Document:

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                                                                    EXHIBIT 10.2

                          REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of November
28, 2001, is made and entered into between (i) SONIC SOLUTIONS, a California
corporation (the "Company"), and (ii) SANSHIN ELECTRONICS CO. LTD., a
corporation organized under the laws of Japan (the "Investor").

     WHEREAS, the Company and the Investor have entered into that certain
Preferred Stock Purchase Agreement, dated as of November 28, 2001 (the "Purchase
Agreement"), pursuant to which the Company desires to sell up to 250,000 shares
of Preferred Stock (the "Registrable Securities") to the Investor, and the
Investor desires to purchase up to 250,000 shares of Preferred Stock from the
Company; and

     WHEREAS, pursuant to the terms of, and in consideration for, the Investor's
agreement to enter into the Purchase Agreement, the Company has agreed to
provide the Investor with certain registration rights:

NOW, THEREFORE, in consideration of the premises, the representations,
warranties, covenants and agreements contained herein and in the Purchase
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, intending to be legally bound
hereby, the parties hereto agree as follows:

                                    ARTICLE I
                               REGISTRATION RIGHTS

     Section 1.1    REGISTRATION STATEMENT.

               (a)  Filing of Registration Statement. Investor shall have the
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right to demand that the Company file a shelf registration statement on Form S-3
or such other form acceptable to the Securities and Exchange Commission (the
"SEC") under the Securities Act of 1933, as amended (the "Securities Act") for
the registration of the Registrable Securities for resale by the Investor to the
public (the "Registration Statement"); provided, however, that such demand (i)
is in writing and states the number of shares of Registrable Securities to be
disposed of by such Investor, and (ii) is delivered in accordance with the
notice provisions of Section 4.8, and (iii) is

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subject to the terms and conditions of this Agreement. The Company shall use
commercially reasonable efforts to cause such shelf registration statement to be
filed within 60 days from the receipt of such demand that a registration
statement be filed (the "Filing Deadline").

          (b) Effectiveness of the Registration Statement. The Company shall use
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its reasonable efforts to have the Registration Statement declared effective by
the SEC as soon as practicable (the "Registration Deadline") and to ensure that
the Registration Statement remains in effect throughout the term of this
Agreement as set forth in Section 4.2, subject to the terms and conditions of
this Agreement; provided, however, that if the Registration Deadline would
otherwise occur while a Blackout Notice (as defined below) remains in effect,
the Registration Deadline shall be extended by the number of days covered by
such Blackout Notice.

          (c) Deferral and Suspension. If the Company shall furnish to the
              -----------------------
Investor notice signed by the Chairman and Chief Executive Officer of the
Company stating that the Board of Directors of the Company has, by duly
authorized resolution, determined in good faith that it would be seriously
detrimental to the Company and its shareholders for the Registration Statement
to be filed (or remain in effect) and it is therefore essential to defer the
filing of such Registration Statement (or temporarily suspend the effectiveness
of such Registration Statement or use of the related prospectus) (a "Blackout
Notice"), the Company shall have the right to defer such filing (or suspend such
effectiveness) immediately for a period of not more than thirty (30) days beyond
such the date by which such Registration Statement was otherwise required to be
filed (or required to remain in effect). The Investor acknowledges that it would
be seriously detrimental to the Company and its shareholders for such
Registration Statement to be filed (or remain in effect) and therefore essential
to defer such filing (or suspend such effectiveness) and agrees to suspend any
disposition of the Registrable Securities pursuant to any such Registration
Statement immediately for a period of not more than thirty (30) days upon
receipt of such notice. The Company may not utilize any of its rights under this
Section 1.1(c) to defer the filing of a Registration Statement (or suspend its
effectiveness) more than once in any eighteen (18) month period.

                                   ARTICLE II
                             REGISTRATION PROCEDURES

     Section 2.1. FILINGS; INFORMATION. The Company will effect the registration
and sale of such Registrable Securities in accordance with the intended methods
of disposition thereof. Without limiting the foregoing, the Company in each such
case will do the following as expeditiously as possible, but in no event later
than the deadline, if any, prescribed therefor in this Agreement:

          (a) The Company shall (i) prepare and file with the SEC a Registration
Statement on Form S-3 (if use of such form is then available to the Company
pursuant to the rules of the SEC and, if not, on such other form promulgated by
the SEC for which the Company then qualifies and which counsel for the Company
shall deem appropriate and which form shall be available for the sale of the
Registrable Securities to be registered thereunder in accordance with the
provisions of this Agreement and in accordance with the intended method of
distribution of such Registrable Securities); (ii) use reasonable efforts to
cause such filed Registration Statement

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to become and remain effective (pursuant to Rule 415 under the Securities Act or
otherwise); (iii) as expeditiously as possible, prepare and file with the SEC
such amendments and supplements to such Registration Statement and the
prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective for the time periods prescribed by Section
1.1(b); (iv) comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such Registration Statement during
such period in accordance with the intended methods of disposition by the
Investor set forth in such Registration Statement; (v) act in good faith and use
reasonable efforts to take all actions that (A) will facilitate the Registration
Statement to be filed and declared effective as expeditiously as possible or (B)
are reasonably necessary to implement the intentions of the parties set forth in
this Agreement.

          (b)  The Company shall file all necessary amendments to the
Registration Statement in order to effectuate the purpose of this Agreement.

          (c)  If so requested by the managing underwriters, if any, or the
holders of a majority in aggregate principal amount of the Registrable
Securities being sold in connection with the filing of a Registration Statement
under the Securities Act for the offering on a continuous or delayed basis in
the future of all of the Registrable Securities (a "Shelf Registration"), the
Company shall (i) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriters, if any,
and such holders agree should be included therein, and (ii) make all required
filings of such prospectus supplement or post-effective amendment as soon as
practicable after the Company has received notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment;
provided, however, that the Company shall not be required to take any action
pursuant to this Section 2.1(c)(ii) that would, in the opinion of counsel for
the Company, violate applicable law.

     (d)  In connection with the filing of a Shelf Registration, and in
connection with any underwritten public offering of the Registrable Securities,
the Company shall enter into such agreements and take all such other reasonable
actions in connection therewith (including those reasonably requested by the
managing underwriters, if any, or the holders of a majority in aggregate
principal amount of the Registrable Securities being sold) in order to expedite
or facilitate the disposition of such Registrable Securities, and in such
connection, whether or not an underwriting agreement is entered into and whether
or not the registration is an underwritten registration, (i) make such
representations and warranties to the holders of such Registrable Securities and
the underwriters, if any, with respect to the business of the Company (including
with respect to businesses or assets acquired or to be acquired by the Company),
and the Registration Statement, prospectus and documents, if any, incorporated
or deemed to be incorporated by reference therein, in each case, in form,
substance and scope as are customarily made by issuers to underwriters in
underwritten offerings, and confirm such representations and warranties if and
when requested; (ii) if an underwriting agreement is entered into, the same
shall contain indemnification provision and procedures no less favorable to the
selling holders of such Registrable Securities and the underwriters, if any,
than those set forth herein (or such other provisions and procedures acceptable
to the holders of a majority in aggregate principal amount of Registrable
Securities covered by such Registration Statement and the managing underwriters,
if any); and (iii) deliver such documents and certificates as may be reasonably
requested by the holders of a majority in aggregate principal amount of the
Registrable Securities being sold, their

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counsel and the managing underwriters, if any, to evidence the continued
validity of their representations and warranties made pursuant to clause (i)
above and to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company. The
Company shall also use its reasonable efforts to furnish, on the date that the
Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, (i) an opinion, dated as of such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and (ii)
a letter, dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering addressed to the underwriters.

          (e)  No less than five (5) trading days prior to filing the
Registration Statement or prospectus, or any amendment or supplement thereto
(excluding amendments deemed to result from the filing of documents incorporated
by reference therein), the Company shall deliver to the Investor and one firm of
counsel representing the Investor, in accordance with the notice provisions of
Section 4.8, copies of such Registration Statement as proposed to be filed,
together with exhibits thereto, which documents will be subject to review by
such parties, and thereafter deliver to the Investor and its counsel, in
accordance with the notice provisions of Section 4.8, such number of copies of
such Registration Statement, each amendment and supplement thereto (in each case
including all exhibits thereto), the prospectus included in such Registration
Statement (including each preliminary prospectus) and such other documents or
information as the Investor or counsel may reasonably request in order to
facilitate the disposition of the Registrable Securities.

          (f)  The Company shall deliver, in accordance with the notice
provisions of Section 4.8, to each seller of Registrable Securities covered by
such Registration Statement such number of conformed copies of such Registration
Statement and of each amendment and supplement thereto (in each case including
all exhibits and documents incorporated by reference), such number of copies of
the prospectus contained in such Registration Statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 promulgated under the Securities Act relating to such
seller's Registrable Securities, and such other documents, as such seller may
reasonably request to facilitate the disposition of its Registrable Securities.

          (g)  After the filing of the Registration Statement, the Company shall
promptly notify the Investor of any stop order issued or threatened by the SEC
in connection therewith and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered.

          (h)  The Company shall use its reasonable efforts to (i) register or
qualify such Registrable Securities under such other securities or blue sky laws
of such jurisdictions in the United States as the Investor may reasonably (in
light of its intended plan of distribution) request, and (ii) cause such
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities in the United States as may be necessary by
virtue of the business and operations of the Company and do any and all other
acts and things that may be

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reasonably necessary or advisable to enable the Investor to consummate the
disposition of the Registrable Securities; provided that the Company will not be
required to qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this paragraph (h), subject itself
to taxation in any such jurisdiction, or consent or subject itself to general
service of process in any such jurisdiction.

          (i) The Company shall immediately notify the Investor upon the
occurrence of any of the following events in respect of a Registration Statement
or related prospectus in respect of an offering of Registrable Securities: (i)
receipt of any request for additional information by the SEC or any other
federal or state governmental authority during the period of effectiveness of
the Registration Statement for additional information, amendments or supplements
to the Registration Statement or related prospectus; (ii) the issuance by the
SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose; (iii) receipt of any notification with respect
to the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; (iv) the happening of any event
that makes any statement made in the Registration Statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in the Registration Statement, related prospectus or documents so that,
in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the related prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (v) the Company's
reasonable determination that a post-effective amendment to the Registration
Statement would be appropriate; and the Company will promptly make available to
the Investor any such supplement or amendment to the related prospectus.

          (j) The Company shall enter into customary agreements and take such
other actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities (whereupon the Investor may, at its
option, require that any or all of the representations, warranties and covenants
of the Company also be made to and for the benefit of the Investor).

          (k) The Company shall appoint a transfer agent and registrar for all
such Registrable Securities covered by such Registration Statement not later
than the effective date of such Registration Statement.

          (l) The Company may require the Investor to promptly furnish in
writing to the Company such information as may be legally required in connection
with such registration including, without limitation, all such information as
may be requested by the SEC or the National Association of Securities Dealers.
The Investor agrees to provide such information requested in connection with
such registration within ten (10) business days after receiving such written
request and the Company shall not be responsible for any delays in obtaining or

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maintaining the effectiveness of the Registration Statement caused by the
Investor's failure to timely provide such information.

     Section 2.2.  REGISTRATION EXPENSES. In connection with each Registration
Statement, the Company shall pay all registration expenses incurred in
connection with the registration thereunder (the "Registration Expenses"),
including, without limitation: (i) all registration, filing, securities exchange
listing and fees required by the National Association of Securities Dealers,
(ii) all registration, filing, qualification and other fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), (iii) all word processing, duplicating, printing,
messenger and delivery expenses, (iv) the Company's internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (v) the fees and expenses
incurred in connection with the listing of the Registrable Securities, (vi)
reasonable fees and disbursements of counsel for the Company and customary fees
and expenses for independent certified public accountants retained by the
Company, (vii) the fees and expenses of any special experts retained by the
Company in connection with such registration, (viii) premiums and other costs of
policies of insurance obtained at the discretion of the Company against
liabilities arising out of any public offering of the Registrable Securities
being registered, and (ix) any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but excluding underwriting
fees, discounts, transfer taxes or commissions, if any, attributable to the sale
of Registrable Securities, which shall be payable by each holder of Registrable
Securities pro rata on the basis of the number of Registrable Securities of each
such holder that are included in a registration under this Agreement.

                                   ARTICLE III
                        INDEMNIFICATION AND CONTRIBUTION

     Section 3.1.  INDEMNIFICATION BY THE COMPANY. To the extent permitted by
law, the Company agrees to indemnify and hold harmless the Investor, its
partners, affiliates, officers, directors, employees and duly authorized agents,
and each Person or entity, if any, who controls the Investor within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, together
with the partners, Affiliates, officers, directors, employees and duly
authorized agents of such controlling Person or entity (collectively, the
"Controlling Persons"), from and against any loss, claim, damage, liability,
costs and expenses (including, without limitation, reasonable attorneys' fees
and disbursements and costs and expenses of investigating and defending any such
claim) (collectively, "Damages"), joint or several, and any action or proceeding
in respect thereof to which the Investor, its partners, affiliates, officers,
directors, employees and duly authorized agents, and any such Controlling Person
may become subject under the Securities Act or otherwise as incurred and,
insofar as such Damages (or actions or proceedings in respect thereof) arise out
of, or are based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or prospectus relating to
the Registrable Securities or any preliminary prospectus, (ii) any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
the same are based upon information furnished in

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writing to the Company by the Investor expressly for use therein, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act, any state securities law or otherwise as incurred in
connection with the offering covered by such registration statement and shall
reimburse the Investor, its partners, affiliates, officers, directors, employees
and duly authorized agents, and each such Controlling Person for any legal and
other expenses reasonably incurred by the Investor, its partners, affiliates,
officers, directors, employees and duly authorized agents, or any such
Controlling Person, as incurred, in investigating or defending or preparing to
defend against any such Damages or actions or proceedings; provided, however,
that the Company shall not be liable to the Investor to the extent that any such
Damages arise out of or are based upon an untrue statement or omission made in
any preliminary prospectus if (i) the Investor failed to send or deliver a copy
of the final prospectus delivered by the Company to the Investor with or prior
to the delivery of written confirmation of the sale by the Investor to the
Person asserting the claim from which such Damages arise, and (ii) the final
prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission, and provided further, that the
indemnity agreement contained in this Section 3.1 shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld.

     Section 3.2.  INDEMNIFICATION BY THE INVESTOR. To the extent permitted by
law, the Investor agrees to indemnify and hold harmless the Company, its
partners, affiliates, officers, directors, employees and duly authorized agents,
and each Controlling Person, from and against any Damages, joint or several, and
any action or proceeding in respect thereof to which the Company, its partners,
affiliates, officers, directors, employees and duly authorized agents, and any
such Controlling Person may become subject under the Securities Act or otherwise
as incurred and, insofar as such Damages (or actions or proceedings in respect
thereof) arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
prospectus relating to the Registrable Securities or any preliminary prospectus,
or arises out of, or are based upon, any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and shall reimburse the Company, its
partners, affiliates, officers, directors, employees and duly authorized agents,
and each such Controlling Person for any legal and other expenses reasonably
incurred by the Company, its partners, affiliates, officers, directors,
employees and duly authorized agents, or any such Controlling Person, as
incurred, in investigating or defending or preparing to defend against any such
Damages or actions or proceedings; provided, however, that this section 3.2
shall apply only with respect to statements provided by the Investor; provided
further, that the indemnity agreement contained in this Section 3.2 shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Investor,
which consent shall not be unreasonably withheld; and provided further, that in
no event shall any indemnity under this Section 3.2 exceed the net proceeds from
the offering received by the Investor.

     Section 3.3.  CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after
receipt by any person or entity in respect of which indemnity may be sought
pursuant to Section 3.1 or 3.2 (an "Indemnified Party") of notice of any claim
or the commencement of any action,

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the Indemnified Party shall, if a claim in respect thereof is to be made against
the person or entity against whom such indemnity may be sought (the
"Indemnifying Party"), notify the Indemnifying Party in writing of the claim or
the commencement of such action; in the event an Indemnified Party shall fail to
give such notice as provided in this Section 3.3 and the Indemnifying Party to
whom notice was not given was unaware of the proceeding to which such notice
would have related and was materially prejudiced by the failure to give such
notice, the indemnification provided for in Section 3.1 or 3.2 shall be reduced
to the extent of any actual prejudice resulting from such failure to so notify
the Indemnifying Party; provided, that the failure to notify the Indemnifying
Party shall not relieve the Indemnifying Party from any liability that it may
have to an Indemnified Party otherwise than under Section 3.1 or 3.2. If any
such claim or action shall be brought against an Indemnified Party, and it shall
notify the Indemnifying Party thereof, the Indemnifying Party shall be entitled
to participate therein, and, to the extent that it wishes, jointly with any
other similarly notified Indemnifying Party, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
defense of such claim or action, the Indemnifying Party shall not be liable to
the Indemnified Party for any legal or other expenses subsequently incurred by
the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided that the Indemnified Party shall
have the right to employ separate counsel to represent the Indemnified Party and
its Controlling Persons who may be subject to liability arising out of any claim
in respect of which indemnity may be sought by the Indemnified Party against the
Indemnifying Party, but the fees and expenses of such counsel shall be for the
account of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or
(ii) in the reasonable judgment of the Company and such Indemnified Party,
representation of both parties by the same counsel would be inappropriate due to
actual or potential conflicts of interest between them, it being understood,
however, that the Indemnifying Party shall not, in connection with any one such
claim or action or separate but substantially similar or related claims or
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (together with appropriate local counsel) at any time for all
Indemnified Parties, or for fees and expenses that are not reasonable. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any claim or pending or threatened proceeding in
respect of which the Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability arising out of such claim or proceeding. Whether or not the
defense of any claim or action is assumed by the Indemnifying Party, such
Indemnifying Party will not be subject to any liability for any settlement made
without its consent, which consent will not be unreasonably withheld.

     Section 3.4. OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding paragraphs of this Article III (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
securities under any federal or state law or regulation of any governmental
authority other than the Securities Act. The provisions of this Article III
shall be in addition to

<PAGE>

any other rights to indemnification, contribution or other remedies which an
Indemnified Party may have pursuant to law, equity, contract or otherwise.

     Section 3.5. CONTRIBUTION. If the indemnification provided for in this
Article III is unavailable to the Indemnified Parties in respect of any Damages
referred to herein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Damages as between the Company on the one
hand and the Investor on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of the Investor in connection with
such statements or omissions, as well as other equitable considerations. The
relative fault of the Company on the one hand and of the Investor on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Investor
agree that it would not be just and equitable if contribution pursuant to this
Section 3.5 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
Indemnified Party as a result of the Damages referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 3.5, the Investor shall in no
event be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities of the Investor were sold to the
public (less underwriting discounts and commissions) exceeds the amount of any
damages which the Investor has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

                                   ARTICLE IV
                                  MISCELLANEOUS

     Section 4.1. NO OUTSTANDING REGISTRATION RIGHTS. The Company represents and
warrants to the Investor that there is not in effect on the date hereof any
agreement by the Company pursuant to which any holders of securities of the
Company have a right to cause the Company to register or qualify such securities
under the Securities Act or any securities or blue sky laws of any jurisdiction
that would conflict or be inconsistent with any provision of this Agreement,
except to the extent such agreements are disclosed in documents filed with the
SEC by the Company under the Exchange Act.

     Section 4.2. TERM. This Agreement shall terminate and be of no foce and
effect if a Closing (as defined in the Purchase Agreement) shall not have
occurred pursuant to the Purchase Agreement.

<PAGE>

     The registration rights provided to the holders of Registrable Securities
hereunder shall terminate at such time as all Registrable Securities (i) have
been disposed of pursuant to the Registration Statement, (ii) have been sold
under circumstances under which all of the applicable conditions of Rule 144 (or
any similar provision then in force) under the Securities Act ("Rule 144") are
met, (iii) have been otherwise transferred to holders who may trade such shares
without restriction under the Securities Act, and the Company has delivered a
new certificate or other evidence of ownership for such securities not bearing a
restrictive legend, or (iv) may be sold without any time, volume or manner
limitations pursuant to Rule 144(k) (or any similar provision then in effect)
under the Securities Act in the opinion of counsel to the Company, which counsel
shall be reasonably acceptable to the Investor; provided, however, that such
registration rights shall not terminate sooner than two years following the date
hereof. Notwithstanding the foregoing, paragraph (c) of Section 1.1, Article
III, Section 4.8, and Section 4.9 shall survive the termination of this
Agreement.

     Section 4.3. RULE 144. The Company covenants that it will file all reports
required to be filed by it under the Act and the Exchange Act and that it will
take such further action as holders of Registrable Securities may reasonably
request, all to the extent required from time to time to enable the Investor to
sell Registrable Securities without registration under the Act within the
limitation of the exemptions provided by (a) Rule 144, as such Rule may be
amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the SEC. If at any time the Company is not required to file such
reports, it will, upon the request of any holder of Registrable Securities, make
publicly available other information so long as necessary to permit sales
pursuant to Rule 144. Upon the request of the Investor, the Company will deliver
to the Investor a written statement as to whether it has complied with such
requirements.

     Section 4.4. CERTIFICATE. The Company will, at its expense, forthwith upon
the request of any holder of Registrable Securities, deliver to such holder a
certificate, signed by the Company's principal financial officer, stating (a)
the Company's name, address and telephone number (including area code), (b) the
Company's Internal Revenue Service identification number, (c) the Company's
Commission file number, (d) the number of shares of each class of Stock
outstanding as shown by the most recent report or statement published by the
Company, and (e) whether the Company has filed the reports required to be filed
under the Exchange Act for a period of at least ninety (90) days prior to the
date of such certificate and in addition has filed the most recent annual report
required to be filed thereunder.

     Section 4.5. AMENDMENT AND MODIFICATION. Any provision of this Agreement
may be waived, provided that such waiver is set forth in a writing executed by
both parties to this Agreement. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of the holders of a majority
of the then outstanding Registrable Securities. Notwithstanding the foregoing,
the waiver of any provision hereof with respect to a matter that relates
exclusively to the rights of holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and does not directly or
indirectly affect the rights of other holders of Registrable Securities may be
given by holders of at least a majority of the Registrable Securities being sold
by such holders; provided that the provisions of this sentence may not be
amended,

<PAGE>

modified or supplemented except in accordance with the provisions of the
immediately preceding sentence. No course of dealing between or among any Person
having any interest in this Agreement will be deemed effective to modify, amend
or discharge any part of this Agreement or any rights or obligations of any
person under or by reason of this Agreement.

     Section 4.6. SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT. This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. The Investor may
assign its rights under this Agreement to any subsequent holder the Registrable
Securities, provided that the Company shall have the right to require any holder
of Registrable Securities to execute a counterpart of this Agreement as a
condition to such holder's claim to any rights hereunder; provided further that
such holder is an "accredited investor" as defined in Rule 501 of Regulation D
of the Securities Act. This Agreement, together with the Purchase Agreement,
sets forth the entire agreement and understanding between the parties as to the
subject matter hereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them.

     Section 4.7. SEPARABILITY. If any provision of this Agreement is held to be
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.

     Section 4.8. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given on the date of service if served personally, by recognized expedited
delivery service, or by facsimile (with confirmation copies of any facsimile
notice to be provided by at least one other method of delivery permitted
hereunder), or five (5) days after the date of mailing if mailed, by first class
mail, registered or certified, postage prepaid. Notices shall be addressed as
follows:

                    To Investor at:           Sanshin Electronics Co. Ltd.

                                              -------------------------
                                              -------------------------
                                              -------------------------
                                              Japan
                                              Attn: ___________________

                    with a copy (which shall not constitute notice) to:

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

<PAGE>

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

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

                     To the Company at:     Sonic Solutions
                                            101 Rowland Way
                                            Novato, California 94945
                                            Attn: Chief Financial Officer

                     with a copy (which shall not constitute notice) to:

                                            Heller Ehrman White & McAuliffe LLP
                                            275 Middelfield Road,
                                            Menlo Park, California 94025
                                            Attn: Kyle Guse

     or to such other address as a party has designated by notice in writing to
the other party in the manner provided by this Section.

     Section 4.9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts entered into and wholly to be performed in the State of California by
California residents. The parties hereby waive trial by jury in connection with
any action or suit under this Agreement or otherwise arising from the
relationship between the parties hereto.

     Section 4.10. HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not constitute a part of this Agreement, nor shall
they affect their meaning, construction or effect.

     Section 4.11. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original instrument and all
of which together shall constitute one and the same instrument.

     Section 4.12. FURTHER ASSURANCES. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.

     Section 4.13. REMEDIES. In the event of a breach or a threatened breach by
any party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach will be entitled to specific performance
of its rights under this Agreement or to injunctive relief, in addition to being
entitled to exercise all rights provided in this Agreement and granted by law.
The parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that the remedy at law, including
monetary damages,

<PAGE>

for breach of any such provision will be inadequate compensation for any loss
and that any defense or objection in any action for specific performance or
injunctive relief that a remedy at law would be adequate is waived.

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be executed by the undersigned, thereunto duly authorized, as of
the date first set forth above.

SONIC SOLUTIONS

By:  /s/ Robert J. Doris
     -------------------
        Robert J. Doris
        Title: President and Chief Executive Officer

SANSHIN ELECTRONICS CO. LTD.

By:  /s/ Mitsumasa Matsunaga
     -----------------------
Name:    Mitsumasa Matsunaga
         Title: Representative Director<PAGE>

LookSmart Ltd
625 Second Street
San Francisco
CA 94107
USA

                                                                 7 December 2001

Dear Sirs,

We refer to a loan facility letter from us, Transceptgate Limited, a company
incorporated in the Isle of Man and having a registered office at 2nd Floor,
10-12 Prospect Hill, Douglas, Isle of Man, IM1 1ES ("Transceptgate"), addressed
to you, LookSmart Limited (the "Borrower") dated 15 February 2000 (as accepted
by the Borrower) (the "Existing Facility Agreement") and various arrangements
relating to it and referred to therein, namely:

(a)  a loan conversion agreement between the Borrower and Transceptgate dated 15
     February 2000 (the "Loan Conversion Agreement");

(b)  an escrow agreement among Transceptgate, the Borrower, LookSmart
     (Barbados), Inc ("LOOK") and The Pacific Bank, National Association (now
     known as City National Bank) dated 15 February 2000 (the "Existing Escrow
     Agreement");

(c)  a share charge between LOOK and Transceptgate dated 15 February 2000 (the
     "Existing Share Charge"); and

(d)  a joint venture agreement between Transceptgate, the Borrower, LOOK, BT
     LookSmart, Ltd ("BT LookSmart") and British Telecommunications Plc ("BT")
     dated 15 February 2000 (the "JVA").

Transceptgate shall make a term loan facility of up to US Dollars $34,980,457.65
(the "New Facility") available to the Borrower on the terms and conditions set
out in this letter.

                                       1

<PAGE>

1.       Definitions

1.1      In this letter "this Agreement" means this letter as accepted by the
         Borrower and LOOK:

          "Advance"               Means an advance under the New Facility made
                                  or to be made in accordance with the terms of
                                  this Agreement, being as the context requires
                                  the "Repayment Advance" or the "New Escrow
                                  Advance", and includes where the context
                                  requires accrued interest thereon;

         "Amendment to JVA"       Means the agreement dated on or about the date
                                  on which this letter is accepted by the
                                  Borrower reflecting the amendments to the JVA
                                  in the Letter of Intent signed by BT,
                                  Transceptgate and the Borrower dated 25
                                  October 2001;

         "Banking Day"            Means a day on which dealings in deposits of
                                  US Dollars are carried on in the London
                                  Interbank Market;

         "BT Group"               Means BT, any subsidiary of BT, any holding
                                  company of BT and any subsidiary of any such
                                  holding company;

         "Default"                Means any event which, with the giving of
                                  notice, lapse of time, determination of
                                  materiality or satisfaction of any other
                                  condition (or any combination of the same)
                                  could constitute an Event of Default;

         "Encumbrance"            Means any mortgage, charge (whether fixed or
                                  floating), pledge, lien, hypothecation,
                                  assignment by way of security, security
                                  interest or other encumbrance of any kind but
                                  does not include liens arising in the ordinary
                                  course of trading by operation of law and not
                                  by way of contract;

         "Escrow Agent"           Means the agent appointed as escrow agent from
                                  time to time pursuant to the terms of the New
                                  Escrow Agreement, being as at the date of this
                                  letter City National Bank (formerly known as
                                  The Pacific Bank, National Association);

         "Event of Default"       Means any of the events or circumstances set
                                  out in Schedule 1;

         "Indebtedness"           Means any obligation for the payment or
                                  repayment of

                                       2

<PAGE>

                                  money, whether as principal or as surety and
                                  whether present or future, actual or
                                  contingent;

         "Interest Payment Date"  Means the last Banking Day of each quarter;

         "Loan"                   Means the aggregate principal amount from
                                  time to time borrowed and outstanding under
                                  the New Facility (being for the avoidance of
                                  doubt the Repayment Advance and the New Escrow
                                  Advance) and the interest accrued thereon up
                                  to the date of this Agreement;

         "New Escrow Advance"     Means an advance released to LOOK from time to
                                  time pursuant to the terms of the New Escrow
                                  Agreement;

         "New Escrow Agreement"   Means the agreement dated on or about the date
                                  on which this letter is accepted by the
                                  Borrower pursuant to which the Borrower
                                  deposits in an escrow account held with the
                                  Escrow Agent the New Escrow Advance for
                                  application in accordance with the terms of
                                  the New Escrow Agreement;

         "New Share Charge"       Means the instrument pursuant to which LOOK
                                  charges in favour of Transceptgate the Shares,
                                  which instrument shall be in a form and
                                  substance satisfactory to Transceptgate,
                                  together with the original share certificates
                                  representing all such shares and instruments
                                  of transfer in respect of all such shares
                                  executed in blank;

         "Repayment Date"         Has the meaning stated in Clause 6.2;

         "Security Documents"     Means the New Share Charge and the New Escrow
                                  Agreement;

         "Share Subscription      Means any day on which LOOK subscribes for
         Date"                    Shares;

         "Shares"                 Means all the shares purchased by LOOK from
                                  time to time in accordance with the terms of
                                  the JVA in the share capital of BT LookSmart;

         "Subsidiary"             Means:
                                  (a)       a subsidiary within the meaning of
                                            Section 736 of the Companies Act
                                            1985 as amended

                                       3

<PAGE>

                                            by Section 144 of the Companies Act
                                            1989; and

                                      (b)   unless the context otherwise
                                            requires, a subsidiary undertaking
                                            within the meaning of Section 21 of
                                            the Companies Act 1989;

         "US Dollars" or "US$"    Means the lawful currency of the United States
                                  of America.

1.2      In this Agreement, a reference to a document, agreement or deed shall
         be construed as a reference to that document, agreement or deed as the
         same may be amended, replaced, supplemented or novated from time to
         time and any reference to any statute, statutory instrument or other
         rule or regulations is a reference to the same as it may from time to
         time be amended, consolidated, re-enacted or extended. In addition, any
         reference to a party shall include references to that party's
         successors and lawful assigns.

2.       Termination of Previous Arrangements

2.1      Transceptgate and the Borrower hereby agree that upon acceptance by the
         Borrower, LOOK and the Escrow Agent of this letter:

         (a)      all monies standing to the credit of the Existing Escrow
                  Agreement amounting, as at the date of acceptance by the
                  Borrower of this letter, to US$ 39,796,780 (the "Drawn But
                  Returned Amount") shall be paid to Transceptgate and such
                  payment shall effect a corresponding reduction in the
                  repayment obligation of the Borrower under the Existing
                  Facility Agreement;

         (b)      no further drawing shall be permitted by the Borrower under
                  the Existing Facility Agreement;

         (c)      the Existing Escrow Agreement and the Loan Conversion
                  Agreement shall be terminated and each of the parties thereto
                  shall be discharged from their respective obligations
                  thereunder for all purposes;

         (d)      the Existing Share Charge shall be discharged; and

         (e)      following the making of the Repayment Advance (as defined in
                  Clause 4.1(a)) under the New Facility in accordance with
                  Clause 4.1 of this Agreement in refinancing:

                  (i)     the principal amount outstanding under the Existing
                          Facility Agreement (namely US$10,203,220);
                  (ii)    all interest on such principal amount and the Drawn
                          But Returned Amount accrued as at such date amounting
                          in aggregate to US$19,527,237.65; and
                  (iii)   the Drawn But Returned Amount amounting in aggregate
                          to US$39,796,780,

<PAGE>

              the Existing Facility Agreement shall be terminated and each of
              the parties thereto shall be discharged from their obligations
              thereunder for all purposes.

       LOOK and the Escrow Agent are to countersign this letter by way of
       confirmation of their agreement and acknowledgement of the termination of
       the agreements referred to above to which they are party.

3.     Purpose of the New Facility

3.1    The New Facility shall comprise a combination of:

       (a)    monies advanced to the Borrower and currently outstanding under
              the Existing Facility Agreement; and

       (b)    new monies to be advanced in accordance with Clause 4.1(b).

3.2    The New Facility is to be used strictly for the two purposes described
       below:

       (a)    the  refinancing  of all amounts  outstanding  under the Existing
              Facility Agreement (as regards the Repayment Advance (as defined
              in Clause 4.1(a)); and

       (b)    for application in or towards meeting all or part of LOOK's
              funding obligations in respect of BT LookSmart as described in the
              JVA (as regards the New Escrow Advance (as defined in Clause
              4.1(b)).

4.     Operation of the New Facility

4.1    The New Facility shall be drawn in two Advances:

       (a)    one Advance (the "Repayment Advance") shall be the amount of
              US$29,730,457.65 (comprising US$19,527,237.65 accrued interest and
              US$10,203,220 cumulative draw downs) which is required to
              refinance all amounts outstanding under the Existing Facility
              Agreement as at the date of the Borrower's acceptance of this
              letter. By its acceptance of this letter, the Borrower requests
              that the Repayment Advance be advanced to it (and applied in
              accordance with this sentence) on the date of such acceptance or,
              if later, the date on which Transceptgate confirms that it is
              satisfied that all conditions precedent referred to in Schedule 2
              to this letter have been fulfilled unconditionally, and hereby
              irrevocably authorises and instructs Transceptgate to apply the
              proceeds of the Repayment Advance in repayment of all amounts
              outstanding under the Existing Facility Agreement; and

       (b)    the other Advance (the "New Escrow Advance") shall be in the
              amount of US$5,250,000 and shall be credited in full to the New
              Escrow

                                       5

<PAGE>

              Account (as defined below) in accordance with this Clause 4, and
              the Borrower hereby irrevocably authorises and instructs
              Transceptgate to pay the New Escrow Advance into the New Escrow
              Account promptly following the acceptance of this letter by the
              Borrower.

4.2    Transceptgate shall deposit the New Escrow Advance in an escrow account
       (the "New Escrow Account") to be opened, held and operated pursuant to
       the terms of the New Escrow Agreement. The New Escrow Agreement shall
       contain terms substantially similar to those contained in the Existing
       Escrow Agreement.

4.3    From the New Escrow Account, the Borrower may authorise and instruct the
       Escrow Agent to apply the proceeds of the New Escrow Advance held in the
       New Escrow Account in settlement of obligations of LOOK to provide
       funding to, and invest in, BT LookSmart under and in accordance with the
       terms of the JVA and the New Escrow Agreement.

5.     Interest and Charges

       Interest shall accrue on the amount of the Loan from time to time
       outstanding at the rate of 15% per annum. Such interest shall accrue from
       day to day by reference to a year of 360 days and shall be applied to the
       Loan at each twelve-month anniversary of the acceptance of this letter
       and on the Repayment Date.

6.     Repayment and Prepayment

6.1    The Loan shall be repaid, and all interest accrued thereon and any other
       amounts outstanding under this Agreement shall be paid, on the Repayment
       Date.

6.2    The Repayment Date shall be the first to occur of the following:

       (a)    31 March 2003;

       (b)    the date on which the Loan becomes repayable pursuant to Clause
              13;

       (c)    the date on which LOOK ceases to be a shareholder in BT Looksmart;
              and

       (d)    the date on which Transceptgate ceases to be a shareholder in BT
              Looksmart as a result of a call made by LOOK under the exit
              provisions in the Amendment to JVA.

                                       6

<PAGE>

6.3    The Loan may be prepaid (in whole or in part, provided that any such part
       must be at least US$ 1,000,000) on an Interest Payment Date provided that
       Transceptgate is given not less than 10 (ten) Banking Days' written
       notice of the intended prepayment. No amount prepaid may be redrawn.

6.4    Any funds remaining in the New Escrow Account pursuant to the New Escrow
       Agreement on the Repayment Date shall be transferred by the Escrow Agent
       to Transceptgate and will be credited by Transceptgate towards
       satisfaction of any sum then due and payable from the Borrower under this
       Agreement.

7.     Fees and Expenses

7.1    The Borrower shall pay to Transceptgate (or an associated company of
       Transceptgate as Transceptgate may specify) on demand:

       (a)    fifty per cent of the reasonable and fully-documented expenses
              (including legal and out-of-pocket expenses) incurred by
              Transceptgate or BT in connection with the instruction of its
              English, US, Barbados and Bermudan lawyers for the purposes of the
              negotiation, preparation and execution of this Agreementand the
              Security Documents, any amendment to or extension of, or the
              granting of any waiver or consent under, or in respect of this
              Agreement or any of the Security Documents; and

       (b)    all expenses (including legal and out-of-pocket expenses)
              reasonably incurred by Transceptgate in contemplation of, or
              otherwise in connection with, the enforcement of any rights under
              this Agreement and/or the Security Documents together with
              interest at the rate referred to in Clause 5 from the date on
              which such expenses were incurred to the date of payment (as well
              after as before judgment or the insolvency or bankruptcy of the
              Borrower).

7.2    All expenses payable pursuant to this Clause 7 shall be paid together
       with Value Added Tax (if any) thereon.

8.     Payments

8.1    If any period would end or payment would fall due under this Agreement on
       a day which is not a Banking Day, the period (or the date for payment)
       shall be extended to the next succeeding Banking Day, unless such next
       succeeding Banking Day falls in the next calendar month in which case the
       period shall be shortened (or the payment date advanced) to end on the
       immediately preceding Banking Day. Where a period or date for payment is
       altered under this clause, interest (and any other payment accruing from
       day to day) shall be re-calculated accordingly.

8.2    The Borrower will pay interest on any moneys due and unpaid, from the due
       date to actual payment (as well after as before judgment or the
       insolvency or bankruptcy of the Borrower) at 15% per annum so long as the
       default continues.

                                       7

<PAGE>

       Such interest shall accrue from day to day and be compounded at each
       twelve-month anniversary of the date of this Agreement.

8.3    Transceptgate may apply any credit balance held by it to which the
       Borrower is entitled on any account of the Borrower with Transceptgate in
       or towards satisfaction of any sum then due and payable from the Borrower
       hereunder. For this purpose, Transceptgate is authorised to purchase with
       the moneys standing to the credit of such account such other currencies
       as may be necessary to effect such application.

8.4    The Borrower shall indemnify Transceptgate against any reasonable loss or
       expense that Transceptgate shall incur or sustain in consequence of:

       (a)    any default in payment by the Borrower of any sum when due under
              this Agreement;

       (b)    the occurrence of any Event of Default; or

       (c)    any prepayment of any Advance or part thereof other than on an
              Interest Payment Date therefor in accordance with Clause 6.

9.     Representations and Warranties

9.1    By its acceptance of this letter, each of the Borrower and LOOK
       respectively represents and warrants to Transceptgate that:

       (a)    the execution and, delivery of, and the performance of its
              obligations under, this Agreement and the Security Documents to
              which it is party will not (i) contravene any existing law,
              regulation or authorisation to which it is subject, or (ii) result
              in any breach of or default under any agreement or other
              instrument to which it is a party or is subject and this Agreement
              and the Security Documents to which it is party constitutes valid
              and legally binding obligations of the Borrower and LOOK
              enforceable in accordance with its respective terms;

       (b)    no litigation or arbitration is taking place, pending or, to the
              best of its knowledge, threatened against it or any of its assets
              that has had or is likely to have a material adverse effect on it;
              and

       (c)    no Default has occurred and is continuing.

10.    Undertakings

10.1   By its acceptance of this letter, each of the Borrower and LOOK
       respectively undertakes with Transceptgate that (save with the prior
       written consent of Transceptgate) for so long as any monies remain
       outstanding under the New Facility:

                                       8

<PAGE>

     (a)  it shall procure that the Advances are utilised for the purpose only
          of purchasing the Shares and immediately upon the issue of any Shares
          funded by either Advance or any part thereof it shall procure that
          LOOK transfers the Shares to Transceptgate pursuant to the terms of
          the New Share Charge;

     (b)  LOOK will not create or allow to exist any Encumbrance over any of its
          present or future assets, rights or revenues;

     (c)  the Borrower will not create or allow to exist any Encumbrance over
          any of its present or future assets, rights or revenues otherwise than
          in the ordinary course of its business (and for the avoidance of
          doubt, the ordinary course of the Borrower's business shall include
          investing in, buying and selling assets, goodwill and shares in other
          corporate entities);

     (d)  LOOK will not enter into any guarantee, indemnity or like agreement to
          answer for the obligations or default of any person;

     (e)  the Borrower will not enter into any guarantee, indemnity or like
          agreement to answer for the obligations or default of any person other
          than a Subsidiary of the Borrower or otherwise in the ordinary course
          of its business (and for the avoidance of doubt, the ordinary course
          of the Borrower's business shall include investing in, buying and
          selling assets, goodwill and shares in other corporate entities); and

     (f)  the Borrower and LOOK will not, whether by one or a series of
          transactions related or not, sell, transfer, lend or otherwise dispose
          of or cease to exercise direct control over any part of their
          respective present or future assets or revenues otherwise than by
          transfers, sales or disposals of assets made for full consideration in
          the ordinary course of its respective business.

11.  Information

11.1 By acceptance of this letter, each of the Borrower and LOOK respectively
     undertakes with Transceptgate that and for so long as any moneys remain
     outstanding under the New Facility:

     (a)  it will inform Transceptgate of any Default forthwith upon becoming
          aware thereof; and

     (b)  it will provide Transceptgate with such financial and other
          information concerning its respective financial affairs as
          Transceptgate may require no less than six monthly save that nothing
          in this sub-clause shall require the Borrower to disclose market
          sensitive information.

12.  Conditions

                                       9

<PAGE>

12.1 Transceptgate shall not be obliged to make any Advance under this Agreement
     unless within seven (7) days after the date of acceptance by the Borrower
     and LOOK of this letter, it shall have received the Security Documents duly
     executed by the parties thereto and the Amendment to JVA duly executed by
     the parties thereto on the terms set out in Schedule 2 in accordance with
     all its terms both in form and substance satisfactory to Transceptgate.

12.2 The obligation of Transceptgate to make either Advance under this Agreement
     is subject to the further conditions that, at the time of the proposed date
     for the making of the relevant Advance:

     (a)  each of the representations and warranties set out in Clause 9 is true
          and correct as if each was made with respect to the facts and
          circumstances existing at such time; and

     (b)  no Default shall have occurred and be continuing or would result from
          the making of the Advance.

13.  Events of Default

     Transceptgate may, without prejudice to its other rights hereunder,
     terminate its obligation to make the New Facility available, declare some
     or all of either Advance together with all accrued interest and other
     moneys payable hereunder immediately repayable or, as the case may be,
     payable at any time after any Event of Default shall have occurred (so long
     as the same is continuing). The Borrower shall repay or, as the case may
     be, pay any moneys declared repayable or payable under this Clause 13
     forthwith on such declaration being made. Provided that the sole recourse
     of Transceptgate for an Event of Default by the Borrower and/or LOOK
     hereunder shall be by the exercise of its rights under the terms of any one
     or more of the Security Documents.

14.  Notices

14.1 Every notice under this letter shall be in writing and may be given or made
     by airmail or courier post or facsimile to the Borrower, LOOK or
     Transceptgate at their respective addresses and facsimile numbers given
     below. Notices shall be effective only upon actual receipt or when mailed
     by registered, certified or courier mail, return receipt requested.

14.2 The address and facsimile number of LOOK are:

     LookSmart (Barbados) Inc.
     KPMG Corporate Services
     Suite 201, Building #1
     Chelston Park, Culloden Road
     St. Michael, Barbados

     Facsimile:   +1 (246) 437-7477
     Attention:   Chief Executive Officer

                                       10

<PAGE>

14.3 The address and facsimile number of the Borrower are:

     LookSmart Ltd
     625 Second Street
     San Francisco
     CA 94107
     USA

     Facsimile:   +1 (415) 348 7034
     Attention:   Chief Executive Officer (with a copy to the General Counsel at
     the same address)

14.4 The address and facsimile number of Transceptgate are:

     Transceptgate Limited
     2nd Floor
     10 - 12 Prospect Hill
     Douglas
     Isle of Man
     IM1 1ES
     Facsimile:   +01624 615654
     Attention:   The Chairman of the Board

     With a copy to:
     British Telecommunications plc
     81 Newgate Street
     London
     EC1A 7AJ
     Facsimile:    +44 (0) 20 7356 6054
     Attention:    The Group Treasurer

15.  No Waivers

     No failure or delay by any party to this Agreement in exercising any right
     or remedy hereunder shall operate as a waiver thereof nor shall any single
     or partial exercise of any right or remedy preclude any further exercise
     thereof or the exercise of any other right or remedy. The rights and
     remedies herein are cumulative and not exclusive of any rights and remedies
     provided by law.

16.  Assignment

     Transceptgate may assign or transfer all or any part of its rights or
     obligations under this Agreement without the Borrower's consent to:

     (a)  any BT Group company; or

                                       11

<PAGE>

     (b)  in the event that Transceptgate sells all of its shares in BT
          Looksmart, to the purchaser of all of Transceptgate's shares.

17.  Conflict

     In the event of any conflict between the provisions of this Agreement and
     the JVA or the Amendment to JVA, the provisions of this Agreement shall
     prevail.

18.  Governing Law and Jurisdiction

     This Agreement shall be governed by and interpreted in accordance with
     English law. The parties hereto acknowledge and accept that the Courts of
     England shall have non-exclusive jurisdiction to settle any dispute which
     may arise under or in connection with this Agreement.

19.  Availability

     We enclose a copy of this letter. To signify your acceptance of the New
     Facility and the terms and conditions contained herein, we would ask you to
     sign and date the enclosed copy and return the same to us before 7 December
     2001 failing which the offer contained in this letter will automatically
     and without further notice lapse.

                                Yours faithfully,

                              Transceptgate Limited

Accepted and agreed

__________________________________

For and on behalf of

LookSmart Limited

__________________________________

For and on behalf of

LookSmart (Barbados), Inc.

                                       12

<PAGE>

With respect to the acknowledgement in Section 2.1 hereof only:

_____________________________

For and on behalf of

City National Bank

                                       13

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                                   SCHEDULE 1

                                Events of Default

There shall be an Event of Default if:

     (a)  the Borrower fails to pay any sum payable by it under this Agreement
          when due; or

     (b)  the Borrower and/or LOOK defaults in the due performance or observance
          of any other provision of this Agreement and (if such default is in
          the opinion of Transceptgate capable of remedy) such default shall not
          have been remedied within 14 days of Transceptgate notifying the
          Borrower and/or LOOK of such default and the remedy required; or

     (c)  any representation made or deemed to be made by the Borrower and/or
          LOOK in or pursuant to this Agreement or the JVA is or proves to have
          been incorrect in any material respect; or

     (d)  any obligation (including a contingent obligation) of the Borrower
          and/or LOOK in respect of Indebtedness is not paid when due or becomes
          due or capable of being declared due prior to its stated maturity by
          reason of default in circumstances where the aggregate amount of
          Indebtedness is in excess of US$25 million; or

     (e)  a judgment or order made against the Borrower and/or LOOK is not
          complied with within seven days or an encumbrancer takes possession or
          a receiver or administrator is appointed of any part of the
          undertaking, assets, rights or revenues of the Borrower and/or LOOK or
          a distress, execution or other process is levied or enforced upon any
          of the assets, rights, undertaking or revenues of the Borrower and/or
          LOOK and is not discharged within 7 days; or

     (f)  the Borrower and/or LOOK stops or suspends payment of its debts or is
          unable to or admits its inability to pay its debts (within the meaning
          of section 123 of the Insolvency Act 1986 or otherwise but ignoring
          the references in that section to determination by the court) or
          becomes insolvent or proposes or commences negotiations with one or
          more of its creditors with a view to the general rescheduling of its
          debts or proposes or enters into any composition or other arrangement
          for the benefit of its creditors generally or any class of its
          creditors; or

     (g)  a petition is presented or an order made for the insolvency of the
          Borrower and/or LOOK; or

     (h)  any event occurs or proceeding is taken with respect to the Borrower
          and/or LOOK in any jurisdiction to which it is subject which has an
          effect

                                       14

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          equivalent or similar to any of the events mentioned in sub-paragraphs
          (e), (f) or (g); or

     (i)  any step is taken to repossess any goods in the possession of the
          Borrower and/or LOOK under any hire purchase, conditional sale,
          leasing, retention of title or similar agreement where the aggregate
          value of such goods exceeds US$25 million; or

     (j)  the JVA is terminated in accordance with the terms thereof; or

     (k)  the Borrower and/or LOOK defaults in the due performance or observance
          of any material provision of the JVA or the Amendment to JVA and/or
          any of the Security Documents and in the case of default in respect of
          the JVA or the Amendment to JVA the default is not remedied pursuant
          to Clause 11.6 of that agreement; or

     (l)  any Security Document is not, or ceases to be, in full force and
          effect in accordance with its terms; or

     (m)  LOOK fails, within 5 days of the date of any New Escrow Advance, to
          subscribe for Shares and deliver the share certificates in respect of
          the same to Transceptgate; or

     (n)  any other event occurs or circumstance arises which, in the reasonable
          opinion of Transceptgate, is likely materially and adversely to affect
          the ability of the Borrower and/or LOOK to perform all or any of its
          respective obligations under or otherwise to comply with the terms of
          this Agreement and/or the JVA or the Amendment to JVA.

                                       15

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                                   SCHEDULE 2

             Documents and Evidence Required as Conditions Precedent

1.   The New Share Charge.

2.   The New Escrow Agreement.

3.   The Amendment to JVA.

4.   Legal opinions in form and substance satisfactory, and addressed, to
     Transceptgate in respect of:

     (a)  the Borrower from Wilson Sonsini Goodrich & Rosati in respect of this
          Agreement, the Amendment to JVA and the New Escrow Agreement; and

     (b)  LOOK from Lystra A. Kodilinye in respect of this Agreement, Amendment
          to JVA, the New Escrow Agreement and the New Share Charge.

                                       16

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