Document:

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                                                                    EXHIBIT 10.1

                              PURCHASE AGREEMENT
                              ------------------

     This PURCHASE AGREEMENT (this "Agreement") is made and entered into as of
the 8/th/ day of May, 2000 by and between FISHER BROADCASTING INC., a Washington
corporation (the "Seller"), FISHER BROADCASTING - FRESNO, LLC, a Delaware
limited liability company (the "Company") and AK MEDIA GROUP, INC., a Washington
corporation (the "Buyer").

                                   RECITALS:

     WHEREAS, the Company is the licensee and operator of television broadcast
station KJEO-TV, Fresno, California, (the "Station") pursuant to certain
authorizations issued by the FCC; and

      WHEREAS, Seller desires to sell, assign and transfer all of it membership
interests in the Company (the "Membership Interests") and Purchaser desires to
acquire the Membership Interests, all on the terms described in this Agreement.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, and for good and sufficient
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:

                                  AGREEMENT:

     1.   Sale and Purchase of Membership Interests.
          -----------------------------------------

          1.1  Membership Interests.  On the terms and subject to the conditions
               --------------------
set forth in this Agreement, on the Closing Date (as hereinafter defined) Seller
shall convey, transfer, assign, sell and deliver to Buyer, and Buyer shall
acquire, the Membership Interests.

          1.2  Assets to be Conveyed.  At Closing, the Company shall own the
               ---------------------
following assets used or useful in the business or operations of the Station
(except for the Excluded Assets) which include, without limitation, the
following assets (the "Station Assets"):

          (a)  All real property or interests in real property of the Company
described on Schedule 1.2(a) (the "Real Property"), and all buildings,
             ---------------
structures, fixtures, appurtenances and other improvements actually or
constructively attached to the Real Property;

          (b)  All personal property of the Company used in connection with the
Station set forth on Schedule 1.2(b) (the "Personal Property");
                     ---------------

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          (c)  All of the Company's broadcast and other rights, if any, to films
and programs, broadcasting facilities contracts, agreements or arrangements,
programming and production materials, film libraries, inventories or programming
items, materials or supplies, and contracts, agreements and writings with
respect thereto, network affiliation agreements, and all amendments, extensions,
renewals, substitutions and replacements of, and additions to, such contracts
and other rights as may be entered into from the date hereof through the Closing
Date in accordance with the terms hereof;

          (d)  All of contracts or other rights listed on Schedule 1.2(d)
                                                          ---------------
(individually, a "Contract" and collectively the "Contracts");

          (e)  All  warranties (to the extent the same can be assigned)
respecting any and all Real Property and Personal Property;

          (f)  All prepaid expenses as prorated in accordance with Section
2.3(c);

          (g)  All goodwill attributable to the Station (other than goodwill
attributable to the Fisher Marks (defined below)), promotional and advertising
material and lists, telephone and telex numbers, supplies, customer lists and
records, and all engineering, business and other books, papers, logs, files and
records and other documents of the Seller pertaining to the Station;

          (h)  All motor vehicles owned by the Company and used or held for use
in the operation or business of the Station;

          (i)  Other than service marks, logos, trade names and other
intellectual property relating to Fisher Broadcasting Inc. that is used by
Seller in connection with other broadcast properties and not solely related to
the Station, including but not limited to, Fisher Television Regional Group
marks (the "Fisher Marks"), all of the service marks, copyrights, software,
licenses, trademarks, trade names, jingles, slogans, logotypes and other similar
intangible assets maintained, owned, used or held for use by the Company in
connection with the business and operation of the Station (including any and all
applications, registrations, extensions and renewals relating thereto) (the
"Intellectual Property"), and all of the rights, benefits and privileges
associated therewith;

          (j)  All licenses, permits, and other authorizations issued by the
Federal Communications Commission (the "FCC") to the Company for the operation
of the Station (the "FCC Licenses"), and all applications therefor, together
with any renewals, extensions or modifications thereof and additions thereto;
and

          (k)  All permits, approvals, orders, authorizations consents,
licenses, certificates, franchises, exemptions of, or filings or registrations
with, any court or governmental authority in any jurisdiction, which have been
issued or granted to or are owned by the Company in

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connection with the business and operation of the Station and ownership of the
Station Assets, and all pending applications therefor.

          1.3  Excluded Assets.  The following assets are not included within
               ---------------
the definition of Station Assets, to the extent they relate to the period prior
to Closing (hereinafter referred to collectively as the "Excluded Assets"):

          (a)  Any cash of the Company, cash equivalents, deposits, reserves,
and accounts receivable, including any inter-company accounts receivable;

          (b)  Any claims asserted by the Company in any litigation involving
the Company, whether or not disclosed pursuant to this Agreement, other than
claims arising out of breaches of express or implied warranties relating to any
of the Station Assets;

          (c)  The Company's rights under the insurance policies applicable to
the Station in respect of all occurrences insured thereunder;

          (d)  All books, records, correspondence and other information which
relates exclusively to the assets of the Company to be retained by Seller
pursuant to the terms hereof;

          (e)  All contracts of insurance and all insurance plans and Employee
Benefit Plans (as defined below) and the assets thereof relating to the Station
or the employees of the Station;

          (f)  Any contracts or agreements other than those listed on a Schedule
to this Agreement, those entered into in the ordinary course of business and
those approved by Buyer; and

          (g)  Any and all Fisher Marks.

          1.4  Further Assurances.  From time to time after the Closing (as
               ------------------
hereinafter defined), the Seller and Buyer will execute and deliver to the other
such instruments of sale, transfer, conveyance, assignment and delivery,
consents, assurances and other instruments as may be reasonably requested by
counsel for the Buyer or Seller in order to vest in the Buyer all right, title
and interest of the Seller in and to the Membership Interests and to continue
Company's ownership of the Station Assets and otherwise in order to carry out
the purpose and intent of this Agreement.

          1.5  Closing.  The closing of the transactions herein contemplated
               -------
shall, unless another date, time or place is agreed to in writing by the parties
hereto, take place at the offices of Graham & Dunn, 1420 Fifth Avenue, Suite
330, Seattle, Washington  98101-2390, at 10:00 A.M., local time, on the first
business day of the month following the month in which the FCC gives public
notice of consent to the transfer of control to operate the Station, but in no
event later than September 30, 2000 (the "Closing" or "Closing Date" herein).

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     2.   Consideration to be Paid by the Buyer.
          -------------------------------------

          2.1  Purchase Price for Membership Interests. The purchase price for
               ---------------------------------------
the Membership Interests (the Purchase Price") shall be Sixty Million Dollars
($60,000,000.00). The Purchase Price, less the Deposit and any related accrued
interest as provided in Section 2.2, shall be delivered to Seller by wire
transfer to one or more accounts designated by Seller on the Closing Date.

          2.2  Deposit.  Within five business days of the date of this
               -------
Agreement, Buyer shall deposit Six Million Dollars ($6,000,000) (the "Deposit")
with Wells Fargo & Company (the "Escrow Agent") pursuant to the Escrow Agreement
(the "Escrow Agreement") of even date herewith among Buyer, Seller and the
Escrow Agent, attached hereto as Exhibit A.  At Closing, the Deposit shall be
                                 ---------
applied to the Purchase Price and any interest or other earnings accrued thereon
shall be disbursed to Buyer.  If this Agreement is terminated by Seller pursuant
to Section 9.1.3, Three Million Dollars ($3,000,000) and accrued interest
thereon shall be disbursed to Seller as agreed liquidated damages as Seller's
and Company's sole remedy against Buyer shall be disbursed to Seller.  If this
Agreement is terminated for any other reason, the Deposit and any interest or
other earnings accrued thereon shall be disbursed to Buyer.

          2.3  Prorations. The Seller shall be entitled to all income earned or
               ----------
accrued, and shall be responsible for all liabilities and obligations incurred
or payable, in connection with the operation of the Station through the close of
business on the last day of the month preceding Closing. The Buyer shall be
entitled to all income earned or accrued, and shall be responsible for all
liabilities incurred or payable, in connection with the operation of the Station
after the close of business on the day preceding the Closing Date. All items of
income and expense shall be apportioned between the Seller and the Buyer as of
the close of business on the day preceding the Closing Date in accordance with
generally accepted accounting principles, unless otherwise specifically stated.
Items to be apportioned include, but are not limited to, the following:

          (a)  General and special real and personal property taxes and
assessments imposed on the Real and Personal Property or imposed on real or
personal property under any leases which are either not yet payable at the
Closing Date or which have been prepaid at the Closing Date; and special
district or other levies which are a lien but not due or which have been prepaid
at the Closing Date;

          (b)  Any power charges, utility charges, telephone charges or other
communication charges either due or prepaid at the Closing Date;

          (c)  Any prepaid rent on real estate or equipment or other prepaid
expenses;

          (d)  Any business or license fee, sale or service charge, commission,
special assessment, rental payment or personal tax or assessment associated with
the Station Assets;

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          (e)  Any prepaid expenses; and

          (f)  All other operating expenses (except those hereinafter excluded
by specific reference), including without limitation employee compensation,
fringe benefits (including vacation pay), sales commissions, and fees for
business and professional services which are accrued but unpaid or which are
prepaid as of the Closing Date.

     Within sixty (60) days after the Closing, Buyer shall determine all
apportionments pursuant to the provisions hereof and shall deliver a statement
of them to Seller together with the supporting documentation and information
(the "Proration Adjustment"). In the event that Seller disputes any such
apportionments or otherwise disagrees with the Proration Adjustment, it will
notify the Buyer in writing, specifying each dispute or disagreement, within ten
(10) business days following receipt of such statement. The parties shall
negotiate in good faith to resolve any disputes or disagreements for a period of
thirty (30) days following delivery to the Buyer of the Seller' notice and the
parties shall pay to one another any undisputed portion of the Proration
Adjustment.  In the event that the parties cannot come to a resolution during
such thirty (30) day period, either party shall have the right to elect to
submit such dispute to Deloitte & Touche LLP to resolve all points of
disagreement with respect to the Proration Adjustment. All determinations made
by Deloitte & Touche LLP shall be final, conclusive and binding on the Seller
and the Buyer with respect to the Proration Adjustment. The costs of the
accountant and/or arbitration shall be paid by the non-prevailing party as
designated by the accounting firm or arbitrator. Within fifteen (15) days after
the later of (i) delivery of the Proration Adjustment to the Seller or (ii)
resolution of any dispute or disagreement with respect to the Proration
Adjustment, the Buyer shall pay the Seller, or the Seller shall pay the Buyer,
as the case may be, the net amount due as a result of the apportionments, less
prior payments of the Proration Adjustment or portion thereof, plus interest at
the rate of eight percent (8%) per annum for any unpaid portion of the Proration
Adjustment from the date of delivery of the Proration Adjustment.

          2.4  Collection of Accounts Receivable.  Within ten (10) business days
               ---------------------------------
after the Closing Date, the Seller shall furnish to Buyer a list of the Accounts
Receivable by accounts and the amounts owing the Company as of the Closing Date.
Buyer agrees, for a period of one hundred twenty (120) days following the
Closing Date (the "Collection Period"), without any requirement to litigate or
engage any third party to collect the Accounts Receivable, to use its reasonable
efforts (with at least the care and diligence Buyer uses to collect its own
accounts receivable) to collect for the Seller the Accounts Receivable and to
remit to the Seller on the fifth (5th) business day following the last day of
each month, collections received by Buyer with respect to the Accounts
Receivable.  Buyer shall not make any referral or compromise of any Accounts
Receivable to a collection agency or attorney for collection and shall not
compromise for less than full value any Account Receivable without the prior
written consent of the Seller.  At all times during the Collection Period Buyer
shall promptly notify the Seller of any claim made by an Account Receivable
debtor that such debtor is not obligated to make payment.  In any such case,
Buyer shall, at the written request of Seller, reassign, without recourse to the

                                      -5-
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Buyer, the associated Accounts Receivable, and Seller shall thereafter have the
exclusive right to enforce the collection of such Account Receivable.  Any
Account Receivable not collected by Buyer during the Collection Period shall
revert to Seller.  Buyer shall reassign, without recourse to Buyer, each Account
Receivable and deliver all records relating thereto at the end of the Collection
Period.  All payments in respect of the Accounts Receivable received by Buyer
(whether during the Collection Period or otherwise), shall be first applied to
the oldest balance then due on the Accounts Receivable.  Buyer agrees, upon the
reasonable request of Seller, to furnish to Seller periodic reports on the
status of its Accounts Receivable.  Buyer shall have the right to set-off any
amounts collected for Accounts Receivable for any amounts paid by Buyer on
behalf of Seller and shall submit a written monthly statement to Seller with
detailed support for any amounts set off.  During the Collection Period, Seller
will not make efforts to collect Accounts Receivable, except those with respect
to which Seller has requested reassignment as described above.

     3.   Liabilities Not Assumed by the Buyer. The Buyer shall not be deemed by
          ------------------------------------
anything contained in this Agreement to have assumed, and does not assume, and
the Seller shall pay and discharge and indemnify the Buyer and hold the Buyer
harmless for, any responsibility for any liabilities of the Company or
obligations of the Company of any kind or description (other than those
liabilities which accrue on or after the Closing Date as specifically set forth
in the Agreement) including, without limitation:

          (a)  Any past due programming expenses of the Company;

          (b)  Any responsibility for any employee plan of the Company or any
accrued or other liability for contribution or payments to be made in respect of
service to employees of the Company during periods through the Closing Date
under any employee pension benefit plan or any other employee benefits provided
to the employees of the Company who are participants therein up to the Closing
Date (the "Employee Plans"); and

          (c)  All accounts payable, claims, requirements, penalties, fines or
costs, liabilities and obligations of the Company arising or accruing from the
operation of the Station by the Company prior to the Closing ("Payables") and
the salaries, wages, severance payments and other compensation and benefits
payable to any of the Company's former or retired employees whose last day of
employment with the Company is prior to the Closing Date, as well as accrued
taxes, employment insurance premiums, damages resulting from employment
practices and decisions and other amounts due with respect to said employees,
except as specifically set forth in this Agreement or otherwise agreed to in
writing by Buyer and Seller.

     4.   Representations and Warranties of the Seller.  The Seller represents
          ---------------------------------------------
and warrants to the Buyer that:

          4.1  Organization and Authority.  The Company is a duly formed limited
               --------------------------
liability company, validly existing and in good standing under the laws of the
State of Delaware

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and has all requisite corporate power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby. The Company is qualified
to do business and is in good standing in the State of California.

          4.2  Authorization of Agreement.  Seller and the Company have all
               --------------------------
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and all other agreements and instruments to be
executed by the Seller and/or the Company in connection herewith have been (or
upon execution will have been) duly executed and delivered by the Seller and the
Company, have been validly authorized by all necessary corporate action and
constitute (or upon execution and delivery will constitute) legal, valid and
binding agreements and obligations of the Seller and the Company, enforceable in
accordance with their respective terms.

          4.3  Ownership of Station Assets.  The Company is the lawful owner of
               ---------------------------
or has the right to use each of the Station Assets, and the Station Assets are
free and clear of all liens, mortgages, pledges, security interests,
restrictions, prior assignments, encumbrances and claims of any kind or nature
whatsoever (collectively, "Encumbrances"), except (i) for any of the foregoing
disclosed in this Agreement, including Schedule 4.3 attached hereto, (ii) liens
                                       ------------
covering current property taxes not yet delinquent, and (iii) any of the
foregoing that individually or in the aggregate do not materially impair the
continued use and operation of the Station Assets (the "Permitted
Encumbrances").

          4.4  Required Consents.  Except for the Contracts Requiring Consent
               -----------------
listed in Schedule 6.5(a), the execution, delivery and performance by Seller and
the Company of this Agreement will not require the consent, approval,
authorization or permit of, or filing with, or notification to any person,
entity or governmental authority (other than the FCC and HSR Act).

          4.5  Agreement Not in Breach of Other Instruments.  Except as
               --------------------------------------------
indicated in Schedule 4.5 attached hereto, and subject to obtaining any required
             ------------
consents under the Contracts, the execution and delivery of this Agreement by
the Seller and the Company and the consummation of the transactions contemplated
hereby will not result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or conflict with, in any material respect (i) any
Contract or any other material agreement, indenture or other instrument to which
the Seller or the Company is a party or by which either the Seller or the
Company are bound, or to which any of the Station Assets or the Station is
subject or affected, or result in the acceleration of any indebtedness (other
than those being satisfied at closing) or in the creation of any Encumbrance
upon the Station Assets or the Membership Interests, (ii) the organizational
documents of the Company, (iii) any judgment, decree, order or award of any
court, governmental body or arbitrator, or (iv) any material law, rule or
regulation applicable to the Station, the Seller, the Company or the Station
Assets.

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          4.6  License Rights.  The Company is the holder of valid FCC
               --------------
Authorizations for the operation of the Station, as listed in Schedule 4.6
                                                              ------------
attached hereto.

          4.7  Taxes.  The Company has filed all tax returns and forms required
               -----
to be filed, or has filed timely requests for extensions of time to file (and
has filed or will file within the period set by such extension), and has paid in
full all taxes, estimated taxes, interest, penalties, assessments and
deficiencies which have become due pursuant to such returns or without returns
or pursuant to any assessments received by the Company. Such returns and forms
are true and correct in all material respects, and the Company is not required
to pay any other taxes except as shown on such returns. The Company is not a
party to any pending action or proceeding, and, so far as Seller knows, there is
no action or proceeding threatened by any government or authority against the
Company (or the Seller with respect to the Company or the Station Assets) for
assessment or collection of taxes, and no unresolved claim for assessment or
collection of taxes has been asserted against the Company.

          4.8  Labor and Employment Matters.
               ----------------------------

          (a)  Employees and Compensation.  All employee benefits and welfare
               --------------------------
plans or arrangements affecting the Company's employees were established and
have been executed, managed and administered in accordance with the Internal
Revenue Code of 1986, as amended, the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and all other laws. Except as set forth on Schedule
                                                                       --------
4.9, Seller is not aware of the existence of any governmental audit or
---
examination of any of such plans or arrangements or of any facts which would
lead it to believe that any such audit or examination is pending or threatened.
Except as set forth on Schedule 4.8, no action, suit, or claim with respect to
                       ------------
any of such plans, or arrangements (other than routine claims for benefits) is
pending or, to the knowledge of Seller, threatened, and Seller possess no
knowledge of any facts which could give rise to any such action, suit or claim.

          (b)  Liabilities. Except as set forth on Schedule 4.8, the Company is
               -----------                         ------------
not in default of its obligations with respect to any employee benefit plan
relating to the employees of the Station (the "Plan"), including withdrawal
liability under Section 4201 of ERISA. The Company has not incurred any
accumulated funding deficiency within the meaning of ERISA or Section 4971 of
the Internal Revenue Code, has not failed to make any required contributions to
any such Plan.

          4.9  Financial Statements.  Annexed hereto as Schedule 4.9 are
               --------------------                     ------------
unaudited financial statements of the Company's operations for the six (6)
months ended December 31, 1999 and the three (3) months ended March 31, 2000
(including the balance sheet of the Company as of December 31, 1999 (the
"Balance Sheet")).  The financial statements referred to in the preceding
sentence are referred to collectively as the "Financial Statements."  The
Financial Statements are true and complete in all material respects and have
been prepared as internal statements without review.  The Financial Statements
fairly present the financial

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condition, results of operations and cash flow of the Company's operations as of
or for the period ended on, their respective dates.

          4.10  Liabilities.  On the Balance Sheet Date, there were no material
                -----------
Liabilities of the Company's operations that would have been required by GAAP to
be included on the balance sheet of the Company as of such date other than those
Liabilities disclosed or provided for on the Balance Sheet or those described in
Schedule 4.9.  There are no other Liabilities of the Company's operations except
------------
(i)  those incurred since the Balance Sheet Date in the ordinary course of
business consistent with past practice and not in violation of or in conflict
with any of the terms, agreements, warranties, representations and conditions of
the Buyer contained in this Agreement, (ii) those set forth in Schedule 4.9
                                                               ------------
hereto and (iii) those which would not, individually or in the aggregate, have a
Material Adverse Effect on Seller's Station operations.

          4.11  Labor Relations; Employees.  Except as set forth on Schedule
                --------------------------                          --------
4.11, there are no labor strikes, disputes, slow downs, work stoppages or other
----
labor troubles or grievances pending or, to the Company's knowledge, threatened
against or involving the Company's operations.  No unfair labor practice
complaint before the National Labor Relations Board, no charges pending before
the Equal Employment Opportunity Commission and no complaint, charge or
grievance of any nature before any similar or comparable Governmental Authority,
in any case relating to the Company's operations or the conduct of the Station's
business, is pending or, to the knowledge of Seller, threatened.  Neither Seller
nor the Company have received notice nor have any knowledge, of the intent of
any Governmental Authority responsible for the enforcement of labor or
employment laws to conduct any investigation of or relating to such corporation
or the conduct of its business.  Schedule 4.11 is a true and correct list of all
                                 -------------
employees of the Company employed in connection with the Station as of March 31,
2000, by job classification, their respective rates of compensation, whether
each employee is bound by an employment agreement and all perquisites provided
to each such employee (i.e., company car, etc.) (collectively, the "Employees"
                       ---
and, individually, an "Employee").

          4.12  Legal Proceedings.  Except as set forth on Schedule 4.12 hereto,
                -----------------                          -------------
there are no Actions (whether or not purportedly on behalf of the Company)
pending or, to the knowledge of Seller, threatened against or affecting the
Station or any of its properties, rights or business.  No Action involving
negligence or strict liability, to the knowledge of Seller, has been threatened
against the Company or the Station operations.  Neither Seller nor the Company
are in material default with respect to any order, writ, injunction or decree of
any Governmental Authority.  None of the Actions referred to on Schedule 4.12,
                                                                -------------
individually or in the aggregate, will have a Material Adverse Effect on the
Company or the Station operations.

          4.13  Orders, Decrees, Etc.  Except for those matters applicable to
                --------------------
the television broadcast industry as a whole, there are no orders, decrees,
injunctions, rulings, publications, decisions, directives, consents,
pronouncements or regulations of any court or any Governmental

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Authority issued against, or binding on, the Company or the Station operations
which do or may affect, limit or control the Company's method or manner of doing
business.

          4.14 Compliance With Law; Permits and Licenses.
               -----------------------------------------

          (a)  To its knowledge, the Company has complied and is in compliance
with all Laws of any Governmental Authority applicable to it, its assets or
property or its operations, including, without limitation, Laws relating to
zoning, building codes, licensing, permits, antitrust, occupational safety and
health, environmental protection and conservation, water or air pollution, toxic
and hazardous waste and substance control, consumer product safety, product
liability, hiring, wages, hours, employee benefit plans and programs, collective
bargaining and withholding and social security taxes, other than any failure to
comply that, individually or in the aggregate, will not result in any Material
Liability or have a Material Adverse Effect on the Company.

          (b)  The Company presently holds all the permits, licenses and
franchises that are necessary for or Material to its current use, occupancy or
operation of its assets or properties or the conduct of its business; and no
notice of violation of any applicable zoning regulations, ordinance or other
similar Laws binding on the Company with respect to its assets, properties or
business has been received.  Schedule 4.14(b) lists all permits, licenses and
                             ----------------
franchises held by the Company.

          (c)  To its knowledge, the Company has not violated nor is alleged to
have violated, or is in violation of, any Environmental Law, nor has released,
treated, stored, disposed of or transported any Hazardous Substance in violation
of any Environmental Law.  Other than as described on Schedule 4.14(c) hereto,
                                                      ----------------
the Company is unaware of any Hazardous Substances located at, in, on, within or
under the surface of the Station's assets, properties or facilities in Material
violation of applicable Environmental Law.  Other than as set forth on Schedule
                                                                       --------
4.14(c) hereto, neither the Seller nor the Company have received, and are not
-------
aware of, any request for information, notice of claim, demand, lawsuit, action
or other notification from any Governmental Authority or any third party that it
may be responsible for any threatened or actual release of Hazardous Substances,
or be in violation of or in noncompliance with any Environmental Law, and the
Company is not subject to any agreement, consent, decree, administrative order,
notice or enforcement action brought under any Environmental Law.  For purposes
of this paragraph 4.14 (c), "Environmental Law" means any applicable federal,
state, local or Indian law, rule, regulation, ordinance, program, permit,
guidance, order, consent, decree or notice of violation pertaining to the
protection of natural resources, the environment and the health and safety of
employees and the general public; and "Hazardous Substances" means any oil,
petroleum product, asbestos, polychlorinated biphenyls, flammable substances,
explosives, radioactive materials, hazardous wastes, hazardous substances, toxic
wastes or substances or any other wastes, materials or pollutants defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes,"

                                      -10-
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"restricted hazardous wastes," "toxic substances" or words of similar import
under any Environmental Law, any substance the presence of which requires
remediation pursuant to any Environmental Law, or any substance disposed of in a
manner not in compliance with Environmental Law. Schedule 3.18(c) lists all
landfills and other disposal sites used by the Company during its ownership of
the Station.

          4.15  No Material Adverse Change.  Since December 31, 1999, there has
                --------------------------
not been any Material adverse change in the condition (financial or otherwise),
business, or operations, of the Company, nor has there been any damage,
destruction or loss, whether or not covered by insurance, that, individually or
in the aggregate, has or will have a Material Adverse Effect on the Company.

          4.16  Representations and Warranties.  The representations and
                ------------------------------
warranties contained in this Section 4 do not contain any untrue statement of a
fact or omit to state a fact necessary in order to make the statements made not
misleading.

          4.17  Definitions.  For purposes of this Section 4, the following
                -----------
terms shall have the respective meanings set forth below:

     "Actions" mean any claims, actions, suits, proceedings and investigations,
whether at law or in equity, before any court, arbitrator, arbitration panel or
Governmental Authority.

     "Governmental Authority" means any agency, instrumentality, department,
commission, court, tribunal or board of any government, whether foreign or
domestic and whether national, Federal, state, provincial or local.

     "Laws" mean laws, rules, regulations, codes, orders, ordinances, judgments,
injunctions, decrees and policies.

     "Liabilities" mean debts (including interest thereon and any prepayment
penalties applicable thereto), liabilities, claims, obligations, duties and
responsibilities of any kind and description, whether absolute or contingent,
monetary or non-monetary, direct or indirect, known or unknown, matured or
unmatured, or of any other nature.

     "Lien" means any security interest, lien, mortgage, claim, charge, pledge,
restriction, equitable interest or encumbrance of any nature.

     "Material" with respect to the Station's operation means an event, change
or effect substantially related to the condition (financial or otherwise) or
business of the Station as currently conducted.

                                      -11-
<PAGE>

     "Material Adverse Effect" means an event, change or effect that
substantially and adversely affects the condition (financial or otherwise) or
business of the Station as currently conducted.

          4.18 Membership Interests. As of the date hereof and at Closing (a) no
               --------------------
membership interests of the Company are held or will be held in the treasury;
(b) there are no, and will not be any, outstanding options, conversion rights,
warrants, or other present or future rights in existence to acquire or to vote
any of the Company's membership interests; (c) the Membership Interests
represent all the issued and outstanding membership interests of the Company,
and all such membership interests have been duly and validly issued and are
fully paid and nonassessable and are not subject to any preemptive rights; (d)
there are no, and will not be any, voting trust agreements or other contracts,
agreements, or arrangements restricting or affecting voting or dividend rights
or transferability with respect to the Membership Interests; (e) Seller owns and
at Closing will own the Membership Interests free and clear of any mortgages,
liens, claims, charges, encumbrances, assessments, or other security or adverse
interests of any kind or nature whatsoever.

     5.   Representations and Warranties of the Buyer.  The Buyer represents and
          -------------------------------------------
warrants to the Seller that:

          5.1  Organization and Good Standing.  The Buyer is a duly organized
               ------------------------------
corporation, validly existing and in good standing under the laws of the State
of Washington, and authorized to do business and in good standing in the State
of California, with full power to carry on the business of the Station and to
own, lease or operate the Station Assets.

          5.2  Authorization of Agreement.  The Buyer has all requisite power
               --------------------------
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement,
and all other agreements and instruments to be executed by the Buyer in
connection herewith, have been (or upon execution will have been) duly executed
and delivered by the Buyer, have been validly authorized by all necessary action
and constitute (or upon execution and delivery will constitute) legal, valid and
binding agreements and obligations of the Buyer, enforceable in accordance with
their respective terms.

          5.3  Agreement Not in Breach of Other Instruments.  The execution and
               --------------------------------------------
delivery of this Agreement by the Buyer and the consummation of the transactions
contemplated hereby will not result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or conflict with, in any material
respect (i) any contract or any other material agreement, indenture or other
instrument to which the Buyer is a party or by which it is bound; (ii) the by-
laws or other organizational documents of the Buyer; (iii) any judgment, decree,
order or award of any court,

                                      -12-
<PAGE>

governmental body or arbitrator; or (iv) any material law, rule or regulation
applicable to the Buyer.

          5.4  Regulatory Approvals.  All consents, approvals, authorizations
               --------------------
and other requirements prescribed by any law, rule or regulation which must be
obtained or satisfied by the Buyer and which are necessary for the entering into
of this Agreement have been obtained and satisfied, and Buyer has no reason to
believe that any consent required to consummate this transaction to be given by
the FCC or any other governmental entity will be materially delayed.

          5.5  Litigation.  There is no claim, litigation, proceeding or
               ----------
governmental investigation pending or, to the best of the Buyer's knowledge,
threatened, or any order, injunction or decree outstanding that would prevent
the consummation of the transactions contemplated by this Agreement.

     6.   Certain Understandings and Agreements of the Parties.
          ----------------------------------------------------

          6.1  Confidentiality.
               ---------------

          (a)  Until the Closing or for a period of three (3) years from the
date hereof if the Closing does not take place, all Proprietary Information
(defined below) obtained by the Buyer and its authorized representatives shall
be kept confidential by the Buyer and shall not be used by it for any purpose
other than in connection with the transactions contemplated hereby.

          (b)  "Proprietary Information" means any information relating directly
or indirectly to Company or Seller and not generally known to the public.
Proprietary Information may be conveyed in written, graphic, oral or physical
form and may include knowledge, know-how, ideas, processes, inventions,
techniques, formulae, products, specifications, business operations, manuals,
customer requirements, technology, data, plans, distributorship agreements,
supply contracts, market data, financial information or other records and
information relating to:  (i) the business, operation or internal structure of
Company or Seller; (ii) the customers, clients and accounts of Company or
Seller; (iii) any method and/or procedures (such as records, programs, systems,
correspondence or other documents) relating or pertaining to projects developed
by Company or Seller or contemplated by Company or Seller to be developed for
its present or future customers; or (iv) Company or Seller's plans, procedures,
contracts or other information directly or indirectly relating to its sources of
supply, relationships with suppliers, expansion plans or acquisition
possibilities.

     Proprietary Information includes any information directly or indirectly
relating to Seller's efforts to solicit or obtain a buyer for the Membership
Interests and/or the Station.

     Proprietary Information does not include information which (i) at the time
of disclosure is in the public domain, (ii) after disclosure becomes public
knowledge other than through the fault

                                      -13-
<PAGE>

of Buyer, (iii) Buyer can show was in its possession at the time of disclosure
and was not acquired, directly or indirectly, from Company or Seller, or (iv)
was furnished or made known to Buyer by third parties not bound by a
confidentiality agreement with Company or Seller or otherwise prohibited from
disclosing such information by a contractual, legal or fiduciary obligation.

          (c)  Buyer will not disclose the Proprietary Information to any person
other than to its partners, directors, officers, employees, advisors, agents or
affiliates (all of the foregoing collectively referred to as its
"Representatives") who need to know the existence of the information in order to
evaluate the information supplied to Buyer.  Buyer shall take all steps
necessary to ensure that all of such persons or entities keep such information
confidential.

          (d)  In the event that Buyer or any of its Representatives are
requested or required (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process) to disclose any of the Proprietary Information, it is agreed that
Buyer, or such Representative, as the case may be, will make all reasonable
efforts to preclude disclosure of the Proprietary Information including seeking
a protective order or other appropriate remedy, and will provide Company and
Seller with prompt notice of such request(s) so that they may also seek an
appropriate protective order or other appropriate remedy.  In the event that
such protective order or other remedy is not obtained, Buyer or its
Representatives may furnish that portion (and only that portion) of the
Proprietary Information which Recipient is legally compelled to disclose and
will exercise its best efforts to obtain reliable assurance that confidential
treatment will be accorded any Proprietary Information so furnished.

          (e)  Buyer agrees that neither it nor its Representatives will use for
the benefit of Buyer or its Representatives, or communicate or divulge to any
other person, firm, association or corporation, without Company and Seller's
prior written consent, any Proprietary Information that has been communicated
to, acquired by or learned by Buyer and its Representatives from Company.

          (f)  Buyer may use the disclosed Proprietary Information only for the
purposes of analyzing and evaluating the potential purchase by the Buyer of the
Membership Interests.  The following restrictions apply:

               (i)  Buyer may duplicate or reproduce the disclosed Proprietary
Information without the prior written consent of Company and Seller for purposes
of review or evaluation by its Representatives; provided that the disclosed
information must carry a notice disclosing the essential terms contained in this
Confidentiality and Nondisclosure Agreement;

               (ii) Buyer may not use, duplicate or disclose Proprietary
Information for purposes of manufacture, sale, replication or procurement;

                                      -14-
<PAGE>

               (iii) Buyer shall not use the disclosed Proprietary Information
to develop sources of supply, customers, products, processes or technologies for
commercialization.

          6.2  Conduct of Business.  From the date hereof through the Closing
               -------------------
Date the Company shall not (except with the prior written consent of the Buyer):
(i) enter into any material transaction not in the ordinary course of business
(including, without limitation, merge or consolidate with or into any other
entity); (ii) sell or transfer any material portion of the Station Assets; (iii)
mortgage, pledge, or encumber any of the Station Assets, except liens for taxes
not yet due; (iv) enter into any agreements, contracts, leases, commitments, or
understandings which would have a Material adverse affect upon the Station
Assets or upon Seller' or the Company's ability to fulfill their respective
obligations hereunder; (v) enter into agreement to provide programming, subject
to the consent of Buyer, not to be unreasonably withheld, (vi) enter into any
trade-out agreements, or similar contracts, commitments or understandings to
provide broadcast time, except those which are in the ordinary course of
business and consistent with the Seller's past business practices, and which can
be and are performed completely prior to the Closing Date; (vii) program or
broadcast any motion picture, feature film or syndicated program, except in the
ordinary course of business and consistent with the Station's past business
practices; (viii) make any increase in, or any commitment to increase, the
compensation payable to any of the employees or agents of the Station other than
in the ordinary course of business; (ix) hire any new employees except in the
ordinary course of business or enter into or become subject to any employment,
labor, union, or professional service contract or agreement not terminable at
will; (x) materially alter the manner of keeping the books, accounts, or records
of the Company or the accounting practices therein reflected; (xi) change or
modify any of the Company's accounting principles or practices or any method of
applying such principles or practices; or (xii) take any action or fail to take
any action that would cause any of the representations, warranties or covenants
contained herein to be untrue, incorrect or incapable of being satisfied on the
Closing Date.

          6.3  (a)  Preservation of Organization. etc.  The Seller and the
                    ----------------------------------
Company shall use their best efforts to (i) preserve the Station Assets and the
Company's limited liability company existence and business organization intact;
(ii) maintain and preserve its goodwill, business relationships, licenses and
franchises; and (iii) maintain in full force and effect all of its existing
casualty, liability, and other insurance through the Closing Date in amounts not
less than those in effect on the date hereof.

               (b)  Membership Interests. The Seller will not (a) issue, sell,
                    --------------------
or otherwise dispose of any of the Membership Interests; (b) acquire (through
redemption or otherwise) any of its membership interests in the Company; (c)
grant any options, warrants, or other rights to acquire any of its membership
interests in the Company, or (d) issue, sell, or otherwise dispose of any
options, bonds, notes, or other securities with respect to the Company.

                                      -15-
<PAGE>

          6.4  Access.
               ------

          (a)  After the Closing Date, each party will retain and preserve for
five years and, upon either party's request and cost, make available to the
other during normal business hours for any proper purpose, any records relating
to the Station prior to Closing. Additionally, each party will permit the party
requesting access to make copies and extracts therefrom and will provide
originals to the party requesting access where reasonably required for any
lawful purpose.

          (b)  After expiration of the ten (10) day termination period in
Section 6.12, upon not less than five (5) days' notice (i) the parties hereto
shall make available to each other, their employees, agents, representatives and
engineers, the books, records, assets, properties, facilities, premises and
equipment of each of them relating to the Station, including meeting with its
employees, accountants and other agents and representatives who shall furnish
information with respect to such matters as they may reasonably request; and
(ii) the Buyer's employees, agents, representatives and consulting engineers may
conduct engineering and other inspections of the Station and Station Assets.

          6.5  Transfer of Certain Contracts.
               -----------------------------

          (a)  The Seller and the Company agree that between the date hereof and
the Closing Date they will use all reasonable efforts to obtain the necessary
consents to the assignment of each Contract which by its terms or under
applicable law requires the consent of any of the other contracting parties
thereto to an assignment thereof to the Buyer, all of which are set forth on the
attached Schedule 6.5(a) (the "Contracts Requiring Consents").
         ---------------

          (b)  At the Closing, the Buyer shall close the transactions
contemplated hereby notwithstanding the fact that the Seller or the Company may
have failed to obtain consents to the transfer of one or more Contracts (other
than the CBS Affiliation Agreement) which by their terms require the consent of
any other contracting party thereto to the assignment thereof to Buyer. The
terms of this Section 6.5(b) shall govern the transfer of the benefits of each
such Contract (other than the CBS Affiliation Agreement).  With respect to each
such unassigned Contract, after the Closing Date the Seller  shall continue to
deal with the other contracting party(ies) to such Contract as the prime
contracting party and shall use all reasonable efforts to obtain the consent of
all required parties to the assignment of such Contract, but the Buyer shall be
entitled to the benefits of such Contract accruing after the Closing Date to the
extent that Seller may provide the Buyer with such benefits without violating
the terms of such Contract, and the Buyer agrees to perform at its sole expense
all of the obligations of the Seller to be performed under such Contract, the
benefits of which the Buyer is receiving after the Closing Date.

                                      -16-
<PAGE>

          6.6  Cooperation in Litigation.  Each party will fully cooperate with
               -------------------------
the other in the defense or prosecution of any litigation or proceeding already
instituted or which may be instituted hereafter against or by such party
relating to or arising out of the operation of the Station prior to or after the
Closing Date (other than litigation arising out of the transactions contemplated
by this Agreement). The party requesting such cooperation shall pay the out-of-
pocket expenses (including legal fees and disbursements) of the party providing
such cooperation and of its officers, directors, employees and agents reasonably
incurred in connection with providing such cooperation, but shall not be
responsible to reimburse the party providing such cooperation for such party's
time spent in such cooperation or the salaries or costs of fringe benefits or
other similar expenses paid by the party providing such cooperation to its
officers, directors, employees and agents while assisting in the defense or
prosecution of any such litigation or proceeding.

          6.7  Actions With Respect to Closing.  Each party will use all
               -------------------------------
reasonable efforts to bring about the satisfaction of the conditions precedent
to the Closing and to cause the covenants and agreements contained in this
Agreement to be satisfied and performed by each of them.

          6.8  Employees.
               ---------

          (a)  With respect to the Employees listed on Schedule 4.11, Seller's
only responsibility for payment of severance and/or accrued vacation time shall
be as follows:

               (i)   Not later than ten (10) days prior to Closing, Buyer agrees
to provide to Seller a written list of Employees who will not be offered re-
employment by Buyer. Within five (5) days after receipt of such list, Seller
will provide Buyer with a schedule of the amount of severance and accrued
vacation time (as of Closing) which Seller agrees to pay with respect to each
such Employee.

               (ii)  Not later than thirty (30) days after Closing, Buyer shall
provide Seller with a written list of additional Employees who will be
terminated within sixty (60) days after Closing.  Within five (5) days after
receipt of such list, Seller will provide Buyer with a schedule showing the
amount of severance and accrued vacation time (as of Closing) which Seller
agrees to pay with respect to each such Employee.

               (iii) Not later than sixty (60) days after Closing, Buyer will
provide Seller with a list of remaining Employees.  Within five (5) days after
receipt of such list, Seller will provide Buyer with a schedule of the amount of
accrued vacation time (as of Closing) which Seller agrees will be set off as
provided in subsection (iv) below.

               (iv)  Buyer shall make the payments set forth on the schedules
delivered to Buyer under subsections (i) and (ii) of this Section 6.8(a) on
Seller's behalf and shall set off the

                                      -17-
<PAGE>

amounts thereof and the amounts under subsection (iii) against the Accounts
Receivable collected under Section 2.4; provided, nothing in this Section 6.8
                                        --------
shall limit Seller's obligation to pay the amounts under subsections (i), (ii)
and (iii) to the amount of the Accounts Receivable collected by Buyer.

          (b)  The Seller agrees that it shall be solely responsible and liable
for any medical, disability or other benefits owed under the Company's benefit
plans to employees through the Closing Date, including, without limitation, (i)
expenses for health or dental benefits incurred but not submitted for
reimbursement prior to the Closing that are covered under the Company's benefit
plans; (ii) any incentive bonuses offered to employees of the Company; and (iii)
any medical, life and other insurance coverage and benefits, and disability
benefits to which any employee of the Company who retired or was terminated from
service with the Company prior to the Closing Date, or who was disabled prior to
the Closing Date, is entitled under the Company's benefit plans.

          (c)  Except for Employees listed on the schedules provided by Buyer in
accordance with subsections 6.8(a)(i) and (ii), for a period commencing upon the
execution of this Agreement and ending two (2) years following the Closing Date,
the Seller and its affiliates will not solicit the employment of employees hired
by the Buyer without the prior written approval of the Buyer.

          6.9  FCC Application.
               ---------------

          (a)  The Seller shall within ten (10) business days after the
execution of this Agreement, submit this Agreement to the FCC. The Buyer and the
Seller shall at the same time file any and all necessary applications with the
FCC to obtain its written consent to the transfer of control of the Station to
the Buyer ("FCC Consents"). The Seller and the Buyer, respectively, shall take
all necessary steps for the expeditious processing of such application or
applications to a favorable conclusion, including the filing of all necessary
papers; provided that neither of the parties hereto shall have any obligation to
take any unreasonable steps to satisfy complainants, if any, or to participate
in any evidentiary hearing (other than a hearing at which only oral argument is
to be presented).

          (b)  The filing fee for the FCC Consents shall be borne equally by
Buyer and Seller.

          (c)  Between the date of this Agreement and the Closing Date, the
Buyer, their employees and agents shall not directly or indirectly control,
supervise, or direct, or attempt to control, supervise or direct, the operation
of the Station, but such operation, including complete control over all
necessary physical property and its use and unlimited supervision of all
programs shall be the sole responsibility and in the complete control and
discretion of the Seller.

                                      -18-
<PAGE>

          6.10 Pre-Merger Notification. Buyer and the Company shall, within ten
               -----------------------
(10) days after the date hereof, file all necessary notifications under the Hart
Scott Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"),
with respect to the transactions contemplated under this Agreement. Buyer and
the Company shall each pay one-half of all filing fees required in connection
with such filing. Buyer and the Company shall promptly comply with any and all
requests by the United States Department of Justice (the "Department of
Justice") or the Federal Trade Commission (the "FTC") for additional documents
or information with respect to the notification filed with the Department of
Justice and the FTC pursuant to the HSR Act and shall use their respective best
efforts to obtain prompt termination of the waiting period under the HSR Act.

          6.11 Tax Elections. Buyer and Seller agree that the transaction
               -------------
contemplated by this Agreement shall be treated as an asset sale for tax
purposes. The Purchase Price shall be allocated among the assets as mutually
agreed by Seller and Buyer prior to Closing, which shall be set forth on
Schedule 6.11 to this Agreement.

          6.12 Delivery of Schedules. Seller shall deliver all Schedules to
               ---------------------
Buyer within ten (10) business days after the filing of an application for the
FCC Consents. Buyer may terminate this Agreement by written notice to Seller
within ten (10) days after Buyer's receipt of the Schedules if any Schedule
discloses a Material Adverse Effect from the Schedules to the Asset Sale and
Purchase Agreement among Seller and Fisher Companies Inc., as Purchaser, and
Retlaw Enterprises, Inc. and others, as Sellers. Failure to give such written
notice within such ten (10) day period shall constitute an acceptance of the
Schedules by Buyer and a waiver of any right to terminate under this Section
6.12.

     7.   Indemnification.
          ---------------

          7.1  Indemnification by Seller.  Notwithstanding the Closing, Seller
               -------------------------
hereby agrees to indemnify, defend and hold Buyer harmless against and with
respect to, and shall reimburse Buyer for:

          (a)  Any and all losses, direct or indirect, liabilities, or damages
resulting from any untrue representation, breach of warranty, or nonfulfillment
of any covenant or obligation by Seller or the Company contained herein or in
any certificate, document, or instrument delivered to Buyer hereunder;

          (b)  Any and all obligations of Seller or the Company not assumed by
Buyer pursuant to the terms of this Agreement;

          (c)  Any and all losses, liabilities, or damages resulting from the
operation or ownership of the Station prior to the Closing Date, including but
not limited to any and all

                                      -19-
<PAGE>

liabilities arising under the FCC Licenses or assumed contracts which relate to
events occurring prior to the Closing Date;

          (d)  Any and all losses, liabilities or damages resulting from any
failure to comply with any "bulk sales" laws applicable to the transactions
contemplated by this Agreement;

          (e)  Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity, subject to the notice and opportunity to remedy
requirements of Section 7.3 hereof; and

          (f)  Interest at the Washington statutory rate for interest on
judgments on any reimbursable expense or loss incurred by Buyer from the date of
incurrence until the date of reimbursement by Seller.

          7.2  Indemnification by Buyer.  Notwithstanding the Closing, Buyer
               ------------------------
hereby agrees to indemnify and hold the Seller harmless against and with respect
to, and shall reimburse the Seller for:

          (a)  Any and all losses, direct or indirect, liabilities, or damages
resulting from any untrue representation, breach of warranty, or nonfulfillment
of any covenant or obligation by Buyer contained herein or in any certificate,
document, or instrument delivered to Seller hereunder;

          (b)  Any and all losses, liabilities, or damages resulting from the
operation or ownership of the Station by Buyer on and after the Closing Date,
including but not limited to any and all liabilities arising under the Station
Licenses or the Contracts assigned to Buyer which relate to events occurring
after the Closing Date;

          (c)  Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity, subject to the notice and opportunity to remedy
requirements of Section 7.3 hereof; and

          (d)  Interest at the Washington statutory rate for interest on
judgments on any reimbursable expense or loss incurred by Seller from the date
of incurrence until the date of reimbursement by Buyer.

          7.3  Procedure for Indemnification.  The procedure for indemnification
               -----------------------------
shall be as follows:

                                      -20-
<PAGE>

          (a)  The party seeking indemnification under this Article 7 (the
"Claimant") shall give notice to the party from whom indemnification is sought
(the "Indemnitor") of any claim, whether solely between the parties or brought
by a third party, specifying (i) the factual basis for the claim, and (ii) the
amount of the claim. If the claim relates to an action, suit, or proceeding
filed by a third party against Claimant, notice shall be given by Claimant
within fifteen (15) business days after written notice of the action, suit, or
proceeding was given to Claimant.  In all other circumstances, notice shall be
given by Claimant within thirty (30) business days after Claimant becomes, or
should have become, aware of the facts giving rise to the claim. Notwithstanding
the foregoing, Claimant's failure to give Indemnitor timely notice shall not
preclude Claimant from seeking indemnification from Indemnitor except to the
extent that Claimant's failure has materially prejudiced Indemnitor's ability to
defend the claim or litigation.

          (b)  With respect to claims between the parties, following receipt of
notice from the Claimant of a claim, the Indemnitor shall have thirty (30) days
to make any investigation of the claim that the Indemnitor deems necessary or
desirable. For the purposes of this investigation, the Claimant agrees to make
available to the Indemnitor and/or its authorized representatives, the
information relied upon by the Claimant to substantiate the claim. If the
Claimant and the Indemnitor cannot agree as to the validity and amount of the
claim within the 30 day period (or any mutually agreed upon extension thereof),
the Claimant may seek appropriate legal remedy.

          (c)  With respect to any claim by a third party as to which the
Claimant is entitled to indemnification hereunder, the Indemnitor shall have the
right at its own expense to participate in or assume control of the defense of
the claim, and the Claimant shall cooperate fully with the Indemnitor, subject
to reimbursement for actual out of pocket expenses incurred by the Claimant as
the result of a request by the Indemnitor. If the Indemnitor elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of the claim at its own expense. If the
Indemnitor does not elect to assume control or otherwise participate in the
defense of any third party claim, Claimant may, but shall have no obligation to,
defend or settle such claim or litigation in such manner as it deems
appropriate, and in any event Indemnitor shall be bound by the results obtained
by the Claimant with respect to the claim (by default or otherwise) and shall
promptly reimburse Claimant for the amount of all expenses (including the amount
of any judgment rendered), legal or otherwise, incurred in connection with such
claim or litigation. The Indemnitor shall be subrogated to all rights of the
Claimant against any third party with respect to any claim for which indemnity
was paid.

          7.4  Limitation of Liability.  Notwithstanding anything to the
               -----------------------
contrary provided herein, neither Seller nor Buyer shall be liable to the other
under Sections 7.1 or 7.2, except and to the extent that the total amount due is
greater than Five Hundred Thousand Dollars ($500,000.00); provided further, that
the maximum liability of either Seller or Buyer under the provisions of this
Section 7 Indemnification shall be Six Million Dollars ($6,000,000).

                                      -21-
<PAGE>

          7.5  Survival of Representations and Warranties.  All representations
               ------------------------------------------
and warranties made by the parties herein or in any instrument or document
furnished in connection herewith shall survive the Closing and shall expire
fifteen months from the Closing Date, except (i) as to any matter which is based
upon willful fraud by the indemnifying party, with respect to which the
representations and warranties set forth in this Agreement shall expire only
upon expiration of the applicable statute of limitations; (ii) that the
representations and warranties of the Seller contained in Section 4.7 hereof
(taxes) shall expire on the expiration of the applicable statute of limitations;
(iii) that the Buyer's obligations with respect to all obligations and
liabilities assumed by Buyer shall survive until such obligations and
liabilities have been paid, performed or discharged in full; (iv) that the
Seller' obligations with respect to all obligations and liabilities not assumed
by the Buyer shall survive until such obligations and liabilities have been
paid, performed or discharged in full; and (v) the covenants and agreements in
this Section 7 shall continue in full force and effect until fully discharged.
No claim or action for indemnity pursuant to Sections 7.2 or 7.3 hereof for
breach of any representation or warranty shall be asserted or maintained by any
party hereto after the expiration of such representation or warranty pursuant to
the preceding sentence except for claims made in writing prior to such
expiration and actions (whether instituted before or after such expiration)
based on any claim made in writing prior to such expiration, in which case the
subject of such claim shall survive with respect to such claim or dispute until
the final resolution thereof. All representations and warranties, covenants, and
agreements shall also survive and be unaffected by (and shall not be deemed
waived by) any investigation, audit, appraisal, or inspection at any time made
by or on behalf of any party hereto.

     8.   Conditions to Closing.
          ---------------------

          8.1  Conditions to Obligations of Each Party.  The obligations of the
               ---------------------------------------
Seller and the Buyer to consummate the transactions contemplated hereby shall be
subject to the fulfillment, at or prior to the Closing Date, of the following
conditions:

               8.1.1  No Action or Proceeding.  No claim, action, suit,
                      -----------------------
investigation, or other proceeding shall be pending or threatened against Seller
or the Company before any court or governmental agency which presents a
substantial risk of the restraint or prohibition of the transactions
contemplated by this Agreement or the obtaining of material damages or other
relief in connection therewith.

               8.1.2  Compliance with Law.  There shall have been obtained all
                      -------------------
permits, approvals, and consents of all governmental bodies or agencies which
counsel for the Buyer or for the Seller may reasonably deem necessary or
appropriate so that consummation of the transactions contemplated by this
Agreement will be in compliance with applicable laws. The FCC Consents shall
have been granted and public notice thereof shall have been given.  The

                                      -22-
<PAGE>

waiting period under the HSR Act shall have expired or early termination shall
have been granted.

          8.2  Conditions to Obligations of the Buyer.  The obligations of the
               --------------------------------------
Buyer to consummate the transactions contemplated hereby shall be, at the option
of the Buyer, subject to the fulfillment, at or prior to the Closing Date, of
the following additional conditions:

               8.2.1  Representations and Warranties True. In all material
                      -----------------------------------
reports, the representations and warranties of the Seller contained in this
Agreement or in any other document of the Seller delivered pursuant hereto shall
have been true and correct when made and shall be true and correct on the
Closing Date as though such representations and warranties were made on and as
of the Closing Date, and at the Closing the Seller shall have delivered to the
Buyer a certificate to such effect signed by the Seller.

               8.2.2  The Seller' Performance. Each of the obligations of the
                      -----------------------
Seller to be performed by them on or before the Closing Date pursuant to the
terms of this Agreement shall have been duly performed or complied with all
material respects on or before the Closing Date, and at the Closing Seller shall
have delivered to the Buyer a certificate to such effect signed by the Seller.

               8.2.3  Authority. All actions required to be taken by or on the
                      ---------
part of, the Seller to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby shall
have been duly and validly taken by the Seller.

               8.2.4  Legal Proceedings. No claim, action, suit, investigation
                      -----------------
or other proceeding shall be pending or threatened before any court or
governmental agency except matters affecting the television broadcast industry
generally, that might prevent, limit, restrict or impair the ownership, use,
operation or enjoyment of the Station Assets or the Station by the Buyer, other
than an action or proceeding instituted or threatened by the Buyer.

               8.2.5  CBS Affiliation Agreement.  Seller shall have received the
                      -------------------------
consent of CBS to the assignment of the CBS affiliation agreement (the "CBS
Affiliation Agreement") or, if Seller is unable to obtain such consent to
assignment, Buyer shall have entered into a new CBS Affiliation Agreement.

               8.2.6  Additional Closing Documents of the Seller. The Buyer
                      ------------------------------------------
shall have received at the Closing the following documents, dated the Closing
Date:

          (a)  Copies, certified by the Seller, of limited liability company
authorizations of the Company authorizing the execution, delivery and
performance of this Agreement and all other agreements, documents and
instruments relating hereto and the consummation of the

                                      -23-
<PAGE>

transactions contemplated hereby; and a copy of the membership agreement for the
Company, certified by the manager of the Company as being true, correct and
complete as of the Closing Date;

          (b)  Certificates (if any) representing all of the Membership
Interests, which shall be either duly endorsed or  accompanied by stock powers
duly executed in favor of Buyer.

          (c)  Such further instruments of sale, transfer, conveyance,
assignment or delivery covering the Station Assets or any part thereof as the
Buyer may reasonably require to assure the full and effective sale, transfer,
conveyance, assignment or delivery to it of the Membership Interests to be
transferred to the Buyer under this Agreement;

          (d)  Copies of the consents to all Contracts Requiring Consents and
any other third-party consents the Seller has been able to obtain;

          (e)  Certificate of the Seller certifying that the representations and
warranties of the Seller made herein and in the other agreements, documents and
instruments relating hereto were true and correct as of the date of this
Agreement and are true and correct as of the Closing Date, and that the Seller
have performed or complied with all covenants and agreements required to be
performed by the Seller on or prior to the Closing;

          (f)  Certificate as to the existence and good standing of the Company
in its state of formation and in the state where the Station is located, dated
shortly before the Closing Date;

          (g)  Resignations of the managers and

          (h)  Such other documents as the Buyer may reasonably request.

          8.3  Conditions to Obligations of the Seller.  The obligation of the
               -----------------------------------------
Seller to consummate the transactions contemplated hereby shall be, at the
option of the Seller, subject to the fulfillment, at or prior to the Closing
Date, of the following additional conditions:

               8.3.1  Representations and Warranties True. The representations
                      -----------------------------------
and warranties of the Buyer contained in this Agreement or in any document
delivered pursuant hereto shall be true and correct in all material respects on
the Closing Date with the same effect as if made on the Closing Date, and at the
Closing the Buyer shall have delivered to the Seller a certificate to such
effect, signed by the Buyer.

               8.3.2  Performance of Covenants. Each of the obligations of the
                      ------------------------
Buyer to be performed on or before the Closing Date pursuant to the terms of
this Agreement shall have been duly performed on or before the Closing Date, and
at the Closing the Buyer shall have delivered to the Seller a certificate to
such effect signed by the Buyer.

                                      -24-
<PAGE>

               8.3.3  Authority. All actions required to be taken by, or on the
                      ---------
part of, the Buyer, including the approval of its Board of Directors, to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken by the Buyer.

               8.3.4  Lender's Consent. Seller shall have obtained the consent
                      ----------------
of its primary lender to the consummation of the transaction described in this
Agreement.

               8.3.5  Additional Closing Documents of the Buyer. The Seller
                      -----------------------------------------
shall have received at the Closing the following documents, each dated the
Closing Date:

               (a)  Copies, certified by an officer of the Buyer, of the Buyer's
authorizing resolutions and any other documentation authorizing the execution
and delivery of this Agreement and all other agreements, documents or
instruments relating hereto and the consummation of the transactions
contemplated hereby; and a copy of the Articles of Incorporation for the Buyer,
certified by an officer of the Buyer as being true, correct and complete as of
the Closing Date;

               (b)  Instruments executed by the Buyer, in form and substance
reasonably satisfactory to counsel for the Seller, pursuant to which the Buyer
assumes the Membership Interests pursuant to the terms hereof;

               (c)  Such other closing documents as the Seller may reasonably
request.

     9.   Termination.   This Agreement may be terminated as follows:
          -----------

            9.1.1.    the mutual consent of Seller and Buyer;

            9.1.2.    by Buyer, upon a material breach of any material covenant
or agreement on the part of Seller set forth in this Agreement, or if any
material representation or warranty of Seller shall have become untrue, in
either case such that the conditions set forth in Section 8.2 would not be
                                                  -----------
satisfied (a "Terminating Seller Breach"); provided, that, if such Terminating
                                           --------
Seller Breach is curable by the Seller through the exercise of reasonable
efforts and for so long as the Seller continues to exercise such reasonable
efforts, Buyer may not terminate this Agreement under this Section 9.1.2;
                                                           -------------

            9.1.3.    by Seller, upon material breach of any material covenant
or agreement on the part of Buyer set forth in this Agreement, or if any
material representation or warranty of Buyer shall have become untrue, in either
case such that the conditions set forth in Section 8.3 would not be satisfied (a
                                           -----------
"Terminating Buyer Breach"); provided, that, if such Terminating Buyer Breach is
                             --------

                                      -25-
<PAGE>

curable by Buyer through the exercise of their reasonable efforts and for so
long as Buyer continues to exercise such reasonable efforts, Seller may not
terminate this Agreement under this Section 9.1.3;
                                    -------------

             9.1.4.   by either Buyer or Seller if the Closing Date shall not
have occurred by September 30, 2000; provided, however, that the right to
                                     --------  -------
terminate this Agreement under this Section 9.1.4 shall not be available to any
                                    -------------
party whose failure to fulfill any obligation under this Agreement has been the
cause of the failure of the Closing Date to occur on or before such date;

             9.1.5.   by either Buyer or Seller if the FCC designates the
application contemplated by Section 6.9 hereof  for an evidentiary hearing;  or

             9.1.6.   by either Buyer or Seller in the event that any court or
Governmental Authority of competent jurisdiction shall issue a final, non-
appealable injunction prohibiting the transactions contemplated by this
Agreement; provided, however, that the issuance of such final, non-appealable
           --------  -------
injunction shall not be attributable to the breach of this Agreement by the
party seeking termination pursuant to this Section 9.1.6.
                                           -------------

          9.2  Buyer's Remedies; Specific Performance.  Seller recognizes that,
               --------------------------------------
in the event Seller defaults in the performance of its obligations to close
under this Agreement, monetary damages alone will not be adequate. Therefore,
unless Buyer is in default in the performance of its obligations to close under
this Agreement, Buyer shall be entitled, in addition to bringing an action at
law or equity for money or other damages for indemnification under Section 7.1
hereof, to obtain specific performance of the terms of this Agreement. In any
action to enforce specifically the performance of this Agreement, Seller shall
waive the defense that there is another adequate remedy at law or equity and
agrees that Buyer shall have the right to obtain specific performance of
Seller's obligations to close under the terms of this Agreement without being
required to prove actual damages, post bond or furnish other security other than
to pay the full Purchase Price and otherwise perform its closing obligations. In
addition, Buyer shall be entitled to obtain from Seller court costs and
reasonable attorneys' fees incurred by it in successfully enforcing its rights
hereunder, plus interest at the Washington statutory rate on the amount of any
judgment obtained against Seller from the date of default by Seller until the
date of payment of the judgment. As a condition to seeking specific performance,
Buyer shall  be required to have tendered the Purchase Price specified in
Section 2.1 of this Agreement, but shall be required to demonstrate it is ready,
willing and able to do so and to perform its other closing obligations in all
material respects.

          9.3  Seller's Remedies.  Unless Seller is in default under this
               -----------------
Agreement, if Seller terminates the Agreement pursuant to Section 9.1.3 hereof,
Seller shall be entitled to the Three Million Dollars ($3,000,000) plus accrued
interest thereon from the Deposit as full satisfaction of any claims it may have
for damages.

          9.4  Effect of Termination.  In the event this Agreement is terminated
               ---------------------
this Agreement shall forthwith become void, there shall be no liability on the
part of Buyer or Seller to

                                      -26-
<PAGE>

the other, and all rights and obligations of Buyer or Seller hereunder shall
cease, except that the obligations of Buyer and Seller and the Company set forth
in Section 9, Section 6.1 (which relates to confidentiality), and Section 10.11
   ---------  -----------                                         -------------
(which relates to payment of certain expenses), shall survive such termination
and the parties hereto shall have any and all remedies to enforce such
obligations provided at law or in equity or otherwise (including, without
limitation, specific performance).

     10.  Miscellaneous.
          -------------

          10.1 Notices. All notices, requests, demands and other communications
               -------
hereunder shall be in writing and shall be deemed given if delivered (i)
personally, (ii) one (1) day after sent by overnight courier, or (iii) three (3)
days after mailed by certified or registered mail, postage prepaid, return
receipt requested, to the parties, their successors in interest or their
assignees at the following addresses, or at such other addresses as the parties
may designate by written notice in the manner aforesaid:

          If to the Buyer:

               AK Media Group, Inc.
               1301 Fifth Avenue, Suite 4000
               Seattle, WA 98101
               Attn.: Denis M. Curley

          With a copy to:

               Rubin, Winston, Diercks, Harris & Cooke, L.L.P.
               1155 Connecticut Avenue, Sixth Floor
               Washington, DC 20036
               Attn.: James L. Winston, Esquire

          If to the Seller:

               Fisher Companies Inc.
               600 University Street, Suite 1525
               Seattle, Washington 98101-3185
               Attn.: William W. Krippaehne, Jr.

                                      -27-
<PAGE>

          With a copy to:

               Graham & Dunn, P.C.
               1420 Fifth Avenue, 33rd Floor
               Seattle, Washington 98101-2390
               Attn: Jack G. Strother, Esquire

               Shaw Pittman
               2001 Pennsylvania Ave. NW, Ste. 400
               Washington, D.C. 20006-1824
               Attn: Clifford M. Harrington, Esquire

          If to the Company:

               Fisher Broadcasting - Fresno, LLC
               600 University Street, Suite 1525
               Seattle, Washington 98101-3185
               Attn.: William W. Krippaehne, Jr.

          With a copy to:

               Graham & Dunn, P.C.
               1420 Fifth Avenue, 33rd Floor
               Seattle, Washington 98101-2390
               Attn: Jack G. Strother, Esquire

          10.2 Knowledge. The term "to the knowledge of Seller" or similar term
               ---------
means the current actual knowledge of any of Pat Scott, John Ulman, Ben Tucker,
Warren Spector and the General Manager of the Station.

          10.3 Assignability and Parties in Interest. Buyer shall have the right
               -------------------------------------
to assign this Agreement, or transfer its rights and obligations hereunder,
without restriction to any other party upon delivery of written notice to
Seller; provided, however, Buyer shall remain fully liable on all obligations
arising hereunder, the same as if no assignment had been made. Seller shall not
have the right to assign this Agreement or transfer its rights and obligations
hereunder without the written consent of Buyer, which consent shall not be
unreasonably withheld or delayed. No assignment of this Agreement shall relieve
the assignor of liability hereunder. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, and their heirs, administrators, and
permitted successors and assigns.

                                      -28-
<PAGE>

          10.4  Governing Law.  This Agreement shall be governed by, and
                -------------
construed and enforced in accordance with, the laws of the State of Washington,
without giving effect to principles of conflicts of laws.

          10.5  Counterparts.  This Agreement may be executed simultaneously in
                ------------
one or more counterparts, each of which shall be deemed an original, but all of
which shall constitute but one and the same instrument.

          10.6  Indemnification for Brokerage.  The Seller and Buyer have not
                -----------------------------
incurred any brokerage commission, expense or similar fee responsibility in
connection with the sale of the Station. Each party shall indemnify the other
party against all claims for any such fees or commission by any person
purporting to act or to have acted for or on behalf of the indemnifying party.

          10.7  Publicity.  The Seller and the Buyer agree that press releases
                ---------
and other announcements to be made by either of them with respect to the
transactions contemplated hereby shall be subject to mutual agreement.

          10.8  Complete Agreement.  This Agreement, the Exhibits hereto, the
                ------------------
Schedules hereto and the documents delivered or to be delivered pursuant to this
Agreement contain or will contain the entire agreement between the parties
hereto with respect to the transactions contemplated herein and shall supersede
all previous oral and written and all contemporaneous oral negotiations,
commitments, and understandings.

          10.9  Modifications, Amendments and Waivers.  At any time prior to the
                -------------------------------------
Closing Date or termination of this Agreement, the parties may, by written
agreement:

          (a)   Extend the time for the performance of any of the obligations or
other acts of the parties hereto;

          (b)   Waive any inaccuracies in the representations and warranties
contained in this Agreement or in any document delivered pursuant to this
Agreement;

          (c)   Waive compliance with any of the covenants or agreements
contained in this Agreement; and

          (d)   Amend or supplement any of the provisions of this Agreement.

          10.10 Interpretation. The headings contained in this Agreement are for
                --------------
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

          10.11 Severability. Any provision of this Agreement which is invalid,
                ------------
illegal, or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such

                                      -29-
<PAGE>

invalidity, illegality, or unenforceability, without affecting in any way the
remaining provisions hereof in such jurisdiction or rendering that or any other
provision of this Agreement invalid, illegal, or unenforceable in any other
jurisdiction.

          10.12  Expenses of Transactions.  The Buyer and Seller shall share
                 ------------------------
equally the following expenses related to the transaction contemplated by this
Agreement: (a) payment of the filing fee required by the HSR Act, and (b)
payment of the filing fee required by the FCC. Any sales and transfer taxes
arising out of the transfer of the Membership Interests to the Buyer and title
insurance and related charges for surveys for all Real Property being
transferred to the Buyer shall be paid by Buyer.  All other costs and expenses
incurred by the Buyer or the Seller in connection with the transactions
contemplated by this Agreement shall be borne by the party incurring the same.

          10.13  Submission to Jurisdiction.  Each of the parties hereto
                 --------------------------
irrevocably consents that any legal action or proceeding against it or any of
its property with respect to this Agreement or any other agreement or instrument
executed in connection herewith may be brought in any court of the State of
Washington or any Federal court of the United States of America located in the
State of Washington, or both, and by the execution and delivery of this
Agreement each party hereto hereby accepts with regard to any such action or
proceeding for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each party hereto
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such party at the
address referred to in Section 10.1 hereof, such service to become effective
upon receipt thereof by such party. Nothing herein shall affect the right of any
party to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction.

                                      -30-
<PAGE>

     IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
or has caused this Agreement to be duly executed and delivered in its name on
its behalf as of the date first above written.

                              Buyer:

                              AK Media Group, Inc.

                              By: /s/ Chris Ackerley
                                  ------------------
                              Name: Chris Ackerley
                              Title: Co-President

                              Seller:

                              Fisher Broadcasting Inc.

                              By: /s/ Patrick M. Scott
                                  --------------------
                              Name: Fisher Broadcasting Inc.
                              Title: Pres. - CEO

                              Company:

                              Fisher Broadcasting - Fresno, LLC

                              By: /s/ William W. Krippaehne, Jr.
                                  ------------------------------
                              Name: William W. Krippaehne, Jr.
                              Title: Manager

                                      -31-<PAGE>

                                                                     EXHIBIT 4.8

                                                                       Exhibit A
                                                                       ---------

                               FORM OF DEBENTURE
No. 1,2,3

THESE SECURITIES (INCLUDING ANY UNDERLYING SECURITIES) HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN
OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION SHALL NO LONGER BE REQUIRED.

                         INFORMATION HIGHWAY.COM, INC.
                            5% CONVERTIBLE DEBENTURE

$500,000                                                           March 3, 2000
New York, New York

          1.  Consideration.  FOR VALUE RECEIVED, INFORMATION HIGHWAY.COM, INC.
a Florida corporation (the "undersigned" or the "Company"), hereby promises to
pay to the order of Senasqua Investors LLC, at its offices located at 110
Colabaugh Pond Road, Croton-on-Hudson, New York  10520 or at such other place as
the holder hereof  (the "holder" or the "Registered Holder") shall designate to
the undersigned in writing, in lawful money of the United States of America or
in New York Clearing House Funds, the principal amount of Five Hundred Thousand
Dollars on the Maturity Date (as defined below). Interest shall accrue on the
outstanding principal balance at the interest rate of five (5%) percent per
annum.  For purposes of calculating interest accrued hereon, interest shall be
calculated on the basis of the actual number of days elapsed in a 360 day year.
This Debenture is one of three (3) Debentures issued to the Registered Holder on
the date hereof in the aggregate principal amount of one million five hundred
thousand dollars ($1,500,000). The undersigned promises to pay the said
principal sum in accordance with the terms of this Debenture (as defined below).

          2.  Payment.   On March 3, 2002 (the "Maturity Date") the undersigned
shall pay the holder all unpaid principal and interest, if any, on this
Debenture.  At the Company's option, any interest payment required to be paid on
this Debenture may be made in the form of the issuance to the holder of the
Company's common stock, par value $.0001 per share (the "Common Stock"), with
the number of shares of such Common Stock to be payable in lieu of such interest
payments to be determined in accordance with the provisions of Section 6, as if
such interest payment were a portion of the principal amount of the Debenture to
be converted into Common Stock.

<PAGE>

          Principal and interest shall be payable at the most recent address as
the Registered Holder shall have designated to the Company in writing.  No
payment of the principal of this Debenture may be made prior to the Maturity
Date by the Company without the consent of the Registered Holder, except as
otherwise provided herein.

          3.  Overdue Interest Payments.  Interest on the indebtedness evidenced
by this Debenture after default or maturity accelerated or otherwise shall be
due and payable at the rate of ten (10%) percent per annum, subject to the
limitations of applicable law.

          4.  Holidays.  If this Debenture or any installment hereof becomes due
and payable on a Saturday, Sunday or public holiday under the laws of the State
of New York, the due date hereof shall be extended to the next succeeding
business day and interest shall be payable at the rate of five (5%) percent per
annum during such extension.  All payments received by the holder shall be
applied first to the payment of all accrued interest payable hereunder.

          5.  Issuance of Debentures.  This Debenture has been issued by the
Company pursuant to the authorization of the Board of Directors of the Company
(the "Board") and issued pursuant to a Securities Purchase Agreement, dated as
of the date hereof, by and between the Company and the Purchaser identified
therein (the "Securities Purchase Agreement").  Pursuant to the Securities
Purchase Agreement, the Company issued $1,500,000 principal amount of the
Debentures and warrants to purchase (the "Warrants") 225,000 shares of the
Company's Common Stock.  The Securities Purchase Agreement contains certain
additional terms that are binding upon the Company and each Registered Holder of
the Debentures.  A copy of the Securities Purchase Agreement may be obtained by
any registered holder of the Debentures from the Company upon written request.
Capitalized terms used but not defined herein shall have the meanings set forth
in the Securities Purchase Agreement, including the Exhibits thereto. This
Debenture  and the other 5% Convertible Debentures due 2002 issued by the
Company pursuant to the terms of the Securities Purchase Agreement, together
with any debentures from time to time issued in replacement thereof, whether
pursuant to transfer and assignment, partial conversion thereof or otherwise,
are collectively referred to herein as the "Debentures."

          6.  Conversion.

          (a) Subject to and in compliance with the provisions hereof, the
holder shall have the right to convert all or a portion of the outstanding
principal amount of this Debenture into such number of shares of Common Stock
(the shares of Common Stock issuable upon conversion of, and issuable in lieu of
interest payments on, this Debenture, if any, are hereinafter referred to as the
"Conversion Shares") as shall equal the quotient obtained by dividing (x) the
principal amount of this Debenture to be converted by (y) the Applicable
Conversion Price (as hereinafter defined) and by surrender of this Debenture,
such surrender to be made in the manner provided herein.

          (b) For purposes hereof the term "Applicable Conversion Price" shall
mean the lesser of (i) $6.22875 (the "Fixed Price") and (ii) the product
obtained by multiplying (x) the Average Closing Price (as hereinafter defined)
by (y) .80.

                                       2
<PAGE>

          For purposes hereof the "Average Closing Price" with respect to any
conversion elected to be made by the holder shall be the average of the five (5)
lowest daily closing bid prices (each such price is referred to individually as
a "Floating Reference Price" and, collectively, as the "Floating Reference
Prices") during the twenty (20) trading days immediately preceding the date on
which the holder gives the Company a written notice of the holder's election to
convert outstanding principal of this Debenture. The closing bid price on any
trading day shall be (a) if the Common Stock is then listed or quoted on either
the OTC Bulletin Board, the NASDAQ SmallCap Market or the NASDAQ National
Market, the reported closing bid price for the Common Stock as reported by
Bloomberg, L.P. ("Bloomberg") or The Wall Street Journal (the "Journal") or on
such day (or, if not so reported, as otherwise reported by The NASDAQ Small Cap
Market, NASDAQ National Market or the OTC Bulletin Board, as the case may be),
(b) if the Common Stock is listed on either the American Stock Exchange or New
York Stock Exchange, the closing bid price for the Common Stock on such exchange
on such day as reported by Bloomberg or the Journal or (c) if neither (a) nor
(b) apply but the Common Stock is quoted in the over-the-counter market, another
recognized exchange, or on the pink sheets, the last reported bid price thereof
on such date.  If the prices of the Common Stock cannot be calculated on such
date on any of the foregoing bases, such prices on such date shall be the fair
market value as mutually determined by the Company and the Registered Holder for
which the calculation is required in order to determine the Applicable
Conversion Price; provided, however, that if the Company and the Registered
Holder are unable to mutually determine the fair market value, such fair market
value shall be determined by a nationally recognized investment banking firm or
firm of independent chartered accountants of recognized standing (which firm may
be the firm that regularly examines the financial statements of the Company) (an
"Appraiser") selected in good faith by the Board and holders of a majority in
interest of the Debentures. "Trading day" shall mean any day on which the
Company's Common Stock is traded for any period on the principal securities
exchange or other securities market on which the Common Stock is then being
traded.

          (c) If, during any period following March 3, 2000 (the "Original Issue
Date"), as a result of the occurrence of any of the events set forth in Section
3(f) or 3(g) of the Registration Rights Agreement, dated as of March 3, 2000, by
and between the Company and the Purchaser set forth therein (the "Registration
Rights Agreement"), the Purchaser set forth therein is not able to sell shares
of Common Stock issuable upon conversion of, or in lieu of interest payments on,
this Debenture pursuant to a registration statement filed pursuant to such
agreement, the Registered Holder shall have the right, for any purpose under
this Debenture during such period and thereafter, to designate as the Applicable
Conversion Price any Conversion Price that would have been applicable during
such period had the Registered Holder delivered a Notice of Conversion with
respect to any portion of this Debenture.  "Conversion Date" shall have the
meaning given such term in Section 5(b) of the Securities Purchase Agreement.

          (d) The Registered Holder shall convert this Debenture in accordance
with Section 5(b) of the Securities Purchase Agreement.  If the Company fails to
deliver to the holder a certificate or certificates for shares of Common Stock
in the period set forth in the

                                       3
<PAGE>

Securities Purchase Agreement, the Company shall make certain payments to the
holder in accordance with Section 5(d) of the Securities Purchase Agreement.

          (e) If the entire outstanding principal amount of this Debenture is
not converted, the Company shall also issue and deliver to such holder a new
Debenture of like tenor in the principal amount equal to the principal which was
not converted and dated the Original Issue Date. Each conversion shall be deemed
to have been effected immediately prior to the close of business on the date on
which a Notice of Conversion shall have been delivered as aforesaid, and the
person or persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares represented thereby at
such time on such date.

          (f) All shares of Common Stock delivered upon conversion of, or in
lieu of interest payments on, this Debenture will, upon delivery, be duly
authorized, validly issued and fully paid and nonassessable.

          (g) No fractional shares of Common Stock shall be issued upon
conversion of, or in lieu of interest payments on, this Debenture. Instead of
any fractional share of Common Stock which would otherwise be deliverable upon
the conversion of, or in lieu of interest  payments on, the principal of this
Debenture, the Company shall pay to the holder an amount in cash (computed to
the nearest cent) equal to the Average Closing Price multiplied by the fraction
of a share of Common Stock represented by such fractional interest.

          (h) The issuance of certificates for shares of Common Stock upon any
conversion of, or in lieu of interest payments on, this Debenture shall be made
without charge to the payee hereof for any tax or other expense in respect to
the issuance of such certificates, all of which taxes and expenses shall be paid
by the Company, and such certificates shall be issued only in the name of the
registered holder of this Debenture.

          (i) Notwithstanding anything herein to the contrary, at no time shall
the Registered Holder (including its officers, directors and affiliates)
maintain in the aggregate beneficial ownership (as defined for purposes of
Section 16 of the Securities Exchange Act of 1934, as amended) of shares of
Common Stock in excess of 4.999% of the Company's outstanding Common Stock and
accordingly, the Registered Holder may only convert this Debenture up to the
point where its aggregate beneficial ownership (as defined for purposes of
Section 16 of the Securities Exchange Act of 1934, as amended) of shares of
Common Stock is equal to or less than 4.999% of the Company's outstanding Common
Stock.

          7.  Redemption by Company.

          (a) If, after the Original Issue Date, there shall occur a Change in
Control of the Company (as defined below), then, at the option of the Registered
Holder, the Company shall, on the effective date of and subject to the
consummation of such Change in Control, redeem this Debenture for cash from the
Registered Holder at a redemption price equal to one hundred twenty percent
(120%) of the aggregate principal and accrued interest

                                       4
<PAGE>

outstanding under this Debenture. Nothing in this subsection shall limit the
Registered Holder's right to convert this Debenture on or prior to such Change
in Control. For purposes hereof, a "Change in Control" shall be deemed to have
occurred if (A) any person or group (as defined for purposes of Regulation 13D
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) shall
have become the beneficial owner or owners of more than fifty percent (50%) of
the outstanding voting stock of the Company; (B) there shall have occurred a
merger or consolidation in which the Company or an affiliate of the Company is
not the survivor or in which holders of the Common Stock of the Company shall
have become entitled to receive cash, securities of the Company other than
voting common stock or securities of any other person; (C) at any time persons
constituting the Existing Board of Directors cease for any reason whatsoever to
constitute at least a majority of the members of the Board of Directors of the
Company; or (D) there shall have occurred a sale of all or substantially all the
assets of the Company. For purposes hereof, the term "Existing Board of
Directors" shall mean the persons constituting the Board of Directors of the
Company on the date hereof, together with each new director whose election, or
nomination for election by the Company's stockholders is approved by a vote of
the majority of the members of the Existing Board of Directors who are in office
immediately prior to the election or nomination of such director.

          (b) In the event that the Company is subject to NASDAQ Rule 4310 or
4460, if prior to the time the stockholders of the Company shall have approved
the transactions contemplated by the Securities Purchase Agreement as provided
in clause (B) below, the number of shares of Common Stock issued (i) upon
conversion of the Debentures and (ii) in lieu of interest payments on the
Debentures, if any, (collectively, the "Conversion Shares"), shall be equal to
or more than 19.9% of the number of the shares of capital stock outstanding on
the Closing Date (a "Redemption Event"), the Company shall have the option to
(A) redeem the outstanding principal amount of this Debenture at the redemption
price of one hundred twenty percent (120%) of the principal amount hereof plus
accrued interest on this Debenture, if any, or (B) call a special meeting of its
stockholders for the purpose of approving the transactions contemplated by the
Securities Purchase Agreement, including the issuance of the Debentures and
Warrants on the terms set forth therein, together with any other approvals that
shall be required so as to cause the transactions contemplated by the Securities
Purchase Agreement to remain in compliance with the Rules and Regulations of
Nasdaq (including Rule 4460 of Nasdaq's Non-Qualitative Designation Criteria on
the occurrence of a Redemption Event; such approvals are referred to herein as
the "Required Approvals").  The Company shall determine within five (5) business
days following the occurrence of any Redemption Event which of such actions it
shall take, and shall promptly furnish notice to the Purchaser as to such
determination, including, if applicable, a notice of redemption.  If the Company
does not make a determination within such five (5) day period, this Debenture
shall be redeemed the first business day following the end of such five (5) day
period, if any, at the redemption price of one hundred twenty percent (120%) of
the principal amount hereof plus accrued interest on the Debenture, if any.

          (c) If the Company elects to call a special meeting of its
stockholders pursuant to Section 6(b) to obtain the Required Approvals, the
Company shall obtain such Required Approvals within thirty (30) days of the
distribution of the notice described in such Section (such thirty (30) day
period is referred to herein as an "Approval Period").  If such approval is not
obtained within the Approval Period, this Debenture shall be redeemed on the

                                       5
<PAGE>

first business day following the Approval Period at the redemption price of one
hundred twenty percent (120%) of the principal amount hereof plus accrued
interest on the Debenture, if any.

          (d) If the Company fails to have a registration statement effective
within one hundred fifty (150) days of the date of the Stock Purchase Agreement,
at the option of the Purchaser, the Company shall redeem these Debentures at a
redemption price of one hundred twenty percent (120%) of the principal amount
hereof plus accrued and unpaid interest thereon, if any.

          (e) If the Company shall be required to redeem the Debentures pursuant
to any of the terms or conditions set forth in this Section 7, the Company shall
remit the redemption price to the Registered Holder thereof immediately upon
such redemption.

          8.  Covenants.

          (a) The Company will pay all taxes, assessments and governmental
charges lawfully levied or assessed upon it, its property and any part thereof,
and upon its income for profits, and any part thereof, before the same shall
become delinquent; and will duly observe, and conform to, all lawful
requirements of any governmental authority relative to any of its property, and
all covenants, terms and conditions upon or under which any of its property is
held; provided that nothing in this Section shall require the Company to observe
or conform to any requirement of governmental authority so long as the validity
thereof shall be contested in good faith by appropriate proceedings or to pay
any such tax, assessment or governmental charges so long as the validity thereof
shall be contested in good faith by appropriate proceedings and adequate
reserves with respect thereto shall have been set aside on the books of the
Company.

          (b) Subject to the other provisions of this Debenture, the Company at
all times will maintain its corporate existence and right to carry on its
business and will duly procure all necessary renewals and extensions thereof and
use its best efforts to maintain, preserve and renew all of its rights, powers,
privileges and franchises; provided, however, that nothing herein contained
shall be construed to prevent the Company from ceasing or omitting to exercise
any rights, powers, privileges or franchises which, in the judgment of the
Board, can no longer be profitably exercised, nor to prevent the consolidation,
merger or liquidation of any subsidiary or subsidiaries of the Company with or
into the Company.

          (c) The Company will at no time close its stock transfer books against
the transfer of any shares of Common Stock issued or issuable upon the
conversion of, or in lieu of interest payments on, the Debentures, in any manner
which interferes with the timely conversion of such Debentures.

          (d) As used in this Debenture, the term "Common Stock" shall include
all stock of any class or classes (however designated) of the Company,
authorized on or after the date hereof, the holders of which shall have the
right, without limitation as to amount, either to all or to a share of the
balance of current dividends and liquidating dividends after the payment of
dividends and distributions on any shares entitled to preference, and the
holders of which shall

                                       6
<PAGE>

ordinarily be entitled to vote for the election of the directors of the Company.
The Company shall not, without the prior written consent of the Registered
Holder of this Debenture, issue any shares of its capital stock, other than as
permitted by Section 4(i) of the Securities Purchase Agreement, in exchange for
Debentures as provided hereunder or upon exercise of the Warrants in accordance
with the terms thereof.

          (e) The Company will not, by amendment of its Certificate of
Incorporation or By-laws or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder or
pursuant to the Securities Purchase Agreement by the Company, and will at all
times assist in good faith in the carrying out of all the provisions of this
Debenture and the Securities Purchase Agreement and in the taking of all such
action as may be necessary or appropriate in order to protect the conversion
rights of the Registered Holders of the Debentures against impairment.

          (f) In the event of any taking by the Company of a record of the
holders of any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a cash dividend) or
other distribution, any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property, or to
receive any other right, the Company shall mail to each Registered Holder of the
Debentures, at least ten (10) days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right.

          9.  Limitation on Certain Corporate Acts.  The Company hereby
covenants and agrees that upon any consolidation or merger or upon the transfer
of all or substantially all of the property or assets of the Company, the due
and punctual payment of the principal and interest on all the Debentures
according to their tenor and the due and punctual performance and observance of
all the terms, covenants and conditions of the Debentures and the Securities
Purchase Agreement to be kept and performed by the Company shall be expressly
assumed by the corporation formed by such consolidation, or into which the
Company shall have merged or by the purchaser of such property or assets; and
such assumption shall be an express condition of such merger or consolidation
agreement or agreement for the transfer of property or assets.

          10.  Events of Default.  In case one or more of the following events
of default shall have occurred:

          (a) default in the due and punctual payment of interest upon or
principal of any of the Debentures as and when the same becomes due and payable
either at maturity or otherwise; or

          (b) failure to deliver the shares of Common Stock required to be
delivered upon conversion of, or in lieu of interest payments on, the
Debentures in the manner and at the time required by Section 5 of the Securities
Purchase Agreement; or

                                       7
<PAGE>

          (c) failure of the Company to have authorized the number of shares of
Common Stock issuable upon conversion of, or in lieu of interest payments on,
the Debentures, or exercise of the Warrants; or

          (d) failure on the part of the Company to duly observe or perform any
of its other covenants or agreements contained in, or to cure any material
breach in a material representation or covenant contained in the Securities
Purchase Agreement, the Debentures or the Registration Rights Agreement for a
period of ten (10) days after the date on which written notice of such failure
or breach requiring the same to be remedied has been given by a Registered
Holder to the Company; or

          (e) a decree or order by a court having jurisdiction has been entered
adjudging the Company (or any Material Subsidiary (as herein after defined))
bankrupt or insolvent, or approving a petition seeking reorganization of the
Company (or any Material Subsidiary) under any applicable bankruptcy law and
such decree or order has continued undischarged or unstayed for a period of
thirty (30) days; or a decree or order of a court having jurisdiction for the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company (or any Material Subsidiary) or of all or
substantially all of its property, or for the winding-up or liquidation of its
affairs, has been entered, and has remained in force undischarged or unstayed
for a period of thirty (30) days; or

          (f) the Company (or any Material Subsidiary) institutes proceedings to
be adjudicated a voluntary bankrupt, or consents to the filing of a bankruptcy
proceeding against it, or files a petition or answer or consent seeking
reorganization under applicable law, or consents to the filing of any such
petition or to the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of it or of all or substantially all of its
property, or makes an assignment for the benefit of creditors, or admits in
writing its inability to pay its debts generally as they become due; or if the
Company (or any Material Subsidiary) shall suffer any writ of attachment or
execution or any similar process to be issued or levied against it or any
significant part of its property which is not released, stayed, bonded or
vacated within thirty (30) days after its issue or levy; or if the Company (or
any Material Subsidiary) takes corporate action in furtherance of any of the
aforesaid purposes or conditions; or

          (g) if any default shall occur under any indenture, mortgage,
agreement, instrument or commitment evidencing or under which there is at the
time outstanding any indebtedness of the Company (or a Material Subsidiary), in
excess of $500,000, or which results in such indebtedness, in an aggregate
amount (with other defaulted indebtedness) in excess of $500,000 becoming due
and payable prior to its due date and if such indenture or instrument so
requires, the holder or holders thereof (or a trustee on their behalf) shall
have declared such indebtedness due and payable; or

          (h) if any of the Company or its subsidiaries shall default in the
observance or performance of any material term or provision of a material
agreement to which it is a party or by which it is bound, and such default is
not waived or cured within the applicable grace period; or

                                       8
<PAGE>

          (i) if a final judgment which, either alone or together with other
outstanding final judgments against the Company and its subsidiaries, exceeds an
aggregate of $500,000 shall be rendered against the Company (or any Material
Subsidiary) and such judgment shall have continued undischarged or unstayed for
thirty (30) days after entry thereof;

then, in each and every such case other than those specified in clauses (e) and
(f) above, so long as such event of default has not been remedied and unless the
principal of all the Debentures has already become due and payable, the holder
of this Debenture, by notice in writing to the Company, may declare the
principal of this Debenture and the interest accrued thereon, if not already due
and payable, to be due and payable immediately, and upon any such declaration
the same shall become and shall be immediately due and payable, anything herein
contained to the contrary notwithstanding and, upon the occurrence of the events
specified in clauses (e) and (f) above, such principal and interest shall
automatically become and shall be due and payable immediately without any action
on the part of any holder of Debentures, anything herein contained to the
contrary notwithstanding.

          For purposes of this Section 10, "Material Subsidiary" means any
subsidiary with respect to which the Company has directly or indirectly
invested, loaned, advanced or guaranteed the obligations of, an aggregate amount
exceeding fifteen percent (15%) of the Company's gross assets, or the Company's
proportionate share of the assets or net income of which (based on the
subsidiary's most recent financial statements) exceed fifteen percent (15%) of
the Company's gross assets or net income, respectively, or the gross revenues of
which exceed fifteen percent (15%) of the gross revenues of the Company based
upon the most recent financial statements of such subsidiary and the Company.

          11.  Transferability.  This Debenture is transferable, in whole or in
part, only in accordance with the terms of Section 5 of the Securities Purchase
Agreement.  The Registered Holder may submit a written request, in person or by
his duly authorized attorney, for a transfer of this Debenture on the register
of the Company maintained at its principal offices.  The Company may deem and
treat the person in whose name this Debenture is registered as the absolute
owner hereof, for the purpose of receiving payment of the principal thereof and
interest hereon, whether or not the same shall be overdue, and for all other
purposes whatsoever, including but without limitation, the giving of any written
notices required hereunder, and the Company shall not be affected by any notice
to the contrary.

          12.  Stock Splits; Dividends; Adjustments; Reorganizations.

          (a) If the Company, at any time after the Original Issue Date, (i)
shall pay a stock dividend or otherwise make a distribution or distributions on
any equity securities (including investments or securities convertible into or
exchangeable for such equity securities) in shares of Common Stock, (ii) issue
any securities payable in shares of Common Stock, (iii) subdivide the
outstanding shares of Common Stock into a larger number of shares, (iv) combine
outstanding shares of Common Stock into a smaller number of shares, the Fixed
Price and each Floating Reference Price prior to the date of any such occurrence
(collectively, the "Reference Prices") shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
before such event and of which the denominator shall be the number

                                       9
<PAGE>

of shares of Common Stock outstanding after such event. Any adjustment made
pursuant to this Section 12(a) shall become effective immediately after the
record date for the determination of shareholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of an issuance, a subdivision or a combination.

          (b) In the event that the Company, at any time after the Original
Issue Date, issues or sells any Common Stock or securities which are convertible
into or exchangeable for its Common Stock or any convertible or exchangeable
securities, or any warrants or other rights to subscribe for or to purchase or
any options for the purchase of its Common Stock or any such convertible or
exchangeable securities (other than shares or options issued pursuant to the
Company's employee or director option plans or shares issued upon exercise of
options, warrants or rights outstanding on the date of the Securities Purchase
Agreement and listed in the Company's most recent periodic report filed under
the Exchange Act) at an effective purchase price per share which is less than
the Fixed Price then in effect, then the Fixed Price in effect immediately prior
to such issue or sale shall be reduced effective concurrently with such issue or
sale to an amount determined by multiplying such Fixed Price then in effect by a
fraction, (x) the numerator of which shall be the sum of (1) the number of
shares of Common Stock outstanding immediately prior to such issue or sale, plus
(2) the number of shares of Common Stock which the aggregate consideration
received by the Company for such additional shares would purchase at such Fixed
Price then in effect; and (y) the denominator of which shall be the number of
shares of Common Stock of the Company outstanding immediately after such issue
or sale.

          For the purposes of the foregoing adjustment, in the case of the
issuance of any convertible or exchangeable securities, warrants, options or
other rights to subscribe for or to purchase or exchange for, shares of Common
Stock ("Exchangeable Securities"),  the maximum number of shares of Common Stock
issuable upon exercise, conversion or exchange of such Exchangeable Securities
shall be deemed to be outstanding, provided that no further adjustment shall be
made upon the actual issuance of Common Stock upon exercise, exchange or
conversion of such Exchangeable Securities.

          (c) If the Company, at any time after the Original Issue Date, shall
distribute to all holders of Shares of Common Stock evidences of its
indebtedness or assets or rights or warrants to subscribe for or purchase any
security (excluding those referred to in Section 12(b) above) then in each such
case the Fixed Price thereafter shall be determined by multiplying the Fixed
Price in effect immediately prior to the record date fixed for determination of
shareholders entitled to receive such distribution by a fraction of which the
denominator shall be the Market Price for Shares of Common Stock (as defined
below) determined as of the record date mentioned above, and of which the
numerator shall be such Market Price for Shares of Common Stock on such record
date less the then fair market value at such record date of the portion of such
assets or evidences of indebtedness so distributed applicable to one outstanding
share of Common Stock as determined by the Board in good faith; provided,
however that in the event of a distribution exceeding twenty-five percent (25%)
of the net assets of the Company, such fair market value shall be determined by
an Appraiser selected in good faith by the Board and holders of a majority in
interest of the Debentures.  In either case the adjustments shall be described
in a statement provided to all holders of Debentures of the portion of assets or
evidences of indebtedness so distributed or such subscription rights applicable
to one outstanding

                                       10
<PAGE>

share of Common Stock. Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the record
date mentioned above.

               "Market Price for Shares of Common Stock" shall mean the price of
one share of Common Stock determined as follows:

          (i)    If the Common Stock is then listed or quoted on either the OTC
Bulletin Board, the NASDAQ SmallCap Market or the NASDAQ National Market, the
reported closing bid price for the Common Stock as reported by Bloomberg or the
Journal on such day (or, if not so reported, as otherwise reported by The NASDAQ
Small Cap Market, NASDAQ National Market or the OTC Bulletin Board, as the case
may be);

          (ii)   If the Common Stock is listed on the New York Stock Exchange or
the American Stock Exchange, the closing bid price for the Common Stock on such
exchange on such day as reported by Bloomberg or the Journal;

          (iii)    If neither (i) nor (ii) apply but the Common Stock is quoted
in the over-the-counter market, another recognized exchange or on the pink
sheets, the last reported bid price thereof on such date; and

          (iv)    If neither clause (i), (ii) or (iii) above applies, the market
value as determined by a nationally recognized investment banking firm or other
nationally recognized financial advisor retained by the Company for such
purpose, taking into consideration, among other factors, the earnings history,
book value and prospects for the Company, and the prices at which shares of
Common Stock recently have been traded.  Such determination shall be conclusive
and binding on all persons.

          (d) (1) In the event that at any time or from time to time after the
Original Issue Date,  the Common Stock issuable upon the conversion of, or in
lieu of interest payments on,  the Debentures is changed into the same or a
different number of shares of any class or classes of stock, whether by merger,
consolidation, recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend or reorganization
provided for elsewhere in this Paragraph 12), then and as a condition to each
such event provision shall be made in a manner reasonably acceptable to the
holders of Debentures so that each holder of Debentures shall have the right
thereafter to convert such Debenture into, and to receive in lieu of interest
payments,  the kind of stock receivable upon such recapitalization,
reclassification or other change by holders of shares of Common Stock, all
subject to further adjustment as provided herein.  In such event, the formulae
set forth herein for conversion and redemption shall be equitably adjusted to
reflect such change in number of shares or, if shares of a new class of stock
are issued, to reflect the market price of the class or classes of stock
(applying the same factors used in determining the Fixed Price) issued in
connection with the above described transaction.

          (2) If at any time or from time to time after the Closing Date there
is a capital reorganization of the Common Stock, including by way of a sale of
all or substantially all of the assets of the Company (other than a
recapitalization, subdivision,

                                       11
<PAGE>

combination, reclassification or exchange of shares provided for elsewhere in
this Paragraph 12), then, as a part of and a condition to such reorganization,
provision shall be made in a manner reasonably acceptable to the holders of the
Debentures so that the holders of the Debentures shall thereafter be entitled to
receive upon conversion of, or in lieu of interest payments on, the Debentures
the number of shares of stock or other securities or property to which a holder
of the number of shares of Common Stock deliverable upon conversion, or in lieu
of interest payments on, the Debentures would have been entitled on such capital
reorganization. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Paragraph 12 with respect to the rights of
the holders of the Debentures after the reorganization to the end that the
provisions of this Paragraph 12 shall be applicable after that event and be as
nearly equivalent as may be practicable, including, by way of illustration and
not limitation, by equitably adjusting the formulae set forth herein for
conversion and redemption to reflect the market price of the securities or
property (applying the same factors used in determining the Market Price for
Shares of Common Stock) issued in connection with the above described
transaction.

          (e) If at any time during the period ending twelve (12) months after
the Original Issue Date,  the Company sells or agrees to sell (including
pursuant to a letter of intent, term sheet, or similar means) shares of Common
Stock or securities or options convertible into, exercisable for, or
exchangeable for, shares of Common Stock (other than (i) a sale pursuant to a
bona fide registered public offering of shares of Common Stock by the Company
conducted on the basis of a firm commitment underwriting raising at least
$10,000,000 and (ii) shares or options issued pursuant to the Company's
employee, director or consultant stock option plans) then, if the effective or
maximum sales price of the shares of Common Stock with respect to such
transaction (including the effective or maximum conversion exercise or exchange
price) ("Other Price") is less than the Fixed Price of the Debentures at such
time, the Company, at the option of a holder exercised by written notice to the
Company, shall adjust the Fixed Price applicable to the Debentures of such
holder not yet converted in form and substance reasonably satisfactory to such
holder of Debentures so that the conversion price applicable to those Debentures
shall, in no event, be greater, after giving effect to all other adjustments
contained therein, than the Other Price.

          (f) Whenever any element of the Applicable Conversion Price is
adjusted pursuant to Section 12(a), (b), (c), (d) or (e), the Company shall
promptly mail to each holder of the Debentures, a notice setting forth the
Applicable Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.

          (g) In the event of any taking by the Company of a record date of the
holders of any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other distribution, any
security or right convertible or exchangeable into or entitling the holder
thereof to receive additional shares of Common Stock, or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, the Company, shall
deliver to each holder of Debentures at least thirty (30) days prior to the date
specified therein, a notice specifying the date on which any such record is to
be taken for the purpose of such dividend, distribution, security or right and
the amount and character of such dividend, distribution, security or right.

                                       12
<PAGE>

          13.  Remedies Cumulative.  The rights, powers and remedies given to
the payee under this Debenture shall be in addition to all rights, powers and
remedies given to it by virtue of the Securities Purchase Agreement, any
document or instrument executed in connection therewith, or any statute or rule
of law.

          14.  Non-Waiver.  Any forbearance, failure or delay by the payee in
exercising any right, power or remedy under this Debenture, the Securities
Purchase Agreement, any documents or instruments executed in connection
therewith or otherwise available to the payee shall not be deemed to be a waiver
of such right, power or remedy, nor shall any single or partial exercise of any
right, power or remedy preclude the further exercise thereof.

          15.  Modifications and Waivers.  No modification or waiver of any
provision of this Debenture, the Securities Purchase Agreement or any documents
or instruments executed in connection therewith shall be effective unless it
shall be in writing and signed by the payee, and any such modification or waiver
shall apply only in the specific instance for which given.

          16.  Attorney's Fees.  If this Debenture shall not be paid when due
and shall be placed by the Registered Holder hereof in the hands of an attorney
for collection, through legal proceedings or otherwise, or if this Debenture
shall not be converted into shares of Common Stock on the Conversion Date,
subject to the provisions of Section 6 hereof, and an action is brought by the
Registered Holder with respect thereto, the Company shall pay attorney's fees to
the Registered Holder hereof, together with reasonable costs and expenses of
collection or enforcement incurred in connection with any such action.

          17.  Enforcement; Specific Performance.  (a)  In case any one or more
Events of Default shall occur and be continuing, a Registered Holder of a
Debenture then outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law.  Each holder
agrees that it will give written notice to the other holders prior to
instituting any such action.

          (b)  The Company expressly agrees that each Registered Holder may not
have adequate remedies at law if the Company does not perform its obligations
under this Debenture. Upon a breach of the terms or covenants of this Debenture
by the Company, the Registered Holder shall, each in addition to all other
remedies, be entitled to obtain injunctive relief, and an order for specific
performance of the Company's obligations hereunder.

          18.  Governing Law.  This Debenture and the rights and obligations of
the parties hereto, shall be governed, construed and interpreted according to
the laws of the State of New York.  The Company agrees that any final judgment
after exhaustion of all appeals or the expiration of time to appeal in any such
action or proceeding shall be conclusive and binding, and may be enforced in any
federal or state court in the United States by suit on the judgment or in any
other manner provided by law.  Nothing contained in this Debenture shall affect
or limit the right of the Registered Holder to serve any process or notice or
motion or other application in

                                       13
<PAGE>

any other manner permitted by law, or limit or affect the right of the
Registered Holder to bring any action or proceeding against the Company or any
of its property in the courts of any other jurisdiction. The Company hereby
consents to the jurisdiction of the federal courts whose districts encompass any
part of the City of New York or the state courts of the State of New York
sitting in the City of New York in connection with any dispute arising under
this Debenture, and hereby waives, to the maximum extent permitted by law, any
objection, including any objections based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions.

          19.  Payee Defined.  The term "payee" as used herein shall be deemed
to include the payee and its successors, endorsees and assigns.

          20.  Waiver of Presentment, etc.  The undersigned hereby waives
presentment, demand for payment, protest, notice of protest and notice of non-
payment hereof.

          21.  Headings. The headings contained in this Debenture are for
reference purposes only and shall not affect the meaning of interpretation of
this Debenture.

          22.  Notices.  Any notice to any party required or permitted hereunder
shall be given in writing (unless otherwise specified herein) and shall be
effective upon personal delivery, via facsimile (upon receipt of confirmation of
error-free transmission) or two business days following deposit of such notice
with an internationally recognized courier service, with postage prepaid and
addressed to such party at the address set forth in the first paragraph of this
Agreement with a copy to the Company at the address set forth below, and to the
other parties thereunto entitled at the following addresses, or at such other
addresses as a party may designate by five days advance written notice to each
of the other parties hereto.

Company:                  Information Highway.com, Inc.
                          #185-10751 Shellbridge Way
                          Richmond, British Columbia V6X 2W8
                          Attention:  John G. Robertson, President
                          Tel:  (604)  278-5996
                          Fax:  (604)  278-3409

                          With a copy to:

                          Ogden Murphy Wallace P.L.L.C.
                          2100 Westlake Center Tower
                          1601 Fifth Avenue
                          Seattle, Washington  98101-1686
                          Attention:  James L. Vandeberg, Esq.
                          Tel:  (206) 447-7000
                          Fax: (206) 447-0215

                                       14
<PAGE>

Registered Holder:        Senasqua Investors LLC
                          c\o WEC Asset Management LLC
                          110 Colabaugh Pond Road
                          Croton-on-Hudson, New York  10520
                          Attention:  Daniel J. Saks
                          Tel:  (914) 271-2211
                          Fax:  (914) 271-0889

                          With a copy to:

                          Pryor Cashman Sherman & Flynn LLP
                          410 Park Avenue
                          New York, New York  10022
                          Attention:  Mark Saks, Esq.
                          Tel:  (212) 326-0140
                          Fax: (212) 326-0806

          23.  Amendments and Modification.  Changes in or additions to this
Debenture may be made, and compliance with any covenant or condition herein set
forth may be omitted only if the Company shall obtain the written consent from
the Registered Holder of this Debenture.

        [SIGNATURE PAGE FOLLOWS, REMAINDER OF PAGE INTENTIONALLY BLANK]

                                       15
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Debenture to be executed as
of the date first written above.

                              INFORMATION HIGHWAY.COM, INC.

                              By:______________________________________
                                  Name:  John G. Robertson
                                  Title:  President
<PAGE>

                             NOTICE OF CONVERSION

          The conversion form appearing below should only be executed by the
Registered Holder desiring to convert all or part of the principal amount of the
Debenture attached hereto.

                                CONVERSION FORM

          Date:  ____________________________________________

          TO:  INFORMATION HIGHWAY.COM, INC.

          The undersigned hereby exercises the conversion privilege upon the
terms and conditions set forth in the attached Debenture, to the extent of the
maximum number of shares of Common Stock issuable pursuant to the terms of
Section 6 of the Debenture, and accordingly, authorizes the Company to apply
$__________ principal amount of the attached Debenture to payment in full for
such shares of Common Stock.  Please register such shares and make delivery
thereof as follows:

          Registered in the Name of (Giving First or Middle Name in Full)

          Name ______________________________________________
                (Please Print)

          Address ___________________________________________
<PAGE>

                             DELIVERY INSTRUCTIONS

          To be completed ONLY if Certificates are to be mailed to persons other
than the Registered Holder.

          Name ______________________________________________
                (Please Print)

          Address ___________________________________________

          Signature _________________________________________

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto _______________________________________________________ the within
Debenture and all rights thereunder, hereby irrevocably authorizing the Company
to transfer said Debenture on the books of the Company, with full power of
substitution in the premises.

          Dated:_____________________________________________

          Signature:_________________________________________

          Print Name:________________________________________

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