Document:

<PAGE>

                                                                   Exhibit 10.2

November 3, 2001

Jean Nassar
16880 Siler Ridge Lane
Beaverton, Oregon, 97007

Dear Jean,

We are very excited about having the opportunity to work with you at WatchGuard.
As a company, we thrive on the entrepreneurial spirit and excitement that feeds
our continued growth and success in the fast-paced and high-growth network
security marketplace. Specifically, we are an industry leader and innovative
company that continually strives to create superior network security products
and services that are easier to deploy and more cost effective than the
competition. As the executive of our worldwide marketing organization, and an
officer of the company (subject to Board of Director approval), you will be
responsible for creating and executing a marketing strategy that continues our
strong growth and places WatchGuard at the "top of the class" in the security
industry. We believe that you have the skills and ability to accomplish this
goal.

We are very pleased to offer you the position of Senior Vice President of
Marketing. In this capacity, you will report directly to me. Your compensation
package will include an annual salary of $225,000.00 payable in increments of
$9,375.00 on a semi-monthly basis (less applicable payroll taxes) on the
fifteenth and last business day of each month. You are also eligible to receive
an annual target bonus of up to $75,000 based on achievement of performance
objectives (both MBO and financial) that will be set by the Company after
consulting with you. Additionally, you will be eligible to receive a sign-on
bonus, upon execution of this agreement, totaling $50,000.00 (payable in equal
installments over a six (6) month period). However, in the event you terminate
your employment relationship with WatchGuard for any reason within one (1) year
from your hire date, you will pay to WatchGuard, within ten (10) days of the
date of your termination, the prorated amount of sign-on bonus that you received
from WatchGuard.

Subject to Board approval, the Company will grant you a stock option to purchase
250,000 shares of Company common stock with an exercise price equal to the fair
market value of a common share on the date of grant. You will also need to
execute the Company's standard stock option agreement and any policies
applicable to employees and officers of the company. This option will be subject
to vesting on the following terms: Assuming that you remain employed by the
Company, 250,000 shares will vest over 4 years with cliff vesting of 25% after
one full year, then monthly vesting for the remaining 3 years.

<PAGE>

Under the terms of your options, if your employment terminates within two (2)
years following a Corporate Transaction, unless due to termination for Cause or
your leaving without Good Reason, all unvested options will accelerate and
become vested. Additionally, 50% of your unvested options will vest upon
consummation of a Corporate Transaction. (These provisions and the capitalized
terms are described and defined in WatchGuard's 1996 Stock Option Plan.)

Further, if your employment is terminated without Cause, leave voluntarily for
Good Reason, or in the event of a Corporate Transaction that substantially
changes your employment, the following will apply: if you leave within twelve
(12) months - you will receive a cash severance payment equal to six (6) months
of your annual compensation and insurance benefits; if you leave after month
twelve (12) but before month eighteen (18) - you will receive a cash severance
payment equal to four (4) months of your annual compensation and insurance
benefits. The benefits described in this paragraph will be provided to you only
if you execute a severance agreement including a release of all claims in a form
agreeable to the Company.

As you know, our corporate offices are located in Seattle, WA between the
wonderfully cultural international district and beautiful historic Pioneer
Square. The Puget Sound area is a very picturesque, high quality of life,
moderate cost of living area with water activities at your doorstep and Mount
Rainier a short drive away.

Should you accept this offer of employment, WatchGuard will reimburse you for
reasonable relocation expenses in consideration of your relocation from
Beaverton, Oregon, to Seattle, Washington. You may submit receipts to WatchGuard
for the following expenses:

..    Airfare from your home in Beaverton to Seattle, if needed, for your
     immediate family;
..    Shipping/moving of your belongings, including up to thirty (30) days
     storage expenses;
..    Temporary housing cost (maximum one [3] months) for you to relocate to
     Seattle and locate a more permanent residence; and
..    Other reasonable expenses incurred during relocation (does not include
     meals).

WatchGuard will reimburse you for the above expenses you incur during your
relocation to Seattle. However, in the event you terminate your employment
relationship with WatchGuard for any reason within one (1) year from your hire
date, you will pay to WatchGuard, within ten (10) days of the date of your
termination, the prorated amount of relocation expenses that you received in the
form of reimbursement from WatchGuard.

Jean, we offer a casual atmosphere and a fabulous package of benefits including,
but not limited to - a Paid Time Off program offering up to 4 weeks of time away
per year, a 401(k) Retirement Plan, an Employee Assistance Program,
Medical/Dental/Vision Insurance paid entirely by WatchGuard for you, an Employee
Stock Purchase Plan, Short and Long-Term Disability benefits paid entirely by
WatchGuard, and Commuting/Parking benefits.

It is important to note that WatchGuard Technologies, Inc. is an at-will
employer. Nothing in this information constitutes an employment contract. If
there is a discrepancy between information in this letter and any official plan
documents or contract, the official document will determine how the plans work
and benefits are paid.

<PAGE>

As a Company employee, you will be expected to abide by Company rules and
regulations and sign and comply with a Proprietary Information, Invention, and
Non-Competition Agreement (attached hereto). Additionally, you will be expected
to sign and comply with all Company policies that are applicable to you,
including the Company Policy Regarding Insider Trading, the Company Policy
Regarding Special Trading Procedures, the International Business Activities
Policy and the Procedures and Guidelines for Public Disclosures and
Communications with Analysts, and any revisions to such policies. You will be a
full-time employee, which means that you may not accept employment or consulting
assignments of any nature with any other employer or enterprise, without the
prior written consent of the Board.

Please review the attached forms and sign this letter in the designated location
indicating your acceptance of the terms outlined within. In addition, please
note your official start date with WatchGuard Technologies in the space provided
below.

Sincerely,

WATCHGUARD TECHNOLOGIES, INC.

/s/ James Cady

James Cady
President and COO

<PAGE>

                                   *********

Accepted and agreed to this 4th day of November, 2001 by:

           /s/ Jean Nassar
-------------------------------------
Jean Nassar - signature

Official Start Date: 11-12-01
                     ----------------

Enclosures:
..  Proprietary Information, Invention and Non Competition Agreement
..  Company Policy Regarding Insider Trading
..  Company Policy Regarding Special Trading Procedures
..  International Business Activities Policy
..  Procedures and Guidelines for Public Disclosures and Communications with
   Analysts
..  Employee Information Form
..  Copy of offer letter
..  W-4
..  I-9
..  Direct deposit formEXHIBIT 10.1
[logo of Merrill Lynch] Merrill Lynch

Confirmation of OTC Variable Forward Sale
Transaction

                        AMENDED AND RESTATED CONFIRMATION
                        ---------------------------------

Effective as of:  April 5, 2002                                 ML Ref: 0281606

To:               Fisher Communications, Inc. ("Counterparty")
                                                ------------

Attention:        Warren J. Spector
                  tel: (206) 404-6789
                  fax: (206) 404-6766

From:             Merrill Lynch International ("MLI")
                  Ropemaker Place
                  25 Ropemaker Street
                  London EC2Y 9L4
-------------------------------------------------------------------------------

Dear Sir / Madam:

         This amended and restated confirmation (this "Confirmation") amends,
                                                       ------------
restates and supersedes confirmation dated April 5, 2002 (ML Ref: 0281606)
between Counterparty and MLI. The purpose of this Confirmation is to confirm
the terms and conditions of the above-referenced transaction entered into
between Counterparty and MLI through its agent Merrill Lynch, Pierce, Fenner &
Smith ("MLPFS") on the Trade Date specified below (the "Transaction"). This
        -----                                           -----------
Confirmation constitutes a "Confirmation" as referred to in the Master
Agreement specified below.

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

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

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

General Terms:
--------------

Trade Date:              March 21, 2002

Effective Date:          April 1, 2002

Termination Date:        March 28, 2005

Seller:                  Counterparty

<PAGE>

Buyer:                   MLI

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

Issuer:                             SAFECO Corporation, a Washington
                                      corporation.

Number of Shares:                   650,000

Multiplier:                         One (1)

Initial Price:                      See pricing chart attached hereto on Annex
                                      A ("Annex A")
                                          -------

Floor Price:                        Annex A

Cap Price:                          Annex A

Participation Percentage:           20%

Final Price:                        The average of the closing prices per Share
                                    on the two (2) Exchange Business Days
                                    immediately prior to, and including, the
                                    Termination Date.

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

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

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

                                    "Reference Delta" means, for any date during
                                     ---------------
                                    the Term of this Transaction, the hedge
                                    ratio for this Transaction (expressed in
                                    percentage terms, provided such

                                      2

<PAGE>

                                    percentage shall not exceed 100%) as
                                    determined by MLI in its good faith
                                    discretion.

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

Settlement Currency:                USD

Exchange:                           Nasdaq National Market

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

Business Day:                       New York

Payment Terms:
--------------

Initial Proceeds:                   USD 16,471,000

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

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

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

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

                                    Notwithstanding any provision in this
                                    Agreement to the contrary, if at any time
                                    during the Term of this Transaction any
                                    obligation (whether present or future,
                                    contingent or otherwise) is owed by
                                    Counterparty to Merrill Lynch, Pierce,
                                    Fenner & Smith, Incorporated ("MLPFS")
                                                                   -----
                                    (such obligation, a "Loan Obligation") in
                                                         ---------------
                                    respect of borrowed money ("Counterparty
                                                                ------------
                                    Loan"), Counterparty shall be deemed to
                                    ----
                                    have requested at such time a Payment
                                    Amount Portion equal to the entire
                                    Outstanding Notional Payment Amount, or if
                                    the related Payment Amount of the
                                    Outstanding Notional Payment Amount is
                                    greater than the Loan Obligation, a
                                    Payment Amount Portion with a related
                                    Payment Amount equal to the Loan
                                    Obligation. Such Payment Amount will not be
                                    paid to Counterparty on the related
                                    Payment Date, but instead shall be

                                      3

<PAGE>

                                    paid to MLPFS in satisfaction of all or
                                    part of such Loan Obligation.
                                    Counterparty hereby irrevocably
                                    authorizes and instructs MLI to use any
                                    such Payment Amount solely to satisfy, in
                                    whole or in part, on behalf of
                                    Counterparty, any Loan Obligation.

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

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

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

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

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

Spread:
                                    See Annex A
Valuation:
----------

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

Valuation Date:                     Termination Date

                                      4

<PAGE>

Settlement Terms:                   Settlement of this Transaction shall
-----------------                   be either Cash Settlement or Physical
                                    Settlement, as determined by Counterparty in
                                    writing to MLI no less than ten (10)
                                    Business Days prior to the Termination Date.
                                    In the event MLI is not notified, the
                                    settlement method for this Transaction shall
                                    be Cash Settlement.

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

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

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

                                    A.  MLI shall pay to Counterparty an amount
                                        in cash equal to the Outstanding
                                        Notional Payment Amount ("MLI Settlement
                                                                  --------------
                                        Obligation").
                                        ----------
                                    B.  Counterparty shall deliver to MLI a
                                        number of Shares equal to the Number of
                                        Shares multiplied by the Variability
                                        Factor ("Counterparty Settlement
                                                 -----------------------
                                        Shares").
                                        ------

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

           Scenario 1:
           ----------

                           If the Final Price is less than the Floor Price,
                           then:

                                    One (1)

           Scenario 2:
           ----------

                           If the Final Price is greater than the Cap Price,
                           then:

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

           Scenario 3:
           ----------

                           If the Final Price is greater than the Floor Price
                           and less than the Cap Price, then:

                           Floor Price / Final Price

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

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

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

                                    MLI Settlement Obligation - Counterparty
                                    Cash Settlement Amount;

                                    Where:

                                      5

<PAGE>

                                    "Counterparty Cash Settlement Amount" means:
                                     -----------------------------------

                                      Counterparty Settlement Shares * Final
                                      Price

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

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

Failure to Deliver:                 Not applicable.

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

Adjustments:
------------

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

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

         Consequences of Merger Event:

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

                                      6

<PAGE>

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

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

         Nationalization or
         Insolvency:                Negotiated close out.

Additional Provisions:
----------------------

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

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

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

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

Non-Reliance:                       Each party represents to the other party
                                    that it is acting for its own account,  and
                                    has made its own independent decisions to
                                    enter into this Transaction and as to
                                    whether this Transaction is appropriate or
                                    proper for it based on its own

                                      7

<PAGE>

                                    judgment and upon advice from such advisors
                                    as it has deemed necessary. It is not
                                    relying on any communication  (written or
                                    oral) of the other party as investment
                                    advice or as a recommendation to enter into
                                    this Transaction, it being understood that
                                    information and explanations related to the
                                    terms and conditions of this Transaction
                                    shall not be considered investment advice
                                    or a recommendation to enter into this
                                    Transaction. No communication  (written or
                                    oral)  received from the other party shall
                                    be deemed to be an assurance or guarantee
                                    as to the expected results of this
                                    Transaction.

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

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

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

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

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

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

                                    Counterparty will use its best efforts to
                                    preserve and protect MLI's security interest

                                      8

<PAGE>

                                    in the Collateral, will defend MLI's right,
                                    title, lien, and security interest in and to
                                    the Collateral against the claims and
                                    demands of all persons whomsoever, and will
                                    do all such acts and things and deliver all
                                    such documents and instruments, including
                                    without limitation further pledges,
                                    assignments, financing statements, and
                                    continuation statements, as MLI and its
                                    Custodian may reasonably deem necessary or
                                    advisable from time to time in order to
                                    preserve, protect, and perfect such security
                                    interest or to enable MLI or its Custodian
                                    to exercise or enforce its rights with
                                    respect to any Collateral.

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

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

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

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

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

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

                                    Counterparty acknowledges and agrees that
                                    (i) it has not taken and will not take any
                                    action that would cause any sale deemed to
                                    be made under the Interpretive Letter (as
                                    defined below) to exceed the volume
                                    limitation of Rule 144(e), (ii) it has not
                                    taken and will not take any action that
                                    could cause any sale deemed to be made under
                                    the Interpretive Letter to fail to meet all
                                    applicable requirements of

                                      9

<PAGE>

                                    Rule 144 and (iii) on the Trade Date of
                                    this Transaction it has transmitted a Form
                                    144 for filing with the Securities and
                                    Exchange Commission. Counterparty covenants
                                    that it will send to MLI via facsimile a
                                    copy of each Form 144 and each filing under
                                    Section 13 or 16 of the Securities and
                                    Exchange Act relating to this Transaction
                                    concurrently with filing or transmission
                                    for filing, as the case may be, of such
                                    form to or with the SEC.

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

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

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

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

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

                                    As of the Effective Date, Counterparty is
                                    not insolvent.

Representation of MLI:              MLI hereby represents and warrants to, and
                                    agrees with, Counterparty that it shall
                                    comply with (i) the terms of the
                                    Interpretive Letter and (ii) the manner of

                                      10

<PAGE>

                                    sale requirements of Rule 144 (f) and (g)
                                    in connection with the sale of Shares
                                    during the hedge period.

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

                                    (2) The parties hereto intend for:

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

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

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

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

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

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

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

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

                                      11

<PAGE>

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

Very truly yours,

MERRILL LYNCH INTERNATIONAL

By:  /s/ Cheryl Dennerlien
    -----------------------------------
     Name:
     Title:

Confirmed as of the date first above written:

FISHER COMMUNICATIONS, INC.

By:  /s/ Warren Spector
    -----------------------------------
     Name:
     Title:

Acknowledged and agreed as to matters relating to the Agent:

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
         solely in its capacity as Agent hereunder

By:  /s/ Vivian Jackson
    -----------------------------------
     Name:
     Title:

                                      12

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