Exhibit 10.1


[LOGO OF MERRILL LYNCH] Confirmation of OTC Variable Forward
Sale Transaction








|Dated: |  | June 3, 2002
|------ |  | ------------

ML Ref: 0281695





|To: |  | Fisher Communications, Inc. (Counterparty)
|--- |  | --------------------------------------------




|Attention: |  | Warren J. Spector
|---------- |  | -----------------

tel: (206) 404-6789


fax: (206) 404-6766





|From: |  | Merrill Lynch International (MLI)
|----- |  | -----------------------------------

Ropemaker Place


25 Ropemaker Street


London EC2Y 9L4





---




Dear Sir / Madam:





The purpose of this letter agreement (this Confirmation) is to confirm the terms and
conditions of the above-referenced transaction entered into between Counterparty and MLI through its agent Merrill Lynch, Pierce, Fenner & Smith (MLPFS) on the Trade Date specified below (the
Transaction). This Confirmation constitutes a Confirmation as referred to in the Master Agreement specified below.





The definitions and provisions contained in the 2000 ISDA Definitions (the Swap Definitions) and the 1996 ISDA Equity Derivatives Definitions (the Equity
Definitions and, together with the Swap Definitions, the Definitions), in each case as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the
event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will govern, and in the event of any inconsistency between the Definitions and this Confirmation, this Confirmation will govern.





This Confirmation supplements, forms part of, and is subject to, the ISDA Master Agreement (including the Schedule thereto)
between Counterparty and MLI dated as of April 5, 2002, as amended and supplemented from time to time (the Agreement). All provisions contained in the Agreement govern this Confirmation except as expressly modified below.





The terms of the particular Transaction to which this Confirmation relates are as follows:





General Terms:





|Trade Date: | March 21, 2002
|----------- | --------------




|Effective Date: | April 8, 2002
|--------------- | -------------




|Termination Date: | October 10, 2006
|----------------- | ----------------




|Seller: | Counterparty
|------- | ------------




|Buyer: | MLI
|------ | ---




|Shares: | The common stock of SAFECO Corporation (Security Symbol SAFC).
|------- | --------------------------------------------------------------





---

|Issuer: | SAFECO Corporation, a Washington corporation.
|------- | ---------------------------------------------




|Number of Shares: | 650,000
|----------------- | -------




|Multiplier: | One (1)
|----------- | -------




|Initial Price: | See pricing chart attached hereto on Annex A (Annex A)
|-------------- | --------------------------------------------------------




|Floor Price: | See Annex A
|------------ | -----------




|Cap Price: | See Annex A
|---------- | -----------




|Participation Percentage: | 20%
|------------------------- | ---




|Final Price: | See Annex A
|------------ | -----------




|Premium: | See Annex A
|-------- | -----------




|Premium Payment Date: | April 11, 2002
|--------------------- | --------------




|Notional Amount: | The USD amount, as determined by the Calculation Agent, equal to the product of the Initial Price and the Number of Shares.
|---------------- | ---------------------------------------------------------------------------------------------------------------------------




|Additional Payments: | In the event the Shares begin trading ex-dividend on any day from but excluding the Trade Date to and including the Termination Date (the Dividend
Period), Counterparty shall pay on the third Business Day following each date that the respective dividend is paid by the Issuer to the holders of the Shares (each such third Business Day, an Additional Payment
Amount Payment Date) an amount equal to the Additional Payment Amount (defined below) for such Additional Payment Amount Payment Date; provided that Counterparty may elect, on not fewer than five (5) Business Days notice prior to
any Additional Payment Amount Payment Date, that, in lieu of paying the Additional Payment Amount to MLI on such Additional Payment Amount Payment Date, the Calculation Agent shall adjust the Cap Price in a commercially reasonable manner to
compensate MLI for not receiving such Additional Payment Amount. The Calculation Agent shall give Counterparty and MLI notice of any such adjustment not later than the respective Additional Payment Amount Payment Date.
|-------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | The Additional Payment Amount for any Additional Payment Amount Payment Date shall be equal to the product of (i) the Number of Shares
multiplied by (ii) the Reference Delta (defined below) as of the ex-dividend date for such Additional Payment Amount Payment Date multiplied by (iii) the difference between the per Share dividend declared by the Issuer and USD 0.185(assuming
a quarterly dividend with appropriate adjustments to the terms of this Transaction in the event that the Issuer pays dividends other than on a quarterly basis); provided that such difference is a positive number; and provided further that,
for the avoidance of doubt, if an ex-dividend date occurs with respect to the Shares on or before the Termination Date and no corresponding payments have been received by shareholders of record of the Shares on or before the Termination Date, then
the dividends to which such ex-dividend date relates shall nonetheless give rise to an Additional Payment Amount.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Reference Delta means, for any date during the Term of this Transaction, the hedge ratio for this Transaction (expressed in percentage
terms, provided such percentage shall not exceed 100%) as determined by MLI in its good faith discretion.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



2




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| | Notwithstanding the foregoing, no Additional Payment Amount shall be payable in respect of, and the foregoing provisions shall not apply to, any extraordinary
dividend (or other event) that gives rise to an Adjustment (as provided below).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|Settlement Currency: | USD
|-------------------- | ---




|Exchange: | Nasdaq National Market
|--------- | ----------------------




|Related Exchange: | Any exchange(s) on which options contracts related to the Shares are principally traded.
|----------------- | ----------------------------------------------------------------------------------------




|Business Day: | New York
|------------- | --------




Payment Terms:





|Payment Period: | The period commencing on the date three (3) Exchange Business Days after the Effective Date and ending on the Termination Date.
|--------------- | -------------------------------------------------------------------------------------------------------------------------------




|Payments: | Counterparty may from time to time during the Payment Period designate a date on which a Payment Amount (as defined below) will be paid as described
herein. Such designation will be made by providing MLI with (i) at least seven (7) Currency Business Days prior written notice of the Currency Business Day during the Payment Period (a Payment Amount Date) on which
such payment is to be made, and (ii) notice of the portion expressed as a USD amount of the Outstanding Notional Payment Amount for such Payment Amount Date (a Payment Amount Portion)
|--------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Unless the Payment Amount Portion is equal to the entire Outstanding Notional Payment Amount on such Payment Amount Date, such Payment Amount Portion shall be
equal to at least 20% of the Initial Notional Payment Amount.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | On each Payment Amount Date, MLI shall pay to Counterparty the Payment Amount. Payment Amount means an amount in USD equal to the present
value on a Payment Amount Date of the related Payment Amount Portion (such present value to be determined by the Calculation Agent using a discount rate equal to the Rate for the period from, and including, such Payment Amount Date to, but
excluding, the Settlement Date (the Payment Calculation Period), plus Spread).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Notwithstanding any provision in this Agreement to the contrary, if at any time during the Term of this Transaction any obligation (whether present or future,
contingent or otherwise) is owed by Counterparty to Merrill Lynch, Pierce, Fenner & Smith, Incorporated (MLPFS) (such obligation, a Loan Obligation) in respect of borrowed money
(Counterparty Loan), Counterparty shall be deemed to have requested at such time a Payment Amount Portion equal to the entire Outstanding Notional Payment Amount, or if the related Payment Amount of the Outstanding Notional
Payment Amount is greater than the Loan Obligation, a Payment Amount Portion with a related Payment Amount equal to the Loan Obligation. Such Payment Amount will not be paid to Counterparty on the related Payment Date, but instead shall be paid to
MLPFS in satisfaction of all or part of such Loan Obligation. Counterparty hereby irrevocably authorizes and instructs MLI to use any such Payment Amount solely to satisfy, in whole or in part, on behalf of Counterparty, any Loan Obligation.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------






3




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|Initial Notional Payment Amount: | The Number of Shares * Floor Price
|-------------------------------- | ----------------------------------




|Outstanding Notional Payment Amount: | As of any date during the term of this Transaction, an amount in USD equal to the excess, if any, of (i) the Initial Notional Payment Amount over (ii) (a) the sum
of the Payment Amount Portions for all Payment Amount Dates occurring prior to such date (the Prepaid Notional Amount) less (b) the sum of all prior Repayment Amounts.
|------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|Repayments: | Counterparty may from time to time during the Payment Period designate a date on which all or a portion of the Prepaid Notional Amount will be re-paid to MLI as
described herein. Such designation will be made by providing MLI with (i) at least seven (7) Currency Business Days prior written notice of the Currency Business Day during the Payment Period (a Repayment Date) on
which such payment is to be made, and (ii) notice of the portion expressed as a USD amount of the Prepaid Notional Amount to be repaid on such Repayment Date (a Repayment Amount). Unless the Repayment Amount is equal to the
entire Outstanding Notional Payment Amount on such Repayment Date, such Repayment Amount shall be equal to at least 20% of the Initial Notional Payment Amount.
|----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | On the Repayment Date, Counterparty shall pay to MLI an amount in USD equal to (i) the present value on such Repayment Date of the related Repayment Amount (such
present value to be determined by the Calculation Agent using a discount rate equal to the Rate for the period from, and including, such Repayment Date, to but excluding, the Settlement Date (the Repayment Calculation
Period), plus Spread) plus (ii) any breakage costs.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|Rate: | If the Payment Calculation Period or the Repayment Calculation Period, as applicable, is (i) equal to or less than 360 calendar days, the rate shall be the zero
coupon rate derived from the prevailing LIBOR curve that appears on page IYC1 I5Z of Bloomberg. If such rate does not appear on page IYC1 I5Z of Bloomberg, the rate will be determined as if the parties had specified USD-LIBOR-BBA, or
(ii) greater than 360 calendar days, the rate shall be the zero coupon rate derived from the prevailing rate curve that appears on page IYC1 I5Z of Bloomberg. If such rate does not appear on page IYC1 I5Z of Bloomberg, the rate will be determined as
if the parties had specified USD-ISDA-Swap Rate, in each case, (x) on a semi-annual basis, (y) with a Day Count Fraction (as defined in the 2000 ISDA Definitions) equal to Actual/360, and (z) interpolated as necessary to account for the
actual number of calendar days within such Payment Calculation Period or Repayment Calculation Period, as reasonably determined by the Calculation Agent
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|Spread: | See Annex A
|------- | -----------




|Valuation: |  | 
|---------- |  | 




|Valuation Time: | At the close of trading on the Exchange.
|--------------- | ----------------------------------------




|Valuation Date: | Termination Date
|--------------- | ----------------




|Settlement Terms: | Settlement of this Transaction shall be either Cash Settlement or Physical Settlement, as determined by Counterparty in writing to MLI no less than ten
|----------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------






4




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| | (10) Business Days prior to the Termination Date. In the event MLI is not notified, the settlement method for this Transaction shall be Cash Settlement.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------




|Physical |  | Settlement Terms:
|-------- |  | -----------------




|Physical Settlement: | On the Settlement Date, Counterparty will deliver the Counterparty Settlement Shares to MLI, and MLI will pay the MLI Settlement Obligation to Counterparty.
|-------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------




|Settlement Date: | Three (3) Exchange Business Days after the Valuation Date.
|---------------- | ----------------------------------------------------------




| | A. |  | MLI shall pay to Counterparty an amount in cash equal to the Outstanding Notional Payment Amount (MLI Settlement Obligation).
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------




| | B. |  | Counterparty shall deliver to MLI a number of Shares equal to the Number of Shares multiplied by the Variability Factor (Counterparty Settlement
Shares).
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------




|Variability Factor: | A factor calculated by the Calculation Agent on the Valuation Date based on one of the following three scenarios (as applicable):
|------------------- | ---------------------------------------------------------------------------------------------------------------------------------




|Scenario 1: | If the Final Price is less than the Floor Price, then:
|----------- | ------------------------------------------------------




| | One (1)
| | -------




|Scenario 2: | If the Final Price is greater than the Cap Price, then:
|----------- | -------------------------------------------------------




| | (Floor Price + ((Final PriceCap Price) * (1Participation Percentage))) / Final Price
| | --------------------------------------------------------------------------------------




|Scenario 3: | If the Final Price is greater than the Floor Price and less than the Cap Price, then:
|----------- | -------------------------------------------------------------------------------------




| | Floor Price / Final Price
| | -------------------------




|Cash |  | Settlement Terms:
|---- |  | -----------------




|Cash Settlement: | If the Cash Settlement Amount is a positive number, MLI will pay the Cash Settlement Amount to Counterparty. If the Cash Settlement Amount is a negative number,
Counterparty will pay the absolute value of the Cash Settlement Amount to MLI. Such amounts shall be paid on the Settlement Date.
|---------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|Cash Settlement Amount: | An amount determined by the Calculation Agent on the Valuation Date based on the following formula:
|----------------------- | ---------------------------------------------------------------------------------------------------




| | MLI Settlement Obligation  Counterparty Cash Settlement Amount;
| | ----------------------------------------------------------------




| | Where:
| | ------




| | Counterparty Cash Settlement Amount means:
| | --------------------------------------------




| | Counterparty Settlement Shares * Final Price
| | --------------------------------------------



5




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|Conditions to Physical Settlement: | Notwithstanding anything contained herein to the contrary, unless all of the following conditions are met, Cash Settlement shall apply to this Transaction:
|---------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------




| | The Shares are in marketable form without restrictive legends, and such Shares shall not be subject to any Transfer Restrictions (as defined below) in connection
with the delivery of the Shares to MLI hereunder or the sale or transfer of such Shares by MLI to a third party, all as determined by MLI in its sole discretion. Transfer Restriction means any condition to or restriction on
the ability of the holder of the Shares to sell, assign or otherwise transfer such Shares, including, without limitation, (i) any registration or qualification requirement, prospectus delivery requirement or other similar requirements (other than
any requirements arising from sales of the Shares by MLI pursuant to Rule 144), (ii) any requirement that any sale, assignment or other transfer or enforcement of such Shares be consented to or approved by any person, including, without limitation,
the issuer thereof or any other obligor thereon, (iii) any limitations on the type or status, financial or otherwise, of any purchaser, pledgee, assignee or transferee of such Shares, and (iv) any requirement to deliver any certificate, consent,
agreement, opinion of counsel, notice or any other document of any person to the issuer of, any other obligor on or any registrar or transfer agent for, such Shares, prior to the sale, pledge, assignment or other transfer or enforcement of such
Shares.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|Failure to Deliver: | Not applicable.
|------------------- | ---------------




|Clearance System(s): | The principal domestic clearance system customarily settling trades on a delivery versus payment basis on the Shares.
|-------------------- | ---------------------------------------------------------------------------------------------------------------------




|Adjustments: |  | 
|------------ |  | 




|Method of Adjustment: | Calculation Agent Adjustment; provided that in the event of the occurrence of a Potential Adjustment Event, the Calculation Agent will determine whether
such Potential Adjustment Event has a diluting or concentrative effect on the theoretical value of the Shares and, if so, will (i) make the corresponding adjustment(s), if any, to the Number of Shares, the Floor Price and the Cap Price and, in any
case, any other variable relevant to the settlement or payment terms of this Transaction as the Calculation Agent determines (in a commercially reasonable manner) appropriate to account for that diluting or concentrative effect and (ii) determine
the effective date(s) of the adjustment(s).
|--------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|Extraordinary |  | Events:
|------------- |  | -------




Consequences of Merger Event:





|(a) Share-for-Share: | Alternative Obligation on the Exchange Business Day immediately following the occurrence of a Merger Event with mutually agreed upon commercially reasonable
adjustments to the terms of the Transaction to preserve the economics of the Transaction as originally bargained for pursuant to the terms stated herein; provided that after the Merger Event, MLI shall be permitted to elect Cancellation and
Payment within three (3) Exchange Business Days immediately following such Merger Event.
|-------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|(b) Share-for-Other: | Cancellation and Payment on the Exchange Business Day immediately following the occurrence of a Merger Event.
|-------------------- | -------------------------------------------------------------------------------------------------------------






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|(c) Share-for-Combined: | As soon as practicable but not to exceed three (3) Exchange Business Days immediately following the occurrence of a Merger Event has occurred, the parties shall
mutually agree upon appropriate adjustments to the terms of the Transaction, and, if the parties are unable to so agree, Cancellation and Payment shall apply.
|----------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|Nationalization or Insolvency | Negotiated close out.
|----------------------------- | ---------------------




Additional Provisions:





|Events of Default: | For the sole purpose of this Transaction and provided that no other transactions under the Agreement other than this Transaction or other substantially similar
variable forward sale transactions shall be outstanding between Counterparty and MLI, (i) the Cross Default provisions of Section 5(a)(vi) of the Agreement will not apply to MLI and will apply to Counterparty, and for such purpose,
Specified Indebtedness means solely any Counterparty Loan and the Threshold Amount means zero and (ii) the Credit Event Upon Merger provisions of Section 5(b)(iv) of the Agreement will not apply to MLI and will
not apply to Counterparty.
|------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|Additional Termination Event: | The occurrence of a Hedging Disruption Event shall constitute an Additional Termination Event with respect to Counterparty, giving MLI the right to designate an
Early Termination Date in respect of this Transaction. For this purpose, Hedging Disruption Event means (i) any inability of MLI due to market illiquidity, Illegality (as defined in the Agreement, but with respect to the transaction
hedge) or lack of availability of third-party institutional stock lenders or MLI otherwise being unable to borrow the Shares, to establish, re-establish or maintain any hedging transaction(s) necessary in the normal course of MLIs business of
hedging the price and market risk of entering into and performing under the Transaction, provided that if MLI is able to borrow Shares from MLPFS under the Counterparty Loan or from Counterparty (including by way of rehypothecation as contemplated
in the Collateral provision hereunder) this clause (i) shall not apply; or (ii) an increase in the cost of borrowing the Shares (from an entity other than Counterparty) and Counterpartys failure (within five (5) Business Days of its receipt of
written notice from MLI in this regard) to agree to adjustments to the terms of the Transaction as the Calculation Agent, in its reasonable discretion, deems necessary to compensate MLI for such increase in costs, including, without limitation, any
costs incurred by MLI during such five (5) Business Day period.
|----------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|Absence of Certain Events Representation | Section 3(b) of the Agreement is hereby amended by adding the following clause at the beginning of the first line thereof: Except as previously disclosed in
writing by Counterparty to MLI,.
|---------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|Calculation Agent: | MLI; provided that the Calculation Agent shall make all calculations and determinations in connection with this Transaction in good faith and in a
commercially reasonable manner.
|------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|Non-Reliance: | Each party represents to the other party that it is acting for its own account, and has made its own independent decisions to enter into this Transaction and as to
whether this Transaction is appropriate or proper for it based on its own judgment and upon advice from such advisors as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as
|------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------






7




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| | investment advice or as a recommendation to enter into this Transaction, it being understood that information and explanations related to the terms and conditions
of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected
results of this Transaction.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|Governing Law: | The laws of the State of New York, including, without limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law.
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------




|Collateral: | On or prior to the Trade Date, Counterparty shall have delivered and shall thereafter continually maintain with MLI or its custodian
(Custodian) during the Term of this Transaction, 650,000 Shares and a stock transfer power related thereto (such Shares, the Collateral).
|----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Counterparty represents that (i) it is the legal and record owner of all Collateral free of all liens, claims, equities, and encumbrances, (ii) it has the power
and has obtained all of the necessary consents and approvals to grant to MLI a legal, valid, binding and enforceable first priority security interest in, and lien on, the Collateral, and (iii) the pledge of the Collateral shall not breach any
covenant in any agreement or contract entered into by Counterparty or any Affiliate thereof.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Counterparty represents that on the Trade Date it granted, and will grant throughout the Term of this Transaction, MLI a first-priority security interest in, and a
first-priority lien on, the Collateral for its obligations under this Transaction and the Agreement; provided, however, that if any Counterparty Loan is outstanding at any time from and including the Trade Date to but excluding the
third Exchange Business Day immediately following the Effective Date, MLIs security interest will be subordinate to any security interest and/or lien on the Collateral granted in favor of MLPFS in connection with such Counterparty Loan.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Notwithstanding Section 9-207 of the New York Uniform Commercial Code, MLI will have the right to (i) sell, pledge, rehypothecate, assign, invest, use, commingle
or otherwise dispose of, or otherwise use in its business, any Collateral it holds free from any claim or right of any nature whatsoever of Counterparty, including any equity or right of redemption by Counterparty (Use of
Collateral), provided that MLI shall not have Use of Collateral five Exchange Business Days following the effectiveness of notice from Counterparty to MLI restricting MLIs Use of Collateral, and (ii) register any
Collateral in the name of MLI, its Custodian or a nominee for either. For the avoidance of doubt, nothing in the foregoing is intended to restrict or impede in any way MLIs ability to foreclose, sell, dispose of, or otherwise exercise its
rights and remedies with respect to the Collateral upon a Counterparty Event of Default or Termination Event.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Upon the occurrence of an Event of Default or Termination Event under the Agreement, MLI or its Custodian shall have all of the rights with respect to the
Collateral of a secured party under the New York Uniform Commercial Code (UCC). MLI or its Custodian shall not be liable for any loss or damages occasioned by any sale or disposal of the Collateral.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Counterparty will use its best efforts to preserve and protect MLIs security interest in the Collateral, will defend MLIs right, title, lien, and
security interest in and to the Collateral against the claims and demands of all persons whomsoever, and will do all such acts and things and deliver all such documents
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------






8




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| | and instruments, including without limitation further pledges, assignments, financing statements, and continuation statements, as MLI and its Custodian may
reasonably deem necessary or advisable from time to time in order to preserve, protect, and perfect such security interest or to enable MLI or its Custodian to exercise or enforce its rights with respect to any Collateral.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Counterparty will not permit any lien, security interest, adverse claim, restriction on transfer or, other encumbrance, other than the lien and security interest
Counterparty created hereby in favor of MLI, to exist upon any of the Collateral.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Counterparty will not take any action that could in any way limit or adversely affect the ability of MLI to realize upon its rights in the Collateral.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------




| | Each of Counterparty and MLI shall perform its obligations and exercise its rights hereunder, as applicable, in compliance with the terms of the UCC.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------




|Representations |  | 
|--------------- |  | 

|and Covenants of Counterparty: | Counterparty (i) has such knowledge and experience in financial and business affairs as to be capable of evaluating the merits and risks of entering into the
Transaction; (ii) has consulted with its own legal, financial, accounting and tax advisors in connection with the Transaction; (iii) is entering into the Transaction for a bona fide business purpose to hedge an existing position; and (iv)
acknowledges that in return for downside protection against a decline in the market price of the Shares below the Floor Price, Counterparty is foregoing, in part, the upside value of an increase in the market price of the Shares above the Cap
Price.
|------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Neither Counterparty nor any person who would be considered to be the same person (as such term is used in Rule 144(a)(2) under the Securities
Act of 1933, as amended (the Securities Act)), has sold any Shares (or security entitlements in respect thereof) or hedged (through swaps, options, short sales or otherwise) any long position in the Shares (or
security entitlements in respect thereof), including, without limitation, any sales pursuant to an agreement by any such persons to act in concert for the purpose of selling such Shares, during the preceding three (3) months prior to the Trade Date
of this Transaction. Counterparty covenants and agrees that until the Effective Date, it will not sell, nor will it permit any person to sell, Shares without the prior written consent of MLI. For the purposes of this paragraph, Shares shall be
deemed to include securities convertible into or exchangeable or exercisable for Shares and any other security or instrument that would be subject to aggregation under Rule 144(e) under the Securities Act. As of the Trade Date, Counterparty owns
3,002,376 Shares.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Counterparty does not know or have any reason to believe that the Issuer has not complied with the reporting requirements contained in Rule 144(c)(1) under the
Securities Act.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Counterparty acknowledges and agrees that (i) it has not taken and will not take any action that would cause any sale deemed to be made under the Interpretive
Letter (as defined below) to exceed the volume limitation of Rule 144(e), (ii) it has not taken and will not take any action that could cause any sale deemed to be made under the Interpretive Letter to fail to meet all applicable requirements of
Rule 144 and (iii) on the Trade Date of this Transaction it has transmitted a Form 144 for filing with the Securities and Exchange Commission.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | Counterparty covenants that it will send to MLI via facsimile a copy of each Form 144 and each filing under Section 13 or 16 of the Securities and Exchange Act
relating to this Transaction concurrently with filing or transmission for filing, as the case may be, of such form to or with the SEC.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | As of the Trade Date of this Transaction, the Shares are eligible for resale under Rule 144. Counterparty shall comply with the terms of the interpretive letter
from the SEC to Goldman, Sachs & Co. dated December 20, 1999 (the Interpretive Letter).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | The directors, officers and/or employees of Counterparty (Contract Persons) who are directly or indirectly involved with
the negotiation, execution and delivery of this Agreement and the performance of the transactions contemplated by this Agreement have no material, nonpublic information in respect of the Issuer and had no such information on each day from and
including the Trade Date to and including the Effective Date. Counterparty further represents that (1) as of the Trade Date it had established and implemented written policies and procedures to ensure that no Contract Person will violate federal and
state securities laws prohibiting the purchase or sale of securities on the basis of material nonpublic information in connection with this Agreement and this Transaction and (2) if any third-party cause of action asserts that Counterparty has
violated such federal and state securities laws, Counterparty may duly and in good faith assert in its responsive pleading an affirmative defense under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Counterparty represents that all proceeds from the Counterparty Loan and any other credit facility entered into by Counterparty as of the date hereof through and
including March 31, 2002 shall be used to satisfy in full all outstanding payment obligations (principal, interest or otherwise) of Counterparty pursuant to (i) the Credit Agreement dated as of May 26, 1998 among Counterparty, Bank of America, N.A.,
and U.S. Bank National Association, as lenders, and Bank of America, N.A., as administrative agent, as amended; and (ii) the Credit Agreement dated as of June 24, 1999 among Counterparty, the various lenders thereto, Bank of America, N.A., as
administrative agent, and Credit Suisse First Boston, as syndication agent, as amended. A breach of this representation shall constitute an Additional Termination Event with respect to Counterparty with Counterparty as the Affected Party, giving MLI
a right to designate an Early Termination Date (as defined in the ISDA Master Agreement).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Counterparty is not and has not been the subject of any civil proceeding of a judicial or administrative body of competent jurisdiction that could reasonably be
expected to impair materially Counterpartys ability to perform its obligations hereunder.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | Counterparty will by the next succeeding Business Day notify MLI upon obtaining knowledge of the occurrence of any event that would constitute an Event of Default,
a Potential Event of Default or a Potential Adjustment Event.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | As of the Effective Date, Counterparty is not insolvent.
| | --------------------------------------------------------




|Representation of MLI: | MLI hereby represents and warrants to, and agrees with, Counterparty that it shall comply with (i) the terms of the Interpretive Letter and (ii) the manner of sale
requirements of Rule 144 (f) and (g) in connection with the sale of Shares during the hedge period.
|---------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



10




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|Acknowledgements: | (1)    The parties acknowledge and agree that there are no other representations, agreements or other undertakings of the parties in relation
to this Transaction, except as set forth in this Confirmation or in the Agreement.
|----------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | (2)    The parties hereto intend for:
| | -------------------------------------




| | (a)    this Transaction to be a securities contract as defined in Section 741(7) of Title 11 of the United States Code (theBankruptcy Code), qualifying for the protections under Section 555 of the Bankruptcy Code;
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | (b)    a partys right to liquidate this Transaction and to exercise any other remedies upon the occurrence of any Event of Default under
the Agreement with respect to the other party to constitute a contractual right as defined in the Bankruptcy Code;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | (c)    any cash, securities or other property provided as performance assurance, credit, support or collateral with respect to this Transaction
to constitute margin payments as defined in the Bankruptcy Code; and
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | (d)    all payments for, under or in connection with this Transaction, all payments for the Shares and the transfer of such Shares to
constitute settlement payments as defined in the Bankruptcy Code.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | (3)    The parties acknowledge and agree that in the event of an Early Termination Date as a result of an Event of Default, the amount payable
under the Agreement will be a cash amount calculated as described therein and that the deliveries specified in this Transaction will no longer be required.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | (4)    Upon the execution of this Confirmation, the Agreement shall constitute a Final Agreement within the meaning of the
Interpretive Letter.
| | -------------------------------------------------------------------------------------------------------------------------------------------------




|Interpretation: | For purposes of the Equity Definitions, this Transaction will be deemed to be a Physically-settled Share Option Transaction if Physical Settlement applies and a
Cash-settled Share Option Transaction if Cash Settlement applies, in either case with an Exercise Date equal to the Valuation Date.
|--------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|Indemnity: | Counterparty agrees to indemnify MLI and its Affiliates and their respective directors, officers, agents and controlling parties (MLI and each such person being an
Indemnified Party) from and against any and all losses, claims, damages and liabilities, joint and several, to which such Indemnified Party may become subject under, in connection with, relating to, or arising out
of, this Agreement or Transaction with respect to any applicable securities laws and will reimburse any Indemnified Party for all reasonable expenses (including reasonable legal fees and reasonable expenses) as they are incurred in connection with
the investigation of, preparation for, or defense of any pending or threatened claim or any action or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto. Counterparty will not be liable under this Indemnity
paragraph to the extent that any loss, claim, damage, liability or expense is found in a final judgment by a court to have resulted from MLIs gross negligence, fraud, bad faith and/or willful misconduct.
|---------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|
|



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Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy of this
Confirmation enclosed for that purpose and returning it to us by facsimile transmission to the attention of: Peter Barna (Telecopier No. 212-738-1069).





Very truly yours,





MERRILL LYNCH INTERNATIONAL





By:

/s/    CHERYL DENNERLIENName: Title:





Confirmed as of the date first above written:








FISHER COMMUNICATIONS, INC.








By:

/s/    WARREN SPECTORName: Title:








Acknowledged and agreed as to matters relating to
the Agent:








MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,


solely in its capacity as Agent hereunder





By:

/s/    VIVIAN JACKSONName: Title:




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