diff --git a/src/settings/template.ts b/src/settings/template.ts
index 42f7f1f..5b58e51 100644
--- a/src/settings/template.ts
+++ b/src/settings/template.ts
@@ -5,6 +5,7 @@ import { Article, HighlightType, PageType } from "../api";
 import {
   compareHighlightsInFile,
   formatDate,
+  formatHighlightQuote,
   getHighlightLocation,
   siteNameFromUrl,
 } from "../util";
@@ -103,7 +104,7 @@ export const renderAttachmentFolder = (
 export const renderLabels = (labels?: LabelVariable[]) => {
   return labels?.map((l) => ({
     // replace spaces with underscores because Obsidian doesn't allow spaces in tags
-    name: l.name.replace(" ", "_"),
+    name: l.name.replaceAll(" ", "_"),
   }));
 };
 
@@ -144,7 +145,7 @@ export const renderArticleContnet = async (
   const highlights: HighlightVariables[] = articleHighlights.map(
     (highlight) => {
       return {
-        text: highlight.quote,
+        text: formatHighlightQuote(highlight.quote, template),
         highlightUrl: `https://omnivore.app/me/${article.slug}#${highlight.id}`,
         dateHighlighted: formatDate(highlight.updatedAt, dateHighlightedFormat),
         note: highlight.annotation,
diff --git a/src/util.ts b/src/util.ts
index c9e4ea1..82f7407 100644
--- a/src/util.ts
+++ b/src/util.ts
@@ -120,3 +120,17 @@ export const siteNameFromUrl = (originalArticleUrl: string): string => {
     return "";
   }
 };
+
+export const formatHighlightQuote = (
+  quote: string,
+  template: string
+): string => {
+  // if the template has highlights, we need to preserve paragraphs
+  const regex = /{{#highlights}}(\n)*>/gm;
+  if (regex.test(template)) {
+    // replace all empty lines with blockquote '>' to preserve paragraphs
+    quote = quote.replaceAll(">", ">").replaceAll(/\n/gm, "\n> ");
+  }
+
+  return quote;
+};
diff --git a/tsconfig.json b/tsconfig.json
index 29d45d9..0a19b42 100644
--- a/tsconfig.json
+++ b/tsconfig.json
@@ -1,25 +1,18 @@
 {
-  "compilerOptions": {
-    "baseUrl": ".",
-    "inlineSourceMap": true,
-    "inlineSources": true,
-    "module": "ESNext",
-    "target": "ES6",
-    "allowJs": true,
-    "noImplicitAny": true,
-    "moduleResolution": "node",
-    "importHelpers": true,
-    "isolatedModules": true,
-    "strictNullChecks": true,
-    "esModuleInterop": true,
-    "lib": [
-      "DOM",
-      "ES5",
-      "ES6",
-      "ES7"
-    ]
-  },
-  "include": [
-    "**/*.ts"
-  ]
+	"compilerOptions": {
+		"baseUrl": ".",
+		"inlineSourceMap": true,
+		"inlineSources": true,
+		"module": "ESNext",
+		"target": "ES2021",
+		"allowJs": true,
+		"noImplicitAny": true,
+		"moduleResolution": "node",
+		"importHelpers": true,
+		"isolatedModules": true,
+		"strictNullChecks": true,
+		"esModuleInterop": true,
+		"lib": ["ES2021", "DOM"]
+	},
+	"include": ["**/*.ts"]
 }