Document:

<PAGE>

                                 Exhibit 10.23

TBCC

                        Amendment and Waiver Agreement

Borrower:        VidaMed, Inc.,
                 a Delaware corporation

Address:         46107 Landing Parkway
                 Fremont, CA 94538-6407

Date:            October 26, 1999

THIS AMENDMENT AND WAIVER AGREEMENT (this "Amendment") is entered into as of
the above date, between the above borrower (the "Borrower"), having its chief
executive office and principal place of business at the address shown above, and
TRANSAMERICA BUSINESS CREDIT CORPORATION, a Delaware corporation ("TBCC"),
having its principal office at 9399 West Higgins Road, Suite 600, Rosemont,
Illinois 60018 and having an office at 15260 Ventura Blvd., Suite 1240, Sherman
Oaks, California 91403.

TBCC and Borrower agree to amend and supplement the Loan and Security Agreement
between them, dated October 20, 1998 (the "Loan Agreement"), as follows.  (This
Amendment, the Loan Agreement, any prior written amendments to the Loan
Agreement signed by TBCC and Borrower, and all other written documents and
agreements between TBCC and Borrower, are referred to herein collectively as the
"Loan Documents."  Capitalized terms used but not defined in this Amendment
shall have the meanings set forth in the Loan Agreement.)

     1.   Amendments.  Effective upon the date hereof, (i) the Maturity Date set
forth at Section 4 of the Schedule to Loan and Security Agreement shall be
amended as follows: the date "December 31, 1999" shall be deleted and the date
"January 31, 2000" shall be inserted in its place, and (ii) the last sentence of
Section 4.10 of the Loan Agreement shall be amended and restated as follows:
"Borrower has no Subsidiaries, except for its Subsidiary in the United Kingdom,
VidaMed International, Ltd."

     2.   Waiver.  Effective the Closing Date (as defined below), TBCC waives
(i) the Event of Default existing under Section 7.1(k) of the Loan Agreement
which resulted from the delivery of a Qualified opinion by Borrower's Auditors
in respect of Borrower's Financial Statements for the fiscal year ended December
31, 1998, and (ii) the Event of Default existing under Section 5.8(a) of the
Loan Agreement which resulted from Borrower's failure to give TBCC notice of the
Event of Default under Section 7.1(k) of the Loan Agreement within two Business
Days after becoming aware thereof.

Conditions Precedent.  The effectiveness of the foregoing waiver under the
preceding Section 2 shall be subject to the conditions precedent

                                       63
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that TBCC shall have received (i) a fee of $10,000, which shall be payable on
the execution hereof by Borrower, and (ii) warrants to purchase 20,000 shares of
common stock of Borrower at a price of $0.89 per share. The date of satisfaction
of the foregoing conditions precedent is the "Closing Date."

Representations True.  To induce TBCC to enter into this Amendment, Borrower
hereby confirms and restates, as of the date hereof (after giving effect to the
waiver contemplated in Section 2 above), the representations and warranties made
by it in Section 4 of the Loan Agreement.  For the purposes of this Section 4
each reference in Section 4 of the Loan Agreement to "this Agreement," and the
words "hereof," "herein," "hereunder," or words of like import in such Section,
shall mean and be a reference to the Loan Agreement as amended by this
Amendment.

GOVERNING LAW.  THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, WHETHER SOUNDING IN
CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE INTERNAL LAWS AND
DECISIONS OF THE STATE OF ILLINOIS.

General Provisions.  TBCC's execution and delivery of, or acceptance of, this
Amendment and any other documents and instruments in connection herewith shall
not be deemed to create a course of dealing or otherwise create any express or
implied duty by it to provide any other or further amendments, consents or
waivers in the future.  This Amendment, the Loan Agreement, and the other Loan
Documents set forth in full all of the representations and agreements of the
parties with respect to the subject matter hereof and supersede all prior
discussions, representations, agreements and understandings between the parties
with respect to the subject hereof.  Except as herein expressly amended and
supplemented, all of the terms and provisions of the Loan Agreement and the
other Loan Documents shall continue in full force and effect and the same are
hereby ratified and confirmed.  This Amendment forms part of the Loan Agreement
and the terms of the Loan Agreement are incorporated herein by reference.

Borrower:                              TBCC:

VIDAMED, INC.                          TRANSAMERICA BUSINESS CREDIT CORPORATION

By  /s/                                By  /s/
   --------------------------------       -------------------------------------
   John F. Howe,
   Vice President and CFO

                                       Title
                                             ----------------------------------

                                       64<PAGE>

                                                                   EXHIBIT 10.17

CONFIDENTIAL TREATMENT                      **Confidential treatment has been
HAS BEEN REQUESTED FOR                      requested with respect to the
CERTAIN PORTIONS OF THIS                    information contained within the
DOCUMENT                                    "[**]" marking. Such marked
                                            portions have been omitted from
                                            this filing and have been filed
                                            separately with the Securities and
                                            Exchange Commission.

                               15 FEBRUARY 2000

                             TRANSCEPTGATE LIMITED

                                      and

                                 LOOKSMART LTD

                                      and

                           LOOKSMART (BARBADOS) INC

                                      and

                               BT LOOKSMART LTD

                                      and

                        BRITISH TELECOMMUNICATIONS PLC

                            JOINT VENTURE AGREEMENT

<PAGE>

[* * *] - Confidential Treatment Requested

THIS JOINT VENTURE AGREEMENT is made on 15 February 2000

BETWEEN

(1)  TRANSCEPTGATE LIMITED whose registered office is at Queen Victoria House,
     Queen Victoria Street, Douglas, Isle of Man ("BTH");

(2)  LOOKSMART LTD with its principal place of business at 625 Second Street,
     San Francisco, CA 94107, USA ("LOOK");

(3)  LOOKSMART (BARBADOS) INC. with its principal place of business at Hastings
     Business Services Limited, Hastings, Christ Church, Barbados ("LOOK
     BARBADOS");

(4)  BT LOOKSMART LTD, a Bermuda exempted company, whose registered office is at
     Clarendon House, 2 Church Street, Hamilton HM CX, Bermuda  ("BT
     LOOKSMART"); and

(5)  BRITISH TELECOMMUNICATIONS plc whose registered office is at 81 Newgate
     Street, London, EC1A 7AJ ("BT").

WHEREAS

(A)  LOOK BARBADOS and BTH wish to agree terms for the formation of a business
     venture for the purpose of making available and exploiting the revenue and
     profit opportunities available from portal web sites and supply of
     component parts of those portal web sites, with a brand agreed with equal
     prominence given to each party's brand, with regional or country-specific
     appellations. These sites will provide category-based Internet directory
     services and associated "portal" functionality similar to existing LOOK
     sites and other Web portals but will be targeted at Internet users residing
     in or carrying on business in the Territory.

(B)  LOOK wishes to expand its consumer internet business and content service
     provision outside its current core territories, the United States of
     America, Canada and Australia and is seeking a partner to increase the
     speed to market of its portal proposition through distribution and
     territory know-how.

(C)  BTH wishes to increase its presence outside the United Kingdom in the
     portal business and to provide content and a portal platform for the ISPs
     of its joint ventures.

(D)  LOOK BARBADOS is the owner of the existing Territory Databases. The parties
     wish to combine LOOK's Databases, associated with the existing LOOK sites
     and any Territory Databases developed by LOOK, or to be developed by the
     joint venture and LOOK BARBADOS, and LOOK's other technical and software
     experience, market knowledge, content, Internet culture and reputation with
     BTH's knowledge, contacts, ability to generate users through its ISP and
     other access businesses, applications and reputation.
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(E)  LOOK BARBADOS and BTH have formed BT LOOKSMART which will develop, market
     and sell products and/or services in the Territory pursuant to licensing
     arrangements between LOOK, LOOK BARBADOS and BT LOOKSMART and utilising
     other third party products and/or services.

(F)  LOOK BARBADOS and BTH are entering into this Agreement to establish the
     manner in which BT LOOKSMART is to be established and to set out the terms
     governing the relationship of BTH and LOOK BARBADOS as shareholders of BT
     LOOKSMART.

(G)  The parties intend to utilise their complementary skills to secure this
     venture as a successful business venture.  BTH and LOOK BARBADOS desire to
     have BT LOOKSMART act and BT LOOKSMART desires to act as an independent
     vehicle for the BT LOOKSMART activities described in this Agreement.

IT IS AGREED as follows:

1.   INTERPRETATION

Definitions

1.1  In this Agreement, the following terms shall (unless the context requires
     otherwise) have the following respective meanings:

     "Accounting Principles" is defined in Clause 12;

     "affiliate" means a company in which a party holds directly or indirectly
     20 per cent or more of the equity share capital or controls directly or
     indirectly, 20 percent or more of the voting rights;

     "Agreed Form" means in relation to any document (or the draft of it) the
     form which BTH and LOOK BARBADOS have initialled for the purposes of
     identification;

     "Ancillary Agreements" means the list of agreements set out in Schedule 1;

     "Best Market Terms" means terms equivalent to the best available terms
     (taking into account price, quality of service, volume, performance and
     other relevant criteria) which the relevant party offers to a third party
     and which in the context of regulated services will mean the applicable
     published tariffs and terms and conditions;

     "Board" means the board of directors of BT LOOKSMART;

     "BTAP" means a company within the Territory in which BT holds directly or
     indirectly an interest in the equity share capital or with whom BT has a
     strategic relationship;

     "BT Directors" means the directors of BT LOOKSMART from time to time
     appointed by the BT Shareholder pursuant to Clause 9.2;

     "BT Group" means all companies which control or are controlled by BT,
     either directly or indirectly, through one or more companies, control being
     defined as the holding of 50 per cent or more of the equity share capital
     or of the voting rights of the controlled company;
<PAGE>

     "BT LOOKSMART Group" means all companies which are controlled by BT
     LOOKSMART, either directly or indirectly, through one or more companies,
     control being defined as the holding of 50 per cent or more of the equity
     share capital or of the voting rights of the controlled company;

     "BT Shares" means Shares with nominal value of US$.01 each of BT LOOKSMART,
     held from time to time by BTH or other members of the BT Group;

     "BT Shareholder" means BTH and its successors and/or such member of the BT
     Group which is the holder(s) for the time being of BT Shares;

     "BT Trade Mark Licence Agreement" means the agreement set out in Schedule
     3;

     "Budget" means a budget for BT LOOKSMART for a particular Financial Year
     (in a format approved from time to time by the Board);

     "Business Day" means a day on which banks generally are open in Sydney for
     a full range of business;

     "Business Plan" means a 5 year rolling business plan for BT LOOKSMART (in a
     format approved from time to time by the Board) to be updated annually
     having its origins in the Initial Business Plan;

     "Bye-laws" means the Bye-laws of BT LOOKSMART to be adopted pursuant to
     Clause 5.3, in the form to be agreed between BTH and LOOK BARBADOS (as they
     may subsequently be altered from time to time);

     "CEO" means the chief executive officer from time to time of BT LOOKSMART;

     "CFO" means the chief financial officer from time to time of BT LOOKSMART;

     "Chairman" means the chairman from time to time of the Board;

     "Company" includes any body corporate, wherever incorporated;

     "Completion" means completion of the matters set out in Clause 5.1;

     "Directors" means directors of BT LOOKSMART;

     "Fair Price" means the fair value, having regard to all relevant factors,
     of the relevant Shares between a willing seller and a willing third party
     buyer without any premium or discount being attributable to the percentage
     of the issued share capital of BT LOOKSMART constituted by the relevant
     Shares;

     "free access portal" means the combination of portal and Internet access,
     for which the only charges to the end user are local rate telephony
     charges;

     "Financial Year" means each financial year of BT LOOKSMART beginning on 1
     January and ending on 31 December;

     "holding company" shall be construed in accordance with sections 736 and
     736A of the UK Companies Act 1985, as amended;
<PAGE>

     "Initial Business Plan" means the first Business Plan as set out in
     Schedule 4;

     "Initial Period" means the period from the date of signing of this
     Agreement to and including 31 March 2001;

     "Insolvency Event" is defined in Clause 21;

     "Intellectual Property Rights" means registered designs, copyright of any
     kind, database rights, rights (contractual or otherwise) to prevent
     disclosure or use of confidential information, and any other similar form
     of intellectual property or proprietary rights, statutory or otherwise,
     whether registrable or not and shall include applications for any of them;

     "ISP" means internet service provider;

     "Loan Agreement" means the loan agreement referred to in Clause 5.2;

     "Loco" means an operating subsidiary or a local presence of BT LOOKSMART in
     a country within the Territory;

     "LOOK Databases" means web directory databases, created and owned by LOOK,
     of web sites for countries and/or languages not in the Territory;

     "LOOK Directors" means the directors of BT LOOKSMART from time to time
     appointed by the LOOK Shareholder pursuant to Clause 9.2;

     "LOOK Group" means all companies which control or are controlled by LOOK,
     either directly or indirectly, through one or more companies, control being
     defined as the holding of 50 per cent or more of the equity share capital
     or of the voting rights of the controlled company;

     "LOOK Licensing Agreement" means the agreement in the form set out in
     Schedule 5, pursuant to which LOOK grants BT LOOKSMART exclusive rights to
     the LOOK Databases and LOOK BARBADOS grants BT LOOKSMART exclusive rights
     to the Territory Databases;

     "LOOK Services Agreement" means the agreement to be entered into between
     LOOK BARBADOS and BT LOOKSMART containing the principles set out in
     Schedule 6 pursuant to which LOOK BARBADOS shall provide certain services
     to BT LOOKSMART, including the creation of Territory Databases;

     "LOOK Shares" means Shares with nominal value of US$.01 each of BT
     LOOKSMART, held from time to time by LOOK BARBADOS or other members of the
     LOOK Group;

     "LOOK Shareholder" means LOOK BARBADOS and its successors and/or such
     member of the LOOK Group which is the holder(s) for the time being of LOOK
     Shares;

     "LOOK Trade Mark Licence Agreement" means the agreement in the form set out
     in Schedule 14;
<PAGE>

     "LOOK Transfer Agreement" means the agreement, in the form set out in
     Schedule 15, to be entered into for the transfer to a member of the BT
     LOOKSMART Group of LOOK's business and assets in the Territory;

     "Memorandum" means the Memorandum of Association of BT LOOKSMART, a copy of
     which is set out in Schedule 2  (as it may subsequently be altered from
     time to time);

     "BT LOOKSMART Business" has the meaning set out in Clause 3.1;

     "parties" means LOOK, LOOK BARBADOS, BTH, BT and BT LOOKSMART, and party
     shall be construed accordingly;

     "Peak Funding Requirement" means the maximum aggregate amount of cash
     required to implement and build a successful BT LOOKSMART Business in
     accordance with the plans set out in the Initial Business Plan, as may be
     amended from time to time;

     "Performance Objectives" means the Year One Performance Objectives and/or
     the Year Two Performance Objectives, as appropriate;

     "portal" means an internet site, based on current and future Territory
     Databases and LOOK's and BT LOOKSMART's Intellectual Property Rights, which
     aggregates general content and services designed for users in the
     Territory;

     "Regulatory Action" means any order of a court of competent jurisdiction or
     any order, decision or view made, given or expressed by a competent
     governmental or regulatory authority or agency or an enhancement of a
     legislative body:

          (a)  which after Completion would materially prohibit or restrict the
               carrying on of BT LOOKSMART Business as contemplated by this
               Agreement; or

          (b)  in consequence of which, any of the Parties would incur fines or
               a liability in damages were this Agreement to be performed in
               accordance with its terms;

     "Shareholders"  means the LOOK Shareholder and the BT Shareholder (and
     Shareholder shall be construed accordingly);

     "Shareholder Matters" means the matters so defined in Clause 11.2;

     "Shares" means shares in BT LOOKSMART with voting rights;

     "subsidiary" shall be construed in accordance with sections 736 and 736A of
     the UK Companies Act 1985 (as amended);

     "Territory Databases" means existing web directory databases created and/or
     owned by LOOK or LOOK BARBADOS for the Territory at the date of this
     Agreement and any web directory databases created by LOOK BARBADOS on
     behalf of BT LOOKSMART after the date of this Agreement, ownership of which
     shall vest in LOOK BARBADOS until such time as the Performance Objectives
     are met, at which time ownership shall thereafter vest in BT LOOKSMART;
<PAGE>

     "Territory" means the countries comprising (i) all of Europe and (ii) Asia
     Pacific but excluding Australia and China but including Hong Kong and
     Taiwan, as identified in Schedule 7;

     "URL" means Uniform Resource Locator;

     "USA" means United States of America;

     "VISP" means virtual internet service provider;

     "WAP" means wireless application protocol;

     "wholesale services" means any services offered to third parties by BT
     LOOKSMART including, without limitation, homepage programming, search,
     licensing and syndication;

     "Year One Performance Objectives" means the performance objectives set out
     in Paragraph 1.1 of Schedule 8;

     "Year Two Performance Objectives" means the performance objectives set out
     in Paragraph 1.2 of Schedule 8.

Clauses and Schedules

1.2  Except where the context requires otherwise, references to Clauses and
     Schedules are to Clauses of or Schedules to this Agreement.

Headings

1.3  Headings are inserted for convenience only and shall not affect the
     construction of this Agreement or the Schedules.

1.4  In this Agreement, words and terms shall be read and construed in
     accordance with trade, custom and usage in the Internet and e-commerce
     business in the United Kingdom.

2.   CHARACTERISTICS OF BT LOOKSMART

2.1  BT LOOKSMART is a company incorporated on 27 January 2000 in Bermuda as an
exempted company with an authorised share capital of US$12,000 consisting of
12,000 shares with a par value of US$1.00 with 6,000 shares issued to BTH and
6,000 shares issued to LOOK BARBADOS. The share capital was subsequently
subdivided into 1,200,000 shares with a par value of US$0.01. On 7 February
2000, or such later date as BTH and LOOK BARBADOS shall agree, the authorised
share capital of BT LOOKSMART shall be increased from US$12,000 to US$2,000,000
by the creation of 198,800,000 new shares with a par value of US$.01. Fifteen
million (15,000,000) of such new shares shall be set aside for the BT LOOKSMART
stock plan to be established pursuant to Clause 15.2.

2.2  The directors of BT LOOKSMART on the date hereof are Evan Thornley, Vernon
Irvin, Stephen Davies, Anthony Castagna, Timothy Pethick and a Chief Financial
Officer to be appointed pursuant to Clause 9.10.
<PAGE>

3.   BUSINESS OF BT LOOKSMART

BT LOOKSMART Business

3.1  The business of BT LOOKSMART ("BT LOOKSMART Business") is:

     (a)   To be a leading Internet media company which offers content-rich free
          Internet based services, based on the Territory Databases and the LOOK
          Databases and other services, to users resident in the Territory by
          building and maintaining a portal in each country in the Territory,
          the aim of which is for BT LOOKSMART to be one of the top three
          amongst its competitors in the relevant country as measured by page
          views, visitors, registered users, revenues and applications.

     (b)  To be a leading Internet media company which offers wholesale Internet
          based services in the Territory by:

          (i)  offering wholesale services in each country in the Territory;

          (ii) working with BT or a BTAP, if any, or a third party in each
               country in the Territory to offer  packaged wholesale access and
               wholesale services.

3.2  BT LOOKSMART's initial business shall be narrowband and BT LOOKSMART shall
     develop services to be delivered over other means including broadband and
     mobile. Subject to the agreement of BTH, BT LOOKSMART will be given the
     opportunity to participate in any emerging distribution channels offered by
     BT or a BTAP including but not limited to WAP.

3.3  BT LOOKSMART shall be responsible for the development or acquisition of
     specific Territory content and applications, for the operation, support and
     maintenance of any Territory file servers, applications and technologies,
     for marketing in the Territory, ad sales, business development, additional
     content licensing and developing Intellectual Property Rights.

3.4  BT LOOKSMART shall commence business in those countries as set out in the
     Initial Business Plan. BT LOOKSMART may set up a Loco to conduct its
     business in a particular country within the Territory. A BTAP or other
     third party may be offered a shareholding in Loco with the consent of the
     Shareholders.

3.5  The parties shall consider on a country by country basis whether BT
     LOOKSMART shall offer a free access portal.

Commercial principles

3.6  The activities of BT LOOKSMART shall be conducted in the best interests of
     BT LOOKSMART in accordance with the general principles of the then current
     Business Plan approved by the Board and on sound commercial basis and in
     compliance with applicable local laws and regulations.

4.  REPRESENTATIONS AND WARRANTIES ON SIGNATURE

    LOOK, LOOK BARBADOS, BTH and BT each warrant and represent to each other
    that:
<PAGE>

     (a)  it has obtained all necessary corporate authorisations to enter into
          this Agreement and the Ancillary Agreements; and

     (b)  nothing in its Bye-laws or internal regulations prevents the full
          performance of its obligations under this Agreement and the Ancillary
          Agreements.

5.   COMPLETION

Completion

5.1  Completion shall take place at Clarendon House, 2 Church Street, Hamilton
     HM CX, Bermuda on 16 February 2000 or such later date as BTH and LOOK
     BARBADOS shall agree but in any event no later than 28 February 2000, when
     the events set out below shall take place:

     (a)  LOOK BARBADOS shall subscribe unconditionally for 41,900,000 Shares at
          an issue price of US$.0238 per share, payment for which shall be made
          in accordance with Clause 8.2;

     (b)  BTH shall subscribe unconditionally for 41,900,000 Shares at an issue
          price of US$.0238 per share, payment for which shall be made in
          accordance with Clause 8.3;

     (c)  LOOK BARBADOS and BTH shall procure that BT LOOKSMART allots and
          issues and BT LOOKSMART shall allot and issue:

          (A) 41,900,000 Shares to LOOK BARBADOS credited as fully paid; and

          (B) 41,900,000 Shares to BTH credited as fully paid;

          and BT LOOKSMART shall cause the names of LOOK BARBADOS and BTH to be
          entered in the register of members of BT LOOKSMART as the respective
          holders of the Shares subscribed by them and that share certificates
          are issued to LOOK BARBADOS and BTH in respect of such Shares;

     (d)  LOOK BARBADOS and BTH shall procure that Evan Thornley, Anthony
          Castagna, Timothy Pethick, Vernon Irvin and Stephen Davies are
          appointed to the Board of Directors of BT LOOKSMART with Evan Thornley
          being appointed Chairman of BT LOOKSMART and that Richard Jenkyn of
          Codan Services Limited in Hamilton, Bermuda be appointed Secretary of
          BT LOOKSMART.

     (e)  LOOK, LOOK BARBADOS and BT LOOKSMART shall execute and deliver the
          LOOK Licensing Agreement and LOOK and BT LOOKSMART shall execute and
          deliver the LOOK Trade Mark License Agreement;

     (f)  BT LOOKSMART shall adopt and LOOK BARBADOS and BTH shall approve the
          Initial Business Plan;
<PAGE>

     (g)  BT and BT LOOKSMART shall execute and deliver the BT Trade Mark
          Licence Agreement;

     (h)  LOOK and BTH shall enter into the Loan Agreement.

5.2  LOOK undertakes to enter into the LOOK Transfer Agreement and LOOK
     BARBADOS, BTH and BT LOOKSMART shall procure that an appropriate company
     from a tax perspective within the BT LOOKSMART Group shall enter into the
     LOOK Transfer Agreement on the date specified in a written notice from BT
     LOOKSMART to LOOK that the transfer is to take place, such date to be no
     earlier than the third Business Day after the date of such notice.

5.3  Within 30 days after the date of this Agreement, BTH and LOOK BARBADOS
     shall agree the form of Memorandum and Byelaws and BT LOOKSMART shall and
     BTH and LOOK BARBADOS shall procure that BT LOOKSMART shall adopt such
     Memorandum and Byelaws.

5.4  No party shall be obliged to complete any of the transactions or do any of
     the things referred to in subclause 5.1(a) to (g) unless all other
     transactions and things referred to in those subclauses are completed in
     accordance with subclauses 5.1(a) to (g).

Rescission

5.5  If a party shall fail or be unable to comply with any of its obligations
     under subclause 5.1(a) to (g), the parties not in default may together:

     5.5.1  defer Completion to a date not more than 28 days after the date set
            by Clause 5.1; or

     5.5.2  agree to proceed to Completion so far as practicable (without
            prejudice to its rights hereunder); or

     5.5.3  rescind this Agreement.

6.   RELATIONSHIP BETWEEN BT LOOKSMART, THE  LOOK GROUP AND THE BT GROUP

6.1  LOOK BARBADOS, BTH and BT LOOKSMART hereby agree that BT LOOKSMART shall
     and BT LOOKSMART shall procure that Locos shall acquire telecommunications
     products and services from the BT Group or a BTAP provided that their Best
     Market Terms for providing the same are as favourable as a third party's
     Best Market Terms (or, if not available, arm's length terms) for providing
     the same.

6.2  BT and BT LOOKSMART shall use their respective reasonable endeavours to
     procure that a BTAP located in a country in which BT LOOKSMART is
     conducting or is about to conduct business, enters into a commercial
     relationship with BT LOOKSMART for the provision of services by BT
     LOOKSMART which may include BT LOOKSMART programming the BTAP's ISP home
     page provided that  BT LOOKSMART's Best Market Terms for providing the same
     are as favourable as a
<PAGE>

     third party's Best Market Terms (or, if not available, arm's length terms)
     for providing the same.

6.3  Subject to agreeing commercial terms and to applicable law and regulation,
     BT shall provide on- and off-web marketing of BT LOOKSMART and Loco
     services and, if possible, shall promote the business of BT LOOKSMART and
     the relevant Loco through its BTAP in a relevant country and the partners
     of the BTAP (including but not limited to BTAPs and their partners that are
     providers of mobile services), to the customers of such BTAP and partners.

6.4  LOOK BARBADOS, BTH and BT LOOKSMART agree that BT LOOKSMART shall and BT
     LOOKSMART shall procure that Locos shall acquire applications, including
     email and IP communications services from the BT Group, a BTAP or the LOOK
     Group provided that their Best Market Terms for providing the same are as
     favourable as a third party's Best Market Terms (or, if not available,
     arm's length terms) for providing the same. If more than one of the BT
     Group, a BTAP and the LOOK Group could provide the application, then
     whichever provides the Best Market Terms shall provide the application
     subject to its Best Market Terms for providing the same being as favourable
     as a third party's Best Market Terms (or, if not available, arm's length
     terms) for providing the same.

6.5  LOOK BARBADOS, BTH and BT LOOKSMART agree that BT LOOKSMART shall and BT
     LOOKSMART shall procure that Locos shall acquire wholesale access, network
     and hosting platforms from the BT Group or a BTAP, provided that their Best
     Market Terms for providing the same are as favourable as a third party's
     Best Market Terms (or, if not available, arm's length terms) for providing
     the same.

6.6  Subject to agreeing commercial terms and to applicable law and regulation,
     LOOK shall provide on-and-off-web marketing of BT LOOKSMART`s services and
     shall promote the business of BT LOOKSMART.

6.7  BT LOOKSMART and LOOK BARBADOS shall enter into the LOOK Services Agreement
     within three months after the date of this Agreement. Until the LOOK
     Services Agreement is entered into, LOOK BARBADOS shall use its best
     endeavours to create new Territory Databases in accordance with the
     principles set out in Schedule 6 as requested by BT LOOKSMART and BT
     LOOKSMART shall pay for the creation of such new Territory Databases at
     cost as set out in Schedule 6. BT LOOKSMART shall reimburse LOOK at LOOK's
     cost as set out in Schedule 17 for the creation of any Territory Databases
     which BT LOOKSMART has requested LOOK or LOOK BARBADOS to develop and the
     databases developed by LOOK or LOOK BARBADOS for the Territory since 3
     December 1999.

     The parties agree that ownership of any new Territory Databases created by
     LOOK BARBADOS on behalf of BT LOOKSMART after the date of this Agreement
     shall vest in LOOK BARBADOS until such time as BT LOOKSMART shall have met
     the Performance Objectives, at which time any new Territory Databases
     thereafter created by LOOK BARBADOS on behalf of BT LOOKSMART shall vest in
     BT LOOKSMART. All such new Territory Databases owned by LOOK BARBADOS shall
     be licensed to BT LOOKSMART pursuant to the terms of the LOOK Licensing
     Agreement.

6.8  BT LOOKSMART and LOOK BARBADOS shall agree a staffing plan each year that
     the LOOK Services Agreement is in effect for the staffing of offices
     established by the
<PAGE>

     LOOK Group to work on the Territory Databases. Provided the Performance
     Objectives have been met, the parties agree that BT LOOKSMART shall have an
     option to acquire all (but not some only unless agreed by the parties) of
     the editorial staff identified on the agreed staffing plan referred to in
     this Clause 6.8 of one or more of the offices established by the LOOK Group
     to work on the Territory Databases under the LOOK Services Agreement which
     may be by way of acquisition of the subsidiary of LOOK which employs such
     staff and/or by way of transfer of the relevant staff. The option to
     acquire such staff may be exercised by BT LOOKSMART by giving written
     notice to LOOK at any time after [* * *]. The consideration for the
     acquisition of such staff shall be [* * *]. The transfer shall be
     effected within six months after the date of the written notice by BT
     LOOKSMART referred to in this Clause 6.8. LOOK BARBADOS shall indemnify BT
     LOOKSMART in respect of any losses, claims, proceedings, liabilities, costs
     and expenses arising out of or in connection with any claim by a member of
     such staff, including without limitation, for unfair dismissal, breach of
     employment regulations, breach of contract of employment or similar
     employment issue which arises or relates to a period prior to the date that
     such staff are transferred to BT LOOKSMART. BT LOOKSMART shall indemnify
     LOOK BARBADOS in respect of any losses, claims, proceedings, liabilities,
     costs and expenses arising out of or in connection with any member of such
     staff which arises or relates to a date after the date that such staff are
     transferred to BT LOOKSMART.

6.9  LOOK shall grant the licences to the LOOKSMART Technology (as defined in
     the LOOK Licensing Agreement) pursuant to the terms of the LOOK Licensing
     Agreement.

6.10 Other than services provided under any Ancillary Agreement or pursuant to
     Clause 6.1 to 6.6 above, LOOK BARBADOS, BTH and BT LOOKSMART hereby agree
     that BT LOOKSMART shall and BT LOOKSMART shall procure that Locos shall
     acquire products and services from the BT Group, a BTAP or the LOOK Group
     where such products and services are available from the BT Group and/or a
     BTAP and/or the LOOK Group provided, in each case, that the BT Group's or a
     BTAP's or the LOOK Group's Best Market Terms for providing the same are as
     favourable as a third party's Best Market Terms (or, if not available,
     arm's length terms) for providing the same. If each of the BT Group, a BTAP
     and the LOOK Group could provide the product or service, then whichever
     provides the Best Market Terms shall provide the product or service subject
     to its Best Market Terms for providing the same being as favourable as a
     third party's Best Market Terms (or, if not available, arm's length terms)
     for providing the same.

7.   TERRITORY DATABASES AND TECHNOLOGY

7.1  If the Year One Performance Objectives are met during the Initial Period:

     7.1.1  LOOK BARBADOS shall transfer to BT LOOKSMART at no cost the legal
            and beneficial ownership with full title guarantee and shall assign
            with full title guarantee all of LOOK BARBADOS' Intellectual
            Property Rights in the Territory Databases existing at the date of
            such transfer. Such transfer shall be subject to LOOK's retention of
            ownership and Intellectual Property Rights to the LOOK trademarks
            which are licensed to BT LOOKSMART pursuant to
<PAGE>

            the LOOK Trade Mark License Agreement; and shall be subject to
            Clauses 7.4 and 7.8 below, subject to the non-exclusive, non
            perpetual license granted to the Inktomi Corporation ("Inktomi")
            pursuant to the Portal Services Agreement dated 6 November 1999
            between LOOK and Inktomi, and subject to the non-exclusive, non
            perpetual syndication and license agreements identified as exhibits
            to the LOOK Transfer Agreement. Such transfer to BT LOOKSMART shall
            take place on the tenth Business Day after the date on which LOOK or
            LOOK BARBADOS receives notice that the Performance Objectives are
            met;

     7.1.2  Pursuant to the terms of the LOOK License Agreement, LOOK shall
            continue to license to BT LOOKSMART the LOOK Databases on an
            exclusive (in the Territory), non-transferable basis; and

     7.1.3  The Year Two Performance Objectives shall not apply.

7.2  If the Year One Performance Objectives have not been met at the end of the
     Initial Period, the licenses to the LOOK Database and the Territory
     Databases in the LOOK Licensing Agreement shall be extended pursuant to the
     terms of the LOOK Licensing Agreement on the same terms for an additional
     twelve (12) month period to 31 March 2002 and the Year Two Performance
     Objectives shall apply.

7.3  If the Year Two Performance Objectives are met during the period commencing
     on 1 April 2001 and ending on 31 March 2002:

     7.3.1  LOOK BARBADOS shall transfer to BT LOOKSMART at no cost the legal
            and beneficial ownership with full title guarantee and shall assign
            with full title guarantee all of LOOK BARBADOS' Intellectual
            Property Rights in the Territory Databases existing at the date of
            such transfer. Such transfer shall be subject to LOOK's retention of
            ownership and Intellectual Property Rights to the LOOK trademarks
            which are licensed to BT LOOKSMART pursuant to the LOOK Trade Mark
            License Agreement; and shall be subject to Clauses 7.4 and 7.8
            below, subject to the non-exclusive, non perpetual license granted
            to the Inktomi Corporation ("Inktomi") pursuant to the Portal
            Services Agreement dated 6 November 1999 between LOOK and Inktomi,
            and subject to the non-exclusive, non perpetual syndication and
            license agreements identified as exhibits to the LOOK Transfer
            Agreement. Such transfer to BT LOOKSMART shall take place on the
            tenth Business Day after the date on which LOOK or LOOK BARBADOS
            receives notice that the Performance Objectives have been met; and

     7.3.2  Pursuant to the terms of the LOOK Licensing Agreement, LOOK shall
            continue to license to BT LOOKSMART the LOOK Databases on an
            exclusive (in the Territory), non-transferable basis.

7.4  The parties acknowledge that the Territory Databases contain URL Content
     which LOOK does not own and that LOOK does not transfer ownership of
     Intellectual Property Rights in such URL Content.  As used herein, "URL
     Content" means the words or symbols which together make up an individual
     URL and the content of any web pages which a customer may see after
     clicking on any URL listed in the Territory Databases.
<PAGE>

7.5  If the Year Two Performance Objectives have not been met by 31 March 2002,
     the licence(s) by LOOK and LOOK BARBADOS to BT LOOKSMART of the LOOK
     Databases and the Territory Databases shall continue on the same terms
     except that it or they shall become perpetual and non-exclusive as set
     forth in the LOOK Licensing Agreement and BT LOOKSMART shall cease to fund
     the creation of the Territory Databases and shall pay to LOOK a royalty as
     set forth in the LOOK Licensing Agreement.

7.6  If the Shareholders decide to wind-up BT LOOKSMART, BTH and LOOK BARBADOS
     shall each be entitled to a copy, without any restrictions on use, of any
     Territory Databases which are owned by BT LOOKSMART and to any other
     Intellectual Property Rights of BT LOOKSMART.

7.7  During the Initial Period and, if the Year One Performance Objectives have
     not been met at the end of the Initial Period, during the period from 1
     April 2001 to 31 March 2002, LOOK and LOOK BARBADOS each undertake not to
     transfer, assign or grant any licence in (save for the transfer or licence
     agreed to in this Agreement or the LOOK Licensing Agreement, and subject to
     Section 7.8 below) or in any way encumber the Territory Databases or any
     Intellectual Property Rights in the Territory Databases.

7.8  The parties understand and agree that the LOOK Licensing Agreement and the
     transfer of the Territory Databases referred to in this Clause 7 are
     subject to LOOK's obligations as set out in Schedule 9 to Microsoft
     Corporation pursuant to an agreement between LOOK and Microsoft dated 4
     December 1998 (the "Microsoft Agreement"). Save as set out in Schedule 9,
     LOOK represents and warrants to BTH and BT LOOKSMART that there are no
     obligations in the Microsoft Agreement that have not been disclosed to BTH
     and BT LOOKSMART which will limit or impair any of the rights of BT
     LOOKSMART, under this Agreement or the LOOK Licensing Agreement, to the use
     of the LOOK Database and/or the Territory Databases.

7.9  Within 10 Business Days after the date upon which the Performance
     Objectives are met, BTH shall nominate a person at BT's Adastral Park to
     liaise with BT LOOKSMART.

7.10 LOOK agrees to provide a link (which shall have equal prominence with other
     non US databases, and if such other non US databases appear above the fold,
     shall appear above the fold) on the looksmart.com website to the URLs of BT
     LOOKSMART at which the Territory Databases are displayed.

8.  FUNDING

Shareholder Funding

8.1  The Peak Funding Requirement for the BT LOOKSMART Business as set out in
     the Initial Business Plan is US$216,000,000.

8.2  LOOK BARBADOS shall pay US$997,220 by subscribing for 41,900,000 Shares in
     accordance with Clause 5.1 which shall be credited as fully paid.  The
     balance of
<PAGE>

     $107,000,000 (or such lesser amount as provided in any approved revised
     Business Plan) payable by LOOK BARBADOS shall be paid in cash by LOOK
     BARBADOS by subscribing for Shares at the then current valuation as
     determined by the Board in the amounts as provided in Clause 8.10.

8.3  BTH shall pay US$997,220 by subscribing for 41,900,000 Shares in accordance
     with Clause 5.1 which shall be credited as fully paid.  The balance of
     $107,000,000 (or such lesser amount as provided in any approved revised
     Business Plan) payable by BTH shall be paid in cash by BTH by subscribing
     for Shares at the then current valuation as determined by the Board in the
     amounts as provided in Clause 8.10.

8.4  Each Shareholder shall be liable only for 50 per cent of the Peak Funding
     Requirement and shall not be jointly and severally liable in respect of the
     Peak Funding Requirement.  If a Shareholder shall not subscribe for Shares
     as set out in Clauses 8.2 and 8.3 on the due date for subscription, that
     Shareholder shall be diluted.

8.5  Subject to LOOK BARBADOS subscribing for shares up to the maximum amounts
     set out in Schedule 10, if required by LOOK BARBADOS, BT shall provide or
     shall procure that a member of the BT Group shall provide to BT LOOKSMART
     or to LOOK BARBADOS or the designated member of the LOOK Group, at LOOK
     BARBADOS'S option, funds up to US$50 million principal amount for the
     payment of part of LOOK BARBADOS'S Funding Commitment on the following
     terms:

a)   the instrument will be non-recourse except as specifically provided in this
     Clause 8.5, and will yield a compound rate of return of twenty per cent per
     annum on the funds made available by BT;

b)   capital and interest will be rolled up;

c)   repayment of each drawdown will be made on the third anniversary of the
     date of that drawdown;

d)   BT shall have a lien on the LOOK Shareholder's interest in BT LOOKSMART on
     a prorated percentage basis determined by dividing the total amount of
     drawdowns by LOOK pursuant to this Clause 8.5 by the total amount
     contributed to BT LOOKSMART by the LOOK Shareholder including the
     drawdowns;

e)   BT shall have the option at any time upon thirty (30) days prior written
     notice to LOOK to convert the instrument into shares in the share capital
     of LOOK or its successor at a price of US$35 per share;

f)   BTH shall pay to LOOK US$50 million in accordance with the terms of the
     Loan Agreement. If the funds are not paid into BT LOOKSMART, BT may demand
     instant repayment of the total funds loaned to LOOK BARBADOS under this
     Clause 8.5, or BT may require that the funds be converted immediately into
     the ordinary share capital of LOOK at US$35 per share. In such a situation,
     BT is immediately relieved of its obligation to provide any of the
     remaining balance of the US$50 million debt commitment. Unless otherwise
     agreed by the parties, the amounts of the drawdowns shall be as provided in
     Schedule 10; provided however, that LOOK may defer some or all of the
     amount of a drawdown to a subsequent drawdown.
<PAGE>

g)   Upon a transfer of the LOOK Shareholder's Shares, the instrument described
     in Clause 8.5(a) may be assigned subject to (i) BT's consent and (ii) the
     successor entity providing appropriate security for its obligations under
     the instrument. If BT does not consent to such an assignment, BT may
     convert the instrument to the ordinary share capital of LookSmart, Ltd. at
     US$35 per share or demand repayment from LOOK BARBADOS.

h)   Upon a change of control of LOOK, the instrument described in Clause 8.5(a)
     may be assigned provided the entity that becomes the controlling entity
     offers to guarantee the debt. LOOK undertakes that it will give written
     notice to BTH as soon as it makes a public announcement of or files a
     notice with the SEC in relation to a change of control of LOOK.

External Funding

8.6  The Board may approve the raising of funds by BT LOOKSMART from third party
     lenders on a non-recourse (to the Shareholders) basis provided that BT
     LOOKSMART's maximum external debt does not exceed fifty per cent (50%) of
     BT LOOKSMART's equity (aggregate Shareholder funding pursuant to Clause 8.2
     and 8.3, plus BT LOOKSMART's accumulated reserves per the last signed
     audited annual accounts).

8.7  Any incremental funding ("Incremental Funding") of BT LOOKSMART over and
     above the Peak Funding Requirement that is required by cash flow forecasts
     prepared by the CFO and approved by the CEO and which is approved by both
     of the Shareholders and which is not obtained from a third party shall be
     provided as follows:

     (a)  equally by way of equity if both Shareholders agree to fund the
          Incremental Funding;

     (b)  if both Shareholders approve the Incremental Funding but one wishes to
          fund less than its pro-rata proportion of such amount, it shall be
          diluted on the basis of the amount of Incremental Funding provided by
          the other Shareholder divided by the then current valuation price per
          share.

IPO

8.8  LOOK BARBADOS and BTH agree that a public offering of shares in BT
     LOOKSMART is the preferred method for BT LOOKSMART to raise funds. LOOK
     BARBADOS and BTH intend to have an initial public offering of shares in BT
     LOOKSMART at the earliest possible time subject to favourable market
     conditions and the consent of the LOOK Shareholder and the BT Shareholder.

Dilution

8.9  If, as a result of a dilution in accordance with this Clause 8, the non-
     funding Shareholder holds a percentage interest in the share capital of BT
     LOOKSMART of 40 per cent or less, it will lose the right, in the case of
     the LOOK Shareholder, to nominate the CEO and, in the case of the BT
     Shareholder, to nominate the CFO.  If, as a result of such dilution, the
     non-funding Shareholder holds a percentage interest in the share capital of
     BT LOOKSMART of 30 per cent or less, it will lose the right to
<PAGE>

     appoint one out of the three people it is entitled to appoint to the Board
     of BT LOOKSMART and the size of the Board will be reduced accordingly. If,
     as a result of such dilution, the non-funding Shareholder holds a
     percentage interest in the share capital of BT LOOKSMART of 20 per cent or
     less, it will lose the right to appoint one out of the two people it is
     entitled to appoint to the Board of BT LOOKSMART and the size of the Board
     will be reduced accordingly. If, as a result of such dilution, the non-
     funding Shareholder holds a percentage interest in the share capital of 10
     per cent or less, it will lose all rights to appoint any person to the
     Board of BT LOOKSMART, and the size of the Board will be reduced
     accordingly.

8.10 The Board shall determine when additional subscriptions for Shares will
     occur and shall do so consistent with the Initial Business Plan or approved
     revised Business Plan. The parties agree that BT LOOKSMART shall not hold
     cash reserves in excess of those required for a 5 week operating period.
     The Shareholders shall receive a minimum of thirty (30) days prior written
     notice of a subscription date and the amounts due. The Board shall set a
     fair market value of BT LOOKSMART at each issuance of additional Shares to
     the Shareholders or grant of stock options pursuant to the BT LOOKSMART
     stock option plan to be established pursuant to Clause 15.2.

9.   DIRECTORS AND MANAGEMENT

Supervision by the Board

9.1  The Board shall have the authority vested in it by this Agreement, the Bye-
     laws and the relevant provisions of Bermuda law.  Therefore, the Board
     shall have the overall responsibility for the general course of the BT
     LOOKSMART Business. The Board may form committees by a decision of the
     Directors which committees shall consist of at least 1 LOOK Director and 1
     BT Director (subject to one of the Shareholders having lost its right to
     appoint one or all of its Directors, as the case may be, as a result of
     dilution in accordance with Clause 8 in which case the composition of
     committees shall be amended accordingly) and delegate certain functions to
     them as the Board may from time to time decide.  All committees formed by
     the Board shall meet at such intervals as directed by the Board and shall
     have such powers and responsibilities as the Board shall delegate to them.

Board of Directors

9.2  The Board shall be comprised of an equal number of LOOK Directors and BT
     Directors (subject to one of the Shareholders having lost its right to
     appoint one or all of its Directors as the case may be, as a result of
     dilution in accordance with Clause 8) and the CEO and CFO.  Until otherwise
     agreed by the Shareholders or until dilution occurs pursuant to Clause 8,
     there shall be 3 LOOK Directors and 3 BT Directors.  The initial
     appointments to the Board are as follows:

LOOK Directors      BT Directors        CEO                 CFO
--------------      -------------       ---                 ---

Evan Thornley       Vernon Irvin        Timothy Pethick     To be nominated by
                                                            the BT Shareholder
Anthony Castagna    Stephen Davies

Tracey Ellery       To be nominated by the
                    BT Shareholder
<PAGE>

     Board meetings shall take place once each month or less frequently as the
     Board shall agree unless by exception the Board agrees otherwise. Each
     Shareholder shall bear the costs of the Directors appointed by it attending
     Board meetings. Directors may participate in Board meetings by telephone or
     video conference, except from the UK or Australia, and shall be counted as
     present for quorum and voting purposes.

Appointment and removal of Directors

9.3  Any appointment or removal of a Director appointed by a Shareholder shall
     be effected by notice in writing to BT LOOKSMART signed by or on behalf of
     the Shareholder in question and shall take effect, subject to any contrary
     intention expressed in the notice, when the notice effecting the same is
     delivered to BT LOOKSMART.

     If one of the Shareholders loses its right to appoint one or all of its
     Directors, as the case may be, as a result of dilution in accordance with
     Clause 8, it shall forthwith procure the resignation of the relevant number
     of Directors and obtain from each resigning Director a waiver of any and
     all rights for compensation for loss of office that they might have.

Quorum

9.4  The quorum for the transaction of business at any meeting of the Board
     (including any adjourned meeting) shall be at least one (1) LOOK Director
     (or his alternate) and at least one (1) BT Director (or his alternate)
     present at the time when the relevant business is transacted. If such a
     quorum is not present within 30 minutes from the time appointed for the
     meeting or if during the meeting such a quorum ceases to be present, the
     meeting shall be adjourned for 7 Business Days and the same quorum
     requirements shall than apply. A Director shall be regarded as present for
     the purposes of a quorum if represented by an alternate Director in
     accordance with Clause 9.6. If, as a result of dilution in accordance with
     Clause 8, either Shareholder has lost the right to appoint any Directors to
     the Board, the quorum shall be simply any two (including at least one
     Director appointed by the Shareholder that has the right to appoint one or
     more Directors) Directors present at the time when the relevant business is
     transacted.

Notice and Agenda

9.5  At least 14 days written notice shall be given to each of the members of
     the Board of any meeting of the Board, provided always that a shorter
     period of notice may be given with the written approval of at least one (1)
     LOOK Director (or his alternate) and at least one (1) BT Director (or his
     alternate). If, as a result of dilution in accordance with clause 8, either
     Shareholder has lost the right to appoint any Directors to the Board, such
     shorter period of notice may be given with the written approval of any two
     Directors. Any such notice shall contain, inter alia, an agenda identifying
     in reasonable detail the matters to be discussed at the meeting and shall
     be accompanied by copies of any relevant papers to be discussed at the
     meeting. Any matter which is to be submitted to the Board for a decision
     which is not identified in reasonable detail as aforesaid shall not be
     decided upon, unless otherwise agreed in writing by all of the members of
     the Board.

Board voting

9.6  Except as otherwise agreed by the LOOK Shareholder and the BT Shareholder,
     if no dilution has occurred pursuant to Clause 8 resulting in one
     Shareholder losing the right to appoint one or all of its Directors, all
     decisions of the Board shall require the
<PAGE>

     positive vote of at least 95 per cent of all the Directors. If dilution has
     occurred pursuant to Clause 8 resulting in one Shareholder losing the right
     to appoint one or all of its Directors, all decisions of the Board shall be
     by simple majority vote. Each Director shall have one vote. Any Director
     who is absent from any meeting may nominate any other person to act as his
     alternate and to vote in his place at the meeting. If any of the Directors
     appointed by a Shareholder is not present at any Board meeting (whether
     present in person or by alternate), then one of the Directors appointed by
     such Shareholder so present shall be entitled at that meeting to such
     additional vote or votes as shall result in the Directors so present
     appointed by each Shareholder having in aggregate an equal number of votes.

9.7  It is recognised that the subsidiaries of BT LOOKSMART may operate
     independently of the Board. However, the Board reserves the right to take
     responsibility for the following matters on giving notice to BT LOOKSMART's
     subsidiaries:

     (a)  capital expenditure by any member of the BT LOOKSMART Group in respect
          of any item or project in excess of  $1,000,000 not contained in the
          then current Business Plan or such other sum as may be approved by the
          Board from time to time;

     (b)  annual updates, extensions and variations of the Business Plan and
          Budgets;

     (c)  the adoption of (or variation to) share option plans and the
          remuneration package of  the CEO and his direct reports;

     (d)  the formation of policies for any member of the BT LOOKSMART Group in
          respect of business conduct, the environment and health and safety
          issues;

     (e)  the entry into by any member of the BT LOOKSMART Group of any
          contract, liability or commitment which could involve an obligation of
          a material magnitude or nature (a liability for expenditure in excess
          of  $2,000,000 being regarded as material for this purpose);

     (f)  any change in any member of the BT LOOKSMART Group Accounting
          Principles:

     (g) appointment and removal of the CEO and the CFO;

     (h)  major decisions relating to the conduct or settlement of material
          legal proceedings (potential liability or claim in excess of $750,000
          being regarded as material for these purposes) or the conduct of any
          competition or regulatory proceedings;

     (i)  contracts between any member of the BT LOOKSMART Group and a member of
          the BT Group or the LOOK Group;

     (j)  any acquisition or disposal (whether in a single transaction or series
          of transactions) by any member of the BT LOOKSMART Group of any
          business (or any material part of any business) or of any shares in
          any company;

     (k)  (except for contracts which satisfy such criteria as the Board may
          from time to time approve as part of the procedures for the entry into
          of contracts by any member of the BT LOOKSMART Group) the entry into
          by any member of the
<PAGE>

          BT LOOKSMART Group of any contract, liability or commitment which is
          outside the ordinary course of business of the BT LOOKSMART Group;

     (l)  the entry into (or termination) by any member of the BT LOOKSMART
          Group of any material partnership or joint venture.

9.8  The Chairman of the Board shall be appointed immediately following each
     annual general meeting. The office of Chairman shall rotate between a BT
     Director and a LOOK Director, with the first Chairman being a LOOK
     Director. The Chairman shall not have a casting vote.

Management

9.9  The CEO who shall be responsible to the Board for:

     (a)  the successful implementation of the Business Plan;

     (b)  BT LOOKSMART's efficient and cost effective management; and

     (c)  submission of monthly reports to the Board in a form agreed by the
          Board.

     These responsibilities shall be reflected in the CEO's terms and conditions
     of appointment with BT LOOKSMART which shall contain performance related
     targets. The CEO shall be a member of the Board. The LOOK Shareholder shall
     nominate each CEO whose appointment shall be subject to a positive vote of
     at least 95 per cent of all the Directors (excluding the votes of the CEO
     and the CFO) if no dilution has occurred pursuant to Clause 8 resulting in
     a Shareholder losing its right to appoint one or more Directors and by
     simple majority vote of the Board if dilution has occurred resulting in a
     Shareholder losing its right to appoint one or more Directors. If the LOOK
     Shareholder has lost the right to nominate the CEO pursuant to Clause 8,
     the Board shall nominate the CEO. The first CEO shall be Timothy Pethick.

9.10 The CFO shall be a member of the Board. The CFO will undertake BT
     LOOKSMART's day-to-day financial control, report to the CEO and be
     responsible to the Board for keeping BT LOOKSMART's financial books and
     records in accordance with appropriate accounting principles and for
     preparing and submitting monthly financial reports to the Board and the
     Shareholders and as may be required by relevant law. The BT Shareholder
     shall nominate each CFO whose appointment shall be subject to a positive
     vote of at least 95 per cent of all the Directors (excluding the votes of
     the CEO and the CFO) if no dilution has occurred pursuant to Clause 8
     resulting in a Shareholder losing the right to appoint one or more
     Directors and by simple majority vote of the Board if dilution has occurred
     resulting in a Shareholder losing the right to appoint one or more
     Directors. If the BT Shareholder has lost the right to nominate the CFO
     pursuant to Clause 8, the Board shall nominate the CFO.

10.  BUSINESS PLAN

10.1 The Initial Business Plan and any subsequent approved revised Business Plan
     constitute the blue print for the development of the BT LOOKSMART Business.
     The parties agree that the Board shall meet within thirty (30) days of
     Completion to discuss and agree a revised Business Plan. The Initial
     Business Plan shall be updated annually by the unanimous approval by the
     Board if no dilution has occurred pursuant to Clause 8 resulting in a
     Shareholder losing its right to appoint one or more
<PAGE>

     Directors and by simple majority vote of the Board if dilution has occurred
     resulting in a Shareholder losing its right to appoint one or more
     Directors and shall form the rolling 5 year Business Plan. Reviews,
     updates, modifications and extensions to the Business Plan shall follow the
     content, timing and procedures determined by the Board.

10.2 The Board shall procure that BT LOOKSMART's management prepare, 30 days
     prior to the end of a Financial Year, a draft annual update for approval by
     the Board on the basis of BT LOOKSMART's existing activities and services.
     If the Board shall fail to approve an update, the last agreed Business Plan
     or update shall continue to apply for the Financial Year in question until
     such time as an update is duly approved. Annual updates shall be in the
     same format as the Initial Business Plan and shall consist of a forecast of
     the next 5 subsequent Financial Years. The CEO's prime responsibility shall
     be to implement the Business Plan and he/she shall be required to provide
     the Board with regular reports of performance against Business Plan
     targets.

11.  SHAREHOLDER MATTERS

Use of powers

11.1 The Shareholders shall use their respective powers to procure, so far as
     they are legally able, that no decision relating to any of the matters
     specified in Clause 11.2 ("Shareholder Matters") shall be taken (whether by
     the Board, BT LOOKSMART or any subsidiary of BT LOOKSMART or any of the
     committees, officers or managers of BT LOOKSMART) unless prior approval has
     been given (i) by at least 95 per cent of the Shareholders if no dilution
     has occurred pursuant to Clause 8 resulting in one of the Shareholders
     holding a percentage interest in the share capital of BT LOOKSMART of 40
     per cent or less or (ii) subject to Clause 11.4(f), by simple majority of
     the votes cast if dilution has occurred pursuant to Clause 8 resulting in
     one of the Shareholders holding a percentage interest in the share capital
     of BT LOOKSMART of 40 per cent or less.

Shareholder Matters

11.2 The Shareholder Matters are the following:

     (a)  adoption of or any alteration to the Memorandum of Association or the
          Bye-laws or other constitutional documents of BT LOOKSMART;

     (b)  any change in the authorised or issued share capital of BT LOOKSMART
          or any increase (or reduction) by BT LOOKSMART in its shareholding in
          any other company;

     (c)  any material change in the nature or scope of BT LOOKSMART's
          activities, including without limitation any decision referred to in
          sub-clause (o) below;

     (d)  the declaration or payment of any dividend or distribution by BT
          LOOKSMART;

     (e)  the creation of any mortgage, charge, encumbrance or other security
          interest of whatsoever nature in respect of all or any material part
          of the undertaking, property or assets of BT LOOKSMART;

     (f)  the appointment or removal of the auditors of BT LOOKSMART;
<PAGE>

     (g)  the approval of the statutory accounts of BT LOOKSMART;

     (h)  any proposal that BT LOOKSMART be wound-up;

     (i)  the introduction of any third party to BT LOOKSMART or a Loco;

     (j)  contracts between BT LOOKSMART or a Loco and a member of the LOOK
          Group or the BT Group which is for an amount in aggregate exceeding
          $1.5 million;

     (k)  approval of the corporate mark and URLs of BT LOOKSMART and Locos and
          any changes to such marks or URLs;

     (l)  any decision to conduct business in a country which is outside the
          Territory;

     (m)  any decision for BT LOOKSMART or a Loco to offer a free access portal;

     (n)  any decision for BT LOOKSMART or a Loco to provide any
          telecommunications services.

Method of approval by Shareholders

11.3 The approval of the Shareholders to any of the Shareholder Matters (or to
     any variation thereof) shall be given by  the Shareholders either by
     unanimous written resolution or at a general meeting of BT LOOKSMART.

Meetings of Shareholders

11.4 General meetings of Shareholders shall take place in accordance with the
     applicable provisions of the Bye-laws on the basis (inter alia) that:

     (a)  if no dilution has occurred pursuant to Clause 8 resulting in one of
          the Shareholders holding a percentage interest in the share capital of
          BT LOOKSMART of 40 per cent or less, a quorum shall be one (1) duly
          authorised representative of the LOOK Shareholder and one (1) duly
          authorised representative of the BT Shareholder;

     (b)  if a dilution has occurred pursuant to Clause 8 resulting in one of
          the Shareholders holding a percentage interest in the share capital of
          BT LOOKSMART of 40 per cent or less, a quorum shall be two (2) duly
          authorised representatives of the Shareholder holding 50 per cent plus
          one vote or more of the issued share capital of BT LOOKSMART;

     (c)  the notice of meeting shall (unless otherwise agreed by each of the
          Shareholders) set out an agenda identifying in reasonable detail the
          matters to be discussed;

     (d)  the chairman of any such meeting shall not have a casting vote;

     (e)  subject to Clause 11.4 (f), a decision to approve any of the
          Shareholder Matters shall require (i) a  positive vote of at least 95
          per cent of the Shareholders present or (ii) a simple majority vote of
          the Shareholders present, if a dilution has occurred pursuant to
          Clause 8 resulting in one of the
<PAGE>

          Shareholders holding a percentage interest in the share capital of BT
          LOOKSMART of 40 per cent or less.

     (f)  if a dilution has occurred pursuant to Clause 8 resulting in one of
          the Shareholders holding a percentage interest in the share capital of
          BT LOOKSMART of 40 per cent or less, a decision to approve the
          Shareholder Matters set out in sub-clauses 11.2 (a), (b), (c), (e),
          (j) and (l) shall require a simple majority vote of the Shareholders
          present, which majority shall include all Shareholders holding a
          percentage interest in the share capital of BT LOOKSMART of 30 per
          cent or more.

11.5 Any matters requiring a general meeting of or approval by the Shareholders
     under relevant corporate laws, but not covered by the Shareholder Matters,
     shall be dealt with in accordance with the Bye-laws.

Deadlock

11.6 If a deadlock arises by reason of a failure by the Shareholders to reach
     agreement on any of the Shareholder Matters or any management matter
     requiring decision by the Board, either Shareholder may serve formal
     written notice on the other Shareholder that a deadlock has arisen. If the
     Shareholders are unable to resolve the matter within a 3 week period after
     the service of such notice, then the matter shall be referred to the Chief
     Executive Officer of LOOK and the President and CEO of the BT Worldwide
     division (or similar senior executive) of BT with a view to the matter
     being resolved within fifteen (15) days of the date on such referral.

12.  FINANCIAL MATTERS

Accounting Principles

12.1 BT LOOKSMART shall, in relation to its financial statements, adopt
     accounting principles in accordance with US GAAP and approved by the Board
     (the "Accounting Principles").

Auditors

12.2 BT LOOKSMART's auditors shall be such firm of chartered accountants of
     recognised international standing as may be recommended by the Board and
     approved by the Shareholders from time to time.

Dividend policy

12.3 The Board shall decide how much to distribute of the consolidated profit
     (after taxation and extraordinary items) of BT LOOKSMART as shown by the
     financial statements of BT LOOKSMART for that Financial Year and available
     for distribution in accordance with applicable law. The constitutional
     documents of BT LOOKSMART shall, wherever legally permitted, make provision
     for the payment of interim dividends.

13.  INFORMATION AND REPORTING

Inspection and information

13.1 Each Shareholder (and its auditors and other representatives) shall be
     entitled to and shall at its request be supplied with:
<PAGE>

     (a)  full access (including copying facilities), at reasonable times and on
          reasonable notice, to the separate books, records, accounts,
          regulatory filings, documents, premises, processes, systems, business
          activities, management and auditors of BT LOOKSMART and its
          subsidiaries and affiliates, whether in connection with such
          Shareholder's own internal audit of BT LOOKSMART or otherwise; and

     (b)  all information, including, but not limited to, monthly management
          accounts, operating statistics (including, but not limited to, the
          number of users, subscribers and advertising sales), details of tax
          payments and other trading and financial information, in such form and
          at such times as such Shareholder may reasonably require to keep it
          properly informed about the business and affairs of BT LOOKSMART and
          to fulfil such Shareholder's own group reporting requirements.

Accounts, Business Plan and Budgets

13.2 The LOOK Shareholder and the BT Shareholder shall, in any event and
     without prejudice to the generality of Clause 13.1, be supplied by BT
     LOOKSMART with copies of:

     (a)  audited accounts for BT LOOKSMART (complying with all relevant legal
          requirements);

     (b)  a Business Plan and itemised revenue and capital Budgets for each
          Financial Year showing proposed trading and cash flow figures,
          staffing levels and all material proposed acquisitions, disposals and
          other commitments for such Financial Year; and

     (c)  within 12 days of the end of each month, monthly/quarterly management
          accounts of BT LOOKSMART including a statement of progress against the
          relevant Business Plan, a statement of any variation from the
          quarterly revenue Budget and up-to-date rolling forecasts for the
          balance of the relevant Financial Year and an itemised account of all
          transactions referred to in the capital Budget entered into by BT
          LOOKSMART during that period. BT LOOKSMART shall maintain a sufficient
          level of oversight from its auditors to ensure that any publicly-
          disclosed accounting information is accurate.

14.  BUDGETARY PROCEDURES

14.1 The Shareholders shall procure that the Board endeavours to agree the
     Budget no less than 30 days prior to the commencement of the relevant
     Financial Year. The Budget (unless otherwise agreed among the Directors)
     shall include the following items:

     (a)  strategic plan;

     (b) traffic, yield and reach assumptions for ad sales revenue projections;

     (c)  customer count and transaction size assumptions for eCommerce revenue
          projections;

     (d)  cost of sales assumptions and projections;
<PAGE>

     (e)  marketing plan and budget;

     (f)  sales and marketing budget including ad sales, business development,
          distribution fees, customer service, and marketing department costs;

     (g)  product development budget including editorial, product development
          and engineering costs;

     (h)  administration budget including finance, executive, human resources
          and facilities expenses;

     (i)  customer services budget;

     (j)  resource budget, including:

          (i)   procurement budget and transfer prices from parent companies;

          (ii)  investment budget (capital expenditure); and

     (k)  financial forecasts analysed into monthly elements including:

          (i)   cash flow;

          (ii)  profit and loss statement;

          (iii) balance sheet; and

          (iv)  financial and economic assumptions on which they are based; and

     (l)  analysis of forecast receipts and payments between BT LOOKSMART and
          the LOOK Shareholder and the BT Shareholder and their respective
          affiliates.

14.2 A variance analysis of Budget figures compared with actual figures and the
     updated forecasts of "year-end" figures will be submitted to the Directors
     on a quarterly basis.

15.  EMPLOYEES

15.1 The Shareholders will at the request of BT LOOKSMART's management exercise
     reasonable endeavours in order to make appropriately qualified personnel
     available to BT LOOKSMART on a temporary basis to enable its early and
     efficient start-up. The cost of the secondments will be met by BT LOOKSMART
     unless otherwise agreed. The Shareholders intend that as soon as
     practicable BT LOOKSMART will be autonomous in the employees required in
     the ordinary course of its business although as Shareholders they shall
     continue to co-operate fully in the development of BT LOOKSMART's skills
     and expertise and in meeting its special needs. For the avoidance of doubt,
     the terms of any such secondment arrangements shall be treated as a
     Shareholder related contract for the purpose of this Agreement.

15.2 Subject to applicable law and regulation, BT LOOKSMART shall establish a
     stock plan substantially in the form set out in Schedule 11.
<PAGE>

16.  CONFIDENTIALITY

Confidentiality obligation

16.1 Each party undertakes with the other that it shall use (and shall procure
     that each member of its Group uses) all reasonable endeavours to keep
     confidential any information:

     (a)  which it may have or acquire (whether before or after the date of this
          Agreement) in relation to BT LOOKSMART's customers, business, assets
          or affairs (including, without limitation, any information provided
          pursuant to Clause 13);

     (b)  which, in consequence of the negotiations relating to this Agreement
          or being a Shareholder or having appointees on the Board or the
          exercise of its rights or performance of its obligations under this
          Agreement, it may have or acquire (whether before or after the date of
          this Agreement) in relation to the customers, business, assets or
          affairs of any member of the LOOK Group (if the party is BTH) or of
          any member of the BT Group (if the party is LOOK BARBADOS); or

     (c)  which relates to the contents of this Agreement or any Ancillary
          Agreement (or any agreement or arrangement entered into pursuant to
          this Agreement).

     No party shall use for its own business purposes or disclose to any third
     party any such information (collectively, "Confidential Information")
     without the consent of the other Parties. In performing its obligations
     under this Clause 16, each party shall apply such confidentiality standards
     and procedures as it applies generally in relation to its own confidential
     information.

Exceptions from confidentiality

16.2 The obligation of confidentiality under Clause 16. 1 shall not apply to :

     (a)  the disclosure (subject to Clause 16.3) on a "need to know" basis to a
          company which is another member of the LOOK Group or BT Group (as the
          case may be) where such disclosure is for a purpose reasonably
          incidental to this Agreement; provided that such disclosure is made
          subject to confidentiality obligations at least as protective as set
          forth in this Clause 16;

     (b)  information which is independently developed by the relevant party or
          acquired from a third party to the extent that it is acquired with the
          right to disclose the same;

     (c)  the disclosure of information to the extent required to be disclosed
          by law, any stock exchange regulation or any binding judgement, order
          or requirement of any court or other competent authority, including
          any regulatory or competition authority, provided that to the extent
          possible prior to making such disclosure the disclosing party provides
          advance written notice to the other party and reasonable assistance in
          seeking confidential treatment or a protective order;

     (d)  the disclosure of information to any tax authority to the extent
          reasonably required for the purposes of the tax affairs of the party
          concerned or any member of its Group;
<PAGE>

     (e)  the disclosure (subject to Clause 16.3) in confidence on a "need to
          know" basis to a party's or a party's Group Officers, employees,
          representatives or advisers of information reasonably required to be
          disclosed for a purpose reasonably incidental to this Agreement;
          provided that such disclosure is made subject to confidentiality
          obligations at least as protective as set forth in this Clause 16;

     (f)  information which becomes within the public domain (otherwise than as
          a result of a breach of this Clause 16); or

     (g)  any announcement or disclosure made in accordance with the terms of
          Clause 28.

Employees, advisers etc.

16.3 Each party shall inform its officers, employees (including those of its
     Group), representatives or any adviser advising it (or any member of its
     Group) in relation to the matters referred to in this Agreement, or to whom
     it provides Confidential Information, that such information is confidential
     and shall instruct them:

     (a)  to keep it as confidential; and

     (b)  not to disclose it to any third party (other than those persons to
          whom it has already been disclosed in accordance with the terms of
          this Agreement).

     The disclosing party shall remain responsible for any breach of this Clause
     16 by the person to whom it is disclosed.

Survival after termination

16.4 The provisions of this Clause 16 shall survive any termination of this
     Agreement.

17.  REGULATORY MATTERS

     Co-operation

17.1 The parties shall co-operate with each other to ensure that all
     information necessary or desirable for the making of (or responding to any
     requests for further information consequent upon) any notifications or
     filings made in respect of this Agreement, or the transactions contemplated
     hereunder, is supplied to the party dealing with such notification and
     filings and that they are properly, accurately and promptly made. BTH shall
     lead on the making of any appropriate regulatory filings but both parties
     shall use all reasonable endeavours to ensure these can be promptly and
     effectively made.

UK Restrictive Trade Practices Act

17.2 No restriction in this Agreement or any document to be executed pursuant
     to this Agreement which renders this Agreement or such document registrable
     under the Restrictive Trade Practices Act 1976 shall have effect until
     immediately after particulars have been furnished to the Office of Fair
     Trading of the United Kingdom as required by the Act.

Regulatory Action

17.3 If any Regulatory Action is to be taken or is threatened, the parties
     shall promptly meet to discuss the situation and the action to be taken as
     a result and whether any
<PAGE>

     modification to the terms of this Agreement (or any Ancillary Agreement or
     other agreement entered into pursuant to this Agreement) should be made, in
     order that any requirements (whether as a condition of giving any approval,
     exemption, clearance or consent or otherwise) of the Commission of the
     European Communities or other regulatory authority may be reconciled with,
     and within the intended scope of, the business arrangement contemplated by
     this Agreement. The parties shall co-operate in giving effect to any
     modifications so agreed upon.

Material regulatory objection

17.4 If under relevant European Union law or other relevant laws applicable to
     the joint venture, the Commission of the European Communities or other
     regulatory authority (after all appropriate notifications and hearings have
     been made and held) makes a decision or order or expresses a conclusive
     view that effect should not be given to the basic principles of the joint
     venture to be established pursuant to this Agreement or which would negate
     the original commercial imperatives of the individual parties in entering
     into this Agreement, then the parties shall:

     (a)  promptly meet to decide the appropriate course in the mutual interests
          of the parties to give effect to the requirements of the Commission of
          the European Communities and/or other regulatory authority; and

     (b)  in the absence of agreement to any other course, take appropriate
          steps to reinstate, as fully as may be possible, the legal position of
          the parties which prevailed in relation to the LOOK business and the
          BT business respectively prior to the signing of this Agreement.

18.  INTELLECTUAL PROPERTY AND BRANDING

Intellectual Property Rights

18.1 Subject to the terms of the LOOK Licensing Agreement and the LOOK Services
     Agreement, the parties acknowledge that all Intellectual Property Rights
     created and/or commissioned by BT LOOKSMART during the term of this
     Agreement shall vest in BT LOOKSMART. Any Intellectual Property Rights
     acquired or licensed by BT LOOKSMART from LOOK or BT shall be dealt with by
     specific licence or purchase agreements and be subject to the specific
     terms of those agreements.

Branding

18.2 BTH and LOOK BARBADOS shall agree a brand for BT LOOKSMART and any Locos.
     Such brand shall give equal prominence to BT's brand and to LOOK's brand.
     The parties agree that the "look and feel" of any BT LOOKSMART site shall
     be substantially similar to the current user interface at the site at
     www.looksmart.com.  The parties acknowledge that use of the LOOK brand and
     -----------------
     LOOK "look and feel" shall be subject to the terms of the LOOK Trade Mark
     License Agreement, and use of the BT brand shall be subject to the terms of
     the BT Trade Mark License Agreement.

18.3 Each of BT LOOKSMART's portals and each Loco portal (except for wholesale
     services) shall be branded with a BT LOOKSMART brand and shall have a BT
     LOOKSMART or a LOOKSMART URL.

18.4 The homepage of each portal shall contain a "Communications Centre" section
     which shall be branded with such elements of the BT trade mark as BTH shall
     decide and which shall provide links to and promote BT IP communications
     services and other
<PAGE>

     BT or BTAP services (except for wholesale services). The homepage of each
     portal shall also have links to other sites of LOOK.

19.  TAX MATTERS

19.1 BT LOOKSMART shall comply with the following provisions:

     (a)  all business decisions shall be made in Bermuda;

     (b)  it shall not maintain a bank account outside of Bermuda;

     (c)  it shall not hold any assets (save for shares in companies) outside of
     Bermuda;

     (d)  it shall not employ any individuals who reside or perform services on
     behalf of BT LOOKSMART outside of Bermuda except for members of the board
     of Directors, provided that, in the case of members of the Board of
     Directors who reside outside of Bermuda, they do not perform such functions
     on behalf of BT LOOKSMART whilst outside of Bermuda;

     (e)  it shall not have an office or fixed place of business outside of
     Bermuda;

     (g)  it shall not directly or indirectly acquire a USA real property
     interest as defined under the US Internal Revenue Code section 897;

     (h)  it shall not enter into any contract or sign any contract outside of
     Bermuda;

     (j)  no person acting as agent of BT LOOKSMART shall reside or perform
     services for them outside of Bermuda.

19.2 References in clause 19.1 above to Bermuda shall include such other
     territories as the Board may agree with due regard to any possible tax
     consequences.

20   TRANSFER OF SHARES

General

20.1 The provisions of this Clause 20 shall apply in relation to any transfer,
     or proposed transfer, of Shares in BT LOOKSMART or any interest in such
     Shares.  With regard to the provisions of this Clause 20, time is of the
     essence.

Restrictions on transfer

20.2 Each party shall procure that, unless LOOK BARBADOS (in the case of a
     proposed transfer of BT Shares) or BTH (in the case of a proposed transfer
     of LOOK Shares) has given its prior consent in writing, no Shareholder
     shall:

     (a)  transfer any Shares (otherwise than in accordance with Clauses 20.3 to
          20.11); or

     (b)  grant, declare, create or dispose of any right or interest in any
          Shares; or

     (c)  create or permit to exist any pledge, lien, charge (whether fixed or
          floating) or other encumbrance over any Shares.
<PAGE>

Initial period

20.3 No Shareholder shall transfer any Shares during the period from the date
     of Completion of this Agreement to the later of 31 March 2001 and the date
     the Performance Objectives are met (save for intra-Group transfers
     permitted under Clause (20.10).

Transfer Notice

20.4 After the expiry of the period mentioned in Clause 20.3 and before a
     transferring Shareholder (the "Seller") (and/or any Shareholder in its
     Group) makes any transfer of its Shares (the "Seller's Shares"), the Seller
     shall first give to the other Shareholder(s) ( the "Continuing Party")
     notice in writing (a "Transfer Notice") of any proposed transfer together
     with details of the proposed third party purchaser thereof (the "Third
     Party Purchaser"), the purchase price and other material terms agreed
     between the Seller and the Third Party Purchaser. A Transfer Notice shall,
     except as hereinafter provided, be irrevocable. The Seller may give notice
     to transfer all but not some only of the Seller's Shares.

Right of Continuing party to purchase

20.5 On receipt of the Transfer Notice, the Continuing Party shall have the
     right to purchase all (but not some only) of the Seller's Shares at the
     purchase price specified in the Transfer Notice (or at such other price as
     shall be agreed between the Seller and the Continuing Party) by giving
     written notice to the Seller within thirty (30) days of receipt of the
     Transfer Notice ("Acceptance Period").  The obligations of the parties to
     complete such purchase shall be subject to the provisions of Clause 20.6.

Obligation to complete

20.6 The Continuing Party shall become bound (subject only to any necessary
     approvals of its shareholders in general meeting and of any competent
     regulatory authorities) to purchase the Seller's Shares on giving written
     notice to the Seller to exercise its rights under Clause 20.5. In such
     event, completion of the sale and purchase of the Seller's Shares shall
     take place within thirty (30) days after the giving of such notice or, if
     later, the obtaining of all necessary approvals of any competent regulatory
     authorities which the Continuing Party undertakes to use reasonable
     endeavours to obtain. Notwithstanding the foregoing, such notice and right
     of the Continuing Party to acquire the Seller's Shares shall cease to have
     effect if (i) any necessary approval of the Continuing Party's shareholders
     in general meeting has not been obtained with the said period of thirty
     (30) days or (ii) any necessary Regulatory Approval has not been obtained
     within sixty (60) days after the giving of such notice or (iii) if earlier
     than the expiry of such latter period, any such authority has conclusively
     refused to grant any such regulatory approval.

Seller's right to sell to Third Party Purchaser

20.7 If the Continuing Party does not exercise its rights of purchase under
     Clause 20.5 or any notice given thereunder ceases to have effect pursuant
     to Clause 20.6, the Seller shall (subject to Clause 20.9 below) be entitled
     to transfer the Seller's Shares on a bona fide arm's length sale to a Third
     Party Purchaser at a price being not less than the purchase price and upon
     terms no more favourable than the terms specified in the Transfer Notice,
     provided that:
<PAGE>

      (a)  such transfer shall have been completed within a period of one
           hundred and twenty (120) days after (i) the date of receipt of the
           Transfer Notice or (ii) if any notice given by the Continuing Party
           shall have ceased to have effect pursuant to Clause 20.6, the date on
           which such notice ceased to have effect;

      (b)  the Third Party Purchaser is financially sound.

20.8  The parties undertake to procure that the Shareholders shall give their
      approval, if and to the extent required under the provisions of the Bye-
      laws, to any transfer of Shares to a Third Party Purchaser permitted by
      the terms of this Paragraph.

Conditions applicable to the Third Party Purchaser

20.9  Completion of any transfer of Shares to a Third Party Purchaser shall be
      subject to the conditions that:

      (a)  the Third Party Purchaser shall first have entered into an agreement
           with the Continuing Party whereby it agrees to be bound (in terms
           reasonably satisfactory to the Continuing Party) by provisions of
           this Agreement and any related agreements binding upon the Seller;

      (b)  any loans, loan capital, borrowings and indebtedness in the nature of
           borrowing (but excluding, for the avoidance of doubt, any debts
           incurred in the ordinary course of trade which are at the relevant
           time outstanding on inter-company account) owing at that time from BT
           LOOKSMART to the Seller or any member of its Group shall first have
           been assigned to, or equivalent finance made available by, the Third
           Party Purchaser; and

      (c)  In no event may BTH transfer its Shares to one of the direct
           competitors of LOOK listed in Schedule 12.

Intra-Group Transfers

20.10  Each Shareholder shall be entitled at any time to transfer all but not
       part only of its Shares to a company in which it holds not less than 50
       per cent of the voting share capital of the company or in which it has
       joint control provided that completion of any transfer of shares as
       contemplated by this Clause 20.10 shall be subject to the condition that
       the transferee shall first have entered into an agreement with the
       Continuing Party whereby it agrees to be bound (in terms reasonably
       satisfactory to the Continuing Party) by the provisions of this Agreement
       binding upon the Seller and provided further that the transferor shall
       have undertaken to procure that such Shares shall at no time be held by a
       company which ceases to satisfy the requirements of this Clause 20.10 and
       provided that BTH or LOOK BARBADOS, as applicable, shall be fully
       responsible for the obligations of the transferee under this Agreement
       and if the transferee ceases to satisfy the requirements of this Clause,
       the Shares shall be transferred to a member of the BT Group or the LOOK
       Group, as appropriate, which does satisfy such requirements. Prior to the
       proposed transfer, the transferor shall satisfy BT LOOKSMART that the
       transferee does satisfy the requirements of this Clause. In no event may
       the BT Shareholder transfer its Shares to an entity which is controlled
       by one of the direct competitors of LOOK listed in Schedule 12.

Change of Control of LOOK
<PAGE>

20.11  In the event that there is a change of control of LOOK, the BT
       Shareholder and the LOOK Shareholder shall enter into good faith
       negotiations for a period of 45 days from the earlier of the date that
       the BT Shareholder is aware of a potential change of control of LOOK and
       the date of the change of control to consider how to address any concerns
       that the BT Shareholder may have as a result of such change of control.
       Such discussions may include possible restructuring of BT LOOKSMART. If
       the BT Shareholder and the LOOK Shareholder fail to agree within the 45
       day period how to deal with the BTShareholder's concerns, the BT
       Shareholder shall have the right to require the LOOK Shareholder to
       acquire its Shares at the fair market value as agreed between the parties
       or in the absence of agreement as determined by an independent expert
       appointed by agreement of the parties or in the absence of agreement by
       the President of the Institute of Chartered Accountants in England and
       Wales. The fair market value shall be determined as between a willing
       vendor and a willing purchaser on an arm's length basis. The
       determination of the expert shall be final and binding save in the case
       of manifest error. BTH recognises that the LOOK Shareholder may not be
       able to provide the fair market value entirely in cash. If cash is not
       paid, the LOOK Shareholder will ensure that BTH has a liquid form of
       exit, such liquid form of exit to be to the BTShareholder's satisfaction.

       A change of control for the purpose of this Clause 20.11 means any change
       in control of 50 per cent or more of the voting stock of LOOK at the time
       in question.

21.    Insolvency
       ----------

Insolvency Events

21.1   It shall be an Insolvency Event in relation to a Shareholder if:

       (a)  an order is made by a court of competent jurisdiction, or a
            resolution is passed, for the dissolution or administration of that
            Shareholder (otherwise than in the course of a reorganisation or
            restructuring);or

       (b)  any step is taken (and not withdrawn within ninety (90) days) to
            appoint a liquidator, manager, receiver, administrator, trustee or
            other similar officer in respect of any assets which include either
            (i) the Shares held by that Shareholder or (ii) shares in that
            Shareholder or any Holding Company thereof; or

       (c)  that Shareholder convenes a meeting of its creditors or makes or
            proposes any arrangement or composition with, or any assignment for
            the benefit of, its creditors;

       and reference to a "Shareholder" in this Paragraph (other than reference
       to the other Shareholder) shall include any Holding Company of that
       Shareholder.

Action following an Insolvency Event

21.2   If an Insolvency Event shall occur in relation to a Shareholder (the
       "Affected Shareholder"), the Affected Shareholder shall be deemed to be a
       Seller which has given a Transfer Notice under Clause 20.4 and the other
       Shareholder shall have the right, as therein provided, to purchase the
       Affected Shareholder's investment at such
<PAGE>

     price as shall be agreed between the Affected Shareholder and the other
     Shareholder or, in the absence of agreement, the Fair Price as determined
     by an independent expert whose decision shall be binding on the parties.

22.  SHAREHOLDER ASSURANCES

     Each Shareholder undertakes with the other that (so far as it is legally
     able) it will exercise all voting rights and powers, direct and indirect,
     available to it in relation to BT LOOKSMART (and its subsidiaries) so as to
     ensure the complete and punctual fulfilment, observance and performance of
     the provisions of this Agreement (and the other agreements referred to in
     this Agreement) and generally that full effect is given to the principles
     set out in this Agreement.

23.  NON-ASSIGNMENT
     Except as expressly permitted herein, no party may assign any of its rights
     or obligations under this Agreement in whole or in part.

24.  WAIVER OF RIGHTS

     No waiver by a party of a failure by any other party to perform any
     provision of this Agreement shall operate or be construed as a waiver in
     respect of any other or further failure whether of a similar or different
     character.

25.  AMENDMENTS

     This Agreement may be amended only in writing by an instrument signed by
     duly authorised representatives of each party.

26.  INVALIDITY

     If any of the provisions of this Agreement is or becomes invalid, illegal
     or unenforceable, the validity, legality or enforceability of the remaining
     provisions shall not in any way be affected or impaired.  The parties shall
     nevertheless negotiate in good faith in order to agree the terms of a
     mutually satisfactory provision, achieving as nearly as possible the same
     commercial effect, to be substituted for the provision found to be void or
     unenforceable.

27.  NO PARTNERSHIP OR AGENCY

27.1 Nothing in this Agreement (or any of the arrangements contemplated
     hereby) shall be deemed to constitute a partnership between the parties
     nor, save as may be expressly set out herein, constitute either party the
     agent of the other party for any purpose.

27.2 In addition, unless otherwise agreed in writing between the Parties, no
     party shall enter into contracts with any third party as agent for BT
     LOOKSMART or for the other parties nor shall any party describe itself as
     agent or in any way hold itself out as being an agent.
<PAGE>

28.  ANNOUNCEMENTS

28.1 No public announcement or press release on the signature or subject
     matter of this Agreement shall (subject to Clause 28.2 and 28.3) be made or
     issued by or on behalf of any party or any member of its Group without the
     prior written approval of the other parties (such approval not to be
     unreasonably withheld or delayed).

28.2 No party shall discuss any provision of this Agreement or any other
     agreement referred to herein with any competition or regulatory body
     without obtaining the prior written approval of the other parties.

28.3 If a party has an obligation to make or issue any announcement required
     by law or by any stock exchange or by any governmental or regulatory
     authority, the relevant party shall give the other parties every reasonable
     opportunity to comment on any such announcement or release before it is
     made or issued and the approval of that other parties shall be required to
     any specific references therein to that party, its affairs or to BT
     LOOKSMART including its management (provided always that this shall not
     have the effect of preventing the party making the announcement or release
     from complying with its legal and stock exchange obligations, from making
     its quarterly or annual earnings releases, or from disclosing operating
     statistics and financial information including but not limited to forward-
     looking information regarding the business of the BT LOOKSMART Group to
     investors, potential investors and securities analysts).

29.  COSTS

     Subject to the terms of a Cost Sharing Agreement dated 19 January 2000
     between LOOK and BT, each of the parties shall pay its own costs, charges
     and expenses incurred in connection with the preparation and implementation
     of this Agreement and the transactions contemplated by it. The costs of and
     incidental to the incorporation and establishment of BT LOOKSMART shall be
     borne and paid by BT LOOKSMART.

30.  LOOK Guarantee

30.1 In consideration of the payment to LOOK of the sum of US$1.00, receipt of
     which is hereby acknowledged, LOOK as primary obligor, irrevocably and
     unconditionally guarantees to the BT Shareholder due performance by LOOK
     BARBADOS or the LOOK Shareholder, as applicable, of all LOOK BARBADOS's (or
     the LOOK Shareholder's as applicable) obligations contained in this
     Agreement, the LOOK Licensing Agreement and the loan agreement to be
     entered into pursuant to the provisions of Clause 8.5.

30.2 The guarantee contained in this Clause 30 is a continuing guarantee and
     shall remain in full force and effect so long as any of the obligations of
     LOOK BARBADOS or the LOOK Shareholder remain to be fully performed or
     satisfied.

30.3 LOOK's liability under the guarantee contained in this Clause 30 shall not
     be discharged or impaired by:

     (a)  anything which would not discharge it or affect its liability if it
          were the sole principal obligor;
<PAGE>

     (b)  the release of or granting of any time or any other indulgence to LOOK
          BARBADOS, the LOOK Shareholder or any third party; and

     (c)  any other act, event or omission which would or might, but for this
          Clause 30 operate to impair or discharge LOOK's liability hereunder,
          other than a release in writing, under the hand of an authorised
          representative of  BTH or the BT Shareholder as applicable or a
          deferral of all or part of such liability.

30.4 The BT Shareholder shall be entitled to take action against LOOK under
     this Clause 30 without first being obliged to take any action of any sort
     against LOOK BARBADOS or the LOOK Shareholder in connection with any
     failure to perform any obligation hereunder.

30.5 All payments to be made by LOOK shall be made in full without set-off or
     counterclaim and free and clear of any deduction whatsoever except to the
     extent permitted by law or where such a set-off, counterclaim or deduction
     would also have been available to LOOK BARBADOS (or the LOOK Shareholder,
     as applicable).

31.  BT Guarantee

31.1 In consideration of the payment to BT of the sum of US$1.00, receipt of
     which is hereby acknowledged, BT as primary obligor, irrevocably and
     unconditionally guarantees to the LOOK Shareholder due performance by BTH
     or the BT Shareholder, as applicable, of all BTH's (or the BT Shareholder's
     as applicable) obligations contained in this Agreement.

31.2 The guarantee contained in this Clause 31 is a continuing guarantee and
     shall remain in full force and effect so long as any of the obligations of
     BTH or the BT Shareholder remain to be fully performed or satisfied.

31.3 BT's liability under the guarantee contained in this Clause 31 shall not
     be discharged or impaired by:

     (a)  anything which would not discharge it or affect its liability if it
          were the sole principal obligor;

     (b)  the release of or granting of any time or any other indulgence to BTH,
          the BT Shareholder or any third party; and

     (c)  any other act, event or omission which would or might, but for this
          Clause 31 operate to impair or discharge BT's liability hereunder,
          other than a release in writing, under the hand of an authorised
          representative of  LOOK BARBADOS or the LOOK Shareholder as applicable
          or a deferral of all or part of such liability.

31.4 The LOOK Shareholder shall be entitled to take action against BT under
     this Clause 31 without first being obliged to take any action of any sort
     against BTH or the BT Shareholder in connection with any failure to perform
     any obligation hereunder.

31.5 All payments to be made by BT shall be made in full without set-off or
     counterclaim and free and clear of any deduction whatsoever except to the
     extent permitted by law
<PAGE>

     or where such a set-off, counterclaim or deduction would also have been
     available to BTH (or the BT Shareholder, as applicable).

32.  ENTIRE AGREEMENT

     This Agreement constitutes the entire agreement between the parties with
     respect to the subject matter hereof and supersedes all prior and
     contemporaneous agreements with respect thereto, including without
     limitation that certain agreement between LOOK and BT dated 08 November
     1999. Notwithstanding the foregoing, this Agreement does not supersede any
     of the Ancillary Agreements or the Cost Sharing Agreement between BT and
     LOOK dated 19 January 2000. It is agreed that:

     (a)  no party has entered into this Agreement in reliance upon any
          representation, warranty or undertaking of the other parties which is
          not expressly set out or referred to in this Agreement;

     (b)  a party may claim in contract for breach of warranty under this
          Agreement but otherwise shall have no claim or remedy in respect of
          misrepresentation (whether negligent or otherwise) or untrue statement
          made by the other parties;

     (c)  this Clause shall not exclude any liability for fraudulent
          misrepresentation.

33.  CONFLICT WITH CONSTITUTIONAL DOCUMENTS

     In the event of any conflict between the provisions of this Agreement and
     the Memorandum of Association or the Bye-laws or other constitutional
     document of BT LOOKSMART, the provisions of this Agreement shall prevail as
     between the parties. The parties shall exercise all voting and other rights
     and powers available to them so as to give effect to the provisions of this
     Agreement and shall further (if necessary) procure any required amendment
     to the Memorandum of Association or the Bye-laws or other constitutional
     document of BT LOOKSMART.

34.  TERMINATION OF AGREEMENT

     This Agreement shall continue in full force and effect unless and until
     terminated with the written agreement of the parties.

35.  NOTICES

Address of notices

35.1 Any notice or other communication to be given hereunder shall either be
     delivered by hand or sent by first class post or facsimile transmission
     (provided that, in the case of facsimile transmission, the notice is
     confirmed by being delivered by hand or sent by first class post within 48
     hours thereafter) as follows:

     (a)  LOOK
          Address: 625 Second Street, San Francisco, CA 94107, USA
          Fax No: (415) 348-7034
<PAGE>

          Addressed for the personal attention of : Chief Executive Officer
          (with a copy to the General Counsel at the same address)

     (b)  LOOK BARBADOS
          Address:  Hastings Business Services Limited, Hastings, Christ Church,
          Barbados
          Fax No:  (246) 437-7477
          Addressed for the personal attention of:  Chief Executive Officer

     (c)  BTH
          Address: Celtic House, Victoria Street, Douglas, Isle of Man
          Fax No: +44 1624 615654
          Addressed for the personal attention of: Chief Executive Officer
          With a copy to BT as set out below

     (d)  BT LOOKSMART
          Address: Clarendon House, 2 Church Street, Hamilton, HM CX, Bermuda
          Fax No: (441) 292-4720
          Addressed for the personal attention of: Chief Executive Officer (with
          a copy to the General Counsel at the same address)

          (e)  BT
          Address: 81 Newgate Street, London, EC1A 7AJ
          Fax No: + 44 171 356 6638
          Addressed for the personal attention of: The Group General Counsel

Changes

35.2 LOOK, LOOK BARBADOS, BTH, BT LOOKSMART or BT may change the address, fax
     number or the name of the person for whose attention notices are to be
     addressed by serving a notice on the other in accordance with this Clause.

Deemed Service

35.3 All notices given in accordance with Clause 34.1 shall be deemed to have
     been served as follows:

     (a)  if delivered by hand, at the time of delivery;

     (b)  if posted, at the expiration of 5 Business Days after the envelope
          containing the same was delivered into the custody of the postal
          authorities;

     (c)  if communicated by facsimile, at the time of transmission;

     PROVIDED that where, in the case of delivery by hand or transmission
     by telex or facsimile, such delivery or transmission occurs after 6 p.m. on
     a Business Day or on a day which is not a Business Day, service shall be
     deemed to occur at 9 a.m. on the next following Business Day. References to
     time in this Clause are to local time in the country of the addressee.

Proof of service

In providing service it shall be sufficient to prove that the envelope
containing notice was properly addressed and delivered either to the address
shown thereon or into the custody of the postal authorities as a pre-paid first
class letter, or that the telex transmission was made and the recipient's
answerback received or that the facsimile transmission was made after
<PAGE>

obtaining in person or by telephone appropriate evidence of the capacity of the
addressee to receive the same, as the case may be.

36.  COUNTERPARTS

This Agreement may be executed in one or more counterparts each signed by one of
the parties and such counterparts shall together constitute one agreement.

37.  GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of
England. The Courts of England shall have non-exclusive jurisdiction to settle
any disputes which may arise in connection with this Agreement.

AS WITNESS this Agreement has been signed by the duly authorised representatives
of the parties the day and year first before written.

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