Document:

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OPTION HOLDER LOCK UP AGREEMENT DATED AS OF DECEMBER 10, 1999.

BETWEEN:

                           SOFTQUAD ACQUISITION CORP.
                                     ("SAC")

                                                               OF THE FIRST PART

                                      -and-

                             SOFTQUAD SOFTWARE LTD.
                                ("Softquad USA")
                                                              OF THE SECOND PART

                                      -and-

                                   ----------
                           (the "Selling Shareholder")
                                                               OF THE THIRD PART

         WHEREAS SAC is a wholly owned subsidiary of Softquad Software Ltd.
("Softquad USA").

         AND WHEREAS Thomson Kernaghan & Co. Limited, as agent, has subscribed
for common and convertible preferred shares in Softquad USA on the condition
that SAC and/or Softquad USA make a Qualifying Offer (as herein defined) to
purchase all of the issued and outstanding shares of Softquad Software Inc.
("Softquad Canada") (other than US residents) pursuant to a securities exchange
takeover bid or Share Purchase Agreement on the basis of the issuance to the
Shareholder for each share of Softquad Canada either: (a) one (1) common share
of Softquad USA; or (b) one (1) SAC Exchangeable Share which may be converted
into one (1) Softquad USA common share at any time within 4 years and in any
event will be automatically converted on the fourth anniversary.

         AND WHEREAS the Selling Shareholder is a party to an option agreement
with Softquad Software Inc. which entitles the Selling Shareholder to purchase
7,500 common shares of Softquad Canada (the rights to acquire such shares and/or
the shares which may be issued upon exercise shall be collectively referred to
as the "Softquad Canada Shares").

1.       AGREEMENT TO TENDER SECURITIES OF SOFTQUAD CANADA

1.1 Softquad USA directly or in conjunction with its wholly owned subsidiary SAC
hereby agree to make a "Qualifying Offer" (as defined below) to acquire all of
the issued and outstanding common shares of Softquad Canada (other than those
owned by US residents) and to assume the obligation of Softquad Canada to issue
common shares of Softquad Canada upon the exercise of any existing common share
purchase agreements.

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1.2 Subject to the terms and conditions hereof, the Selling Shareholder agrees
to unconditionally and irrevocably accept any "Qualifying Offer" made by SAC
and/or Softquad USA in respect of all of the Softquad Canada Shares and shall:

                  (a) duly deposit and not withdraw Softquad Canada Shares and
         any shares issued to the Selling Shareholder in the capital of SAC or
         Softquad USA with Thomson Kernaghan & Co. Limited in escrow pursuant to
         the terms of the escrow Agreement attached (or in a form substantially
         similar); and

                  (b) duly deposit and not withdraw the requisite Letter of
         Transmittal form agreeing to tender Softquad Canada Shares, SAC or
         Softquad USA shares, as applicable, in support of the Qualifying Offer.

1.3      A Qualifying Offer shall be an offer:

                  (a) made by Softquad USA and/or SAC or such other person as
         they may designate in writing;

                  (b) made by takeover bid circular or share purchase agreement
         to all of the holders of common shares of Softquad Canada (other than
         US residents) and all holders of options to acquire common shares of
         Softquad Canada (other than US residents); and

                  (c) made on or before March 1, 2000, and closing on or before
         April 30, 2000 and having the following provisions:

                           (i)      the consideration to be received by each
                                    holder of a Softquad Canada common share
                                    shall be $1.3574 US per share;

                           (ii)     the consideration of Softquad USA and/or SAC
                                    shall be either:

                                    (A)      the issuance of 1 Softquad USA
                                             common share; or

                                    (B)      the issuance of 1 SAC Exchangeable
                                             Share which may be converted into 1
                                             Softquad USA common share at any
                                             time within 4 years and which shall
                                             be automatically converted on the
                                             4th anniversary;

                           (iii)    the consideration to be received by each
                                    holder of a Softquad Canada option to
                                    acquire Softquad common shares shall be,
                                    subject to applicable law or regulatory
                                    approval, the receipt of a Softquad USA
                                    option to acquire a Softquad USA common
                                    share for the same exercise price and under
                                    the same terms and conditions as set out in
                                    any agreement between the optionholder and
                                    Softquad Canada;

         It is acknowledged that any Qualifying Offer will include and be
         subject to customary conditions appropriate in the context. The date
         upon which SAC and/or Softquad USA accepts the tendered common shares
         under the Qualifying Offer shall be referred to as the "Closing Date".

                                      -2-

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2.       COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER

2.1 The Selling Shareholder, by its acceptance hereof, covenants, represents and
warrants as follows and acknowledges and confirms that SAC and/or Softquad USA
is relying upon such covenants, representations and warranties in connection
with the purchase by SAC and/or Softquad USA of the Softquad Canada Shares.

                  (a) the Selling Shareholder will not permit and will not
         permit anyone to:

                           (i)      sell, assign, convert or dispose of any
                                    Softquad Canada Shares;

                           (ii)     exercise any statutory or other rights of
                                    withdrawal with respect to the Softquad
                                    Canada Shares; or

                           (iii)    exercise any shareholder rights or remedies
                                    available at common law or pursuant to
                                    applicable legislation to delay, binder,
                                    upset or challenge the Qualifying Offer.

                  (b) all the Softquad Canada Shares are now, and at the time of
         closing will be, owned by the Selling Shareholder as the sole
         beneficial owner of record with a good and marketable title thereto,
         free and clear of any mortgages, liens, charges, restrictions, security
         interest, adverse claims, pledges, encumbrances or demands whatsoever,
         and are issued and outstanding as fully paid and non-assessable;

                  (c) other than as set out in the Unanimous Shareholder
         Agreement of Softquad Canada, no person, firm or corporation has any
         agreement or option, or any right or privilege (whether by law,
         pre-emptive or contractual) capable of becoming an agreement or option
         for the purchase, acquisition or transfer from the Selling Shareholder
         of any of the Softquad Canada Shares or any interest therein or right
         thereto, except SAC pursuant hereto;

                  (d) the Selling Shareholder does not act as nominee, agent,
         trustee, executor, administrator or other legal representative on
         behalf of any other person, firm or corporation in respect of the
         Softquad Canada Shares;

                  (e) if the Selling Shareholder is a corporation, the Selling
         Shareholder is a validly subsisting corporation under the laws of
         Canada or a province of Canada or foreign jurisdiction (as the case may
         be) and the Selling Shareholder has all necessary corporate power and
         authority to execute and deliver this Lockup Agreement to sell the
         Softquad Canada Shares to SAC and/or Softquad USA and to perform its
         obligations hereunder;

                  (f) this Lockup Agreement has been duly executed and delivered
         by and on behalf of the Selling Shareholder and constitutes a legal,
         valid and binding obligation of the Selling Shareholder enforceable
         against the Selling Shareholder in accordance with its terms;

                                      -3-

<PAGE>

                  (g) the execution and delivery of this Lockup Agreement and
         the completion of the transactions contemplated hereby will not
         conflict with, result in a default under, or accelerate or permit the
         acceleration of the performance required by, any agreement or
         instrument to which the Selling Shareholder; or

                  (h) neither the Selling Shareholder nor any affiliate or
         associate thereof is a party to, or is aware of, any agreement,
         commitment or understanding between or among shareholder of Softquad
         Canada with respect to the exercise of any voting rights attaching to
         any securities of Softquad Canada beneficially owned by such
         shareholders or any voting trust agreement or other shareholders
         agreement relating to securities of Softquad Canada;

3.       COVENANTS, REPRESENTATIONS AND WARRANTIES OF SAC/SOFTQUAD USA

3.1 SAC and/or Softquad USA jointly and severally, covenant, represent and
warrant as follows and hereby acknowledge and confirm that the Selling
Shareholder is relying upon such covenants, representations and warranties in
connection with the sale by it of the Softquad Canada Shares:

                  (a) SAC and/or Softquad USA have all necessary power and
         authority to execute and deliver this offer, to purchase the Softquad
         Canada Shares pursuant to the provisions hereof and to perform its
         obligations hereunder; and

                  (b) this Lockup Agreement has been duly executed and delivered
         by and on behalf of SAC and/or Softquad USA and this Lockup Agreement
         will constitute a legal, valid and binding obligation of SAC and
         Softquad USA enforceable against SAC and Softquad USA in accordance
         with its terms.

4.       CONDITIONS OF CLOSING

4.1 The obligation of SAC and/or Softquad USA to purchase the Softquad Canada
Shares shall be subject to the following conditions for the exclusive benefit of
SAC to be fulfilled and/or performed at any time:

                  (a) SAC and/or Softquad USA shall, upon written request
         therefor made prior to the execution of this agreement by the Selling
         Shareholder, receive the opinion of counsel to the Selling Shareholder,
         which counsel shall be reasonably satisfactory to SAC and/or Softquad
         USA, in form and terms reasonably satisfactory to counsel of SAC and/or
         Softquad USA, to the effect that this Lockup Agreement has been duly
         executed and delivered by, and constitutes a legal, valid and binding
         obligation of, the Selling Shareholder enforceable against the Selling
         Shareholder in accordance with its terms, subject to the qualifications
         that enforcement thereof may be limited by bankruptcy, insolvency or
         other laws affecting the enforcement of creditors' rights generally and
         that specific performance and injunction and other equitable remedies

                                      -4-

<PAGE>

         may only be granted in the discretion of a court of competent
         jurisdiction;

                  (b) no action or proceeding shall be pending or threatened by
         any person, company, firm, governmental authority, securities
         commission, regulatory body or agency to enjoin or prohibit the
         purchase and sale of the Softquad Canada Shares contemplated hereby or
         the right of the SAC and/or Softquad USA to own the Softquad Canada
         Shares or to suspend or stop trading in securities of Softquad Canada;

                  (c) the covenants, representations and warranties of the
         Selling Shareholder contained in Article 2 hereof shall be true and
         correct on and as of the date of the acceptance of this Lockup
         Agreement and at the Closing Date;

                  (d) the Selling Shareholder shall have complied with all
         covenants and agreements herein agreed to be performed or caused to be
         performed by it;

                  (e) SAC and/or Softquad USA shall have received at the Closing
         Date a certificate dated the Closing Date, in form reasonably
         satisfactory to SAC and/or Softquad USA, executed by the Selling
         Shareholder to the effect that the Selling Shareholder has neither
         authorized nor taken any act referred to in subsection 2.1 (a) and that
         no state of facts exists which would entitle the Selling Shareholder to
         rescind the Agreement.

In case any of the foregoing conditions have not been fulfilled and/or performed
at or before the Closing Date to the satisfaction of SAC and/or Softquad USA,
SAC and/or Softquad USA may rescind this Lockup Agreement by notice to the
Selling Shareholder and in such event SAC and/or Softquad USA shall be released
from all obligations hereunder; provided that any of such conditions may be
waived in whole or in part by SAC and/or Softquad USA without prejudice to its
rights of rescission in the event of the non-fulfillment of any other condition
or conditions.

4.2 The obligation of SAC and/or Softquad USA to purchase the Softquad Canada
Shares shall be subject to the further condition for the exclusive benefit of
SAC that, on or before the close of business on March 1, 2000, SAC shall be
satisfied that it is or will be in compliance with all applicable legal and
regulatory requirements relating to it with respect to its investment in the
Softquad Canada Shares and shall have received, in its discretion, all necessary
or appropriate orders, rulings and consents from regulatory bodies, securities
commissions, government agencies and others with respect thereto.

4.3 In the event that SAC shall not have notified the Selling Shareholder on or
before 4:00 o'clock in the afternoon Toronto, Ontario time on March 1, 2000 that
the condition referred to in Section 4.2 has been fulfilled or waived, then such
condition shall be deemed not to have been fulfilled.

4.4 In the event that the condition referred to in section 4.3 shall not have
been fulfilled or waived by SAC and/or Softquad USA, this Lockup Agreement shall
be rescinded and each of the parties hereto shall be released from all
obligations hereunder.

                                      -5-

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5.       COVENANTS OF THE SELLING SHAREHOLDER

5.1 The Selling Shareholder agrees to use its best efforts to cause the
conditions referred to in subsection 4.1 to be fulfilled and/or performed prior
to the Closing Date.

5.2 The Selling Shareholder covenants and agrees that, between the date hereof
and the Closing Date, it will not take any step or act with respect to or in
furtherance of the sale of the Softquad Canada Shares or any portion thereof to
any person, firm or corporation other than SAC and/or Softquad USA and, without
limiting the generality of the foregoing, will not negotiate with, solicit any
offer from, or have any discussion with, any other person, firm or corporation
with a view to such a sale.

6.       ENTIRE AGREEMENT

6.1 The agreement resulting from acceptance of this offer shall constitute the
entire agreement and understanding between the parties with respect to the
subject matter hereof and shall supersede any prior agreement, representation or
understanding with respect thereto.

7.       TIME OF THE ESSENCE

7.1      Time shall be of the essence hereof.

8.       SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES

8.1 The respective covenants, representations and warranties of the parties
contained herein shall survive the closing of the purchase and sale of the
Softquad Canada Shares herein provided for, and, notwithstanding such closing,
or any investigation made by or on behalf of any party, shall continue in full
force and effect for the benefit of the party to whom the covenant,
representation or warranty was made.

9.       NOTICES

9.1 Any notice, direction or other instrument required or permitted to be given
to either party hereto shall be in writing and may be given by delivering or
telecopying the same to:

                  If to SAC:                    If to the Selling Shareholder:

         Softquad Acquisition Corp.           ----------------------------------
         161 Eglinton Avenue East, Suite 400  ----------------------------------
         Toronto, Ontario M4P lJ5             ----------------------------------
                                              ----------------------------------
         Attention: Roberto Drassinower       ----------------------------------
         Facsimile No. (416) 544-0300         ----------------------------------

9.2 Any such notice, direction or other instrument shall be deemed to have been
given or made on the date on which it was delivered or telecopied (or, if such
day is not a business day, on the next following business day).

                                      -6-

<PAGE>

10.      GOVERNING LAW

10.1 The Agreement shall be construed and enforced in accordance with, and the
respective rights and obligations of the parties shall be governed by, the laws
of the province of Ontario and the applicable federal laws of Canada.

11.      CONFIDENTIALITY

11.1 The Agreement shall be kept confidential by the parties hereto and no
public announcement or press release concerning the Agreement shall be made by
either party without the consent of the other party or except as may be required
by law.

12.      SUCCESSORS AND ASSIGNS

12.1 Neither party may assign any of its rights or obligations hereunder to any
other person, firm or corporation without the prior written consent of the other
party hereto, except that SAC and/or Softquad USA may assign this agreement and
its rights hereunder in whole or in part to one or more corporations all of the
shares of which are beneficially owned by SAC and/or Softquad USA.

12.2 This agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.

13.      TERMINATION

13.1 The Selling Shareholder may at any time thereafter, by notice in writing to
SAC, terminate its obligations hereunder if:

                  (a) no Qualifying Offer is made by March 1, 2000; and/or

                  (b) if the Qualifying Offer is made by March 1, 2000, but the
         acquisition of 90% of the common shares of Softquad Canada is not
         completed by April 30, 2000.

14.      TERMINATION OF UNANIMOUS SHAREHOLDER AGREEMENT

14.1 The Selling Shareholder hereby agrees to the immediate termination of the
unanimous shareholders agreement of Softquad Software Inc. dated November 6,
1998 (the "Unanimous Shareholders Agreement") and agrees that if on April 30,
2000, 90% of Softquad Software Inc.'s common shares have not been purchased by
SAC and/or Softquad USA as set forth herein, the terms of the Unanimous
Shareholders Agreement shall be reinstated and shall be in full force and effect
as of the date thereof and the Selling Shareholder agrees to execute and deliver
any documentation necessary to evidence such reinstatement of the Unanimous
Shareholders Agreement.

                                      -7-

<PAGE>

15.      SIGNED IN COUNTERPART

15.1 This Agreement may be signed in counterpart.

SOFTQUAD ACQUISITION CORP.

Per:

------------------------------
SOFTQUAD SOFTWARE LTD.

Per:

------------------------------

------------------------------              ------------------------------------
Witness                                     Signature of Selling Shareholder

                                            ------------------------------------
                                            (Print Name)

                                      -8-<PAGE>

                      AMENDED AND RESTATED ESCROW AGREEMENT

1.       PARTIES.

1.1 This Amended and Restated Escrow Agreement (this "Agreement") is made and
entered into effective as of December 16, 1999 (the "Effective Date"), by
_______(the "Shareholder"), Softquad Acquisition Corp. ("SAC"), Softquad
Software Ltd. ("Softquad USA") and Thomson Kernaghan & Co. Ltd. (the "Escrow
Holder").

2.       RECITALS.

2.1 This Escrow Agreement is made with reference to the following facts and
circumstances:

         (a)      SAC is a wholly-owned subsidiary of Softquad USA. SAC and/or
                  Softquad USA have committed to make a Qualifying Offer, as
                  defined in a Lock Up Agreement between the Shareholder and SAC
                  dated December 16, 1999 ("Lock Up Agreement"), to acquire all
                  of the common shares of the Shareholder in Softquad Software
                  Inc. ("Softquad Canada") namely nil common shares (the
                  "Softquad Canada Shares") and to assume Softquad Canada's
                  obligations with respecting any outstanding common stock
                  purchase option agreements on the basis that Softquad USA
                  would issue one Softquad USA common share upon the exercise of
                  each option to purchase one Softquad Canada common share for
                  the consideration set out in existing Softquad Canada option
                  agreements. And whereas the Shareholder is entitled to
                  purchase 5,000 common shares of Softquad Canada pursuant to
                  existing stock option agreements (any Softquad USA common
                  shares or Softquad Canada shares issued to the Shareholder
                  upon exercise of rights to purchase common shares shall be
                  referred to as the "Option Shares").

         (b)      The Shareholder has agreed to tender Softquad Canada Shares to
                  the Offeror(s) under the Qualifying Offer for:

                      (i)  nil common shares in Softquad USA; or
                      (ii) nil Exchangeable Shares in SAC which may be converted
                      into an equivalent number of common shares of Softquad
                      USA.

                      (either one referred to as the "Escrowed Shares")

         (c)      The Escrow Holder shall release the number of Escrowed Shares
                  and Option Shares to the Shareholder and transmit the share
                  certificates representing such shares on the dates specified
                  in section 4.1.

3.       ESCROW

3.1 By the execution of this Agreement, the Shareholder directs Softquad USA
and/or SAC to deliver, upon completion of the Qualifying Offer and thereafter
from time to time on the exercise of options, the certificates representing the
Escrowed Shares and Option Shares to the Escrow Holder to be held, delivered and
released in accordance with the terms of this Agreement.

3.2 The Escrowed Shares and Option Shares shall be represented by such number of
certificates for such numbers of Escrowed Shares and Option Shares as the
Shareholder shall specify, which certificates shall be registered in the name of
the Shareholder.

3.3 In the event of any capital reorganization, consolidation, stock split or
other corporate event which requires the Escrow Holder to surrender the Escrowed
Shares and Option Shares to the transfer agent of SAC and/or Softquad USA, the
Escrow Holder may effect such substitution. By virtue of this agreement, the
Shareholder hereby provides to the Escrow Holder such rights, including
irrevocable power of attorney to act on behalf of the Shareholder and to take
such steps and execute such documents on behalf of the Shareholder as are
necessary to effect the share substitutions, provided that the substituted
shares shall remain subject to the terms hereof.

                                      -1-

<PAGE>

3.4 Upon receipt of a written notice from the Shareholder advising the Escrow
Holder of the Shareholder's intention to exchange the SAC Exchangeable Shares
for Softquad USA common shares, the Escrow Holder shall submit the Exchangeable
Shares to the transfer agent of SAC and instruct Softquad USA to deliver the
Softquad USA common shares to the Escrow Holder. By virtue of this agreement,
the Shareholder hereby provides to the Escrow Holder such rights, including
irrevocable power of attorney to act on behalf of the Shareholder and to take
such steps and execute such documents on behalf of the Shareholder as are
necessary to effect such exchanges, provided that the Softquad USA common shares
issued in favour of the Shareholder shall remain subject to the terms hereof.

4.       RELEASE OF ESCROWED SHARES / RESALE OF ESCROWED SHARES / SHAREHOLDER
         RIGHTS

4.1      (a)      The Shareholder shall be held by the Escrow Holder and
                  shall be released (and certificates representing such shares
                  shall be delivered to the Shareholders) on the following
                  schedule:

                      (i)  nil Escrowed Shares on December 16, 2000;
                      (ii) nil Escrowed Shares on December 16, 2001; and
                      (iii) the balance of the Escrowed Shares on
                      December 16, 2002.

         (b)      Any Option Shares issued to the Shareholder shall be held by
                  the Escrow Holder and shall be released (and certificates
                  representing such shares shall be delivered to the
                  Shareholders) on the following schedule:

                      (i) to a maximum of 1,666 Option Shares on December 16,
                      2000;
                      (ii) to a maximum of 1,666 Option Shares on
                      December 16, 2001; and
                      (iv) the balance of the Option Shares on
                      December 16, 2002.

         (c)      Notwithstanding (a) and (b), in the event that a registration
                  statement under the U.S. Securities Act of 1933 has not been
                  filed by Softquad USA and declared effective by the Securities
                  and Exchange Commission on or before October 31, 2000, all of
                  the Escrowed Shares and Option Shares shall be immediately
                  released from escrow.

4.2 The Shareholder agrees that the Shareholder shall not sell, transfer,
assign, pledge, hypothecate, hedge or otherwise deal with the Escrowed Shares
and/or Option Shares until such Escrowed Shares and/or Option Shares are
released to the Shareholder in accordance with this Agreement.

4.3 Other than as set out in paragraph 4.2, nothing in this Agreement shall
diminish the rights of the Shareholder (as a shareholder of SAC or Softquad USA)
and without limiting the generality of the foregoing, the Shareholder shall
retain voting control over the Escrowed Shares and Option Shares and shall be
entitled to receive dividends, as and when declared and paid.

5.       TERMINATION.

5.1. This Escrow Agreement shall terminate on the earlier of: (a) the date on
which all of the Escrowed Shares and Option Shares have been released from
escrow; and (b) December 16, 2002.

6.       LIMITATION ON THE ESCROW HOLDER'S LIABILITY; INDEMNIFICATION.

6.1 The Escrow Holder shall not be liable to the Shareholder, or to any other
person or entity for any action taken or omitted by it, except for the Escrow
Holder's own negligence or wilfull misconduct. Without limiting the generality
of the foregoing the Escrow Holder may rely upon, and shall be protected in
acting or refraining from acting in reliance upon, any notice, certificate,
instrument, request, paper or other document reasonably believed by it to be
genuine and made, sent, signed or presented by the Shareholder, Softquad Canada,
Softquad USA and/or SAC, or any other person or entity.

                                      -2-

<PAGE>

6.2 The Escrow Holder shall not be responsible for the validity or
enforceability of any provision of this Escrow Agreement, or for the execution
thereof by any parties to this agreement, or for the truth or accuracy of any
recitals or other statements of fact contained in this Escrow Agreement.

6.3 The Escrow Holder is not, and shall not be deemed for any purpose to be, a
fiduciary under this Escrow Agreement or otherwise, for any party to this
agreement, or for any other person or entity.

7.       MISCELLANEOUS PROVISIONS.

7.1 No amendment, modification, termination, or waiver of any provision of this
Escrow Agreement, nor consent to any departure by the Shareholder or the Escrow
Holder from any of its provisions, shall in any event be effective unless the
same shall be in writing and signed by the other, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.

7.2. All notices given under this Escrow Agreement shall be in writing,
addressed to the parties as set forth below (except in the case of the
Shareholder, in which event it shall be sent to the last address shown for the
Shareholder in the relevant shareholders' register), and shall be effective on
the earliest of (i) the date received, or (ii) if given by facsimile transmittal
on the date given if transmitted before 5:00 p.m. the recipient's time,
otherwise it is effective the next day, or (iii) on the second business day
after delivery to a major international air delivery or air courier service
(such as Federal Express or Network Couriers):

         If to the Escrow Holder:                If to SAC
     Thomson Kernaghan & Co. Ltd.            Softquad Acquisition Corp.
     365 Bay Street                          161 Eglinton Avenue East, Suite 400
     Toronto, Ontario M5H 2V2                Toronto, Ontario  M4P 1J5
     Attention: Lionel Conacher              Attention:  Roberto Drassinower
     Facsimile No. (416)  367-8055           Facsimile No. (416) 544-0300

     With a copy (that does not constitute       If to Softquad USA
         Notice) to:                         Softquad Software Ltd.
     John M. Mann                            161 Eglinton Avenue East, Suite 400
     Attorney at Law                         Toronto, Ontario  M4P 1J5
     2200 Post Oak Boulevard, Suite 614      Attention:  Roberto Drassinower
     Houston, Texas 77056-4706               Facsimile No. (416) 544-0300
     Facsimile No. (713) 622-7185
                                             With a copy (that does not
                                                 constitute notice) to:
                                             Blaney McMurtry Stapells Friedman
                                             20 Queen Street West, Suite 1400
                                             Toronto, Ontario  M5H 2V3
                                             Attention:  Arlene D. O'Neill
                                             Facsimile No. (416) 593-5437

7.3 No failure or delay on the part of the Escrow Holder in exercising any
right, power, or remedy hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right, power, or remedy preclude any
other or further exercise thereof or the exercise of any other right, power, or
remedy hereunder. The rights and remedies provided herein are cumulative, and
are not exclusive of any other rights, powers, privileges, or remedies, now or
hereafter existing, at law or in equity or otherwise.

7.4 This Escrow Agreement shall be binding upon and inure to the benefit of the
Shareholder, SAC, Softquad USA and the Escrow Holder, and their respective
successors and assigns, except that the Shareholder may not assign or transfer
any of its rights under this Escrow Agreement without the prior written consent
of the Escrow Holder.

                                      -3-

<PAGE>

7.5 The Shareholder agrees to pay on demand all costs and expenses incurred by
the Escrow Holder in connection with the preparation, execution, delivery,
filing, and administration of this Escrow Agreement, and of any amendment,
modification, or supplement hereto, including, without limitation, the fees and
out-of-pocket expenses of counsel for the Escrow Holder incurred in connection
with advising the Escrow Holder as to its rights and responsibilities hereunder.
The Shareholder also agrees to pay all such costs and expenses, including court
costs, incurred in connection with enforcement of this Escrow Agreement, or any
amendment, modification, or supplement thereto, whether by negotiation, legal
proceedings, or otherwise. In addition, the Shareholder shall pay any and all
stamp and other taxes and fees payable or determined to be payable in connection
with the issuance, transfer and deliver of any Escrowed Shares, and agrees to
hold the Escrow Holder harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
and fees. This provision shall survive termination of this Escrow Agreement.

7.6 This Agreement shall be governed by and interpreted in accordance with the
laws of the Province of Ontario and the laws of Canada as applicable; provided,
however, that if any provision of this Agreement is unenforceable under the laws
of the Province of Ontario or the laws of Canada as applicable, but is
enforceable under Delaware law, then such provision shall be governed by and
interpreted in accordance with Delaware law. The parties agree that the courts
of the Province of Ontario, Canada, shall have exclusive jurisdiction and venue
for the adjudication of any civil action between them arising out of relating to
this Agreement, and hereby irrevocably consent to such jurisdiction and venue.

7.7      This agreement may be signed in counterpart and by fax.

      IN WITNESS WHEREOF, the Shareholder and the Escrow Holder have executed
this Escrow Agreement as of the Effective Date.

THOMSON KERNAGHAN & CO. LIMITED.            SOFTQUAD ACQUISITION CORP.

By _________________________________        By _________________________________

SOFTQUAD SOFTWARE LTD.

By _________________________________

____________________________________        ____________________________________
WITNESS                                     SIGNATURE OF  SELLING SHAREHOLDER

                                            ____________________________________

                                      -4-

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"}]]