Document:

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Warrant No. 9 (Replacement)                                      Agent's Warrant

        Void after 5:00 p.m. Toronto, Ontario time, on February 28, 2003
                   Warrant to Purchase Shares of Common Stock

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THE SECURITIES
ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION S
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE
SECURITIES ARE "RESTRICTED" AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES
OR TO U.S. PERSONS (AS SUCH TERM IS DEFINED IN REGULATION S PROMULGATED UNDER
THE ACT) UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT, PURSUANT TO
REGULATION S OR PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND THE SELLER WILL BE PROVIDED WITH OPINION OF COUNSEL
OR OTHER SUCH INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
EXEMPTIONS ARE AVAILABLE. FURTHER HEDGING TRANSACTIONS INVOLVING THE SECURITIES
MAY NOT BE MADE EXCEPT IN COMPLIANCE WITH THE ACT.

          _____________________________________________________________

               WARRANT TO PURCHASE 100,000 SHARES OF COMMON STOCK

                                       OF

                             SOFTQUAD SOFTWARE, LTD.

        ________________________________________________________________

     This it to certify that, FOR VALUE RECEIVED, Thomson Kernaghan & Co.
Limited or assigns ("Holder") is entitled to purchase, subject to the provisions
of this Warrant, from SOFTQUAD SOFTWARE, LTD., a Delaware corporation (the
"Company"), the fully paid, validly issued and non-assessable shares of Common
Stock, $0.001 par value, of the Company ("Common Stock") at any time or from
time to time during the period from the date hereof, through and including
February 28, 2003, but not later than 5:00 p.m. Toronto, Ontario time, on
February 28, 2003 (the "Exercise Period"), at the price of US$2.50 per share
(the "Exercise Price"). The total number of shares of Common Stock to be issued
upon exercise of this Warrant shall be 100,000 shares. The price to be paid for
each share of Common Stock may be adjusted from time to time as hereinafter set
forth. The shares of Common Stock deliverable upon such exercise, and as
adjusted from time to time, are hereinafter sometimes referred to as "Warrant
Shares" and the respective exercise price of a share of Common Stock in effect
at any time and as adjusted from time to time is hereinafter sometimes referred
to as the "Exercise Price." This Warrant is being issued pursuant to the Special
Warrant Purchase Agreement, dated as of May 19, 2000, between the Company and
Thomson Kernaghan & Co. Limited, as Agent.

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                                     - 2 -

A.   EXERCISE OF WARRANT

     This Warrant may be exercised in whole or in part at any time or from time
to time during the Exercise Period; provided, however, that (i) if the last day
of the Exercise Period is a day on which banking institutions in the City of
Toronto are authorized by law to close, then the Exercise Period shall terminate
on the next succeeding day that shall not be such a day, and during such period
the Holder shall have the right to exercise this Warrant into the kind and
amount of shares of stock and other securities and property (including cash)
receivable by a holder of the number of shares of Common Stock into which this
Warrant might have been exercisable immediately prior thereto. This Warrant may
be exercised by presentation and surrender hereof to the Company of this Warrant
at the Company's principal office, with the Exercise Form annexed hereto duly
executed and accompanied by payment of the Exercise Price for the number of
Warrant Shares specified in such form. As soon as practicable after each such
exercise of the Warrants, but not later than seven (7) days from the date of
such exercise, the Company shall issue and deliver to the Holder a certificate
or certificates for the designee. If this Warrant should be exercised in part
only, the Company shall, upon surrender of this Warrant for cancellation,
execute and deliver a new Warrant evidencing the rights of the Holder thereof to
purchase the balance of Warrant Shares purchasable thereunder. Upon receipt by
the Company of this Warrant at its principal office, or by the stock transfer
agent of the Company at its office, in proper form for exercise, the Holder
shall be deemed to be holder of record of the shares of Common Stock issuable
upon such exercise, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such shares of Common
Stock shall not then be physically delivered to the Holder.

     THIS WARRANT MAY BE EXERCISED ONLY (i) BY A PERSON WHO IS NOT A U.S. PERSON
(AS DEFINED IN REGULATION S PROMULGATED UNDER THE ACT), (ii) IF NOT EXERCISED ON
BEHALF OF A U.S. PERSON, (iii) IF NO U.S. PERSON HAS ANY INTEREST IN THE
WARRANTS BEING EXERCISED OR THE UNDERLYING SECURITIES TO BE ISSUED UPON
EXERCISE, AND (iv) OUTSIDE THE UNITED STATES AND THE WARRANT SHARES UNDERLYING
THE WARRANTS ARE TO BE DELIVERED OUTSIDE THE UNITED STATES. IF THE ABOVE CANNOT
BE COMPLIED WITH, THEN THE WARRANT CAN BE EXERCISED ONLY IF A WRITTEN OPINION OF
COUNSEL, THE FORM AND SUBSTANCE OF WHICH IS ACCEPTABLE TO THE COMPANY, IS
DELIVERED TO THE COMPANY PRIOR TO EXERCISE OF THE WARRANTS BEING EXERCISED THAT
REGISTRATION IS NOT REQUIRED, OR THE UNDERLYING SECURITIES DELIVERED UPON
EXERCISE HAVE BEEN REGISTERED UNDER THE ACT.

B.   RESERVATION OF SHARES AND COVENANTS OF THE COMPANY

     The Company shall at all times have allotted and reserved for issuance
and/or delivery upon exercise of this Warrant such number of shares of its
Common Stock as shall be required for issuance and delivery upon exercise of the
Warrant.

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                                     - 3 -

     The Company covenants with the Holder that so long as any Warrants remain
outstanding and may be exercised:

     1.   it will cause the shares of Common Stock and the certificates
          representing the Common Stock subscribed and paid for pursuant to the
          exercise of the Warrants to be duly issued and delivered in accordance
          herewith and the terms hereof;

     2.   all shares of Common Stock that shall be issued upon exercise of the
          right to purchase provided for herein, upon payment of the prevailing
          Exercise Price herein provided, shall be fully paid and
          non-assessable;

     3.   it will use its best efforts to maintain its corporate existence; and

     4.   generally, it will and truly perform and carry out all of the acts or
          things to be done by it as provided herein.

C.   FRACTIONAL SHARES

     No fractional shares or script representing fractional shares shall be
issued upon the exercise of this Warrant. With respect to any fraction of a
share called for upon any exercise hereof, the Company shall pay to the Holder
an amount in cash equal to such fraction multiplied by the current market value
of a share, determined as follows:

     1.   If the Common Stock is listed on a National Securities Exchange or
          admitted to unlisted trading privileges on such exchange or listed for
          trading on the NASDAQ system, the current market value shall be the
          last reported sale price of the Common Stock on such exchange or
          system on the last business day prior to the date of exercise of this
          Warrant or, if no such sale is made (or reported) on such day, the
          average closing bid and asked prices for such day on such exchange or
          system; or

     2.   If the Common Stock is not so listed or admitted to unlisted trading
          privileges, the current market value shall mean to be the last
          reported bid and ask prices reported by the Electronic Bulletin Board
          or National Quotation Bureau, Inc. on the last business day prior to
          the date of the exercise of this Warrant; or

     3.   If the Common Stock is not so listed or admitted to unlisted trading
          privileges and bid and ask prices are not so reported, the current
          market value shall be an amount, not less than book value thereof as
          at the end of the most recent fiscal year of the Company ending prior
          to the date of the exercise of the Warrant, determined in such
          reasonable manner as may be prescribed by the Board of Directors of
          the Company.

D.   EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT

     This Warrant is exchangeable, without expense, at the option of the Holder,
upon

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                                     - 4 -

presentation and surrender hereof to the Company for other warrants of different
denominations entitling the holder thereof to purchase in the aggregate the same
number of shares of Common Stock purchasable hereunder. Upon surrender of this
Warrant to the Company at its principal office, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any applicable transfer tax,
the Company shall, without charge, execute and deliver a new Warrant in the name
of the assignee named in such Assignment Form and this Warrant shall promptly be
canceled. This Warrant may be divided or combined with other warrants that carry
the same rights upon presentation hereof at the principal office of the Company,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof. The term
"Warrant" as used herein includes any Warrants into which this Warrant may be
divided or exchanged. Upon receipt of the Company of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed
or mutilated shall be at any time enforceable by anyone.

     This Warrant and the Common Stock issuable upon exercise of this Warrant
were issued under Regulation S under the Act and may be transferred only in
accordance therewith and as provided in the legends set forth in this Warrant.

E.   RIGHTS OF THE HOLDER

     The Holder shall not, by virtue hereof, be entitled to any rights of a
shareholder in the Company, either at law or equity, and the rights of the
Holder are limited to those expressed in the Warrant and are not enforceable
against the Company except to the extent set forth herein.

F.   ANTI-DILUTION PROVISIONS

     The respective Exercise Price in effect at any time and the number and kind
of securities purchasable upon the exercise of the Warrant shall be subject to
adjustment from time to time upon the happening of certain events are follows:

     1.   In case the Company shall (i) declare a dividend or make a
          distribution on its outstanding shares of Common Stock in shares of
          Common Stock, (ii) subdivide or reclassify its outstanding shares of
          Common Stock into a greater number of shares, or (iii) combine or
          reclassify its outstanding shares of Common Stock into a smaller
          number of shares, the respective Exercise Price in effect at the time
          of the record date for such dividend or distribution or of the
          effective date of such subdivision, combination or reclassification
          shall be adjusted so that it shall equal the price determined by
          multiplying the respective Exercise Price by a fraction, the
          denominator of which shall be the number of shares of Common Stock
          outstanding after giving effect to such action, and the numerator of
          which shall be the number of shares of Common Stock outstanding
          immediately prior to such

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                                     - 5 -

          action. Such adjustment shall be made successively whenever any event
          listed above shall occur.

     2.   Whenever the respective Exercise Price payable upon exercise of each
          Warrant is adjusted pursuant to Subsection (1) above, the number of
          Shares purchasable upon exercise of this Warrant shall simultaneously
          be adjusted by multiplying the respective number of Shares initially
          issuable upon exercise of this Warrant by a fraction, the denominator
          of which shall be the Exercise Price after giving effect to such
          action and the numerator of which shall be the Exercise Price in
          effect immediately prior to such action.

     3.   No adjustment in the respective Exercise Price shall be required
          unless such adjustment would require an increase or decrease of at
          least one cent ($0.01) in such price; provided, however, that any
          adjustment that by reason of this Subsection (3) is not required to be
          made shall be carried forward and taken into account in any subsequent
          adjustment required to be made hereunder. All calculations under this
          Section (F) shall be made to the nearest cent or to the nearest
          one-hundredth of a share, as the case may be. Anything in this Section
          (F) to the contrary notwithstanding, the Company shall be entitled,
          but shall not be required, to make such changes in the respective
          Exercise Price, in addition to those required by this Section (F), as
          it shall determine, in its sole discretion, to be advisable in order
          that any dividend or distribution in shares of Common Stock, or any
          subdivision, reclassification or combination of Common Stock,
          hereafter made by the Company shall not result in any federal income
          tax liability to the holders of Common Stock or securities convertible
          into Common Stock (including the Warrants).

     4.   In the event that at any time, as a result of an adjustment made
          pursuant to Subsection (1) above, the Holder of this Warrant
          thereafter shall become entitled to receive any shares of the Company,
          other than Common Stock, thereafter the number of such other shares so
          receivable upon exercise of this Warrant shall be subject to
          adjustment from time to time in a manner and on terms as nearly
          equivalent as practicable to the provisions with respect to the Common
          Stock contained in Subsections (1) to (3) inclusive above.

     5.   Irrespective of any adjustments in the respective Exercise Price or
          the related number or kind of shares purchasable upon exercise of this
          Warrant, Warrants theretofore or thereafter issued may continue to
          express the same price and number and kind of shares as are stated in
          the similar Warrants initially issuable pursuant to this Warrant.

G.   OFFICER'S CERTIFICATE

     Whenever the respective Exercise Price shall be adjusted as required by the
provisions of the foregoing Section (F), the Company shall forthwith file in the
custody of its Secretary or an

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                                     - 6 -

Assistant Secretary at its principal office, an officer's certificate showing
the adjusted Exercise Price determined as herein provided, setting forth in
reasonable detail the facts requiring such adjustment, including a statement of
the number of related additional shares of Common Stock, if any, and such other
facts as shall be necessary to show the reason for and the manner of computing
such adjustment. Each such officer's certificate shall be made available at all
reasonable times for inspection by the holder or any holder of a Warrant
executed and delivered pursuant to Section (A) and the Company shall, forthwith
after each such adjustment, mail a copy by certified mail of such certificate to
the Holder or any such holder.

H.   NOTICES TO WARRANT HOLDERS

     So long as this Warrant shall be outstanding, (i) if the Company shall pay
any dividend or make any distribution upon the Common Stock or (ii) if the
Company shall offer to the holders of Common Stock for subscription or purchase
by them any share of any class or any other rights, options or warrants (other
than this Warrant) or (iii) if a capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least fifteen (15) days prior
to the date specified, as the case may be, a notice containing a brief
description of the proposed action and stating the date on which a record date
is to be determined for the purpose of such dividend, distribution or issue of
rights, options, or warrants or such reclassification, reorganization,
consolidation, merger, conveyance, lease, dissolution, liquidation or winding up
is to take place and the date, if any is to be fixed as of which the holders of
Common Stock or other securities shall receive cash or other property
deliverable upon such reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up. The failure to give such
notice shall not otherwise affect the action take by the Company.

I.   RECLASSIFICATION, REORGANIZATION OR MERGER

     In case of any reclassification, capital reorganization or other change of
outstanding shares Common Stock of the Company, or in case of any consolidation
or merger of the Company with or into another corporation (other than a merger
with a subsidiary in which merger the Company is the continuing corporation and
that does not result in any reclassification, capital reorganization or other
change of outstanding shares of Common Stock of the class issuable upon exercise
of this Warrant) or in case of any sale, lease or conveyance to another
corporation of the property of the Company as an entirety, the Company shall, as
a condition precedent to such transaction, cause effective provisions to be made
so that the Holder shall have the right thereafter, by exercising this Warrant
at any time prior to the expiration of the Warrant, to purchase the kind and
amount of shares of stock an other securities and property receivable upon such
reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance by a holder of such number of shares of Common Stock
that might have been purchased upon exercise of this Warrant immediately prior
to such reclassification, change, consolidation, merger, sale or conveyance. Any
such provision shall include provision

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                                     - 7 -

for adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Warrant. The foregoing provisions of this
Section (I) shall similarly apply to successive reclassifications, capital
reorganizations and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances. In the event that in connection
with any such capital reorganization or reclassification, consolidation, merger,
sale or conveyance, additional shares of Common Stock shall be issued in
exchange, conversion, substitution or payment, in whole or in part, for a
security of the Company other than Common Stock, any such issue shall be treated
as an issue of Common Stock covered by the provisions of Subsection (1) of
Section (F) hereof.

J.   WARRANTS TO RANK PARI PASSU

     All Warrants shall rank pari passu, whatever may be the actual date of
issue of the same.

K.   GOVERNING LAW; JURISDICTION AND VENUE

     This Warrant shall be governed by and interpreted in accordance with the
laws of the State of Delaware; provided, however, that if any provision of this
Agreement is unenforceable under the laws of the State of Delaware, but is
enforceable under the laws of the Province of Ontario, Canada, then such
provision shall be governed by and interpreted in accordance with the laws of
the Province of Ontario. 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.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by the
undersigned effective as of the date below.

                                              SOFTQUAD SOFTWARE LTD.

                                              By:_____________________________

DATED: February 29, 2000.

(Warrant No. 9 - Replacement)

<PAGE>

                           FORM OF NOTICE OF EXERCISE

THIS WARRANT MAY BE EXERCISED ONLY (i) BY A PERSON WHO IS NOT A U.S. PERSON (AS
DEFINED IN REGULATION S PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED), (ii) IF NOT EXERCISED ON BEHALF OF A U.S. PERSON, (iii) IF NO U.S.
PERSON HAS ANY INTEREST IN THE WARRANTS BEING EXERCISED OR THE UNDERLYING
SECURITIES TO BE ISSUED UPON EXERCISE, AND (iv) OUTSIDE THE UNITED STATES AND
THE WARRANT SHARES UNDERLYING THE WARRANTS ARE TO BE DELIVERED OUTSIDE THE
UNITED STATES. IF THE ABOVE CANNOT BE COMPLIED WITH, THEN THE WARRANT CAN BE
EXERCISED ONLY IF A WRITTEN OPINION OF COUNSEL, THE FORM AND SUBSTANCE OF WHICH
IS ACCEPTABLE TO THE COMPANY, IS DELIVERED TO THE COMPANY PRIOR TO EXERCISE OF
THE WARRANTS BEING EXERCISED THAT REGISTRATION IS NOT REQUIRED, OR THE
UNDERLYING SECURITIES DELIVERED UPON EXERCISE HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933.

     The undersigned hereby irrevocably elects to exercise the within Warrant to
the extent of purchasing ______________ shares of Common Stock of SOFTQUAD
SOFTWARE, LTD at the price of $______ per share for a total of $______.

INSTRUCTIONS FOR REGISTRATION OF STOCK

Name___________________________________________________
       (Please typewrite or print in block letters)

Address________________________________________________

Social Security or Federal I.D. Number_________________

The undersigned represents and warrants to SoftQuad Software Ltd. that the
conditions for exercise of the within Warrant set forth in the first sentence of
the first paragraph above have been fully complied with and no U.S. Person has
any interest in the Warrant or the Warrant Shares.

Signature_____________________________________________________________________
         (Sign exactly as your name appears on the first page of this Warrant)

<PAGE>

                                 ASSIGNMENT FORM

       FOR VALUE RECEIVED,

_________________________________

hereby sells, assigns and transfers unto

Name

__________________________________________________________

      (Please typewrite or print in block letters)

Address

__________________________________________________________

Social Security Federal I.D. Number

___________________________________

the right to purchase shares of Common Stock of SoftQuad Software Ltd.
represented by this Warrant as to which such right is exercisable and does
hereby irrevocably constitute and appoint __________________________ Attorney,
to transfer the same on the books of SoftQuad Software Ltd. with full power of
substitution in the premises.

Date:  ______________________

Signature:  _____________________________________
                  (sign exactly as your name
                  appears on the first page of
                  this Warrant)

Note: The Warrant and the Common Stock issuable upon exercise of the Warrant
were issued under Regulation S under the Securities Act of 1933, as amended, and
may be transferred only in accordance therewith and as provided in the legends
set forth in the Warrant.<PAGE>

                                 SPECIAL WARRANT

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). THE HOLDER HEREOF,
BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH
SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH
AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT AND IN COMPLIANCE WITH ANY
STATE SECURITIES LAWS.

THE HOLDER HEREOF, BY PURCHASING THE SPECIAL WARRANTS REPRESENTED HEREBY,
ACKNOWLEDGES AND COVENANTS THAT SUCH SPECIAL WARRANTS MAY NOT BE SOLD,
TRANSFERRED OR EXERCISED EXCEPT IN COMPLIANCE WITH ALL APPLICABLE SECURITIES
LAWS.

CERTIFICATES REPRESENTING SECURITIES ISSUABLE UPON EXERCISE OF THIS SPECIAL
WARRANT SHALL BEAR A LEGEND RESTRICTING TRANSFER SIMILAR TO THE LEGEND SET FORTH
ABOVE, TO THE EXTENT APPLICABLE.

                                SPECIAL WARRANTS

                             SOFTQUAD SOFTWARE, LTD.

                       (governed by the laws of Delaware)

SPECIAL WARRANT NO.                                  1,000,000  SPECIAL WARRANTS
                    ----------------------------  --------------
                                                    each entitling the holder to
                                                    acquire one (1) Common
                                                    Share, subject to adjustment
                                                    in certain events.

                             THIS IS TO CERTIFY THAT

                        Thomson Kernaghan & Co. Limited,
                                    as Agent

                                 (the "holder")

is the registered holder of the number of Special Warrants of Softquad Software,
Ltd. (the "Company") specified above and is thereby entitled, without payment of
any additional consideration, to be issued shares of Common Stock, par value
U.S.$0.001 per share, in the capital of the Company ("Common Shares") on the
basis of one Common Share for each Special Warrant by surrendering to the
Company, at 161 Eglinton Avenue East, Suite 400, Toronto, Ontario M4P 1J5 during
the exercise period referred to below, this Warrant Certificate together with a
notice of exercise in the form set forth below duly completed and executed.

The Company has covenanted that, among other things, it will use its
commercially reasonable efforts to expeditiously obtain receipts for a
prospectus (the "Prospectus") from the securities regulatory authorities of the
provinces of Alberta, British Columbia, Ontario and Quebec (each a "Qualifying
Province") for the purposes of qualifying under the applicable laws of the
Qualifying Provinces the distribution of the Common Shares issuable upon the
exercise of the Special Warrants.

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                                     - 2 -

The Special Warrants evidenced by this Warrant Certificate may be exercised by
the holder at any time prior to the "Time of Expiry" being 5:00 p.m. (Toronto
time) on the date which is five (5) business days after the issuance of a
receipt for the Company's Prospectus in the Qualifying Province in which the
holder is resident (for this purpose, holders not resident in a Qualifying
Province shall be deemed to be resident in Ontario) by surrendering to the
Warrant Agent this Warrant Certificate evidencing such Special Warrants together
with a duly completed and executed notice of exercise substantially in the form
attached hereto. Surrender of this Warrant Certificate will be effective only on
personal delivery thereof to, or, if sent by mail or other means of
transmission, on actual receipt thereof by, the Warrant Agent at the office
specified above. As soon as practicable following the relevant exercise date and
surrender of the applicable Warrant Certificates, the Company shall cause to be
delivered or mailed to or to the order of the Warrantholder certificates
representing the appropriate number of Common Shares issuable upon such exercise
of such Special Warrants.

At the Time of Expiry, any Special Warrants evidenced by this Warrant
Certificate which are outstanding and have not been exercised shall be
automatically exercised by the Company on behalf of the holder without any
further action on the part of the holder. The Common Shares issuable in respect
of such exercise of such Special Warrants shall be issued to such holder upon
surrender of the Warrant Certificate evidencing such Special Warrants. Surrender
of this Warrant Certificate will be effective only on personal delivery thereof
to, or, if sent by mail or other means of transmission, on actual receipt
thereof by, the Company at the address specified above. As soon as practicable
following the Time of Expiry and surrender of the applicable Warrant
Certificates, the Company shall cause to be delivered or mailed to or to the
order of the Warrantholder certificates representing the appropriate number of
Common Shares issuable upon such exercise of such Special Warrants

To the extent that any Special Warrant evidenced hereby confers the right to be
issued a fraction of a Common Share, such right may be exercised in respect of
such fraction only in combination with another Special Warrant Certificate or
other Special Warrant Certificates which, in the aggregate, entitle the holder
to be issued a whole number of Common Shares, and under no circumstances is the
Company obligated to issue any fractional Common shares or to make any payment
in respect of such a fraction.

The holder of Special Warrants evidenced by this Warrant Certificate may
exercise a number of Special Warrants less than the total number which the
holder is entitled to exercise pursuant to this Warrant Certificate. In the
event of an exercise by such holder of a number of Special Warrants less than
the total number which the holder is entitled to exercise, the holder shall be
entitled to receive, without charge therefor, a new special warrant certificate
evidencing the balance of the Special Warrants which are not being exercised.

No Common Shares will be issued upon the exercise of any Special Warrant if the
issuance of such Common Shares would constitute a violation of the securities
laws of any jurisdiction.

Schedule "A" to this Warrant Certificate provides for adjustments to the rights
of the holders of Special Warrants, including the number of Unit Shares issuable
upon the exercise or deemed exercise thereof on the happening of certain stated
events such as the subdivision or consolidation of the outstanding Common
Shares, certain distributions of Common Shares or of securities convertible into
or exchangeable for Common Shares or of other securities or assets of the
Company, certain offerings of rights, warrants or options and certain capital
reorganizations.

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                                     - 3 -

On presentation at the office of the Company in Toronto, Ontario at the address
above, on compliance with the reasonable requirements of the Company, one or
more Warrant Certificates may be exchanged for one or more Warrant Certificates
of different denomination evidencing in the aggregate the same number of Special
Warrants as the Warrant Certificate or Warrant Certificates being exchanged.

The Special Warrants evidenced by this Warrant Certificate may only be
transferred, on the register of transfers to be by the Company, by the holder or
his executors, administrators or other legal representatives or his or their
attorney duly appointed by an instrument in writing in form and execution
satisfactory to the Company, and, in compliance with applicable laws (in
connection with which requirement the Company may require, in its discretion, an
opinion from counsel as to such compliance reasonably acceptable to it, and upon
compliance with such other reasonable requirements as the Company may prescribe,
such transfer will be duly recorded on such register of transfers. Without
limiting the generality of the foregoing, the Company will be entitled to refuse
to permit and record any transfer of any Special Warrant on such register if
such transfer would constitute a violation of the securities laws of any
jurisdiction.

No Special Warrants may be exercised in the United States or by or for account
of benefits of a U.S. Person, and no certificate representing Common Shares will
be delivered to an address in the United States, unless an exemption from
registration under the U.S. Securities Act and applicable state securities laws
is available and evidence thereof satisfactory to the Company (which may, at the
option of the Company, include an opinion of counsel) is received prior to the
exercise. Evidence of an exemption from registration shall not be required in
the case of a Warrantholder that certifies in writing that it was an original
purchaser of Special Warrants from the Company and is an "accredited investor"
(as defined in Regulation D under the U.S. Securities Act) and provides evidence
of such status satisfactory to the Company (which may, at the option of the
Company, include financial statements).

The holder of Special Warrants evidenced by this Warrant Certificate may at time
prior to Time of Expiry, upon written instructions delivered to the Company,
exchange this Warrant Certificate for other Warrant Certificates evidencing the
Special Warrants in other denominations entitling the holder to acquire in the
aggregate the same number of Common Shares as may be required under this Warrant
Certificate.

In the event that this Warrant Certificate is mutilated, lost, destroyed or
stolen, the Company shall issue a new certificate of like date and tenor as the
one mutilated, lost, destroyed or stolen upon surrender and cancellation of such
mutilated Warrant Certificate or in lieu of and in substitution for such lost,
destroyed or stolen Warrant Certificate, provided that the applicant for
issuance of a new Warrant Certificate shall bear the reasonable costs of the
issue thereof and in the case of loss, destruction or theft the Company's
obligation to issue a new Warrant Certificate shall be subject to the condition
that the applicant therefor shall have provided to the Company evidence of
ownership of the loss, destruction or theft satisfactory to the Company and an
indemnity in form and amount satisfactory to the Company in its discretion.

The holding of this Warrant Certificate will not constitute the holder a
shareholder of the Company or entitle it to any right or interest in respect
thereof except as otherwise provided in the Special Warrant Indenture.

<PAGE>

                                     - 4 -

This Warrant Certificate shall be governed by the laws of the Province of
Ontario and the federal laws of Canada applicable therein.

IN WITNESS WHEREOF Softquad Software, Ltd. has caused this Warrant Certificate
to be signed by its officer duly authorized in that behalf effective as of
February 29, 2000.

                                       SOFTQUAD SOFTWARE, LTD.

                                       PER: __________________________________
                                                AUTHORIZED SIGNING OFFICER

<PAGE>

                          TRANSFER OF SPECIAL WARRANTS

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________________ , _______________ Special Warrants
of Softquad Software, Ltd. (the "Company") registered in the name of the
undersigned on the register of the Warrant Agent maintained therefor, and hereby
irrevocably appoints __________________________________________________ the
attorney of the undersigned to transfer the said securities on the books of the
Company with full power of substitution.

         Dated the ________ day of _________________, _________ .

Signature of Transferor guaranteed by:

---------------------------------------     ------------------------------------
ELIGIBLE INSTITUTION:                       PRINT NAME OF TRANSFEROR

                                            ------------------------------------
                                            SIGNATURE OF TRANSFEROR

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

                                            ------------------------------------
                                            ADDRESS OF TRANSFEROR

(Note: The signature to this transfer must correspond with the name written upon
the face of this Special Warrant Certificate in every particular without any
changes whatsoever.)

A guarantee of signature may be given by any Canadian chartered bank or a major
Canadian trust company or by a Medallion signature guarantee from a member of a
recognized signature Medallion guarantee program.

<PAGE>

                          ACKNOWLEDGEMENT OF TRANSFEREE

TO:      [NAME OF TRANSFEROR]

         - and -

         Softquad Software, Ltd.

The undersigned transferee of __________Special Warrants of Softquad Software,
Ltd. (the "Company") hereby expressly waives and releases the Company and
Thomson Kernaghan & Co., Limited from, to the fullest extent permitted by law,
all rights of withdrawal to which it might otherwise be entitled pursuant to
section 71(2) of the Securities Act (Ontario) and analogous provisions of other
provincial securities legislation.

         Dated the ______ day of _____________________ , _________ .

                                            ------------------------------------
                                            PRINT NAME OF TRANSFEREE

                                            BY:
                                                   -----------------------------
                                                   SIGNATURE

                                            ------------------------------------
                                            OFFICE OR TITLE

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

                                            ------------------------------------
                                            ADDRESS OF TRANSFEREE

<PAGE>

                                  EXERCISE FORM

TO:      Softquad Software, Ltd.

The undersigned hereby certifies that the undersigned is a resident of the
Province/State of _________________ and irrevocably exercises the right to
acquire _________ Common Shares of Softquad Software, Ltd.

Such securities are to be issued as follows:

NAME:
     -------------------------------------------------------------------

(PRINT CLEARLY)

ADDRESS IN FULL:
                --------------------------------------------------------

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

Further Special Warrants required for the balance of the Common Shares which may
be acquired are to be issued as follows:

NAME:
     -------------------------------------------------------------------
(PRINT CLEARLY)

ADDRESS IN FULL:
                --------------------------------------------------------

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

         DATED this ______ day of ____________________ , __________ .

Signature Guarantee

Eligible Institution:                       PRINT NAME OF WARRANTHOLDER

                                            ------------------------------------
                                            SIGNATURE OF WARRANTHOLDER

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

                                            ------------------------------------
                                            ADDRESS OF WARRANTHOLDER

Note:    (1) The signature of the registered holder must correspond with the
name as written upon the face of the Special Warrant in every particular without
alteration or any change whatsoever.

         (2) Common Shares and Special Warrants will be issued in the name of
the registered holder as it appears on the Special Warrant register unless
otherwise specified.

A guarantee of signature may be given by any Canadian chartered bank or a major
Canadian trust company or by a Medallion signature guarantee from a member of a
recognized signature Medallion guarantee program.

<PAGE>

                                  SCHEDULE "A"

                                   ADJUSTMENTS

1.       ADJUSTMENT OF EXCHANGE NUMBER

The number of Common Shares issuable on the exercise of the Special Warrants (or
the number and kind of shares or securities to be received upon exercise in the
case of Sections 1(4) and 1(5) below) (in case, the "EXCHANGE NUMBER") shall be
subject to adjustment from time to time in the events and in the manner provided
in Section 2 and as follows:

(1) If prior to the Time of Expiry (the "EXERCISE PERIOD") the Company shall:

         (a)      issue to all or substantially all the holders of the Common
                  Shares by way of a stock distribution, stock dividend or
                  otherwise, Common Shares or securities exchangeable for or
                  convertible into Common Shares (the "CONVERTIBLE SECURITIES");

         (b)      subdivide or redivide its outstanding Common Shares into a
                  greater number of Common Shares; or

         (c)      combine, consolidate or reduce its outstanding Common Shares
                  into a lesser number of Common Shares

(any of these events being herein called a "SHARE REORGANIZATION"), then on each
such event, the Exchange Number shall be adjusted effective immediately after
the record date at which the holders of Common Shares are determined for the
purposes of the Share Reorganization to a number that is the product of (1) the
Exchange Number in effect on the record date, and (2) a fraction:

         (i)      the numerator of which shall be the number of Common Shares,
                  outstanding after giving effect to the Share Reorganization;
                  and

         (ii)     the denominator of which shall be the number of Common Shares,
                  outstanding on the record date before giving effect to the
                  Share Reorganization.

For the purposes of determining the number of Common Shares outstanding at any
particular time for the purpose of this Section 1(1), there shall be included
that number of Common Shares which would have resulted from the conversion at
that time of all Convertible Securities.

(2) If during the Exercise Period the Company shall issue rights, options or
warrants to all or substantially all the holders of the Common Shares pursuant
to which those holders are entitled to subscribe for, purchase or otherwise
acquire Common Shares (the "OFFERED SHARES") or Convertible Securities (the
"OFFERED CONVERTIBLE SECURITIES") within a period of 45 days from the date of
issue thereof at a price per Common Share or underlying Common Share less than
95% of the Current Market Price (any such issuance being herein called a "RIGHTS
OFFERING") and the Company does not provide the holders of Special Warrants with
the opportunity to participate in the Rights Offering on the same terms and
conditions applicable to holders of Common Shares, the Exchange Number shall be
adjusted effective immediately after the record date at which holders of Common
Shares are determined for the purposes of the Rights Offering to an Exchange

<PAGE>

                                     - 2 -

Number that is the product of (i) the Exchange Number in effect on the record
date and (ii) a fraction:

         (a)      the numerator of which shall be the sum of (i) the number of
                  Common Shares, outstanding on the record date plus (ii) that
                  number of Common Shares equal to the aggregate price of the
                  total number of Offered Shares or Common Shares underlying the
                  Offered Convertible Securities divided by the Current Market
                  Price; and

         (b)      the denominator of which shall be the sum of (i) the number of
                  Common Shares outstanding on the record date plus (ii) the
                  total number of Offered Shares or Common Shares underlying the
                  Offered Convertible Securities.

Any Offered Shares or Offered Convertible Securities owned by or held for the
account of the Company shall be deemed not to be outstanding for the purpose of
any computation. If all the rights, options or warrants so issued are not
exercised prior to the expiration thereof, the Exchange Number shall be
readjusted to the Exchange Number in effect immediately prior to the record date
and the Exchange Number shall be further adjusted based upon the number of
Offered Shares or Offered Convertible Securities actually issued and delivered
upon the exercise of the rights, options or warrants, as the case may be, but
subject to any other adjustment required hereunder by reason of any event
arising after that record date.

(3) If during the Exercise Period the Company shall issue or distribute to all
or substantially all the holders of Common Shares (i) shares of any class other
than Common Shares or (ii) rights, options or warrants other than rights,
options or warrants in respect of which the provisions of Section 1(2) apply or
(iii) evidences of indebtedness or (iv) any other assets and that issuance or
distribution does not constitute a Share Reorganization or a Rights Offering
(any of those events being herein called a "SPECIAL DISTRIBUTION"), the Company
shall issue or distribute to the holders of the Special Warrants their pro rata
share of such Special Distribution, based on the number of Unit Shares to which
they are entitled upon exercise of their Special Warrants as of the record date
or effective date of such Special Distribution (after giving effect to all
adjustments hereunder required as of such date), such issuance or distribution
to be made forthwith following the exercise by any holder of his or her Special
Warrants.

(4) If during the Exercise Period there is a reorganization of the Company not
otherwise provided for in Section 1(1) or a consolidation or merger or
amalgamation of the Company with or into another body corporate including a
transaction whereby all or substantially all of the Company's undertaking and
assets become the property of any other corporation (any such event being herein
called a "CAPITAL REORGANIZATION"), any holder of a Special Warrant who has not
exercised his or her right to exchange his or her Special Warrant for Common
Shares prior to the effective date of the Capital Reorganization shall be
entitled to receive and shall accept, upon the exercise of his or her right at
any time after the effective date of the Capital Reorganization, in lieu of the
number of Common Shares (and any other securities or property to which holders
are entitled upon exercise of the Special Warrants after giving effect to all
adjustments hereunder required as of such date to which he or she was
theretofore entitled upon exercise of the Special Warrant, the aggregate number
of securities or property of the Company or the Company's successor or
transferee, as the case may be, that the holder would have been entitled to
receive as a result of the Capital Reorganization if, on the effective date

<PAGE>

                                     - 3 -

thereof, he or she had been the holder of the number of Common Shares to which
immediately before the transaction he or she was entitled upon exercise of the
Special Warrants. No Capital Reorganization shall be carried into effect unless
all necessary steps to be taken by the Company shall have been taken to afford
the holders of Common Shares the entitlement to receive the number of securities
or property of the Company or of the Company's successor or transferee, as the
case may be, contemplated hereby, in the same manner as holders of Common
Shares, subject to adjustment thereafter in accordance with provisions the same,
as nearly as may be possible, as those contained in this Section 1 and in
Section 2.

(5) If the Company shall reclassify or otherwise change the outstanding Common
Shares, the exercise right shall be adjusted effective immediately upon the
reclassification becoming effective so that holders of Special Warrants who
exercise their rights thereafter shall be entitled to receive such securities as
they would have received had the Special Warrants been exercised immediately
prior to the effective date, subject to adjustment thereafter in accordance with
provisions the same, as nearly as may be possible, as those contained in this
Section 1 and in Section 2.

2.       SUBSCRIPTION RIGHTS ADJUSTMENT RULES

The following rules and procedures shall be applicable to adjustments made
pursuant to Section 1:

(1) The adjustments and readjustments provided for herein are cumulative and,
subject to Section 2(2), shall apply (without duplication) to successive issues,
subdivisions, combinations, consolidations, distributions and any other events
that require adjustment of the Exchange Number.

(2) No adjustment in the Exchange Number shall be required unless the adjustment
would result in a change of at least 1/2 of 1% in the Exchange Number then in
effect, provided, however, that any adjustments that, except for the provisions
of this Section 2(2) would otherwise have been required to be made, shall be
carried forward and taken into account in any subsequent adjustment.

(3) No adjustment in the Exchange Number shall be made in respect of any event
described in Section 1(1)(a) or Section 1(2) or Section 1(3) if the holders of
the Special Warrants are entitled to participate in the event on the same terms,
mutatis mutandis, as if they had exercised their Special Warrants immediately
prior to the effective date or record date of the event.

(4) No adjustment in the Exchange Number shall be made pursuant to Section 1 in
respect of the issue of Common Shares pursuant to:

         (a)      the exercise of Special Warrant; or

         (b)      the issuance of Common Shares pursuant to the exercise of
                  options now or hereafter granted pursuant to the Company's
                  stock option plan or option agreements with employees, or
                  pursuant to the exercise of rights under currently existing
                  agreements,

and any such issue shall be deemed not to be a Share Reorganization, a Rights
Offering or a Special Distribution.

<PAGE>

                                     - 4 -

(5) If a dispute shall at any time arise with respect to adjustments of the
Exchange Number, the dispute shall be conclusively determined by the auditors of
the Company or if they are unable or unwilling to act, by such firm of
independent chartered accountants as may be selected by the directors and any
such determination shall, absent manifest error, be binding upon the Company and
all Warrantholders.

(6) If the Company shall set a record date to determine the holders of Common
Shares for the purpose of entitling them to receive any dividend or distribution
or any subscription or purchase rights and shall, thereafter, legally abandon
its plans to pay or deliver the dividend or distribution or subscription or
purchase rights, then no adjustment in the Exchange Number shall be required by
reason of the setting of the record date.

(7) If and whenever at any time during the Exercise Period, the Company shall
take any action affecting or relating to the Common Shares, other than any
action described in this Section 2 which in the opinion of the directors of the
Company would prejudicially affect the rights of any holders of Special
Warrants, the Exchange Number may be adjusted by the directors of the Company in
such manner, if any, and at such time, as the directors of the Company, may in
their sole discretion, subject to the approval of any stock exchange on which
the Common Shares which are listed and posted for trading, determine to be
equitable in the circumstances to such holders.

(8) As a condition precedent to the taking of any action which would require an
adjustment in any of the rights under the Special Warrants, the Company will
take any action which, in the opinion of counsel to the Company, may be
necessary in order that the Company or any successor to the Company or any
successor to the undertaking or assets of the Company, will be obligated to and
may validly and legally issue all the Common Shares or other securities which
the Warrantholders would be entitled to receive thereafter and to exercise such
Special Warrants in accordance with the provisions hereof.

3.       POSTPONEMENT OF SUBSCRIPTION

In any case where the application of Section 2 results in an increase of the
Exchange Number taking effect immediately after the record date for or
occurrence of a specific event, if any Special Warrants are exercised after that
record date or occurrence and prior to completion of the event or of the period
for which a calculation is required to be made, the Company may postpone the
issuance to the Warrantholders of the Common Shares or other securities to which
the holder is entitled by reason of the increase of the Exchange Number but the
Common Shares or other securities shall be so issued and delivered to that
holder upon completion of that event or period, with the number of those Common
Shares calculated on the basis of the Exchange Number on the date of exercise of
the Special Warrants, adjusted for completion of that event or period, and the
Company shall forthwith after such date deliver to the person or persons in
whose name or names the Common Shares or other securities are to be issued an
appropriate instrument evidencing the person's or persons' right to receive the
Common Shares or other securities.

4.       NOTICE OF CERTAIN EVENTS

(1) At least 7 days before but not more than 30 days before the earlier of the
effective date of or the record date for any event referred to in Section 1 or
Section 2 that requires an adjustment in the Exchange Number, the Company shall

<PAGE>

                                     - 5 -

give notice to the Warrantholders of the particulars of the event and, if
determinable, the adjustment.

(2) If notice has been given under Section 4(1) and the adjustment is not then
determinable, the Company shall promptly after the adjustment is determinable
give notice to the Warrantholders of the adjustment.

5.       DEFINITIONS

Capitalized terms used herein and not otherwise defined shall have the meaning
ascribed thereto in the special warrant certificate to which this schedule is
appended. For purposes hereof "CURRENT MARKET PRICE" means in respect of a
Common Share at any date means the weighted average trading price of a Common
Share for any twenty (20) consecutive trading days ending on the third trading
day before such date, on such primary stock exchange on which the Common Shares
are then listed as may be selected for such purpose by the directors of the
Company or, if the Common Shares are not listed on more than one stock exchange,
on such stock exchange on which the Common Shares are then listed, or if the
Common Shares are not then listed on any stock exchange, on the over-the-counter
market, or, if the Common Shares are not then traded in the over-the-counter
market, the Current Market Price of the Common Shares shall be the fair value of
a Common Share as determined by the directors of the Company, after consultation
with a nationally recognized investment banking firm with respect to the fair
value of such securities

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