution of securities pursuant to a registration
                  statement, and will reimburse the Company, such Holders, such
                  directors, officers, Persons, or control Persons for any legal
                  any other expenses reasonably incurred in connection with
                  investigating or defending any such claim, loss, damage,
                  liability, or action, as incurred; provided, however, that the
                  obligations of each such Holder hereunder shall be limited to
                  an amount equal to the aggregate proceeds received by such
                  Holder in such offering.

         (c)      Each party entitled to indemnification under this Section 2.4
                  (the "Indemnified Party") shall give notice to the party
                  required to provide indemnification (the "Indemnifying Party")
                  promptly after such Indemnified Party has received written
                  notice of any claim as to which indemnity may be sought, and
                  shall permit the Indemnifying Party to assume the defense of
                  any such claim or any litigation resulting therefrom, provided
                  that counsel for the Indemnifying Party, who shall conduct the
                  defense of such claim or litigation, shall be approved by the
                  Indemnified Party (whose approval shall not unreasonably be
                  withheld). The Indemnified Party may participate in such
                  defense at such party's expense; provided, however, that the

<PAGE>
                                     - 7 -

                  Indemnifying Party shall bear the expense of such defense of
                  one counsel representing the Indemnified Party (or Indemnified
                  Parties) if counsel reasonably acceptable to the Indemnifying
                  Party provides a written opinion that representation of both
                  parties by the same counsel would be inappropriate due to
                  actual or potential conflicts of interest. The failure of any
                  Indemnified Party to give notice as provided herein shall not
                  relieve the Indemnifying Party of its obligations under this
                  Section 2.4, except to the extent such failure to give notice
                  shall materially and adversely prejudice the Indemnifying
                  Party in the defense of any such claim or any such litigation.
                  No Indemnifying Party, in the defense of any such claim or
                  litigation, shall, except with the consent of each Indemnified
                  Party, not to be unreasonably withheld, consent to entry of
                  any judgment or enter into any settlement that does not
                  include as an unconditional term thereof the giving by the
                  claimant or plaintiff to such Indemnified Party of a release
                  from all liability in respect to such claim or litigation.

         (d)
                  (i)      If the indemnification provided for in this Section
                           2.4 is held by a court of competent jurisdiction to
                           be unavailable to an Indemnified Party with respect
                           to any loss, liability, claim, damage or expense
                           referred to herein, then the Indemnifying Party
                           hereunder shall contribute to the amount paid or
                           payable by such Indemnified Party as a result of such
                           loss, liability, claim, damage or expense, in such
                           proportion as is appropriate to reflect the relative
                           fault of the Indemnifying Party on the one hand and
                           the Indemnified Party on the other hand in connection
                           with the statements or omissions which resulted in
                           such loss, liability, claim, damage or expense as
                           well as any other relevant equitable considerations.
                           The relative fault of the Indemnifying Party and of
                           the Indemnified Party shall be determined by
                           reference to, among other things, whether the untrue
                           or alleged untrue statement of a material fact or the
                           omission to state a material fact relates to
                           information supplied by the Indemnifying Party or by
                           the Indemnified Party and the parties' relevant
                           intent, knowledge, access to information and
                           opportunities to correct or prevent such statement or
                           omission.

                  (ii)     The parties agree that it would not be just and
                           equitable if contribution pursuant to this Section
                           2.4 were determined by pro rata allocation or by any
                           other method of allocation that does not take account
                           of the equitable considerations referred to above.
                           The amount paid or payable by an Indemnified Party as
                           a result of the claims, losses, damages and
                           liabilities referred to above shall be deemed to
                           include, subject to the limitations set forth above,
                           any legal or other expenses reasonably incurred by
                           such Indemnified Party in connection with
                           investigating or defending any such action or claim.

<PAGE>
                                     - 8 -

                  (iii)    No Holder that is a seller of Registrable Securities
                           covered by such registration statement or Person
                           controlling such seller other than the Company shall
                           be obligated to make contribution hereunder that in
                           the aggregate exceeds the total public offering price
                           of the Registrable Stock sold by such Holder, less
                           the aggregate amount of any damages that such Holder
                           and its controlling Persons have otherwise been
                           required to pay pursuant to this Section 2.4. The
                           obligations of such Holders to contribute are several
                           in proportion to their respective ownership of the
                           securities covered by such registration statement and
                           not joint.

                  (iv)     The indemnity and contribution provided herein shall
                           be in addition to, and not in lieu of, any other
                           liability that one party may have to another.

2.5      INFORMATION BY HOLDER.
         ---------------------

         Each Holder of Registrable Securities included in any registration
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may request in writing and
as shall be required in connection with any registration, qualification or
compliance referred to in this Article II.

2.6      RULE 144 REPORTING.
         ------------------

         With a view to making available the benefits of certain rules and
regulations of the Commission that may at any time permit the sale of the
Restricted Securities to the public without registration, the Company agrees to:

                  (a)      use its best efforts to facilitate the sale of the
                           Restricted Securities to the public without
                           registration under the Securities Act, pursuant to
                           Rule 144 under the Securities Act;

                  (b)      make and keep public information available, as those
                           terms are understood and defined in Rule 144 under
                           the Securities Act, at all times after the effective
                           date of the first registration statement filed by the
                           Company for an offering of its securities to the
                           general public;

                  (c)      file with the Commission in a timely manner all
                           reports and other documents required of the Company
                           under the Securities Act and the Exchange Act (at any
                           time after it has become subject to such reporting
                           requirements); and

                  (d)      so long as a Holder owns any Restricted Securities to
                           furnish to the Holder forthwith upon request a
                           written statement by the Company as to its compliance
                           with the public information requirements of said Rule
                           144, and the reporting requirements of the Securities
                           Act and the Exchange Act, a copy of the most recent
                           annual or quarterly report of the Company, and such
                           other reports and documents so filed by the Company
                           as a Holder may reasonably request in availing itself
                           of any rule or regulation of the Commission allowing
                           a Holder to sell any such securities without
                           registration.

<PAGE>
                                     - 9 -

2.7      TRANSFER OF REGISTRATION RIGHTS.
         -------------------------------

         The rights granted under this Article II may be assigned or otherwise
conveyed by any Holder of Registrable Securities to any transferee, subject to
compliance with all applicable securities laws and regulations and the written
assumption by the transferee of all of the transferor's obligations under this
Agreement.

2.8      RESTRICTIONS ON MARKET MANIPULATION.
         -----------------------------------

         In the event any shares of Common Stock are offered or sold by any
Holder in a registration, each such Holder will:

         (a)      advise the Company in writing of any offer, sale or other
                  disposition by it of any Common Stock in any manner other than
                  as set forth in the registration statement or any prospectus
                  included therein on or for the 30-day period prior to the
                  filing of such registration statement until the distribution
                  under the registration statement has been completed;

         (b)      not effect any stabilization activity in connection with the
                  Company's Common Stock;

         (c)      not bid or purchase, for any account in which it has a
                  beneficial interest, any Common Stock except as may be
                  permitted pursuant to Regulation M under the Exchange Act (if
                  applicable);

         (d)      not until it has sold all of such shares of Common Stock,
                  attempt to induce any Person to purchase any Common Stock
                  except as may be permitted pursuant to Regulation M; and

         (e)      not until it has sold all such shares of Common Stock, pay any
                  compensation for soliciting another to purchase any securities
                  of the Company, except as may be permitted pursuant to Rule
                  10b-6.

                                   ARTICLE III
                                  MISCELLANEOUS

3.1      GOVERNING LAW; JURISDICTION AND VENUE.
         -------------------------------------

         This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Delaware.

3.2      SUCCESSORS AND ASSIGNEES.
         ------------------------

         Except as otherwise provided herein, the provisions hereof shall inure
to the benefit of, and be binding upon, the successors, assignees, heirs,
executors and administrators (as the case may be) of the parties hereto.

<PAGE>
                                     - 10 -

3.3      ENTIRE AGREEMENT.
         ---------------

         This Agreement constitutes the full and entire understanding and
agreement between the parties with regard to the subject matter hereof.

3.4      NOTICES, ETC.
         ------------

         All notices and other communications required or permitted hereunder
shall be in writing and shall be effective four days after mailed by first-class
mail, postage prepaid, or otherwise delivered by hand or by messenger, addressed
(a) if to the Agent, at 365 Bay Street, 10th Floor Toronto, Ontario M5H 2V2,
Canada, Attention: Mark E. Valentine, Chairman; (b) if to any other Holder of
Registrable Securities, at such address as such Holder shall have furnished the
Company in writing, or, until any such Holder so furnishes an address to the
Company, then to and at the address of the last Holder of such Registrable
Securities who has so furnished an address to the Company; or (c) if to the
Company, at 161 Eglinton Avenue East, Suite 400, Toronto, Ontario M4P 1J5.

3.5      DELAYS OR OMISSIONS.
         -------------------

         No delay or omission to exercise any right, power or remedy accruing to
any Holder of any Registrable Securities, upon any breach or default of the
Company under this Agreement, shall impair any such right, power or remedy of
such Holder nor shall it be construed to be a waiver of any such breach or
default or an acquiescence therein or of or in any similar breach or default
thereunder occurring nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any Holder of any breach or default under this Agreement or any
waiver on the part of any Holder of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any Holder shall be cumulative and
not alternative.

3.6      COUNTERPARTS.
         ------------

         This Agreement may be executed in any number of counterparts, each of
which may be executed by less than all of the parties hereto, each of which
shall be enforceable against the parties actually executing such counterparts
and all of which together shall constitute one instrument.

3.7      SEVERABILITY.
         ------------

         In the event any provision of this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

<PAGE>
                                     - 11 -

3.8      AMENDMENTS.
         ----------

         The provisions of this Agreement may be amended at any time and from
time to time, and particular provisions of this Agreement may be waived, with
and only with, an agreement or consent in writing signed by the Company and by
the Holders of a majority of the Registrable Securities voting as a single
class.

         The parties have executed this Registration Rights Agreement as of the
date first written above.

                                       SOFTQUAD SOFTWARE, LTD.

                                          By:
                                               ---------------------------------
                                               Name:
                                               Title:

                                       SMALL CAPS ONLINE LLC, AS AGENT

                                          By:
                                               ---------------------------------
                                               Name:
                                               Title:

<PAGE>REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of April 18, 2000, by and between SoftQuad Software Ltd., a
Delaware corporation (the "Company"), and Thomson Kernaghan & Co. Limited (the
"Agent"), for itself and as agent for the purchasers (the "Purchasers") referred
to in the agency agreement (the "Agency Agreement") of even date herewith by and
between the Company and the Agent.

                             PRELIMINARY STATEMENTS

         In connection with the consummation of the transactions contemplated by
the Agency Agreement, the Company has agreed, upon the terms and subject to the
conditions of the Agency Agreement, to issue and sell to the Purchasers
1,799,990 units ("Units"), each Unit being comprised of one special warrant
(collectively, the "Special Warrants") and one-half (1/2) of one share purchase
warrant (collectively, the "Share Purchase Warrants"), each with the attributes
described in the Agency Agreement.

         The Company has also agreed, upon the terms and subject to the
conditions of the Agency Agreement, to issue to the Agent for its own account a
warrant (the "Agent's Warrant") to acquire options (the "Agent's Options") to
purchase 200,000 shares of the Company's Common Stock.

         For the purposes of this Agreement the shares of the Company's Common
Stock underlying the Special Warrants are referred to as the "Underlying
Shares"; the shares of the Company's Common Stock underlying the Share Purchase
Warrants are called the "Warrant Shares"; the shares of the Company's Common
Stock underlying the Agent's options are referred to as "Agent's Shares"; and
the Underlying Shares, the Warrant Shares and the Agent's Shares are
collectively referred to as the "Shares".

         To induce the Purchasers and the Agent to execute and deliver the
Subscription Agreements, the Company has agreed, pursuant to the terms and
conditions of this Agreement, to provide certain registration rights with
respect to the Shares.

                                    AGREEMENT

         In consideration of the foregoing, the mutual covenants and conditions
set forth in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to become legally bound, hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         As used in this Agreement, the following terms shall have the following
respective meanings:

         "Agency Agreement" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.

<PAGE>
                                     - 2 -

         "Agent" shall mean Thomson Kernaghan & Co. Limited.

         "Agent's Option" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.

         "Agent's Shares" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.

         "Agent's Warrant" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.

         "Agreement" shall mean this Registration Rights Agreement, made and
entered into as of April 18, 2000, by and between the Company and the Agent (for
itself and on behalf of the Purchasers).

         "Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.

         "Common Shares" shall mean shares of the Company's Common Stock.

         "Company" shall mean SoftQuad Software, Ltd., a Delaware corporation.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as in effect from time to time.

         "Filing Deadline" shall have the meaning ascribed to such term in
Section 2.1 of this Agreement.

         "Holder" or "Holders" shall mean (a) a Purchaser, to the extent that
the Purchaser holds Registrable Securities, and (b) any Person holding
Registrable Securities as a transferee of the Purchaser (directly or indirectly,
including subsequent transfers).

         "Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

         "Purchasers" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.

         The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing with the Commission one or more
registration statements covering Registrable Securities in compliance with the
Securities Act that is declared or ordered effective by the Commission.

         "Registrable Securities" shall mean the Shares and any shares of
capital stock issued or issuable with respect to the Securities, as a result of
any stock split, stock dividend, recapitalization, exchange or similar event;
provided, however, that such securities shall cease to be Registrable Securities

<PAGE>
                                     - 3 -

when (a) a registration statement with respect to such securities shall have
been declared effective under the Securities Act and such securities shall have
been disposed of pursuant to the registration statement, (b) such securities are
distributed to the public pursuant to Rule 144(k) (or any successor provisions)
promulgated under the Securities Act or (c) such securities shall have ceased to
be outstanding.

         "Registration Deadline" shall have the meaning ascribed to such term in
Section 2.1 of this Agreement.

         "Registration Expenses" shall mean all expenses incurred in order to
comply with Article II hereof, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel for the
Company, reasonable fees and disbursements of one (1) counsel for the Holders,
blue sky fees and expenses, and the expense of any special audits incident to or
required by any such registration, but excluding the compensation of regular
employees of the Company (which shall be paid in any event by the Company) and
excluding Selling Expenses.

         "Restricted Securities" shall mean Registrable Securities that are
"restricted securities" as defined in Rule 144 under the Securities Act.

         "Securities" shall mean, collectively, the Special Warrants, the Share
Purchase Warrants and the Agent's Warrants.

         "Securities Act" shall mean the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the Commission
thereunder, all as in effect from time to time.

         "Selling Expenses" shall mean all underwriting discounts and selling
commissions incurred in connection with the sale of securities pursuant to a
registration effected hereunder.

         "Share Purchase Warrants" shall have the meaning ascribed to such term
in the Preliminary Statements to this Agreement.

         "Shares" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.

         "Special Warrants" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.

         "Underlying Shares" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.

         "Warrant Shares" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.

         Capitalized terms used in this Agreement and not otherwise defined
herein shall have the respective meanings ascribed to such terms in the Purchase
Agreement.

<PAGE>
                                     - 4 -

                                   ARTICLE II
                               REGISTRATION RIGHTS

2.1      MANDATORY REGISTRATION.
         ----------------------

         (a)      The Company shall prepare and file with the Commission within
                  sixty (60) days from the date of this Agreement (the "Filing
                  Deadline") a registration statement or registration statements
                  (as is necessary) on Form SB-2 or Form S-1 covering the
                  issuance and resale of the Shares. Such registration statement
                  shall initially register for resale at least 100% of the
                  Shares. The Company shall use its best efforts to have the
                  registration statement declared effective by the Commission
                  within one hundred and twenty (120) days after the Filing
                  Deadline (the "Registration Deadline"). The Company shall
                  permit the registration statement to become effective within
                  five (5) business days after receipt of a "no review" notice
                  from the Commission. Such registration statement shall be kept
                  current and effective for the greater of (i) a period of at
                  least twelve (12) months from the Closing Date and (ii) a
                  period of at least ninety (90) days after the Agent's Options
                  shall have been fully exercised or expired.

2.2      EXPENSES OF REGISTRATION.
         ------------------------

         All Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2.1 shall be borne by the
Company; and all Selling Expenses in connection with such registration,
qualification or compliance shall be borne by the holders of the securities so
registered pro rata on the basis of the number of shares so registered.

2.3      REGISTRATION PROCEDURES.
         -----------------------

         In the case of each registration, qualification or compliance effected
by the Company pursuant to this Article II, the Company will keep the Agent (as
agent for the Holders) advised in writing as to the initiation of each
registration, qualification and compliance and as to the completion thereof. At
its expense, the Company will:

         (a)      prepare and file with the Commission such amendments and
                  supplements to such registration statement and the prospectus
                  used in connection with such registration statement as may be
                  necessary to comply with the provisions of the Securities Act
                  with respect to the disposition of all securities covered by
                  such registration statement;

         (b)      furnish to the Agent (as agent for the Holders) such numbers
                  of copies of a prospectus, including a preliminary prospectus,
                  in conformity with the requirement of the Securities Act, and
                  such other documents as it may reasonably request (including a
                  conformed copy of the registration statement filed with the
                  Commission and any amendments thereto and an original executed
                  underwriting agreement (if any) entered into in connection
                  with such registration) in order to facilitate the disposition
                  of Registrable Securities owned by the Holders;

<PAGE>
                                     - 5 -

         (c)      use reasonable efforts to register and qualify the securities
                  covered by such registration statement under such other
                  securities or blue sky laws of one (1) jurisdiction (in
                  addition to those jurisdictions in which the Company has
                  otherwise agreed to so register and qualify such securities)
                  as shall be reasonably requested by the Agent (as agent for
                  the Holders) provided that the Company shall not be required
                  in connection therewith or as a condition thereto to qualify
                  to do business or to file a general consent to service of
                  process in any such states or jurisdictions;

         (d)      in the event of any underwritten public offering, enter into
                  and perform its obligations under an underwriting agreement
                  with the managing underwriter(s) of such offering; each Holder
                  participating in such underwriting shall also enter into and
                  perform its obligations under such underwriting agreement;

         (e)      notify the Agent (as agent for each Holder of Registrable
                  Securities covered by such registration statement) at any time
                  when a prospectus relating thereto is required to be delivered
                  under the Securities Act, of the happening of any event as a
                  result of which the prospectus included in such registration
                  statement, as then in effect, includes an untrue statement of
                  a material fact or omits to state a material fact required to
                  be stated therein or necessary to make the statements therein
                  not misleading in the light of the circumstances then
                  existing; and

         (f)      furnish, at the request of the Agent (as agent for the Holders
                  requesting registration of Registrable Securities pursuant to
                  this Article II) on the date that such Registrable Securities
                  are delivered to the underwriters for sale in connection with
                  registration pursuant to this Article II, if such securities
                  are being sold through underwriters, or on the date that the
                  registration statement with respect to such securities becomes
                  effective, if such securities are not being sold through
                  underwriters, (i) a copy of any opinion, dated such date, of
                  the counsel representing the Company for the purposes of such
                  registration, addressed to the underwriters of the Company,
                  and (ii) a copy of any letter, dated such date, from the
                  independent accountants of the Company, addressed to the
                  underwriters of the Company.

         Each Holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described in
clause (e) of this Section 2.3, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such Holder's receipt of the copies
of a supplemented or amended prospectus and, if so directed by the Company, such
Holder will deliver to the Company (at the Company's expense), all copies, other
than permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Securities that was in effect prior to such amendment
or supplement. In the event the Company shall give any such notice, the period
set forth in clause (a) of Section 2.1 shall be extended by the number of days
during the period from and including the date of the giving of such notice
pursuant to clause (e) of this Section 2.3 to and including the date when each
seller of Registrable Securities covered by such registration statement shall
have received the copies of a supplemented or amended prospectus.

<PAGE>
                                     - 6 -

2.4      INDEMNIFICATION.
         ---------------

         (a)      The Company will indemnify each Holder, each Holder's
                  officers, directors and partners, and each Person controlling
                  such Holder (collectively, "Holder's Parties"), participating
                  in any registration, qualification, or compliance effected
                  pursuant to this Article II with respect to Registrable
                  Securities held by such Holder against all claims, losses,
                  damages and liabilities (or actions in respect thereof),
                  including any of the foregoing incurred in settlement of any
                  litigation, commenced or threatened, to which they may become
                  subject under the Securities Act, the Exchange Act or other
                  federal or state law, arising out of or based on (i) any
                  untrue statement (or alleged untrue statement) of a material
                  fact contained in any prospectus, offering circular or other
                  similar document (including any related registration
                  statement, notification or the like prepared by the Company)
                  incident to any such registration, qualification or
                  compliance, or based on any omission (or alleged omission) to
                  state therein a material fact required to be stated therein or
                  necessary to make the statements therein not misleading, or
                  (ii) any violation by the Company of any federal, state or
                  common law rule or regulation applicable to the Company in
                  connection with any such registration, qualification or
                  compliance, and will reimburse each such Holder's Parties for
                  any legal and any other expenses reasonably incurred in
                  connection with investigating or defending any such claim,
                  loss, damage, liability or action, as incurred, provided that
                  the Company will not be liable in any such case to the extent
                  that any such claim, loss, damage, liability or expense arises
                  out of or is based on any untrue statement or omission, made
                  in reliance on and in conformity with written information
                  furnished to the Company by such Holder's Parties specifically
                  for use in the preparation thereof.

         (b)      Each Holder will, if Registrable Securities held by such
                  Holder are included in the securities as to which such
                  registration, qualification or compliance is being effected,
                  severally and not jointly, indemnify the Company, each of its
                  directors and officers, and each Person who controls the
                  Company within the meaning of the Securities Act, against all
                  claims, losses, damages and liabilities (or actions in respect
                  thereof) arising out of or based on (i) any untrue statement
                  (or alleged untrue statement) of a material fact contained in
                  any such registration statement, prospectus, offering circular
                  or other similar document, or any omission (or alleged
                  omission) to state therein a material fact required to be
                  stated therein or necessary to make the statements therein not
                  misleading, and will reimburse the Company, such directors,
                  officers, Persons or control Persons for any legal or any
                  other expenses reasonably incurred in connection with
                  investigating or defending any such claim, loss, damage,
                  liability or action, as incurred, in each case to the extent,
                  but only to the extent, that such untrue statement (or alleged
                  untrue statement) or omission (or alleged omission) is made in
                  such registration statement, prospectus, offering circular or
                  other document in reliance upon and in conformity with the

<PAGE>
                                     - 7 -

                  written information furnished to the Company by such Holder
                  specifically for use in the preparation thereof, or (ii) any
                  violation by any such Holder of any federal, state or common
                  law rule or regulation applicable to such Holder in connection
                  with the distribution of securities pursuant to a registration
                  statement, and will reimburse the Company, such Holders, such
                  directors, officers, Persons, or control Persons for any legal
                  any other expenses reasonably incurred in connection with
                  investigating or defending any such claim, loss, damage,
                  liability, or action, as incurred; provided, however, that the
                  obligations of each such Holder hereunder shall be limited to
                  an amount equal to the aggregate proceeds received by such
                  Holder in such offering.

         (c)      Each party entitled to indemnification under this Section 2.4
                  (the "Indemnified Party") shall give notice to the party
                  required to provide indemnification (the "Indemnifying Party")
                  promptly after such Indemnified Party has received written
                  notice of any claim as to which indemnity may be sought, and
                  shall permit the Indemnifying Party to assume the defense of
                  any such claim or any litigation resulting therefrom, provided
                  that counsel for the Indemnifying Party, who shall conduct the
                  defense of such claim or litigation, shall be approved by the
                  Indemnified Party (whose approval shall not unreasonably be
                  withheld). The Indemnified Party may participate in such
                  defense at such party's expense; provided, however, that the
                  Indemnifying Party shall bear the expense of such defense of
                  one counsel representing the Indemnified Party (or Indemnified
                  Parties) if counsel reasonably acceptable to the Indemnifying
                  Party provides a written opinion that representation of both
                  parties by the same counsel would be inappropriate due to
                  actual or potential conflicts of interest. The failure of any
                  Indemnified Party to give notice as provided herein shall not
                  relieve the Indemnifying Party of its obligations under this
                  Section 2.4, except to the extent such failure to give notice
                  shall materially and adversely prejudice the Indemnifying
                  Party in the defense of any such claim or any such litigation.
                  No Indemnifying Party, in the defense of any such claim or
                  litigation, shall, except with the consent of each Indemnified
                  Party, not to be unreasonably withheld, consent to entry of
                  any judgment or enter into any settlement that does not
                  include as an unconditional term thereof the giving by the
                  claimant or plaintiff to such Indemnified Party of a release
                  from all liability in respect to such claim or litigation.

         (d)
                  (i)      If the indemnification provided for in this Section
                           2.4 is held by a court of competent jurisdiction to
                           be unavailable to an Indemnified Party with respect
                           to any loss, liability, claim, damage or expense
                           referred to herein, then the Indemnifying Party
                           hereunder shall contribute to the amount paid or
                           payable by such Indemnified Party as a result of such
                           loss, liability, claim, damage or expense, in such
                           proportion as is appropriate to reflect the relative
                           fault of the Indemnifying Party on the one hand and
                           the Indemnified Party on the other hand in connection
                           with the statements or omissions which resulted in
                           such loss, liability, claim, damage or expense as

<PAGE>
                                     - 8 -

                           well as any other relevant equitable considerations.
                           The relative fault of the Indemnifying Party and of
                           the Indemnified Party shall be determined by
                           reference to, among other things, whether the untrue
                           or alleged untrue statement of a material fact or the
                           omission to state a material fact relates to
                           information supplied by the Indemnifying Party or by
                           the Indemnified Party and the parties' relevant
                           intent, knowledge, access to information and
                           opportunities to correct or prevent such statement or
                           omission.

                  (ii)     The parties agree that it would not be just and
                           equitable if contribution pursuant to this Section
                           2.4 were determined by pro rata allocation or by any
                           other method of allocation that does not take account
                           of the equitable considerations referred to above.
                           The amount paid or payable by an Indemnified Party as
                           a result of the claims, losses, damages and
                           liabilities referred to above shall be deemed to
                           include, subject to the limitations set forth above,
                           any legal or other expenses reasonably incurred by
                           such Indemnified Party in connection with
                           investigating or defending any such action or claim.

                  (iii)    No Holder that is a seller of Registrable Securities
                           covered by such registration statement or Person
                           controlling such seller other than the Company shall
                           be obligated to make contribution hereunder that in
                           the aggregate exceeds the total public offering price
                           of the Registrable Stock sold by such Holder, less
                           the aggregate amount of any damages that such Holder
                           and its controlling Persons have otherwise been
                           required to pay pursuant to this Section 2.4. The
                           obligations of such Holders to contribute are several
                           in proportion to their respective ownership of the
                           securities covered by such registration statement and
                           not joint.

                  (iv)     The indemnity and contribution provided herein shall
                           be in addition to, and not in lieu of, any other
                           liability that one party may have to another.

2.5      INFORMATION BY HOLDER.
         ---------------------

         Each Holder of Registrable Securities included in any registration
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may request in writing and
as shall be required in connection with any registration, qualification or
compliance referred to in this Article II.

2.6      RULE 144 REPORTING.
         ------------------

         With a view to making available the benefits of certain rules and
regulations of the Commission that may at any time permit the sale of the
Restricted Securities to the public without registration, the Company agrees to:

<PAGE>
                                     - 9 -

         (a)      use its best efforts to facilitate the sale of the Restricted
                  Securities to the public without registration under the
                  Securities Act, pursuant to Rule 144 under the Securities Act;

         (b)      make and keep public information available, as those terms are
                  understood and defined in Rule 144 under the Securities Act,
                  at all times after the effective date of the first
                  registration statement filed by the Company for an offering of
                  its securities to the general public;

         (c)      file with the Commission in a timely manner all reports and
                  other documents required of the Company under the Securities
                  Act and the Exchange Act (at any time after it has become
                  subject to such reporting requirements); and

         (d)      so long as a Holder owns any Restricted Securities to furnish
                  to the Holder forthwith upon request a written statement by
                  the Company as to its compliance with the public information
                  requirements of said Rule 144, and the reporting requirements
                  of the Securities Act and the Exchange Act, a copy of the most
                  recent annual or quarterly report of the Company, and such
                  other reports and documents so filed by the Company as a
                  Holder may reasonably request in availing itself of any rule
                  or regulation of the Commission allowing a Holder to sell any
                  such securities without registration.

2.7      TRANSFER OF REGISTRATION RIGHTS.
         -------------------------------

         The rights granted under this Article II may be assigned or otherwise
conveyed by any Holder of Registrable Securities to any transferee, subject to
compliance with all applicable securities laws and regulations and the written
assumption by the transferee of all of the transferor's obligations under this
Agreement.

2.8      RESTRICTIONS ON MARKET MANIPULATION.
         -----------------------------------

         In the event any shares of Common Stock are offered or sold by any
Holder in a registration, each such Holder will:

         (a)      advise the Company in writing of any offer, sale or other
                  disposition by it of any Common Stock in any manner other than
                  as set forth in the registration statement or any prospectus
                  included therein on or for the 30-day period prior to the
                  filing of such registration statement until the distribution
                  under the registration statement has been completed;

         (b)      not effect any stabilization activity in connection with the
                  Company's Common Stock;

         (c)      not bid or purchase, for any account in which it has a
                  beneficial interest, any Common Stock except as may be
                  permitted pursuant to Regulation M under the Exchange Act (if
                  applicable);

<PAGE>
                                     - 10 -

         (d)      not until it has sold all of such shares of Common Stock,
                  attempt to induce any Person to purchase any Common Stock
                  except as may be permitted pursuant to Regulation M; and

         (e)      not until it has sold all such shares of Common Stock, pay any
                  compensation for soliciting another to purchase any securities
                  of the Company, except as may be permitted pursuant to Rule
                  10b-6.

                                   ARTICLE III
                                  MISCELLANEOUS

3.1      GOVERNING LAW; JURISDICTION AND VENUE.
         -------------------------------------

         This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Delaware.

3.2      SUCCESSORS AND ASSIGNEES.
         ------------------------

         Except as otherwise provided herein, the provisions hereof shall inure
to the benefit of, and be binding upon, the successors, assignees, heirs,
executors and administrators (as the case may be) of the parties hereto.

3.3      ENTIRE AGREEMENT.
         ----------------

         This Agreement constitutes the full and entire understanding and
agreement between the parties with regard to the subject matter hereof.

3.4      NOTICES, ETC.
         ------------

         All notices and other communications required or permitted hereunder
shall be in writing and shall be effective four days after mailed by first-class
mail, postage prepaid, or otherwise delivered by hand or by messenger, addressed
(a) if to the Agent, at 365 Bay Street, 10th Floor Toronto, Ontario M5H 2V2,
Canada, Attention: Mark E. Valentine, Chairman; (b) if to any other Holder of
Registrable Securities, at such address as such Holder shall have furnished the
Company in writing, or, until any such Holder so furnishes an address to the
Company, then to and at the address of the last Holder of such Registrable
Securities who has so furnished an address to the Company; or (c) if to the
Company, at 161 Eglinton Avenue East, Suite 400, Toronto, Ontario M4P 1J5.

3.5      DELAYS OR OMISSIONS.
         -------------------

         No delay or omission to exercise any right, power or remedy accruing to
any Holder of any Registrable Securities, upon any breach or default of the
Company under this Agreement, shall impair any such right, power or remedy of
such Holder nor shall it be construed to be a waiver of any such breach or
default or an acquiescence therein or of or in any similar breach or default
thereunder occurring nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on

<PAGE>
                                     - 11 -

the part of any Holder of any breach or default under this Agreement or any
waiver on the part of any Holder of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any Holder shall be cumulative and
not alternative.

3.6      COUNTERPARTS.
         ------------

         This Agreement may be executed in any number of counterparts, each of
which may be executed by less than all of the parties hereto, each of which
shall be enforceable against the parties actually executing such counterparts
and all of which together shall constitute one instrument.

3.7      SEVERABILITY.
         ------------

         In the event any provision of this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

3.8      AMENDMENTS.
         ----------

         The provisions of this Agreement may be amended at any time and from
time to time, and particular provisions of this Agreement may be waived, with
and only with, an agreement or consent in writing signed by the Company and by
the Holders of a majority of the Registrable Securities voting as a single
class.

         The parties have executed this Registration Rights Agreement as of the
date first written above.

                                       SOFTQUAD SOFTWARE, LTD.

                                          By:
                                               ---------------------------------
                                               Name:
                                               Title:
                                       THOMSON KERNAGHAN & CO.
                                       LIMITED, FOR ITSELF AND AS AGENT

                                          By:
                                               ---------------------------------
                                               Name:
                                               Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}]]