<PAGE>   1
                                                                   EXHIBIT 10.21




                            ASSET PURCHASE AGREEMENT




                                  BY AND AMONG




                      THE BASKETBALL CLUB OF SEATTLE, LLC,




                            THE ACKERLEY GROUP, INC.,



                         AND CERTAIN OF ITS SUBSIDIARIES





                          DATED AS OF JANUARY 11, 2001


<PAGE>   2
                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                      PAGE
                                                                                                      ----
<S>                                                                                                   <C>
ARTICLE I PURCHASE AND SALE OF ASSETS...........................................................        1

        1.1    PURCHASE AND SALE OF ASSETS; THE BUSINESSES......................................        1
        1.2    ASSUMPTION OF OBLIGATIONS........................................................        4
        1.3    CONSIDERATION FOR PURCHASED ASSETS...............................................        5
        1.4    SALES AND USE TAXES..............................................................        6
        1.5    CLOSING..........................................................................        6
        1.6    NONTRANSFERABLE ASSETS...........................................................        7
        1.7    TAKING OF NECESSARY ACTION, FURTHER ACTION.......................................        8

ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLERS............................................        8

        2.1    ORGANIZATION, QUALIFICATION, AND CORPORATE POWER.................................        9
        2.2    AUTHORIZATION....................................................................        9
        2.3    NO CONFLICTS.....................................................................        9
        2.4    CONSENTS.........................................................................        9
        2.5    FINANCIAL STATEMENTS.............................................................       10
        2.6    UNDISCLOSED LIABILITIES..........................................................       10
        2.7    EVENTS SUBSEQUENT TO MOST RECENT FISCAL PERIOD END...............................       11
        2.8    COMPLIANCE.......................................................................       12
        2.9    TAX MATTERS......................................................................       12
        2.10   TITLE OF PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES; CONDITION OF EQUIPMENT...       14
        2.11   INTELLECTUAL PROPERTY............................................................       14
        2.12   CONTRACTS........................................................................       17
        2.13   POWER OF ATTORNEY................................................................       18
        2.14   [INTENTIONALLY OMMITTED].........................................................       18
        2.15   LITIGATION.......................................................................       18
        2.16   RESTRICTIONS ON BUSINESS ACTIVITIES..............................................       19
        2.17   AIRCRAFT.........................................................................       19
        2.18   EMPLOYEES........................................................................       19
        2.19   EMPLOYEE MATTERS AND BENEFIT PLANS...............................................       19
        2.20   ENVIRONMENT, HEALTH, AND SAFETY..................................................       24
        2.21   NO ADVERSE DEVELOPMENTS..........................................................       26
        2.22   FEES.............................................................................       26
        2.23   COMPLETE COPIES OF MATERIALS.....................................................       26
        2.24   BOARD APPROVAL...................................................................       26
        2.25   FULL DISCLOSURE..................................................................       27
        2.26   LICENSES AND AUTHORIZATIONS......................................................       27
        2.27   AFFILIATE TRANSACTIONS...........................................................       27
</TABLE>


                                      -ii-


<PAGE>   3

<TABLE>
<S>                                                                                                   <C>
ARTICLE III REPRESENTATION AND WARRANTIES OF BUYER..............................................       27

        3.1    ORGANIZATION, QUALIFICATION, AND CORPORATE POWER.................................       28
        3.2    AUTHORIZATION....................................................................       28
        3.3    NO CONFLICTS.....................................................................       28
        3.4    CONSENTS.........................................................................       28
        3.5    BROKERS' FEES....................................................................       29
        3.6    FUNDING..........................................................................       29
        3.7    BUYER'S INFORMATION ABOUT THE BUSINESS...........................................       29

ARTICLE IV PRE-CLOSING COVENANTS................................................................       29

        4.1    OPERATION OF BUSINESSES..........................................................       29
        4.2    ACCESS TO INFORMATION............................................................       31
        4.3    NOTICE OF DEVELOPMENTS...........................................................       31
        4.4    NO SOLICITATION..................................................................       31
        4.5    REGULATORY FILINGS...............................................................       32
        4.6    ASSOCIATION APPROVALS............................................................       32
        4.7    REASONABLE EFFORTS...............................................................       32
        4.8    NOTICES AND CONSENTS.............................................................       33

ARTICLE V OTHER AGREEMENTS AND COVENANTS........................................................       33

        5.1    CONFIDENTIALITY..................................................................       33
        5.2    ADDITIONAL DOCUMENTS AND FURTHER ASSURANCES......................................       33
        5.3    COLLECTION OF SELLERS' RECEIVABLES...............................................       33
        5.4    RETAINED EMPLOYEES; BENEFITS.....................................................       34
        5.5    NONCOMPETITION...................................................................       36
        5.6    EXTENSION........................................................................       36
        5.7    INJUNCTIVE RELIEF................................................................       36
        5.8    LIMITATIONS......................................................................       37
        5.9    REASONABLE COOPERATION OF SELLER.................................................       37
        5.10   PRACTICE FACILITY SIGNATURE......................................................       37

ARTICLE VI CONDITIONS TO THE CLOSING............................................................       37

        6.1    CONDITIONS TO BUYER'S OBLIGATION TO CLOSE........................................       37
        6.2    CONDITIONS TO SELLERS' OBLIGATIONS...............................................       39

ARTICLE VII INDEMNIFICATION.....................................................................       40

        7.1    SURVIVAL OF REPRESENTATIONS AND WARRANTIES.......................................       40
        7.2    INDEMNIFICATION BY SELLER........................................................       41
        7.3    INDEMNIFICATION BY BUYER.........................................................       41
        7.4    INDEMNIFICATION PROCEDURES.......................................................       42

ARTICLE VIII TERMINATION........................................................................       43

        8.1    TERMINATION OF THE AGREEMENT.....................................................       43
        8.2    EFFECT OF TERMINATION............................................................       44
</TABLE>


                                     -iii-


<PAGE>   4
<TABLE>
<S>                                                                                                   <C>
ARTICLE IX MISCELLANEOUS........................................................................       44

        9.1    PRESS RELEASES AND PUBLIC ANNOUNCEMENTS..........................................       44
        9.2    NO THIRD-PARTY BENEFICIARIES.....................................................       45
        9.3    ENTIRE AGREEMENTS AND MODIFICATION...............................................       45
        9.4    AMENDMENT........................................................................       45
        9.5    WAIVERS..........................................................................       45
        9.6    SPECIFIC PERFORMANCE.............................................................       45
        9.7    SUCCESSORS AND ASSIGNS...........................................................       45
        9.8    COUNTERPARTS.....................................................................       46
        9.9    HEADINGS.........................................................................       46
        9.10   NOTICES..........................................................................       46
        9.11   GOVERNING LAW....................................................................       47
        9.12   ARBITRATION......................................................................       47
        9.13   SEVERABILITY.....................................................................       48
        9.14   EXPENSES.........................................................................       48
        9.15   CONSTRUCTION.....................................................................       48
        9.16   SELLER DISCLOSURE LETTER.........................................................       48
        9.17   ATTORNEYS' FEES..................................................................       48
        9.18   FURTHER ASSURANCES...............................................................       49
        9.19   TIME OF ESSENCE..................................................................       49
</TABLE>


                                      -iv-


<PAGE>   5
                                    EXHIBITS


<TABLE>
<S>                      <C>
Exhibit A                Affidavit of Funding
Exhibit B-1              Form of Seller Non-Competition Agreement
Exhibit B-2              List of Persons signing Non-Competition Agreements
Exhibit C                Form of Seller Counsel Legal Opinion
Exhibit D                Transition Services Agreement
Exhibit E                Sublease Agreement for 351 Elliott Avenue and First Addendum
                         to Sublease
</TABLE>

                                    SCHEDULES

<TABLE>
<S>                      <C>
Schedule 1.1             Purchased Assets Schedule
Schedule 1.3(b)          Prorations, Payment and Adjustments Schedule
Schedule 5.3             Sellers' Receivables
Schedule 6.1(f)          Necessary Consents
Schedule 6.1(s)          Liens to be Released
</TABLE>


                                      -v-


<PAGE>   6
                             INDEX OF DEFINED TERMS


<TABLE>
<CAPTION>
TERM                                  PAGE DEFINED
----                                  ------------
<S>                                   <C>
Acquisition Proposal.......................32
Affidavit of Funding.......................29
Affiliate..............................11, 19
Affiliates.................................11
Agreement...................................1
Aircraft....................................1
Aircraft Exclusion Elections................3
Aircraft Purchase Agreement................39
Ancillary Agreements........................9
Association Approvals......................10
Associations.............................3, 4
Assumed Contracts...........................2
Assumed Leases..............................2
Assumed Liabilities.........................4
Assumed Obligations.........................4
Basket Amount..............................41
Business Facility..........................24
Businesses..................................1
Buyer.......................................1
Buyer Disclosure Letter....................27
Buyer Indemnified Persons..................41
Cash Consideration..........................5
Closing.....................................6
Closing Date.............................4, 6
COBRA......................................19
Code........................................5
Collective Bargaining Agreement............12
Contract...................................11
Copyrights.................................15
Delayed Prorations..........................5
Disposal Site..............................24
DOL........................................20
Employee...................................20
Employment Agreement.......................20
Environmental Laws.........................24
Environmental Permit.......................25
ERISA......................................20
Excluded Assets.............................3
Excluded Contracts..........................4
Excluded Liabilities........................4
FICA.......................................13
Financial Schedules........................10
FMLA.......................................20
FUTA.......................................13
GAAP........................................5
Governmental Authority.....................24
Governmental Entity.........................9
Hazardous Material.........................24
Hazardous Materials Activity...............25
HSR Act....................................10
Intellectual Property......................11
Intellectual Property Rights...............15
IRS........................................20
Liabilities.................................4
Liens.......................................1
Loss.......................................41
Losses.....................................41
Most Recent Balance Sheet..................10
Most Recent Statement of Operations........10
Multiemployer Plan.........................20
NBA.........................................3
Parties.....................................1
Party.......................................1
Patents....................................15
Permits....................................27
Permitted Liens............................14
Practice Facility..........................37
PTO........................................15
Purchase Price..............................5
Purchased Assets.........................2, 3
Restricted Period..........................36
Seller......................................1
Seller Disclosure Letter....................8
Seller Employee Plan.......................19
Seller Indemnified Persons.................41
Seller Intellectual Property...............11
Seller Registered Intellectual
     Property Rights ......................15
Sellers.....................................1
Tax........................................12
</TABLE>


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<PAGE>   7

<TABLE>
<S>                                       <C>
Tax Returns................................13
Taxes......................................12
Teams.......................................1
Technology.................................14
Title IV Plan..............................20
Trademarks.................................15
Transfer Taxes..............................6
WNBA........................................3
</TABLE>


<PAGE>   8
                            ASSET PURCHASE AGREEMENT

        THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") is made and entered
into as of January 11, 2001, by and among The Basketball Club of Seattle, LLC, a
Washington limited liability company ("BUYER"), The Ackerley Group, Inc., a
Delaware corporation ("ACKERLEY"), Ackerley Media Group, Inc. (formerly AK
Media Group, Inc.), a Washington corporation ("MEDIA"), SSI, Inc., a Washington
corporation ("SSI"), and T.C. Aviation, Inc., an Oregon corporation
("Aviation"). Ackerley, Media, SSI and Aviation are sometimes referred to herein
collectively as the "SELLERS," and each individually as a "SELLER." Buyer and
Sellers are sometimes referred to herein individually as a "PARTY" and
collectively as the "PARTIES."


                                    RECITALS

        A. Ackerley is a corporation engaged in multiple businesses that
directly, and through its subsidiaries Media, SSI and Aviation, owns certain
assets related to (1) the business of managing and operating a professional
men's basketball team and a professional women's basketball team under
franchises granted by the National Basketball Association and the Women's
National Basketball Association, respectively, (2) certain sports-related
merchandising, advertising and media businesses and (3) certain other
businesses.

        B. Sellers desire to sell to Buyer, and Buyer desires to purchase from
Sellers, on the terms and subject to the conditions set forth herein, those
assets of Sellers described herein related to such professional sports teams,
other sports-related businesses and additional businesses, and Sellers desire
Buyer to assume certain of Sellers' obligations under certain specified
agreements that are included among the purchased assets, which Buyer would agree
to assume on the terms and subject to the conditions set forth herein.

        C. The Boards of Directors of each of Buyer and each Seller believes it
is in the best interests of its respective organization and owners that the
transactions contemplated hereby be consummated and, in furtherance thereof, has
approved this Agreement and the transactions contemplated hereby.

        D. Buyer and Sellers desire to make certain representations, warranties,
covenants and other agreements in connection with the transactions contemplated
hereby.

        NOW, THEREFORE, in consideration of the covenants and representations
set forth herein, and for other good and valuable consideration, the Parties
agree as follows:


                                      -1-


<PAGE>   9
                                    ARTICLE I
                           PURCHASE AND SALE OF ASSETS

        1.1 PURCHASE AND SALE OF ASSETS; THE BUSINESSES. Upon the terms and
subject to the conditions set forth herein, at the Closing (as defined in
Section 1.5(a) hereof), Buyer (and with respect to the Aircraft (as defined
below), Buyer's nominee Fastbreak Aviation Inc., an Oregon corporation) shall
purchase from Sellers, and Sellers shall irrevocably sell, convey, transfer,
assign and deliver to Buyer, the Purchased Assets (as defined in Section 1.1(b)
hereof), free and clear of all liens, pledges, charges, claims, restrictions on
transfer, mortgages, security interests or other encumbrances of any sort
(collectively, "LIENS"), except as expressly provided herein. Notwithstanding
the foregoing, at Buyer's request and expense, in lieu of transferring some of
the Transferred Assets to Buyer directly as aforesaid, Sellers shall (a)
transfer such Purchased Assets as Buyer may request into one or more newly
formed entities (specifically and exclusively for this purpose) that are
wholly-owned by one or more Sellers, and (b) irrevocably sell, convey, transfer,
assign and deliver to Buyer 100% of the equity of such entities, free and clear
of all liens.

               (a) Definition of Businesses of Sellers. As used herein, the
"BUSINESSES" shall mean the following operations and businesses of Sellers:

                      (i) The operations of the Full House Sports and
Entertainment Group Division of Ackerley;

                      (ii) The operations of Media, specifically including
operations of the Seattle SuperSonics men's professional basketball team and the
Seattle Storm women's professional basketball team (collectively, the "TEAMS");

                      (iii) The operations relating to use and operation of the
Seattle SuperSonics Boeing 727 aircraft (the "AIRCRAFT");

                      (iv) The operations of certain additional sports-related
media businesses, not including radio stations, as identified in contracts
assumed by Buyer pursuant to this Agreement, including but not limited to the
Contract for Professional Services, dated as of December 14, 1999, between the
City of Tacoma and Full House Sports and Entertainment, Inc.;

                      (v) The operation of concessions in the Key Arena and the
sale and marketing of sports merchandise as currently conducted by any of the
Sellers;

                      (vi) The Sellers' interests in the operations of joint
ventures, partnerships, and other business entities, if any, related to or
associated with the Teams; and

                      (vii) All other operations related to or associated with
the professional sports franchises not separately listed above.


                                      -1-


<PAGE>   10
               (b) Definition of Purchased Assets. For all purposes of and under
this Agreement, the term "PURCHASED ASSETS" shall mean, refer to and include all
of Sellers' right, title and interest in and to all tangible and intangible
assets, properties and rights which are used in, held for use in, intended to be
used in, necessary to or primarily relating to the Businesses, including,
without limitation, the following categorical listing of assets, subject to the
prorations described in Section 1.3(b), but specifically excluding the Excluded
Assets (as defined in Section 1.1(c) hereof):

                      (i) all real property, and any leaseholds, sub-leaseholds,
licenses and occupancy agreements therein (the "ASSUMED LEASES"), buildings,
structures, improvements, fixtures, furnishings and other fittings thereon, and
easements, rights-of-way, and other appurtenances thereto used in, held for use
in, intended to be used in, necessary to or primarily relating to any of the
Businesses, as described in Section (b)(i) of SCHEDULE 1.1 hereto;

                      (ii) all tangible personal property (whether or not
located on Sellers' premises), including, without limitation, all machinery,
equipment and tools, furniture and furnishings, computers and computer supplies,
telephone, telecommunications, networking and Internet equipment and
infrastructure, office materials and supplies, inventories of any kind or
nature, raw materials and supplies, manufactured and purchased goods, and all
goods in process and finished goods used in, held for use in, intended to be
used in, necessary to or primarily relating to any of the Businesses, as
described in Section (b)(ii) of SCHEDULE 1.1 hereto;

                      (iii) all books, records (other than records relating to
Taxes (as defined in Section 2.9)), ledgers, files, documents, correspondence,
customer, supplier, advertiser, circulation and other lists (including
subscribers), invoices and sales data, creative, advertising and other
promotional materials, studies, reports, and other printed or written materials
or data used in, held for use in, intended to be used in, necessary to or
primarily relating to any of the Businesses, as described in Section (b)(iii) of
SCHEDULE 1.1 hereto;

                      (iv) all Technology and Intellectual Property Rights (each
as defined in Section 2.11), goodwill associated therewith, licenses and
sublicenses granted and obtained with respect thereto, rights thereunder,
remedies against infringements thereof, and rights to protection of interests
therein under the applicable laws of all jurisdictions, in each case used in,
held for use in, intended to be used in, necessary to or primarily relating to
any of the Businesses, as described in Section (iv) of SCHEDULE 1.1 hereto;

                      (v) all rights under the contracts, indentures, mortgages,
instruments, Liens, licenses, guaranties or other agreements of Sellers set
forth in Section (b)(v) of SCHEDULE 1.1 hereto (the "ASSUMED CONTRACTS");

                      (vi) all rights under all permits (as defined in Section
2.10), authorizations, orders, registrations, certificates, variances,
approvals, consents and franchises or any pending applications of Sellers used
in, held for use in, intended to be used in, necessary to or primarily relating
to any of the Businesses, as described on Section (b)(vi) of SCHEDULE 1.1
hereto;


                                      -2-


<PAGE>   11
                      (vii) all claims, actions, deposits, prepayments, refunds,
causes of action, choses in action, rights of recovery, rights of set off, and
rights of recoupment of any kind or character which have arisen from the
operation of the Businesses or primarily relating to any of the Businesses, as
described in Section (b)(vii) of SCHEDULE 1.1 hereto;

                      (viii) all assignable insurance policies, if any,
including any such insurance policies through the National Basketball
Association and the Womens National Basketball Association (the "NBA" and
"WNBA," respectively, and the "ASSOCIATIONS," collectively); as described in
Section (viii) of SCHEDULE 1.1 hereto,;

                      (ix) all insurance proceeds and rights thereto derived
from any loss, damage or destruction of or to any of the other Purchased Assets,
but only to the extent not utilized prior to the Closing to repair or replace
the lost, damaged or destroyed items, as described in Section (a)(ix) of
SCHEDULE 1.1 hereto; and

                      (x) the goodwill associated with the Businesses.

        Notwithstanding the foregoing, Buyer may in its sole discretion elect
(the "AIRCRAFT EXCLUSION ELECTION" ) to exclude from the Purchased Assets the
Aircraft and any Purchased Assets related to the operation of the Aircraft;
provided that any such election shall be made by written notice to Sellers
within fourteen (14) days following the date hereof. In consideration of the
option granted to Buyer to exclude the Aircraft from the Purchased Assets, Buyer
shall pay Seller upon termination of the Aircraft Use Agreement a non-refundable
payment in an amount to be mutually agreed upon by Buyer and Sellers.

               (c) Definition of Excluded Assets. Notwithstanding anything to
the contrary set forth in this Section 1.1 or elsewhere in this Agreement, the
term "PURCHASED ASSETS" shall not mean, refer to or include the following
(collectively, the "EXCLUDED ASSETS"):

                      (i) all cash, cash equivalents or similar type investments
of Sellers, such as certificates of deposit, Treasury bills and other marketable
securities on hand and/or in banks, and unearned insurance premiums and security
deposits, excluding, however, (A) such cash, cash equivalents, or investments,
if any, as are left in accounts at Closing for the benefit of Buyer in
connection with and as a result of Closing prorations pursuant to Section
1.3(b); and (B) insurance proceeds to the extent such insurance proceeds have
not been utilized prior to closing in the manner contemplated in Section
1.1(b)(ix);

                      (ii) all accounts receivable of Sellers accrued prior to
the Closing Date listed on Schedule 5.3 hereto;

                      (iii) all supplies and items of tangible property consumed
or disposed of in the ordinary course of the Businesses and consistent with
prior practice between the date of this Agreement and the Closing Date;


                                      -3-


<PAGE>   12
                      (iv) all rights of Sellers to enforce (A) the obligations
of Buyer to pay, perform or discharge the Assumed Obligations (as defined in
Section 1.2(b)), and (B) all other obligations of Buyer under or in connection
with, as well as all other rights of Sellers, under or in connection with, this
Agreement;

                      (v) any and all rights necessary to defend against any and
all debts, liabilities and obligations retained by Sellers, including, but not
limited to, rights of setoff which Sellers may have with respect to any of such
debts, liabilities and obligations;

                      (vi) any and all claims or causes of action against third
parties to the extent the same may have accrued in favor of Sellers prior to the
Closing Date or which may have arisen or may arise out of any one or more
events, conditions or circumstances prior to the Closing Date;

                      (vii) all rights and obligations under the contracts,
indentures, mortgages, instruments, Liens, licenses, guaranties or other
agreements of Sellers set forth in Section (c)(vii) of SCHEDULE 1.1 hereto (the
"EXCLUDED CONTRACTS");

                      (viii) revenue and expense items prorated in favor of the
Sellers pursuant to Section 1.3(b), to the extent so prorated; and

                      (ix) all assets set forth on Section (c)(viii) of SCHEDULE
1.1 hereto.

        1.2 ASSUMPTION OF OBLIGATIONS.

               (a) Assumed Obligations. Effective as of the Closing Date (as
such term is defined in Section 1.5(a) below), Buyer hereby agrees to assume,
pay, perform, discharge and otherwise satisfy promptly when due, only the
following liabilities and obligations of the Sellers (the "ASSUMED
OBLIGATIONS"):

                      (i) Subject to the prorations provided for in Section
1.3(b), the liabilities and obligations which arise on or after the Closing Date
pursuant to the terms of the Assumed Contracts and the Assumed Leases;

                      (ii) Subject to the prorations provided for in Section
1.3(b), the liabilities and obligations which arise on or after the Closing as a
result of Buyer's operation of the Businesses and ownership of the Purchased
Assets on and following the Closing, including without limitation liabilities
and obligations arising as a result of the application of the [CONSTITUTION AND
BYLAWS] of the Associations.

               (b) Except as specifically provided in Section 1.2(a) of this
Agreement, Buyer shall not assume any debts, liabilities, Taxes or obligations
of any of the Sellers, and all debts, liabilities, Taxes and obligations of the
Sellers not so assumed are herein referred to as the "EXCLUDED LIABILITIES".


                                      -4-


<PAGE>   13
        1.3 CONSIDERATION FOR PURCHASED ASSETS.

               (a) Consideration. On the terms and subject to the conditions set
forth in this Agreement, as full payment for the transfer of the Purchased
Assets by Sellers to Buyer and for the noncompetition covenant in Section 5.5,
at the Closing, (i) Buyer shall deliver to Sellers by wire transfer of
immediately available funds the amount of US $200 million plus the estimated
balance due Seller or minus the estimated balance due Buyer, as applicable, as
calculated as of the Closing and noted on SCHEDULE 1.3(b) hereto (the "CASH
CONSIDERATION") and (ii) Buyer shall assume all of the Assumed Obligations
pursuant to Section 1.2 hereof (the Cash Consideration and such assumption,
collectively, the "PURCHASE PRICE").

               (b) Certain Closing and Post-Closing Prorations, Payments and
Adjustments. All items listed on the Schedule of Prorations, SCHEDULE 1.3(b)
hereto, and such other items as the Parties shall agree upon, shall be prorated
between Buyer and the Seller, according to generally accepted accounting
principles ("GAAP") applied on a consistent basis with the Financial Schedules
except as otherwise set forth in SCHEDULE 1.3(b), as of Midnight on the day
immediately preceding the Closing Date, and the net amount resulting from the
foregoing in favor of Buyer or the Sellers, as the case may be, shall then be
paid to Buyer or the Sellers, as the case may be at the Closing. If all the
apportionments set forth above are not accomplished at the Closing ("DELAYED
PRORATIONS"), then, as soon as practicable thereafter and no less often than on
a quarterly basis, representatives of the Sellers and Buyer shall examine all
appropriate books and records in order to make the determination of said
apportionments. Payments in respect thereof shall be made within ten (10) days
after each such determination, provided that if payments with respect to real or
personal property taxes are based in whole or in part on the previous year's
taxes, there shall be a later adjustment to reflect the current year's taxes
when the bills are finally rendered.

               (c) Prorations and Adjustments Disputes. In the event of any
dispute between the parties as to prorations or adjustments under this Section
1.3(b) the amounts not in dispute shall nonetheless be paid and adjusted for at
the Closing (or, in the case of Delayed Prorations, as soon as practicable after
a determination of such proration may be made) and such disputes shall be
subject to arbitration pursuant to Section 9.12 hereof.

               (d) Allocation of Purchase Price. The Purchase Price shall be
allocated in its entirety among the Businesses and to the Purchased Assets and
the noncompetition covenant in Section 5.5 as determined by Buyer within one
hundred eighty (180) days after Closing (the "ALLOCATION"); provided, further
that Buyer shall provide Sellers a written copy of the Allocation; whereupon
Sellers shall have ten (10) days to provide written comments or recommendations
with respect thereto and Buyer shall consider in good faith all such comments
and recommendations. After consideration of Sellers' comments and
recommendations, and within ten (10) days of receipt thereof, Buyer shall
prepare a final Allocation which shall be provided to Sellers. Sellers and Buyer
shall comply with the applicable information reporting requirements of Section
1060 of the Internal Revenue Code of 1986, as amended (the "CODE") and the
Treasury regulations promulgated thereunder and shall file all information and
Tax returns (and any amendments thereto) in a manner


                                      -5-


<PAGE>   14
consistent with the final Allocation. If, contrary to the intent of the parties
hereto as expressed in this Section 1.3(e), any taxing authority makes or
proposes an allocation different from that determined in accordance with the
terms of this Section 1.3(e), Sellers and Buyer shall cooperate with each other
in good faith to contest such taxing authority's allocation (or proposed
allocation), provided, however, that after consultation with the party adversely
affected by such allocation (or proposed allocation), another party hereto may
file such protective claims or returns as may reasonably be required to protect
its interests.

        1.4 SALES AND USE TAXES. Buyer shall bear and pay any and all sales and
use taxes provided for in Revised Code of Washington Chapter 82.08 arising out
of the transfer of the Purchased Assets to Buyer pursuant hereto (the "BUYER
TRANSFER TAXES"). To the extent permitted by applicable law, Sellers shall
cooperate fully with Buyer in minimizing such Buyer Transfer Taxes. To the
extent any Tax authority provides notice of an audit of the Buyer Transfer
Taxes, Buyer shall promptly assume responsibility for such audit and shall bear
and pay when due any additional Buyer Transfer Taxes (plus interest and
penalties determined to be due thereon). Seller shall bear and pay any and all
transfer taxes and similar taxes arising out of the transfer of real property to
Buyer pursuant hereto.

        1.5 CLOSING.

               (a) Closing Place, Time and Date. Unless this Agreement is
earlier terminated pursuant to Section 8.1 hereof, the closing of the
transactions contemplated by this Agreement (the "CLOSING") shall be held at the
offices of Wilson Sonsini Goodrich & Rosati, Professional Corporation, 5300
Carillon Point, Kirkland, WA 98033, at 10:00 a.m. on the later of (i) February
15, 2001 or (ii) the date which is five (5) business days following the
satisfaction or, if permitted pursuant to the terms of Article VI hereof, waiver
of the conditions to Closing set forth in Article VI hereof, or at such other
place and such other time and/or date as the parties hereto shall mutually agree
(the actual date on which the Closing shall occur being referred to herein as
the "CLOSING DATE").

               (b) Closing Deliveries.

                      (i) At the Closing, Buyer shall deliver, or cause to be
delivered, to Sellers the following, dated as of the Closing Date and executed
for and on behalf of Buyer by a duly authorized officer thereof:

                           (1) the Cash Consideration;

                           (2) one or more instruments of assignment and
assumption, in customary form and substance reasonably satisfactory to Buyer and
Sellers and their respective counsel; and

                           (3) any and all other instruments, certificates and
agreements contemplated by Article VI hereof or as Sellers may reasonably
request in order to effectively make


                                      -6-


<PAGE>   15
Buyer responsible for all Assumed Obligations pursuant hereto to the fullest
extent permitted by applicable law.

                      (ii) At the Closing, Sellers shall deliver, or cause to be
delivered, to Buyer the following, dated as of the Closing Date and executed for
and on behalf of Sellers by a duly authorized officer thereof:

                           (1) a bill of sale, in customary form and substance
reasonably satisfactory to Buyer and Sellers and their respective counsel;

                           (2) one or more instruments of assumption, in
customary form and substance reasonably satisfactory to Buyer and Sellers and
their respective counsel;

                           (3) an instrument of assignment of copyrights and
trademarks, in customary form and substance reasonably satisfactory to Buyer and
Sellers and their respective counsel;

                           (4) an instrument of transfer of the lease of the
Aircraft, in customary form and substance reasonably satisfactory to Buyer and
Sellers and their respective counsel; and

                           (5) any and all other instruments, certificates and
agreements contemplated by Article VI hereof or as Buyer may reasonably request
in order to effectively transfer to Buyer all of the Purchased Assets pursuant
hereto to the fullest extent permitted by applicable law.

               (c) Closing. The effective date of the transfer of the Purchased
Assets from Sellers to Buyer pursuant hereto shall be 12:01 a.m. of the Closing
Date. From and after the Closing, the Businesses of Sellers shall be conducted
by Buyer and the Purchased Assets shall by held for the account and benefit, and
at the risk, of Buyer.

        1.6 NONTRANSFERABLE ASSETS. To the extent that any Purchased Asset or
Assumed Obligation to be sold, conveyed, assigned, transferred, delivered or
assumed to or by Buyer pursuant hereto, or any claim, right or benefit arising
thereunder or resulting therefrom, is not capable of being sold, conveyed,
assigned, transferred or delivered without the approval, consent or waiver of
the issuer thereof or the other party thereto, or any third person (including a
government or governmental unit), or if such sale, conveyance, assignment,
transfer or delivery or attempted sale, conveyance, assignment, transfer or
delivery would constitute a breach or termination right thereof or a violation
of any law, decree, order, regulation or other governmental edict, except as
expressly otherwise provided herein, this Agreement shall not constitute a sale,
conveyance, assignment, transfer or delivery thereof, or an attempted sale,
conveyance, assignment, transfer or delivery thereof absent such approvals,
consents or waivers. If any such approval, consent or waiver shall not be
obtained, or if an attempted assignment of any such Purchased Asset or the
assumption of any Assumed Liability by Buyer would be ineffective so that Buyer
would not in fact receive all such Purchased Assets or assume all such Assumed
Obligations pursuant hereto, Sellers and Buyer shall cooperate in a mutually
agreeable arrangement under which Buyer would obtain the benefits and assume the


                                      -7-


<PAGE>   16
obligations of such Purchased Assets and Assumed Obligations in accordance with
this Agreement, including subcontracting, sub-licensing, or sub-leasing to
Buyer, or under which Seller, at Buyer's expense, would enforce for the benefit
of Buyer, with Buyer assuming all of Seller's obligations thereunder, any and
all rights of Sellers against a third party thereto. From and after the Closing,
Sellers shall promptly pay to Buyer when received all monies received by Sellers
under any Purchased Asset or any claim or right or any benefit arising
thereunder, except to the extent the same represents an Excluded Asset
hereunder, and Buyer shall promptly pay, perform and discharge when due all
Assumed Obligations; and Buyer shall indemnify and hold Sellers harmless from
any Claims associated with any such Purchased Asset, Assumed Obligation or such
arrangement. The failure of Sellers to obtain any third party consent hereunder
shall not affect the Purchase Price if the Closing shall occur.

        1.7 TAKING OF NECESSARY ACTION, FURTHER ACTION. From time to time after
the Closing Date, at the request of either Party hereto and at the expense of
such Party, the Parties hereto shall execute and deliver such other instruments
of sale, transfer, conveyance, assignment and confirmation and take such action
as may be reasonably necessary to transfer, convey and assign to Buyer, and to
confirm Buyer's title to or interest in the Purchased Assets, to put Buyer in
actual possession and operating control thereof and to assist Buyer in
exercising all rights with respect thereto. The Sellers hereby constitute and
appoint Buyer and its successors and assigns as its true and lawful attorney in
fact in connection with the transactions contemplated by this instrument, with
full power of substitution, in the name and stead of the Sellers but on behalf
of and for the benefit of the Buyer and its successors and assigns, to demand
and receive any and all of the assets, properties, rights and businesses hereby
conveyed, assigned, and transferred or intended so to be, and to give receipt
and releases for and in respect of the same and any part thereof, and from time
to time to institute and prosecute, in the name of the Sellers or otherwise, for
the benefit of the Buyer or its successors and assigns, proceedings at law, in
equity, or otherwise, which is proper in order to collect or reduce to
possession or endorse any of the Purchased Assets and to do all acts and things
in relation to the Purchased Assets which the Buyer or its successors or assigns
reasonably deem desirable.

                                   ARTICLE II
                    REPRESENTATIONS AND WARRANTIES OF SELLERS

        Subject to such exceptions as are specifically disclosed in the
disclosure letter supplied by Sellers to Buyer (the "SELLER DISCLOSURE LETTER"),
Sellers hereby jointly and severally represent and warrant to Buyer that the
statements contained in this Article II are true and correct as of the date of
this Agreement and will be true and correct as of the Closing (as though made at
the Closing ); provided, that the representations and warranties made as of a
specified date will be true and correct as of such date. The Seller Disclosure
Letter may be supplemented by Sellers in writing after the date hereof and prior
to the Closing Date (a "Seller Disclosure Supplement") only with respect to
matters that have occurred during such period; provided, that any such Seller
Disclosure Supplement is delivered to Buyer at least 5 days prior to the Closing
Date and Sellers provide to Buyer any information regarding such disclosed
matters as Buyer may request and which is in Sellers'


                                      -8-


<PAGE>   17
possession or known to Sellers; and provided further, that no Seller Disclosure
Supplement shall be effective with respect to Section 6.1(a).

        2.1 ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. Each of the
Sellers is a corporation duly organized, validly existing, and in good standing
under the laws of its respective state of incorporation. Each of the Sellers is
duly authorized to conduct business and is in good standing under the laws of
each other jurisdiction where such qualification is required and in which the
failure to so qualify is reasonably likely to have a material adverse effect on
Sellers. Each of the Sellers has full corporate power and authority to carry on
the businesses in which it is engaged and to own and use the properties owned
and used by it.

        2.2 AUTHORIZATION. Each of the Sellers has full power and authority to
execute and deliver this Agreement and all agreements and instruments delivered
pursuant hereto (the "ANCILLARY AGREEMENTS") to which each of them is a party,
and, subject to receipt of requisite approval of its stockholders, to consummate
the transactions contemplated hereunder and to perform its respective
obligations hereunder and thereunder and no other proceedings on the part of any
of the Sellers are necessary to authorize the execution, delivery and
performance of this Agreement and the Ancillary Agreements to which any of the
Sellers is a party. This Agreement and the Ancillary Agreements to which any of
the Sellers is a party and the transactions contemplated hereby and thereby have
been approved by Sellers' Boards of Directors. This Agreement and the Ancillary
Agreements to which any of the Sellers is a party constitute the valid and
legally binding obligations of the Sellers that are parties hereto and thereto,
enforceable against such Sellers in accordance with their respective terms and
conditions.

        2.3 NO CONFLICTS. Neither the execution and the delivery of this
Agreement by Sellers nor the consummation of the transactions contemplated
hereby will (A) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any foreign,
United States, state, local or municipal government, governmental agency, or
court ("GOVERNMENTAL ENTITY") to which any of the Sellers is subject, (B)
violate or conflict with any provision of the CERTIFICATE OF INCORPORATION or
bylaws of any of the Sellers, or (C) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice or
consent under, any agreement, contract, lease, license, instrument, franchise,
permit, mortgage, indenture or other arrangement to which any of the Sellers is
a party or by which any of them is bound or to which any of their assets are
subject (or result in the imposition of any Lien upon any of their respective
assets). Sellers have not granted, and there is not outstanding, any option,
right, agreement or other obligation pursuant to which any person could claim a
right to acquire in any way all or part of, or any interest in, any of the
Businesses or the Purchased Assets, other than any which might arise in the
ordinary course of the business as a result of a sale or agreement to sell the
Businesses' products or services.

        2.4 CONSENTS. No consent, waiver, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Entity or any
third party, including a party to any agreement with any of the Sellers, is
required by or with respect to any of the Sellers in connection


                                      -9-


<PAGE>   18
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for (i) such consents, waivers,
approvals, orders, authorizations, registrations, declarations and filings as
are required under applicable rules and regulations of the NBA or the WNBA
("ASSOCIATION APPROVALS") which are set forth in Section 2.4 to the Seller
Disclosure Letter, and (ii) any applicable filings required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
ACT").

        2.5 FINANCIAL STATEMENTS. Section 2.5 of Seller Disclosure Letter
contains the following financial schedules (collectively the "FINANCIAL
SCHEDULES"): unaudited balance sheet as of September 30, 2000 and the unaudited
statements of revenue and operating expenses for the fiscal years ended
September 30, 1999 and 2000 for the Businesses and an unaudited balance sheet as
of November 30, 2000 (the "MOST RECENT BALANCE SHEET") and an unaudited
statement of revenue and operating expenses for the two months ended November
30, 2000 (the "MOST RECENT STATEMENT OF OPERATIONS"). The Financial Schedules
exclude a statement of cash flow and any footnote disclosures. The Financial
Schedules also exclude certain non-cash expenses such as depreciation and
amortization expense and other expenses such as interest expense and income tax
expense. Additionally, the balance sheets exclude the following:

                1.      Assets and long-term indebtedness for the Seattle
Supersonic team airplane.

                2.      Capital lease obligation for certain assets located in
Key Arena.

                3.      Any income tax assets or liabilities.

        Subsequent to the preparation of the Most Recent Financial Schedules,
the following items came to our attention and will be reflected in the December
31, 2000 Financial Schedules for the Businesses:

                1.      A performance settlement pertaining to a sponsorship
contract. This additional expense and liability is estimated to be $200,000.

                2.      Additional compensation expense pertaining to a player's
guaranteed employment contract. This player is no longer associated with the
Seattle Supersonics. This additional expense is estimated to be $800,000.

        The Financial Schedules, except for the items noted above, have been
prepared in accordance with GAAP in all material respects and on a consistent
basis. The Most Recent Financial Schedules are subject to normal year-end
adjustments. Except as noted above, the Financial Schedules reflect, as of the
dates shown thereon, all items of income and expenses, and all assets,
liabilities and accruals of the Businesses required to be reflected therein.

        2.6 UNDISCLOSED LIABILITIES. To Seller's knowledge, Sellers have no
liability, indebtedness, obligation, expense, claim, deficiency, guaranty or
endorsement of any type (whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for taxes) relating to
the


                                      -10-


<PAGE>   19
Businesses or the Purchased Assets, except for those which individually or in
the aggregate (i) are reflected on the Most Recent Balance Sheet or (ii) have
arisen after the Most Recent Fiscal Period End in the ordinary course of
business.

        2.7 EVENTS SUBSEQUENT TO MOST RECENT FISCAL PERIOD END. Subject to
Section 3.7, since the Most Recent Fiscal Period End, there has not been any
material adverse change in the business, operations, assets (including
intangible assets), liabilities (contingent or otherwise), results of operations
or financial performance, or condition (financial or otherwise) of the
Businesses. Without limiting the generality of the foregoing, since that date:

               (a) None of the Sellers has sold, leased, transferred, or
assigned any assets or properties, tangible or intangible, used in or relating
to the Businesses outside the ordinary course of business;

               (b) None of the Sellers has entered into, assumed or become bound
under or obligated by any agreement, contract, lease or commitment (collectively
a "CONTRACT") or extended or modified the terms of any Contract which relates to
or involves any of the Businesses or the Purchased Assets and which (i) involves
the payment of greater than $50,000 per annum or which extends for more than one
(1) year, (ii) involves any payment or obligation to any other person or entity
that directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with any Seller ("AFFILIATE,"
collectively "AFFILIATES") other than in the ordinary course of business, (iii)
involves the sale of any asset with a sale price of more than $50,000, or (iv)
involves any license of any Seller Intellectual Property;

               (c) no party (including any of the Sellers) has accelerated,
terminated, made modifications to, or canceled any agreement, contract, lease,
or license relating to any of the Businesses or the Purchased Assets and none of
the Sellers has modified, canceled or waived or settled any debts or claims held
by them, outside the ordinary course of business, or waived or settled any
rights or claims of a substantial value, whether or not in the ordinary course
of business;

               (d) none of the Purchased Assets has become subject to any Lien;

               (e) Sellers have not made any capital expenditures relating to
any of the Businesses or the Purchased Assets except in the ordinary course of
business and not exceeding $50,000 in the aggregate of all such capital
expenditures;

               (f) None of the Sellers has granted any license or sublicense of
any rights under or with respect to any of the Purchased Assets;

               (g) None of the Sellers has experienced any damage, destruction,
or loss (whether or not covered by insurance) to any of the Purchased Assets or
any other property relating to the Businesses in excess of $50,000 in the
aggregate of all such damage, destruction and losses;

               (h) None of the Sellers has entered into any employment contract
which is not terminable at will without significant penalty or severance payment
or collective bargaining


                                      -11-


<PAGE>   20
agreement, written or oral, or modified the terms of any existing such contract
or agreement which relates to the Businesses or their employees;

               (i) None of the Sellers has granted any increase in the base
compensation or other benefits (including, without limitation, severance
benefits) of any of the employees of the Businesses, except in the ordinary
course of business;

               (j) None of the Sellers has suffered any significant adverse
change or any threat of any significant adverse change in its relations with, or
any loss or threat of loss of, any of the major customers, distributors,
partners or suppliers of any of the Businesses;

               (k) None of the Sellers has received notice and does not have
knowledge of any actual or threatened labor trouble or strike, or any other
occurrence, event or condition of a similar character relating to any of the
Businesses;

               (l) None of the Sellers has changed any of the accounting
principles followed by it or the method of applying such principles with respect
to any of the Businesses;

               (m) None of the Sellers has entered into any transaction relating
to any of the Businesses or the Purchased Assets other than in the ordinary
course of business; and

               (n) None of the Sellers has become obligated to do any of the
foregoing.

        2.8 COMPLIANCE. To Sellers knowledge, Sellers are in material compliance
with all applicable (a) laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of
Governmental Entities; (b) rules and regulations of the Associations relating to
or affecting the Businesses or the Purchased Assets; and (c) terms of the 1999
NBA Collective Bargaining Agreement (the "COLLECTIVE BARGAINING AGREEMENT"). No
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, notice or inquiry is pending, or to the knowledge of Sellers, is
threatened against any of the Sellers or their employees or agents by any
Governmental Entity or Association alleging any failure to so comply. Sellers
have all licenses, permits, approvals, registrations, qualifications,
certificates and other governmental authorizations that are necessary for the
operations of the Businesses as they are presently conducted. There are no fines
or other penalties imposed by either of the Associations against either Team or
any of the Sellers, nor is there any reason to anticipate any such fines or
penalties.

        2.9 TAX MATTERS. For purposes of this Agreement, (i) "TAX" or,
collectively, "TAXES", means (i) any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions and
liabilities, including taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, and value added, ad valorem, transfer,
franchise, withholding, payroll, recapture, employment, excise and property
taxes, together with all interest, penalties and additions imposed with respect
to such amounts; (ii) any liability for the payment of any amounts of the type
described in clause (i) as a result of being or ceasing to be a member of an
affiliated, consolidated, combined or unitary group for any period (including,
without limitation, any liability under Treas. Reg. Section 1.1502-6 or any
comparable provision of foreign, state or local


                                      -12-


<PAGE>   21
law); and (iii) any liability for the payment of any amounts of the type
described in clause (i) or (ii) as a result of any express or implied obligation
to indemnify any other person or as a result of any obligations under any
agreements or arrangements with any other person with respect to such amounts
and including any liability for taxes of a predecessor entity.

               (a) Sellers have timely filed all information statements,
estimates, reports, returns and other documents with respect to any Taxes ("TAX
RETURNS") with respect to the Businesses or the Purchased Assets. All such Tax
Returns were correct and complete in all material respects and all Taxes owed by
Sellers (whether or not shown on any Tax Return) with respect to the Businesses
or the Purchased Assets were paid in full when due or are being contested in
good faith.

               (b) Sellers have withheld with respect to their employees
employed in the Businesses and any independent contractors providing services to
or for the benefit of the Businesses all federal and state income Taxes, Taxes
pursuant to the Federal Insurance Contribution Act ("FICA"), Taxes pursuant to
the Federal Unemployment Tax Act ("FUTA"), and other Taxes required to be
withheld.

               (c) There is no dispute, claim or proposed adjustment concerning
any Tax liability of Sellers attributable to the Businesses or the Purchased
Assets either (A) claimed or raised by any authority in writing or (B) based
upon personal contact with any agent of such authority. With respect to the
Businesses or the Purchased Assets, Sellers are not a party to nor have they
been notified that it is the subject of any pending, proposed or threatened
action, investigation, proceeding, audit, claim or assessment by or before the
Internal Revenue Service or any other governmental authority and no claim for
assessment, deficiency or collection of Taxes, or proposed assessment,
deficiency or collection from the Internal Revenue Service or any other
governmental authority which has not been satisfied, nor do Sellers have any
reason to believe that any such notice will be received in the future.

               (d) There are no Liens upon any of the Purchased Assets relating
to or attributable to Taxes, except for Permitted Liens (as defined in Section
2.10(b)). Sellers have no knowledge of any basis for the assertion of any claim
relating or attributable to Taxes which, if adversely determined, would result
in any Lien upon any property or assets of Sellers.

               (e) None of the assets of Sellers are treated as "tax-exempt use
property" within the meaning of Section 168(h) of the Code.

               (f) None of the Assumed Obligations is an obligation to make a
payment that will not be deductible under Section 280G of the Code.

               (g) Sellers shall prepare and file on a timely basis all Tax
Returns relating to the Businesses or the Purchased Assets with respect to all
periods through and including the Closing Date and shall pay or cause to be paid
when due all Taxes relating to the Businesses and the Purchased Assets for such
periods, including any interest, additions to tax or penalties thereon together
with interest on such additions to tax or penalties.


                                      -13-


<PAGE>   22
               (h) If, subsequent to the Closing Date, any liability for Taxes
relating to the Businesses or the Purchased Assets is asserted against Buyer or
the Purchased Assets with respect to any period or portion of any period ending
on or before the Closing Date, Sellers shall indemnify and hold Buyer harmless
from and against, and shall pay the full amount of such Tax liability, including
any interest, additions to tax and penalties thereon, together with interest on
such additions to tax or penalties (as well as reasonable attorney's or other
fees and disbursements of Buyer incurred in determination thereof or in
connection therewith). Sellers shall, at their sole expense and in their
reasonable discretion, either settle any Tax claim that may be the subject of
indemnification under this Section 2.9 at such time and on such terms as it
shall deem appropriate or assume the entire defense thereof.

        2.10 TITLE OF PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES; CONDITION
OF EQUIPMENT.

               (a) Sellers own no real property, which is or has been used in or
relates or has related to the operation of any of the Businesses. All current
leases (or other real property licenses or occupancy agreements of Sellers, all
such being referred to herein as "leases") are in full force and effect, are
valid and effective in accordance with their respective terms, and there is not,
under any of such leases, any existing default or event of default (or event
which with notice or lapse of time, or both, would constitute a default) on the
part of any of the Sellers and, to the knowledge of Sellers, on the part of any
other party thereto.

               (b) Sellers have good and valid title to, or, in the case of
leased properties and assets, valid leasehold interests in, all of its tangible
properties and assets, real, personal and mixed, used or held for use in the
Businesses, free and clear of any Liens, except (i) liens for taxes not yet due
and payable, (ii) mechanics', workmens', landlords' and other statutory liens
(or other liens arising by operation of law) incurred in the ordinary course of
business for amounts not in default, and (iii) such imperfections of title and
encumbrances, if any, which do not detract from the value in any material
respect or interfere with the present use of the property subject thereto or
affected thereby (such exceptions, "PERMITTED LIENs").

               (c) Each item of equipment with a value of $5,000 or more owned
or leased by Sellers and used in or held for use in the Businesses is (i)
adequate for the conduct of the Businesses as currently conducted, and (ii) in
adequate operating condition, subject to normal wear and tear taking into
account the age thereof.

               (d) The Purchased Assets listed in Sections (b)(i)-(b)(x) of
SCHEDULE 1.1 constitute all of the assets and rights used in or reasonably
necessary to the operation of the Businesses as currently conducted.

        2.11 INTELLECTUAL PROPERTY.

               (a) Definitions

                      (i) "TECHNOLOGY" means all of the following: (1) works of
authorship; (2) inventions and discoveries (whether or not patentable), (3)
proprietary and confidential


                                      -14-


<PAGE>   23
information, including trade secrets and know-how; (4) databases, data
compilations, data collections, and technical data; (5) logos, trade names,
trade dress, trademarks, service marks, World Wide Web addresses, and domain
names; (6) and all instantiations of the foregoing in any form and embodied in
any media.

                      (ii) "INTELLECTUAL PROPERTY RIGHTS" means all of the
following: (1) United States, foreign, and international patents and utility
models and applications therefor and all reissues, divisions, re-examinations,
renewals, extensions, provisionals, continuations, and continuations-in-part
thereof, ("PATENTS"); (2) trade secrets and other rights in know-how and
confidential or proprietary information; (3) copyrights, copyrights
registrations and applications therefor ("COPYRIGHTS"); (4) rights in World Wide
Web addresses and domain names and applications and registrations therefor, all
trade names, logos, common law trademarks and service marks, trademark and
service mark registrations and applications therefor and all goodwill associated
therewith throughout the world ("TRADEMARKS"); (6) personality rights, publicity
rights, moral rights, and "droit moral"; and (5) any similar, corresponding or
equivalent rights to any of the foregoing anywhere in the world.

                      (iii) "SELLER INTELLECTUAL PROPERTY" means Technology and
Intellectual Property Rights including the Seller Registered Intellectual
Property Rights (as defined below) that are owned by any of the Sellers and
which are used in, held for use in, intended to be used in, necessary to or
primarily relating to any of the Businesses.

                      (iv) "REGISTERED INTELLECTUAL PROPERTY RIGHTS" means all
United States, international, and foreign: (1) Patents, including applications
therefor; (2) registered Trademarks, applications to register Trademarks,
including intent-to-use applications, or other registrations or applications
related to Trademarks; (3) Copyrights registrations and applications to register
Copyrights; and (4) any other Technology that is the subject of an application,
certificate, filing, registration, or other document issued by, filed with, or
recorded by, any state, government, or other public legal authority at any time.

               (b) Section 2.11(b) of the Seller Disclosure Letter lists all
Registered Intellectual Property Rights owned by, filed in the name of, or
applied for, by the Sellers which are used in, held for use in, intended to be
used in, necessary to or primarily relating to any of the Businesses (the
"SELLER REGISTERED INTELLECTUAL PROPERTY RIGHTS") and lists any proceedings or
actions before any court, tribunal (including the United States Patent and
Trademark Office (the "PTO") or equivalent authority anywhere in the world)
related to any of the Seller Registered Intellectual Property Rights or Seller
Intellectual Property.

               (c) Each item of Seller Registered Intellectual Property Rights
is valid and subsisting, and all necessary registration, maintenance and renewal
fees in connection with such Seller Registered Intellectual Property Rights have
been paid and all necessary documents and certificates in connection with such
Seller Registered Intellectual Property Rights have been filed with the relevant
patent, copyright, trademark or other authorities in the United States or
foreign jurisdictions, as the case may be, for the purposes of maintaining such
Registered Intellectual Property Rights.


                                      -15-


<PAGE>   24
               (d) In each case in which the Sellers have acquired any
Technology or Intellectual Property Right from any person which is used in, held
for use in, intended to be used in, necessary to or primarily relating to any of
the Businesses, the Sellers have obtained a valid and enforceable assignment
sufficient to irrevocably transfer all rights in such Technology and the
associated Intellectual Property Rights (including the right to seek past and
future damages with respect thereto) to the Sellers. In accordance with
applicable laws and regulations, the Sellers have recorded each such assignment
of a Registered Intellectual Property Right assigned to the Sellers with the
relevant Governmental Entity, including the PTO, the U.S. Copyright Office, or
their respective equivalents in any relevant foreign jurisdiction, as the case
may be.

               (e) The Sellers have no knowledge of any facts or circumstances
that would render any Seller Intellectual Property invalid or unenforceable.
Without limiting the foregoing, Sellers know of no information, materials,
facts, or circumstances, including any information or fact that would constitute
prior art, that would render any of the Seller Registered Intellectual Property
Rights invalid or unenforceable, or would adversely effect any pending
application for any Seller Registered Intellectual Property Right. Sellers have
not misrepresented, or failed to disclose, and has no knowledge of any
misrepresentation or failure to disclose, any fact or circumstances in any
application for any Seller Registered Intellectual Property Right that would
constitute fraud or a misrepresentation with respect to such application or that
would otherwise affect the validity or enforceability of any Seller Registered
Intellectual Property Right.

               (f) Each item of Seller Intellectual Property is free and clear
of any Liens. The Sellers are the exclusive owner of all Seller Intellectual
Property.

               (g) The Sellers have taken all steps that are reasonably required
to protect the Sellers' rights in confidential information and trade secrets of
the Sellers or provided by any other person to the Sellers. Without limiting the
foregoing, the Sellers have, and enforces, a policy requiring each employee,
consultant and contractor to execute a proprietary information, confidentiality
and assignment agreement, substantially in the form attached hereto as Section
2.11(h) of the Seller Disclosure Letter, and all current and former employees,
consultants and contractors of the Sellers have executed such an agreement.

               (h) The Sellers have not transferred ownership of, or granted any
exclusive license of or right to use, or authorized the retention of any
exclusive rights to use or joint ownership of, any Technology or Intellectual
Property Right that is or was Seller Intellectual Property, to any other person.

               (i) Except as set forth on Section 2.11(j) of the Seller
Disclosure Letter, no person who has licensed Technology or Intellectual
Property Rights to the Sellers which are used in, held for use in, intended to
be used in, necessary to or primarily relating to any of the Businesses has
ownership rights or license rights to improvements made by the Sellers in such
Technology or Intellectual Property Rights.

               (j) To Sellers' knowledge, the operation of the Businesses as
they currently are conducted or are contemplated to be conducted by the Sellers
do not and will not when conducted by


                                      -16-


<PAGE>   25
Buyer in substantially the same manner following the Closing, infringe or
misappropriate any Intellectual Property Right of any person, violate any right
of any person (including any right to privacy or publicity), or constitute
unfair competition or trade practices under the laws of any jurisdiction, and
the Sellers have not received notice from any person claiming that such
operation or any act, product, technology or service (including products,
technology or services currently under development) of the Sellers infringes or
misappropriates any Intellectual Property Right of any person or constitutes
unfair competition or trade practices under the laws of any jurisdiction (nor do
the Sellers have knowledge of any basis therefor).

               (k) To the Seller's knowledge, no person is infringing or
misappropriating any Seller Intellectual Property Right.

               (l) No Seller Intellectual Property or service of the Sellers is
subject to any proceeding or outstanding decree, order, judgment or settlement
agreement or stipulation that restricts in any manner the use, transfer or
licensing thereof by the Sellers or may affect the validity, use or
enforceability of such Seller Intellectual Property.

               (m) No (i) product, technology, service or publication of the
Sellers, (ii) material published or distributed by the Sellers, or (iii) conduct
or statement of the Sellers, in each case which relates to any of the
Businesses, constitutes obscene material, a defamatory statement or material,
false advertising or otherwise violates in any material respect any law or
regulation.

               (n) All Seller Intellectual Property will be fully transferable,
alienable, or licensable by Buyer without restriction and without payment of any
kind to any third party.

               (o) Neither this Agreement nor the transactions contemplated by
this Agreement, including the assignment to Buyer, by operation of law or
otherwise, of any contracts or agreements to which any Sellers is a party, will
result in (i) Buyer's granting to any third party any right to or with respect
to any Technology or Intellectual Property Right owned by, or licensed to,
either of them, (ii) Buyer's being bound by, or subject to, any non-compete or
other restriction on the operation or scope of their respective businesses, or
(iii) Buyer's being obligated to pay any royalties or other amounts to any third
party in excess of those payable by Buyer prior to the Closing.

        2.12 CONTRACTS. (a) To Sellers' knowledge, Section 2.12(a) of Seller
Disclosure Letter lists the following written or oral contracts, agreements,
commitments and other arrangements under which any of Sellers is obligated or by
which any of Sellers or any of their assets is bound which relates to any of the
Businesses or the Purchased Assets:

               (i) each contract, agreement, commitment and other arrangement
which is an Assumed Contract or an Assumed Lease and which involves either (A)
aggregate annual payments of more than $20,000, (B) aggregate annual nonmonetary
obligations valued at more than $20,000, or (C) material nonmonetary obligations
or restrictions that are not terminable by Buyer after the Closing on less than
30 days notice without penalty; and


                                      -17-


<PAGE>   26
               (ii) each contract, agreement, commitment and other arrangement
pursuant to which any Seller has granted any right or interest in any Purchased
Asset

        (b) Sellers have made available to Buyer a correct and complete copy of
each written agreement (as amended to date) listed in Section 2.12(a) of Seller
Disclosure Letter and a written summary setting forth the terms and conditions
of each oral agreement referred to in Section 2.12(a) of Seller Disclosure
Letter of which Sellers are aware. With respect to each such agreement: (A) the
agreement, with respect to Sellers and, to Sellers' knowledge, all other parties
thereto, is legal, valid, binding, enforceable, and in full force and effect in
all respects; (B) neither Sellers nor, to Sellers' knowledge, any other party is
in breach or default, and no event has occurred, which with notice or lapse of
time would constitute a breach or default, or permit termination, modification,
or acceleration, under the agreement; (C) to Sellers' knowledge, there is no
dispute regarding the scope of such agreement or performance under such
agreement; and (D) Sellers have not received notice that any party has
repudiated any provision of the agreement. Except as set forth on Section 2.3 of
the Seller Disclosure Letter, Sellers have obtained or will obtain prior to the
Closing Date, all necessary consents, waivers and approvals of parties to any
such agreement as are required thereunder in connection with the transactions
contemplated by this Agreement or to remain in effect without modification after
the Closing. Except as set forth on Section 2.3 of the Seller Disclosure Letter,
following the Closing, Buyer will be permitted to exercise all of Sellers'
rights under the Assumed Contracts and the Assumed Leases to the same extent
Sellers would have been able to had the transactions contemplated by this
Agreement not occurred and without the payment of any additional amounts or
consideration other than ongoing fees, royalties or payments which Sellers would
otherwise be required to pay. Any agreement relating to the Businesses that is
between any Seller and other Seller or Affiliate of a Seller has material terms
that are not materially more or less favorable to the Businesses than terms that
would have been obtained as a result of "arms length" bargaining between
unrelated parties.

        (c) Section 2.12(c) of the Seller Disclosure Letter contains a list of
each contract between any Seller and any Team player.

        (d) To Seller's knowledge, no contract between any Seller and any Team
player breaches any term or condition of the Collective Bargaining Agreement.

        2.13 POWER OF ATTORNEY. There are no outstanding powers of attorney
executed on behalf of Sellers relating to the Businesses or the Purchased
Assets.

        2.14 [INTENTIONALLY OMMITTED]

        2.15 LITIGATION. Section 2.15 of Seller Disclosure Letter sets forth
each instance in which any of the Sellers (or any of their assets) (i) is
subject to any outstanding injunction, judgment, judicial or arbitrator's
decision order, decree, ruling, or charge relating to the Businesses or the
Purchased Assets or (ii) is or has been, or, to the knowledge of Sellers, is
threatened to be made a party, to any action, suit, proceeding, hearing,
arbitration, appeal or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator relating to any of the Businesses or the
Purchased Assets that, if


                                      -18-


<PAGE>   27
determined adversely to Sellers, could reasonably be anticipated to have a
material adverse effect on the Businesses or the Purchased Assets. To the
knowledge of Sellers, there are no facts or circumstances that would form the
reasonable basis of any claim against Sellers relating to the Businesses or the
Purchased Assets.

        2.16 RESTRICTIONS ON BUSINESS ACTIVITIES. Except as set forth in Section
2.16 of the Disclosure Letter, there is no agreement (not to compete or
otherwise), commitment, judgment, injunction, order or decree to which any
Seller is a party or which is otherwise binding upon any Seller which has the
effect of prohibiting or restricting the operation of the Businesses. Without
limiting the foregoing, no Seller has entered into any agreement under which any
of the Sellers is restricted from operating any of the Businesses with respect
to any customers or potential customers or any class of customers, in any
geographic area, or in any segment of the market.

        2.17 AIRCRAFT. Sellers have provided to Buyer all documentation relating
to Sellers' lease and operation of the Aircraft, and any appraisal or other
documentation regarding the value of the Aircraft.

        2.18 EMPLOYEES. No executive, key employee, or significant group of
employees has advised any executive officer of a Seller that he, she or they
plan to terminate employment with a Seller during the next 12 months. No Seller
is a party to or bound by any collective bargaining agreement, except for the
Collective Bargaining Agreement, nor has any Seller experienced any strike or
grievance, claim of unfair labor practices, or other collective bargaining
dispute, except the strike/lockout between the NBA and the Players' Association
ended prior to the 1999-2000 NBA Season. To Seller's knowledge, there is no
organizational effort presently being made or threatened by or on behalf of any
labor union with respect to employees of Sellers.

        2.19 EMPLOYEE MATTERS AND BENEFIT PLANS.

               (a) Definitions. With the exception of the definition of
"Affiliate" set forth in Section 2.19(a)(i) below (which definition shall apply
only to this Section 2.19), for purposes of this Agreement, the following terms
shall have the meanings set forth below:

                      (i) "AFFILIATE" of a Seller shall mean any corporation,
partnership, limited liability company, sole proprietorship, trade, business,
organization or other person or entity that together with a Seller, is treated
as a single employer under Section 414(b), (c), (m) or (o) of the Code;

                      (ii) "COBRA" shall mean the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended;

                      (iii) "SELLER EMPLOYEE PLAN" shall mean any plan, program,
policy, practice, contract, agreement or other arrangement providing for
compensation, severance, termination pay, deferred compensation, performance
awards, stock or stock-related awards, fringe benefits or other employee
benefits or remuneration of any kind, whether written or unwritten or otherwise,
funded or unfunded, including without limitation, each "employee benefit plan,"
within


                                      -19-


<PAGE>   28
the meaning of Section 3(3) of ERISA which is or ever has been maintained,
contributed to, or required to be contributed to, by any Seller or Affiliate, or
with respect to which any Seller or Affiliate has or may have any liability or
obligation, for the benefit of any Employee;

                      (iv) "DOL" shall mean the United States Department of
Labor;

                      (v) "EMPLOYEE" shall mean any current or former or retired
employee, consultant or director of any Seller or Affiliate who is employed by
or performs services for any of the Businesses;

                      (vi) "EMPLOYMENT AGREEMENT" shall mean each management,
employment, severance, release, consulting, personal service, relocation,
repatriation, expatriation, visas, work permit or other agreement, contract or
understanding between any Seller or Affiliate and any Employee;

                      (vii) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended;

                      (viii) "FMLA" shall mean the Family Medical Leave Act of
1993, as amended;

                      (ix) "INTERNATIONAL EMPLOYEE PLAN" shall mean each Seller
Employee Plan that has been adopted or maintained by the Seller or any
Affiliate, whether informally or formally, or with respect to which the Seller
or any Affiliate will or may have any liability, for the benefit of Employees
who perform services outside the United States;

                      (x) "IRS" shall mean the Internal Revenue Service;

                      (xi) "MULTIEMPLOYER PLAN" shall mean any "multiemployer
plan," as defined in Section 3(37) or 4001(a)(3) of ERISA or 414(f) of the Code;

                      (xii) "TITLE IV PLAN" shall mean each Seller Employee Plan
which is an "employee pension benefit plan," within the meaning of Section 3(2)
of ERISA that is covered by Title IV of ERISA.

               (b) Disclosure Letter. Section 2.19(b) contains an accurate and
complete list of all Seller Employee Plans and all Employment Agreements. There
has been no amendment, interpretation or other announcement (written or oral) by
any Seller, Affiliate or other person relating to, or change in participation or
coverage under, any Seller Employee Plan that, either alone or together with
other such items or events, could materially increase the expense of maintaining
such Seller Employee Plan (or Seller Employee Plans taken as a whole) above the
level of expense incurred with respect thereto for the most recent fiscal year
included in the Financial Schedules. Sellers do not have any plan or commitment
to establish, adopt or enter into any additional Seller Employee Plan or
Employment Agreement, or to modify any existing Seller Employee Plan or
Employment Agreement.


                                      -20-


<PAGE>   29
               (c) Documents. Sellers have provided (or will provide no later
than immediately following execution of this Agreement) to Buyer correct and
complete copies of: (i) all documents embodying each Seller Employee Plan and
each Employment Agreement including (without limitation) all amendments thereto
and all related trust documents, administrative service agreements, group
annuity contracts, group insurance contracts, and policies pertaining to
fiduciary liability insurance covering the fiduciaries for each Seller Employee
Plan; (ii) the most recent annual actuarial valuations, if any, prepared for
each Seller Employee Plan; (iii) the three (3) most recent annual reports (Form
Series 5500 and all schedules and financial statements attached thereto), if
any, required under ERISA or the Code in connection with each Seller Employee
Plan; (iv) if a Seller Employee Plan is funded, the most recent annual and
periodic accounting of such Seller Employee Plan assets; (v) the most recent
summary plan description together with the summaries of material modifications
thereto, if any, required under ERISA with respect to each Seller Employee Plan;
(vi) all IRS determination, opinion, notification and advisory letters, and all
applications and correspondence to or from the IRS or the DOL with respect to
any such application or letter; (vii) all written communications material to any
Employee or Employees relating to any Seller Employee Plan and any proposed
Seller Employee Plans, in each case, relating to any amendments, terminations,
establishments, increases or decreases in benefits, acceleration of payments or
vesting schedules or other events which would result in any material liability
to Seller; (viii) all correspondence to or from any governmental agency relating
to any Seller Employee Plan; (ix) all COBRA forms and related notices (or such
forms and notices as required under comparable law); (x) the three (3) most
recent plan years discrimination tests for each Seller Employee Plan; and (xi)
all registration statements, annual reports (Form 11-K and all attachments
thereto) and prospectuses prepared in connection with each Seller Employee Plan.

               (d) Employee Plan Compliance. Except as set forth on Section
2.19(d), (i) each Seller and each Affiliate has performed in all material
respects all obligations required to be performed by it under, is not in default
or violation of, and has no knowledge of any default or violation by any other
party to each Seller Employee Plan, and each Seller Employee Plan has been
established, maintained, operated, administered and funded at all times and in
all material respects in accordance with its terms and in compliance with all
applicable laws, statutes, orders, rules and regulations, including but not
limited to ERISA or the Code; (ii) no "prohibited transaction," within the
meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA, and not
otherwise exempt under Section 4975 of the Code or Section 408 of ERISA (or any
administrative class exemption issued thereunder), has occurred with respect to
any Seller Employee Plan; (iii) no Seller, Affiliate or fiduciary has engaged in
any transaction or acted or failed to act in a manner that violates the
fiduciary requirements of ERISA or any other applicable law with respect to any
Seller Employee Plan; (iv) there are no actions, suits or claims pending, or, to
the knowledge of Seller, threatened or reasonably anticipated (other than
routine claims for benefits) against, or with respect to, any Seller Employee
Plan or against the assets of any Seller Employee Plan; (v) each Seller Employee
Plan (other than any stock option plan) can be amended, terminated or otherwise
discontinued at any time at or after the Closing, without material liability to
Buyer, any Seller or any of their Affiliates (other than ordinary administration
expenses); (vi) there are no audits, inquiries or proceedings pending or, to the
knowledge of any Seller or Affiliate, threatened by the IRS or DOL with respect
to any Seller Employee Plan; and (vii) no Seller or Affiliate has incurred, and
there


                                      -21-


<PAGE>   30
exists no condition or set of circumstances in connection with which Buyer, any
Seller or any Affiliate could incur, directly or indirectly, any material
liability or expense (except for routine contributions and benefit payments)
under ERISA, the Code or any other applicable law, statute, order, rule or
regulation, or pursuant to any indemnification or similar agreement, with
respect to any Seller Employee Plan.

               (e) Qualification. Each Seller Employee Plan that is intended to
be qualified under Section 401(a) of the Code is so qualified and its related
trust is, and at all times since inception has been, exempt from taxation under
Section 501(a) of the Code. Each such Seller Employee Plan either (i) is the
subject of an unrevoked favorable determination letter from the IRS with respect
to such Seller Employee Plan's qualified status under the Code, as amended by
the Tax Reform Act of 1986 and all subsequent legislation, or (ii) has remaining
a period of time under the Code or applicable Treasury regulations or IRS
pronouncements in which to apply to the IRS for such a letter and to make any
amendments necessary to obtain such a letter from the IRS. No fact exists or is
reasonably expected by any Seller or Affiliate to arise, that could adversely
affect the qualification or exemption of any such Seller Employee Plan or its
related trust.

               (f) Pension Plan. Except for the National Basketball Association
Players' Pension Plan and the National Basketball Association Pension Plan for
Coaches, Assistant Coaches and Trainers, no Seller or Affiliate has ever
maintained, sponsored, participated in or contributed to (or been obligated to
contribute to) any Multiemployer Plan, any multiple employer plan (within the
meaning of Section 4063 or 4064 of ERISA or Section 413(c) of the Code), any
employee benefit plan, fund, program or arrangement that is subject to Title IV
of ERISA, Section 302 of ERISA or Section 412 of the Code, or any multiple
employer welfare arrangements (as defined under Section 3(40) of ERISA). The
PBGC has not instituted proceedings, and has not notified any Seller or
Affiliate or Title IV Plan sponsored, maintained or contributed to by Sellers or
Affiliates at any time during the last seven (7) years that it intends to
institute proceedings to terminate such Title IV Plan. Each Seller and each
Affiliate has timely made all contributions that each of them has been required
to make by operation of law or by contract to each Multiemployer Plan in which
any of them participates (or to which any of them is obligated to contribute).
No Seller or Affiliate has incurred within the last seven (7) years, or
reasonably expects to incur, a complete or partial withdrawal, within the
meaning of Section 4203 or 4205 of ERISA, from any Multiemployer Plan, and the
consummation or the transactions contemplated by this Agreement or any related
agreement will not result in a complete or partial withdrawal, within the
meaning of Section 4203 or 4205 of ERISA, by any Seller or Affiliate from any
Multiemployer Plan. Were all of the Sellers and Affiliates to completely
withdraw, within the meaning of Section 4203 of ERISA, from all Multiemployer
Plans in which any of them participates (or to which any of them contributes or
is obligated to contribute) on the Closing Date, their collective withdrawal
liability under Subtitle E of Title IV of ERISA to the Sellers' knowledge would
not exceed $3.5 million as of the date hereof. There has been no decline in
contributions by any Seller or Affiliate to any Multiemployer Plan that, if
continued, could result in a complete or partial withdrawal, within the meaning
of Section 4203 or 4205 of ERISA, from such Multiemployer Plan in the future. To
the knowledge of each of the Sellers and Affiliates, no Multiemployer Plan in
which any Seller or Affiliate participates (or to which any Seller or Affiliate
makes or is obligated to make contributions) is in reorganization status, within
the meaning


                                      -22-


<PAGE>   31
of Section 4241 of ERISA, or insolvent, within the meaning of Section 4245 of
ERISA. No Seller or Affiliate has been notified by any Multiemployer Plan that
such plan intends to terminate or has been terminated under Section 4041A of
ERISA.

               (g) No Post-Employment Obligations. Except as set forth in
Section 2.19(g), no Seller Employee Plan provides, or reflects or represents any
liability to provide any welfare benefits (within the meaning of Section 3(1) of
ERISA), including without limitation, health benefits to (or with respect to)
any person for any reason, except as may be required by COBRA or other
applicable statute, and Sellers have never represented, promised or contracted
(whether in oral or written form) to any Employee (either individually or to
Employees as a group) or any other person that such Employee(s) or other person
would be provided with any welfare benefits following termination of employment,
except to the extent required by statute.

               (h) Health Care Compliance. No Seller or Affiliate has, in any
material respect, violated any of the health care continuation requirements of
COBRA, the requirements of FMLA, the requirements of the Health Insurance
Portability and Accountability Act of 1996, the requirements of the Women's
Health and Cancer Rights Act of 1998, the requirements of the Newborns' and
Mothers' Health Protection Act of 1996, or any amendment to each such act, or
any similar provisions of state law applicable to its Employees.

               (i) Effect of Transaction.

                      (i) Except as set forth on Section 2.19(i) of the Seller
Disclosure Letter or as required by Section 5.4 hereof, the execution of this
Agreement and the consummation of the transactions contemplated hereby will not
(either alone or upon the occurrence of any additional or subsequent events)
constitute an event under any Seller Employee Plan, Employment Agreement, trust
or loan that will or may result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting, distribution,
increase in benefits or obligation to fund benefits with respect to any
Employee.

                      (ii) Except as set forth on Section 2.19(i) of the Seller
Disclosure Letter, no payment or benefit which will or may be made by Sellers or
their Affiliates with respect to any Employee will be characterized as a
"parachute payment," within the meaning of Section 280G(b)(2) of the Code.

               (j) Employment Matters. Seller: (i) is in compliance in all
respects with all applicable foreign, federal, state and local laws, rules and
regulations respecting employment, employment practices, terms and conditions of
employment and wages and hours, in each case, with respect to Employees; (ii)
has withheld and reported all amounts required by law or by agreement to be
withheld and reported with respect to wages, salaries and other payments to
Employees; (iii) is not liable for any arrears of wages or any taxes or any
penalty for failure to comply with any of the foregoing; and (iv) is not liable
for any payment to any trust or other fund governed by or maintained by or on
behalf of any governmental authority, with respect to unemployment compensation
benefits, social security or other benefits or obligations for Employees (other
than routine payments to be made in the normal course of business and consistent
with past practice). There are no


                                      -23-


<PAGE>   32
pending, threatened or reasonably anticipated claims or actions against Sellers
under any worker's compensation policy or long-term disability policy.

               (k) Labor. No work stoppage or labor strike against Sellers is
pending, threatened or reasonably anticipated. Sellers do not know of any
activities or proceedings of any labor union to organize any Employees. There
are no actions, suits, claims, labor disputes or grievances pending, or, to the
knowledge of Seller, threatened or reasonably anticipated relating to any labor,
employment, safety or discrimination matters involving any Employee, including,
without limitation, charges of unfair labor practices or discrimination
complaints, which, if adversely determined, would, individually or in the
aggregate, result in any material liability to Sellers. Neither Sellers nor any
of their subsidiaries have engaged in any unfair labor practices within the
meaning of the National Labor Relations Act. Except as set forth in Section
2.19(k), Sellers are not presently, nor has it been in the past, a party to, or
bound by, any collective bargaining agreement or union contract with respect to
Employees and no collective bargaining agreement is being negotiated by any of
the Sellers.

               (l) International Employee Plan. Sellers do not now, nor has it
ever had the obligation to, maintain, establish, sponsor, participate in, or
contribute to any International Employee Plan.

        2.20 ENVIRONMENT, HEALTH, AND SAFETY. For purposes of this Agreement,
the following terms shall have the meanings ascribed to them below:

               (a) Definitions:

                      (i) "HAZARDOUS MATERIAL" is any material or substance that
is prohibited or regulated by any Environmental Law or that has been designated
by any Governmental Authority to be radioactive, toxic, hazardous or otherwise a
danger to health, reproduction or the environment.

                      (ii) "GOVERNMENTAL AUTHORITY" is any local, state,
provincial, federal, or international governmental authority or agency which has
had or now has jurisdiction over any portion of the subject matter of this
Agreement, any Business Facility of any Seller.

                      (iii) "BUSINESS FACILITY" is any property including the
land, the improvements thereon, the groundwater thereunder and the surface water
thereon, that is or at any time has been owned, operated, occupied, controlled
or leased by any Seller in connection with the operation of any of the
Businesses.

                      (iv) "DISPOSAL SITE" is a landfill, disposal agent, waste
hauler or recycler of Hazardous Materials.

                      (v) "ENVIRONMENTAL LAWS" are all applicable laws, rules,
regulations, orders, treaties, statutes, and codes promulgated by any
Governmental Authority which prohibit, regulate or control any Hazardous
Material or any Hazardous Material Activity, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,


                                      -24-


<PAGE>   33
the Resource Recovery and Conservation Act of 1976, the Federal Water Pollution
Control Act, the Clean Air Act, the Hazardous Materials Transportation Act, the
Clean Water Act, comparable laws, rules, regulations, ordinances, orders,
treaties, statutes, and codes of other Governmental Authorities, the regulations
promulgated pursuant to any of the foregoing, and all amendments and
modifications of any of the foregoing, all as amended to date.

                      (vi) "HAZARDOUS MATERIALS ACTIVITY" is the transportation,
transfer, recycling, storage, use, treatment, manufacture, removal, remediation,
release, exposure of others to, sale, or distribution of any Hazardous Material
or any product containing a Hazardous Material.

                      (vii) "ENVIRONMENTAL PERMIT" is any approval, permit,
license, clearance or consent required to be obtained from any private person or
any Governmental Authority with respect to a Hazardous Materials Activity which
is or was conducted by any Seller.

               (b) Condition of Property. As of the Closing, except in
compliance with Environmental Laws in a manner that could not reasonably be
expected to subject any Seller to liability, to the knowledge of Sellers, no
Hazardous Materials are present on any Business Facility currently owned,
operated, occupied, controlled or leased by any Seller or were present on any
other Business Facility at the time it ceased to be owned, operated, occupied,
controlled or leased by any Seller. Except as set forth in Section 2.20(b) of
Seller Disclosure Letter, to Seller's knowledge there are no underground storage
tanks, asbestos which is friable or likely to become friable or PCBs present on
any Business Facility currently owned, operated, occupied, controlled or leased
by any Seller or as a consequence of the acts of any Seller or its agents.

               (c) Hazardous Materials Activities. To Sellers' knowledge,
Sellers have conducted all Hazardous Material Activities relating to any of the
Businesses in compliance in all material respects with all applicable
Environmental Laws. Except as set forth in Section 2.20(c) of Seller Disclosure
Letter, to Seller's knowledge the Hazardous Materials Activities of Sellers
prior to the Closing have not resulted in the exposure of any person to a
Hazardous Material in a manner which has caused or could reasonably be expected
to cause an adverse health effect to any such person.

               (d) Permits. Section 2.20(d) of Seller Disclosure Letter
accurately describes all of the Environmental Permits currently held by Sellers
and relating to any of the Businesses and the listed Environmental Permits are
all of the Environmental Permits necessary for the continued conduct of any
Hazardous Material Activity of any Seller relating to any of the Businesses as
such activities are currently being conducted. All such Environmental Permits
are valid and in full force and effect. Sellers have complied in all material
respects with all covenants and conditions of any Environmental Permit which is
or has been in force with respect to its Hazardous Materials Activities. To
Sellers' knowledge, no circumstances exist which could cause any Environmental
Permit to be revoked, modified, or rendered non-renewable upon payment of the
permit fee. All Environmental Permits and all other consent and clearances
required by any Environmental Law or any agreement to which any Seller is bound
as a condition to the performance and enforcement of this Agreement, have been
obtained or will be obtained prior to the Closing at no cost to Buyer.


                                      -25-


<PAGE>   34
               (e) Environmental Litigation. Except as set forth in Section
2.20(e) of Seller Disclosure Letter, no action, proceeding, revocation
proceeding, amendment procedure, writ, injunction or claim is pending, or to the
best of Sellers' knowledge, threatened, concerning or relating to any
Environmental Permit or any Hazardous Materials Activity of any Seller relating
to any of the Businesses, or any Business Facility.

               (f) Offsite Hazardous Material Disposal. Sellers have directly
transferred or released Hazardous Materials only to those Disposal Sites set
forth in Section 2.20(f) of Seller Disclosure Letter; and no action, proceeding,
liability or claim is pending or, to Seller's knowledge, is threatened against
any Disposal Site or against any Seller with respect to any transfer or release
of Hazardous Materials relating to any of the Businesses to a Disposal Site
which could reasonably be expected to subject any Seller to liability.

               (g) Environmental Liabilities. Sellers are not aware of any fact
or circumstance, which could result in any environmental liability which could
reasonably be expected to result in a material adverse effect on Sellers.

               (h) Reports and Records. Sellers have delivered to Buyer or made
available for inspection by Buyer and its agents, representatives and employees
all records in Sellers' possession concerning the Hazardous Materials Activities
of Sellers relating to its business and all environmental audits and
environmental assessments of any Business Facility conducted at the request of,
or otherwise in the possession of Sellers. Sellers have complied with all
environmental disclosure obligations imposed by applicable law with respect to
this transaction.

        2.21 NO ADVERSE DEVELOPMENTS. There is no development (exclusive of
general economic factors affecting business or Sellers' industry in general) or,
to Sellers' knowledge, threatened development affecting Sellers (or affecting
customers, suppliers, employees, and other Persons which have relationships with
Sellers) that (i) is having or is reasonably likely to have a material adverse
effect on any of the Businesses or the Purchased Assets, or (ii) would prevent
Buyer from conducting the Businesses following the Closing in the manner in
which it was conducted by Sellers prior to the Closing.

        2.22 FEES. Sellers have no liability or obligation to pay any fees or
commissions to any broker, finder, agent or attorney, with respect to the
transactions contemplated by this Agreement.

        2.23 COMPLETE COPIES OF MATERIALS. Sellers have delivered or made
available true and complete copies of each document (or summaries of same) that
has been requested by Buyer or its counsel.

        2.24 BOARD APPROVAL. The Board of Directors of each of the Sellers has
(i) approved this Agreement and the transactions contemplated hereby, and (ii)
determined that the transactions contemplated hereby are in the best interests
of the stockholders of the respective Sellers and is on terms that are fair to
such stockholders.


                                      -26-


<PAGE>   35
        2.25 FULL DISCLOSURE. No representation or warranty in this Article II
or in any document delivered by Sellers or its Representatives pursuant to the
transactions contemplated by this Agreement, and no statement, list, certificate
or instrument furnished to Buyer pursuant hereto or in connection with this
Agreement, when taken as a whole, contains any untrue statement of a material
fact, or omits to state a material fact necessary to make the statement herein
or therein, in light of the circumstances in which they were made, not
misleading. Sellers have delivered to Buyer true, correct and complete copies of
all documents, including all amendments, supplements and modifications thereof
or waivers currently in effect thereunder, described in Seller Disclosure
Letter.

        2.26 LICENSES AND AUTHORIZATIONS. Section 2.26 of the Seller Disclosure
Letter lists all licenses, permits, registrations and approvals necessary to
operate the Purchased Assets (the "PERMITS"). Sellers are in compliance with the
terms of the Permits. Sellers are not aware of any fact or event which
constitutes a violation of any Permit. Sellers have not received written notice
that any Governmental Entity issuing any Permit intends to cancel, terminate,
modify, or amend any Permit. All such Permits are in full force and effect.

        2.27 AFFILIATE TRANSACTIONS. Except as set forth on Section 2.27 of the
Seller Disclosure Letter, no officer, director, Affiliate or stockholder of any
of the Sellers (nor, to the Sellers' knowledge, any family member, or any trust,
partnership or corporation in which any of such persons has or has had an
interest), has or has had, directly or indirectly, (i) an economic interest in
any entity which furnished or sold, or furnishes or sells, services or products
that any of the Businesses furnish or sell, or propose to furnish or sell, (ii)
an economic interest in any entity that purchases from or sells or furnishes to,
any of the Businesses, any goods or services or (iii) a beneficial interest in
any contract or agreement that is included in the Purchased Assets or that
involves the Businesses; provided, that ownership of no more than one percent
(1%) of the outstanding voting stock of a publicly traded corporation shall not
be deemed an "economic interest in any entity" for purposes of this Section
2.27.

                                   ARTICLE III

                     REPRESENTATION AND WARRANTIES OF BUYER

        Subject to such exceptions as are specifically disclosed in the
disclosure letter supplied by the Buyer to Sellers (the "BUYER DISCLOSURE
LETTER"), Buyer hereby represents and warrants to Sellers that the statements
contained in this Article III are true and correct as of the date of this
Agreement and will be true and correct as of the Closing (as though made at the
Closing); provided, that the representations and warranties made as of a
specified date will be true and correct as of such date. The Buyer Disclosure
Letter may be supplemented by Buyer in writing after the date hereof and prior
to the Closing Date (a "Buyer Disclosure Supplement") only with respect to
matters that have occurred during such period; provided, that any such Buyer
Disclosure Supplement is delivered to Sellers at least 5 days prior to the
Closing Date and Buyer provides to Sellers any information regarding such
disclosed matters as Sellers may request and which is in Buyer's possession or


                                      -27-


<PAGE>   36
known to Buyer; and provided further, that no Buyer Disclosure Supplement shall
be effective with respect to Section 6.2(a).

        3.1 ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. Buyer is a limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Washington. Buyer is duly authorized to conduct
business and are in good standing under the laws of each other jurisdiction
where such qualification is required and in which the failure to so qualify is
reasonably likely to have a material adverse effect on Buyer. Buyer has full
limited liability power and authority, and have all necessary licenses and
permits (other than licenses or permits the failure of which to possess would
not result in a material adverse effect on Buyer), to carry on the businesses in
which they are engaged and to own and use the properties owned and used by them.

        3.2 AUTHORIZATION. Buyer has full power and authority to execute and
deliver this Agreement and the Ancillary Agreements to which it is a party, and
to consummate the transactions contemplated hereunder and to perform their
obligations hereunder, and no other proceedings on the part of Buyer are
necessary to authorize the execution, delivery and performance of this Agreement
and the Ancillary Agreements to which it is a party. This Agreement and the
Ancillary Agreements to which it is a party and the transactions contemplated
hereby and thereby have been approved by Buyer's Board of Directors. The
transactions contemplated hereby have been approved by any required approval of
the members of Buyer. This Agreement and the Ancillary Agreements to which it is
a party constitute the valid and legally binding obligations of Buyer,
enforceable against Buyer in accordance with its terms and conditions.

        3.3 NO CONFLICTS. Neither the execution and the delivery of this
Agreement nor the consummation of the transactions contemplated hereby, will (A)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Buyer is subject, (B) violate or conflict
with any provision of the governing documents of Buyer, or (C) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under, any agreement, contract, lease, license,
instrument, or other arrangement to which Buyer is a party, other than any of
the foregoing which would not in the aggregate have a material adverse effect on
Buyer or adversely affect the ability of Buyer to consummate the transactions
contemplated hereby.

        3.4 CONSENTS. No consent, waiver, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Body, or any third
party, including a party to any agreement with Buyer, is required by or with
respect to Buyer in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby, except for (i) the
Association Approvals that are listed in Section 3.4 of the Buyer Disclosure
Letter, (ii) any applicable filings required under the HSR Act and (iii) such
consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings in which the failure of which to obtain would not in
the aggregate have a material adverse effect on Buyer or adversely affect the
ability of Buyer to consummate the transactions contemplated hereby.


                                      -28-


<PAGE>   37
        3.5 BROKERS' FEES. Buyer does not have any liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.

        3.6 FUNDING. Buyer's Chairman has delivered to Sellers an affidavit, the
"Affidavit of Funding," attached hereto as Exhibit A, attesting that Buyer has,
or at Closing will have, funds sufficient to pay the Cash Consideration.

        3.7 BUYER'S INFORMATION ABOUT THE BUSINESS. Walter Walker, President and
General Manager of SSI ("Walker"), is an officer and member of of Buyer. Section
3.7 of the Buyer Disclosure Letter lists or describes all information about the
Business provided in writing to Buyer by Walker, including but not limited to
projections, forecasts, analyses, compilations, studies, documents and other
information about the Business and its prospects. Buyer represents that (i) all
information and knowledge about the Business in the possession of Walker (at the
time of this Agreement and at all previous periods during which Walker was
General Manager of SSI) may be deemed to be in the possession of Buyer and (ii)
that Buyer shall have no right to indemnification pursuant to Article VII
hereof, to termination pursuant to Article VIII hereof, or to any other remedy
at law or equity, for any breach of Sellers' representations and warranties set
forth in Article II hereof, or for any breach of the Sellers' certificate
delivered to Buyer pursuant to Section 6.1 hereof, if (x) Walker had knowledge
as of the date of this Agreement that the representation or warranty at issue
was untrue, or (y) Walker had knowledge as of the Closing Date that the
officer's certificate was untrue.

                                   ARTICLE IV

                              PRE-CLOSING COVENANTS

        With respect to the period between the execution of this Agreement and
the earlier of the termination of this Agreement and the Closing:

        4.1 OPERATION OF BUSINESSES. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
and the Closing, Sellers agree (except to the extent that the other shall
otherwise consent in writing or this Agreement shall otherwise require), to
carry on the Businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted, to pay debts and Taxes
when due, to pay or perform other obligations when due, and, to the extent
consistent with such businesses, use all reasonable efforts consistent with past
practice and policies to preserve intact the present business organization, keep
available the services of the present officers and key employees and, except as
or this Agreement shall otherwise require, preserve their relationships with
customers, suppliers, distributors, licensors, licensees, and others having
business dealings with it, all with the goal of preserving unimpaired the their
goodwill and ongoing businesses at the Closing. Sellers shall promptly notify
Buyer of any event or occurrence or emergency not in the ordinary course of its
business, and any material event involving it. Except as expressly contemplated
by this Agreement, Sellers shall not, without the prior written consent of
Buyer:


                                      -29-


<PAGE>   38
               (a) Enter into any commitment, agreement or transaction not in
the ordinary course of business other than player personnel and coaching
decisions approved by Walker.

               (b) (i) Sell or enter into any license agreement with respect to
Seller Intellectual Property with any person or entity or (ii) buy or enter into
any license agreement with respect to the Intellectual Property of any person or
entity;

               (c) Amend or otherwise modify (or agree to do so), or violate the
terms of, any of the Assumed Contracts or Assumed Leases;

               (d) Commence any litigation;

               (e) Acquire or agree to acquire by merging or consolidating with,
or by purchasing any assets or equity securities of, or by any other manner, any
business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to acquire any
assets which relate to and are material, individually or in the aggregate, to
the Businesses;

               (f) Sell, lease, license or otherwise dispose of any of (or any
interest in) the Purchased Assets, except in the ordinary course of business or
as specifically contemplated by Section 1.1 hereof;

               (g) Intentionally subject to any Lien, other than Permitted
Liens, any of the Purchased Assets;

               (h) Grant any loans to others or purchase debt securities of
others or amend the terms of any outstanding loan agreement except for advances
to employees for travel and business expenses in the ordinary course of
business, consistent with past practices;

               (i) Grant any severance or termination pay to any employee of the
Businesses, except payments disclosed in Section 2.12(i) of the Seller
Disclosure Letter;

               (j) Adopt or amend any employee benefit plan, or enter into any
employment contract, pay or agree to pay any special bonus or special
remuneration to any director or employee, or increase the salaries or wage rates
of their employees;

               (k) Revalue any assets used in, held for use in, intended to be
used in, necessary to or primarily relating to the Businesses, including without
limitation writing down the value of inventory or writing off notes or accounts
receivable other than in the ordinary course of business;

               (l) Pay, discharge or satisfy, in an amount in excess of $50,000,
any claim, liability or obligation (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction in
the ordinary course of business of liabilities reflected or reserved against in
the Financial Schedules (or the notes thereto);


                                      -30-


<PAGE>   39
               (m) Enter into any strategic alliance or joint marketing
arrangement or agreement;

               (n) Hire or terminate employees (including, without limitation,
any player or coaching personnel) or encourage employees to resign other than in
the ordinary course of business;

               (o) Amend or otherwise modify (or agree to do so) the terms of
its relationships with any of its Affiliates; or

               (p) Take, or agree in writing or otherwise to take, any of the
actions described in Sections 4.1(a) through (o) above, or any other action that
would prevent Sellers from performing or cause Sellers not to perform their
covenants hereunder.

        4.2 ACCESS TO INFORMATION. Each of Sellers and Buyer will permit the
other Party and its representatives to have access at all reasonable times, and
in a manner so as not to interfere with its normal business operations, to its
business and operations. Neither such access, inspection and furnishing of
information to any Party and its representatives, nor any investigation by any
Party and its representatives, shall in any way diminish or otherwise affect
such Party's right to rely on any representation or warranty made by the other
Parties hereunder.

        4.3 NOTICE OF DEVELOPMENTS. Sellers shall give prompt notice to Buyer of
(i) the occurrence or non-occurrence of any event, the occurrence or
non-occurrence of which is likely to cause any representation or warranty of
Sellers contained in this Agreement to be untrue or inaccurate at or prior to
the Closing and (ii) any failure of Sellers to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 4.3 shall not limit or otherwise affect any remedies available to the
Party receiving such notice. No disclosure by Sellers pursuant to this Section
4.3, however, shall be deemed to amend or supplement Seller Disclosure Letter or
prevent or cure any misrepresentations, breach of warranty or breach of covenant
without the written consent of Buyer.

        4.4 NO SOLICITATION.

               (a) From and after the date hereof and until the earlier of the
Closing or the termination of this Agreement, Sellers shall not (nor shall they
permit their Representatives to) directly or indirectly take any of the
following actions with any Person other than Buyer and its designees: (a)
solicit, initiate or encourage any proposals or offers from, or conduct
discussions with or engage in negotiations with, any Person relating to any
possible Acquisition Proposal, (b) provide information with respect to the
Businesses or the Purchased Assets to any Person, other than Buyer, relating to,
or otherwise cooperate with, facilitate or encourage any effort or attempt by
any such Person with regard to, any possible Acquisition Proposal, (c) enter
into a contract or agreement (whether oral or written) with any Person, other
than Buyer, providing for an Acquisition Proposal, or (d) make or authorize any
statement, recommendation or solicitation in support of any possible Acquisition
Proposal involving any Person other than by Buyer. Sellers shall, and shall
cause their Representatives to, immediately cease and cause to be terminated any
such contacts or negotiations with any Person other than Buyer relating to any
Acquisition Proposal. In addition to the foregoing, if Sellers or any of their
Representatives receives, prior to the Closing or the termination of this


                                      -31-


<PAGE>   40
Agreement, any offer or proposal (formal or informal) relating to any of the
above, Sellers shall immediately notify Buyer thereof and provide Buyer with the
details thereof including the identity of the Person or Persons making such
offer or proposal, and will keep Buyer fully informed of the status and details
of any such offer of proposal. Each of Sellers and Buyer acknowledge that this
Section 4.4 was a significant inducement for Buyer and Buyer to enter into this
Agreement and the absence of such provision would have resulted in either (i) a
material reduction in the Purchase Price to be paid to Sellers or (ii) a failure
to induce Buyer and Buyer to enter into this Agreement.

        As used in this Section 4.4, "ACQUISITION PROPOSAL" shall mean a
proposal or offer for a merger, consolidation or other business combination
involving an acquisition of the Businesses or any material portion of the
Purchased Assets.

        4.5 REGULATORY FILINGS.

               (a) On or before the tenth business day following the date
hereof, each of Sellers and Buyer, as promptly as practicable, (i) shall make,
or cause to be made, all filings and submissions under laws, rules and
regulations applicable to them, or to their Affiliates, including the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, as may be
required for it to consummate the transactions contemplated hereby; (ii) shall
use their commercially reasonable efforts to obtain, or cause to be obtained,
all authorizations, consents and waivers from all Persons and governmental or
public authorities or bodies necessary to be obtained by them, or any
Affiliates, in order for them so to consummate such transactions; (iii) shall
respond to any requests for information or documentation within the time period
set forth in any such request; and (iv) shall use their commercially reasonable
efforts to take, or cause to be taken, all other actions necessary, proper or
advisable in order for them to fulfill their respective obligations hereunder.
Sellers shall use their commercially reasonable efforts to assist Buyer in
obtaining all consents required under the Assumed Contracts as a result of this
Agreement and the transactions contemplated hereby.

        (b) The transfer of the Aircraft to Buyer and the interim use of the
Aircraft by Buyer are subject to confirmation by the Federal Aviation
Administration (the "FAA") in a form acceptable to Buyer and Sellers.
Immediately upon execution of this Agreement, Sellers shall make, or cause to be
made, all filings and submissions required by the FAA for authority to enter
into an aircraft use agreement. If the FAA does not approve such Agreement,
Buyer shall have the right but not the obligation to purchase the Aircraft, as
provided in Section 1.1(b), provided however, that Seller shall not have any
further obligation to Buyer regarding interim use of the Aircraft.

        4.6 ASSOCIATION APPROVALS. On or before the tenth business day following
the date hereof, Buyer and Seller shall complete and file any and all necessary
applications required by the NBA and WNBA to obtain the Association Approvals in
connection herewith. Buyer shall pay the fees owed to the NBA relating to any
applications filed with the NBA relating to the transactions contemplated by
this Agreement.

        4.7 REASONABLE EFFORTS. Each of the Parties will use their reasonable
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the


                                      -32-


<PAGE>   41
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in Section 6 below).

        4.8 NOTICES AND CONSENTS. Sellers will give any notices to third parties
and will use their reasonable best efforts to obtain any third party consents
that are required in connection with the matters identified in Sections 2.3 and
2.4 of Seller Disclosure Letter or otherwise required in connection with the
transactions contemplated by this Agreement so as to preserve all material
rights of or benefits to Sellers. Each of the Parties will give any notices to,
make any filings with, and use its reasonable best efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters identified in Sections 2.3 and 2.4 of Seller
Disclosure Letter or as otherwise required in connection with the transactions
contemplated by this Agreement.

                                    ARTICLE V

                         OTHER AGREEMENTS AND COVENANTS

        5.1 CONFIDENTIALITY. Each of the Parties hereto hereby agrees to keep
such information or knowledge obtained in any due diligence or other
investigation pursuant to the negotiation and execution of this Agreement or the
effectuation of the transactions contemplated hereby, confidential; provided,
however, that the foregoing shall not apply to information or knowledge which
(a) a party can demonstrate was already lawfully in its possession prior to the
disclosure thereof by the other party, (b) is generally known to the public and
did not become so known through any violation of law, (c) became known to the
public through no fault of such party, (d) is later lawfully acquired by such
party from other sources, (e) is required to be disclosed by order of court or
government agency with subpoena powers or (f) which is disclosed in the course
of any litigation between any of the parties hereto. This provision supercedes
and replaces any and all prior confidentiality agreements between or among the
Parties, or between or among any of them or their Affiliates.

        5.2 ADDITIONAL DOCUMENTS AND FURTHER ASSURANCES. Each Party hereto, at
the request of another Party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of the transactions
contemplated hereby. Sellers commit to pay, in the ordinary course of business,
all debts, trade payables, taxes, and employee and other expenses related to the
Businesses for all periods prior to the Closing Date.

        5.3 COLLECTION OF SELLERS' RECEIVABLES. Sellers hereby authorize Buyer
to collect the amounts reflected on SCHEDULE 5.3 hereto (which amounts are
estimated on such schedule) ("SELLERS' RECEIVABLES") for the account of Sellers
for a period of six (6) months after the Closing Date ("COLLECTION PERIOD").
Within ten (10) business days after the end of each calendar month during the
Collection Period, Buyer shall pay to Sellers all Sellers' Receivables collected
by Buyer during the preceding calendar month on account of Sellers' Receivables,
together with an itemized listing of each receivable collected; provided that,
notwithstanding the foregoing, if any Sellers' Receivable is


                                      -33-


<PAGE>   42
paid to Buyer by check, Buyer shall not be obligated to pay to Sellers any
amount represented by such check until such check has been finally paid by the
payor bank of such check (Buyer agrees to deposit any such check reasonably
promptly upon receipt). If more than $100,000 of Sellers' Receivables remains
uncollected or unpaid to Sellers at the end of the Collection Period, Sellers
may extend the Collection Period for an additional six (6) months. Buyer shall
use the same best efforts to collect Sellers' Receivables as it employs in its
own collection efforts, but shall not be required to refer any of Sellers'
Receivables to a collection agency or an attorney for collection or use any
extraordinary means of collection and shall not assign, pledge or grant a
security interest in Sellers' Receivables to any third party, claim a security
interest or other right in and to such receivables, or compromise, settle, or
adjust any account without receiving the written approval of Sellers. From time
to time after applying the collection efforts required herein, Buyer may
determine that a specific item cannot be collected and may render the item to
Sellers for further prosecution through a collection agency or attorney. All
payments received by Buyer from any person with respect to a single invoice on
which such person owes payments to both Buyer and Sellers shall be applied by
Buyer first to payment of the portion of such invoice which is a Sellers'
Receivable. During the Collection Period, Sellers shall make no direct
solicitation of payment of the Sellers' Receivables except as provided herein.
All of Sellers' Receivables not collected by Buyer shall be returned to Sellers
at the end of the Collection Period, and Buyer shall have no responsibility for
the collection of any Sellers' Receivable after the end of the Collection
Period.

        5.4 RETAINED EMPLOYEES; BENEFITS

               (a) Retained Employees.

                      (i) On the Closing Date, Sellers shall terminate the
employment of all persons at that time employed by any of the Businesses whose
employment is not governed by the Collective Bargaining Agreement or who are
listed on SCHEDULE 5.4(a) hereto (such listed employees, the "SCHEDULED
EMPLOYEES"). Sellers shall use their best efforts to cause each of the Scheduled
Employees to agree to have his or her employment contract with Sellers (or any
Seller) assumed by Buyer and to further agree that such contract shall not be
deemed to have terminated as a result of the transaction contemplated herein.
Sellers shall obtain a waiver or a similar representation from each Scheduled
Employee that provides that such Scheduled Employee agrees and acknowledges that
his or her contract may be assumed by Buyer. Buyer shall concurrently offer
"at-will" employment to be effective as of the Closing Date to all of such
persons whose employment is terminated by Sellers in accordance with the first
sentence of this Section 5.4(a)(i) on terms that are substantially similar in
the aggregate as those in effect prior to Closing. Each employee of the Sellers
who so becomes an employee of the Buyer shall be referred to hereafter as a
"Retained Employee." Retained Employees shall be eligible to participate in
Buyer's benefit programs to the extent consistent with Buyer's standard human
resource policies in effect from time to time. Buyer will grant full credit
under such programs for prior service with the Sellers for purposes of
eligibility, vesting, and benefit accrual; provided, however, (A) Buyer receives
adequate records from Sellers reflecting Retained Employees' service; and,
(B)such service crediting shall be consistent with Seller's policies, the
applicable plan or program, and the providers and carriers of


                                      -34-


<PAGE>   43
each such program agree to credit such service upon request of Buyer; and (C) no
such service crediting for any purpose shall result in duplicate benefits or
funding.

                      (ii) On the Closing Date, Sellers shall pay to such
terminated employees all amounts owing to them in connection with their
employment by Seller, whether or not then due, including but not limited to,
accrued wages, salaries, vacation pay and expense reimbursement, and shall pay
to the appropriate taxing authorities on or before the date due any amounts
required to be deposited with respect to such payments to such terminated
employees.

                      (iii) Written contracts between any of the Sellers and
each Team player governing the Seller's employment of each Team player as a
player on such Team shall be included in the Assumed Contracts.

               (b) 401(k) Plan Distribution. Sellers agree and acknowledge that
the consummation of the transactions contemplated by this Agreement will result
in, and constitute, a distributable event pursuant to Code Section
401(k)(10)(A)(ii) (the "Distributable Event") for all Employees of Sellers who
are participants in any tax-qualified plan that has a 401(k) component
maintained by Sellers prior to the Closing Date and, accordingly, Sellers shall
provide Buyer, in a form reasonably acceptable to Buyer, evidence that Sellers
recognize the Distributable Event. Sellers further agree that on or prior to the
Closing Date, all of the accounts in Sellers' tax-qualified plan(s) of all
Employees who cease to be employees of Sellers as a result of, or in connection
with, the consummation of the transactions contemplated by this Agreement shall
be fully vested.

               (c) COBRA Obligations. Sellers agree and acknowledge that the
selling group (as defined in Proposed Treasury Regulation Section 54.4980B-9,
Q&A-3(a)) of which they are a part (the "Selling Group") will continue to offer
a group health plan to employees after the Closing Date and, accordingly, that
Sellers and the Selling Group shall be solely responsible for providing
continuation coverage under the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended ("COBRA"), to those individuals who are M&A qualified
beneficiaries (as defined in Proposed Treasury Regulation Section 54.4980B-9,
Q&A-4(a)) with respect to the transactions contemplated by this Agreement
(collectively, the "M&A Qualified Beneficiaries"). Sellers shall indemnify,
defend and hold harmless Buyer for, from and against any and all claims,
liabilities, losses, costs, and expenses (including attorneys' fees) relating
to, arising out of, or resulting from any and all COBRA obligations, liabilities
and claims related to M&A Qualified Beneficiaries. Sellers further agree and
acknowledge that in the event that the Selling Group ceases to provide any group
health plan to any employee prior to the expiration of the continuation coverage
period for all M&A Qualified Beneficiaries (pursuant to Proposed Treasury
Regulation Section 54.4980B-9, Q&A-8(c)), then Sellers shall provide Buyer with
(i) written notice of such cessation as far in advance of such cessation as is
reasonably practicable (and in any event, at least thirty (30) days prior to
such cessation), and (ii) all information necessary or appropriate for Buyer to
offer continuation coverage to such M&A Qualified Beneficiaries.

               (d) Pension Plan Withdrawal Liability. Sellers agree and
acknowledge, pursuant to ERISA Section 4204(a)(1)(C), that if Buyer withdraws
from the National Basketball Association Players' Pension Plan and/or the
National Basketball Association Pension Plan for Coaches,


                                      -35-


<PAGE>   44
Assistant Coaches and Trainers (collectively, the "NBA Plans") in a complete
withdrawal, or partial withdrawal with respect to operations of the Businesses,
during the five (5) plan year period commencing with the first plan year
beginning after the Closing Date (such five (5) plan year period to be
determined separately with respect to each of the NBA Plans), then Sellers shall
be secondarily liable for any withdrawal liability that they would have had to
the NBA Plans with respect to the operations of the Businesses (but for ERISA
Section 4204) if the liability of the Buyer with respect to the NBA Plans is not
fully paid. Sellers further agree and acknowledge that they shall be solely
liable for, and shall indemnify, defend and hold harmless Buyer for, from and
against, any and all claims, liabilities, losses, costs and expenses (including
attorneys' fees) relating to, arising out of, or resulting from the dissolution
of the remainder of Sellers' operations such that additional requirements with
respect to withdrawal liability under the NBA Plans are imposed by the NBA
and/or the NBA Plans on Buyer and/or Sellers.

               (e) Sellers agree that, except as specifically provided otherwise
in this Agreement, they shall indemnify, defend and hold harmless Buyer for,
from and against any and all claims, liabilities, losses, costs and expenses
(including attorneys' fees) relating to or arising out of, or in connection
with, any employee benefit plan, program, policy, practice or arrangement
(including, without limitation, any "employee benefit plan," as defined in
Section 3(3) of ERISA) established, sponsored, maintained, administered,
contributed to or required to be contributed to at any time by any of the
Sellers or Affiliates.

        5.5 NONCOMPETITION. For a period ending upon the fifth anniversary of
the Closing Date (the "Restricted Period"), neither Sellers nor any of their
Affiliates shall (a) engage, directly or indirectly in the Businesses anywhere
in the world or directly or indirectly, own an interest in, manage, operate,
join, control, lend money or render financial or other assistance to or
participate in or be connected with, as an officer, employee, partner,
stockholder, consultant or otherwise, any person or entity that competes with
Buyer or its Affiliates with respect to the Businesses; or (b) solicit, attempt
to solicit, induce or otherwise cause any employee of Buyer or any of Buyer's
Affiliates to terminate his or her employment with Buyer or any of Buyer's
Affiliates; provided, however, that, for the purposes of this Section 5.5,
ownership of securities having no more than five percent (5%) of the outstanding
voting power of any competitor which are listed on any national securities
exchange or traded actively in the national over-the-counter market shall not be
deemed to be in violation of the Section 5.5 so long as the person owning such
securities has no other connection or relationship with such competitor.

        5.6 EXTENSION. The Restricted Period shall be extended by the length of
any period during which any of the Sellers are in breach of the terms of this
Article V.

        5.7 INJUNCTIVE RELIEF. Sellers agree that money damages would not be
sufficient remedy for any breach of this Article V and that any such breach
would cause Buyer and its Affiliates irreparable harm. Accordingly, Sellers
agree that Buyer and its Affiliates shall be entitled to specific performance,
injunctive relief or other equitable remedy, without the requirement of posting
a bond with respect to an actual or threatened breach of this Article V. Such
remedy shall not be deemed to


                                      -36-


<PAGE>   45
be the exclusive remedy for other breach of this Article V but shall be in
addition to all other remedies available at law or equity.

        5.8 LIMITATIONS. In the event that the covenants set forth in this
Article V are more restrictive than permitted by the laws of the jurisdiction in
which Buyer or its Affiliates seeks enforcement thereof, each of such covenants
shall be deemed limited to the extent permitted by such laws.

        5.9 REASONABLE COOPERATION OF SELLER. Sellers shall cooperate with Buyer
to the extent reasonable with Buyer's efforts to obtain any required approvals
or consents from the Associations; provided, however, that this Section 5.9
shall not obligate Sellers to incur any additional expense or liability.

        5.10 PRACTICE FACILITY SIGNATURE. Sellers agree to, as soon as
practicable, at Seller's sole expense, make any modifications to (or, if
necessary, replace) the signage at or relating to the Practice Facility
necessary to cause such signage to be in full compliance with any applicable
municipal rules, regulations and restrictions. "Practice Facility" means the
facility used by the Terms which is the subject of the Ground Lease Agreement,
dated March 10, 1994, between the City of Seattle and SSI Sports, Inc.

                                   ARTICLE VI

                            CONDITIONS TO THE CLOSING

        6.1 CONDITIONS TO BUYER'S OBLIGATION TO CLOSE. The obligations of Buyer
hereunder are subject to the fulfillment or satisfaction on, and as of the
Closing, of each of the following conditions (any one or more of which may be
waived by Buyer, but only in a writing signed by Buyer):

               (a) Representations and Warranties. The representations and
warranties of Sellers set forth in Article II that are qualified as to
materiality or material adverse effect, or in Sections 2.1 or 2.2 shall be true
and correct, and those that are not so qualified shall be true and correct, in
each case as of the date of this Agreement, and as of the Closing with the same
force and effect as if made on and as of the Closing (except to the extent
expressly made as of a particular date, in which case as of such date), in each
case without regard to any Seller Disclosure Supplement.

               (b) Covenants. Sellers shall have performed or complied with all
agreements and covenants required by this Agreement to be performed or complied
with by Sellers on or prior to the Closing.

               (c) No Actions. No action, suit, or proceeding shall be
threatened or pending before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling,
or charge would, if successful, (A) prevent consummation of any of the
transactions contemplated by this Agreement, or (B) result in a material adverse
effect to the Businesses or the Purchased Assets.


                                      -37-


<PAGE>   46
               (d) No Material Adverse Effect. From the date of the Most Recent
Balance Sheet, there shall not have been any event or development which has
resulted in, or which could reasonably be likely to result in the future in, a
material adverse effect on the Businesses or the Purchased Assets.

               (e) Certificates. An officer of each Seller shall have delivered
to Buyer a certificate to the effect that each of the conditions specified above
in Section 6.1(a) to 6.1(d) (inclusive) is satisfied in all respects.

               (f) Required Consents. Buyer shall have been furnished with
evidence satisfactory to it that Sellers has obtained all required consents,
approvals and waivers as set forth in SCHEDULE 6.1(f) attached hereto.

               (g) Sublease. Buyer shall have obtained all required consents,
approvals, and waivers for the sublease of properties at 351 Elliot Ave. W,
Seattle, WA 98119 currently used by Full House Sports & Entertainment Group
Division of Ackerley and Buyer, Sellers and the original landlord of such
properties shall have executed the sublease agreement in the form attached
hereto as EXHIBIT E.

               (h) Governmental Authorizations. The Parties shall have received
all authorizations, consents and approvals of Governmental Bodies set forth in
Section 2.4 of the Seller Disclosure Letter.

               (i) Termination of HSR Waiting Period. The waiting period(s)
under the HSR Act and all applicable material foreign merger laws, if any shall
have expired or been terminated.

               (j) Non-Competition Agreements. Sellers and the Persons listed on
EXHIBIT B-2 shall each have executed and delivered to Buyer a Non-Competition
Agreement in substantially the form attached hereto as EXHIBIT B-1 and such
Non-Competition Agreements shall be in full force and effect.

               (k) Legal Opinion. Buyer shall have received from Graham & Dunn,
counsel to Seller, an opinion in the form attached hereto as EXHIBIT C,
addressed to Buyer, and dated as of the Closing Date.

               (l) Association Approvals. Buyer and Sellers shall have received
any and all required Association Approvals.

               (m) Multiemployer Plans. Sellers shall have provided a guarantee
of any unfunded amount under any Multiemployer Plan, in the form and amount as
may be required by the administrator of one or both of the NBA Plans.

               (n) Transition Services Agreement. Buyer and Sellers shall have
executed a Transition Services Agreement, attached hereto as EXHIBIT D.


                                      -38-


<PAGE>   47
               (o) Aircraft Purchase Agreement. If Buyer has not made the
Aircraft Exclusion Election (as defined in Section 1.1(b)), Buyer and Sellers
shall have executed an Aircraft Purchase Agreement in the form agreed upon by
Buyer and Sellers (the "AIRCRAFT PURCHASE AGREEMENT").

               (p) Aircraft Transition Lease. Buyer and Sellers shall have
executed a transition lease for the Aircraft in the form agreed upon by Buyer
and Sellers giving Buyer the right to use the Aircraft until such time as
closing shall have occurred under the Aircraft Purchase Agreement.

               (q) Amended KJR Agreement. Buyer and Sellers shall have executed
an amendment to the Exclusive Radio Broadcast Clearance and Carriage Agreement,
between KJR(AM) and Full House Sports and Entertainment providing that the term
of such agreement shall end five (5) years from the end of the 2000-2001
basketball season.

               (r) Sellers and their affiliates shall have executed an agreement
reasonably satisfactory to Buyer terminating Seller's and such affiliates rights
to use Suite 38 in the Key Arena.

               (s) Release of Liens. Sellers shall have caused all Liens in the
Purchased Assets, including without limitation the Liens listed in SCHEDULE
6.1(s) hereto, to be released or terminated and shall have delivered to Buyer
evidence reasonably satisfactory to Buyer of such release or termination.

               (t) Intellectual Property Maintenance Schedule. Sellers shall
have delivered to Buyer a list of all actions that must be taken by the Buyer
within one hundred twenty (120) days of the Closing Date, including the payment
of any registration, maintenance or renewal fees or the filing of any responses
to PTO office actions, documents, applications or certificates for the purposes
of obtaining, maintaining, perfecting or preserving or renewing any Registered
Intellectual Property Rights.

        6.2 CONDITIONS TO SELLERS' OBLIGATIONS. The obligations of Sellers
hereunder are subject to the fulfillment or satisfaction on, and as of the
Closing, of each of the following conditions (any one or more of which may be
waived by Sellers, but only in a writing signed by Sellers):

               (a) Representations and Warranties. The representations and
warranties of Buyer and Buyer set forth in Article III that are qualified as to
materiality or material adverse effect, or in Sections 3.1, 3.2 or 3.3 shall be
true and correct, and those that are not so qualified shall be true and correct
in all material respects, in each case as of the date of this Agreement, and as
of the Closing with the same force and effect as if made on and as of the
Closing (except to the extent expressly made as of a particular date, in which
case as of such date), in each case without regard to any Buyer Disclosure
Supplement.

               (b) Covenants. Buyer shall have performed or complied in all
material respects with all agreements and covenants required by this Agreement
to be performed or complied with by them on or prior to the Closing.


                                      -39-


<PAGE>   48
               (c) No Material Adverse Effect. Since the date hereof, there
shall not have been any event or development which has resulted in a material
adverse effect on Buyer nor shall there have occurred any event or development
which could reasonably be likely to result in the future in a material adverse
effect on Buyer.

               (d) Certificate. The Chairman of Buyer shall have delivered to
Sellers a certificate to the effect that each of the conditions specified above
in Section 6.2(a), 6.2(b) and 6.3(c) is satisfied in all respects.

               (e) Termination of HSR Waiting Period. The waiting period(s)
under the HSR Act and all applicable material foreign merger laws, if any, shall
have expired or been terminated.

               (f) Association Approvals. Sellers and Buyer shall have received
any and all required Association Approvals.

               (g) Transition Services Agreement. Sellers and Buyer shall have
executed a Transition Services Agreement, attached hereto as EXHIBIT D.

               (h) Aircraft Purchase Agreement. Sellers and Buyer shall have
executed an Aircraft Purchase Agreement in the form agreed upon by Buyer and
Sellers (the "AIRCRAFT PURCHASE AGREEMENT").

               (i) Aircraft Transition Lease. Sellers and Buyer shall have
executed a transition lease for the Aircraft in the form agreed upon by Buyer
and Sellers giving Buyer the right to use the Aircraft until such time as
closing shall have occurred under the Aircraft Purchase Agreement.

               (j) Multiemployer Plans. Buyer shall have provided a letter of
credit with respect to unfunded amounts under any Multiemployer Plans in the
form and amount as shall be required by the administrator of one or both of the
NBA Plans.

                                   ARTICLE VII

                                 INDEMNIFICATION

        7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties set forth in this Agreement, the Seller Disclosure Letter, the Buyer
Disclosure Letter or in any certificate or instrument delivered pursuant to this
Agreement, shall survive the Closing for a period ending on the one (1) year
anniversary of the Closing, except for those set forth in Section 2.9 relating
to Taxes and those set forth in Section 2.19 relating to Employee Matters and
Benefit Plans which shall survive for the applicable statutory period of
limitations plus 30 days. The covenants and other agreements set forth in this
Agreement shall terminate at the Closing, except for covenants and other
agreements which by their terms contemplate or require performance following the
Closing and for obligations that are not due and payable at Closing, each of
which shall survive without limitation until complete performance of the terms
thereof.


                                      -40-


<PAGE>   49
        7.2 INDEMNIFICATION BY SELLER.

               (a) Indemnity.

                      (i) Sellers agree, jointly and severally, to indemnify and
hold harmless Buyer and its Representatives and Affiliates (collectively, the
"BUYER INDEMNIFIED PERSONS") from against all claims, losses, liabilities,
damages, deficiencies, costs, expenses (including reasonable attorneys' fees and
expenses of investigation) (hereinafter individually a "LOSS" and collectively
"LOSSES" ) arising out of, or resulting from, or incurred with respect to, (A)
any breach or inaccuracy of a representation or warranty of Sellers contained in
this Agreement, the Seller Disclosure Letter (as supplemented by any Seller
Disclosure Supplement) or any certificate or instrument delivered pursuant to
this Agreement, (B) any failure by Sellers to perform or comply with any
covenant contained in this Agreement, or (C) any Excluded Liabilities. Buyer and
Sellers each acknowledge that such Losses, if any, would relate to unresolved
contingencies existing at the Closing, which if resolved at the Closing would
have led to a reduction in the aggregate Purchase Price; provided, however, that
Buyer shall not be entitled to claim a Loss to the extent Buyer has received
insurance proceeds with respect to such Loss.

                      (ii) Sellers shall not have any liability or obligation to
indemnify any Buyer Indemnified Person for any Losses unless and until Officer's
Certificates (as hereinafter defined) shall have been delivered with respect to
Losses which equal or exceed $100,000 in the aggregate for all Losses (the
"BASKET AMOUNT"). Once the Basket Amount has been reached, all subsequent Losses
(including the first $100,000) are recoverable up to a maximum of $20,000,000
(the "Seller Cap") Notwithstanding the foregoing, Buyer shall be entitled to
indemnification without regard to the Basket Amount with respect to any Losses
with respect to Excluded Liabilities and such Losses shall not be included in
the calculation of the Basket Amount and shall not be limited by the Seller Cap
and such right to indemnification shall not be limited by section 7.1.

                      (iii) Notwithstanding the foregoing or anything to the
contrary set forth herein, nothing in this Agreement shall limit the liability
(i) of Sellers for any breach of any representation, warranty or covenant
contained herein if the Closing shall not occur, to the extent that such breach
(or breaches), individually or in the aggregate, amount to a failure to fulfill
a condition of closing pursuant to Section 6.1 hereof, or (ii) of Sellers for
any Losses arising out of fraud or intentional misrepresentation by any Seller.

        7.3 INDEMNIFICATION BY BUYER.

               (a) Indemnity. Subject to the limitations set forth in this
Section 7.3, Buyer shall indemnify and hold harmless, jointly and severally,
Sellers and any successors thereto ("SELLER INDEMNIFIED PERSONS") from and
against any and all Losses arising out of, or resulting from, or incurred with
respect to, (i) any breach of any of the representations, warranties, covenants
and agreements given or made by Buyer in this Agreement, the Buyer Disclosure
Letter (as supplemented by any Buyer Disclosure Supplements) or any certificate
or instrument delivered pursuant to this Agreement, and (ii) any and all Assumed
Obligations.


                                      -41-


<PAGE>   50
               (b) Limitation on Indemnification by Buyer. Notwithstanding
anything to the contrary contained in this Agreement, no Seller Indemnified
Person shall be entitled to indemnification from Buyer or Buyer hereunder, and
Buyer shall not be required to indemnify any Seller Indemnified Person
hereunder, for any Losses unless and until the total of all such Losses exceeds
$100,000 in the aggregate (at which time, Seller Indemnified Persons shall be
entitled to indemnification for all Losses) or for total losses in excess of
$20,000,000; provided, however, that these limitations on liability shall not
apply to the indemnities set forth in Section 7.3(a)(ii).

        7.4 INDEMNIFICATION PROCEDURES.

               (a) The parties seeking indemnification under this Article VII
(the "Indemnified Parties") shall give notice to the parties from whom
indemnification is sought (the "Indemnifying Parties") of any claim, whether
solely between the parties or brought by a third party (a "Third Party Claim"),
specifying (i) the factual basis for the claim, and (ii) the amount of the
claim. If the claim relates to a Third Party Claim, notice shall be given by the
Indemnified Parties promptly after written notice of the action, suit, or
proceeding was given to the Indemnified Parties. In all other circumstances,
notice shall be given by the Indemnified Parties promptly after they become
aware of the facts giving rise to the claim. Notwithstanding the foregoing, the
Indemnified Parties' failure to give the Indemnifying Parties timely notice
shall not preclude the Indemnified Parties from seeking indemnification from the
Indemnifying Parties except to the extent that Indemnified Parties' failure has
materially prejudiced the Indemnifying Parties' ability to defend the claim or
litigation.

               (b) With respect to claims between the parties, following receipt
of notice from the Indemnified Parties of a claim, the Indemnifying Parties
shall have thirty (30) business days to make any investigation of the claim that
the Indemnifying Parties deem necessary or desirable. For the purposes of this
investigation, the Indemnified Parties agree to make available to the
Indemnifying Parties and/or their authorized representatives the information
relied upon by the Indemnified Parties to substantiate the claim. If the
Indemnified Parties and the Indemnifying Parties cannot agree as to the validity
and amount of the claim within the 30-day period (or any mutually agreed upon
extension thereof), the Indemnified Parties may seek appropriate resolution
pursuant to Section 9.12 hereof.

               (c) The Indemnifying Parties shall have the right to conduct and
control, through counsel of their choosing, the defense, compromise or
settlement of any Third Party Claim against any Indemnified Parties as to which
indemnification will be sought by such Indemnified Parties from any Indemnifying
Parties hereunder, and in any such case the Indemnified Parties shall cooperate
in connection therewith and shall furnish such records, information and
testimony and attend such conferences, discovery proceedings, hearings, trials
and appeals as may be reasonably requested by the Indemnifying Parties in
connection therewith; provided, that (i) the Indemnified Parties may
participate, through counsel chosen by them and at their own expense, in the
defense of any such Third Party Claim as to which the Indemnifying Parties have
so elected to conduct and control the defense thereof; (b) the Indemnifying
Parties shall pay for the fees and expenses of such Indemnified Parties' counsel
to the extent that such Indemnified Parties have been advised by counsel that
there is a reasonable likelihood of conflict of interest between the Indemnified
Parties and the


                                      -42-


<PAGE>   51
Indemnifying Parties; (c) the Indemnifying Parties shall not have the right to
settle any Third Party Claim without the consent of the Indemnified Parties
unless such settlement (A) releases the Indemnified Parties from all past and
future liability concerning the subject matter of the action and (ii) has no
adverse effect on the business or assets of the Indemnified Parties; and (d) the
Indemnifying Parties shall have no right to conduct or control any defense of a
claim brought by a Governmental Body without the consent of the Indemnified
Party. So long as the Indemnifying Parties are defending in good faith any Third
Party Claim as to which indemnification has been sought hereunder, the
Indemnified Parties shall not settle or compromise such Third Party Claim. Each
party shall cooperate, and cause their respective affiliates to cooperate, in
the defense or prosecution of any Third Party Claim and shall furnish or cause
to be furnished such records, information and testimony, and attend such
conferences, discovery proceedings, hearing, trials or appeals, as may be
reasonably requested in connection therewith.

               (d) If any Indemnified Party receives any payment from an
Indemnifying Party in respect of any indemnifiable Losses pursuant to Section
7.2 or 7.3 and the Indemnified Party could have recovered all or part of such
Losses from a third party (a "POTENTIAL CONTRIBUTOR") based on the underlying
claim asserted against the Indemnifying Party, the Indemnified Party shall
assign such of its rights to proceed against the Potential Contributor as are
necessary to permit the Indemnifying Party to recover from the Potential
Contributor the amount of such payment.

                                  ARTICLE VIII

                                   TERMINATION

        8.1 TERMINATION OF THE AGREEMENT. The Parties may terminate this
Agreement as provided below:

               (a) Buyer and Sellers may terminate this Agreement as to all
Parties by mutual written consent at any time prior to the Closing;

               (b) Buyer or Sellers may terminate this Agreement by written
notice if: (i) the Closing has not occurred by March 31, 2001; provided,
however, that the right to terminate this Agreement under this Section 8.1(b)(i)
shall not be available to any Party whose action or failure to act has been a
principal cause of or resulted in the failure of the Closing to occur on or
before such date and such action or failure to act constitutes a breach of this
Agreement; (ii) there shall be a final nonappealable order of a court of
competent jurisdiction in effect preventing consummation of the transactions
contemplated by this Agreement or (iii) there shall be any statute, rule,
regulation or order enacted, promulgated or issued or deemed applicable to the
transactions contemplated by this Agreement by any Governmental Body that would
make consummation of the transactions contemplated by this Agreement illegal;

               (c) Buyer may terminate this Agreement by written notice if there
shall be any action taken, or any statute, rule, regulation or order enacted,
promulgated or issued or deemed applicable to the transactions contemplated by
this Agreement by any Governmental Body, which would


                                      -43-


<PAGE>   52
(i) prohibit Buyer's ownership or operation of all or a portion of the
Businesses or the Purchased Assets or (ii) compel Buyer to dispose of or hold
separate all or a portion of the Businesses or Purchased Assets as a result of
the transactions contemplated by this Agreement;

               (d) Buyer may terminate this Agreement by written notice if it is
not in material breach of its obligations under this Agreement and there has
been a material breach of any representation, warranty, covenant or agreement
contained in this Agreement on the part of Sellers and such breach has not been
cured within thirty (30) calendar days after written notice to Seller; provided,
however, that, no cure period shall be required for a breach which by its nature
cannot be cured;

               (e) Sellers may terminate this Agreement by written notice if it
is not in material breach of its obligations under this Agreement and there has
been a material breach of any representation, warranty, covenant or agreement
contained in this Agreement on the part of Buyer and such breach has not been
cured within thirty (30) calendar days after written notice to Buyer; provided,
however, that no cure period shall be required for a breach which by its nature
cannot be cured;

               (f) Buyer may terminate this Agreement by written notice if an
event having a material adverse effect on Sellers or on the Purchased Assets
shall have occurred after the date of this Agreement.

        8.2 EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to Section 8.1 above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach); provided that each Party
shall remain liable for any willful breaches of this Agreement prior to its
termination and provided, further, that the provisions contained in Section 5.1
(confidentiality) and Section 9 (miscellaneous) shall survive termination.

                                   ARTICLE IX

                                  MISCELLANEOUS

        9.1 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of the
other Party; provided, however, that Sellers may correspond with third parties
in writings in form and substance reasonably satisfactory to Buyer with respect
to obtaining consents from such parties pursuant to Sections 4.8 and 6.1(f). In
furtherance of the foregoing sentence, the Parties agree and acknowledge that
Buyer will issue a press release following the execution and delivery of this
Agreement by the Parties, which Buyer shall provide to Sellers in advance with
an opportunity to comment thereon. Buyer shall accept any reasonable comment of
Sellers specifically related to Sellers.


                                      -44-


<PAGE>   53
        9.2 NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties, and their respective
successors and permitted assigns, other than as specifically set forth herein.

        9.3 ENTIRE AGREEMENTS AND MODIFICATION. This Agreement (including the
exhibits hereto) constitutes the entire agreement among the Parties with respect
to the subject matter hereof and supersedes any prior understandings,
agreements, or representations by or among the Parties, written or oral, to the
extent they related in any way to the subject matter hereof. This Agreement may
not be amended except by a written agreement executed by all Parties.

        9.4 AMENDMENT. At any time prior to the Closing, this Agreement may be
amended by the parties hereto at any time by execution of an instrument in
writing signed on behalf of each of the parties hereto. At any time after the
Closing, this Agreement may be amended by Buyer and Sellers or any successor
thereto by execution of an instrument in writing.

        9.5 WAIVERS. The rights and remedies of the Parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
Party in exercising any right, power or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power or privilege, and no single or partial exercise of such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (i) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one Party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other Party; (ii) no waiver that may be
given by a Party will be applicable except in the specific instance for which it
is given; and (iii) no notice to or demand on one Party will be deemed to be a
waiver of any obligation of such Party or of the right of the Party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.

        9.6 SPECIFIC PERFORMANCE. The parties to this Agreement acknowledge that
it may be impossible to measure in money the damages that a party would incur if
any covenant or agreement contained in this Agreement were not performed in
accordance with its terms and agree that each of the parties hereto shall be
entitled to obtain an injunction to require specific performance of, and prevent
any violation of the terms of, this Agreement, in addition to any other remedy
available hereunder. In any such action specifically to enforce a provision of
this Agreement, each party hereby waives any claim or defense therein that an
adequate remedy at law or in damages exists.

        9.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Parties; provided, however, that so long as Buyer or Sellers
remains liable for all of their respective obligations under this Agreement,
Buyer or Sellers may (i) assign any or all of its rights and interests hereunder
to one or more of its Affiliates and (ii) designate one or more of its
Affiliates to perform its obligations hereunder.


                                      -45-


<PAGE>   54
        9.8 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which together will constitute
one and the same instrument.

        9.9 HEADINGS. The Section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

        9.10 NOTICES. All notices and other communications required or permitted
hereunder shall be in writing, shall be effective when given, and shall in any
event be deemed to be given upon receipt or, if earlier, (a) five (5) days after
deposit with the U.S. Postal Service or other applicable postal service, if
delivered by certified or registered first class mail, postage prepaid, return
receipt requested, (b) upon delivery, if delivered by hand, (c) one business day
after the business day of deposit with Federal Express or similar overnight
courier, freight prepaid or (d) one business day after the business day of
facsimile transmission, if delivered by facsimile transmission with copy by
certified or registered first class mail, postage prepaid, return receipt
requested and shall be addressed to the intended recipient as set forth below:

        If to Buyer:

           The Basketball Club of Seattle, LLC
           351 Elliott Avenue
           Seattle, Washington
           Attention:  Howard Schultz
           Facsimile:

        Copies to:

           Wilson Sonsini Goodrich & Rosati, Professional Corporation
           5300 Carillon Point
           Kirkland, Washington  98033
           Attention:   Scott Greenburg, Esq.
           Facsimile:   (425) 576-5899

        And

           Perkins Coie LLP
           1201 Third Ave., Suite 4800
           Seattle, WA 98101
           Attention:   Stewart Landefeld, Esq.
           Facsimile:   (206) 583-8500


                                      -46-


<PAGE>   55
        If to Sellers:

           The Ackerley Group, Inc.
           1301 Fifth Avenue, Suite 4000
           Seattle, Washington  98101
           Attention:  Christopher H. Ackerley
           Facsimile:  (206) 674-2815

        Copy to:

           Rubin, Winston, Diercks, Harris & Cooke, L.L.P.
           1155 Connecticut Avenue NW, Sixth Floor
           Washington, D.C.  20036
           Attention:   Eric M. Rubin, Esq.
           Facsimile:  (202) 429-0657

        Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Parties ten (10) days' advance written notice to the other Parties
pursuant to the provisions above.

        9.11 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Washington without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Washington or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Washington.

        9.12 ARBITRATION. From and after the Closing, any claim or dispute
arising out of or related to this Agreement, or the interpretation, making,
performance, breach or termination thereof, shall be finally settled by binding
arbitration in King County, Washington in accordance with the then current
Commercial Arbitration Rules of the American Arbitration Association conducted
by one arbitrator mutually agreeable to the parties to such dispute. In the
event that within forty-five (45) days after submission of any dispute to
arbitration, the Parties cannot mutually agree on one arbitrator, the parties to
the dispute shall each select one arbitrator, and the two arbitrators so
selected shall select a third arbitrator and the dispute shall be resolved by
the panel of three arbitrators. The arbitrator or arbitrators, as the case may
be, shall set a limited time period not to exceed forty-five (45) days and
establish procedures designed to limit the cost and time for discovery while
allowing the parties to the dispute an opportunity, adequate in the sole
judgement of the arbitrator or majority of the three arbitrators, as the case
may be, to discover relevant information from the opposing parties about the
subject matter of the dispute. The arbitrator or a majority of the three
arbitrators, as the case may be, shall rule upon motions to compel or limit
discovery and shall have the authority to impose sanctions, including attorneys'
fees and costs, to the same extent as a competent court of law or equity, should
the arbitrators or a majority of the three arbitrators, as the case may be,
determine that discovery was sought without substantial justification or that
discovery was refused or objected to without substantial justification. The
decision of the arbitrator or a majority of the three arbitrators, as the case
may be, as to the validity and amount of any claim in such Officer's Certificate
shall be binding and conclusive upon the Parties to this Agreement.


                                      -47-


<PAGE>   56
Judgment upon any award rendered by the arbitrators may be entered in any court
having jurisdiction. Each Party to any arbitration pursuant to this Section 9.12
shall pay its own expenses; the fees of each arbitrator and the administrative
fee of the American Arbitration Association shall be borne equally by the
parties to the dispute. Nothing contained in this Section shall limit the
Parties' rights to injunctive relief or to specific performance.

        9.13 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

        9.14 EXPENSES. Each Party will bear its own costs and expenses
(including legal and accounting fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby.

        9.15 CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
questions of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
work "including" shall mean including without limitation.

        9.16 SELLER DISCLOSURE LETTER.

               (a) All disclosures in the Seller Disclosure Letter are made
generally, and none of such disclosures relates to any particular Section of
Article II. All disclosures in the Buyer Disclosure Letter are made generally,
and none of such disclosures relates to any particular Section of Article III.
Accordingly, any numbering or references in the Seller Disclosure Letter and the
Buyer Disclosure Letter are for convenience only and do not in any way limit,
and shall not be regarded as limiting, the disclosure concerning such numbered
or referred to Sections.

               (b) In the event of any inconsistency between the statements in
the body of this Agreement and those in Seller Disclosure Letter (other than an
exception expressly set forth as such in Seller Disclosure Letter with respect
to a specifically identified representation or warranty), the statements in the
body of this Agreement will control.

               (c) Statements contained within the Seller Disclosure Letter
shall be deemed to be representations and warranties under this Agreement,
including, without limitation, Article VII.

        9.17 ATTORNEYS' FEES. If any legal proceeding or other action relating
to this Agreement is brought or otherwise initiated, the prevailing Party shall
be entitled to recover reasonable attorneys fees, costs and disbursements (in
addition to any other relief to which the prevailing Party may be entitled).


                                      -48-


<PAGE>   57
        9.18 FURTHER ASSURANCES. The Parties agree (a) to furnish upon request
to each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
Party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.

        9.19 TIME OF ESSENCE. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.


                                      -49-


<PAGE>   58
        IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
of the date first above written.

BUYER:                                  THE BASKETBALL CLUB OF SEATTLE, LLC


                                        By:
                                           ------------------------------------
                                        Name: Howard Schultz
                                             ----------------------------------
                                        Title:   Chairman of the Board
                                              ---------------------------------

                                        By:
                                           ------------------------------------
                                        Name: Walter F. Walker
                                             ----------------------------------
                                        Title:   Chief Executive Officer
                                              ---------------------------------

SELLERS:



THE ACKERLEY GROUP, INC.                ACKERLEY MEDIA GROUP, INC.

By:                                     By:
   ---------------------------------       ------------------------------------
Name:                                   Name:
     -------------------------------         ----------------------------------
Title:                                  Title:
      ------------------------------          ---------------------------------



SSI, INC.                               T.C. AVIATION, INC.

By:                                     By:
   ---------------------------------       ------------------------------------
Name:                                   Name:
     -------------------------------         ----------------------------------
Title:                                  Title:
      ------------------------------          ---------------------------------