10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2006

o Transition Report Under Section 13 or 15(d) of the Exchange Act

For the transition period from                      to                     

Commission File Number 0-22439

FISHER COMMUNICATIONS, INC.

(Exact Name of Registrant as Specified in Its Charter)

WASHINGTON	91-0222175
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

100 Fourth Ave. N
Suite 510
Seattle, Washington 98109
(Address of Principal Executive Offices) (Zip Code)

(206) 404-7000
(Registrant’s Telephone Number, Including Area Code)

     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o           Accelerated filer þ           Non-accelerated filer o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Common Stock, $1.25 par value, outstanding as of August 1, 2006: 8,712,091

PART I

FINANCIAL INFORMATION

     The following Condensed Consolidated Financial Statements (unaudited) are presented for the Registrant, Fisher Communications, Inc., and its subsidiaries.

 EXHIBIT 10.2

 EXHIBIT 10.3

 EXHIBIT 10.4

 EXHIBIT 31.1

 EXHIBIT 31.2

 EXHIBIT 32.1

 EXHIBIT 32.2

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ITEM 1 — FINANCIAL STATEMENTS

FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Six months ended						Three months ended
	June 30						June 30
	2006			2005			2006			2005
(in thousands, except per-share amounts)
(Unaudited)
Revenue	$	71,271		$	65,178		$	40,190		$	36,865
Costs and expenses
Cost of services sold (exclusive of depreciation reported separately below, amounting to $4,149 $6,391, $2,073 and $2,966, respectively)		34,734			35,915			19,632			19,947
Selling expenses		12,267			11,260			6,654			6,355
General and administrative expenses		14,183			16,026			6,456			7,060
Depreciation and amortization		5,027			7,619			2,511			3,558
		66,211			70,820			35,253			36,920
Income (loss) from operations		5,060			(5,642	)		4,937			(55	)
Other income, net		1,767			1,754			881			923
Interest expense		(6,822	)		(6,775	)		(3,368	)		(3,404	)
Income (loss) from continuing operations before income taxes		5			(10,663	)		2,450			(2,536	)
Provision (benefit) for federal and state income taxes					(4,095	)		658			(1,074	)
Income (loss) from continuing operations		5			(6,568	)		1,792			(1,462	)
Income from discontinued operations, net of income taxes		562			410			476			372
Net income (loss)	$	567		$	(6,158	)	$	2,268		$	(1,090	)
Income (loss) per share:
From continuing operations	$	0.00		$	(0.76	)	$	0.21		$	(0.17	)
From discontinued operations		0.07			0.05			0.05			0.04
Net income (loss) per share	$	0.07		$	(0.71	)	$	0.26		$	(0.13	)
Income (loss) per share assuming dilution:
From continuing operations	$	0.00		$	(0.76	)	$	0.21		$	(0.17	)
From discontinued operations		0.07			0.05			0.05			0.04
Net income (loss) per share assuming dilution	$	0.07		$	(0.71	)	$	0.26		$	(0.13	)
Weighted average shares outstanding		8,708			8,658			8,710			8,690
Weighted average shares outstanding assuming dilution		8,716			8,658			8,719			8,690

See accompanying notes to condensed consolidated financial statements.

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30			December 31
	2006			2005
(in thousands, except share and per-share amounts)
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	8,513		$	19,622
Receivables, net		31,334			28,166
Income taxes receivable		986			986
Deferred income taxes		923			665
Prepaid expenses		3,839			4,295
Television and radio broadcast rights		3,043			6,519
Assets held for sale		400
Total current assets		49,038			60,253
Marketable securities, at market value		169,632			170,053
Cash value of life insurance and retirement deposits		15,595			15,303
Television and radio broadcast rights		1,551			2,075
Goodwill, net		30,122			38,354
Intangible assets		330			1,244
Investment in equity investee		6,751			2,759
Prepaid financing fees and other assets		9,498			6,040
Assets held for sale		12,193
Property, plant and equipment, net		143,970			144,312
Total Assets	$	438,680		$	440,393
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Trade accounts payable	$	3,883		$	3,483
Accrued payroll and related benefits		5,393			7,355
Interest payable		3,773			3,809
Television and radio broadcast rights payable		1,367			5,524
Other current liabilities		4,960			4,520
Liabilities of businesses held for sale		492
Total current liabilities		19,868			24,691
Long-term debt		150,000			150,000
Accrued retirement benefits		19,724			19,644
Deferred income taxes		31,786			31,381
Other liabilities		6,866			5,056
Liabilities of businesses held for sale		48
Commitments and Contingencies
Stockholders’ Equity
Common stock, shares authorized 12,000,000, $1.25 par value; issued and outstanding 8,709,841 as of June 30, 2006 and 8,705,041 as of December 31, 2005		10,887			10,881
Capital in excess of par		8,900			8,590
Deferred compensation					(159	)
Accumulated other comprehensive income, net of income taxes:
Unrealized gain on marketable securities		109,325			109,600
Minimum pension liability		(2,172	)		(2,172	)
Retained earnings		83,448			82,881
Total Stockholders’ Equity		210,388			209,621
Total Liabilities and Stockholders’ Equity	$	438,680		$	440,393

See accompanying notes to condensed consolidated financial statements.

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six months ended
	June 30
	2006			2005
(in thousands)
(Unaudited)
Cash flows from operating activities
Net income (loss)	$	567		$	(6,158	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation and amortization		5,155			7,751
Deferred income taxes		295			(3,740	)
Equity in operations of equity investees		8			(17	)
Amortization of deferred loan costs		316			326
Amortization of television and radio broadcast rights		9,336			10,410
Payments for television and radio broadcast rights		(9,494	)		(9,987	)
Other		327			350
Change in operating assets and liabilities
Receivables		(3,167	)		(1,049	)
Prepaid expenses		(944	)		(602	)
Cash value of life insurance and retirement deposits		(292	)		152
Other assets		(275	)		(40	)
Trade accounts payable, accrued payroll and related benefits, interest payable, and other current liabilities		(665	)		(4,482	)
Income taxes receivable and payable					(306	)
Accrued retirement benefits		80			788
Other liabilities		1,860			245
Net cash provided by (used in) operating activities		3,107			(6,359	)
Cash flows from investing activities
Proceeds from collection of notes receivable					1,585
Proceeds from sale of marketable securities					247
Investment in equity investee		(4,000	)
Deposit paid for purchase of Oregon television stations		(3,500	)
Purchase of property, plant and equipment		(6,903	)		(3,955	)
Net cash used in investing activities		(14,403	)		(2,123	)
Cash flows from financing activities
Payments under notes payable					(53	)
Payment of deferred loan costs					(87	)
Proceeds from exercise of stock options		177			3,068
Excess tax benefit from exercise of stock options		10
Net cash provided by financing activities		187			2,928
Net decrease in cash and cash equivalents		(11,109	)		(5,554	)
Cash and cash equivalents, beginning of period		19,622			16,025
Cash and cash equivalents, end of period	$	8,513		$	10,471

See accompanying notes to condensed consolidated financial statements.

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Six months ended						Three months ended
	June 30						June 30
	2006			2005			2006			2005
(in thousands)
(Unaudited)
Net income (loss)	$	567		$	(6,158	)	$	2,268		$	(1,090	)
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities		(423	)		6,294			18,429			16,890
Effect of income taxes		148			(2,204	)		(6,450	)		(5,912	)
Less: Reclassification adjustment for gains included in net loss					(106	)					(106	)
		(275	)		3,984			11,979			10,872
Comprehensive income (loss)	$	292		$	(2,174	)	$	14,247		$	9,782

See accompanying notes to condensed consolidated financial statements.

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The unaudited financial information furnished herein, in the opinion of management, reflects all adjustments which are necessary to state fairly the consolidated financial position, results of operations, and cash flows of Fisher Communications, Inc. and its consolidated subsidiaries (the “Company”) as of and for the periods indicated. Any adjustments are of a normal recurring nature. Fisher Communications, Inc.’s principal wholly owned subsidiaries include Fisher Broadcasting Company and Fisher Media Services Company. The Company presumes that users of the interim financial information herein have read or have access to the Company’s audited consolidated financial statements and that the adequacy of additional disclosure needed for a fair presentation, except in regard to material contingencies or recent subsequent events, may be determined in that context. Accordingly, footnote and other disclosures which would substantially duplicate the disclosures contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 filed by the Company have been omitted. The financial information herein is not necessarily representative of a full year’s operations.

2. Summary of Significant Accounting Policies

The significant accounting policies used in preparation of the consolidated financial statements are disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005. Additional significant accounting policies for 2006 are disclosed below.

     Stock-based Compensation

On January 1, 2006, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 123 (Revised), “Share-Based Payment,” (“SFAS 123(R)”) which requires the measurement and recognition of compensation for all stock-based awards made to employees, including stock options and restricted stock rights, based on estimated fair values. SFAS 123(R) supersedes previous accounting under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” (“APB 25”) for periods beginning in 2006.

The Company adopted SFAS 123(R) using the modified prospective transition method, which requires the application of the accounting standard as of January 1, 2006. In accordance with the modified prospective transition method, the Company’s condensed consolidated financial statements for periods prior to the first quarter of 2006 have not been restated to reflect this change. Stock-based compensation recognized under the new standard is based on the value of the portion of the stock-based award that vests during the period, adjusted for expected forfeitures. Stock-based compensation recognized in the Company’s condensed consolidated financial statements for the second quarter of 2006 includes compensation cost for stock-based awards granted prior to, but not fully vested as of, December 31, 2005, and stock-based awards granted subsequent to December 31, 2005.

The compensation cost for awards granted prior to December 31, 2005 is based on the grant-date fair value estimated in accordance with the pro forma provisions of SFAS 123, while awards granted after December 31, 2005 follow the provisions of SFAS 123(R). Compensation cost for awards granted prior to December 31, 2005 is recognized on a straight-line basis over the requisite service period for each separately remaining vesting portion of the award, while compensation cost for awards granted after December 31, 2005 is recognized on a straight-line basis over the requisite service period for the entire award.

Upon adoption of SFAS 123(R), the Company continued to use the Black-Scholes option pricing model as its method of valuation for stock option awards. The Company’s determination of the fair value of stock option awards on the date of grant using an option pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the expected life of the award, the Company’s expected stock price volatility over the term of the award, forfeitures, and actual and projected exercise behaviors. Although the fair value of stock option awards is determined in

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accordance with SFAS 123(R), the Black-Scholes option pricing model requires the input of subjective assumptions, and other reasonable assumptions could provide differing results.

3. Recent Accounting Pronouncements

On July 13, 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement 109 (“FIN 48” or the “Interpretation”) relating to income taxes. This Interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. The Interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006, so the Company expects to adopt the new requirements in the first quarter of 2007 and is currently evaluating the impact that the adoption of FIN 48 will have on its consolidated financial statements.

In February 2006, the FASB issued Statement of Financial Accounting Standard No. 155, “Accounting for Certain Hybrid Instruments,” which is an amendment of FASB Statements No. 133 and 140. The statement is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. The Company does not anticipate that this standard will impact its financial statements.

4. Discontinued Operations

On May 30, 2006, the Company entered into an agreement to sell its 24 small-market radio stations located in Montana and Eastern Washington for $33.3 million. Consummation of the transaction is subject to approval from the Federal Communications Commission and certain other conditions. In accordance with SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company has reported the results of operations of these stations as discontinued operations in the accompanying financial statements. These stations were included in the Company’s radio segment.

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Operational data for these stations to be sold is summarized as follows (in thousands):

	Six months ended						Three months ended
	June 30						June 30
	2006			2005			2006			2005
	(Unaudited)
Revenue	$	6,049		$	5,901		$	3,302		$	3,257
Income from discontinued operations:
Discontinued operating activities	$	868		$	631		$	734		$	573
Income tax effect		(306	)		(221	)		(258	)		(201	)
	$	562		$	410		$	476		$	372

The following table summarizes the classes of assets held for sale as of June 30, 2006 (in thousands):

Assets held for sale:

Goodwill, net	$	8,683
Property, plant and equipment, net		2,266
Intangible assets		1,244
Other assets		400
	$	12,593

5. Television and Radio Broadcast Rights and Other Broadcast Commitments

The Company acquires television and radio broadcast rights, and may make commitments for program rights where the cost exceeds the projected direct revenue from the program. The impact of such contracts on the Company’s overall financial results is dependent on a number of factors, including popularity of the program, increased competition from other programming, and strength of the advertising market. Estimates of future revenue can change significantly and, accordingly, are reviewed periodically to determine whether impairment is expected over the life of the contract.

At June 30, 2006, the Company had commitments under license agreements amounting to $48.7 million for future rights to broadcast television and radio programs through 2011, and $5.8 million in related fees. As these programs will not be available for broadcast until after June 30, 2006, they have been excluded from the financial statements in accordance with provisions of SFAS No. 63, “Financial Reporting by Broadcasters.” In addition, the broadcasting subsidiary has exclusive rights to sell available advertising time for a radio station in Seattle (the “Joint Sales Agreement”). Under the Joint Sales Agreement, the broadcasting subsidiary has commitments for monthly payments totaling $4.4 million through 2007.

6. Retirement Benefits

The Company has a noncontributory supplemental retirement program for key management. No new participants have been admitted to this program since 2001. The program provides for vesting of benefits under certain circumstances. Funding is not required, but generally the Company has acquired annuity contracts and life insurance on the lives of the individual participants to assist in payment of retirement benefits. The Company is the owner and beneficiary of such policies; accordingly, the cash values of the policies as well as the accrued liability are reported in the financial statements. The program requires continued employment through the date of expected retirement. The cost of the program is accrued over the participants’ remaining years of service at the Company.

In June 2005, the program was amended to freeze the accrual of all benefits to active participants provided under the program. As a result, the Company recorded a charge of $451,000 in the second quarter of 2005 as a curtailment loss associated with an unrecognized transition obligation that was required to be recognized at the effective date of

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the program amendment. The Company will continue to recognize periodic pension cost related to the program, but the amount is expected to be lower as a result of the curtailment as there is no future service cost component. The curtailment loss was calculated based on a current discount rate of 5.02% and no future compensation increases. The program amendment in June 2005 resulted in a decrease of the Company’s projected benefit obligation of $597,000. Pursuant to the provisions of SFAS No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits,” this gain was netted against unrecognized actuarial losses resulting in no impact in the Company’s Consolidated Statement of Operations.

The net periodic pension cost for the Company’s supplemental retirement program is as follows (in thousands):

	Six months ended				Three months ended
	June 30				June 30
	2006		2005		2006		2005
Service cost	$	—	$	80	$	—	$	40
Interest cost		520		534		260		267
Amortization of loss		77		175		39		87
Recognition of remaining transition obligation, curtailment loss				451				451
Net periodic pension cost	$	597	$	1,240	$	299	$	845

Assumptions used to determine net periodic pension costs are as follows:

	2006			2005
Discount Rate		5.48	%		5.02% - 5.74	%
Rate of Compensation increase		—			3.00	%

7. Income (loss) Per Share

Net income (loss) per share represents net income (loss) divided by the weighted average number of shares outstanding during the period. Net income (loss) per share assuming dilution represents net income (loss) divided by the weighted average number of shares outstanding, including the potentially dilutive impact of stock options and restricted stock rights issued under the Company’s incentive plans. Common stock options and restricted stock rights are converted using the treasury stock method.

The weighted average number of shares outstanding for the six months ended June 30, 2006 was 8,707,959. The weighted average number of shares outstanding assuming dilution for the six months ended June 30, 2006 was 8,715,568.

The weighted average number of shares outstanding for the six months ended June 30, 2005 was 8,658,083. The dilutive effect of 1,000 restricted stock rights and options to purchase 347,005 shares are excluded for the six and three-month periods ended June 30, 2005, because such rights and options were anti-dilutive due to the net loss for the period; therefore, there is no difference in the calculation between basic and diluted per-share amounts.

8. Stock-Based Compensation

Effective January 1, 2006, the Company adopted SFAS 123(R), which establishes accounting for stock-based awards exchanged for employee services, using the modified prospective application transition method. Accordingly, stock-based compensation cost is measured at grant date, based on the fair value of the award, and

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recognized over the requisite service period. Previously, the Company applied APB 25 and related Interpretations, as permitted by SFAS 123.

The Company maintains two incentive plans (the “Plans”), the Amended and Restated Fisher Communications Incentive Plan of 1995 (the “1995 Plan”) and the Fisher Communications Incentive Plan of 2001 (the “2001 Plan”). The 1995 Plan provided that up to 560,000 shares of the Company’s common stock could be issued to eligible key management employees pursuant to options and rights through 2002. The Company issues new shares of common stock upon option exercise or rights vesting. As of June 30, 2006, options and rights for 191,000 shares, net of forfeitures, had been issued. No further options and rights will be issued pursuant to the 1995 Plan. The 2001 Plan provides that up to 600,000 shares of the Company’s common stock may be issued to eligible key management employees pursuant to options and rights through 2008. As of June 30, 2006, options and rights for 262,000 shares had been issued, net of forfeitures.

Stock options The Plans provide that eligible key management employees may be granted options to purchase the Company’s common stock at the fair market value on the date the options are granted. The options generally vest over five years and generally expire ten years from the date of grant. Non-cash compensation expense of $236,000 ($153,000 after-tax) and $115,000 ($75,000 after-tax) related to the options was recorded for the six and three-month periods ended June 30, 2006, respectively. During the first quarter of 2005, the vesting on certain previously granted options was accelerated as part of a separation agreement with the Company’s former chief executive officer; as a result, the Company recognized non-cash compensation expense of $303,000 ($197,000 after-tax). No compensation expense related to stock options was recorded in the second quarter of 2005.

Restricted stock rights The Plans also provide that eligible key management employees may be granted restricted stock rights which entitle such employees to receive a stated number of shares of the Company’s common stock. The rights generally vest over five years and expire upon termination of employment. Non-cash compensation expense of $51,000 ($34,000 after-tax) and $29,000 ($19,000 after-tax) related to the rights was recorded for the six and three-month periods ended June 30, 2006, respectively. No compensation expense related to restricted stock rights was recorded during the six or three-month periods ended June 30, 2005.

     Determining Fair Value Under SFAS 123(R)

Valuation and Amortization Method. The Company estimates the fair value of stock option awards granted using the Black-Scholes option valuation model. The Company amortizes the fair value of all awards on a straight-line basis over the requisite service periods, which are generally the vesting periods.

Expected Life. The expected life of awards granted represents the period of time that they are expected to be outstanding. The Company determines the expected life based primarily on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules, expected exercises and post-vesting forfeitures. Stock options granted by the Company generally vest 20% per year over five years and have contractual terms of ten years.

Expected Volatility. The Company estimates the volatility of its common stock at the date of grant based on the historical volatility of its common stock. The volatility factor the Company uses in the Black-Scholes option valuation model is based on its historical stock prices over the most recent period commensurate with the estimated expected life of the award.

Risk-Free Interest Rate. The Company bases the risk-free interest rate used in the Black-Scholes option valuation model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award.

Expected Dividend Yield. The Company uses an expected dividend yield of zero in the Black-Scholes option valuation model, consistent with the Company’s recent experience.

Expected Forfeitures. The Company primarily uses historical data to estimate pre-vesting option forfeitures. The Company records stock-based compensation only for those awards that are expected to vest.

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The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. A summary of the weighted average assumptions and results for options granted during the periods presented is as follows:

	Six months ended
	June 30
	2006			2005
Assumptions:
Weighted average risk-free interest rate		4.8	%		4.1	%
Expected dividend yield		0			0
Expected volatility		33	%		31	%
Expected life of options	6 years			6 years
Weighted average fair value at date of grant	$	17.57		$	19.74

There were no stock options granted during the three months ended June 30, 2006 or 2005.

     Stock-based Compensation Under SFAS 123(R)

Stock-based compensation expense related to stock-based awards under SFAS 123(R) for the six and three-month periods ended June 30, 2006 totalled $287,000 and $144,000, respectively, which is included in general and administrative expenses in the Company’s Condensed Consolidated Statements of Operations.

As of June 30, 2006, the Company had approximately $1.3 million of total unrecognized compensation cost related to non-vested stock-based awards granted under all equity compensation plans. Total unrecognized compensation cost will be adjusted for any future changes in estimated forfeitures. The Company expects to recognize this cost over a period of approximately five years (or a weighted average period of 1.8 years). A greater percentage of the stock-based compensation expense is recognized in the first few years due to the prior method under APB 25 for which compensation cost is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award, while compensation cost for awards granted after December 31, 2005 is recognized on a straight-line basis over the requisite service period for the entire award.

The following table presents the impact of the Company’s adoption of SFAS 123(R) on selected line items from our condensed consolidated financial statements for the six and three-month periods ended June 30, 2006 (in thousands, except per share amounts):

	Six Months Ended			Three Months			Ended
	June 30			June 30
Condensed consolidated statement of operations:
Decrease in income from operations	$	(236	)	$	(115	)
Decrease in income before income taxes		(236	)		(115	)
Decrease in net income		(153	)		(75	)
Decrease in basic and diluted net income per share		(0.02	)		(0.01	)
Condensed consolidated statement of cash flows:
Decrease in net cash provided by operating activities		(10	)		—
Increase in net cash provided by financing activities		10			—

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     Stock Award Activity

A summary of stock options and restricted stock rights is as follows:

	Stock Options								Restricted Stock Rights
				Weighted		Weighted
				Average		Average						Weighted
				Exercise		Remaining	Aggregate					Average
	Number			Price Per		Contractual	Intrinsic		Number			Grant-Date
	of Shares			Share		Life	Value		of Shares			Fair Value
Outstanding at December 31, 2005		275,430		$	52.88					4,000		$	46.89
Options and stock rights granted		39,100			42.70					6,400			42.70
Options exercised/stock rights vested		(4,800	)		36.86					(250	)		49.75
Options expired		(4,000	)		37.25
Options and stock rights forfeited		(43,505	)		52.40
Outstanding at June 30, 2006		262,225		$	52.03	5.9 years	$	119,000		10,150		$	44.18
Exercisable at June 30, 2006		163,500		$	55.49	4.2 years	$	97,000

The aggregate intrinsic value of options outstanding at June 30, 2006 is calculated as the difference between the market price of the underlying common stock and the exercise price of the options for the 22,500 options that had exercise prices that were lower than the $42.13 closing market price of the Company’s common stock at June 30, 2006.

The total intrinsic value of options exercised during the six months ended June 30, 2006 was $29,000, determined as of the date of exercise. No options were exercised during the three months ended June 30, 2006. The total intrinsic value of options exercised during the six and three-month periods ended June 30, 2005 was $848,000 and $106,000, respectively, determined as of the date of exercise. During the six and three-month periods ended June 30, 2006, 250 restricted stock rights vested, with a total fair value of $11,000. During the six months ended June 30, 2005, 60 restricted stock rights vested, with a total fair value of $3,000. No restricted stock rights vested during the three months ended June 30, 2005.

     Pro Forma Information Under SFAS 123 and APB 25

Prior to fiscal 2006, stock-based compensation plans were accounted for using the intrinsic value method prescribed in APB 25 and related Interpretations. Had compensation cost for the plans been determined based on the fair value at the grant dates for awards under those plans consistent with the method of SFAS 123, the Company’s net loss and basic and diluted net loss per share would have been changed to the pro forma amounts indicated below (in thousands, except for per share data):

	Six months ended			Three months ended
	June 30, 2005			June 30, 2005
Net loss, as reported	$	(6,158	)	$	(1,090	)
Add: stock-based compensation included in net loss, net of tax		197			—
Deduct: total stock-based compensation determined under fair value method for all awards, net of tax		(181	)		(159	)
Pro forma net loss	$	(6,142	)	$	(1,249	)
Basic and diluted net loss per share:
As Reported	$	(0.71	)	$	(0.13	)
Pro forma	$	(0.71	)	$	(0.14	)

9. Segment Information

The Company reports financial data for three reportable segments: television, radio, and Fisher Plaza. The television reportable segment includes the operations of the Company’s eleven network-affiliated television stations, and a 50% interest in a company that owns a twelfth television station. The radio reportable segment

13

includes the operations of the Company’s three Seattle radio stations, while operations of the Company’s 24 small-market radio stations are reported as discontinued operations. Corporate expenses of the broadcasting business unit are allocated to the television and radio reportable segments based on a ratio that approximates historic revenue and operating expenses of the segments. The Fisher Plaza reportable segment includes the operations of a communications center located near downtown Seattle that serves as home of the Company’s Seattle television and radio operations, the Company’s corporate offices, and third-party tenants.

Revenue for each reportable segment is as follows (in thousands):

	Six Months						Three Months
	Ended June 30						Ended June 30
	2006			2005			2006			2005
Television	$	48,850		$	44,196		$	25,991		$	23,370
Radio		18,172			17,091			12,081			11,470
Fisher Plaza		4,292			3,996			2,128			2,078
Corporate and eliminations		(43	)		(105	)		(10	)		(53	)
Continuing operations		71,271			65,178			40,190			36,865
Discontinued operations		6,049			5,901			3,302			3,257
	$	77,320		$	71,079		$	43,492		$	40,122

Income (loss) before interest and income taxes for each reportable segment is as follows (in thousands):

	Six months						Three months
	Ended June 30						Ended June 30
	2006			2005			2006			2005
Television	$	8,684		$	1,435		$	6,085		$	2,486
Radio		(207	)		(1,068	)		183			(93	)
Fisher Plaza		1,089			102			579			178
Corporate and eliminations		(2,739	)		(4,357	)		(1,029	)		(1,703	)
Continuing operations		6,827			(3,888	)		5,818			868
Discontinued operations		868			631			734			573
	$	7,695		$	(3,257	)	$	6,552		$	1,441

The following table reconciles total segment income (loss) from continuing operations before interest and income taxes shown above to consolidated loss from continuing operations before income taxes (in thousands):

	Six months						Three months
	ended June 30						ended June 30
	2006			2005			2006			2005
Total segment income (loss) before interest and income taxes	$	6,827		$	(3,888	)	$	5,818		$	868
Interest expense		(6,822	)		(6,775	)		(3,368	)		(3,404	)
	$	5		$	(10,663	)	$	2,450		$	(2,536	)

14

Identifiable assets for each reportable segment are as follows (in thousands):

	June 30,		December 31,
Total assets	2006		2005
Television	$	84,899	$	92,543
Radio		32,114		41,487
Fisher Plaza		120,347		118,611
Corporate and eliminations		188,727		187,752
Continuing operations		426,087		440,393
Discontinued operations		12,593		—
	$	438,680	$	440,393

Identifiable assets by reportable segment are those assets used in the operations of each segment. Corporate assets are principally marketable securities.

10. Commitments

On May 1, 2006, the Company entered into an amendment to an asset purchase agreement, dated December 12, 2005 with Equity Broadcasting Corporation and entities owned or controlled by Equity Broadcasting Corporation (“EBC”). The amendment provided, among other things, that (1) the purchase of Idaho low-power stations and low-power construction permits (the “Idaho Closing”) will not be conditioned on the purchase of the Oregon stations (the “Oregon Closing”), (2) the Idaho Closing will occur as soon as practicable, but no later than May 15, 2006, (3) the Buyer may defer the date of the Oregon Closing to September 30, 2006 and (4) the parties will negotiate toward establishing a joint sales agreement (“JSA”) for the Oregon full-power station. As a result of the amendment, the Company paid a $3.5 million non-refundable fee in consideration for the extension of the Oregon Closing to be applied toward the purchase price of $19.3 million for the Oregon stations. The Company finalized the purchase of the Idaho stations for $1.0 million on May 15, 2006 and further agreed to pay $500,000 in prepaid fees upon establishing a JSA structure, on July 1, 2006.

On May 30, 2006, the Company entered into an agreement pursuant to which its 100% owned subsidiary, Fisher Radio Regional Group Inc. (“FRRG”), will sell its 24 small-market radio stations located in Montana and Eastern Washington (the “Stations”), subject to Federal Communications Commission (“FCC”) approval. The purchaser of the Stations is Cherry Creek Radio LLC and entities owned or controlled by Cherry Creek Radio LLC (“CCR”). The aggregate purchase price for the Stations is $33.3 million, subject to certain proration and adjustments. On July 21, 2006, FRRG agreed to a time brokerage agreement with CCR whereby CCR will provide programming to 19 FRRG stations, sell advertising, and collect payment on those sales while FRRG will maintain control as licensee of the stations, commencing on August 1, 2006.

On June 26, 2006, the Company entered into a stock purchase agreement with African-American Broadcasting of Bellevue, Inc. (“AABB”), and its owner Christopher J. Racine. In connection and contemporaneously with the stock purchase agreement, the parties also entered into a Local Marketing Agreement (“LMA”). Under these agreements, the Company acquired an immediate 25 percent equity interest in AABB for $4.0 million and the right and obligation to acquire the remaining equity interest in AABB pending FCC approval of the transaction and the fulfillment of certain other closing conditions by AABB. The stock certificate is held by our lender as collateral under the senior credit facility. This was accounted for using the equity method as of June 30, 2006.

11. Subsequent Events

On July 11, 2006 the Company entered into an LMA with WatchTV, Inc. to manage four of their television stations located in Eastern Washington. The stations currently provide Spanish-language programming to the Yakima-Pasco-Richland-Kennewick television market through an affiliation with Univision. Contemporaneously with the LMA, the Company entered into an option agreement with WatchTV, whereby the Company has the right to acquire the stations until June 30, 2007.

15

12. Financial Information for Guarantors

On September 20, 2004, the Company completed an offering of $150.0 million of 8.625% senior notes due 2014. The notes are unconditionally guaranteed, jointly and severally, on an unsecured, senior basis by the 100% owned subsidiaries of the Company.

Presented below are condensed consolidated statements of operations for the three and six months ended June 30, 2006 and 2005, and cash flows for the six months ended June 30, 2006 and 2005. Also presented are the condensed consolidated balance sheets as of June 30, 2006 and December 31, 2005. The condensed consolidated information is presented for the Company (issuer) with its investments accounted for under the equity method, the 100% owned guarantor subsidiaries, eliminations, and the Company on a consolidated basis. The Company (issuer) information consists primarily of corporate oversight and administrative personnel and related activities, as well as certain investments in marketable securities.

16

Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the six months ended June 30, 2006

				100%						Fisher
	Fisher			Owned						Communications,
	Communications,			Guarantor						Inc. and
	Inc.			Subsidiaries			Eliminations			Subsidiaries
(in thousands)
Revenue	$			$	71,375		$	(104	)	$	71,271
Costs and expenses
Cost of services sold		—			33,923			811			34,734
Selling expenses		—			12,267			—			12,267
General and administrative expenses		4,223			10,875			(915	)		14,183
Depreciation and amortization		124			4,903			—			5,027
		4,347			61,968			(104	)		66,211
Income (loss) from operations		(4,347	)		9,407			—			5,060
Other income, net		1,576			191			—			1,767
Equity in income of subsidiaries		6,664			—			(6,664	)		—
Interest expense		(6,817	)		(5	)		—			(6,822	)
Income (loss) from continuing operations before income taxes		(2,924	)		9,593			(6,664	)		5
Provision (benefit) for federal and state income taxes		(3,491	)		3,491			—			—
Income (loss) from continuing operations		567			6,102			(6,664	)		5
Income from discontinued operations, net of income taxes		—			562			—			562
Net income (loss)	$	567		$	6,664		$	(6,664	)	$	567

17

Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the six months ended June 30, 2005

				100%					Fisher
	Fisher			Owned					Communications,
	Communications,			Guarantor					Inc. and
	Inc.			Subsidiaries		Eliminations			Subsidiaries
(in thousands)
Revenue	$			$	65,292	$	(114	)	$	65,178
Costs and expenses
Cost of services sold					35,137		778			35,915
Selling expenses					11,260					11,260
General and administrative expenses		5,686			11,232		(892	)		16,026
Depreciation and amortization		134			7,485					7,619
		5,820			65,114		(114	)		70,820
Income (loss) from operations		(5,820	)		178		—			(5,642	)
Other income, net		1,405			349					1,754
Equity in income of subsidiaries		777					(777	)		—
Interest expense		(6,775	)							(6,775	)
Income (loss) from continuing operations before income taxes		(10,413	)		527		(777	)		(10,663	)
Provision (benefit) for federal and state income taxes		(4,255	)		160					(4,095	)
Income (loss) from continuing operations		(6,158	)		367		(777	)		(6,568	)
Income from discontinued operations net of income taxes					410					410
Net income (loss)	$	(6,158	)	$	777	$	(777	)	$	(6,158	)

18

Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the three months ended June 30, 2006

				100%						Fisher
	Fisher			Owned						Communications,
	Communications,			Guarantor						Inc. and
	Inc.			Subsidiaries			Eliminations			Subsidiaries
(in thousands)
Revenue	$			$	40,242		$	(52	)	$	40,190
Costs and expenses
Cost of services sold		—			19,232			400			19,632
Selling expenses		—			6,654						6,654
General and administrative expenses		1,782			5,126			(452	)		6,456
Depreciation and amortization		62			2,449						2,511
		1,844			33,461			(52	)		35,253
Income (loss) from operations		(1,844	)		6,781			—			4,937
Other income, net		789			92						881
Equity in income of subsidiaries		4,846			—			(4,846	)		—
Interest expense		(3,366	)		(2	)					(3,368	)
Income (loss) from continuing operations before income taxes		425			6,871			(4,846	)		2,450
Provision (benefit) for federal and state income taxes		(1,843	)		2,501						658
Income (loss) from continuing operations		2,268			4,370			(4,846	)		1,792
Income from discontinued operations, net of income taxes		—			476						476
Net income (loss)	$	2,268		$	4,846		$	(4,846	)	$	2,268

19

Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the three months ended June 30, 2005

				100%					Fisher
	Fisher			Owned					Communications,
	Communications,			Guarantor					Inc. and
	Inc.			Subsidiaries		Eliminations			Subsidiaries
(in thousands)
Revenue	$			$	36,921	$	(56	)	$	36,865
Costs and expenses
Cost of services sold					19,562		385			19,947
Selling expenses					6,355					6,355
General and administrative expenses		2,248			5,253		(441	)		7,060
Depreciation and amortization		65			3,493					3,558
		2,313			34,663		(56	)		36,920
Income (loss) from operations		(2,313	)		2,258		—			(55	)
Other income, net		735			188					923
Equity in income of subsidiaries		1,973					(1,973	)		—
Interest expense		(3,404	)							(3,404	)
Income (loss) from continuing operations before income taxes		(3,009	)		2,446		(1,973	)		(2,536	)
Provision (benefit) for federal and state income taxes		(1,919	)		845					(1,074	)
Income (loss) from continuing operations		(1,090	)		1,601		(1,973	)		(1,462	)
Income from discontinued operations, net of income taxes		—			372					372
Net income (loss)	$	(1,090	)	$	1,973	$	(1,973	)	$	(1,090	)

20

Financial Information for Guarantors
Condensed Consolidated Balance Sheet
as of June 30, 2006

				100%					Fisher
	Fisher			Owned					Communications,
	Communications,			Guarantor					Inc. and
	Inc.			Subsidiaries		Eliminations			Subsidiaries
(in thousands)
ASSETS
Current Assets
Cash and cash equivalents	$	5,241		$	3,272	$			$	8,513
Receivables, net		279			31,055					31,334
Due from affiliate					2,312		(2,312	)		—
Income taxes receivable		1,538					(552	)		986
Deferred income taxes		73			850					923
Prepaid expenses		318			3,521					3,839
Television and radio broadcast rights					3,043					3,043
Assets held for sale					400					400
Total current assets		7,449			44,453		(2,864	)		49,038
Marketable securities, at market value		169,202			430					169,632
Investment in consolidated subsidiaries		231,721					(231,721	)		—
Cash value of life insurance and retirement deposits		5,308			10,287					15,595
Television and radio broadcast rights					1,551					1,551
Goodwill, net					30,122					30,122
Intangible assets					330					330
Investments in equity investee					6,751					6,751
Prepaid financing fees and other assets		4,854			4,644					9,498
Assets held for sale					12,193					12,193
Property, plant and equipment, net		804			143,166					143,970
Total Assets	$	419,338		$	253,927	$	(234,585	)	$	438,680
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Trade accounts payable	$	683		$	3,200	$			$	3,883
Payable to affiliate		2,312					(2,312	)		—
Accrued payroll and related benefits		1,035			4,358					5,393
Interest payable		3,773								3,773
Television and radio broadcast rights payable					1,367					1,367
Income taxes payable					552		(552	)		—
Other current liabilities		1,500			3,460					4,960
Liabilities of businesses held for sale					492					492
Total current liabilities		9,303			13,429		(2,864	)		19,868
Long-term debt		150,000								150,000
Accrued retirement benefits		19,640			84					19,724
Deferred income taxes		29,942			1,844					31,786
Other liabilities		65			6,801					6,866
Liabilities of businesses held for sale					48					48
Stockholders’ Equity
Common stock		10,887			1,131		(1,131	)		10,887
Capital in excess of par		8,900			164,234		(164,234	)		8,900
Accumulated other comprehensive income, net of income taxes:
Unrealized gain on marketable securities		109,325								109,325
Minimum pension liability		(2,172	)							(2,172	)
Retained earnings		83,448			66,356		(66,356	)		83,448
Total Stockholders’ Equity		210,388			231,721		(231,721	)		210,388
Total Liabilities and Stockholders’ Equity	$	419,338		$	253,927	$	(234,585	)	$	438,680

21

Financial Information for Guarantors
Condensed Consolidated Balance Sheet
as of December 31, 2005

				100%					Fisher
	Fisher			Owned					Communications,
	Communications,			Guarantor					Inc. and
	Inc.			Subsidiaries		Eliminations			Subsidiaries
(in thousands)
ASSETS
Current Assets
Cash and cash equivalents	$	3,660		$	15,962	$			$	19,622
Receivables, net		105			28,061					28,166
Due from affiliate		6,184					(6,184	)		—
Income taxes receivable		1,538					(552	)		986
Deferred income taxes		7			658					665
Prepaid expenses		414			3,881					4,295
Television and radio broadcast rights					6,519					6,519
Total current assets		11,908			55,081		(6,736	)		60,253
Marketable securities, at market value		169,634			419					170,053
Investment in consolidated subsidiaries		225,057					(225,057	)		—
Cash value of life insurance and retirement deposits		5,115			10,188					15,303
Television and radio broadcast rights					2,075					2,075
Goodwill, net					38,354					38,354
Intangible assets					1,244					1,244
Investments in equity investee					2,759					2,759
Deferred income taxes										—
Prepaid financing fees and and other assets		5,169			871					6,040
Property, plant and equipment, net		904			143,408					144,312
Total Assets	$	417,787		$	254,399	$	(231,793	)	$	440,393
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Trade accounts payable	$	693		$	2,790	$			$	3,483
Payable to affiliate					6,184		(6,184	)		—
Accrued payroll and related benefits		1,113			6,242					7,355
Interest payable		3,809								3,809
Television and radio broadcast rights payable					5,524					5,524
Income taxes payable					552		(552	)		—
Other current liabilities		2,058			2,462					4,520
Total current liabilities		7,673			23,754		(6,736	)		24,691
Long-term debt		150,000								150,000
Accrued retirement benefits		19,560			84					19,644
Deferred income taxes		30,868			513					31,381
Other liabilities		65			4,991					5,056
Stockholders’ Equity
Common stock		10,881			1,131		(1,131	)		10,881
Capital in excess of par		8,590			164,234		(164,234	)		8,590
Deferred compensation		(159	)							(159	)
Accumulated other comprehensive income, net of income taxes:
Unrealized gain on marketable securities		109,600								109,600
Minimum pension liability		(2,172	)							(2,172	)
Retained earnings		82,881			59,692		(59,692	)		82,881
Total Stockholders’ Equity		209,621			225,057		(225,057	)		209,621
Total Liabilities and Stockholders’ Equity	$	417,787		$	254,399	$	(231,793	)	$	440,393

22

Financial Information for Guarantors
Condensed Consolidated Statement of Cash Flows
for the six months ended June 30, 2006

				100%					Fisher
	Fisher			Owned					Communications,
	Communications,			Guarantor					Inc. and
	Inc.			Subsidiaries			Eliminations		Subsidiaries
(in thousands)
Net cash provided by operating activities	$	1,420		$	1,687		$		$	3,107
Cash flows from investing activities
Investment in equity investee					(4,000	)				(4,000	)
Deposit paid for purchase of Oregon television stations					(3,500	)				(3,500	)
Purchase of property, plant and equipment		(26	)		(6,877	)				(6,903	)
Net cash used in investing activities		(26	)		(14,377	)		—		(14,403	)
Cash flows from financing activities
Excess tax benefit from exercise of stock options		10								10
Proceeds from exercise of stock options		177								177
Net cash provided by financing activities		187			—			—		187
Net increase (decrease) in cash and cash equivalents		1,581			(12,690	)		—		(11,109	)
Cash and cash equivalents, beginning of period		3,660			15,962					19,622
Cash and cash equivalents, end of period	$	5,241		$	3,272		$	—	$	8,513

23

Financial Information for Guarantors
Condensed Consolidated Statement of Cash Flows
for the six months ended June 30, 2005

				100%					Fisher
	Fisher			Owned					Communications,
	Communications,			Guarantor					Inc. and
	Inc.			Subsidiaries			Eliminations		Subsidiaries
Net cash used in operating activities	$	(2,988	)	$	(3,371	)	$		$	(6,359	)
Cash flows from investing activities
Proceeds from collection of note receivable					1585					1,585
Proceeds from sale of marketable securities		73			174					247
Purchase of property, plant and equipment		(228	)		(3,727	)				(3,955	)
Net cash used in investing activities		(155	)		(1,968	)		—		(2,123	)
Cash flows from financing activities
Payments under notes payable		(44	)		(9	)				(53	)
Payment of deferred loan costs		(87	)							(87	)
Proceeds from exercise of stock options		3,068								3,068
Net cash provided by (used in) financing activities		2,937			(9	)		—		2,928
Net decrease in cash and cash equivalents		(206	)		(5,348	)		—		(5,554	)
Cash and cash equivalents, beginning of period		1,007			15,018					16,025
Cash and cash equivalents, end of period	$	801		$	9,670		$	—	$	10,471

24

ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the Financial Statements and related Notes thereto included elsewhere in this quarterly report on Form 10-Q. Some of the statements in this quarterly report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all passages containing verbs such as `aims, anticipates, believes, estimates, expects, hopes, intends, plans, predicts, projects or targets’ or nouns corresponding to such verbs. Forward-looking statements also include any other passages that are primarily relevant to expected future events or that can only be fully evaluated by events that will occur in the future. There are many risks and uncertainties that could cause actual results to differ materially from those predicted in our forward-looking statements, including, without limitation, those factors discussed under the caption “Risk Factors” in Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2006. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made in this report and in our other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect our business, prospects and results of operations. As used herein, unless the context requires otherwise, when we say “we”, “us”, “our”, or the “Company”, we are referring to Fisher Communications, Inc. and its consolidated subsidiaries.

This discussion is intended to provide an analysis of significant trends, if any, and material changes in our financial position and operating results of our business units during the three and six-month periods ended June 30, 2006, compared with the corresponding periods in 2005.

We are an integrated media company. We own and operate eleven network-affiliated television stations and 27 radio stations. We also own a 50% interest in a company that owns a twelfth television station. Our television and radio stations are located in Washington, Oregon, Idaho, and Montana. We also own and operate Fisher Plaza, a communications facility located near downtown Seattle that serves as the home for our corporate offices and our Seattle television and radio stations, and also houses a variety of companies, including media and communications companies. We also own approximately 3.0 million shares of common stock of Safeco Corporation, a publicly traded insurance company.

Our broadcasting operations receive revenue from the sale of local, regional, and national advertising and, to a much lesser extent, from network compensation, satellite and fiber transmission services, satellite retransmission, tower rental, and commercial production activities. Our operating results are therefore sensitive to broad economic trends that affect the broadcasting industry in general, as well as local and regional trends, such as those in the Northwest economy. Excluding revenue derived from seasonal sports rights, the advertising revenue of our stations is generally highest in the second and fourth quarters of each year, due in part to increases in consumer advertising in the spring, and retail advertising in the period leading up to and including the holiday season. In addition, advertising revenue is generally higher during national election years due to spending by political candidates and advocacy groups. This political spending typically is heaviest during the fourth quarter.

Our television revenue is significantly affected by network affiliation and the success of programming offered by those networks. Our two largest television stations, representing approximately three-fourths of our television revenue, are affiliated with ABC, we have two Telefutura-affiliated television stations, and the remaining eight television stations (including 50%-owned KPIC TV) are affiliated with CBS. Our broadcasting operations are subject to competitive pressures from traditional broadcasting sources, as well as from alternative methods of delivering information and entertainment, and these pressures may cause fluctuations in operating results.

In May 2006, the Company entered into a n amendment to an asset purchase agreement, dated December 12, 2005 with Equity Broadcasting Corporation and entities owned or controlled by Equity Broadcasting Corporation (“EBC”). The amendment provided, among other things, that (1) the purchase of Idaho low-power stations and low-power construction permits (the “Idaho Closing”) will not be conditioned on the purchase of the Oregon stations (the “Oregon Closing”), (2) the Idaho Closing will occur as soon as practicable, but no later than May 15, 2006, (3) the Buyer may defer the date of the Oregon Closing to September 30, 2006 and (4) the parties will negotiate toward establishing a joint sales agreement (“JSA”) for the Oregon full-power station. As a result of the amendment, the Company paid a $3.5

25

million non-refundable fee in consideration for the extension of the Oregon Closing to be applied toward the purchase price of $19.3 million for the Oregon stations. The Company finalized the purchase of the Idaho stations for $1.0 million on May 15, 2006 and further agreed to pay $500,000 in prepaid fees upon establishing a JSA structure, on July 1, 2006.

Also in May 2006, the Company entered into an agreement pursuant to which its 100% owned subsidiary, Fisher Radio Regional Group Inc. (“FRRG”), will sell its 24 small-market radio stations located in Montana and Eastern Washington (the “Stations”), subject to Federal Communications Commission (“FCC”) approval. The purchaser of the Stations is Cherry Creek Radio LLC and entities owned or controlled by Cherry Creek Radio LLC (“CCR”). The aggregate purchase price for the Stations is $33.3 million, subject to certain proration and adjustments. On July 21, 2006, FRRG agreed to a time brokerage agreement with CCR whereby CCR will provide programming to 19 FRRG stations, sell advertising, and collect payment on those sales while FRRG will maintain control as licensee of the stations, commencing on August 1, 2006. The FRRG stations group is treated as discontinued operations in the accompanying financial data.

In June 2006, the Company entered into a stock purchase agreement with African-American Broadcasting of Bellevue, Inc. (“AABB”), and its owner Christopher J. Racine. In connection and contemporaneously with the stock purchase agreement, the parties also entered into a Local Marketing Agreement (“LMA”). Under these agreements, the Company acquired an immediate 25 percent equity interest in AABB for $4.0 million and the right and obligation to acquire the remaining equity interest in AABB pending FCC approval of the transaction and the fulfillment of certain other closing conditions by AABB.

In July 2006 the Company entered into an LMA with WatchTV, Inc. to manage four of their television stations located in Eastern Washington. The stations currently provide Spanish-language programming to the Yakima-Pasco-Richland-Kennewick television market through an affiliation with Univision. Contemporaneously with the LMA, the Company entered into an option agreement with WatchTV, whereby the Company has the right to acquire the stations until June 30, 2007.

In May 2002, we entered into a radio rights agreement (the “Rights Agreement”) to broadcast Seattle Mariners baseball games on KOMO AM for the 2003 through 2008 baseball seasons. The impact of the Rights Agreement is greater during periods that include the broadcast of Mariners baseball games; therefore, the impact on the first and fourth quarters of each year is less than what is expected for the second and third quarters of the calendar year. We also changed to an all-news format for KOMO AM in September 2002. These changes have led to improved ratings for KOMO AM in the Seattle market over the past few years. Nevertheless, the success of this programming is dependent, in part, on factors beyond our control, such as the competitiveness of the Seattle Mariners and the successful marketing of the team.

In addition to our broadcasting operations, we own and operate Fisher Plaza, and we lease space to other companies that are attracted by the property location and the infrastructure provided at this facility. Fisher Plaza was first opened for occupancy in May 2000, and the second phase of the project was opened for occupancy in the summer of 2003. As of June 30, 2006, approximately 96% of Fisher Plaza was occupied or committed for occupancy (42% was occupied by Fisher entities), compared to 91% occupied or committed for occupancy at December 31, 2005 and 88% at June 30, 2005. Revenue and operating income from Fisher Plaza are dependent upon the general economic climate, the Seattle economic climate, the outlook of the telecommunications and technology sectors and real estate conditions, including the availability of space in other competing properties.

On September 20, 2004 we completed an offering of $150.0 million of 8.625% senior notes due 2014 and used the net cash proceeds to retire our previous debt facilities and terminate the forward sales contract covering shares of our investment in Safeco Corporation. The notes are unconditionally guaranteed, jointly and severally, on an unsecured, senior basis by the current and future material domestic subsidiaries of the Company. Interest on the notes is payable semiannually in arrears on March 15 and September 15 of each year.

Management focuses on key metrics from operational data within our broadcasting and Fisher Plaza operations. Information on significant trends is provided in the section entitled “Consolidated Results of Operations.”

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CRITICAL ACCOUNTING POLICIES

The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Our critical accounting policies and estimates include the estimates used in determining the recoverability of goodwill and other indefinite-lived intangible assets, the value of television and radio broadcast rights, the cost of pension programs, the amount of tax accruals and the amount of the allowance for doubtful accounts. For a detailed discussion of our critical accounting policies and estimates, please refer to our Annual Report on Form 10-K for the year ended December 31, 2005. There have been no material changes in the application of our critical accounting policies and estimates subsequent to that report. We have discussed the development and selection of these critical accounting estimates with the Audit Committee of our board of directors.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

CONSOLIDATED RESULTS OF OPERATIONS

We report financial data for three reportable segments: television, radio and Fisher Plaza. The television reportable segment includes the operations of our eleven network-affiliated 100% owned television stations, and a twelfth television station 50% owned by us. The radio reportable segment includes the operations of the Company’s three Seattle radio stations, while operations of the Company’s 24 small-market radio stations are reported as discontinued operations. Corporate expenses of the broadcasting business unit are allocated to the television and radio reportable segments based on a ratio that approximates historic revenue and operating expenses of the segments. The Fisher Plaza reportable segment consists of the operations of Fisher Plaza. Fisher-owned entities that reside at Fisher Plaza do not pay rent; however, these entities do pay common-area maintenance expenses. The segmental data includes additional allocation of depreciation and certain operating expenses from Fisher Plaza to the Seattle-based television and radio operations.

Percentage comparisons have been omitted within the following table where they are not considered meaningful.

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	Six months												Three months
	ended June 30						Variance						ended June 30						Variance
	2006			2005			$			%			2006			2005			$			%
(dollars in thousands)
(Unaudited)
Revenue
Television	$	48,850		$	44,196		$	4,654			10.5	%	$	25,991		$	23,370		$	2,621			11.2	%
Radio		18,172			17,091			1,081			6.3	%		12,081			11,470			611			5.3	%
Fisher Plaza		4,292			3,996			296			7.4	%		2,128			2,078			50			2.4	%
Corporate and eliminations		(43	)		(105	)		62						(10	)		(53	)		43
Consolidated		71,271			65,178			6,093			9.3	%		40,190			36,865			3,325			9.0	%
Cost of services sold
Television		22,252			23,407			(1,155	)		-4.9	%		11,102			11,537			(435	)		-3.8	%
Radio		10,242			10,440			(198	)		-1.9	%		7,489			7,361			128			1.7	%
Fisher Plaza		1,429			1,288			141			10.9	%		641			666			(25	)		-3.8	%
Corporate and eliminations		811			780			31						400			383			17
Consolidated		34,734			35,915			(1,181	)		-3.3	%		19,632			19,947			(315	)		-1.6	%
Selling expenses
Television		6,585			5,933			652			11.0	%		3,368			3,235			133			4.1	%
Radio		5,581			5,114			467			9.1	%		3,226			2,998			228			7.6	%
Fisher Plaza		101			213			(112	)		-52.6	%		60			122			(62	)		-50.8	%
Consolidated		12,267			11,260			1,007			8.9	%		6,654			6,355			299			4.7	%
General and administrative expenses
Television		8,524			8,637			(113	)		-1.3	%		4,042			3,946			96			2.4	%
Radio		2,177			2,079			98			4.7	%		989			952			37			3.9	%
Fisher Plaza		146			395			(249	)		-63.0	%		81			126			(45	)		-35.7	%
Corporate and eliminations		3,336			4,915			(1,579	)		-32.1	%		1,344			2,036			(692	)		-34.0	%
Consolidated		14,183			16,026			(1,843	)		-11.5	%		6,456			7,060			(604	)		-8.6	%
Depreciation and amortization
Television		2,935			4,908			(1,973	)		-40.2	%		1,464			2,230			(766	)		-34.3	%
Radio		442			595			(153	)		-25.7	%		219			296			(77	)		-26.0	%
Fisher Plaza		1,526			1,981			(455	)		-23.0	%		766			967			(201	)		-20.8	%
Corporate and eliminations		124			135			(11	)		-8.1	%		62			65			(3	)		-4.6	%
Consolidated		5,027			7,619			(2,592	)		-34.0	%		2,511			3,558			(1,047	)		-29.4	%
Income (loss) from operations
Television		8,554			1,311			7,243						6,015			2,422			3,593
Radio		(270	)		(1,137	)		867						158			(137	)		295
Fisher Plaza		1,090			119			971						580			197			383
Corporate and eliminations		(4,314	)		(5,935	)		1,621						(1,816	)		(2,537	)		721
Consolidated		5,060			(5,642	)		10,702						4,937			(55	)		4,992
Other income, net		1,767			1,754			13						881			923			(42	)
Interest expense, net		(6,822	)		(6,775	)		(47	)					(3,368	)		(3,404	)		36
Income (loss) from continuing operations before income taxes		5			(10,663	)		10,668						2,450			(2,536	)		4,986
Provision (benefit) for federal and state income taxes					(4,095	)		4,095						658			(1,074	)		1,732
Income (loss) from continuing operations		5			(6,568	)		6,573						1,792			(1,462	)		3,254
Income (loss) from discontinued operations, net of income taxes		562			410			152						476			372			104
Net income (loss)	$	567		$	(6,158	)	$	6,725					$	2,268		$	(1,090	)	$	3,358

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Comparison of Fiscal Six and Three-Month Periods Ended June 30, 2006, and June 30, 2005

Revenue

Television revenue increased in the three and six-month periods ended June 30, 2006 compared to the same periods in 2005, primarily due to improved national and local advertising in most of our markets as well as increased political advertising in certain markets. The increase was led by improvements at our two ABC-affiliated stations. Total revenue for our Seattle and Portland television stations increased 13.1% and 14.4%, respectively, in the first six months of 2006 as compared to the same period in 2005. Revenue from the remaining television stations increased slightly in the first six months of 2006 as compared to the like period in 2005. In May 2005, we signed agreements with ABC to renew that network’s affiliation at KOMO TV and KATU through August 2009. In January 2006, we also renewed affiliation agreements with CBS through February 2016. The terms of the renewal include decreasing network compensation, and we are recognizing network compensation revenue on a straight-line basis over the term of the agreement. Television network compensation revenue decreased to $529,000 in the first six months of 2006, compared to $1.0 million in the same period of 2005.

Radio revenue increased in the three and six-month periods ended June 30, 2006, as compared to the same periods in 2005, primarily as a result of increased local revenue. Excluding revenue specifically attributable to Seattle Radio’s agreement with the Seattle Mariners to broadcast baseball games, KOMO AM’s revenue increased 17.3% in the first six months of 2006, compared to the first six months of 2005. We attribute the increase to improved ratings on KOMO-AM and a more aggressive sales strategy. Revenue from our small-market radio operations, which has historically comprised approximately 30% of our total radio revenue, has been included in the discontinued operations category due to the pending sale of those stations announced in May 2006.

Fisher Plaza first opened in May of 2000, and the second phase of the project was open for occupancy in the summer of 2003. The increase in revenue in the three and six-month periods ended June 30, 2006, as compared to the same periods of 2005, was due primarily to increased rents and service fees.

Cost of services sold

The cost of services sold consists primarily of costs to acquire, produce, and promote broadcast programming for the television and radio segments, and costs to operate Fisher Plaza. Many of these costs are relatively fixed in nature and do not necessarily vary on a proportional basis with revenue. The decrease in the television segment cost of services sold in the three and six-month periods ended June 30, 2006, as compared to the same periods in 2005, is primarily the result of lower syndicated programming costs. In particular, the six months of 2005 included syndicated programming costs for a television program that was cancelled later in 2005; 2006 replacement programming was at a lower cost.

Cost of services sold at our radio segment in the first three and six-months of 2006 is similar to the comparable periods in 2005. Expenses fluctuate seasonally consistent with the effect of the Seattle Mariners programming.

The increase in cost of services sold at Fisher Plaza in the first half of 2006 over the same 2005 period was primarily attributable to the increased costs to provide services at a higher third-party tenant occupancy level, for which expense reimbursements are classified as revenue.

The corporate and eliminations category consists primarily of the reclassification and elimination of certain operating expenses between operating segments. For example, KOMO TV and Seattle Radio recognize facilities-related expenses as general and administrative, while Fisher Plaza records the reimbursement of these intercompany expenses as a reduction of cost of services sold.

Selling expenses

The increase in selling expenses in the television segment in the three and six-month periods ended June 30, 2006, as compared to the same periods in 2005, were due primarily to increased commission-based expense at our television stations. The increase in selling expenses in the radio segment in the three and six-month periods ended

29

June 30, 2006, as compared to the same period in 2005, was due primarily to increased commission expense as a result of increased revenue.

Decreased selling expense at Fisher Plaza for the first half of 2006, as compared to the same period in 2005, was due primarily to reduced marketing efforts in 2006 as the property was becoming substantially occupied.

General and administrative expenses

The television segment had similar general and administrative costs during the three and six-month periods ended June 30, 2006, as compared to the corresponding 2005 periods. The radio segment had slightly increased general and administrative costs during the three and six-month periods ended June 30, 2006, as compared to the corresponding 2005 periods.

Decreased general and administrative expense at Fisher Plaza for the first six months of 2006 as compared to the same period in 2005 was due primarily to lower required administration and headcount levels due to management’s centralization of such functions to the corporate group in mid 2005.

The corporate group incurred lower general and administrative expenses in the first three and six-month periods of 2006, as compared to the same periods of 2005, due primarily to reduced pension-related expense and decreased severance-related expenses. In the first quarter of 2005, severance-related expense totaling approximately $1.0 million was recognized for the Company’s former chief executive officer. During second quarter of 2006, approximately $300,000 of severance-related expense was recognized for an executive officer.

Depreciation

Depreciation for the television, radio, and plaza segments declined in the three and six-month periods ended June 30, 2006, as compared to the same periods in 2005, as a result of certain assets having become fully depreciated.

Other income, net

Other income, net, includes primarily dividends received on marketable securities and, to a lesser extent, interest and miscellaneous income.

Interest expense

Interest expense consists primarily of interest on our $150 million senior notes and amortization of loan fees.

Provision (benefit) for federal and state income taxes

The provision or benefit for federal and state income taxes varies directly with pre-tax income or loss. Consequently, the changes in federal and state income taxes were primarily due to fluctuating income or losses from continuing operations before income taxes. The effective tax rate varies from the statutory rate primarily due to a deduction for dividends received from our investment in Safeco corporate common stock, changes in cash surrender value of life insurance policies held by the Company (for which proceeds are received tax-free if held to maturity), and the impact of other permanent tax differences. As required by accounting rules for interim financial reporting, we record our income tax provision or benefits based upon our estimated annual effective tax rate of 23% for 2006. The estimated effective tax rate in the 2006 period was lower than in the same period in 2005 due primarily to the relationship between the amount of estimated annual permanent differences and our estimated annual pretax income or loss.

Liquidity and capital resources

In September 2004, we completed a $150.0 million offering of 8.625% senior notes due 2014 and used $143.9 million of the initial $144.5 million net proceeds to retire existing debt and to settle the outstanding obligations.

30

The notes are unconditionally guaranteed, jointly and severally, on an unsecured, senior basis by our current and future material domestic subsidiaries. Interest on the notes is payable semiannually in arrears on March 15 and September 15 of each year. In September 2004, we also entered into a new six-year senior credit facility with a financial institution for borrowings of up to $20.0 million. The credit facility is collateralized by substantially all of the Company’s assets (excluding certain real property and our investment in shares of Safeco Corporation common stock).

Our current assets as of June 30, 2006 included cash and cash equivalents totaling $8.5 million, and we had working capital of $29.2 million. As of December 31, 2005, our current assets included cash and cash equivalents totaling $19.6 million, and we had working capital of $35.6 million. We intend to finance working capital, debt service and capital expenditures primarily through operating activities. However, we may use the credit facility to meet operating needs. As of June 30, 2006, the entire $20.0 million was available under the credit facility.

In May 2006, the Company entered into an amendment to an asset purchase agreement, dated December 12, 2005 with Equity Broadcasting Corporation and entities owned or controlled by Equity Broadcasting Corporation (“EBC”). As a result of the amendment, the Company paid a $3.5 million non-refundable fee in consideration for the extension of the Oregon Closing to September 30, 2006. The fee will be applied toward the purchase price of $19.3 million for the Oregon stations. The Company finalized the purchase of the Idaho stations for $1.0 million on May 15, 2006 and further agreed to pay $500,000 in prepaid fees upon establishing a JSA structure, on July 1, 2006.

Also in May 2006, the Company entered into an agreement pursuant to which its 100% owned subsidiary, Fisher Radio Regional Group Inc. (“FRRG”), will sell its 24 small-market radio stations located in Montana and Eastern Washington (the “Stations”), subject to FCC approval. The purchaser of the Stations is Cherry Creek Radio LLC and entities owned or controlled by Cherry Creek Radio LLC (“CCR”). The aggregate purchase price for the Stations is $33.3 million, subject to certain proration and adjustments. On July 21, 2006, FRRG agreed to a time brokerage agreement with CCR whereby CCR will provide programming to 19 FRRG stations, sell advertising, and collect payment on those sales while FRRG will maintain control as licensee of the stations, commencing on August 1, 2006.

In June 2006, the Company entered into a stock purchase agreement with African-American Broadcasting of Bellevue, Inc. (“AABB”), and its owner Christopher J. Racine. In connection and contemporaneously with the stock purchase agreement, the parties also entered into a Local Marketing Agreement (“LMA”). Under these agreements, the Company acquired an immediate 25 percent equity interest in AABB for $4.0 million and the right and obligation to acquire the remaining equity interest in AABB pending FCC approval of the transaction and the fulfillment of certain other closing conditions by AABB.

In July 2006 the Company entered into an LMA with WatchTV, Inc. to manage four of their television stations located in Eastern Washington. The stations currently provide Spanish-language programming to the Yakima-Pasco-Richland-Kennewick television market through an affiliation with Univision. Contemporaneously with the LMA, the Company entered into an option agreement with WatchTV, whereby the Company has the right to acquire the stations until June 30, 2007.

Net cash provided by operating activities during the six months ended June 30, 2006 was $3.1 million, compared to net cash used in operations of $6.4 million in the six months ended June 30, 2005. Net cash provided by (used in) operating activities consists of our net income (loss), adjusted by non-cash expenses such as depreciation and amortization, further adjusted by changes in deferred income tax and changes in operating assets and liabilities. Net cash used in investing activities during the period ended June 30, 2006 included $6.9 million used to purchase property, plant and equipment, $4.0 million paid as an investment in AABB and $3.5 million paid as a deposit on the purchase of the Oregon television stations from EBC. Net cash used in investing activities during the six months ended June 30, 2005 included $4.0 million used to purchase property, plant and equipment, which was partially offset by the collection of two notes receivable totalling $1.6 million related to prior year asset sales. Broadcasting is a capital-intensive business; however, we have no significant commitments for the purchase of capital items. During 2006, we constructed full power digital broadcasting facilities or obtained waivers for extended construction for certain of our smaller market television stations to be in compliance with FCC rules.

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Net cash provided by financing activities in the six months ended June 30, 2006 was $187,000, consisting primarily of proceeds from the exercise of stock options. Net cash provided by financing activities in the six months ended June 30, 2005 was $2.9 million, comprised primarily of $3.1 million of proceeds from the exercise of stock options, partially offset by payments of notes payable and deferred loan costs.

We are subject to various debt covenants and other restrictions — including the requirement for early payments upon the occurrence of certain events, including the sale of assets — the violation of which could require repayment of outstanding borrowings and affect our credit rating and access to other financing. The Company was in compliance with all debt covenant requirements at June 30, 2006.

ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The market risk in our financial instruments represents the potential loss arising from adverse changes in financial rates. We are exposed to market risk in the areas of interest rates and securities prices. These exposures are directly related to our normal funding and investing activities.

Interest Rate Exposure

As a result of our September 20, 2004 placement of $150.0 million of 8.625% senior notes due 2014, substantially all of our debt as of June 30, 2006, is at a fixed rate. As of June 30, 2006, our fixed-rate debt totaled $150.0 million. The fair market value of long-term fixed interest rate debt is subject to interest rate risk. Generally, the fair market value of fixed interest rate debt will increase as interest rates fall and decrease as interest rates rise. The estimated fair value of our long-term debt at June 30, 2006 was approximately $155.3 million, which was approximately $5.3 million more than its carrying value. Market risk is estimated as the potential change in fair value resulting from a hypothetical 10% change in interest rates and, as of June 30, 2006, amounted to approximately $7.5 million. Fair market values are determined based on estimates made by investment bankers. For fixed rate debt, interest rate changes do not impact book value, operations or cash flows.

Marketable Securities Exposure

The fair value of our investments in marketable securities as of June 30, 2006 was $169.6 million, compared to $170.1 million as of December 31, 2005. Marketable securities consist primarily of 3.0 million shares of Safeco Corporation common stock, valued based on the closing per-share sale price on the specific-identification basis as reported on the Nasdaq stock market. As of June 30, 2006, these shares represented 2.6% of the outstanding common stock of Safeco Corporation. We have classified the investments as available-for-sale under applicable accounting standards. A hypothetical 10% change in market prices underlying these securities would result in a $17.0 million change in the fair value of the marketable securities portfolio. Although changes in securities prices would affect the fair value of the marketable securities and cause unrealized gains or losses, such gains or losses would not be realized unless the investments are sold.

ITEM 4 — CONTROLS AND PROCEDURES

The Company’s Chief Executive Officer and Vice President Finance and Acting Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and, based on their evaluation, the Chief Executive Officer and Vice President Finance and Acting Chief Financial Officer have concluded that, as of the end of the Company’s fiscal quarter ended June 30, 2006, these disclosure controls and procedures are effective in ensuring that the information that the Company is required to disclose in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and that, as of the end of the Company’s fiscal quarter ended June 30, 2006, the disclosure controls and procedures are effective in ensuring that the information required to be reported is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Vice President Finance and Acting Chief Financial Officer, to allow timely decisions regarding required disclosure.

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During the second quarter of 2006, we made the following changes to our internal controls over financial reporting:

• In June 2006, we announced the resignation of Rob Bateman as Chief Financial Officer and the intention to recruit for his successor.

• In July 2006, we resolved to reappoint Jodi Colligan as Vice President of Finance and appointed her as Acting Chief Financial Officer until the next annual meeting of the Directors or the election and qualification of her successor.

Except for those changes, we have made no other change in internal control over financial reporting during the second fiscal quarter of 2006 that materially affected or is reasonably likely to materially affect our internal control over financial reporting. We intend to continue to refine our internal control on an ongoing basis as we deem appropriate with a view towards continuous improvement.

33

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

The Company and its subsidiaries are parties to various claims, legal actions and complaints in the ordinary course of their businesses. In the Company’s opinion, all such matters are adequately covered by insurance, are without merit or are of such kind, or involve such amounts, that unfavorable disposition would not have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company.

Item 1A. Risk Factors

There were no material changes during the quarter ended June 30, 2006 from risk factors previously disclosed in Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2006.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders

The Annual Meeting of Shareholders was held April 27, 2006.

The four nominees elected to the Board of Directors for three-year terms expiring in 2009 are listed below. There were no broker non-votes with respect to any of the nominees.

	Votes for		Votes withheld
James W. Cannon		7,200,875		258,762
Phelps K. Fisher		6,984,130		475,507
Deborah L. Bevier		7,225,483		234,154
Jerry A. St. Dennis		7,243,958		215,679

Continuing as Directors are Carol Fratt, Donald G. Graham, Jr. and Donald G. Graham, III, whose terms expire in 2007 and Richard L. Hawley, George F. Warren, Jr. and William W. Warren, Jr., whose terms expire in 2008.

Item 5. Other Information

None

34

Item 6. Exhibits

(a) Exhibits:

10.1*	Amendment and Agreement Regarding Asset Purchase Agreement dated May 1, 2006 between Fisher Radio Regional Group Inc., Equity Broadcasting Corporation, La Grande Broadcasting, Inc., EBC Boise, Inc. and EBC Pocatello, Inc. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 3, 2006 (File No. 000-22439)).
10.2	Purchase and Sale Agreement dated May 30, 2006 by and between Cherry Creek Radio LLC, Fisher Communications, Inc. and Fisher Radio Regional Group Inc.
10.3	Stock Purchase Agreement dated June 26, 2006 by and among Christopher J. Racine, African-American Broadcasting of Bellevue, Inc. and Fisher Broadcasting Company.
10.4	Local Marketing Agreement dated June 26, 2006 by and between Fisher Broadcasting Company and African-American Broadcasting of Bellevue, Inc.
31.1	Certification of Chief Executive Officer.
31.2	Certification of Acting Chief Financial Officer.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Incorporated by reference.

35

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FISHER COMMUNICATIONS, INC.
	(Registrant)
Dated: August 8, 2006	/s/ Jodi A. Colligan
	Jodi A. Colligan
	Vice President Finance
	Acting Chief Financial Officer

36

EXHIBIT INDEX

Exhibit No.	Description
10.1*	Amendment and Agreement Regarding Asset Purchase Agreement dated May 1, 2006 between Fisher Radio Regional Group Inc., Equity Broadcasting Corporation, La Grande Broadcasting, Inc., EBC Boise, Inc. and EBC Pocatello, Inc. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 3, 2006 (File No. 000-22439)).
10.2	Purchase and Sale Agreement dated May 30, 2006 by and between Cherry Creek Radio LLC, Fisher Communications, Inc. and Fisher Radio Regional Group Inc.
10.3	Stock Purchase Agreement dated June 26, 2006 by and among Christopher J. Racine, African-American Broadcasting of Bellevue, Inc. and Fisher Broadcasting Company.
10.4	Local Marketing Agreement dated June 26, 2006 by and between Fisher Broadcasting Company and African-American Broadcasting of Bellevue, Inc.
31.1	Certification of Chief Executive Officer.
31.2	Certification of Acting Chief Financial Officer.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Incorporated by reference.

37

EX-10.2

EXHIBIT 10.2

PURCHASE AND SALE AGREEMENT

BY AND BETWEEN

CHERRY CREEK RADIO LLC
“BUYER”

AND

FISHER COMMUNICATIONS INC.
“PARENT”

AND

FISHER RADIO REGIONAL GROUP INC.
“SELLER”

May 30, 2006

TABLE OF CONTENTS

	Page No.
ARTICLE 1 DEFINITIONS		1
1.1 Definitions		1
1.2 Singular/Plural; Gender		12
ARTICLE 2 PURCHASE AND SALE AND ASSUMPTION OF LIABILITIES		12
2.1 Purchase and Sale		12
2.2 Payments and Assumption of Liabilities		13
2.3 Closing Date; Bifurcated Closings		13
2.4 Closing Date Deliveries		14
2.5 Proration Adjustments		15
2.6 Escrow Reserve		18
2.7 Non-Assumption of Liabilities		18
2.8 Taxes		19
2.9 Risk of Loss		19
2.10 Allocation of Purchase Price		19
2.11 Accounts Receivable		20
2.12 Section 1031 Exchanges		21
ARTICLE 3 GOVERNMENTAL APPROVALS AND CONTROL OF STATIONS		22
3.1 FCC Consent		22
3.2 Application For FCC Consent		22
3.3 Notice of Application		22
3.4 Delay in Approval of Application		22
3.5 Other Governmental Consents		23
3.6 Great Falls Waiver		23
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE FISHER PARTIES		23
4.1 Organization		23
4.2 Authorization; Enforceability		23
4.3 Absence of Conflicting Agreements		24
4.4 Purchased Assets		24
4.5 Title to Purchased Assets; Liens and Encumbrances		25
4.6 Condition of Equipment		25
4.7 Contracts		25
4.8 Intangible Property		26
4.9 Real Property		27
4.10 Leases		29
4.11 Financial Statements and Interim Financial Statements		29
4.12 No Changes		30
4.13 Undisclosed Liabilities		31
4.14 No Litigation; Labor Disputes; Compliance with Laws		31
4.15 Taxes		32
4.16 Governmental Authorizations		32
4.17 Pending Applications		33
4.18 Compliance with FCC Requirements		33
4.19 Qualification		33
4.20 Insurance		33

i

	Page No.
4.21 Brokers		33
4.22 Powers of Attorney		34
4.23 Employees		34
4.24 Employee Benefit Plans		34
4.25 Environmental Compliance		35
4.26 Representation as of the Closing Date		36
4.27 Records		36
4.28 Insolvency		36
4.29 Related Party Transactions		37
4.30 Disclosure		37
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER		37
5.1 Organization		37
5.2 Authorization; Enforceability		37
5.3 Absence of Conflicting Agreements		37
5.4 Brokers		38
5.5 Buyer’s Qualifications		38
5.6 Insolvency		38
5.7 Representation as of the Closing Date		38
5.8 Disclosure		38
ARTICLE 6 COVENANTS		38
6.1 Access		38
6.2 Title Insurance; Surveys and Lien Search		39
6.3 Notice of Adverse Changes		41
6.4 Operations Pending Closing		42
6.5 Financial and FCC Reports		45
6.6 Consents		45
6.7 Cooperation		45
6.8 Tax Returns and Payments		45
6.9 Updating of Information; Cure		46
6.10 Conveyance Free and Clear of Liens		46
6.11 Financing Leases		46
6.12 Access to and Conversion of Data		46
6.13 Cooperation for Financing		46
6.14 Public Announcement		46
6.15 Restrictions on Buyer		47
6.16 Correction of coordinates		47
ARTICLE 7 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER		47
7.1 Compliance with Agreement		47
7.2 Proceedings and Instruments Satisfactory		47
7.3 Representations and Warranties		47
7.4 No Material Adverse Change		48
7.5 Event of Loss		48
7.6 Deliveries at Closing		48
7.7 Other Documents		48
7.8 Possession; Instruments of Conveyance and Transfer		48
7.9 Approvals and Consent		48

ii

	Page No.
7.10 Title Policies; Survey; Lien Search Report and Environmental Report		48
7.11 Absence of Investigations and Proceedings		48
7.12 Governmental Consents		49
7.13 Licenses		49
7.14 Absence of Liens; Payoff Letters		49
7.15 Non-Foreign Affidavit		49
7.16 Governmental Consents		49
ARTICLE 8 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER		50
8.1 Compliance with Agreement		50
8.2 Proceedings and Instruments Satisfactory		50
8.3 Representations and Warranties		50
8.4 Deliveries at Closing		50
8.5 Other Documents		50
8.6 Absence of Investigations and Proceedings		50
8.7 Governmental Consents		50
ARTICLE 9 INDEMNIFICATION		51
9.1 Indemnification of Buyer		51
9.2 Indemnification of Fisher Parties		52
9.3 Method of Asserting Claims		53
9.4 Payment of Claims		54
9.5 Nature and Survival of Representations		54
9.6 Limitation on Aggregate Claims		54
ARTICLE 10 FURTHER AGREEMENTS		55
10.1 Event of Loss		55
10.2 Station Employees		56
10.3 WARN Act		57
10.4 Bulk Transfer		57
ARTICLE 11 TERMINATION; MISCELLANEOUS		57
11.1 Termination		57
11.2 Rights on Termination; Waiver		58
11.3 Further Assurances		59
11.4 Schedules		59
11.5 Survival		59
11.6 Entire Agreement; Amendment; and Waivers		59
11.7 Expenses		60
11.8 Benefit; Assignment		60
11.9 Confidentiality; Public Announcements		60
11.10 Exclusivity		61
11.11 Notices		61
11.12 Counterparts; Headings		62
11.13 Income Tax Position		62
11.14 Severability		62
11.15 Electronic Notices, Signatures or Records		62
11.16 Legal Actions		62

iii

LIST OF EXHIBITS

Exhibit A	—	Assumption Agreement
Exhibit B	—	Bill of Sale and Assignment
Exhibit C	—	Buyer’s Closing Certificate
Exhibit D	—	Escrow Agreement
Exhibit E	—	Assignment and Assumption of Contracts
Exhibit F	—	Assignment and Assumption of Leases
Exhibit G	—	Assignment of Licenses, Permits, and Authorizations
Exhibit H	—	Fisher Parties’ Closing Certificate
Exhibit I-1	—	Fisher Parties’ Opinion of Counsel
Exhibit I-2	—	Opinion of FCC Counsel
Exhibit J-1	—	Intangible Property Assignment
Exhibit J-2	—	Assignment and Assumption of Registered Trademarks
Exhibit K	—	Intentionally Omitted
Exhibit L	—	Form of Estoppel Certificate
Exhibit M	—	Form of Non-Compete/Non-Solicit Agreement
Exhibit N-1	—	Form of Warranty Deed for Montana
Exhibit N-2	—	Form of Warranty Deed for Washington

iv

LIST OF SCHEDULES

Schedule 1.0	—	List of Stations
Schedule 1.1	—	Assumed Liabilities
Schedule 1.2	—	Contracts
Schedule 1.3	—	Intangible Property
Schedule 1.4	—	Equipment
Schedule 1.5	—	Leases
Schedule 1.6	—	Licenses
Schedule 1.7	—	Motor Vehicles
Schedule 1.8	—	Real Property
Schedule 1.9	—	Retained Assets
Schedule 2.1	—	Permitted Liens
Schedule 2.10	—	Allocation of Purchase Price
Schedule 4.3	—	Conflicting Agreements
Schedule 4.4	—	Matters Relating to Purchase Assets
Schedule 4.5	—	Liens
Schedule 4.6	—	Condition of Equipment
Schedule 4.7	—	Matters Relating to Contracts
Schedule 4.8	—	Matters Relating to Intangible Property
Schedule 4.9	—	Matters Relating to Real Property
Schedule 4.10	—	Matters Relating to Leases
Schedule 4.11(a)	—	Financial Statements
Schedule 4.11(b)	—	Interim Financial Statements
Schedule 4.12	—	No Changes
Schedule 4.13	—	Undisclosed Liabilities
Schedule 4.14	—	Litigation, Labor Matters and Compliance with Laws
Schedule 4.15	—	Taxes
Schedule 4.16	—	Governmental Authorizations
Schedule 4.17	—	Pending Applications
Schedule 4.18	—	Compliance with FCC Requirements
Schedule 4.20	—	Insurance
Schedule 4.22	—	Powers of Attorney
Schedule 4.23	—	Employees
Schedule 4.24	—	Employee Benefit Plans
Schedule 4.25	—	Environmental Matters
Schedule 4.29	—	Related Party Transactions
Schedule 6.10	—	Liens Not to be Released

v

PURCHASE AND SALE AGREEMENT

This PURCHASE AND SALE AGREEMENT is made as of the 30th day of May, 2006, by and among Cherry Creek Radio LLC, a limited liability company organized under the laws of the State of Delaware (“Buyer”), Fisher Communications Inc., a corporation organized under the laws of the State of Washington (“Parent”), and Fisher Radio Regional Group Inc., a corporation organized under the laws of the State of Washington (“Seller”).

R E C I T A L S:

     WHEREAS, Seller holds certain licenses, permits and authorizations issued by the Federal Communications Commission for the operation of the radio broadcast stations specified on SCHEDULE 1.0 hereto (individually, a “Station” and collectively, the “Stations”) and owns the assets used or useful in the operation of the Stations; and

     WHEREAS, Seller desires to sell or assign and Buyer desires to purchase the assets of the Stations, including the Licenses (as defined below), and to assume certain liabilities and obligations of Seller, as more fully described and on the terms and subject to the conditions set forth herein.

     NOW, THEREFORE, in consideration of the above recitals and of the mutual agreements and covenants contained in this Agreement, the parties, intending to be legally bound, hereby agree as follows:

ARTICLE 1

DEFINITIONS

     1.1 Definitions. When used in this Agreement, the following terms shall have the meanings specified:

          “Accountants” shall have the meaning set forth in Section 2.5(g).

          “Accounts Receivable” shall mean all trade accounts receivable of Seller immediately prior to the Closing, as determined in accordance with GAAP.

          “Adjustment Amount” shall have the meaning set forth in Section 2.5(f).

          “Adjustment List” shall have the meaning set forth in Section 2.5(f).

          “Affiliate” shall mean, with respect to any Person, any other Person that, directly or indirectly, Controls, is Controlled by, or is under common Control with, the specified Person.

          “Agreement” shall mean this Purchase and Sale Agreement, together with the Schedules and the Exhibits attached hereto, as the same shall be amended from time to time in accordance with the terms hereof.

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          “Alternative Transaction” shall have the meaning set forth in Section 11.10.

          “Assignment Application” shall have the meaning set forth in Section 3.2.

          “Assumed Liabilities” shall mean the Transferred Obligations; provided, however, that if a Bifurcated Closing occurs pursuant to Section 2.3(b), then “Assumed Liabilities” shall mean (A) in the case of the Primary Closing, all of the Transferred Obligations arising in connection with or otherwise relating to the Primary Stations and (B) in the case of the Great Falls Closing, all of the Transferred Obligations arising in connection with or otherwise relating to the Great Falls Stations.

          “Assumption Agreement” shall mean an instrument in the form of EXHIBIT A attached hereto by which the Assumed Liabilities are to be accepted by Buyer.

          “Benefit Arrangements” shall mean a benefit program or practice providing for bonuses, incentive compensation, vacation pay, severance pay, insurance, restricted stock, stock options, employee discounts, company cars, tuition reimbursement or any other perquisite or benefit (including, without limitation, any fringe benefit under Section 132 of the Code) to employees, officers or independent contractors that is not a Plan.

          “Bifurcated Closing” shall have the meaning set forth in Section 2.3(b).

          “Bill of Sale and Assignment” shall mean an instrument in the form of EXHIBIT B attached hereto, by which Seller will convey to Buyer title to the Purchased Assets.

          “Business” shall mean the assets, business and operations of the Stations conducted by Seller but shall exclude the business, operations, assets and all other properties of Parent and all other entities affiliated with Parent, to the extent not used primarily or in any material manner in the operation of the Stations. For purposes of clarification, it is understood that an asset of an entity that may have been indirectly used or assisted in the operation of the Stations shall be excluded from the definition of “Business” if such asset is not used primarily in the operation of the Stations, and is not physically located at the Stations.

          “Buyer” shall mean Cherry Creek Radio LLC, a Delaware limited liability company, its successors or assigns.

          “Buyer Indemnified Parties” shall have the meaning set forth in Section 9.1.

          “Buyer’s Closing Certificate” shall mean a certificate of Buyer in the form of EXHIBIT C attached hereto.

          “Buyer’s Information” shall have the meaning set forth in Section 11.9(b).

          “Cash” shall mean all monies of Seller relating to the Stations, whether in the form of cash, cash equivalents, marketable securities or deposits in bank accounts prior to the Closing Date.

          “Claims” shall have the meaning set forth in Section 9.1.

2

          “Closing” shall have the meaning set forth in Section 2.3(a).

          “Closing Date” shall have the meaning set forth in Section 2.3(b).

          “COBRA” shall have the meaning set forth in Section 4.24(b).

          “Code” shall mean the Internal Revenue Code of 1986, as amended.

          “Collection Period” shall have the meaning ascribed to it in Section 2.11(b).

          “Communications Act” shall have the meaning set forth in Section 4.16.

          “Communications Laws” shall have the meaning set forth in Section 4.16.

          “Consolidated Tradeout Credit” shall have the meaning set forth in Section 2.5(d).

          “Consultant” shall have the meaning set forth in Section 6.2(d)(I).

          “Contract Assignment” shall mean an instrument, in the form of EXHIBIT E attached hereto, by which Seller assigns the Contracts to Buyer and Buyer assumes the then remaining rights and obligations of Seller under the Contracts.

          “Contracts” shall mean (i) those agreements (other than those included in the Retained Assets and other than the Leases) under which Seller conducts the business of the Stations, including all contractual obligations incurred by Seller for the Program Rights, that are listed on SCHEDULE 1.2 and (ii) contracts for the sale of advertising time on the Stations entered into in the ordinary course of Seller’s business. Notwithstanding the foregoing definition, the parties hereby acknowledge that those certain Contracts that are expressly identified on SCHEDULE 1.2 as “Group Contracts” may benefit affiliates of Seller, and with respect to those “Group Contracts” that are expressly identified on SCHEDULE 1.2, the definition of “Contracts” for purposes of this Agreement shall only include and be limited to such terms of a Contract, or portions thereof, as benefits Seller, and then only to the extent relating to the Business or the Purchased Assets.

          “Control” including its various tenses and derivatives (such as “Controlled” and “Controlling”) shall mean (i) when used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities, by contract, agreement or arrangement or otherwise and (ii) when used with respect to any security, the possession, directly or indirectly, of the power to vote, or to direct the voting of, such security or the power to dispose of, or to direct the disposition of, such security.

          “Customer Lists” shall mean all lists, documents, written information and computer tapes and programs and other computer readable media in Seller’s possession concerning past, present and potential purchasers of services from the Stations.

          “Environment” shall mean surface waters, ground waters, surface water sediment, soil, subsurface strata, ambient air and other environmental medium.

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          “Environmental Laws” shall mean the rules and regulations of the FCC, the Environmental Protection Agency and any other federal, state or local government authority pertaining to human exposure to RF radiation and all applicable rules and regulations of federal, state and local laws, including statutes, regulations, ordinances, judicial or administrative orders, consent decrees or judgments, codes, rules and policies, now or hereafter in effect and as amended, relating to pollution or protection of the Environment, health, safety or natural resources or to the use, handling, transportation, treatment, storage, disposal, release or discharge of Regulated Substances.

          “Environmental Permit” shall mean any permit, license, certificate, approval, identification number or other authorization required to operate the Business under applicable Environmental Law.

          “Environmental Work” shall have the meaning ascribed to it in Section 6.2(d)(III).

          “Equipment” shall mean all machinery, equipment, furniture, fixtures, furnishings, toolings, parts, tubes, tapes, microwaves, transponders, relays and other items of tangible personal property of Seller used, held for use or useable in the operation of any Station, including, but not limited to, those items listed on SCHEDULE 1.4, and excluding in all cases the Retained Assets.

          “Equipment Claims” shall have the meaning set forth in Section 9.6(a).

          “Equipment Threshold Amount” shall have the meaning set forth in Section 9.6(a).

          “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

          “Escrow Agent” shall mean U.S. Bank National Association in Atlanta, Georgia.

          “Escrow Agreement” shall mean the Escrow Agreement in the form of EXHIBIT D attached hereto among Escrow Agent, Buyer and the Fisher Parties.

          “Escrow Deposit” shall mean the sum of One Million Six Hundred Thousand Dollars ($1,600,000), to be deposited by Buyer with the Escrow Agent concurrently with the execution of this Agreement, to be held by Escrow Agent in accordance with the terms and provisions of this Agreement and the Escrow Agreement.

          “Escrow Reserve” shall have the meaning ascribed to it in Section 2.6.

          “Estoppel Certificates” shall have the meaning set forth in Section 2.4(a).

          “Event of Loss” shall mean any loss, taking, condemnation, or destruction of, or damage to, any of the Purchased Assets or any Station.

          “FCC” shall mean the Federal Communications Commission.

4

          “FCC Consent” shall mean action by the FCC granting its written consent to the assignment of the Licenses to Buyer (or Buyer’s assignee pursuant to Section 11.8).

          “Final Order” shall mean that action shall have been taken by the FCC (including action duly taken by the FCC’s staff, pursuant to delegated authority) which shall not have been reversed, stayed, enjoined, set aside, annulled or suspended, with respect to which no timely request for stay, petition for rehearing, appeal or certiorari or sua sponte action of the FCC with comparable effect shall be pending and as to which the statutory time for filing any such petition, appeal, certiorari or for the taking of any such sua sponte action by the FCC shall have expired or otherwise terminate.

          “Financial Statements” shall mean the unaudited financial statements of Seller relating to the Stations described in Section 4.11(a).

          “Financing Leases” shall mean any lease which is properly characterized as a capitalized lease obligation in accordance with GAAP.

          “Fisher Parties” shall mean Seller and Parent.

          “Fisher Parties’ Closing Certificate” shall mean a certificate of the Fisher Parties, in the form of EXHIBIT H attached hereto.

          “Fisher Parties Opinions of Counsel” shall mean legal opinions of outside counsel and FCC outside counsel to the Fisher Parties addressed to Buyer in the form of EXHIBITS I-1 and I-2 attached hereto.

          “GAAP” shall mean generally accepted accounting principles set forth in opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, in each case as the same are applicable to the circumstances as of the date of determination.

          “Governmental Body” shall mean any foreign, federal, state, local or other governmental authority or regulatory body.

          “Great Falls Closing” means the consummation, in accordance with the terms of this Agreement, of the purchase and sale of the Purchased Assets that are used or held for use with respect to the Great Falls Stations.

          “Great Falls Stations” shall mean the following Stations of Seller located in Great Falls, Montana: KXGF(AM), KQDI-FM, KQDI(AM), KIKF(FM), KINX(FM) and K274BC (“Great Falls Stations”).

          “Great Falls Waiver” shall have the meaning set forth in Section 3.6.

          “Incentive Program” means any agreement, obligation, commitment or program of Seller in the nature of a rebate or an incentive, whether for Seller’s employees, third parties or

5

otherwise, including without limitation, any incentives in the nature of a cruise, travel voucher, merchandise or other goods and services.

          “Indemnitee” shall have the meaning set forth in Section 9.3(a).

          “Indemnitor” shall have the meaning set forth in Section 9.3(a).

          “Individual Tradeout Credit” shall have the meaning set forth in Section 2.5(d).

          “Intangible Property” shall mean: (a) all patents, trademarks, service marks, copyrights (whether or not registered) and registrations and applications therefor, trade names, trade secrets, confidential know-how, designs, inventions, software which is necessary for the operation of the Stations in their respective markets (which shall include by way of example and not in limitation, traffic and billing software and data owned or primarily used by any Station, but specifically excluding accounting and human resources software and data used or licensed by the Fisher Parties prior to the Closing Date through Parent), formulae, jingles, slogans, logos and similar proprietary information owned or used by, or in any way relating to, any Station, (b) all of the rights of Seller in and to the call letters for each Station and any related Internet domain name, and (c) all goodwill associated therewith, a complete list of which (consisting of the items described in (a), (b) and (c) above) is set forth on SCHEDULE 1.3.

          “Intangible Property Assignment” shall mean an instrument, in the form of EXHIBIT J-1 attached hereto, by which interests in and to all of the Intangible Property are to be conveyed to Buyer.

          “Interim Financial Statements” shall mean the unaudited financial statements of Seller relating to the Stations described in Section 4.11(b).

          “Knowledge” with respect to Seller shall have the following meaning: the Fisher Parties will be deemed to have “Knowledge” of a particular fact or other matter if the President or Chief Financial Officer of Fisher Communications Inc., the President, Controller or Chief Engineer of Seller, or the Chief Engineer, Business Manager, or General Manager of any Station has actual knowledge of such fact or other matter, or if any of the foregoing individuals could reasonably be expected to discover or otherwise become aware of such fact or other matter in the course of making a reasonable inquiry into such areas of the Business that are under such individual’s general area of responsibility.

          “Lease Assignment” shall mean an instrument in the form of EXHIBIT F attached hereto, by which Seller shall assign to Buyer the Leases.

          “Leases” shall mean those leases of real and personal property related to any Station as listed on SCHEDULE 1.5.

          “License Assignment” shall mean an instrument in the form of EXHIBIT G attached hereto, by which Seller shall assign to Buyer the Licenses.

          “Licenses” shall mean all licenses, permits (including but not limited to construction permits) and authorizations issued by the FCC to Seller for the operation of each

6

Station and other material licenses, permits and authorizations issued or granted by any other Governmental Body, all of which are listed on SCHEDULE 1.6.

          “Lien” shall mean any mortgage, deed of trust, pledge, hypothecation, security interest, encumbrance, claim, lien, lease (including any capitalized lease) or charge of any kind, whether voluntarily incurred or arising by operation of law or otherwise, affecting any assets or property, including any agreement to give or grant any of the foregoing, any conditional sale or other title retention agreement and the filing of or agreement to give any financing statement with respect to any assets or property under the Uniform Commercial Code of the States of Montana, Washington or a comparable law of any jurisdiction.

          “Material Adverse Effect” shall mean a material adverse effect on the business, operations, or financial condition of the Stations, the Business, the Purchased Assets, or on the ability of the Fisher Parties to consummate the transactions contemplated hereby, or any event or condition which would reasonably be expected, with the passage of time, to constitute such a “material adverse effect,” other than changes generally applicable to the economy of the United States or the radio broadcasting industry in general.

          “Material Leases” and “Material Contracts” shall mean those Leases listed on SCHEDULE 1.5 and marked with an asterisk, and those Contracts listed on SCHEDULE 1.2 and marked with an asterisk.

          “Miscellaneous Assets” shall mean all tangible and intangible assets used, held for use or useable in the operation of any Station and not otherwise specifically referred to in this Agreement, including any warranties relating to any of the Purchased Assets, excepting therefrom only the Retained Assets.

          “Motor Vehicle Title Certificates” shall mean the official evidences of title to the Motor Vehicles.

          “Motor Vehicles” shall mean all motor vehicles owned by Seller used in the operation of the Business, including, without limitation, those listed on SCHEDULE 1.7.

          “Non-Compete/Non-Solicit Agreements” shall mean the Non-Compete Agreements from the Fisher Parties and certain affiliated entities for the benefit of Buyer substantially in the form of EXHIBIT M attached hereto.

          “Notice of Defect” shall have the meaning ascribed to it in Section 6.2(a).

          “Parent” shall mean Fisher Communications Inc., a Washington corporation.

          “Permitted Liens” shall mean: (i) liens for Taxes not yet due and payable, (ii) liens for inchoate mechanics’ and materialmen’s liens for construction in progress and workmen’s, repairmen’s, warehousemen’s and carriers’ liens arising in the ordinary course of business for sums not yet delinquent (provided the Title Companies agree to insure over any such exception raised in the Title Commitment pertaining to such liens), (iii) easements, rights of way, building and use restrictions, exceptions, reservations and other non-monetary encumbrances on the Real Property in each case that appear in the public real property records

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(or that would be disclosed by a survey) and that do not in any material respect adversely affect, impair or interfere with the use of the property subject thereto for the operation of the Station, and (iv) liens listed on SCHEDULE 2.1.

          “Person” shall mean any natural person, general or limited partnership, corporation, limited liability company, firm, association or other legal entity.

          “Phase I Environmental Assessment” shall have the meaning ascribed to it in Section 6.2(d)(I).

          “Phase I Time Period” shall have the meaning ascribed to it in Section 6.2(d)(I).

          “Phase II Inspection” shall have the meaning ascribed to it in Section 6.2(d)(II).

          “Phase II Time Period” shall have the meaning ascribed to it in Section 6.2(d)(II).

          “Plan” shall mean any plan, program or arrangement, whether or not written, that is or was: (a) an “employee benefit plan” as such term is defined in Section 3(3) of ERISA; (b) an “employee pension benefit plan” as such term is defined in Section 3(2) of ERISA, including, without limitation, any such plan that satisfies, or is intended by Seller to satisfy, the requirements for tax qualification described in Section 401 of the Code; (c) a “multiemployer plan” as such term is defined in Section 3(37) of ERISA; or (d) an “employee welfare benefit plan” as such term is defined in Section 3(1) of ERISA; and with respect to (a)-(d), (i) which was or is established or maintained by Seller, (ii) to which Seller contributed or is obligated to contribute, fund or provide benefits, or (iii) which provides or promises or provided or promised benefits to any Person who performs or who has performed services for Seller and because of those services is or has been (A) a participant therein or (B) entitled to benefits thereunder.

          “Primary Closing” means the consummation, in accordance with the terms of this Agreement, of the purchase and sale of the Purchased Assets that are used or held for use with respect to all Stations other than the Great Falls Stations.

          “Primary Stations” means all Stations other than the Great Falls Stations.

          “Program Rights” shall mean all rights presently existing and obtained prior to the Closing, in accordance with this Agreement, of Seller to broadcast radio programs in the operation of the Business as part of any Station’s programming and for which Seller is or will be obligated to compensate the vendor of such Program Rights, including all program barter agreements.

          “Purchased Assets” shall mean the right, title and interest of Seller in and to all assets owned or used by, or in any way relating to, the operation of any Station, other than the Retained Assets, including but not limited to, (i) the Contracts, (ii) the Customer Lists, (iii) the Equipment, (iv) the Intangible Property, (v) the Leases, (vi) the Licenses, (vii) the Miscellaneous Assets, (viii) the Motor Vehicles, (ix) the Real Property and (x) the Records.

          “Purchased Assets Reports” shall have the meaning set forth in Section 6.2(c).

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          “Purchase Price” shall mean the sum of Thirty Three Million Three Hundred Forty Thousand Dollars ($33,340,000), as adjusted pursuant to Section 2.5 hereof”); provided, however, that if a Bifurcated Closing occurs pursuant to Section 2.3(b), the term “Purchase Price” with respect to the Primary Closing shall mean Twenty Nine Million One Hundred Forty Thousand Dollars ($29,140,000) as adjusted pursuant to Sections 2.5 and 10.1, and the term “Purchase Price” with respect to the Great Falls Closing shall mean Four Million Two Hundred Thousand Dollars ($4,200,000), as adjusted pursuant to Sections 2.5 and 10.1.

          “Real Property” shall mean Seller’s fee simple or leasehold interest in the real property described on SCHEDULE 1.8, and all buildings, structures, improvements and fixtures thereon used or held for use in connection with the operation of the Business, together with all strips and gores, rights of way, easements, privileges and appurtenances pertaining thereto, including any right, title and interest of Seller in and to any street adjoining any portion of the Real Property.

          “Receivables” shall mean all notes receivable of Seller immediately prior to the Closing and all Accounts Receivable.

          “Receivables List” shall have the meaning ascribed to it in Section 2.11(a).

          “Recognized Environmental Condition” shall have the meaning ascribed to it in Section 6.2(d)(I).

          “Records” shall mean files and records, including schematics, technical information and engineering data, programming information, correspondence, books of account, employment records, customer files, purchase and sales records and correspondence, advertising records, files and literature, and FCC logs, files and records, and other written materials, of Seller relating to any Station.

          “Regulated Substances” shall mean any material or substance which is or may be hazardous, or which could otherwise pose a risk to health, safety or the Environment or which is regulated, prohibited or controlled pursuant to or the subject of any Environmental Laws, including without limitation, any hazardous substances (as defined in 42 U.S.C. § 9601(14)), solid waste (as defined in 42 U.S.C. § 6903(27)), pollutant or contaminant (as defined in 42 U.S.C. § 9601(33)), or any other waste, pollutant, hazardous waste (as defined in 42 U.S.C. § 6903(5)), petroleum (as defined in 42 U.S.C. § 6991(8)), petroleum-based substance, by-product, breakdown product or waste, oil (as defined in 33 U.S.C. § 2701(23)), special waste, sludge (as defined in 42 U.S.C. § 6903(26A)), or as such terms are otherwise defined under applicable laws of the States of Montana and Washington; and any constituent of any of the aforementioned substance or waste and specifically including but is not limited to polychlorinated biphenyls (PCBs), asbestos, asbestos-containing material, lead-based paints, urea formaldehyde, infectious wastes, radioactive materials and wastes and petroleum and petroleum products (including, without limitation, crude oil or any fraction thereof).

          “Remedial Action” shall have the meaning ascribed to it in Section 7.10.

          “Retained Assets” shall mean:

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          (a) All Cash;

          (b) All claims, rights and interests of the Fisher Parties in and to any refunds for Taxes paid in respect of the Stations or the Business for periods ending on or prior to the Closing Date (subject to claims of Buyer for proration of property and other Taxes or fees of any nature whatsoever under this Agreement);

          (c) Any rights, claims or causes of action of the Fisher Parties against third parties relating to the assets, properties, business or operations of the Business, the Purchased Assets or the Stations, to the extent they relate to the period prior to the Closing, but excluding warranty claims with respect to Equipment unless such Equipment shall have been replaced;

          (d) All bonds, letters of credit, intercompany notes and similar items, contracts or policies of insurance and prepaid insurance with respect to such contracts or policies;

          (e) Each Fisher Party’s corporate seal, corporate minute books, stock record books, corporate records relating to incorporation and capitalization, financial accounting records (except to the extent they constitute Records), tax returns and related documents and supporting work papers and any other records and returns relating to Taxes, assessments and similar governmental levies (other than real and personal property Taxes, assessments and levies imposed on the Purchased Assets);

          (f) The contracts, agreements or understandings of the Fisher Parties that are listed on SCHEDULE 1.9;

          (g) Any trade name, trademarks, service marks or logos using or incorporating the phrases “Fisher” or “Fisher Broadcasting” or any portion of any logo containing such phrases;

          (h) All records and documents relating to Retained Assets or to liabilities other than Assumed Liabilities and not relating to the Business, the Purchased Assets, the Stations or the Assumed Liabilities;

          (i) All trusts, trust assets, trust accounts, reserves, insurance policies, or other assets, including, but not limited to, those relating to any Station Employee Benefit Plan or to funding the other employee benefit plans, agreements or arrangements sponsored, maintained, contributed to, or administered by the Fisher Parties or their Affiliates;

          (j) Any rights of, or payment due to, the Fisher Parties under or pursuant to this Agreement or the other agreements with Buyer contemplated hereby;

          (k) All Receivables;

          (l) The Fisher Parties’ intranet service and related connections;

          (m) All accounting and human resources software and data used or licensed by the Fisher Parties prior to the Closing Date through Parent (but excluding software which is

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necessary for the operation of the Stations in their respective markets (which by way of example and not in limitation shall include traffic and billing software and data owned or primarily used by any Station)); and

          (n) All other tangible and intangible assets not relating to any of the Stations, including, without limitation, the assets described on SCHEDULE 1.9.

          “Retained Liabilities” shall mean all debts, liabilities and other obligations of Seller that are not Assumed Liabilities.

          “Schedules” shall mean those schedules referred to in this Agreement (which shall be listed and organized by Station and shall reference specific sections and subsections to which they relate) which have been bound in that separate volume executed by or on behalf of the parties, and delivered concurrently with the execution of this Agreement, which volume is hereby incorporated herein and made a part hereof.

          “Seller” shall mean Fisher Radio Regional Group Inc., a Washington corporation.

          “Seller Indemnified Parties” shall have the meaning set forth in Section 9.2.

          “Seller Market” shall have the meaning set forth in Section 2.5(d).

          “Seller’s Information” shall have the meaning set forth in Section 11.9(a).

          “Station” or Stations” shall have the meaning set forth in the Recitals to this Agreement.

          “Station Employee” shall mean an employee of Seller who spends substantially all of his or her time working for any Station as of the Closing Date.

          “Station Employee Benefit Plans” shall mean any Plan or Benefit Arrangement in which any current, former or retired employee of Seller participates or has participated.

          “Survey Defect” shall have the meaning set forth in Section 6.2(b).

          “Tax” or “Taxes” means any federal, state, local or foreign income, franchise, assessments, charges, duties, fees, sales, use, transfer, ad valorem, transfer, employment, social security, withholding, payroll, FICA, unemployment compensation, disability, excise, personal property, or real property taxes of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any Governmental Body.

          “Threshold Amount” shall have the meaning set forth in Section 9.6(a).

          “Title Commitment” shall have the meaning set forth in Section 6.2(a).

          “Title Companies” shall mean Stewart Title Guaranty Company, First American Title Insurance Company, Commonwealth Land Title Insurance Company and/or such other title insurance company acceptable to Buyer.

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          “Title Policies” shall mean the owner’s standard coverage title policies issued pursuant to the Title Commitment in accordance with Section 6.2(a).

          “Trademark Assignment” shall mean an instrument, in the form of EXHIBIT J-2 attached hereto, by which Seller assign all of their rights, title and interest in the registered trademarks used in the operation of the Business to Buyer and Buyer assumes the then remaining rights and obligations of Seller under such registered trademarks.

          “Tradeout Agreement” shall mean any contract, agreement or commitment of Seller, oral or written, pursuant to which Seller has sold or traded commercial air time of any Station in consideration for property or services in lieu of or in addition to cash, excluding program barter agreements.

          “Transferred Employee” shall mean a Station Employee who becomes an employee of Buyer as contemplated by Section 10.2(b).

          “Transferred Obligations” means: (i) the liabilities of Seller, if any, listed on SCHEDULE 1.1; and (ii) the obligations of Seller under the Contracts and the Leases arising from and accruing with respect to the operation of the Business after the Closing Date, except those Contracts and Leases, if any, relating to the Retained Assets.

          “WARN Act” shall have the meaning set forth in Section 10.3.

          “Warranty Deed” shall mean a special warranty deed in a form acceptable to the Title Companies pursuant to which Seller shall convey to Buyer at the Closing the Real Property located in the State of Montana and the State of Washington substantially in the forms of EXHIBIT N-1 and Exhibit N-2 attached hereto.

     1.2 Singular/Plural; Gender. Where the context so requires or permits, the use of the singular form includes the plural, and the use of the plural form includes the singular, and the use of any gender includes any and all genders.

ARTICLE 2

PURCHASE AND SALE AND ASSUMPTION OF LIABILITIES

     2.1 Purchase and Sale. At the Closing on the Closing Date, and upon all of the terms and subject to all of the conditions of this Agreement, Seller shall sell, assign, convey, transfer and deliver to Buyer, and Buyer shall purchase all of Seller’s right, title and interest, legal and equitable, in and to the Purchased Assets free and clear of all Liens other than Permitted Liens. Notwithstanding any provision of this Agreement to the contrary, (i) Seller shall not transfer, convey or assign to Buyer, but shall retain, all of its right, title and interest in and to the Retained Assets, (ii) subject to Section 6.6 hereof, this Agreement shall not constitute an agreement to assign any license, certificate, approval, authorization, agreement, contract, lease, easement or other commitment included in the Purchased Assets if an attempted assignment thereof without the consent of a third party thereto would constitute a breach thereof, and (iii) if a Bifurcated Closing occurs pursuant to Section 2.3(b), then at each of the Primary Closing and the Great Falls Closing, as applicable, Seller shall sell, transfer, assign, convey, and deliver to Buyer, and

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Buyer shall purchase from Seller, the Purchased Assets that are used or held for use in the operations of, respectively, the Primary Stations and the Great Falls Stations.

     2.2 Payments and Assumption of Liabilities. At the Closing on the Closing Date, Buyer shall do the following:

          (a) If a Bifurcated Closing does not occur pursuant to Section 2.3(b), then Buyer shall (i) cause Escrow Agent to wire transfer to Seller in immediately available funds the Escrow Deposit, plus any interest accrued thereon during the period the Escrow Deposit was held by Escrow Agent, (ii) pay to Seller, by wire transfer, in immediately available funds an amount equal to the Purchase Price, as adjusted pursuant to Sections 2.5 and 10.1, less (A) the total amount paid by Escrow Agent to Seller in accordance with this Section, and (B) the Escrow Reserve (provided that Buyer in its discretion may make payments out of the Purchase Price directly to lenders and equipment lessors of Seller in the amounts provided for in such parties’ respective payoff letters), (iii) pay to the Escrow Agent, by wire transfer in immediately available funds, an amount equal to the Escrow Reserve, and (iv) assume the Assumed Liabilities pursuant to the Assumption Agreement.

          (b) If a Bifurcated Closing occurs pursuant to Section 2.3(b), then the following shall occur:

               (i) at the Primary Closing, Buyer shall (i) cause Escrow Agent to wire transfer to Seller in immediately available funds the Escrow Deposit, plus any interest accrued thereon during the period the Escrow Deposit was held by Escrow Agent, (ii) pay to Seller, by wire transfer in immediately available funds, an amount equal to the applicable Purchase Price with respect to the Primary Closing, as adjusted pursuant to Sections 2.5 and 10.1, less (A) the total amount paid by Escrow Agent to Seller in accordance with this Section, and (B) the Escrow Reserve (provided that Buyer in its discretion may make payments out of the Purchase Price directly to lenders and equipment lessors of Seller in the amounts provided for in such parties’ respective payoff letters), (iii) pay to the Escrow Agent, by wire transfer in immediately available funds, an amount equal to the Escrow Reserve, and (iv) assume the Assumed Liabilities pursuant to the Assumption Agreement; and

               (ii) at the Great Falls Closing, if it occurs, Buyer shall (i) pay to Seller, by wire transfer in immediately available funds, an amount equal to the applicable Purchase Price with respect to the Great Falls Closing, as adjusted pursuant to Sections 2.5 and 10.1, and (ii) assume the Assumed Liabilities pursuant to the Assumption Agreement.

     2.3 Closing Date; Bifurcated Closings.

          (a) Subject to Section 2.3(b), the purchase and sale of the Purchased Assets shall be consummated in accordance with the terms of this Agreement (the “Closing”) at 10:00 a.m., Atlanta, Georgia time, on the first business day of the calendar month following the date on which each of the conditions set forth in Articles 7 and 8 has been satisfied or, if permissible, waived by the party whose obligation is subject to such condition (disregarding for this purpose any such conditions to be satisfied by actions to be taken at the Closing), or such other date as may be agreed upon by the Fisher Parties and Buyer in writing, at the offices of Lord, Bissell &

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Brook, 1900 The Proscenium, 1170 Peachtree Street, N.E., Atlanta, Georgia 30309, or at such other place as may be designated by counsel to Buyer’s lender and as the parties may mutually agree to in writing. The Closing shall be deemed effective as of 12:01 a.m. Mountain time on the Closing Date.

          (b) Notwithstanding anything to the contrary contained herein, Seller and Buyer agree that if the FCC has not issued the FCC Consent with respect to the Primary Stations by September 1, 2006, the parties will jointly request that the FCC approve the sale of the Primary Stations to Buyer. Notwithstanding Section 2.3(a), if the Closing has not occurred on or prior to September 1, 2006, but the conditions set forth in Articles 7 and 8 are satisfied or, if permissible, waived at the applicable party’s option, such that the Primary Closing may occur at any time after September 1, 2006 (disregarding for this purpose any such conditions to be satisfied by actions to be taken at the Primary Closing), then Seller or Buyer upon such satisfaction of all of the conditions set forth in Articles 7 and 8 (or, if permissible, waived), at its option and upon prior written notice to Buyer or Seller, as applicable, at least ten (10) days prior to the Primary Closing, may elect to bifurcate the Closing as follows (the “Bifurcated Closing”): (a) the Primary Closing will occur, regardless of whether the conditions to the Great Falls Closing have been satisfied; and (b) the Great Falls Closing will occur only if the Primary Closing has occurred and all other conditions to the Great Falls Closing have been satisfied. The failure of the Great Falls Closing to occur will have no effect on the Primary Closing, and the Primary Closing shall not be unwound or otherwise rescinded as a result of such failure. The actual day on which a Closing occurs, whether it be the Primary Closing, the Great Falls Closing or both, is the “Closing Date.”

     2.4 Closing Date Deliveries. At the Closing on the Closing Date:

          (a) Seller shall deliver, or cause to be delivered to Buyer, properly executed and dated as of the Closing Date:

               (i) the Assumption Agreement;

               (ii) the Bill of Sale and Assignment;

               (iii) the Contract Assignment;

               (iv) the Lease Assignment;

               (v) the License Assignment;

               (vi) the Motor Vehicle Title Certificates;

               (vii) Fisher Parties’ Closing Certificate;

               (viii) Fisher Parties’ Opinions of Counsel;

               (ix) the Intangible Property Assignment;

               (x) the Warranty Deeds;

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               (xi) Estoppel Certificates from the lessors under the Material Leases in substantially the form attached hereto as EXHIBIT L (the “Estoppel Certificates”);

               (xii) Registered Trademark Assignment;

               (xiii) the Non-Compete/Non-Solicit Agreements; and

               (xiv) such other documents as provided in Article 7 hereof or as Buyer shall reasonably request.

          (b) Buyer shall deliver, or cause to be delivered to Seller, properly executed and dated as of the Closing Date:

               (i) the Assumption Agreement;

               (ii) Buyer’s Closing Certificate;

               (iii) the Contract Assignment;

               (iv) the Lease Assignment;

               (v) the Intangible Property Assignment; and

               (vi) such other documents as provided in Article 8 hereof or as Seller shall reasonably request.

          (c) Promptly following Closing, Seller shall exercise its best efforts to cause the Title Companies to issue the Title Policies to Buyer.

          (d) The obligations of the parties under this Section 2.4 shall apply on the actual day on which a Closing occurs, whether it be the Primary Closing, the Great Falls Closing or both.

     2.5 Proration Adjustments.

          (a) All income and expenses (including prepaid expenses and accrued expenses) of the Stations as of 11:59 p.m. Mountain time on the day before the Closing Date shall, except as otherwise expressly provided herein, be adjusted and allocated between Seller and Buyer to reflect the principle that all income and expenses arising from the operation of the Stations before the Closing Date shall be for the account of Seller, and all income and expenses arising from the operation of the Stations from and after the Closing Date shall be for the account of Buyer. Such prorations shall include, without limitation, all ad valorem, real estate and other property Taxes, business and license fees, lease payments, payments made pursuant to Assumed Liabilities, rents, wages and salaries of Station Employees, workers’ compensation premiums, utility expenses, water and sewer use charges, unbilled time sales agreements, prepaid fees and expenses to the extent Buyer will receive a benefit thereof, and all other expenses attributable to the ownership and operation of the Station.

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          (b) The prorations shall not include: (i) accruals for vacation and sick leave of Transferred Employees, (ii) Taxes arising by reason of the transfer of the Purchased Assets as contemplated hereby, which shall be paid as set forth in Section 2.8 hereof and (iii) Taxes based on income of Seller. The consideration hereunder for the Purchased Assets includes consideration for the Contracts relating to programming and for barter receivables and Program Rights arising in connection with Tradeout Agreements and that no further payment to Seller or proration shall be due in respect thereof. Notwithstanding the foregoing, Seller shall be responsible for any cash payments due on or before the Closing Date under the Contracts for programming, and Buyer shall be responsible for any such payments after the Closing Date (including reimbursement to Seller on a pro rata basis for any prepayments made by Seller of the amounts due in respect of the month in which the Closing occurs and reimbursement to Buyer for any deferred payments which under normal industry practices would have been paid prior to the Closing Date by Seller).

          (c) Any and all rebates and other incentives (including, without limitation, those payable in connection with any Incentive Programs) that, under any Contracts in effect on the Closing Date, may have been paid prior to or be payable after such date to any advertiser or other user of a Station’s facilities or any other third party, based in part on business, advertising or services prior to the Closing Date, shall be borne by Seller and Buyer ratably in proportion to revenues received or volume of business done by each during the applicable period, as determined in accordance with GAAP. Any and all agency commissions which are subject to adjustment after the Closing Date based on revenue, volume of business done or services rendered in part before the Closing Date and in part on or after the Closing Date shall be borne by Seller and Buyer ratably in proportion to the revenue, volume of business done or services rendered, as the case may be, by each during the applicable period, as determined in accordance with GAAP.

          (d) Buyer shall receive a credit against the Purchase Price equal to the greater of (i) the sum of all of the Individual Tradeout Credits or (ii) the Consolidated Tradeout Credit. For purposes of this Section 2.5(d), an “Individual Tradeout Credit” shall mean the extent any liabilities under Tradeout Agreements for a particular Seller Market on the Closing Date exceed by more than $50,000 the value of any assets from Tradeout Agreements for a particular Seller Market as of the Closing Date. For purposes of this Section 2.5(d), a “Consolidated Tradeout Credit” shall mean the extent any liabilities under Tradeout Agreements on an aggregate basis for all Stations on the Closing Date exceed by more than $175,000 the value of any assets from Tradeout Agreements on an aggregate basis for all Stations as of the Closing Date. For purposes of this Section 2.5(d), a “Seller Market” shall mean each of the following markets of Seller: Butte, Montana; Missoula, Montana; Wenatchee, Washington; Billings, Montana; and Great Falls, Montana. For purposes of this Section 2.5(d) only, radio broadcast station KAAK(FM) shall be deemed one of the Great Falls Stations and included in the Great Falls, Montana “Seller Market.” In addition, if the Primary Closing occurs, the assets and liabilities under Tradeout Agreements with respect to radio broadcast station KAAK(FM) shall be applicable to the determination of the Consolidated Tradeout Credit as it relates to the Primary Closing, as set forth above.

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          (e) To the extent not inconsistent with the express provisions of this Agreement, the allocations made pursuant to this Section 2.5 shall be made in accordance with GAAP.

          (f) If not otherwise provided for pursuant to this Section 2.5, net settlement of the adjustments contemplated under this Section 2.5 shall be made at the Closing to the extent feasible. For items not readily subject to ascertainment at the Closing, the following procedures shall apply. Buyer shall prepare and deliver to Seller within ninety (90) days following the Closing Date, or such later date as shall be mutually agreed to by Seller and Buyer, an itemized list (the “Adjustment List”) of all sums to be credited to or charged against the account of Buyer, and such Adjustment List shall be in reasonable detail. Such list shall show the net amount credited to or charged against the account of Buyer (the “Adjustment Amount”). If the Adjustment Amount is a credit to the account of Buyer, Seller shall pay by wire transfer such amount to Buyer of the undisputed portion of the Adjustment Amount within thirty (30) days following delivery of the Adjustment List. If the Adjustment Amount is a charge to the account of Buyer, Buyer shall pay by wire transfer such amount to Seller of the undisputed portion of the Adjustment Amount within thirty (30) days following delivery of the Adjustment List. Notwithstanding the foregoing, the parties acknowledge and agree that certain prorations (i.e., rebates and volume discounts) may not be known by the parties at the Closing or within the time period for the delivery of the Adjustment List and that the parties shall cooperate to make such adjustments in a timely manner when they become aware of such prorations.

          (g) Not later than thirty (30) days following the delivery of the Adjustment List, Seller may furnish Buyer with written notification of any dispute concerning any items shown thereon or omitted therefrom together with a detailed explanation in support of Seller’s position in respect thereof. Buyer and Seller shall consult to resolve any such dispute for a period of thirty (30) days following the notification thereof. In the event of any such dispute, that portion of the Adjustment Amount that is not in dispute shall be paid to the party entitled to receive the same by wire transfer on the day for payment provided in Section 2.5(f). If such thirty (30) day consultation period expires and the dispute has not been resolved, the matter shall be referred to an independent public accounting firm mutually agreed upon by Seller and Buyer (the “Accountants”), which shall resolve the dispute and shall render its decision (together with a brief explanation in reasonable detail of the basis therefor) to Buyer and Seller not later than thirty (30) days following submission of the dispute to it; provided, however, if Buyer and Seller are unable to mutually agree upon an independent public accounting firm, then Buyer and Seller shall each choose an independent public accounting firm and those firms shall appoint a third independent public accounting firm to act as the Accountants. The disputed portion of the Adjustment Amount shall be paid by wire transfer by the party required to pay the same within five (5) business days after the delivery of a copy of such decision to Seller and Buyer. The fees and expenses of the Accountants shall be shared equally by Seller and Buyer.

          (h) Except as otherwise provided in the last sentence of Section 2.5(f) regarding certain prorations, the Adjustment List (to the extent not disputed within the specified period by Seller), any mutually agreed written settlement of any such dispute concerning the Adjustment List and any determination of disputed items by the Accountants shall be final, conclusive and binding on the parties hereto absent manifest error.

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          (i) If a Bifurcated Closing occurs pursuant to Section 2.3(b), then the prorations and other adjustments required by this Section 2.5 shall be made as of each Closing Date with respect only to those Purchased Assets that are the subject of such Closing.

     2.6 Escrow Reserve. Subject to the terms and conditions of the Escrow Agreement, One Million Six Hundred Thousand Dollars ($1,600,000) of the Purchase Price (the “Escrow Reserve”) shall be retained by the Escrow Agent in order to secure the indemnification obligations of Seller pursuant to Article 9. On the first business day nine (9) months following the Closing Date (or the date of the Primary Closing, if applicable), the Escrow Agent shall release to Seller on behalf of Buyer the balance of the Escrow Reserve that exceeds the sum of $800,000 plus the amounts of any pending indemnification Claims by Buyer pursuant to Article 9. On the first business day eighteen (18) months following the Closing Date (or the date of the Primary Closing, if applicable), the Escrow Agent shall release to Seller on behalf of Buyer the balance of the Escrow Reserve that exceeds the amount of any pending indemnification Claims by Buyer pursuant to Article 9.

     2.7 Non-Assumption of Liabilities. Except with respect to its assumption of the Assumed Liabilities, Buyer shall not assume, or in any way become liable for, any liabilities or obligations of Seller of any kind or nature, whether accrued, absolute, contingent or otherwise, or whether due or to become due, or otherwise, whether known or unknown, arising out of events, transactions or facts which shall have occurred, arisen or existed on or prior to the Closing Date, which liabilities and obligations, if ever in existence, shall continue to be liabilities and obligations of Seller. Specifically, but without limiting the generality of the foregoing, Buyer shall not assume or be liable for the following debts, liabilities and obligations except to the extent that they are Assumed Liabilities:

          (a) Debts, obligations or liabilities which arise or exist in violation of any of the representations, warranties, covenants or agreements of Seller contained in this Agreement or in any statement or certificate delivered to Buyer by or on behalf of Seller on or before the Closing Date pursuant to this Agreement or in connection with the transactions contemplated hereby;

          (b) Debts, obligations or liabilities of any kind or nature, whether absolute, accrued, contingent or otherwise, required by this Agreement to be disclosed to Buyer, if not so disclosed in writing and specifically assumed in writing by Buyer;

          (c) Contingent liabilities of Seller of any kind arising or existing on or prior to the Closing Date, including, but not limited to, claims, proceedings or causes of action which are currently or hereafter become, the subject of claims, assertions, litigation or arbitration;

          (d) Debts, obligations or liabilities of Seller, whether absolute, accrued, contingent or otherwise, for any other Taxes (other than sales taxes), including without limitation any such Taxes arising from, based upon or related to the sale, transfer or delivery of the Purchased Assets pursuant to this Agreement;

          (e) Debts, obligations or liabilities under any Station Employee Benefit Plan, policies, handbooks, customs or practices, employment agreements whether express or implied,

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applicable to any of the Station Employees at any time prior to and including the Closing Date, including any severance or other liability arising out of the termination of any employee’s employment;

          (f) Debts, obligations or liabilities arising out of claims alleging damage to the environment or similar claims with respect to the operation of any Station, or the ownership or lease by Seller of real property, in each case on or before the Closing Date;

          (g) Any liability or obligation of Seller arising out of any wrongful or unlawful violation or infringement of any proprietary rights of any Person occurring on or prior to the Closing Date;

          (h) Any liabilities or obligations in respect of the borrowing of money or issuance of any note, bond, indenture, loan, credit agreement or other evidence of indebtedness or direct or indirect guaranty or assumption of indebtedness, liabilities or obligations of others, whether or not disclosed in this Agreement or otherwise of Seller, including, without limitation, any intercompany obligations or liabilities, if any;

          (i) Debts, obligations or liabilities of Seller arising out of any claim, action, suit or proceeding pending as of the Closing Date or arising out of or relating to matters or events occurring on or prior to the Closing Date (whether or not such claim is then asserted), including, without limitation, any claims for personal injury (including worker’s compensation or otherwise) or property damage;

          (j) Any liabilities or obligations arising out of or relating to the Retained Assets;

          (k) Any liability, claim or obligation, contingent or otherwise, arising out of the business or operation of any Station or any Purchased Asset prior to the Closing Date;

          (l) Any liability or obligation under any contract, agreement, license or lease that is not an Assumed Lease or an Assumed Contract or relating to a breach prior to the Closing Date of any Assumed Lease or Assumed Contract; and

          (m) Any liability, obligation, contract, agreement, lease or license of Seller that relates in any way to any of its properties, assets or business, other than the Stations.

     2.8 Taxes. All Taxes applicable to, imposed upon or arising out of the transfer to Buyer of the Purchased Assets as contemplated by this Agreement shall be paid by Seller, except sales taxes, which shall be paid by Buyer and collected by Seller.

     2.9 Risk of Loss. Subject to Sections 7.5 and 10.1 hereof, the risk of all Events of Loss prior to the Closing shall be upon Seller and the risk of all Events of Loss at or subsequent to the Closing shall be upon Buyer.

     2.10 Allocation of Purchase Price. The Purchase Price shall be allocated in accordance with SCHEDULE 2.10. Following the Closing, the parties shall make consistent use of the allocation, fair market value and useful lives specified in SCHEDULE 2.10 for all Tax purposes

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and in all filings, declarations and reports with the IRS in respect thereof, including the reports to be filed under Section 1060 of the Code. Buyer shall prepare and deliver IRS Form 8594 to Seller within ninety (90) days after the Closing Date to be filed with the IRS.

     2.11 Accounts Receivable.

          (a) For purposes of Buyer’s obligation to collect the Accounts Receivable as set forth in this Section 2.11, for all Accounts Receivable, Buyer and Seller shall cooperate to create and deliver to Buyer within five (5) days after the Closing Date a complete and detailed statement of Accounts Receivable, showing the name, amount and age of each Account Receivable as of the Closing Date (“Receivables List”). Buyer shall, in the ordinary course of business, prepare invoices for each account debtor, which shall include the Accounts Receivable, and shall deliver such invoices to the applicable account debtors in the ordinary course of business, but not later than thirty (30) days following the Closing Date. Effective upon the Closing Date, during the Collection Period (as defined herein), Seller hereby constitutes and appoints Buyer, its successors and assigns, the true and lawful attorney of Seller with full power of substitution, in the name of Buyer, or the name of Seller, on behalf of and for the benefit of Seller, to collect the Accounts Receivable, to endorse, without recourse, checks, notes and other instruments in the name of Seller and to do all such further acts and things in relation thereto as is contemplated by this Section 2.11. Seller agrees that the foregoing powers are coupled with an interest. For the avoidance of doubt, the parties acknowledge and agree that any invoices prepared and delivered by Buyer to account debtors in accordance with this Section 2.11 shall be for a normal billing cycle as implemented by Buyer and there will not be a special invoice or demand letters sent to account debtors based upon the Closing Date and outside of such normal billing cycle.

          (b) Buyer will collect the Accounts Receivable in the same manner and with the same diligence that Buyer uses to collect its own accounts receivable for a period of one hundred twenty (120) days from the date of delivery of the Receivables List to Buyer (the “Collection Period”). Within fifteen (15) days after the end of each full calendar month in the Collection Period (i) Buyer shall furnish Seller with a list of the amounts collected during such period with respect to the Accounts Receivable and an Accounts Receivable aging report and (ii) Buyer shall pay over to Seller (or its designee) by wire transfer of immediately available funds such collected amounts in full.

          (c) Any payment received by Buyer during the Collection Period from any account debtor owing on any of the Accounts Receivable shall first be applied in reduction of the oldest outstanding balance due from such account debtor, except to the extent the account debtor shall otherwise expressly provide. Notwithstanding the foregoing, if an account debtor disputes its obligations for an Account Receivable, Buyer shall promptly return all records relating to the disputed account to Seller, and Buyer shall have no further obligation with respect to the collection thereof. So long as Buyer is in compliance with this Section 2.11, and except for disputed accounts returned to Seller, neither Seller nor its agents or successors or assigns shall make any direct solicitation of the account debtors for collection purposes or other direct attempts to collect from account debtors during such Collection Period except as may be agreed to by Buyer. Upon the expiration of the Collection Period, Buyer shall pay to Seller (or its designee) by wire transfer of immediately available funds all remaining amounts collected with

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respect to Accounts Receivable and furnish Seller with a (i) a statement of accounts for each Account Receivable which then remains uncollected prepared substantially in the manner in which Seller has heretofore prepared such report for the Stations, (ii) copies of all open Accounts Receivable invoices, (iii) an Accounts Receivable aging report and (iv) all files to the extent concerning the collection or attempts to collect such accounts hereunder; thereafter Buyer shall have no further obligations hereunder with respect to such Accounts Receivable. Any amounts received by Buyer after the Collection Period expires which can be identified as a payment of the Accounts Receivable will be promptly paid over to Seller. Buyer shall not be obligated to use any extraordinary efforts (including, demand letters), or such other action other than those it would customarily undertake in the ordinary course of business, to collect any of the Accounts Receivable or to refer any of such Accounts Receivable to a collection agency or to an attorney for collection, and Buyer shall not make any such referral or compromise, settle or adjust the amount of any Account Receivable, except with the approval of Seller. Buyer shall incur no liability to Seller for any uncollected amount. The payment by Buyer of collected Accounts Receivable to Seller hereunder shall in all events be net of commissions due to employees, national sales representatives and advertising agency sales representatives (except to the extent already paid) paid by Buyer on behalf of Seller at Buyer’s applicable commission rate, and Buyer shall promptly pay such commissions to the appropriate party solely to the extent of collections of Accounts Receivable.

     2.12 Section 1031 Exchanges. Buyer acknowledges that Seller may wish to transfer any or all of the Purchased Assets in a transaction intending to qualify in whole or in part for nonrecognition of gain pursuant to Section 1031 of the Code. If Seller so desires, it shall provide Buyer with a written statement, at least five (5) days prior to Closing, stating Seller’s intent to qualify the transfer of the Purchased Assets specified in such statement as a tax-deferred exchange under Section 1031 of the Code. Buyer agrees that at the request of Seller, and subject to the terms of this Agreement, at the Closing, Buyer shall pay the portion of the Purchase Price allocable to the Purchased Assets, as specified in the written statement, to any single “qualified intermediary” (as defined in Treasury Regulation Section 1.1031(k)-1(g)(4)) designated by Seller in lieu of and in complete satisfaction of the portion of the Purchase Price otherwise payable to Seller. In addition, Buyer agrees that it will cooperate with Seller in completing any such exchange, and shall execute all such agreements, instructions, instruments, and other documents as Seller shall reasonably request with respect to such exchange. Nothing in this Section 2.12 shall be construed to (a) require that the transactions contemplated by this Agreement be conditioned upon completion of any such exchange, (b) permit Seller to delay the transfer of the Purchased Assets to Buyer as required by this Agreement, including without limitation any delay of the FCC Consent or filing of the Assignment Application, (c) require Buyer to make any payment of any portion of the Purchase Price to any person other than Seller, the Escrow Agent, or a qualified intermediary designated by Seller in accordance with this Section 2.12, or (d) require that Buyer incur any additional expense or liability as a result of or otherwise in connection with any such exchange.

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ARTICLE 3

GOVERNMENTAL APPROVALS AND CONTROL OF STATIONS

     3.1 FCC Consent. Consummation of the transactions contemplated herein and the performance of the obligations of Seller and Buyer under this Agreement are subject to the condition that the FCC or its staff shall have given its consent in writing, without any condition materially adverse to Buyer or Seller, to the assignment of the Licenses to Buyer, other than as set forth in Section 3.6 hereof.

     3.2 Application For FCC Consent.

          (a) Seller and Buyer agree to proceed expeditiously, in good faith, and with due diligence and to use their good faith best efforts and to cooperate with each other in seeking the FCC’s approval of the assignment of the Licenses to Buyer or in the case of the Great Falls Closing, Buyer’s designee. Within ten (10) days after the date of this Agreement, each party shall prepare its portion of an application for consent to assign the Licenses (the “Assignment Application”) for electronic filing by Seller with the FCC, including all information, data, exhibits, resolutions, statements and other materials necessary and proper in connection with such Assignment Application. Seller and Buyer further agree expeditiously to prepare and submit amendments to the Assignment Application whenever such amendments are required by the FCC or its rules. Seller and Buyer will promptly provide to the other(s) a copy of any pleading, order or other document it receives from other parties relating to the Assignment Application. Buyer and Seller shall oppose any efforts by any third parties for action against the Assignment Application, and for reconsideration or judicial review of the grant by the FCC of the Assignment Application (but nothing in this Article 3 shall limit any party’s right to terminate this Agreement pursuant to Section 11.1 of this Agreement).

          (b) Except as otherwise provided herein, each party will be solely responsible for the expenses incurred by it in the preparation, filing and prosecution of its respective portion of the Assignment Application. All filing fees imposed by the FCC shall be paid one-half (1/2) by Seller and one-half (1/2) by Buyer.

          (c) Seller and Buyer agree to comply with any condition imposed by the FCC, except that no such party shall be required to comply with a condition that would have a material adverse effect upon it unless the condition was imposed as the result of a circumstance which constitutes a breach by that party of any of its representations, warranties or covenants in this Agreement, other than as set forth in Section 3.6 hereof.

     3.3 Notice of Application. Seller shall, at its own expense, give the notice of the filing of the Assignment Application as required by the FCC’s rules.

     3.4 Delay in Approval of Application. Seller or Buyer, not then being in default under this Agreement, at their option may terminate this Agreement by providing ten (10) days’ prior written notice to the other party, without liability, at any time after one (1) year from the date hereof, if the FCC has not granted the Assignment Application by that date; provided, however, if a Final Order is required by Buyer or Seller and the FCC has provided an initial

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grant of the Assignment Application within such one (1) year period from the date hereof, then Buyer or Seller, as the case may be, shall have the right to extend the Closing Date through a date no later than sixty (60) days thereafter. In the event of such termination, each party shall bear its own expenses, and the Escrow Agent shall return to Buyer the Escrow Deposit (as such amount remains on such effective date of termination) (including all interest earned thereon) without foreclosing any other remedies Buyer or the Fisher Parties may choose to pursue.

     3.5 Other Governmental Consents. Promptly following the execution of this Agreement, Buyer and Seller shall prepare and file with the appropriate governmental authorities any other requests for approval or waiver, if any, that are required from other governmental authorities in connection with the Closing, and shall diligently and expeditiously prosecute, and shall cooperate fully with each other in the prosecution of, such requests for approval or waiver and all proceedings necessary to secure such approvals and waivers.

     3.6 Great Falls Waiver. The parties acknowledge that Buyer’s affiliates currently own radio stations in Great Falls, Montana and that the purchase of all of Seller’s Stations in Great Falls, Montana will cause Buyer to exceed the ownership limits for radio stations in that market as prescribed by the Communications Laws. Accordingly, Buyer and the Fisher Parties acknowledge that Buyer will request from the FCC in the Assignment Application a waiver of these ownership limits in Great Falls, Montana by requesting FCC consent to the use of a voting trust or other means of establishing independent ownership for certain of the radio stations in Great Falls, Montana such that Buyer will comply with the radio ownership limits for the Great Falls market at the Closing (collectively, the “Great Falls Waiver”). Buyer shall expeditiously, in good faith, and with due diligence exercise its best efforts in seeking the FCC’s approval of the Great Falls Waiver.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE FISHER PARTIES

     The Fisher Parties, jointly and severally, represent, warrant and covenant to Buyer as follows:

     4.1 Organization. Each of Parent and Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Washington. Except for the qualification of Seller in Montana and Washington, there is no jurisdiction in which Seller is required to be qualified or registered to transact business. Each of Parent and Seller has the power and authority to own, lease and operate its properties and to carry on its business in the places where such properties are now owned, leased or operated as such business is now conducted.

     4.2 Authorization; Enforceability. The execution, delivery and performance of this Agreement and all of the documents and instruments required hereby by each Fisher Party and the consummation by the Fisher Parties of the transactions contemplated hereby and thereby, are within the corporate power of such Fisher Party and have been duly authorized by all necessary action by such Fisher Party. This Agreement is, and the other documents and instruments required hereby will be, when executed and delivered by each Fisher Party, the valid and binding

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obligations of such Fisher Party, enforceable against it in accordance with their respective terms, subject only to bankruptcy, insolvency, reorganization, moratoriums or similar laws at the time in effect affecting the enforceability or rights of creditors generally and by general equitable principles which may limit the right to obtain equitable remedies.

     4.3 Absence of Conflicting Agreements. Except as set forth on SCHEDULE 4.3, neither the execution, delivery or performance of this Agreement by the Fisher Parties, nor the consummation of the sale and purchase of the Purchased Assets or any other transaction contemplated by this Agreement, does or will, after the giving of notice, or the lapse of time or both, or otherwise:

          (a) conflict with, result in a breach of, or constitute a default under the articles of incorporation, corporate charter, by-laws, or other organizational or governance documents of either Fisher Party, or any federal, state or local law, statute, ordinance, rule or regulation, or any judgment, decree or court or administrative order or process, or any material contract, agreement, arrangement, commitment or plan to which a Fisher Party is a party or by which a Fisher Party is bound and which relates to the ownership or operation of any Station or the Purchased Assets;

          (b) result in the creation of any Lien upon any of the Purchased Assets;

          (c) terminate, amend or modify, or give any party the right to terminate, amend, modify, abandon or refuse to perform any Contract, Lease or any other material agreement, arrangement, commitment or plan to which a Fisher Party is a party and which relates to the ownership or operation of any Station or the Purchased Assets;

          (d) accelerate or modify, or give any party the right to accelerate or modify, the time within which, or the terms under which, any duties or obligations are to be performed, or any rights or benefits are to be received, under any Contract, Lease or any other material agreement, arrangement, commitment or plan to which a Fisher Party is a party and which relates to the ownership or operation of any Station or the Purchased Assets;

          (e) require the consent, waiver, approval, permit, license, clearance or authorization of, or any declaration or filing with, any court or Governmental Body other than the FCC Consent; or

          (f) require the consent of any Person under any Contract, Lease or other material agreement, arrangement or commitment of any nature to which a Fisher Party is a party or the Purchased Assets are subject or by which a Fisher Party or Purchased Assets are bound.

     4.4 Purchased Assets. Except as set forth on SCHEDULE 4.4, the Purchased Assets (a) include all of the assets, properties and rights of every type and description, real, personal and mixed, tangible and intangible, that are necessary for, used or held for use in the conduct of the business of owning and operating the Stations in the manner in which that business has been and is now conducted, and (b) constitute all of the assets and rights required by Buyer to operate the business of each Station. All inventories of supplies, tubes and spare parts necessary or appropriate for the operation of each Station are at levels consistent with past operations of such Station.

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     4.5 Title to Purchased Assets; Liens and Encumbrances. Except as set forth on SCHEDULE 4.5, Seller owns good, transferable and marketable title to or has valid leasehold interests in all of the Purchased Assets (other than the Real Property as to which the provisions of Section 4.9 apply) free and clear of any and all Liens except for Permitted Liens.

     4.6 Condition of Equipment. Except as set forth on SCHEDULE 4.6:

          (a) the Equipment currently being used by Seller to operate the Stations is operating in a condition that is sufficient to conduct the Business as is customary within industry standards for a small market broadcast radio station;

          (b) the Equipment includes all items of tangible personal property utilized by Seller in connection with owning and operating each Station;

          (c) the list of Equipment on SCHEDULE 1.4 is a true and correct list of all items of tangible personal property necessary for or used in the operation of each Station in the manner in which it has been and is now operated;

          (d) those items of Equipment currently used for transmission and for studio purposes are operating in conformity with the Communications Laws;

          (e) no Equipment has been removed since December 31, 2005 except for removal of obsolete or non-operational equipment; and

          (f) EXCEPT AS SET FORTH IN THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE 4, THE EQUIPMENT IS BEING SOLD TO BUYER ON AN “AS IS” BASIS, WITHOUT ANY EXPRESS OR IMPLIED WARRANTIES (INCLUDING WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE AND/OR MERCHANTABILITY).

     4.7 Contracts. Except as set forth on SCHEDULE 4.7:

          (a) All of the Contracts constitute legal, valid and binding obligations of the respective parties thereto, are in full force and effect, and neither Seller nor, to the Knowledge of Seller, any other party thereto has violated any provision of, or committed or failed to perform any act which, with notice, lapse of time or both, could constitute a default under the provisions of any Contract;

          (b) The Contracts described on SCHEDULE 1.2 constitute all of the agreements, undertakings, commitments or understandings, whether written or oral, relating to the conduct of the Stations (and including all employment agreements of Station Employees) other than (i) each contract for the sale of time on the Stations that involves the purchase in the aggregate of less than $20,000 in advertising time and requires performance over a period of less than six (6) months, and (ii) each contract which is cancelable by Seller or its assignee without breach or penalty on not more than thirty (30) days notice and which involves average annual payments or receipts by the applicable Stations of less than $5,000 in the case of any single contract and $15,000 in the aggregate for all Stations;

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          (c) Seller has furnished to Buyer true and complete copies of all Contracts, including all amendments, modifications and supplements thereto, and SCHEDULE 1.2 contains true, accurate and complete summaries of the provisions of all oral contracts;

          (d) SCHEDULE 1.2 sets forth an accurate and complete list and description of each (i) Tradeout Agreement not entered into in the ordinary course of Seller’s business and any (ii) Tradeout Agreement which creates an obligation or liability of Seller of more than $5,000 individually. Assuming a Closing Date of September 1, 2006, Seller has furnished to Buyer true and complete copies of all Tradeout Agreements listed on SCHEDULE 1.2 that Seller has a reasonable expectation will not be extinguished and completed in accordance with their terms by such Closing Date;

          (e) Seller’s right, title and interest in and to each of the Contracts is fully assignable to Buyer without the consent, approval or waiver of any other Person and the assignment of such Contracts will give no party thereto the right to terminate such Contract;

          (f) None of the Contracts provides for delayed or deferred payments that Buyer would be obligated to pay after the Closing Date; and

          (g) Seller is current on all of its payment obligations under the Contracts.

     4.8 Intangible Property. Except as set forth on SCHEDULE 4.8:

          (a) there are no claims, demands or proceedings instituted or, to the Knowledge of Seller, pending or threatened, by any third party pertaining to or challenging Seller’s right to use any of the Intangible Property;

          (b) to the Knowledge of Seller, no facts exist that could reasonably be expected to render any of the Intangible Property invalid or unenforceable;

          (c) there is no Intangible Property owned by a third party which Seller is using in connection with the operation of the Stations without proper license to do so (which licenses, if any, constitute part of the Contracts);

          (d) there are no royalty agreements between Seller and any third party relating to any of the Intangible Property;

          (e) SCHEDULE 1.3 lists and identifies correctly and completely all of the Intangible Property (i) owned or used by, or in any way relating to, the operation of any Station and (ii) necessary for or used in the operation of any Station; and

          (f) Seller owns or has the right to use the Intangible Property, all of which Intangible Property is transferable to Buyer by the sole act of Seller without the consent, approval or waiver of any other Person and without affecting Buyer’s continuing right to use such Intangible Property after the Closing.

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     4.9 Real Property. Except as disclosed on SCHEDULE 4.9:

          (a) Seller has good, valid, marketable and insurable (at standard rates) fee simple absolute interest in the Real Property and Seller has a valid, enforceable and insurable (at standard rates) Lease for all Real Property which is leased, and such Real Property includes all real property necessary or appropriate for, held for use or used in the operation of each Station. Attached to SCHEDULE 4.9 are true and complete copies of (i) all policies of title insurance currently existing in favor of Seller with respect to the Real Property, (ii) all surveys in the possession or under control of Seller related to the Real Property and (iii) all agreements or documentation related to appurtenances or improvements to the Real Property in the possession or under control of Seller, in each case which have previously been provided to Buyer. Except for Permitted Liens and the items set forth on SCHEDULE 4.9, there are no Liens, restrictions, encroachments or encumbrances to title to any portion of the Real Property. No Real Property owned by Seller is subject to any unrecorded easements, rights, obligations, duties, covenants, conditions, restrictions, limitations or agreements not of record.

          (b) There is no pending condemnation or similar proceeding affecting the Real Property or any portion thereof and, to Seller’s Knowledge, no such action is presently contemplated or threatened.

          (c) Seller has not received any notice from any insurance company of any defects or inadequacies in the Real Property or any part thereof which could adversely affect the insurability of the Real Property or the premiums for the insurance thereof. Seller has not received any notice from any insurance company which has issued or refused to issue a policy with respect to any portion of the Real Property or by any board of fire underwriters (or other body exercising similar functions) requesting the performance of any repairs, alterations or other work with which full compliance has not been made.

          (d) To the Knowledge of Seller, there are no parties in possession of any portion of the Real Property other than Seller, whether as lessees, tenants at will, trespassers or otherwise, and except as set forth in the Leases listed on SCHEDULE 1.5 and as otherwise listed on SCHEDULE 4.9. There are no options or rights in any party to purchase or acquire any ownership interest in the Real Property owned by Seller, including pursuant to any executory contracts of sale, rights of first refusal or options.

          (e) No zoning, subdivision, building, environmental, health, land-use, fire or other federal, state or municipal law, ordinance, regulation or restriction is violated by the continued maintenance, operation, use or occupancy of the Real Property or any tract or portion thereof or interest therein in its present manner, except for such violations which could not have a Material Adverse Effect. The current use of the Real Property and all parts thereof as aforesaid does not violate any restrictive covenants affecting the Real Property. No current use by Seller of the Real Property or improvement located thereon is dependent on a nonconforming use or other approval from a governmental authority, the absence of which would materially limit the use of any of the properties or assets in the operation of the Business.

          (f) There is no law, ordinance, order, regulation or requirement now in existence, including, without limitation, any Environmental Law which would require any

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expenditure to modify or improve any of the Real Property in order to bring it into compliance therewith.

          (g) Except as set forth on Schedule 4.9(a), the Real Property has access to and from completed, dedicated and accepted public roads, either directly or pursuant to an enforceable and transferable legal right to traverse property or properties owned by third parties, including but not limited to Governmental Bodies, and there is no pending, or to Seller’s Knowledge threatened, governmental proceeding which could impair or curtail such access. No improvement or portion thereof is dependent for its access, operation, or utility on any land, building, or other improvement not included in the Real Property.

          (h) There are presently in existence water, sewer, gas and/or electrical lines or private systems on the Real Property which have been completed, installed and paid for and which are sufficient to service adequately the current operations of each building, facility or tower located on the Real Property, as the case may be.

          (i) There are no material structural, electrical, mechanical, plumbing, air conditioning, heating or other defects in the buildings located on the Real Property and the roofs of the building located on the Real Property are free from material structural defects and leaks and are in good condition, and adequate to operate such facilities as currently used and the towers, antennae, fixtures and improvements on the Real Property are in good operating condition and repair.

          (j) All Environmental Permits and Licenses which are necessary to permit the lawful access, use and operation of the Equipment, buildings and improvements located on the Real Property for their present and intended use have been obtained, are in full force and effect, and to Seller’s Knowledge there is no pending threat of modification or cancellation of any such Environmental Permits and Licenses. Seller has not received or been informed by a third party of the receipt by it of any written notice from any governmental authority having jurisdiction over the Real Property threatening a suspension, revocation, modification or cancellation of any Environmental Permit or License.

          (k) The conduct of the operations of each Station in the manner in which they are presently conducted, to Seller’s Knowledge, has not violated and does not violate any law, statute, ordinance, rule or regulation of any government, governmental body, agency or authority (Federal, state or local) in any material respect and no current use by Seller of the Equipment, Real Property or improvements located thereon is dependent on a nonconforming use or other approval from a governmental authority, the absence of which would materially limit the use of any of the properties or assets in the operation of the Station’s business.

          (l) To the Knowledge of Seller, all buildings, structures and transmitting facilities of each Station, including towers, antennas, guy lines, anchors and all other related buildings, structures and appurtenances, are located entirely within the confines of the Real Property.

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          (m) Seller has not received written notice of any assessments, general or special, which have been or are in the process of being levied against the Real Property, and to Seller’s Knowledge there are no contemplated assessments.

     4.10 Leases. Except as set forth on SCHEDULE 4.10:

          (a) All of the Leases (i) constitute legal, valid and binding obligations of Seller and to Seller’s Knowledge, the other parties thereto, (ii) are in full force and effect, and (iii) neither Seller nor to Seller’s Knowledge, any other party thereto has violated any provision of, or committed or failed to perform any act which, with notice, lapse of time or both, would constitute a default under the provisions of any of the Leases that would allow the other party to terminate such Lease or bring a claim for damages, except as would not individually or in the aggregate have, or could reasonably be expected to have, a Material Adverse Effect;

          (b) The Leases constitute all of the agreements, whether written or oral, between Seller and third parties relating to the operation of each Station and the Purchased Assets and the operation of the Stations. SCHEDULE 1.5 lists all of the Leases relating to the Purchased Assets and the operation of the Stations and the Leases have not been cancelled, modified, assigned, extended or amended except as set forth on SCHEDULE 1.5;

          (c) Seller has furnished true and complete copies of the Leases to Buyer, including any and all amendments thereto, and SCHEDULE 1.5 contains true, accurate and complete summaries of the provisions of all oral leases;

          (d) There are no leasing commissions or similar payments due, arising out of, resulting from or with respect to any Lease which are owed by Seller; nor does any other party thereto have a claim, lien, charge or credit against Seller or offsets against rent due under the Lease;

          (e) Seller’s right, title and interest in and to each of the Leases is fully assignable to Buyer without the consent, approval or waiver of any other Person and the assignment of such Leases will not give any party thereto the right to terminate such Lease or accelerate payments under such Lease; and

          (f) Each of Seller’s Financing Leases is listed as such on SCHEDULE 1.5 and identified as a “Financing Lease” on such schedule.

     4.11 Financial Statements and Interim Financial Statements.

          (a) Attached as SCHEDULE 4.11(a) are true and complete copies of the unaudited balance sheet of Seller relating to the Stations, as at December 31, 2003, December 31, 2004 and December 31, 2005, and the related statements of income for the fiscal years then ended (collectively, the “Financial Statements”). The Financial Statements (i) were prepared in accordance with the books of account and other financial records of Seller and the Stations, which are accurate and complete in all material respects, (ii) fairly and accurately present the assets, liabilities and financial condition of Seller and the Stations as of the respective dates thereof, and the results of operation and cash flows for the periods then ended, (iii) have been prepared in accordance with GAAP applied on a consistent basis with Seller’s past practices, and

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(iv) include all adjustments (consisting only of normally recurring accruals) and Affiliate transactions that are necessary for a fair presentation of the financial condition and results of operation of the business of Seller and the Stations as of the dates thereof and for the periods covered thereby.

          (b) Attached as SCHEDULE 4.11(b) are true and complete copies of the unaudited balance sheet of Seller relating to the Stations (by market) as at the month ended March 31, 2006, and the related statement of income (by market) for the period then ended (the “Interim Financial Statements”). The Interim Financial Statements were (i) prepared in good faith and in accordance with the books and records of Seller and the Stations which are accurate and complete in all material respects, (ii) have been prepared in accordance with GAAP applied on a basis consistent with the Financial Statements, and (iii) present fairly the financial condition of Seller and the Stations as at each of the dates indicated and the results of its operations and changes in financial position for each of the periods then ended (and shall include all Affiliate transactions); subject, however, to year-end adjustments which, in the aggregate, are not materially adverse.

     4.12 No Changes. Except as set forth on SCHEDULE 4.12, since December 31, 2005, there has not been any:

          (a) transaction by the Fisher Parties relating to any Station except in the ordinary course of business conducted as of that date;

          (b) material adverse change in the financial condition, liabilities, assets, prospects or results of operation of any Station;

          (c) any default under any indebtedness of the Fisher Parties, or any event which, with the lapse of time, giving of notice or both, could constitute such a default;

          (d) amendment or termination of any Contract, Lease or License to which the Fisher Parties is a party relating to any Station, except in the ordinary course of business;

          (e) increase in compensation paid, payable or to become payable to a Station Employee, except customary increases not in excess of 5% in connection with annual employee reviews;

          (f) extraordinary losses (whether or not covered by insurance) or waiver by a Fisher Party of any extraordinary rights of value relating to any Station;

          (g) commitment or liability to any labor organization which represents, or proposes to represent, employees of any Station;

          (h) lowering of the advertising rates of any Station in a manner not consistent with past practices or reflective of current market conditions;

          (i) notice from any sponsor or customer as to that sponsor’s or customer’s intention not to conduct business with any Station, the result of which loss or losses of business,

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individually or in the aggregate, has had, or could reasonably be expected to have, a material adverse effect on any Station;

          (j) write down of the value of any assets or write off as uncollectible of any Receivable except in the ordinary course of business, none of which, individually or in the aggregate, has or might reasonably have a material adverse effect on Seller’s or any Station’s financial condition;

          (k) change in either Fisher Party’s method of accounting;

          (l) other event or condition of any character that has or might reasonably have a Material Adverse Effect;

          (m) sale, assignment, lease or other transfer or disposition of any of the assets or properties of any Station except in the ordinary course of business;

          (n) downgrade of, or any agreement or obligation of any Station to downgrade, its broadcast transmission signal of any Station;

          (o) distribution, transfer, sale, exchange, loan or disposition by Seller to a related or affiliated Person; or

          (p) agreement by any Fisher Party to do any of the foregoing.

     4.13 Undisclosed Liabilities. Seller has no debt, liability or obligation of any kind, whether accrued, absolute, contingent or otherwise, including, without limitation, any liability or obligation on account of Taxes or any governmental charges or penalty, interest or fines relating to any Station, except: (i) those liabilities reflected in the Financial Statements and Interim Financial Statements; (ii) liabilities disclosed on SCHEDULE 4.13; (iii) liabilities incurred in the ordinary course of business (other than contingent liabilities) since December 31, 2005, which do not exceed $25,000 in the aggregate; and (iv) liabilities incurred in connection with the transactions provided for in this Agreement.

     4.14 No Litigation; Labor Disputes; Compliance with Laws. Except as set forth on SCHEDULE 4.14:

          (a) There is no claim, decree, judgment, order, litigation at law or in equity, arbitration proceeding or proceeding before or by any Governmental Body pending or, to the Knowledge of Seller, threatened, to which any Fisher Party is a party or to which the Purchased Assets are subject, that would have a Material Adverse Effect, and there is no basis for any such claim, litigation or proceeding. There is no investigation by any Governmental Body pending or, to the Knowledge of Seller, threatened, which could have a Material Adverse Effect, nor is there any basis for any such investigation.

          (b) Seller is not subject to or bound by any labor agreement or collective bargaining agreement; there is no labor dispute, grievance, controversy, strike or request for union representation pending or, to the Knowledge of Seller, threatened against Seller relating to or affecting the business or operations of any Station; and there has been no occurrence of any

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events which could reasonably be expected to give rise to any such labor dispute, grievance, controversy, strike or request for representation.

          (c) Seller owns and operates, and has owned and operated, its properties and assets, and carries on and conducts, and has carried on and conducted, the business and affairs of each Station in compliance in all material respects with all federal, foreign, state and local laws, statutes, ordinances, rules and regulations, and all court or administrative orders or processes, including, but not limited to, FCC, Occupational Safety and Health Administration, Equal Employment Opportunity Commission, National Labor Relations Board, Environmental Protection Agency or state agencies. Each Station complies in all material respects with all applicable statutes, rules and regulations pertaining to equal employment opportunity, including, without limitation, those of the FCC.

     4.15 Taxes. Except as disclosed on SCHEDULE 4.15:

          (a) Seller has filed all federal, state and local tax returns, reports and estimates for all years and periods (and portions thereof) for which any such returns, reports and estimates were due with respect to the Stations or the Purchased Assets, and any and all amounts due and payable have been paid in full except to the extent such amounts have been contested in good faith. All of such returns, reports and estimates are true and complete in all respects. Seller has withheld all Tax required to be withheld under applicable law and regulation with respect to the Stations in all material respects, and such withholdings have either been paid to the proper governmental agency or set aside in accounts for such purpose, or accrued, reserved against and entered upon the books of Seller, as the case may be; and

          (b) There are, and after the date of this Agreement will be, no Tax deficiencies (including penalties and interest) of any kind assessed against or relating to the Fisher Parties with respect to any taxable periods ending on or before, or including, the Closing Date of a character or nature that could result in Liens or claims on any of the Purchased Assets or on Buyer’s title or use of the Purchased Assets or that could result in any claim against Buyer.

     4.16 Governmental Authorizations. Seller, as specified on SCHEDULE 1.6, is the authorized legal holder of all licenses, permits, and authorizations reasonably necessary to operate the Business of the Stations lawfully and as it is now being conducted, including, without limitation, the Licenses listed in SCHEDULE 1.6, none of which is subject to any restrictions or conditions (other than conditions or restrictions stated on the face of the Licenses or matters affecting the radio broadcasting industry generally) which would limit in any respect the operation of any Station as now operated. Other than as set forth on SCHEDULE 1.6, no other Licenses are required for Seller to own and operate the Stations in the manner operated as of the date hereof. All such Licenses are validly existing authorizations for the operation of the facilities described therein under the Communications Act of 1934, as amended (the “Communications Act”). Except as stated in SCHEDULE 4.16, Seller is operating each Station in all respects in accordance with the Licenses, their underlying construction permits, and all rules and published policies of the FCC (collectively, with the Communications Act, the “Communications Laws”). Except as stated in SCHEDULE 4.16, there is no action pending or, to Seller’s Knowledge, threatened, before the FCC or other body to revoke, refuse to renew, suspend or modify any of the Licenses; and there is no action pending or, to Seller’s Knowledge,

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threatened, before the FCC or other body which may result in the denial of any pending applications, the issuance of any cease and desist orders, or the imposition of any administrative sanctions whatsoever with respect to any Station or its operation. The FCC has granted the most recent applications for renewal of License for all Stations without the imposition of any conditions other than conditions that are set forth on the face of the Licenses of the Stations or that are imposed generally by the Communications Laws upon all holders of FCC licenses, permits or authorizations for facilities of the same class and nature.

     4.17 Pending Applications. SCHEDULE 4.17 sets forth a true and complete list of all pending applications filed with the FCC by Seller with respect to the Stations.

     4.18 Compliance with FCC Requirements. Except as set forth on SCHEDULE 4.18, each Station, its physical facilities, electrical and mechanical systems and transmitting and studio equipment are being and, to Seller’s Knowledge, have been operated in all material respects in accordance with the specifications of the Licenses, the Communications Laws and with each document submitted in support of such Licenses. Seller has complied in all material respects with all requirements of the Communications Laws and the Federal Aviation Administration with respect to the construction and/or alteration of each Station’s antenna structures that are included in the Purchased Assets. Where required of Seller, “no hazard” determinations for antenna structures have been obtained; and where required, each antenna structure has been registered with the FCC. All material obligations, reports and other filings required by the Communications Laws with respect to each Station, including, without limitation, all regulatory fee payments and all materials required to be placed in each Station’s public inspection files, are currently on file and are true and complete in all material respects; and after the Closing Date, Seller shall furnish to Buyer all information required by the FCC relating to the operation of each Station prior to the Closing Date. Seller is aware of no matters that might result in the suspension or revocation of any Licenses pertaining to any Station. Each Station is operating at its authorized power as specified in its FCC License or within the legal range thereof as permitted by the Communications Laws.

     4.19 Qualification. Seller is qualified under the Communications Act to assign the Licenses to Buyer. Except as set forth in Section 3.6, Seller knows of no fact that could cause the FCC to withhold its consent to the assignment of the Licenses to Buyer other than grant of the pending applications for renewal of the radio station Licenses.

     4.20 Insurance. Seller has in full force and effect the liability and casualty insurance and errors and omissions insurance insuring the business, properties and assets of each Station as described on SCHEDULE 4.20 and such insurance is for such coverage and in such amounts as is usual and customary for businesses similar to that of Seller. Seller is not in default with respect to such insurance policies, and Seller has not failed to give any notice or present any claim under any policies in due and timely fashion. No notice of cancellation, termination or nonrenewal has been received with respect to any such policy.

     4.21 Brokers. Neither this Agreement nor the sale and purchase of the Purchased Assets or any other transaction contemplated by this Agreement was induced or procured through any Person acting on behalf of or representing Seller as broker, finder, investment

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banker, financial advisor or in any similar capacity, other than Kalil & Company, who shall be paid by Seller.

     4.22 Powers of Attorney. Except as set forth on SCHEDULE 4.22 there are no Persons holding a power of attorney on behalf of the Fisher Parties relating to the operation of the Stations or the Purchased Assets.

     4.23 Employees. SCHEDULE 4.23 lists the names and current annual salary rate or hourly rate of all employees of each Station, which list includes for each such Person the amounts paid or payable as base salary and describes any other compensation arrangements for employees for the years 2005 and 2006, including bonuses, severance or other perquisites. Except as set forth on SCHEDULE 4.23 hereto, there are no collective bargaining agreements, employment agreements between Seller and their employees or professional service Contracts not terminable at will relating to any Station or the business and operations thereof. The consummation of the transactions contemplated hereby will not cause Buyer to incur or suffer any liability relating to, or obligation to pay, severance, termination or other payments to any Person or any liability or obligation to pay with respect to any Station Employee Benefit Plan.

     4.24 Employee Benefit Plans. Except as set forth on SCHEDULE 4.24:

          (a) Seller has not at any time maintained or been a party to or made contributions to any Station Employee Benefit Plan. All Station Employee Benefit Plans maintained by Seller or to which Seller is obligated to contribute (and all Plans maintained by any other entity which together with Seller would be considered to be a single employer within the meaning of Section 4001(b) of ERISA or Section 414 of the Code), are, and have in the past been, in all respects maintained, funded and administered in compliance with the terms of such Station Employee Benefit Plan, ERISA and the Code, and other applicable law; no such plan subject to Title IV of ERISA has been terminated; no proceedings to terminate any such plan have been instituted under Subtitle C of Title IV of ERISA; no reportable event within the meaning of Section 4043 of Subtitle C of ERISA has occurred for any such plan maintained by Seller; Seller has not withdrawn from a multi-employer plan (as defined in Section 4001(a) of ERISA) with respect to the Stations; the consummation of the transactions contemplated hereby will not result in any withdrawal liability on the part of Seller under a multi-employer plan; no Plan or Benefit Arrangement established or maintained by Seller or to which Seller is obligated to contribute has any “accumulated funding deficiency,” as defined in ERISA, or any other unfunded liability or funding deficit; and Seller has not incurred any liability to the Pension Benefit Guaranty Corporation with respect to any such plan. Seller has not engaged in any “prohibited transaction,” as defined in Section 406 of ERISA, or in Section 4975 of the Code with respect to any Plan.

          (b) Seller has: (a) filed or caused to be filed all returns and reports on the Station Employee Benefit Plans that are required to be filed and (b) paid or made adequate provision for all fees, interest, penalties, assessments or deficiencies that have become due pursuant to those returns or reports or pursuant to any assessment or adjustment that has been made relating to those returns or reports. All other fees, interest, penalties and assessments that are payable by or for Seller have been timely reported, fully paid and discharged. There are no unpaid fees, penalties, interest or assessments due from Seller or from any other Person that are

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or could become a Lien on any Purchased Asset or could otherwise adversely affect any Station or Purchased Assets. Seller has collected or withheld all amounts that are required to be collected or withheld by it to discharge its obligations, and all of those amounts have been paid to the appropriate governmental authority or set aside in appropriate accounts for future payment when due. Seller has furnished to Buyer true and complete copies of all documents setting forth the terms and funding of each Plan. The requirements of Section 4980B of the Code (“COBRA”) have been met with respect to each such Station Employee Benefit Plan that is an “employee welfare benefit plan” as such term is defined in Section 3(1) of ERISA and, except as required by COBRA, Seller has no obligation or potential liability for benefits to employees, former employees or their respective dependents following termination of employment or retirement under any such employee welfare benefit plan.

          (c) All contributions or premiums for any period ending on or before the Closing Date that are not yet due have been made to or for each such Station Employee Benefit Plan or accrued in accordance with the past custom and practice of Seller.

          (d) Neither Seller nor any other entity which together with Seller would be considered to be a single employer within the meaning of Section 4001(b) of ERISA or Section 414 of the Code has ever established, maintained, contributed to or otherwise participated in or had an obligation to establish, maintain, contribute to or otherwise participate in any “multiemployer plan” as such term is defined in Section 3(37) of ERISA.

     4.25 Environmental Compliance. Except as set forth on SCHEDULE 4.25:

          (a) Seller’s business has complied and is in material compliance with, and the Real Property and all improvements thereon are in material compliance with, all Environmental Laws.

          (b) Seller is not a party to any litigation or administrative proceeding, nor is any litigation or administrative proceeding threatened against it relating to any Station, which in either case: (i) asserts or alleges that Seller violated any Environmental Laws; (ii) asserts or alleges that Seller is required to clean up, remove or take remedial or other response action due to the disposal, depositing, discharge, leaking or other release of any Regulated Substances; or (iii) asserts or alleges that Seller is required to pay all or a portion of the cost of any past, present or future cleanup, removal or remedial or other response action arising out of or relating to the disposal, depositing, discharge, leaking or other release of any Regulated Substances.

          (c) With respect to the period during which Seller owned or occupied the Equipment, Real Property, no Person has caused or permitted Regulated Substances to be generated, treated, stored, or disposed of, released, recycled on, under or at any Real Property owned, leased, used or occupied by Seller, which Regulated Substances, if known to be present, would require response remediation or cleanup, removal or some other remedial action under any Environmental Laws.

          (d) To the Knowledge of Seller, there are not now nor have there been previously, tanks, disposal areas, landfills, surface impoundments or other facilities on, under or at the Real Property which contained any Regulated Substances which, if known to be present in

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soils or groundwater or surface water, would require response remediation, removal or such other remedial action under Environmental Laws.

          (e) There are no conditions existing currently regarding the Purchased Assets that would subject Seller to damages (including notice of resources damages), penalties, injunctive relief or response remediation or removal costs under any Environmental Laws or which require or are likely to require response, remediation or removal or such other remedial action pursuant to Environmental Laws by Seller.

          (f) With respect to the Real Property, Seller is not subject to any judgment, order or citation related to or arising out of any Environmental Laws and has not been named or listed as a potentially responsible party by any governmental body or agency in a matter related to or arising out of any Environmental Laws.

          (g) The operation of each Station does not exceed the permissible levels of exposure to RF radiation specified in the FCC’s rules, regulations and policies concerning RF radiation.

          (h) Seller has been duly issued, and currently has and will maintain through the Closing Date, all Environmental Permits, licenses, certificates and approvals required under any Environmental Law relating to each Station. A true and complete list of such permits, licenses, certificates and approvals, all of which are valid and in full force and effect, is set out on SCHEDULE 4.25(h). Except in accordance with such permits, licenses, certificates and approvals or in compliance with Environmental Laws, there has been no discharge of any Regulated Substances or any other material regulated by such permits, licenses, certificates or approvals on the Real Property.

          (i) True and complete copies of the environmental assessment reports listed on SCHEDULE 4.25 have been delivered to Buyer which SCHEDULE 4.25 includes all environmental assessment reports in Seller’s possession with respect to the Stations. Since April 1999, there are no other environmental assessment reports, environmental studies or other reports relating to the compliance of the Purchased Assets with Environmental Laws other than as set forth in SCHEDULE 4.25.

     4.26 Representation as of the Closing Date. Each of the Fisher Parties’ representations and warranties set forth in this Agreement shall be true and correct on and as of the Closing Date, as though such representations and warranties were made on and as of such time.

     4.27 Records. The Records of the Stations have been fully, properly and accurately maintained in all material respects, and there are no material inaccuracies or discrepancies of any kind effected herein, and true and accurate copies thereof have been made available to Buyer.

     4.28 Insolvency. No insolvency proceedings of any kind, including bankruptcy, receivership, reorganization, composition or arrangement with creditors, voluntary or involuntary, affecting the Fisher Parties or the Purchased Assets are pending or threatened. The Fisher Parties have not made an assignment for the benefit of creditors or taken any action with a view to, or that would constitute a valid basis for, the institution of any such insolvency proceedings.

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     4.29 Related Party Transactions. Except as set forth on SCHEDULE 4.29, and except for employment Contracts listed on the Schedules hereto and at will employment arrangements, no partner, director, officer, employee, member or shareholder of any Fisher Party or any associate or Affiliate thereof, or any relative with a relationship of not more remote than first cousin of any of the foregoing, is presently, or during the twelve (12) month period ending on the date hereof has been a party to any transaction related to the Business with any Fisher Party, including any contract, agreement or arrangement providing for the furnishing of services by, or rental of real or personal property from, or otherwise requiring payments to, any such partner, director, officer, employee, member, shareholder, associate or Affiliate.

     4.30 Disclosure. No statement of fact by a Fisher Party contained in this Agreement and no written statement of fact furnished or to be furnished by the Fisher Parties to Buyer pursuant to or in connection with this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary in order to make the statements herein or therein contained not misleading.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer represents, warrants and covenants to Seller as follows:

     5.1 Organization. Buyer is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware, and on the Closing Date Buyer will be duly qualified to do business in Montana and Washington. Buyer has full corporate power to purchase the Purchased Assets pursuant to this Agreement. Subject to Section 3.6, on the Closing Date, Buyer will be qualified to be a licensee of the FCC.

     5.2 Authorization; Enforceability. The execution, delivery and performance of this Agreement and all of the documents and instruments required hereby by Buyer and the consummation by Buyer of the transactions contemplated hereby and thereby are within the limited liability company power of Buyer and have been duly authorized by all necessary limited liability company action by Buyer. This Agreement is, and the other documents and instruments required hereby will be, when executed and delivered by Buyer, the valid and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms, subject only to bankruptcy, insolvency, reorganization, moratoriums or similar laws at the time in effect affecting the enforceability or right of creditors generally and by general equitable principles which may limit the right to obtain equitable remedies.

     5.3 Absence of Conflicting Agreements. Neither the execution, delivery or performance of this Agreement by Buyer nor the consummation of the sale and purchase of the Purchased Assets or any other transaction contemplated by this Agreement, does or will, after the giving of notice, or the lapse of time or otherwise, conflict with, result in a breach of, or constitute a default under, the certificate of organization or operating agreement of Buyer, or any federal, state or local law, statute, ordinance, rule or regulation, or any court or administrative order or process, or any material contract, agreement, arrangement, commitment or plan to which Buyer is a party or by which Buyer or its assets is bound.

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     5.4 Brokers. Neither this Agreement nor the sale and purchase of the Purchased Assets or any other transaction contemplated by this Agreement was induced or procured through any Person acting on behalf of or representing Buyer as broker, finder, investment banker, financial advisor or in any similar capacity, other than Kalil & Company, who shall be paid by Seller.

     5.5 Buyer’s Qualifications. Except as set forth in Section 3.6, there is no fact that would, under present law (including the Communications Laws), disqualify Buyer from being the assignee of the Stations or that would delay FCC approval of the Assignment Application. Should Buyer become aware of any such fact, it will so inform Seller within five (5) business days of its awareness of such fact and will use its best efforts to remove any such disqualification. Buyer will not take any action that Buyer knows, or has reason to believe, would result in such disqualification.

     5.6 Insolvency. No insolvency proceedings of any character including without limitation, bankruptcy, receivership, reorganization, composition or arrangement with creditors, voluntary or involuntary, affecting Buyer, or any of Buyer’s assets or properties are now, or on the Closing Date will be, pending. Buyer has not, and at the Closing Date shall not have made any assignment for the benefit of creditors, or have taken any action with a view to, or which would constitute the basis for, the institution of any such insolvency proceedings.

     5.7 Representation as of the Closing Date. Buyer’s representations and warranties set forth in this Agreement shall be true and correct on and as of the Closing Date, as though such representations and warranties were made on and as of such time.

     5.8 Disclosure. No statement of fact by Buyer contained in this Agreement and no written statement of fact furnished or to be furnished by Buyer to Seller pursuant to or in connection with this Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements herein or therein contained not misleading.

ARTICLE 6

COVENANTS

     From and after the date of this Agreement and until the Closing:

     6.1 Access. Buyer and its authorized agents, officers and representatives shall have access, upon reasonable prior notice, to the Business, the Stations and the Purchased Assets to conduct such examination and investigation of the Business, the Stations and the Purchased Assets as it reasonably deems necessary (including meeting with Station Employees), provided that such examinations shall be during the Stations’ normal business hours, and shall not unreasonably interfere with the Stations’ operations and activities. Buyer shall give the Fisher Parties prompt written notice if Buyer discovers facts or circumstances that would cause either of the Fisher Party’s representations or warranties to be materially false or misleading; provided, however, that failure to give such notice shall neither excuse the failure of such representations or warranties to be true when and as made, nor constitute a breach of this Agreement.

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Additionally, Seller shall furnish to Buyer such information and materials concerning the Stations’ affairs as Buyer may reasonably request, so far as such access, information and materials pertain to the operation of the Stations and do not impose undue burden or cost upon Seller.

     6.2 Title Insurance; Surveys and Lien Search. Seller shall cooperate fully with Buyer and Buyer and Seller will use their good faith commercially reasonable efforts so that as soon as practicable, but in no event later than sixty (60) days after the date hereof with respect to the items set forth in Section 6.2(a) and 6.2(b), ninety (90) days with respect to the item set forth in Section 6.2(d), and with respect to the item set forth in Section 6.2(c) within ten (10) days prior to the Closing, the following shall have been obtained by Buyer and Seller, as provided herein:

          (a) With respect to the Real Property, Seller shall cause the Title Companies to issue and deliver to Buyer preliminary reports on title covering a date subsequent to the date hereof, which preliminary reports shall contain a commitment (individually, a “Title Commitment” and collectively, the “Title Commitments”) of the Title Companies to issue an owner’s or lessee’s title insurance policy on ALTA Owners or Lessees Policy (and corresponding mortgagee’s policies) insuring the fee simple or leasehold interest of Seller in such parcels of Real Property (individually, a “Title Policy” and collectively, the “Title Policies”) as well as legible copies of all underlying title documents referenced in such Title Commitment. To the extent available from the Title Companies, all standard exceptions shall be removed from the Title Policies and the Title Policies shall contain extended coverage over the general exceptions to title which do not require the delivery of an ALTA survey and which can be removed by the delivery by Seller of an ALTA statement, owner’s affidavit or such similar certificate as is customarily required by the Title Company to issue such coverage. The cost of extended coverage and any other endorsement obtained by Buyer in connection with the issuance of the Title Policies shall be paid for by Buyer. The Title Commitments (and Title Policies issued to Buyer) shall not be subject to any Liens other than (i) Liens that will be released or removed at or prior to Closing, (ii) Permitted Liens or (iii) those exceptions listed on SCHEDULE 4.9 and Leases listed in SCHEDULE 1.5 in which Seller is the lessor of a transmission tower; provided, however, if Buyer has an objection to title it shall notify Seller of such objection or defect (“Notice of Defect”) within ten (10) days of Buyer’s receipt of the Title Commitment and Survey (as described in Section 6.2(b) hereof) and Seller shall have until the Closing Date to cure such objection or defect. The Title Commitments (and Title Policies issued to Buyer) for the leasehold interests of the Seller in the Real Property shall commit to insure or insure, as appropriate, those Leases listed in SCHEDULE 1.5. Any mortgage, security deed, deed of trust, lien, judgment, or other claim in liquidated amount which constitutes an exception to the title to the Real Property (whether or not the same is disclosed by the Title Commitment or listed in the Notice of Defect) shall not in any event be a “Permitted Lien” hereunder, but such claim shall be paid or satisfied out of the sums payable by Buyer at Closing, and the proceeds of sale payable to Seller shall be reduced accordingly. At any time prior to Closing, Buyer shall have the right to notify Seller of any additional title exception which first appears of record after the effective date of the Title Commitment, is disclosed by any survey obtained by Buyer, or otherwise becomes known to Buyer, it being understood and agreed that no such additional title exception shall constitute a Permitted Lien hereunder unless Buyer shall expressly approve the same or unless such exception was caused by Buyer. Seller shall use its best efforts to cooperate with Buyer and any applicable landlord to obtain each leasehold Title Policy.

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          (b) If desired by Buyer, Buyer shall at its own expense obtain ALTA-ASCM Surveys of the Real Property as of a date subsequent to the date hereof which shall: (i) be prepared by a registered land surveyor; (ii) be certified to the Title Companies, Buyer’s lender and Buyer; and (iii) show with respect to such Real Property: (A) the legal description of such parcel of Real Property (which shall be the same as the Title Policy pertaining thereto); (B) all buildings, structures and improvements thereon and all restrictions of record and other restrictions that have been established by an applicable zoning or building code or ordinance and all easements or rights of way; (C) no encroachments upon such parcel or adjoining parcels by buildings, structures or improvements; and (D) access to a public street from such parcel, if applicable. Any restrictions, encroachments (onto the Real Property or from the Real Property onto adjoining property) or other claims which materially affect the intended use of the Real Property as disclosed on the Survey shall be a “Survey Defect,” and if Buyer shall have an objection to such Survey, Buyer shall notify Seller of such objection within ten (10) days of Buyer’s receipt of the Survey and the Title Commitment and Seller shall have until the Closing Date to cure such objection of Survey Defect.

          (c) With regard to the Purchased Assets other than the Real Property, Buyer shall obtain lien search reports prepared by an independent, nationally recognized reporting service (the “Purchased Assets Reports”), reflecting the results of UCC, tax and judgment lien searches conducted at the applicable state offices of the States of Montana and Washington, and in the County Clerk’s office of any county in which the Purchased Assets are located, to the effect that: (i) none of the Purchased Assets is subject to any record Lien for federal, state or local Taxes or assessments, excepting only a Lien for property Taxes not yet due and payable; and (ii) there are no then-effective financing statements pertaining to any of the Purchased Assets, except for financing statements that will be released at or before the Closing.

          (d) (I) Within ninety (90) calendar days from the date hereof (the “Phase I Time Period”), Buyer shall have the right, at its sole cost and expense, to engage an environmental engineering firm reasonably acceptable to Seller (the “Consultant”) to conduct a Phase I Environmental Assessment, as such term is commonly understood (a “Phase I Environment Assessment”) concerning each Station and the Purchased Assets which shall confirm, in a manner satisfactory to Buyer, that there are no Recognized Environmental Conditions (as such term is defined in the American Society of Testing and Materials Standard for Phase I Environmental Assessments) (a “Recognized Environmental Condition”) on or about each Station and the accuracy of Seller’s representations set forth in Section 4.25. A copy of the Phase I Environmental Assessment shall be delivered to Seller within seven (7) days of Buyer’s receipt of the same.

               (II) If the Phase I Environmental Assessment conducted in connection with Section (d)(I) above details a Recognized Environmental Condition in connection with the Real Property, the Consultant reasonably recommends further investigatory action with respect to such Recognized Environmental Condition, and Buyer delivers such assessment and recommendation to Seller within twenty (20) calendar days from Buyer’s receipt of the Phase I Environmental Assessment, Buyer shall have the right until fifty-five (55) calendar days from the expiration of the Phase I Time Period (the “Phase II Time Period”), to have Seller, at its cost and expense, conduct the investigation so recommended (the “Phase II Inspection”); provided, however, Seller shall have the right to review and, in its reasonable discretion, approve the work

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plan for any Phase II Inspection proposed. Any damage caused by Seller or its agents, in the course of any Phase II Inspection shall be promptly repaired by Seller, at its sole cost and expense.

               (III) If it is determined that there is a Recognized Environmental Condition in connection with the Real Property and there is a Phase II Inspection, the Consultant shall provide an estimate to Buyer and Seller of the cost and expense of clean up, removal, remedial, corrective or responsive action necessary to address such Recognized Environmental Condition (the “Environmental Work”), which estimate shall set forth in reasonable detail the basis for those estimates; provided, however, the Environmental Work shall be designed to meet the least stringent standards or requirements so as not to be a violation under applicable Environmental Laws (taking into account the zoning of the applicable Real Property and the current uses of resources thereon). If the estimated costs of Environmental Work are equal to or less than Three Hundred Seventy-Five Thousand Dollars ($375,000), Seller shall, at its election, either cause such Environmental Work to be completed at Seller’s sole cost and expense to Buyer’s reasonable satisfaction, in which case Closing shall be delayed until such Environmental Work has been completed, or the Purchase Price shall be reduced by the amount of the estimate. If such Environmental Work exceeds Three Hundred Seventy-Five Thousand Dollars ($375,000), Seller may elect to complete Environmental Work or terminate this Agreement and return the Escrow Deposit, together with all accrued interest thereon, to Buyer by providing written notice to Buyer within ten (10) days after receipt of the estimate for the Environmental Work; provided, however, Buyer may elect, within ten (10) days of receipt of said termination notice from Seller, to elect to Close the purchase pursuant to the Agreement and receive a Three Hundred Seventy-Five Thousand Dollar ($375,000) credit against the Purchase Price. Without limiting the rights of Buyer herein or the obligations of Seller herein, as between Seller and third parties, Seller hereby reserves any and all rights that it may have against the tenants of the Owned Real Property with respect thereto, including but not limited to any claim or right of contribution, indemnity or cost recovery under Comprehensive Environmental Response Compensation and Liabilities Act of 1980, as amended, and under any other federal or state environmental law, rule, regulation or statute. Notwithstanding anything to the contrary contained herein, if such Environmental Work exceeds Three Hundred Seventy-Five Thousand Dollars ($375,000), Buyer may elect to terminate this Agreement and Buyer shall be entitled to the return of the Escrow Deposit together with all accrued interest thereon.

               (IV) The parties understand and agree that the procedures outlined in this subsection (d) shall in no event delay the Closing beyond the date on which the Closing would occur but for such procedures.

          (e) The expenses incurred relating to Sections 6.2(a) and 6.2(b) shall be paid by Buyer. The expenses incurred relating to Section 6.2(c) shall be paid by Seller.

     6.3 Notice of Adverse Changes. Pending the Closing Date, Seller shall give Buyer prompt written notice of the occurrence of any of the following:

          (a) an Event of Loss;

          (b) the commencement of any proceeding or litigation at law or in equity or before the FCC or any other commission, agency or administrative or regulatory body or

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authority involving any of the Licenses or which could have a Material Adverse Effect, other than proceedings or litigation of general applicability to the radio broadcasting industry that do not have a disproportionate impact on any Station;

          (c) any labor grievance, controversy, strike or dispute affecting the business or operation of any Station;

          (d) any violation by Seller or any Station of any federal, state or local law, statute, ordinance, rule or regulation which may have a Material Adverse Effect;

          (e) any notice of breach, default, claimed default or termination of any Contract or Lease (excluding contracts for the sale of advertising time on the Stations);

          (f) Any Station operates at less than ninety percent (90%) of its authorized power level for more than seventy-two (72) consecutive hours; or

          (g) any other developments that may have a Material Adverse Effect.

     6.4 Operations Pending Closing. Subject to the provisions of Section 6.15 regarding control of the Stations, pending the Closing, Seller shall:

          (a) operate each Station in the ordinary course of business in accordance with past practices consistently applied;

          (b) operate each Station in accordance with the Communications Laws;

          (c) maintain the Equipment currently being used by the Seller to operate the Stations in good operating condition, wear and tear due to ordinary usage excepted, and replace any of the Equipment which shall be worn out, lost, stolen or destroyed;

          (d) not remove from the Station, sell, assign, lease, transfer, mortgage, pledge, grant any Lien other than Permitted Liens on or otherwise dispose of, any of the Purchased Assets except for dispositions in the ordinary course of business in accordance with past practices consistently applied or unless such Purchased Assets are replaced with an asset of like kind and utility;

          (e) not increase or otherwise change the rate or nature of the compensation (including wages, salaries and bonuses) or severance paid or payable to any Person, except pursuant to existing compensation and fringe benefit plans, practices and arrangements which have been disclosed to Buyer, other than annual performance based increases which shall not exceed 5% per annum, and not enter into, renew or allow the renewal of, any employment or consulting agreement or other contract or arrangement with respect to the performance of personal services;

          (f) except with Buyer’s prior written consent, not enter into, or become obligated under, any agreement or commitment affecting any Station or its operations including any Program Rights agreement except for commitments for advertising time on any Station at then prevailing rates and entered into in the ordinary course of the operation of its business, or

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change, amend, terminate or otherwise modify in any material respect any Contract, Lease, agreement or commitment except for those which terminate or expire by their own terms; provided, however, that Seller will not enter into any agreements for Program Rights or any agreements with affiliates of Seller without Buyer’s prior written consent; provided, further, that Seller will not enter into any agreements for or otherwise obligate any Station to commence any Incentive Program without Buyer’s prior written consent; and provided, further, that Seller shall continue to make such expenditures and commitments as is consistent with past practices of the Stations;

          (g) maintain in full force and effect policies of liability and casualty insurance of the same type, character and coverage as the policies currently carried with respect to the business, operations and assets of each Station;

          (h) not enter into any Tradeout Agreement relating to any Station which creates an obligation or liability of Seller of more than $5,000 individually or which is not in the Seller’s ordinary course of business, without the prior written consent of Buyer;

          (i) furnish to Buyer true and complete copies of all Tradeout Agreements disclosed to Buyer pursuant to Section 6.4(h) above;

          (j) not enter into any agreement providing for a delayed or deferred payment that Buyer would be obligated to pay after the Closing Date;

          (k) stay current on all of its payment obligations under the Contracts and Leases that are part of the Assumed Liabilities;

          (l) proceed with all reasonable diligence to satisfy its obligations pursuant to Tradeout Agreements in the ordinary course of each Station’s business;

          (m) utilize the programming of each Station only in the ordinary course of business and not sell or otherwise dispose of any such programming; and make all payments on programming and agreements on a current basis;

          (n) make reasonable efforts to endeavor to protect the service areas of the Stations, as currently authorized by the FCC, from interference from other stations, existing or proposed, to the extent such interference is prohibited by the Communications Laws, and promptly give Buyer notice of any such interference;

          (o) not adopt, or commit to adopt, any pension, profit sharing, deferred compensation or similar plan, program or trust on behalf of personnel of any Station, other than any such plan, program or trust currently maintained by Seller;

          (p) subject to any legal obligations to bargain in good faith, and except as may otherwise be required by law, not voluntarily agree to enter into any collective bargaining agreement applicable to any employees of any Station or recognize any union as the bargaining representative of any such employees of the Station; and promptly notify Buyer upon acquiring Knowledge of any organizing activity with respect to any employees of any Station;

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          (q) follow Seller’s usual and customary policy with respect to extending credit for sales of broadcast time on any Station and with respect to collecting Receivables arising from such extension of credit;

          (r) make reasonable commercial efforts to promote and advertise each Station and its programs and make expenditures therefor in accordance with past practices consistently applied;

          (s) make reasonable efforts to endeavor to renew or extend the Licenses with the FCC in an expeditious manner;

          (t) (i) maintain in effect the Licenses that are required to carry on the business of the Stations, and (ii) timely file with the FCC all required reports and pay any required annual regulatory fees for the operation of the Stations;

          (u) not apply to the FCC for any license, construction permit, authorization (including any special temporary authorization) or modification of license that would materially restrict any Station’s operation, or make any material change in any Station’s buildings, leasehold improvements or fixtures;

          (v) not downgrade, or enter into any agreement or otherwise obligate any Station to downgrade, its broadcast transmission signal of any Station;

          (w) not offer any Station or any Purchased Asset for sale, entertain an offer to purchase the Purchased Assets or equity interests of Seller, enter into any negotiations with any Person other than Buyer for the assignment and transfer of the Purchased Assets or the equity interests of Seller, give an option to any other Person to acquire any of the Purchased Assets or equity interests of Seller or enter into any agreement or understanding, whether oral or written, that would prevent the consummation of the transactions contemplated hereby;

          (x) not by any act or omission of Seller or of its owners, stockholders, directors, officers, employees or agents, surrender, modify adversely, forfeit or fail to seek timely renewal of any License or cause the FCC to institute any proceedings for revocation, suspension or modification of any License, or fail to prosecute with due diligence, or participate in the prosecution of, the Assignment Application, renewal application or any other pending application, including all amendments thereto as necessitated by the rules of the FCC or as requested by the FCC’s staff;

          (y) not from the time of execution of this Agreement through the ninetieth (90th) day after the Closing Date, commence a voluntary case under any provision of any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or take any action to assist in or consent to the entry of an order for relief in an involuntary case under any such law or consent to the appointment of or taking possession by a receiver, or trustee or other custodian for all or a substantial part of its property;

          (z) not take or agree to take any action inconsistent with consummation of the Closing as contemplated by this Agreement; nor take any other actions with respect to the Stations except as specifically contemplated by this Agreement;

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          (aa) correct within a reasonable period of time (but in any event prior to the Closing) any Station that is operating below its authorized effective radiated power level as specified in the FCC Licenses; and

          (bb) not agree to or authorize any of the foregoing.

     6.5 Financial and FCC Reports. Within thirty (30) days after the end of each month ending after the date of the Interim Financial Statements, Seller will furnish Buyer with a copy of Seller’s monthly financial reports prepared after the date of the Interim Financial Statement (including balance sheet, operating statement and weekly pacing reports) for each such month and the fiscal year to the end of such month; and will furnish all reports filed with the FCC with respect to each Station after the date hereof within ten (10) days after each such report has been filed. All of the foregoing financial statements shall comply with the requirements concerning financial statements set forth in Section 4.11. In addition, upon Buyer’s request, Seller will furnish Buyer with copies of regular management reports, if any, concerning the operation of each Station within ten (10) days after such reports are prepared.

     6.6 Consents. Seller will, at its sole expense, use its good faith best efforts to obtain Estoppel Certificates from lessors under the Leases and all consents required from third Persons whose consent or approval is required pursuant to any Contract or Lease, prior to the Closing Date. Sellers shall advise Buyer of any difficulties experienced in obtaining such consents and of any conditions requested for any of such consents. To the extent that any Contract or Lease may not be assigned without the consent of any third party, and such consent is not obtained prior to Closing, this Agreement and any assignment executed pursuant hereto shall not constitute an assignment thereof, but to the extent permitted by law shall constitute an equitable assignment and assumption of rights and obligations under the applicable Contract or Lease, with Sellers making available to Buyer the benefits thereof and Buyer performing the obligations thereunder on Sellers’ behalf.

     6.7 Cooperation. Buyer and Seller will cooperate in all respects in connection with: (a) securing any nongovernmental approvals, consents and waivers of third parties referenced in Section 6.6 or consents of third parties necessary for the transfer of the Purchased Assets from Seller to Buyer; and (b) giving notices to any governmental authority, or securing the permission, approval, determination, consent or waiver of any governmental authority required by law in connection with the transfer of the Purchased Assets from Seller to Buyer.

     6.8 Tax Returns and Payments.

          (a) All Tax returns, estimates and reports required to be filed by Seller prior to the Closing Date or relating to periods prior to the Closing Date will be timely filed by Seller with the appropriate governmental agencies.

          (b) All Taxes pertaining to ownership of the Purchased Assets or operation of each Station prior to the Closing Date will be paid when due and payable.

          (c) Seller shall not permit to exist any Tax deficiencies (including penalties and interest) of any kind assessed against or relating to Seller with respect to any taxable periods ending on or before, or including, the Closing Date of a character or nature that could reasonably

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be expected to result in Liens (other than Permitted Liens) or claims on any of the Purchased Assets or on Buyer’s title or use of the Purchased Assets following the Closing or that would reasonably be expected to result in any claim against Buyer.

     6.9 Updating of Information; Cure. Between the date of this Agreement and the Closing Date, Seller will deliver to Buyer: (a) information necessary to update the representations and warranties and the Schedules hereto and the lists, documents and other information furnished by Seller as contemplated by this Agreement; and (b) updated copies of documents relating to or included as a part of such Schedules, in order that all such Schedules, lists, documents and other information and items shall be complete and accurate in all material respects as of the Closing Date. Such delivery shall be made promptly as such information becomes available until the Closing Date, on which date a final delivery shall be made. No such updating of the representations and warranties or the Schedules shall be deemed to cure any breach of a representation or warranty made hereunder which was not true and correct in all material respects as of the time made.

     6.10 Conveyance Free and Clear of Liens. Except for Permitted Liens and the Liens disclosed on SCHEDULE 6.10, at or prior to the Closing, Seller shall obtain the release of all Liens disclosed in the Schedules hereto and any other Liens on the Purchased Assets, and shall duly file releases of all such Liens in each governmental agency or office in which any such Lien or evidence thereof shall have been previously filed, and Seller shall transfer and convey, or cause to be transferred and conveyed, to Buyer at Closing good and marketable title to all of the Purchased Assets free and clear of all Liens, except for Permitted Liens and those Liens disclosed on SCHEDULE 6.10.

     6.11 Financing Leases. At or prior to the Closing, Seller shall obtain the release of all obligations under any Financing Leases.

     6.12 Access to and Conversion of Data. At or prior to the Closing, the Fisher Parties shall grant access to Buyer to all data generated by the Fisher Parties’ accounting and human resources software (which is a Retained Asset) related to the Business and shall cooperate with and provide assistance to Buyer its authorized agents, officers and representatives in converting its accounting and human resources data related to the Business to a customarily used electronic medium and format.

     6.13 Cooperation for Financing. At or prior to the Closing, the Fisher Parties shall cooperate with and provide reasonable assistance to Buyer and its authorized agents, officers and representatives in providing information related to the Stations and the Purchased Assets by Buyer to its lender for financing of the transactions contemplated by this Agreement, including without limitation, using Seller’s good faith best efforts to obtain and provide to Buyer (a) a landlord’s consent to encumbrance and waiver agreement from lessors under the Leases, and (b) the legal descriptions of real property leased under the Leases.

     6.14 Public Announcement. Seller shall publish and broadcast a public notice concerning the filing of the application for assignment of the Licenses in accordance with the requirements of Section 73.3580 of the FCC’s Rules. As to any other announcements, neither party hereto shall issue any press release or public announcement or otherwise divulge the

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existence of this Agreement or the transactions contemplated hereby without prior approval of the other party hereto, except as and to the extent that such party shall be obligated by law or regulation or by the rules, regulations or policies of any national securities exchange or association, in which case the other party shall be so advised and the parties shall use their best efforts to cause a mutually agreeable release or announcement to be issued.

     6.15 Restrictions on Buyer. This Agreement shall not give Buyer any right to control the programming or operations of the Stations prior to the Closing Date and Seller shall have complete control of the programming and operation of the Stations between the date hereof and the Closing Date and shall operate the Stations in conformity with the requirements of law and this Agreement.

     6.16 Correction of coordinates. Not later than July 5, 2006, the Fisher Parties will take all actions at their sole cost and expense necessary to (i) submit such applications or other documents to the FCC as are necessary to insure that the FCC License and the antenna structure registration (“ASR”) for station KBLG specify the same geographic coordinates; (ii) submit such applications or other documents to the FCC as are necessary to insure that the FCC License and ASR for station KXDR specify the same geographic coordinates; provided, however, if the FCC License for KXDR is correct and the ASR is incorrect, the Fisher Parties will use best efforts to have the tower owner/landlord correct the ASR with the FCC; and (iii) update the FCC’s ASR database such that all antenna structures owned by Seller are properly associated with and registered to Seller.

ARTICLE 7

CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER

     Each and every obligation of Buyer to be performed on the Closing Date shall be subject to the satisfaction prior to or at the Closing of the following express conditions precedent:

     7.1 Compliance with Agreement. Each Fisher Party shall have performed and complied in all material respects with all of its obligations under this Agreement which are to be performed or complied with by it prior to or at the Closing.

     7.2 Proceedings and Instruments Satisfactory. All proceedings, corporate or other, to be taken by Seller in connection with the performance of this Agreement, and all documents incident thereto, shall be complete to the reasonable satisfaction of Buyer and Buyer’s counsel and Seller shall have made available to Buyer for examination the originals or true and correct copies of all documents which Buyer may reasonably request in connection with the transactions contemplated by this Agreement.

     7.3 Representations and Warranties. The representations and warranties made by the Fisher Parties contained herein shall be true and correct in all material respects, as though such representations and warranties had been made on the Closing Date. For purposes of determining whether the conditions set forth in this Section 7.3 has been fulfilled, materiality qualifiers in the Fisher Parties’ representations and warranties in Article 4 shall be disregarded.

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     7.4 No Material Adverse Change. Between the date of this Agreement and the Closing, there shall have been no Material Adverse Effect.

     7.5 Event of Loss. Between the date of this Agreement and the Closing, neither any Station nor the Purchased Assets shall have sustained an Event of Loss which individually or in the aggregate would cost in excess Five Hundred Thousand Dollars ($500,000) to repair. If such an Event of Loss has occurred, the provisions of Section 10.1 shall be applicable.

     7.6 Deliveries at Closing. Seller shall have delivered or caused to be delivered to Buyer the documents required pursuant to Section 2.4(a) each properly executed and dated as of the Closing Date.

     7.7 Other Documents. Seller shall have delivered to Buyer such documents and certificates of Seller and public officials as shall be reasonably requested by Buyer’s counsel to establish the existence and good standing of Seller and the due authorization of this Agreement and the transactions contemplated hereby by Seller.

     7.8 Possession; Instruments of Conveyance and Transfer. Seller shall deliver to Buyer at the Closing such other documents as shall be effective to vest in Buyer good and marketable title to the Purchased Assets as contemplated by this Agreement.

     7.9 Approvals and Consent. There shall have been secured such permissions, approvals, determinations, consents, Estoppel Certificates and waivers, if any, in form and substance satisfactory to Buyer, as may be required by law, regulatory authorities, the Material Leases or the Material Contracts.

     7.10 Title Policies; Survey; Lien Search Report and Environmental Report. Buyer shall have obtained or received the items described in Section 6.2(a), (b), (c) and (d) at the time such items are required to be obtained or received as described therein. If the reports Buyer receives pursuant to Section 6.2 do not meet the requirements of Section 6.2, Buyer shall notify Seller within ten (10) business days after the respective time periods set forth in Section 6.2 or such condition shall be waived. If Buyer provides such notice, Buyer shall be entitled to terminate this Agreement and receive the return of the Escrow Deposit, together with all accrued interest, on the business day following its notice of termination. The environmental reports shall evidence no material violation of any Environmental Law that Seller has not cured or agreed to cure in a manner reasonably satisfactory to Buyer or any response, remediation or removal, or some other remedial action under the Environmental Laws (“Remedial Action”).

     7.11 Absence of Investigations and Proceedings. There shall be no decree, judgment, order or litigation at law or in equity, no arbitration proceedings, and no proceeding before or by any Governmental Body pending to which Seller is a party or to which any Station or the Purchased Assets are subject, including any with respect to condemnation, zoning, use or occupancy, which could affect in any material respect the ability of Buyer to operate any Station or to use or acquire the Purchased Assets in the same manner as operated and used by Seller or as currently proposed to be used by Seller.

Without limiting the generality of the foregoing, no action, proceeding or formal investigation by any Person or Governmental Body shall be pending with the object of challenging or preventing

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the Closing and no other proceedings shall be pending with such object or to collect damages from Buyer on account thereof. No action or proceeding shall be pending before the FCC or any other Governmental Body to revoke, modify in any material respect or refuse to renew any of the Licenses. No suit, action or other proceeding shall be pending before any court or Governmental Body in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, this Agreement or the consummation of the transactions contemplated hereby.

     7.12 Governmental Consents. The FCC Consent shall have become a Final Order without any condition or qualification that is materially adverse to Buyer; provided, however, that if a Bifurcated Closing occurs, (a) this condition shall be satisfied for purposes of the Primary Closing if the FCC Consent with respect to the Primary Stations has become such a Final Order, regardless of whether such a Final Order has been granted with respect to the Great Falls Stations, and (b) this condition shall be satisfied for purposes of the Great Falls Closing if the FCC Consent with respect to the assignment of the Licenses for the Great Falls Stations has become such a Final Order. All other authorizations, consents or approvals of any and all Governmental Bodies necessary in connection with the consummation of the transactions contemplated by this Agreement shall have been obtained on terms and conditions reasonably acceptable to Buyer and be in full force and effect.

     7.13 Licenses. Seller shall be the holder of the Licenses and there shall not have been any modification of any of such Licenses which could have a material adverse effect on any Station or the conduct of its business operations. Each Station shall be operating in material compliance with the Communications Laws and no proceeding shall be pending or threatened, the effect of which could be to revoke, cancel, fail to renew, suspend or modify materially and adversely any of the Licenses.

     7.14 Absence of Liens; Payoff Letters. On the Closing Date and simultaneously with the Closing, there shall not be any Liens on the Purchased Assets except for Permitted Liens and except for the items set forth on SCHEDULE 6.10. Seller shall deliver to Buyer copies of payoff letters for all existing indebtedness of Seller.

     7.15 Non-Foreign Affidavit. Seller shall have furnished to Buyer an affidavit of Seller, in a form reasonably satisfactory to Buyer, stating under penalty of perjury Seller’s United States taxpayer identification number and that Seller is not a foreign Person within the meaning of Section 1445(b) (2) of the Code.

     7.16 Governmental Consents. The FCC Consent shall have been issued and be in full force and effect at Closing. All other material authorizations, consents or approvals of any and all Governmental Bodies necessary in connection with the Closing shall have been obtained and be in full force and effect.

     If there is a Primary Closing or a Great Falls Closing, then the conditions shall apply to the Primary Stations or the Great Falls Stations, as applicable, unless the context shall specifically require otherwise. If any of the conditions set forth in this Article 7 have not been satisfied (other than the FCC Consent), Buyer may nevertheless waive such condition, but only in writing, and proceed with the consummation of the transactions contemplated hereby but such waiver shall not relieve Seller of any of its obligations under Article 9 hereof. Buyer shall not be

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deemed to have waived any failure by Seller to fulfill any of the conditions described in this Article 7 if Buyer does not have actual knowledge of such failure at the time of Closing.

ARTICLE 8

CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER

     Each and every obligation of Seller to be performed on the Closing Date shall be subject to the satisfaction prior to or at the Closing of the following express conditions precedent:

     8.1 Compliance with Agreement. Buyer shall have performed and complied in all material respects with all of its obligations under this Agreement which are to be performed or complied with by it prior to or at the Closing.

     8.2 Proceedings and Instruments Satisfactory. All proceedings, limited liability company or other, to be taken by Buyer in connection with the transactions contemplated by this Agreement, and all documents incident thereto, shall be complete to the reasonable satisfaction of Seller and Seller’s counsel, and Buyer shall have made available to Seller for examination the originals or true and correct copies of all documents which Seller may reasonably request in connection with the transactions contemplated by this Agreement.

     8.3 Representations and Warranties. The representations and warranties made by Buyer contained herein shall be true and correct in all material respects, as though such representations and warranties had been made on the Closing Date. For purposes of determining whether the conditions set forth in this Section 8.3 has been fulfilled, materiality qualifiers in Buyer’s representations and warranties in Article 5 shall be disregarded.

     8.4 Deliveries at Closing. Buyer shall have delivered or caused to be delivered to Seller the documents, each properly executed and dated as of the Closing Date required pursuant to Section 2.4(b). Buyer shall also have made the payments described in Section 2.2.

     8.5 Other Documents. Buyer shall have delivered to Seller such documents and certificates of officers of Buyer and of public officials as shall be reasonably requested by Seller’s counsel to establish the existence and good standing of Buyer and the due authorization of this Agreement and the transactions contemplated hereby by Buyer, including manager or board of directors resolutions of Buyer.

     8.6 Absence of Investigations and Proceedings. No action, proceeding or formal investigation by any Person or Governmental Body shall be pending with the object of challenging or preventing the Closing and no other proceedings shall be pending with such object or to collect damages from Seller on account thereof.

     8.7 Governmental Consents. The FCC Consent shall have become a Final Order; provided, however, that if a Bifurcated Closing occurs, (a) this condition shall be satisfied for purposes of the Primary Closing if the FCC Consent with respect to the Primary Stations has become such a Final Order, regardless of whether such a Final Order has been granted with respect to the Great Falls Stations, and (b) this condition shall be satisfied for purposes of the Great Falls Closing if the FCC Consent with respect to the assignment of the Licenses for the

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Great Falls Stations has become such a Final Order. All other authorizations, consents or approvals of any and all Governmental Bodies necessary in connection with the consummation of the transactions contemplated by this Agreement shall have been obtained on terms and conditions reasonably acceptable to Buyer and be in full force and effect.

     If there is a Primary Closing or a Great Falls Closing, then the conditions shall apply to the Primary Stations or the Great Falls Stations, as applicable, unless the context shall specifically require otherwise. If any of the conditions set forth in this Article 8 have not been satisfied (other than the FCC Consent), Seller may nevertheless waive such condition, but only in writing, and proceed with the consummation of the transactions contemplated hereby but such waiver shall not relieve Buyer of any of its obligations under Article 9 hereof. Seller shall not be deemed to have waived any failure by Buyer to fulfill any of the conditions precedent described in this Article 8 if Seller does not have Knowledge of such failure at the time of Closing.

ARTICLE 9

INDEMNIFICATION

     The parties shall be indemnified as set forth below.

     9.1 Indemnification of Buyer. The Fisher Parties, jointly and severally, covenant and agree with Buyer that they shall reimburse and indemnify and hold Buyer and its respective stockholders, general partners, limited partners, members, managers, directors, officers, employees, agents, affiliates, subsidiaries and assigns (the “Buyer Indemnified Parties”) harmless from, against and in respect of any and all actions, suits, claims, proceedings, investigations, audits, demands, assessments, fines, judgments, costs and expenses, (including, without limitation, reasonable attorneys’ fees) (“Claims”) incurred by any of the Buyer Indemnified Parties that result from:

          (a) any inaccuracy in or breach of any representations or warranties made by the Fisher Parties in this Agreement, the Schedules or any other written statement, list, certificate or other instrument furnished to Buyer by or on behalf of the Fisher Parties pursuant to this Agreement;

          (b) any breach of any covenant or agreement of the Fisher Parties under this Agreement or the agreements and instruments contemplated herein;

          (c) any liabilities and obligations that are Retained Liabilities;

          (d) the operation or ownership of each Station or the Purchased Assets prior to the Closing (except for the Assumed Liabilities);

          (e) any Taxes, payments, claims or accruals for salaries, wages, bonuses, vacation, severance, amounts payable under Station Employee Benefit Plans, or otherwise to employees or agents of Seller, and other liabilities and obligations of Seller, in each case relating to and incurred with respect to the periods on or prior to the Closing Date, whether or not due or payable on or prior to the Closing Date;

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          (f) any claims or litigation matters which relate or are due to the conduct of the Fisher Parties or any Station on or prior to the Closing Date, including, without limitation, the claims described in SCHEDULE 4.14 hereto;

          (g) the failure to comply with statutory provisions relating to bulk sales and transfers, if applicable;

          (h) any fees, expenses or other payments incurred or owed by the Fisher Parties to any brokers or comparable third parties retained or employed by them or their affiliates in connection with the transactions contemplated by this Agreement;

          (i) any claims made by a third party alleging facts which, if true, would entitle Buyer Indemnified Parties to indemnification pursuant to (a) through (h) above;

          (j) any failure of the Fisher Parties to comply with its obligations under this Section 9.1; or

          (k) any fees or expenses (including without limitation, reasonable attorneys’ fees) incurred by Buyer in enforcing its rights hereunder.

     For purposes of this Section 9.1, to the extent any facts or circumstances can be deemed a breach of a representation or warranty by the Fisher Parties, or be deemed a Retained Liability, such facts and circumstances shall be deemed to be a Retained Liability.

     9.2 Indemnification of Fisher Parties. Buyer covenants and agrees with the Fisher Parties that it shall reimburse and indemnify and hold the Fisher Parties and their directors, officers, employees, affiliates, subsidiaries, agents and assigns (the “Seller Indemnified Parties”) harmless from, against and in respect of any and all Claims incurred by any of Seller Indemnified Parties that result from:

          (a) any inaccuracy in or breach of any representations or warranties made by Buyer in this Agreement, the Schedules or any other written statement, list, certificate or other instrument furnished to the Fisher Parties by or on behalf of Buyer pursuant to this Agreement;

          (b) any breach of any covenant or agreement of Buyer (or any of its assigns) under this Agreement or the agreements and instruments contemplated herein;

          (c) Assumed Liabilities;

          (d) any fees, expenses or other payments incurred or owed by Buyer to any brokers or comparable third parties retained or employed by them or their affiliates in connection with the transactions contemplated by this Agreement;

          (e) any claims made by a third party alleging facts which, if true, would entitle the Seller Indemnified Parties to indemnification pursuant to (a) through (d) above;

          (f) any failure of Buyer to comply with its obligations under this Section 9.2;

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          (g) any fees or expenses (including without limitation, reasonable attorneys’ fees) incurred by the Fisher Parties in enforcing its rights hereunder; or

          (h) any claim, liability or obligation incurred or owed by Buyer relating to the operation of any Station after the Closing Date.

     9.3 Method of Asserting Claims.

          (a) The party seeking indemnification (the “Indemnitee”) will give prompt written notice to the other party or parties (the “Indemnitor”) of any Claim which it discovers or of which it receives notice after the Closing and which might give rise to a claim by it against Indemnitor under Section 9 hereof, stating the nature, basis and (to the extent known) amount thereof; provided that failure to give prompt notice shall not jeopardize the right of any Indemnitee to indemnification except to the extent such failure shall have materially prejudiced the ability of the Indemnitor to defend such Claim. Subject to the Indemnitor’s right to defend in good faith third party claims as hereinafter provided, the Indemnitor shall satisfy its obligations and this Article 9 within thirty (30) days after receipt of written notice thereof from the Indemnitee.

          (b) In case of any Claim or suit by a third party or by any Governmental Body, or any legal, administrative or arbitration proceeding with respect to which Indemnitor may have liability under the indemnity agreement contained in this Section 9, Indemnitor shall be entitled to participate therein, and, to the extent desired by it, to assume the defense thereof, and after notice from Indemnitor to Indemnitee of the election so to assume the defense thereof, Indemnitor will not be liable to Indemnitee for any legal or other expenses subsequently incurred by Indemnitee in connection with the defense thereof, other than reasonable costs of investigation, unless Indemnitor does not actually assume the defense thereof following notice of such election. Indemnitee and Indemnitor will render to each other such assistance as may reasonably be required of each other in order to insure proper and adequate defense of any such suit, Claim or proceeding. If the Indemnitor actually assumes the defense of the Indemnitee, the Indemnitee will not make any settlement of any Claim which might give rise to liability of Indemnitor under the indemnity agreements contained in this Section without the written consent of Indemnitor, which consent shall not be unreasonably withheld, and the Indemnitor shall not agree to make any settlement of any Claim which would not include the unconditional release of the Indemnitee without the written consent of Indemnitee, which consent shall not be unreasonably withheld.

          (c) If the Indemnitee shall notify the Indemnitor of any claim or demand pursuant to Section 9.3(a), and if such claim or demand relates to a claim or demand asserted by a third party against the Indemnitee which the Indemnitor acknowledges is a claim or demand for which it must indemnify or hold harmless the Indemnitee under Sections 9.1 or 9.2, the Indemnitor shall have the right to employ counsel acceptable to the Indemnitee to defend any such claim or demand asserted against the Indemnitee. The Indemnitee shall have the right to participate in the defense of any such claim or demand. The Indemnitor shall notify the Indemnitee in writing, as promptly as possible (but in any case before the due date for the answer or response to a claim) after the date of the notice of claim given by the Indemnitee to the Indemnitor under Section 9.3(a) of its election to defend in good faith any such third party claim

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or demand. So long as the Indemnitor is defending in good faith any such claim or demand asserted by a third party against the Indemnitee, the Indemnitee shall not settle or compromise such claim or demand. The Indemnitee shall make available to the Indemnitor or its agents all records and other materials in the Indemnitee’s possession reasonably required by it for its use in contesting any third party claim or demand. Whether or not the Indemnitor elects to defend any such claim or demand, the Indemnitee shall have no obligations to do so.

     9.4 Payment of Claims. Buyer shall have the right to cause any Claims it may have against the Fisher Parties, whether under this Agreement or otherwise, to be paid by reduction or offset of such Claims against any amounts payable by Buyer pursuant to this Agreement. In addition, to the extent permitted under the Escrow Agreement, Buyer may offset any such Claims against the Escrow Reserve retained by the Escrow Agent pursuant to Section 2.6 hereof. The rights contained herein shall not be exclusive, but shall be in addition to any other rights and remedies available to Buyer. If such Claims by Buyer are pending against the Fisher Parties at such time as the Escrow Reserve would otherwise be disbursed by the Escrow Agent, then, to the extent permitted by the Escrow Agreement, the Escrow Agent shall withhold from such disbursement any amount that would become necessary to satisfy such Claim until such time as such Claim has been resolved.

     9.5 Nature and Survival of Representations. All statements made by or on behalf of the Fisher Parties herein or in the Schedules, shall be deemed representations and warranties of the Fisher Parties, regardless of any investigation made by or on behalf of Buyer. The representations and warranties made by the Fisher Parties, on the one hand, and by Buyer, on the other hand, under this Agreement shall survive for a period of two (2) years following the Closing, except that (i) the representations and warranties set forth in Section 4.15 (Taxes) and Section 4.24 (Employee Benefit Plans) shall survive the Closing until ninety (90) days after the expiration of the applicable statute of limitations, and (ii) the representations and warranties set forth in Section 4.5 (Title), Section 4.21 (Brokers), Section 4.25 (Environmental Compliance) and Section 5.4 (Brokers) shall survive indefinitely.

     9.6 Limitation on Aggregate Claims.

          (a) No Claims may be asserted by a party pursuant to Sections 9.1(a) or 9.1(i) (as it relates to 9.1(a)) or 9.2(a) or 9.2(e) (as it relates to 9.2(a)) of this Agreement until the aggregate amount of all such Claims of such party shall exceed One Hundred Twenty-Five Thousand Dollars ($125,000) (the “Threshold Amount”), at which time the party seeking indemnification shall be entitled to recover all amounts in excess of the Threshold Amount; provided, however, the foregoing clause shall not apply to Claims with respect to the representations and warranties set forth in Section 4.6(d) herein which may be asserted by Indemnitor without regard to whether any Threshold Amount has been met; provided further, however, (I) no Claims may be asserted by Indemnitor pursuant to Sections 9.1(a) or 9.1(i) (as it relates to 9.1(a)) of this Agreement with respect to the representations and warranties set forth in Section 4.6(a) herein (“Equipment Claims”) until the aggregate amount of all such Equipment Claims of Indemnitor shall exceed Twenty-Five Thousand Dollars ($25,000) (the “Equipment Threshold Amount”), at which time Indemnitor shall be entitled to recover all amounts in excess of the Equipment Threshold Amount and (II) any Equipment Claims by Indemnitor up to

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$25,000 shall reduce on a dollar-for-dollar basis the Threshold Amount, but any amount in excess of $25,000 paid by the Fisher Parties shall not further reduce the Threshold Amount.

          (b) The parties acknowledge and agree that to the extent any aggregate liabilities under Tradeout Agreements on the Closing Date exceed the value of any aggregate assets from Tradeout Agreements as of the Closing Date, the amount of such excess shall reduce on a dollar-for-dollar basis the Threshold Amount; provided, however, to the extent Buyer is entitled to a Purchase Price credit in accordance with Section 2.5(d), the amount of the reduction of the Threshold Amount shall be net of the amount of such Purchase Price credit. For avoidance of doubt and by way of clarification (i) this Section 9.6(b) shall not affect Buyer’s right to receive a credit to the Purchase Price in accordance with Section 2.5(d) and (ii) the Threshold Amount shall at no time be increased or replenished.

          (c) Except for any such Claims involving fraud or intentional misrepresentation or any inaccuracy in or breach of any representations or warranties of the Fisher Parties set forth in Section 4.2 (Authorization), Section 4.5 (Title), Section 4.15 (Taxes), or Section 4.25 (Environmental Compliance), the liability of the Fisher Parties or Buyer for Claims asserted pursuant to Sections 9.1(a) or 9.1(i) (as it relates to 9.1(a)) or 9.2(a) or 9.2(e) (as it relates to 9.2(a)) shall not exceed Ten Million Dollars ($10,000,000).

ARTICLE 10

FURTHER AGREEMENTS

     10.1 Event of Loss. Upon the occurrence of an Event of Loss prior to the Closing, the Fisher Parties shall take reasonable steps to repair, replace and restore damaged, destroyed or lost property to its condition prior to any such loss, damage, or destruction. In the event of any such loss, damage, or destruction, the proceeds of any claim for any loss, payable under any insurance policy with respect thereto, shall be used to repair, replace, or restore any such property to its former condition subject to the conditions stated below. In the event of any loss or damage to the Stations or any of the Purchased Assets, the Fisher Parties shall notify Buyer thereof in writing immediately. Such notice shall specify with particularity the loss or damage incurred, the cause thereof (if known or reasonably ascertainable), and the insurance coverage. In the event that the property is not completely repaired, replaced or restored on or before the scheduled Closing Date, Buyer at its option: (a) may elect to postpone Closing until such time as the property has been completely repaired, replaced or restored (and, if necessary, the Fisher Parties shall join Buyer in requesting from the FCC any extensions of time in which to consummate the Closing that may be required in order to complete such repairs); or (b) may elect to consummate the Closing and accept the property in its then condition, in which event the Fisher Parties shall pay to Buyer all proceeds of insurance and assign to Buyer the right to any unpaid proceeds. The Fisher Parties shall have no responsibility to repair or replace damaged or destroyed Purchased Assets not covered by insurance if the cost of such repair exceeds Five Hundred Thousand Dollars ($500,000) in the aggregate; provided, however, Buyer shall have the right to accept the Purchased Assets subject to such Event of Loss and receive a Five Hundred Thousand Dollars ($500,000) credit against the Purchase Price plus all proceeds of insurance and an assignment by Seller to Buyer of the right to any unpaid proceeds; provided further, however, that should the Fisher Parties not advise Buyer within five (5) days after being requested to do so that the Fisher

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Parties will repair or replace such Purchased Assets, Buyer may terminate this Agreement without penalty upon ten (10) days’ written notice to the Fisher Parties, and upon such termination Buyer shall be entitled to have the Escrow Deposit, together with all accrued interest, returned to it on or on the business day following such termination.

     10.2 Station Employees.

          (a) Buyer specifically reserves to itself the right to employ or not employ any and all current employees of Seller at Buyer’s sole and absolute discretion. Nothing in this Agreement shall be construed as a commitment or obligation of Buyer to offer employment to, accept for employment, or otherwise continue the employment of, any of Seller’s employees, or to continue the terms and conditions of employment previously enjoyed by Seller’s employees.

          (b) To the extent any of the Stations’ employees accept employment with Buyer (collectively, the “Transferred Employees”), such Transferred Employees will be included in Buyer’s then-existing employee welfare benefit plans (if any) and will be subject to Buyer’s then-existing employment policies, as generally applicable to Buyer’s employees.

          (c) Nothing herein shall restrict Buyer’s ability to change or terminate the benefits or benefit plans provided to Buyer’s employees (including Transferred Employees), nor shall Buyer be required to provide to any employee any of the terms and conditions of employment provided by Seller, subject, however, to the requirements of any written employment agreements of Seller which Buyer agrees to assume. This Section 10.2 shall operate exclusively for the benefit of the parties to this Agreement and not for the benefit of any other Person, including, without limitation, any current, former or retired employee of Seller or Buyer.

          (d) Seller agrees that it shall be solely responsible and liable for any medical, disability, severance, vacation, sick leave or other benefits owed under Seller’s benefit plans, including, without limitation, any expenses for health or dental benefits incurred but not submitted for reimbursement prior to the Closing that are covered under Seller’s benefit plans. Seller will be solely responsible for providing, at its cost, all life and other insurance coverage and benefits, and disability benefits to which any employee of Seller who retired or was terminated from service with Seller on or prior to the Closing Date or who was disabled prior to the Closing Date is entitled.

          (e) Seller and Buyer acknowledge and agree that Buyer shall not assume any liability whatsoever for any compensation arrangement or bonus plan for any Transferred Employees, except to the extent liabilities in respect of any such amounts have been included in calculating the adjustments pursuant to Section 2.5.

          (f) Seller agrees that it will not enter into any collective bargaining agreement that would be contractually binding on Buyer without Buyer’s prior written consent. Any such collective bargaining agreement will not be effective as to Buyer until on or after the Closing Date. Seller further agrees that, upon Buyer’s request and with the consent of the labor organization, Seller will allow Buyer or its designated representative to engage in negotiations for a collective bargaining agreement with the labor organization certified by the NLRB as the representative of a group of included employees.

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     10.3 WARN Act. Seller shall be responsible for compliance with applicable provisions of the Worker Adjustment and Retraining Act, as amended (the “WARN Act”). To the extent any obligations under the WARN Act might arise as a consequence of the transactions contemplated by this Agreement, Seller shall be responsible for, and indemnify Buyer and its Affiliates (as hereinafter defined) against any losses caused by, arising from, incurred in connection with or relating in any way to, any obligations under the WARN Act arising as a result of any employment losses occurring prior to or on the Closing Date.

     10.4 Bulk Transfer. Buyer and Seller hereby waive compliance with the bulk transfer provisions of the Uniform Commercial Code and all similar laws. Except for the Assumed Liabilities, Seller shall promptly pay and discharge when and as due all liabilities and obligations arising out of or relating to Seller’s ownership, operation and sale of the Stations. Except for the Assumed Liabilities, Seller hereby agrees to indemnify, defend and hold Buyer harmless from and against any and all liabilities, losses, costs, damages or causes of action (including, without limitation, reasonable attorneys’ fees and other legal costs and expenses) arising out of or relating to claims asserted against Buyer pursuant to the bulk transfer provisions of the Uniform Commercial Code or any similar law.

ARTICLE 11

TERMINATION; MISCELLANEOUS

     11.1 Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing Date, as follows:

          (a) by mutual written agreement of Seller and Buyer; or

          (b) by written notice of Buyer to the Fisher Parties if any of the conditions set forth in Article 7 of this Agreement shall not have been fulfilled by the Closing Date or as otherwise provided herein (other than by reason of Buyer’s failure to comply with its obligations under this Agreement or its breach of representation or warranty); or

          (c) by written notice of Buyer to the Fisher Parties if the Fisher Parties have failed to cure a material breach of their representations, warranties or covenants under this Agreement within thirty (30) calendar days after they receive notice from Buyer of such occurrence; or

          (d) by written notice of Buyer to the Fisher Parties if there shall have been a Material Adverse Effect; or

          (e) by written notice of the Fisher Parties to Buyer if any of the conditions set forth in Article 8 of this Agreement shall not have been fulfilled by the Closing Date (other than by reason of a failure by the Fisher Parties to comply with their obligations under this Agreement or their breach of representation or warranty); or

          (f) by written notice of the Fisher Parties to Buyer if Buyer has failed to cure a material breach of its representations, warranties or covenants under this Agreement within thirty (30) calendar days after it receives notice from the Fisher Parties of such occurrence; or

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          (g) by Buyer or Seller by written notice to the other party, subject to Section 3.4, if the Closing has not occurred on or before one (1) year from the date hereof, other than by reason of the terminating party’s failure to comply with its obligations under this Agreement, unless one or more of the applications to transfer the Licenses are challenged by a third party, in which case this Agreement shall continue in full force and effect; provided however, this Agreement may be terminated by Buyer or Seller if the Closing has not occurred on or before the six (6) month period immediately following the expiration of the foregoing one (1) year period; or

          (h) by written notice of the Fisher Parties to Buyer or Buyer to the Fisher Parties in accordance with, and subject to the limitations of, Section 6.2(d)(III); or

          (i) by Buyer in accordance with Section 10.1 (Event of Loss).

     11.2 Rights on Termination; Waiver.

          (a) In the event of the termination of this Agreement as provided in Section 11.1 above, all further obligations of the parties under or pursuant to this Agreement shall terminate without further liability of either party to the other, except (i) as provided in Section 11.2(b) and (c) below, and (ii) for claims resulting from any breach of this Agreement prior to the termination of this Agreement. Except as set forth in Section 11.2(c), the Escrow Deposit, together with all accrued interest thereon, shall be returned promptly to Buyer pursuant to the terms of the Escrow Agreement upon termination of this Agreement.

          (b) If Buyer is the terminating party of this Agreement and such termination is pursuant to Sections 11.1(c) or (d) above and Buyer is not in material default of its obligations under this Agreement and has not breached in any material respects its representations and warranties hereunder, then Buyer shall be entitled to pursue all legal and equitable remedies against Seller for such default or breach, including specific performance (the Fisher Parties hereby acknowledge that the Purchased Assets are unique and that Buyer has no adequate remedy at law if the Fisher Parties breach this Agreement), and the Fisher Parties agree to waive the defense in any such suit that Buyer has an adequate remedy at law and to interpose no opposition, legal or otherwise, as to the propriety of specific performance as a remedy. In the event Buyer elects to terminate this Agreement as a result of the Fisher Parties’ breach instead of seeking specific performance (or if Buyer is denied the remedy of specific performance of Fisher Parties’ obligations under this Agreement), Buyer shall be entitled to (i) the return of the Escrow Deposit and all interest earned thereon, and (ii) recover from the Fisher Parties Buyer’s actual damages occasioned by the Fisher Parties’ breach, including without limitation, attorneys fees and costs, bank commitment fees, due diligence costs and other expenses reasonably incurred by Buyer in attempting to consummate the transaction contemplated by this Agreement; provided, however, the amount Buyer shall be entitled to recover pursuant to this Section 11.2(b)(ii) shall not exceed $1,600,000.

          (c) If a Fisher Party is the terminating party of this Agreement and such termination is pursuant to Section 11.1(f) above and each Fisher Party is not in material default of its obligations under this Agreement and has not breached in any material respect its representations and warranties hereunder and there shall have been no Material Adverse Effect,

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then the Fisher Parties shall be entitled to receive as liquidated damages (i) the Escrow Deposit (including all interest or other proceeds earned thereon, less any compensation due to the Escrow Agent) and (ii) the Fisher Parties’ actual attorneys fees in attempting to consummate the transactions contemplated by this Agreement, which amounts shall be substantiated by the Fisher Parties to the reasonable satisfaction of the Buyer. Such liquidated damages shall be the Fisher Parties’ sole and exclusive remedy and shall be in lieu of any other remedies at law or in equity to which the Fisher Parties might otherwise be entitled due to Buyer’s wrongful failure to consummate the transactions contemplated by this Agreement. Buyer and the Fisher Parties each acknowledges and agrees that the liquidated damage amount is reasonable in light of the anticipated harm which would be caused by Buyer’s breach of this Agreement, the difficulty of proof of loss, the inconvenience and non-feasibility of otherwise obtaining an adequate remedy, and the value of the transactions to be consummated hereunder. The parties agree that the liquidated damages provided in this Section are intended to limit the claims that the Fisher Parties may have against Buyer in the circumstances described herein.

     11.3 Further Assurances. From time to time after the Closing Date, upon the reasonable request of Buyer, any Fisher Party shall execute and deliver, or cause to be executed and delivered, such further instruments of conveyance, assignment and transfer and take such further action as Buyer may reasonably request in order more effectively to sell, assign, convey, transfer, reduce to possession and record title to any of the Purchased Assets. The Fisher Parties agree to cooperate with Buyer in all reasonable respects to assure to Buyer the continued title to and possession of the Purchased Assets in the condition and manner contemplated by this Agreement.

     11.4 Schedules. Any disclosure with respect to a Section of this Agreement requires a specific reference in the Schedules to such Section of the Agreement to which any such disclosure applies, and no disclosure shall be deemed to apply with respect to any Section to which it does not expressly apply.

     11.5 Survival. The obligations to indemnify contained in Article 9 hereof, the agreements contained herein, the representations and warranties made in this Agreement or made pursuant hereto shall survive the Closing and the consummation of the transactions contemplated by this Agreement, and shall survive any independent investigation by Buyer or Seller, and any dissolution, merger or consolidation of Buyer or Seller and shall bind the legal representatives, assigns and successors of Buyer and Seller.

     11.6 Entire Agreement; Amendment; and Waivers. This Agreement and the documents referred to herein and to be delivered pursuant hereto constitute the entire agreement between the parties pertaining to the subject matter hereof, and supersede all prior and contemporaneous agreements, understandings, negotiations and discussions of the parties, whether oral or written, and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof, except as specifically set forth herein. No amendment, supplement, modification, waiver or termination of this Agreement shall be binding unless executed in writing by the party to be bound thereby. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision or breach of this Agreement, whether or not similar, unless otherwise expressly provided.

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     11.7 Expenses. Except as otherwise specifically provided herein, whether or not the transactions contemplated by this Agreement are consummated, each of the parties hereto shall pay the fees and expenses of its respective counsel, accountants and other experts incident to the negotiation and preparation of this Agreement and consummation of the transactions contemplated hereby.

     11.8 Benefit; Assignment. This Agreement shall be binding upon and inure to the benefit of and shall be enforceable by Buyer and Seller and their respective proper successors and assigns. This Agreement may not be assigned by Buyer to another party without the prior written consent of Seller, which consent will not be unreasonably withheld; provided, however, that (a) Buyer may assign this Agreement to any entity or entities which are Affiliates of Buyer or which are direct or indirect subsidiaries of Buyer, and (b) no such assignment to such Affiliates or subsidiaries shall relieve Buyer of its obligations hereunder. With respect to any permitted assignment hereunder, the parties shall reasonably cooperate to take actions necessary to effectuate such assignment, including but not limited to cooperating in any appropriate filings with the FCC or other governmental authorities. Upon prior written notice to Seller, Buyer may make an assignment of its rights hereunder to any third party or to a voting trust solely in connection with the transactions contemplated by the Great Falls Waiver; provided, however, that failure to provide such notice shall not invalidate such assignment.

     11.9 Confidentiality; Public Announcements.

          (a) Buyer agrees that prior to Closing, Buyer and its agents and representatives shall not use for its or their own benefit (except when required by law and except for use in connection with Buyer’s financing of the transactions contemplated by, and Buyer’s investigation of the Stations and its assets in connection with, this Agreement), and shall hold in strict confidence and not disclose: (i) any data or information relating to Seller, their affiliates or the Stations obtained from Seller or any of its directors, officers, employees, agents or representatives in connection with this Agreement; or (ii) any data and information relating to the business, customers, financial statements, conditions or operations of the Stations, in each case which is confidential in nature and not generally known to the public (clauses (i) and (ii) together, “Seller’s Information”). If the transactions contemplated in this Agreement are not consummated for any reason, Buyer shall return to Seller all data, information and any other written material (including, without limitation, material in electronic form) obtained by Buyer from Seller in connection with the transactions contemplated by this Agreement and any copies, summaries or extracts thereof, and shall refrain from disclosing any of Seller’s Information to any third party or using any of Seller’s Information for its own benefit or that of any other Person.

          (b) Seller agrees that Seller and their respective agents and representatives shall not use for their own benefit (except when required by law and except for use in connection with their respective investigations and reviews of Buyer in connection with this Agreement), and shall hold in strict confidence and not disclose: (i) any data or information relating to Buyer or its affiliates obtained from Buyer, or from any of its directors, officers, employees, agents or representatives, in connection with this Agreement; or (ii) any data and information relating to the business, customers, financial statements, conditions or operations of Buyer which is confidential in nature and not generally known to the public (clauses (i) and (ii) together

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“Buyer’s Information”). If the transactions contemplated in this Agreement are not consummated for any reason, Seller shall return to Buyer all data, information and any other written material (including, without limitation, material in electronic form) obtained by Seller from Buyer in connection with this transaction and any copies, summaries or extracts thereof and shall refrain from disclosing any of Buyer’s Information to any third party or using any of Buyer’s Information for its own benefit or that of any other Person.

          (c) Prior to Closing, except as otherwise required by law or regulation or by the rules, regulations or policies of any national securities exchange or association, no party hereto will make any public announcement regarding the transactions described in this Agreement without the prior consent of the other parties hereto, which consent will not be unreasonably withheld, conditioned or delayed.

     11.10 Exclusivity. The Fisher Parties will not, after the date hereof: (a) solicit, initiate or encourage the submission of any proposal or offer from any Person relating to (i) the liquidation, dissolution, sale of assets or stock, or recapitalization of, (ii) merger or consolidation with or into, (iii) acquisition or purchase of assets of (other than in the ordinary course of business) or any equity interest in, or (iv) similar transaction or business combination, involving any Station (each, an “Alternative Transaction”), or (b) institute, pursue, or engage in any discussions, negotiations, or agreements with any Person concerning any of the foregoing, or (c) furnish any information with respect to any effort or attempt by any other Person to do any of the foregoing. The Fisher Parties will immediately notify Buyer of any offer received from third parties regarding an Alternative Transaction.

     11.11 Notices. All communications or notices required or permitted by this Agreement shall be in writing and shall be deemed to have been given at the earlier of (i) the date when sent by telecopy or facsimile machine to the number shown below, or (ii) the business day after being properly deposited for delivery by commercial overnight delivery service, prepaid, or (iii) five (5) days after deposit in the United States mail, certified or registered mail, postage prepaid, return receipt requested, and addressed as follows, unless and until either of such parties notifies the other in accordance with this Section of a change of address or change of telecopy number:

If to Buyer:	Cherry Creek Radio LLC
	501 South Cherry Street, Suite 480
	Denver, CO 80246
	Attention:       Joe Schwartz
	Telecopy No.: (303) 468-6555
With a copy to:	Lord, Bissell & Brook LLP
	1900 The Proscenium
	1170 Peachtree St., N.E.
	Atlanta, Georgia 30309
	Attention:       Neil H. Dickson, Esq.
	Telecopy No.: (404) 872-5547
If to the Fisher Parties:	Fisher Communications Inc.

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	100 4th Avenue North, Suite 440
	Seattle, WA 98109
	Attention:       Colleen B. Brown
	Telecopy No.: (206) 404-6783
With a copy to:	Graham & Dunn
	1420 Fifth Avenue, 33rd Floor
	Seattle, WA 98101
	Attention:       Jack G. Strother, Esq.
	Telecopy No.: (206) 340-9599

     11.12 Counterparts; Headings. This Agreement may be executed in counterparts, each of which shall be deemed an original, but such counterparts shall together constitute but one and the same Agreement. The Table of Contents and Article and Section headings in this Agreement are inserted for convenience of reference only and shall not constitute a part hereof.

     11.13 Income Tax Position. Neither Buyer nor Seller shall take a position for income tax purposes which is inconsistent with this Agreement.

     11.14 Severability. If any provision, clause or part of this Agreement or the application thereof under certain circumstances is held invalid, or unenforceable, the remainder of this Agreement, or the application of such provision, clause or part under other circumstances, shall not be affected thereby.

     11.15 Electronic Notices, Signatures or Records. For purposes of providing notices required or permitted by this Agreement, waiving any right under this Agreement, or amending any term of this Agreement and notwithstanding any law recognizing electronic signatures or records, “a writing signed,” “in writing” and words of similar meaning, shall mean only a writing in a tangible form bearing an actual “wet” signature in ink manually applied by the person authorized by the respective party, unless both parties agree otherwise by making a specific reference to this Section.

     11.16 Legal Actions.

          (a) This Agreement shall be construed and interpreted according to the laws of the State of Colorado, without regard to the conflict of law principles thereof.

          (b) If either Seller or Buyer initiates any legal action or lawsuit against the other involving this Agreement, the prevailing party in such action or suit shall be entitled to receive reimbursement from the other party for all reasonable attorneys’ fees and other costs and expenses incurred by the prevailing party in respect of that litigation, including any appeal, and such reimbursement maybe included in the judgment or final order issued in such proceeding. Any award of damages following judicial remedy as a result of the breach of this Agreement or any if its provisions shall include an award of prejudgment interest from the date of the breach at the maximum rate of interest allowed by the law.

[Signatures on following page]

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     IN WITNESS WHEREOF, the parties have executed this Purchase and Sale Agreement as of the day and year first above written.

“BUYER”
CHERRY CREEK RADIO LLC
By:	/s/ Joseph D. Schwartz
Name:	Joseph D. Schwartz
Its:	President / CEO
“SELLER”
FISHER RADIO REGIONAL GROUP INC.
By:	/s/ Robert C. Bateman
Name:	Robert C. Bateman
Its:	Vice President, Finance
“PARENT”
FISHER COMMUNICATIONS, INC.
By:	/s/ Robert C. Bateman
Name:	Robert C. Bateman
Its:	Senior VP & CFO

EX-10.3

EXHIBIT 10.3

STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of this 26th day of June, 2006, by and among Christopher J. Racine, an individual who is a resident of the State of Washington (“Seller”), African-American Broadcasting of Bellevue, Inc., a Washington corporation (d/b/a African-American Broadcasting Co. of Bellevue, Inc. and African-American Broadcasting Company of Bellevue, Inc. ) (the “Company”), and Fisher Broadcasting Company, a Washington corporation (“Buyer”).

RECITALS:

     WHEREAS, Seller owns Ten Thousand (10,000) shares of common stock of the Company, with no par value (the “Stock”), constituting 100% of the shares of the Company’s issued and outstanding capital stock;

     WHEREAS, the Company is the owner and licensee of Television Station KWOG(TV), Bellevue, Washington (FCC Facility ID No. 4624) (the “Station”), and holds substantially all of the assets or rights used or useful in the operation of the Station;

     WHEREAS, Seller desires to convey to Buyer and Buyer desires to acquire from Seller all of the Stock, which acquisition shall be effected as follows, pursuant to the terms and subject to the conditions of this Agreement: (i) as of the date hereof, Seller will sell to Buyer, and Buyer will acquire from Seller, 25% of the Stock of the Company, and (ii) at the subsequent closing contemplated hereby, Seller will sell to Buyer, and Buyer will acquire from Seller all of the remaining issued and outstanding Stock of the Company;

     WHEREAS, contemporaneously with the execution of this Agreement, the Company and Buyer are entering into a Local Marketing Agreement for the Station (the “LMA”); and

     WHEREAS, the parties recognize that control of the Company may not be conveyed to Buyer without the prior consent of the Federal Communications Commission (the “FCC” or “Commission”).

     NOW, THEREFORE, in consideration of the mutual promises and covenants set forth below, the parties, intending to be legally bound, agree as follows:

ARTICLE 1
SALE OF STOCK

     On the terms and subject to the conditions set forth in this Agreement, (a) on the date hereof, Seller shall, and does hereby, assign, transfer, convey and deliver to Buyer, and Buyer shall, and does hereby, acquire from Seller, all of the right, title and interest of Seller in and to Two Thousand Five Hundred (2,500) shares of the Stock (the “Initial Shares”), free and clear of Liens, except for Permitted Liens (as defined below), and (b) on the Closing Date (as defined in Article 3), Seller shall assign, transfer, convey and deliver to Buyer, and Buyer shall acquire from Seller, all of the right, title and interest of Seller in and to Seven Thousand Five Hundred

(7,500) shares of the Stock (the “Closing Shares”), constituting all of the remaining shares of the Stock, free and clear of Liens, except for Permitted Liens. As used herein, the term “Liens” means all liens, pledges, claims, orders, security interests, writs, judgments, possessory interests, options and encumbrances of any kind, and the term “Permitted Liens” means liens for taxes not yet due and payable.

ARTICLE 2
PURCHASE PRICE

2.1. Purchase Price. The aggregate purchase price to be paid by Buyer to Seller for the Stock shall be Sixteen Million Dollars ($16,000,000.00) (the “Purchase Price”), due and payable as set forth in Section 2.2.

2.2. Payment of Purchase Price.

     (a) Upon execution of this Agreement, in consideration for the Initial Shares, Buyer will pay to Seller the sum of Four Million Dollars ($4,000,000.00) by wire transfer of immediately available funds to an account specified by Seller.

     (b) At the Closing, in consideration for the Closing Shares Buyer will pay to Seller the sum of Twelve Million Dollars ($12,000,000.00) by wire transfer of immediately available funds to accounts specified by Seller.

2.3. Prorations and Adjustments. All revenues and expenses arising from the Company’s business shall be prorated between Seller and Buyer in accordance with the principle that, except as expressly otherwise set forth in this Agreement or the LMA, (a) Seller shall be entitled to the benefit of all revenues, and shall be responsible for all expenses, relating to the business and operations of the Company for the period ending at 11:59 p.m. on the day prior to the Closing Date, and (b) Buyer shall be entitled to the benefit of all revenues, and be responsible for all expenses, relating to the business and operations of the Company thereafter. The outstanding debts of the Company (if any) at Closing, associated with the Liens identified in Schedule 5.10 hereto (the “Closing Liens”) shall be discharged and paid at the Closing, and the funds transferred to Seller pursuant to Section 2.2(b) will be reduced by the Payoff Amount (if applicable) pursuant to Section 13.2(a). Except as otherwise provided herein, the prorations and adjustments contemplated by this Section, to the extent practicable, shall be made on the Closing Date. As to those prorations and adjustments not capable of being ascertained on the Closing Date, an adjustment and proration shall be made within ninety (90) calendar days of the Closing Date. In the event of any disputes between the parties as to such prorations and adjustments, the amounts not in dispute shall nonetheless be paid at the time provided herein and such disputes shall be determined by an independent certified public accountant mutually acceptable to the parties, and the fees and expenses of such accountant shall be paid one half by Buyer and one half by Seller.

ARTICLE 3
CLOSING

3.1. Closing with respect to the Initial Shares. The consummation of the transaction contemplated in this Agreement with respect to the purchase and sale of the Initial Shares (the

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“Initial Closing”) shall take place simultaneously with the execution and delivery of this Agreement. Subject to the delivery by Buyer of the payment contemplated in Section 2.2(a), Seller shall deliver to Buyer one or more certificates representing the Initial Shares accompanied by stock powers endorsed in blank, sufficient to convey and transfer to Buyer title to the Initial Shares (the “Initial Stock Certificate”), and the Company shall, and Seller shall cause the Company, to record such transfer to Buyer of the Initial Shares in its books and records. The Initial Closing shall be conducted by exchange of executed documents by facsimile or other electronic delivery with originals to be delivered by overnight courier service, or at such place as the parties hereto may agree.

     (a) The obligations of Buyer to consummate the transactions contemplated by this Agreement for the Initial Closing are subject to the satisfaction or waiver by Buyer of the condition that all representations and warranties of Seller made in this Agreement or in any exhibit, schedule or document delivered pursuant hereto (a) if qualified by materiality, shall be true and complete in all respects and (b) if not so qualified, shall be true and complete in all material respects, as of the date hereof.

     (b) Subject to the delivery by Buyer of the payment contemplated in Section 2.2(a), as of the date hereof, together with the Initial Stock Certificate, Seller shall deliver to Buyer the following:

          (i) a copy of the articles of incorporation of the Company, certified as of a date no earlier than five (5) days prior to the Initial Closing;

          (ii) a certificate of the Secretary of the Company, dated as of the date hereof, certifying a copy of the bylaws of the Company in effect as of such date;

          (iii) a certificate, dated as of the date hereof, executed by Seller, certifying that the conditions set forth in Section 3.1(a) have been fulfilled;

          (iv) an opinion of corporate counsel to the Company in a form reasonably agreeable to Buyer, in the form set forth in Exhibit A attached hereto; and

          (v) a certificate of the Secretary of the State of Washington as of a date no earlier than five (5) days prior to the date hereof regarding the due incorporation and good standing of the Company.

3.2. Closing with respect to the Closing Shares. The consummation of the transactions contemplated in this Agreement with respect to the purchase and sale of the Closing Shares (the “Closing”) shall occur within five (5) business days after (a) the FCC Consent (as defined in Section 4.1) to the transfer of control of the Station Licenses, and (b) all other terms and conditions as set forth in Articles 10 and 11 have been satisfied (the “Closing Date”). Notwithstanding the foregoing, should a petition to deny or other protest be filed against the FCC Application (as defined in Section 4.2) on or before the Closing Date, Buyer may elect to postpone the Closing until five (5) business days after the FCC Consent has become a Final Order, provided, however, that in the event that Buyer elects to exercise the right under the provisions of this sentence prior to September 28, 2006, Buyer may not delay the Closing Date past September 28, 2006. For purposes of this Agreement, a “Final Order” shall mean action by

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the FCC granting the FCC Application that is not reversed, stayed, enjoined, set aside, annulled or suspended, and with respect to which no timely request for stay, petition for rehearing or reconsideration, application for review or appeal is pending, and as to which the time for filing any such request, petition, application or appeal, or for reconsideration by the FCC on its own motion, has expired. The Closing shall be conducted by exchange of executed documents by facsimile or other electronic delivery with originals to be delivered by overnight courier service, or at such place as the parties hereto may agree. In the event that the Closing shall occur prior to the date on which the FCC Consent has become a Final Order and the FCC Consent subsequently is reversed or otherwise set aside, the parties shall take those steps necessary to unwind the transaction and place the parties, to the extent possible, in the position in which they were situated prior to the Closing.

ARTICLE 4
GOVERNMENTAL CONSENTS

4.1. Consents. The occurrence of the Closing is subject to and conditioned upon prior FCC consent (the “FCC Consent”) to the transfer of control of the Station Licenses to Buyer.

4.2. FCC. Within five (5) business days following the date of execution of this Agreement, Seller and Buyer shall file an application with the FCC (the “FCC Application”) requesting the FCC Consent. Buyer and Seller shall diligently prosecute the FCC Application and otherwise use their best efforts to obtain the FCC Consent as soon as possible.

4.3. General. Seller and Buyer shall notify each other of all documents filed with or received from any Governmental Entity with respect to this Agreement or the transactions contemplated hereby. Seller and Buyer shall furnish each other with information and assistance as the other may reasonably request in connection with its preparation of any governmental filing hereunder.

4.4. License Renewal. Seller and the Company each acknowledges that the Station’s license renewal application is due to be filed with the FCC on or before October 2, 2006. If such renewal application is due prior to Closing Date and if not previously filed, the Company shall, and Seller shall cause the Company to, timely file the FCC license renewal application for the Station and thereafter prosecute such application with commercially reasonable diligence. If necessary to expedite grant of the renewal application, the Company agrees to, and Seller agrees to cause the Company to, enter into a standard “tolling agreement” with the FCC. The parties acknowledge that under current FCC policy, either the FCC will not grant a transfer of control application while a renewal application is pending, or the FCC will grant a transfer of control application with a renewal condition. If grant of the FCC Application is subject to a renewal condition, then the term “FCC Consent” shall mean FCC grant of the FCC Application and satisfaction in full of all such renewal conditions.

ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY

     Each of Seller and the Company, jointly and severally, hereby make the following representations and warranties to Buyer:

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5.1. Organization, Authority and Binding Agreements. The Company is a corporation, duly organized, validly existing and in good standing under the Laws of the State of Washington. The Company has all requisite corporate power and authority to own, lease, operate or otherwise hold the assets owned, leased or otherwise held by it and to carry on its business and operations, including the business and operations of the Station (the “Station Business”) as now being conducted. The Company has full legal right and capacity to execute, deliver and perform the documents contemplated hereby to which the Company is a party according to their respective terms and such documents contemplated hereby shall be duly executed and delivered by the Company and shall constitute legal, valid and binding agreements of the Company enforceable in accordance with their terms, except to the extent that (a) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or hereafter in effect relating to creditor’s rights generally and (b) the remedy of specific performance or injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

5.2. Absence of Conflicting Agreements or Required Consents. Except for the FCC Consent contemplated in this Agreement, the execution and delivery of this Agreement shall not: (a) violate, conflict with or result in any breach or default of any provision of the organizational documents of the Company, (b) violate any applicable statute, ordinance, law, judgment, settlement, order, injunction, decree, rule, regulation or ruling of any court administrative agency or commission or other governmental entity or instrumentality (a “Governmental Entity”) applicable to Seller or the Company; or (c) either alone or with the giving of notice or the passage of time, violate the terms, conditions or provisions of, or constitute a default or breach under, any agreement, commitment, instrument, license or permit to which Seller or the Company is now subject.

5.3. Capitalization. The Stock constitutes the entire authorized capital stock of the Company. No other shares of stock of the Company are issued or outstanding. The Stock has been duly authorized and is validly issued, fully paid and non-assessable. Seller owns and holds all legal and beneficial right, title and interest in and to the Stock, free and clear of all Liens, except Permitted Liens, and the authorization of no other person or entity is required in order to consummate the transactions contemplated herein by virtue of any such person or entity having an equitable or beneficial interest in the Company or the Stock. No shares of the capital stock of the Company are held in the treasury of the Company. There are no outstanding subscriptions, options, warrants, rights, calls, commitments, conversion rights, rights of exchange, plans or other agreements of any character providing for the purchase, issuance, redemption, or sale of any shares of Stock of the Company, nor are there any other rights to acquire shares of the capital stock of the Company or securities of any kind convertible or exchangeable into or for any capital stock of the Company. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or similar rights with respect to Company. There are no stockholder agreements, voting trusts, proxies, or other agreements or understandings with respect to the voting or transfer of any of the Stock. The Company has no subsidiaries and holds no capital stock or securities in any other person; the Company is not a member of any limited liability company or partner in any partnership. The Company is not a participant in any joint venture or similar arrangement. The Company does not own directly or indirectly, any capital stock or other equity or ownership interest in any corporation, partnership, limited liability company or other entity. Seller is the sole director and holds each office of the Company.

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5.4. Compliance with Applicable Laws; FCC Matters.

     (a) Except as permitted or contemplated in this Agreement, the Station Business, including the operation of the Station is being conducted in material compliance with all licenses, permits and other authorizations issued to the Company by the FCC with respect to the Station (the “Station Licenses”) and with each law, ordinance, regulation, judgment, decree, injunction, rule or order (“Laws”) applicable to the Company or the Station Business. No investigation or review by any Governmental Entity with respect to the Company or the Station is pending or, to Seller’s or the Company’s knowledge, threatened. When used throughout this Agreement, the term “knowledge” when applied to the Company shall mean the actual knowledge of Racine, and the Company shall be deemed to have “knowledge” of the contents of any written communication actually received by the Company at the Station’s studio in Seattle or office in Honolulu. Without limiting the generality of the foregoing and with respect to the Station and the Station Business, the operations of the Station comply in all material respects with the Communications Act of 1934, as amended (the “Communications Act”), and all rules, regulations and written policies of the FCC thereunder (collectively, with the Communications Act, the “Communications Laws”).

     (b) Except as disclosed in Schedule 5.4(b) attached hereto, the Company has duly filed, or caused to be filed, with the appropriate Governmental Entities all applications, reports, statements, fees, documents, registrations, filings or submissions with respect to the business or operations of the Station and the ownership thereof, including applications for renewal of authority required to be filed by applicable Law. Attached hereto as Schedule 5.4(b) is a true and complete list all of the Station Licenses, and includes a true and complete list as of the date of this Agreement of all main station, translator, microwave, low power television and transmitting earth station licenses (if any) and the date on which each expires. The FCC Licenses listed on Schedule 5.4(b) constitute all of the licenses and authorizations required under the Communications Laws for, or used in, the Station Business as currently conducted. Each Station License is in full force and effect, and the Company is the sole and authorized legal holder thereof. The Station is operating in all material respects in accordance with the terms of the Station Licenses.

     (c) Except as disclosed in Schedule 5.4(c), there is no action by or before the FCC pending or, to the knowledge of Seller or the Company, threatened to revoke, suspend, cancel, rescind or terminate any of the FCC Licenses (except for those affecting the broadcast industry generally), and there is not now issued or outstanding or pending or overtly threatened, by or before the FCC, any order to show cause, notice of violation, notice of apparent liability, notice of forfeiture or materially adverse order, or material complaint, investigation or other proceeding (except for those affecting the broadcast industry generally) against the Seller, the Company, the Station or the Station Licenses. Neither Seller nor the Company is aware of any reason why the Station Licenses will not be renewed by the FCC, on the timely filing of a renewal application and payment of the applicable fee, in the ordinary course without the imposition of any fine or other sanction.

     (d) Except as set forth on Schedule 5.4(d), the Company has timely made must-carry elections on behalf of the Station with respect to each cable and satellite multichannel video

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program distributor (“MVPD”) serving the DMA in which the Station is located, and its signal is currently carried by each such MVPD pursuant to such election.

5.5. Litigation. There is no claim, action, suit, litigation, inquiry, judicial, tax or administrative proceeding, or arbitration in progress or pending or, to the knowledge of Seller or the Company, threatened against, involving or arising in connection with the Company, or against Seller or the Station. No complaint was filed during the present FCC license term of the Station before any Governmental Entity that alleges unlawful discrimination in the employment practices of the Company with respect to the Station. The Company is not subject to any judgment, order or decree entered in any lawsuit or proceeding.

5.6. Insurance. Schedule 5.6 is a true and complete list of all insurance policies of the Company. All policies of insurance listed in Schedule 5.6 are in full force and effect as of the date of this Agreement. The Company maintains sufficient insurance or other arrangements with respect to the Station such that the Station assets can be replaced in the event of damage or destruction. No event or claim has occurred, including the failure by the Company to give any notice or information, or the delivery of any inaccurate or erroneous notice or information, or any reservation of rights, which limits or impairs, or could limit or impair, the rights of the insured parties under any such insurance policies.

5.7. Real Property Leases. Schedule 5.7(i) identifies and describes all real property interests (the “Real Property”), used in or held for use in connection with the business of the Company, including the Station Business. The Company does not own, nor has agreed or has an option, to acquire any Real Property. The Company has a valid leasehold or license interest in all of the Real Property and Schedule 5.7(ii) includes complete copies of all leases or licenses for Real Property, including the Company’s leases for the Station’s studio and transmitter/antenna site (collectively, the “Real Property Leases”), including all amendments thereto. The Company is the sole owner and holder of all of the leasehold or license interests and estates purported to be granted by such Real Property Leases. To Seller’s or the Company’s knowledge, the Real Property Leases are in full force and effect and are binding and enforceable in accordance with their terms. The Company has timely performed its obligations under the Real Property Leases. There is no default or claim of default or breach against the Company or, to Seller’s or the Company’s knowledge, against any other party to the Real Property Leases, or any event or circumstance that, with the passage of time or the giving of notice or both, would result in (i) a default by the Company or (ii) to Seller’s or the Company’s knowledge, a default by any other party to the Real Property Leases. No notice of termination, foreclosure, eviction, or possession has been received by the Company with respect to the Real Property Leases. To Seller’s or the Company’s knowledge, there are no eminent domain proceedings pending or threatened with respect to the real property upon which the studio, tower and transmitter building are located. The Real Property and all appurtenances and improvements thereto or thereon, as used, constructed or maintained by the Company at any time, conform to applicable Laws (including all building, fire, health and environmental Laws) and no notices of violation of any such Laws have been received by the Company from any Governmental Entity with respect to any Real Property. The Real Property (including the improvements thereon) (y) is in good operating condition and repair (ordinary wear and tear excepted) and no condition exists which could reasonably be expected to interfere with the customary use and operation thereof and (z) is available for immediate use in the conduct of the Station Business. The Company does not lease

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to any third party any Real Property and there are no subtenants with respect to any of the Real Property. To Seller’s or the Company’s knowledge, no financing statements have been filed by any party with respect to the Real Property Leases.

5.8. Tangible Personal Property. Attached hereto as Schedule 5.8(i) is a true and complete list of all equipment, antennas, transmitters and other tangible personal property of every kind and description owned, leased or licensed by the Company, which is used or held for use in the operation of the Station (the “Tangible Personal Property”). The Company owns and possesses good and marketable title to all Tangible Personal Property and none of such Tangible Personal Property is subject to any Liens, other than Permitted Liens and the Liens identified in Schedule 5.10 below. The Tangible Personal Property is in good working condition, with reasonable wear and tear for its age. To Seller’s or the Company’s knowledge, no financing statements have been filed by any party with respect to the tangible personal property of the Company, except as set forth in Schedule 5.8(ii).

5.9. Contractual and Other Obligations. Attached hereto as Schedule 5.9 is a true and complete list of all those contracts, agreements and leases, licenses, whether written or oral to which the Company is a party (the “Material Station Contracts”), except for (i) orders for the purchase of supplies, and (ii) routine maintenance contracts, in each case entered into in the ordinary course of business, having an unexpired term of less than three (3) months and involving aggregate remaining payments of less than One Thousand Dollars ($1,000) ((i) and (ii), the “Ordinary Course Contracts”). All of the Ordinary Course Contracts, in the aggregate, do not involve payment of more than Five Thousand Dollars ($5,000). Neither the Company nor, to the knowledge of Seller or the Company, any other party thereto is in material default in the performance of any covenant or condition under any Material Station Contract or Ordinary Course Contract (collectively, the “Contracts”). No claim of such a default has been made and, to the knowledge of Seller or the Company, no event has occurred that, with the giving of notice or the lapse of time, would constitute such a default under any covenant or condition under any Material Station Contract. All of the Material Station Contracts are, and on the Closing Date, will be, in full force and effect, constituting valid and binding obligations of the parties thereto and enforceable in accordance with their respective terms. Schedule 5.9 identifies each Material Station Contract containing a “change of control” provision or otherwise requiring the consent of a third party with respect to the such Material Station Contract upon the consummation of the transactions contemplated for the Closing.

5.10. Liens and Encumbrances. Except as set forth in Schedule 5.10, all of the Company’s assets and the Stock, are free and clear of all Liens, other than Permitted Liens. The outstanding debts of the Company (if any) on the Closing Date, associated with the Closing Liens shall be paid at the Closing, and such Closing Liens shall be terminated on and as of the Closing Date, whether pursuant to Section 13.2(a) or otherwise.

5.11. Environmental Matters.

     (a) To Seller’s or the Company’s knowledge, the Company, in its operation and conduct of the Station Business, including the conduct of its activities with respect to the Real Property, has complied in all material respects with all applicable federal, state and local statutes, codes, rules, ordinances or regulations as well as common law decisions relating to the

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environment, natural resources and public or employee health and safety (collectively, the “Environmental Laws”). The Company has obtained all environmental, health and safety permits necessary for the operation and the conduct of the Station Business (if any), all such permits are in full force and effect, and, to Seller’s or the Company’s knowledge, the Company is in compliance with the terms and conditions of all such permits. There are no outstanding Liens on the Company’s interest in the Real Property under any Environmental Laws.

     (b) No judicial or administrative proceedings are pending or, to Seller’s or the Company’s knowledge, threatened against the Company in connection with the Company or the Station Business alleging the violation of or seeking to impose liability on the Company or otherwise involving the Real Property or the operations conducted on or in the Real Property, pursuant to any Environmental Law. No notice or claim from any Governmental Entity or other person has been received by the Company claiming any violation of or alleging any liability under any Environmental Laws in connection with the Real Property Leases or the Station.

     (c) To Seller’s or the Company’s knowledge, substances, materials or waste that are regulated by federal, state or local government under the Environmental Laws as hazardous, toxic or a pollutant or contaminant, as well as any petroleum or petroleum derived product, used or generated by the Company in connection with the Station (collectively, the “Hazardous Substances”), have not been stored, used, treated, and disposed of by the Company or on its behalf in such manner as to result in any material Environmental Costs or Liabilities. The term “Environmental Costs and Liabilities” means any losses, including environmental remediation costs, clean up funds, liabilities, obligations, damages, fines, penalties or judgments arising from or under any Environmental Law or order of or agreement with any Governmental Entity or other person. To Seller’s or the Company’s knowledge, no asbestos-containing material is present on or in the Real Property, and to Seller’s or the Company’s knowledge, the Real Property and all operations conducted by the Company thereon or therein are in compliance with all federal and state regulations relating to asbestos. To Seller’s or the Company’s knowledge, the Real Property is in compliance with all Environmental Laws and there has been no release (nor is there any substantial threat of a release) of any Hazardous Substance at or from the Real Property in amounts or concentrations requiring remediation under current Environmental Laws. To Seller’s or the Company’s knowledge, there are no Hazardous Substances present on or in the Real Property except for ordinary quantities of properly stored Hazardous Substances found in consumer or commercial products that are used in the normal course of operations of the Company, including grounds and building operation and maintenance. To Seller’s or the Company’s knowledge, there are no underground storage tanks, or underground piping associated with such tanks, used for the management of Hazardous Substances on the Real Property and, to Seller’s or the Company’s knowledge, there are no abandoned underground storage tanks at the Real Property which have not been either abandoned in place or removed (to the extent required by Environmental Laws in effect at the time such storage tanks, if any, were abandoned or removed), pursuant to notice to or authorization from the applicable Governmental Entity.

5.12. Taxes.

     (a) All Tax Returns (as defined below) that are required to be filed on or before the execution of this Agreement on or behalf of the Company have been filed, and the Company will

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file or will cause to be filed all Tax Returns required to be filed by the Company as of the Closing Date and with respect to any taxable period prior to or which includes the Closing Date. All such Tax Returns are (or will be) complete and accurate in all material respects. All Taxes which are due with respect to the Company have been paid by the Company. The provision made for taxes on the Financial Statements is sufficient for the payment of all Taxes for which the Company may be liable as of the Closing Date and for all years and periods prior thereto. The Company has not requested any extension of time within which to file or send any Tax Return (and no such request has been made on behalf of the Company), which Tax Return has not since been filed or sent within the proper time period. The Company has maintained all required records relating to Taxes with respect to the Company and the Station Business.

     (b) No claim, judgment, Lien, settlement, writ, or order for assessment or collection of Taxes is pending against the Company, and no asset of the Company and none of the Stock is subject to any Lien for due Taxes. The Company is not party to any pending audit, action, suit, claim, litigation, proceeding or investigation by any Governmental Entity for the assessment or collection of Taxes, nor does Seller have knowledge of any such threatened audit, suit, claim, litigation, action, proceeding or investigation. There are no outstanding agreements or waivers extending the statutory period of limitations applicable to any Tax Return filed by or on behalf of the Company. All amounts required to have been withheld or collected by the Company for all periods prior to the Closing Date in compliance with the withholding or collection provisions of all applicable Tax jurisdictions have been timely paid by the Company to the proper governmental authorities or properly deposited or are provided for in the Financial Statements to the extent not required to be paid or deposited prior to the Closing Date.

     (c) For purposes of this Agreement, the terms “Tax” and “Taxes” shall mean all federal, state, local, or foreign income, payroll, Medicare, Medicaid, withholding, unemployment insurance, social security, Federal Insurance Contribution Act, sales, use, service, excise, franchise, gross receipts, value added, alternative or add on minimum, occupation, real and personal property, stamp, duty, document, transfer, workers’ compensation, or other tax, levy or assessment of the same or of a similar nature, including any interest, penalty, or addition thereto, whether disputed or not. The term “Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes or any amendment thereto, and including any schedule or attachment thereto.

     (d) The Company has never (i) filed any consent or agreement under Section 341(f) of the Code, (ii) entered into a closing agreement with any tax authority affecting any period after the Closing Date, (iii) made any payments, or been a party to an agreement (including this Agreement) that could obligate it to make payments that will not be deductible because of Section 280G of the Code, or (iv) been party to a tax allocation or tax sharing agreement affecting any period after the date of this Agreement.

5.13. Financial Statements and Conditions. Set forth on or attached to Schedule 5.13 are the following financial statements (the “Financial Statements”) in respect of the Station: (a) the balance sheets as of the end of the fiscal years ended December 31, 2003, 2004 and 2005, and the related profit and loss statements, on an accrual basis, for the respective fiscal years then ended, and (b) the balance sheet as of June 10, 2006 and the related statement profit and loss statement, on an accrual basis, for the period from January 1, 2006 through June 10, 2006. The

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Financial Statements present fairly the financial condition of the Company at the respective dates thereof and the results of operations of the Station Business for the periods then ended, and are true and complete in all material respects. There are no liabilities or obligations of the Company of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, of a nature required by standard broadcast industry accounting practices to be reflected in financial statements other than (y) liabilities disclosed or provided for in the Financial Statements and (z) liabilities incurred in the ordinary course of business consistent with past practice since June 10, 2006 (the “Financial Statements Date”) that are not material to the Company and, to Seller’s or the Company’s knowledge, there is no circumstance currently existing that could reasonably be expected to result in any such liability or obligation. Together with the Financial Statements, accurate and complete copies of the books and records of the Company for the period beginning January 1, 2001, and ending on the date hereof will be made available to Buyer upon reasonable notice.

5.14. Absence of Certain Changes or Events. Except as set forth in Schedule 5.14, since the Financial Statements Date, Seller has operated the Station in the ordinary course of business consistent with past practice, and there has not been in connection with or related to the Station:

     (a) any obligation or liability (whether absolute, accrued, contingent or otherwise, and whether due or to become due) incurred by the Company, other than current obligations and liabilities incurred in the ordinary course of business and consistent with past practice;

     (b) any payment, discharge or satisfaction of any claim or obligation of the Company, except in the ordinary course of business and consistent with past practice;

     (c) any sale, assignment or other disposition of any tangible asset of the Company (except for obsolete equipment disposed of in the ordinary course of business consistent with past practice) or any sale, assignment, license, transfer or other disposition of any Intellectual Property Rights (as hereinafter defined) or any other intangible assets;

     (d) except in the ordinary course of business, any amendment, modification or termination of any Material Station Contract;

     (e) any creation of any material claim or Lien (other than Permitted Liens) on any property of the Company;

     (f) any material write-down of the value of any asset of the Company or any material write-off as uncollectible of any account receivable or any portion thereof;

     (g) any acceleration in the collection of accounts receivable of the Company;

     (h) any adverse change in cable carriage or channel position on which the Station is carried (on any cable system with more than 1,000 subscribers);

     (i) any notice from any of the Station’s sponsors as to any of such sponsor’s intention not to conduct business with the Station, the result of which loss or potential loss of business, individually or in the aggregate, has had, or could reasonably be expected to have, a Material Adverse Effect;

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     (j) any period of four (4) or more consecutive days during which the Station was off the air for any reason or a period of fifteen (15) or more days during which the Station operated at substantially reduced power;

     (k) any cancellation of any debts or claims or any amendment, termination or waiver of any rights of value to Seller;

     (l) any capital expenditure or commitment or addition to property, plant or equipment of the Company, individually or in the aggregate, in excess of Five Thousand Dollars ($5,000);

     (m) any increase in the compensation of any employee, officer, shareholder, director, consultant or agent of the Company, including any increase pursuant to any bonus, pension, profit-sharing or other benefit or compensation plan, policy or arrangement or commitment;

     (n) any material damage, destruction or loss (whether or not covered by insurance) affecting any asset or property of the Company;

     (o) any cancellation, delinquency or loss of any permit, approval, franchise, concession, license or other governmental authorization;

     (p) any institution of, settlement of or agreement to settle any litigation, arbitration, action or proceeding;

     (q) any change in the accounting methods or accounting practices followed by the Company or any change in depreciation or amortization policies or rates;

     (r) any Material Adverse Effect (which, for purposes of this Agreement, means (i) any effect that is materially adverse to the business, assets, operations, condition (financial or otherwise), prospects, or results of operations of the Company and the Station Business taken as a whole, but excluding from this clause (i) any such effect resulting from or arising in connection with (A) changes or conditions generally affecting the broadcast television industry (except in the case of this clause (A) if the impact on the Station Business is materially disproportionate to the impact on broadcast television) or (B) changes in United States general economic, regulatory or political conditions, (ii) any effect with respect to the Station Business that materially impacts, materially delays or prevents the consummation of the transactions contemplated hereby, including the grant of the FCC Consent, (iii) an effect that creates a material limitation on the ability of the Buyer to conduct the Station Business as conducted immediately prior to the Initial Closing or Closing, as applicable, or (iv) an effect that creates a limitation in the ability of Buyer to acquire valid and marketable title to the Stock free and clear of all Liens (other than Permitted Liens)).

     (s) any agreement or action not otherwise referred to in items (a) through (r) above entered into or taken that is material to the Station Business; or

     (t) any agreement or commitment, whether in writing or otherwise, to take any of the actions specified in the foregoing items (a) through (s).

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5.15. Assets of the Business. The assets owned, leased or licensed by the Company and reflected in the Financial Statements constitute all of the assets used or held for use by the Company (other than such items as can be readily purchased or licensed at retail and the purchase, lease or license of which would not, in the aggregate, have a material effect) and such assets are adequate to carry on the Station Business as it is presently conducted.

5.16. Employee Benefits.

     (a) Neither the Company, nor any person who would be considered a single employer with the Company pursuant to Section 414(b), (c), (m) or (o) of the Internal Revenue Code (“Code”) (an “ERISA Affiliate”), maintains or contributes to or has any obligation to contribute to, any employment, consulting or deferred compensation agreement, or an executive compensation, bonus, pension, profit sharing, savings, retirement, stock option or other equity based compensation, severance pay, life, medical, dental, death benefit, disability or accident insurance plan or any other “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (individually, a “Seller Plan”, and collectively, the “Seller Plans”).

     (b) Neither the Company nor any ERISA Affiliate maintains or contributes to, nor has ever had any obligation to maintain or contribute to, any Seller Plan that is (i) subject to Title IV of ERISA or Section 412 of the Code, (ii) a “multiemployer plan” within the meaning of Section 3(37) or 4001(a)(3) of ERISA, (iii) a “multiple employer plan” within the meaning of the Code or ERISA, (iv) any “employee benefit plan” (as defined in Section 3(3) of ERISA) which provides welfare benefits to or in respect of former employees, except as may be required pursuant to Section 4980B of the Code and Section 601, et seq. of ERISA (“COBRA”) and the cost of which are fully paid by such former employees.

     (c) The consummation of the transactions contemplated by this Agreement will not (i) accelerate the time of the payment or vesting of, or increase the amount of, compensation due to any employee or former employee, (ii) reasonably be expected to result in any “excess parachute payment” under Section 280G of the Code, (iii) result in any liability to any present or former employee, including as a result of the Worker Adjustment Retraining and Notification Act or any similar state Law, or (iv) entitle any employee or former employee to severance pay, unemployment compensation or similar payment.

     (d) The Company has not announced any plan or legally binding commitment to create a Seller Plan.

5.17. Employment and Labor Matters.

     (a) The Company is not a party to any contract with any labor organization with respect to employees of the Station, the Company has not agreed to recognize any union or other collective bargaining unit with respect to employees of the Station, nor has any union or other collective bargaining unit been certified as representing any of the Station employees.

     (b) The Company has not violated any provision of federal or state Law or any governmental rule or regulation, or any order, decree, judgment arbitration award of any court, arbitrator or any government agency regarding the terms and conditions of employment of

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employees, former employees or prospective employees or other labor related matters, including laws, rules, regulations, orders, rulings, decrees, judgments and awards relating to discrimination, fair labor standards and occupational health and safety, wrongful discharge or violation of the personal rights of employees, former employees or prospective employees.

     (c) Schedule 5.17 sets forth a true and correct list of the employees of the Company, as of the date hereof, together with each such individual’s title, annual compensation, and date employment commenced with the Company. Except (i) for oral employment contracts terminable at will, or (ii) as described in Schedule 5.17, the Company has no written or oral contracts of employment with any employee. Seller has made available to Buyer copies of all employee handbooks and employee rules and regulations, if any.

5.18. Broker, Commission or Finder’s Fees. Neither Seller nor any entity acting on behalf of Seller has agreed to pay a broker’s commission, finder’s fee or similar payment in connection with this Agreement or any matter related hereto.

5.19. No other Representations or Warranties by Company. Buyer agrees that, except for the representations and warranties (including the schedules with respect thereto) made by the Company and set forth in this Article 5, neither the Company nor any representative of the Company has made and shall not be construed as having made to the Buyer or to any representative of Buyer, and neither Buyer nor any representative of Buyer has relied upon, any other representation or warranty of any kind.

5.20. LMA. Notwithstanding anything to the contrary contained in this Agreement, Seller shall not be deemed to have breached any of his representations or warranties (nor have any indemnification obligation or any other liability to Buyer under such representations and warranties) to the extent that the breach or inaccuracy of such representations or warranties is caused by any act or omission of the Buyer or any of its agents in connection with performance under LMA, or the failure of Buyer to perform or discharge any of its obligations under the terms of the LMA.

5.21. Intellectual Property. The Company holds the necessary Intellectual Property Rights in and to all material copyrights, trademarks, trade names, service marks, licenses, patents, permits and other similar intangible property rights and interests used or useful in the conduct of the Company’s business, as conducted immediately prior to the Closing Date, all of which rights and interests are licensed or franchised to or owned by the Company and, if so licensed or franchised, are valid and uncontested other than the absence of such rights as would not have a material adverse affect. The Company has received no notice of any and, to the knowledge of Seller or the Company, there is no infringement or unlawful use of such intellectual property. The term “Intellectual Property Right” means all intellectual and industrial property rights and other proprietary rights, including rights to, arising out of, or based upon (i) inventions and patents for inventions, including re-issue thereof and continuation and continuations in part, (ii) copyrights, (iii) designs and industrial designs, (iv) trade marks and any word, symbol, icon, logo or other indicia of origin adopted or used in connection with any product or service, (v) trade secrets and confidential information, (vi) any other intangible expression of a kind which is recognized in law or equity as having the attributes of property and is protected in law or equity from unauthorized appropriation or exploitation.

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5.22. [Intentionally blank.]

5.23. Permits and Licenses. Schedule 5.23 sets forth all material licenses, permits, construction permits, approvals, concessions, franchises, certificates, consents, qualifications, registrations, privileges and other authorizations and other rights, other than the Station Licenses, from any Governmental Entity reasonably necessary to conduct the Station Business as presently conducted (the “Permits”). The Company is the sole holder or solely holds rights to all of the Permits. The Station Business has been conducted in all material respects in accordance with all Permits.

5.24. Bank Accounts. Schedule 5.24 contains a true and complete list of all bank accounts of the Company with a list of each person with signature authority over the funds in each such account.

5.25. Corporate Records. All material corporate actions taken by the Company since its inception have been duly and validly authorized by all necessary corporate action.

5.26. Bankruptcy. No insolvency proceedings of any character, including without limitation, bankruptcy, receivership, reorganization, composition or arrangement with creditors, voluntary or involuntary, affecting the Company are pending or, to Seller’s or the Company’s knowledge, threatened, and the Company has not made any assignment for the benefit of creditors or taken any action in contemplation of, or which would constitute the basis for, the institution of such insolvency proceedings.

5.27. Business of the Company. The Station Business consists solely of, and is limited to, the business and operation of the Station and matters incidental thereto.

ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SELLER INDIVIDUALLY

     Seller hereby makes the following representations and warranties for himself:

6.1. Binding Agreement. Seller has the full legal right and capacity to execute, deliver and perform this Agreement and any documents contemplated hereby to which Seller is a party according to their respective terms. This Agreement and any documents contemplated hereby to which Seller is a party have been duly executed and delivered by Seller and constitute the legal, valid and binding agreement of Seller enforceable in accordance with their terms, except to the extent that (a) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or hereafter in effect relating to creditor’s rights generally and (b) the remedy of specific performance or injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

6.2. Ownership. Seller does not own, beneficially or of record, directly or indirectly, any capital stock or other ownership or proprietary interest (other than publicly traded securities) in any corporation, partnership, association, trust, joint venture, limited liability company, or other entity that is in competition, does business, or is a party to a Contract, with the Company.

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6.3. Good Title Conveyed. Seller has complete and unrestricted power and the unqualified right to sell, transfer, assign, convey and deliver to the Buyer, and upon consummation of the transactions contemplated by this Agreement for the Initial Closing and the Closing, Buyer will acquire, good, valid and marketable title to, respectively, the Initial Shares and the Closing Shares owned beneficially and of record by Seller free and clear of all Liens, except for Permitted Liens.

6.4. No Violation. Subject to the receipt of the FCC Consent, the execution, delivery and performance by Seller of this Agreement and the documents contemplated hereby (with or without the giving of notice, the lapse of time, or both), and the consummation by Seller of the transactions contemplated hereby or thereby (a) do not require the consent of any third party; and (b) will not conflict in any material respect with, result in a material breach of, or constitute a material default under, any applicable Law of any person or Governmental Entity applicable to Seller or any material contract or agreement to which Seller is a party or by which Seller may be bound or affected. Seller is not a party to, nor is he bound by, and the Stock is not subject to, any agreement or commitment that prohibits the execution and delivery by Seller of this Agreement or the consummation of the transactions contemplated hereby.

6.5. Bankruptcy. No insolvency proceedings of any character, including without limitation, bankruptcy, receivership, reorganization, composition or arrangement with creditors, voluntary or involuntary, affecting Seller are pending or, to knowledge of Seller or the Company, threatened, and Seller has not made any assignment for the benefit of creditors or taken any action in contemplation of, or which would constitute the basis for, the institution of such insolvency proceedings.

6.6. No other Representations or Warranties by Seller. Buyer agrees that, except for the representations and warranties (including the schedules with respect thereto) made by Seller and set forth in Articles 5 and 6, neither Seller nor any representative of Seller has made and shall not be construed as having made to the Buyer or to any representative of Buyer, and neither Buyer nor any representative of Buyer has relied upon, any other representation or warranty of any kind.

ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby makes the following representations and warranties to Seller:

7.1. Organization and Authority.

     (a) Buyer is validly existing and in good standing under the Laws of the State of Washington and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted and is duly qualified to do business in the State of Washington.

     (b) Buyer has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. Buyer’s execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and

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validly authorized by all necessary corporate action on behalf of Buyer and constitutes the valid and binding obligation of Buyer, enforceable in accordance with its terms.

7.2. Qualification. Buyer is legally, financially and otherwise qualified to be the owner of the Stock under the Communications Act and the rules, regulations and policies of the FCC, including the applicable FCC multiple-ownership rules. Buyer is an “accredited investor” as defined in Rule 501 of the Securities Act of 1933, as amended (the “Securities Act”). Buyer is acquiring the Stock for its own account and not with a view to any subsequent distribution thereof. Buyer acknowledges that (a) neither the Stock nor the sale of the Stock to Buyer under this Agreement have been registered under the Securities Act or any applicable state securities Laws; (b) that Seller is relying upon the representations of Buyer’s qualification under applicable exemptions from registration requirements under the Securities Act; (c) the Stock may not be resold or transferred unless a registration is made under the Securities Act or state Law or unless there is an applicable exemption from registration available; (d) and that any certificate(s) evidencing the Stock will bear legends setting forth such restrictions.

7.3. Absence of Conflicting Agreements or Required Consents. Except for the FCC Consent contemplated in this Agreement, the execution and delivery of this Agreement shall not: (a) violate, conflict with or result in any breach or default of any provision of the organizational documents of Buyer, (b) violate any applicable Law; or (c) either alone or with the giving of notice or the passage of time, violate the terms, conditions or provisions of, or constitute a default or breach under, any agreement, instrument, license or permit to which Buyer is now subject.

7.4. Litigation; Compliance with Law. There is no claim, action, suit, litigation, inquiry, judicial or administrative proceeding, or arbitration pending or, to the knowledge of Buyer, threatened against Buyer that would adversely affect Buyer’s ability to perform its obligations pursuant to this Agreement. Buyer has committed no violation of any applicable law, statute, regulation or ordinance or any other requirement of any Governmental Entity or court which would have an adverse effect on Buyer or its ability to perform its obligations pursuant to this Agreement.

7.5. Broker, Commission or Finder’s Fees. Neither Buyer nor any entity acting on behalf of Buyer has agreed to pay a broker’s commission, finder’s fee or similar payment in connection with this Agreement or any matter related hereto.

ARTICLE 8
COVENANTS OF SELLER

Seller covenants and agrees with Buyer that, pending the Closing, except as otherwise agreed to in writing by Buyer and except as otherwise specified in the LMA:

8.1. Conduct of Station prior to the Closing Date. Seller, from and after the date hereof through the Closing Date, shall cause the Company to:

     (a) Continue to use commercially reasonable efforts to maintain the Real Property Leases in full force and effect;

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     (b) Operate in the usual and ordinary course of business in accordance with past practices and conduct the Station Business in all material respects in compliance with the terms of the Station Licenses, Permits and all applicable Laws, including the Communications Laws (and including compliance with all FCC deadlines relating to conversion to digital operations, timely pursuit of digital television (“DTV”) channel election and construction of full-power DTV facilities prior to the applicable Use-It-or-Lose-It Deadline);

     (c) use, repair, and, if necessary, replace any of Tangible Personal Property and keep books of account, records and files, in each case, in a reasonable manner consistent with historical practice, and maintain the Company’s assets, facilities and equipment, inventory of supplies, parts and other materials in substantially their current condition, ordinary wear and tear excepted;

     (d) maintain insurance or other arrangements in accordance with Section 5.6;

     (e) pay as and when the same shall become due and payable any amounts owed by the Company to its employees who have performed services up to the time of Closing, for wages or commissions;

8.2. Purchase-Related Covenants. Except as otherwise permitted pursuant to the terms and subject to the conditions of this Agreement, including Section 8.4, but subject in all events to Section 10.4, (i) during the period from and after the date hereof through the earlier of the Closing Date or the effective date of termination of this Agreement, and (ii) in the event of termination of this Agreement, during the period from the effective date of termination of this Agreement for so long as Buyer shall own any of the Stock (the “Post-Termination Period”), without the prior written consent of Buyer (not to be unreasonably conditioned, delayed, or withheld), each of Seller and the Company shall not, and Seller shall cause the Company to not:

     (a) (i) renew, amend, modify, extend or grant any special wavier under any Material Station Contract other than in the ordinary course of business consistent with past practices, or (ii) enter into any new Contract requiring in a single transaction or a series of related transactions, payments by or on behalf of the Company in excess of Five Thousand Dollars ($5,000) per year;

     (b) other than in the ordinary course of business consistent with past practices, hire any employee, increase the compensation of any employee or enter into, renew, amend or modify any Contract of employment;

     (c) establish any Seller Plan, or establish, adopt or enter into any collective bargaining agreement;

     (d) change any accounting principles used by the Company other than changes required by applicable Law;

     (e) make any capital expenditure or commitment or addition to property, plant or equipment, individually or in the aggregate, in excess of Five Thousand Dollars ($5,000);

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     (f) agree or commit, whether in writing or otherwise, to take any of the actions specified in the foregoing clauses; or

     (g) commit or suffer any of the acts described in the foregoing clauses.

This Section 8.2 shall survive the termination of this Agreement for any reason.

8.3. Investment-Related Covenants. Except as otherwise permitted pursuant to the terms and subject to the conditions of this Agreement, including Section 8.4, but in all events subject to Section 10.4, (i) during the period from and after the date hereof through the earlier of the Closing Date or the effective date of termination of this Agreement, and (ii) in the event of termination of this Agreement, during the Post-Termination Period, without the prior written consent of Buyer, each of Seller and the Company shall not, and Seller shall cause the Company to not:

     (a) encumber, mortgage, pledge, or subject to a Lien, claim, or encumbrance (other than Permitted Liens) any of the Company’s assets or sell, assign, convey or transfer any of the Company’s assets without replacing such asset with an asset of substantially the same value, utility and quality;

     (b) apply to the FCC for any FCC license, construction permit, authorization or any modification thereto that would restrict the Company’s present operations, or make any material change in the Company’s buildings, leasehold improvements, or fixtures that is not in the ordinary course of business;

     (c) make any assignment for the benefit of creditors or take any action in contemplation of, or which would constitute the basis for, the institution of insolvency proceedings of any character, including without limitation, bankruptcy, receivership, reorganization, composition or arrangement with creditors, voluntary or involuntary;

     (d) enter into, renew, amend or modify any trade or barter agreement that is not to be fully performed by the Closing Date;

     (e) take any actions that would result in the assets or the business of the Company being in violation of any Station License, Permit or any applicable Law, nor omit to take any commercially reasonable action that is necessary to prevent the assets or the Station Business from violating the terms of any Station License, Permit or any applicable Law;

     (f) dispose of, or permit to lapse, any rights with respect to the use of any Intellectual Property Rights;

     (g) create any Lien of any kind on any Real Property or other property or asset (whether tangible or intangible) of the Company, other than (A) Permitted Liens, and (B) Liens that will be released prior to the Closing;

     (h) make any material acquisition or material disposition (other than disposition of assets in the ordinary course of business consistent with past practice) of assets or securities, including by means of an asset sale, merger, consolidation or otherwise;

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     (i) other than the LMA contemplated hereby, enter into any local marketing agreement, joint sales agreement, shared services agreement or other similar contract in respect of the programming or operations of the Station;

     (j) take, or fail to take, any other action which could reasonably be expected to result in a breach or inaccuracy in any of the representations or warranties of Seller contained in this Agreement;

     (k) (except as expressly provided in Section 5.1 of the LMA), enter into, renew, extend, amend or terminate any Real Property Lease or Material Station Contract, including any employment agreement constituting a Material Station Contract;

     (l) enter into any line of business other than the Station Business as conducted on the date hereof;

     (m) sell, transfer, convey or assign the Stock or any interest therein, issue or redeem any shares of capital stock or rights convertible into, or exchangeable or exercisable for capital stock (or enter into any agreement with respect thereto);

     (n) create, incur, assume or permit to exist any indebtedness for borrowed money except for indebtedness which is incurred or assumed in the ordinary course of business and which is discharged in full as of the Closing Date or the effective date of termination of this Agreement;

     (o) make any loan to any third person or guarantee (or otherwise become responsible for) the oblations or indebtedness of any other person;

     (p) declare, set aside or pay any dividends or make any other distributions on any shares of capital stock, or restate, amend or modify its certificate of incorporation or bylaws, except for dividends or distributions solely in respect of the payments made by Buyer pursuant to the LMA, and Buyer acknowledges that Seller shall be entitled to receive one hundred percent (100%) of any such dividends or distributions in respect of the payments made by Buyer under the LMA, notwithstanding Buyer’s ownership of twenty-five percent (25%) of the Stock;

     (q) agree or commit, whether in writing or otherwise, to take any of the actions specified in the foregoing clauses; or

     (r) commit or suffer any of the acts described in the foregoing clauses.

This Section 8.3 shall survive the termination of this Agreement for any reason.

8.4. Certain Post-Termination Operations. Notwithstanding anything to the contrary set forth in Sections 8.2 or 8.3 hereof, in the event of termination of this Agreement pursuant to Section 16.1(b), during the Post-Termination Period the Company shall have the right, and Seller shall have the right to cause the Company, to:

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     (a) purchase equipment, make related capital expenditures, and enter into programming agreements as may be reasonably necessary to operate the Station in the ordinary course in the absence of the LMA;

     (b) to incur indebtedness for borrowed money in an amount not to exceed Two Million Dollars ($2,000,000) in the aggregate in connection with funding the Station Business in the ordinary course and permit Liens to be place against the Company’s asset or the Closing Shares in connection with such indebtedness.

This Section 8.4 shall survive the termination of this Agreement for any reason.

8.5. Access. Seller shall give, or cause the Company to give, Buyer and Buyer’s employees, engineers, environmental consultants, and other authorized representatives reasonable access during normal business hours upon at least twenty-four (24) hours prior notice to Seller and in accordance with the Real Property Leases, to the Station’s facilities, including the studio and transmitter sites and the Tangible Personal Property in order that Buyer may have the opportunity to make such investigation as Buyer deems appropriate, including environmental assessments and the performance of surveys (at the sole cost and expense of Buyer). The rights of Buyer under this Section shall not be exercised in such a manner as to interfere unreasonably with the business of the Station.

8.6. Employee Records. Seller will cause the Company to provide Buyer, as Buyer may reasonably request and only to the extent permitted by Law, with access to the Company’s records with respect to position, salary and accrued vacation and sick leave for any Station personnel.

8.7. Other Consents. Seller will use commercially reasonable efforts to obtain all consents, authorizations, or approvals, if any, required pursuant to the Material Station Contracts or otherwise required for Seller’s consummation of the transactions contemplated by this Agreement.

8.8. No Inconsistent Action. Seller shall take no action which is inconsistent with his obligations under this Agreement.

8.9. FCC Filings. Seller shall file, or cause the Company to file, on a current basis until the Closing Date all applications, reports and documents required to be filed with the FCC with respect to the Station. Copies of each such application, report and document filed between the date hereof and the Closing Date shall be furnished to Buyer within ten (10) business days after its filing.

8.10. Notification. Seller shall promptly notify Buyer in writing of (i) the initiation, or credible threat of initiation, of any litigation, arbitration or administrative proceeding against Seller or the Company which challenges the transactions contemplated by this Agreement, or (ii) the failure of Seller, or any employee or agent of Seller or the Company to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or be satisfied by it hereunder.

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8.11. Taxes. Seller shall pay or cause the Company to pay when due all property and all other taxes relating to the Station, the Company and the Company’s assets and employees of the Station and the Company required to be paid to city, county, state, federal and other governmental entities through the Closing Date; provided, however, Seller or the Company may appeal or contest any such tax. Seller shall, or shall cause the Company to, prepare, sign, and file with the appropriate taxing authorities all Tax Returns required to be filed by or on behalf of the Company for all periods ending on the Closing Date. Sellers shall, or shall cause the Company to, file such Tax Returns on a timely basis and shall timely pay, or cause to be timely paid, in full all Taxes shown to be due on such Tax Returns for all periods for which any Tax is due. Such Tax Returns shall be prepared on a basis consistent with those prepared for prior tax years unless a different treatment of any item is required by an intervening change in Law.

8.12. Non-Solicitation. As long as this Agreement is in effect and except as otherwise provided in this Agreement, Seller shall not directly or indirectly solicit, entertain, negotiate with any person or entity (other than a party hereto) regarding the acceptance of any proposal to acquire the Company, the Station or any of the Company’s assets in whole or in part, including any of the Stock.

8.13. Financial Information. Seller shall furnish Buyer within thirty (30) days after the end of each month ending during the period terminating on the Closing Date, an unaudited balance sheet and statement of income and expense for such month and such other financial information prepared by Seller, as Buyer may reasonably request. This Section 7.12 shall survive termination of this Agreement for so long as Buyer holds any of the Stock.

8.14. DTV Build-Out. Seller shall complete the digital build-out of the Station as required by the FCC on or prior to the July 1, 2006 deadline with respect thereto. The new build-out DTV transmitter has not been installed by the Company as of the date of this Agreement, and is not, therefore, reflected in Schedule 5.8(i).

8.15. Modification of Certain Leases.

     (a) Seller covenants and agrees to use his, and to cause the Company to use its, and the Company covenants and agrees to use its, best efforts and to otherwise cooperate with Buyer to obtain an amendment to each Designated Lease (as hereinafter defined) providing the Company with a right to terminate, terminate in part, or otherwise modify each such Designated Lease following the Closing on terms and conditions reasonably satisfactory to Buyer.

     (b) The term “Designated Leases” shall refer to each of the following: (i) that certain Lease Agreement, dated May 12, 1999, by and between American Tower Systems, L.P., as Lessor, and the Company, as Lessee, for space on a multi-unit broadcasting tower and in the equipment building at the tower site, located on West Tiger Mountain, in or near Issaquah, Washington, as amended by that certain First Amendment to Lease Agreement, dated as of October 2002, by and between American Tower, L.P. (successor to American Tower Systems, L.P.) and African American Broadcasting of Bellevue, Inc., to add space for digital broadcasting equipment; and (ii) that certain Office Building Lease, dated for reference purposes March 31, 2004, by and between Kilroy Realty, L.P., as Landlord, and the Company, as Tenant, for space in the Kilroy Airport Center/Seatac South Tower with a street address of 1800 Pacific Highway

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South, Seattle, Washington, 98188, as amended by that certain Amendment No. 1 to Lease, dated May 16, 2006, extending the term through May 31, 2011, and relocating the Premises to Suite 1103, as further amended by that certain Amendment No. 2 to Lease, dated May 1, 2006, to provide for additional equipment in and about the leased premises.

ARTICLE 9
COVENANTS OF BUYER

Buyer covenants and agrees with Seller that, pending the Closing, except as otherwise agreed to in writing by Seller and except as otherwise specified in the LMA:

9.1. Notification. Buyer shall promptly notify Seller in writing of (i) the initiation, or credible threat of initiation, of any litigation, arbitration or administrative proceeding against Buyer which challenges the transactions contemplated by this Agreement, or (ii) the failure of Buyer, or any employee or agent of Buyer to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or be satisfied by it hereunder.

9.2. No Inconsistent Action. Buyer shall not take any action which is inconsistent with its obligations under this Agreement.

ARTICLE 10
JOINT COVENANTS

Buyer and Seller covenant and agree that, pending the Closing, except as mutually otherwise agreed to in writing by the parties and except as otherwise specified in the LMA:

10.1. Confidentiality. Both of the parties hereto will hold in confidence, and will cause their respective directors, officers, employees, accountants, counsel, financial advisors and other representatives and affiliates to hold in confidence, all non-public information received from the other party hereto (collectively, “Confidential Information “); provided, however, that the term Confidential Information does not include any information that (a) at the time of disclosure or thereafter is generally available to and known by the public (other than as a result of a disclosure directly or indirectly by the party hereto which received such information (the “Recipient”)), (b) was available to the Recipient from a source other than the other parties hereto or (c) has been independently acquired or developed by the Recipient without violating any of its obligations under this Agreement. The obligation to keep Confidential Information confidential shall not apply to any information that is required to be disclosed pursuant to any court action or any proceeding before a Governmental Entity. In the event this Agreement is terminated for any reason, each party hereto, upon the request of the party hereto, shall promptly return to the requesting party all copies of Confidential Information in its possession and shall destroy all analysis, studies and documents prepared by it which contain any Confidential Information.

10.2. Cooperation. Buyer and Seller shall cooperate fully with one another in taking any actions, including actions to obtain the required consent of any governmental instrumentality or any third party necessary or helpful to accomplish the transactions contemplated by this Agreement. This provision shall survive the Closing.

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10.3. Public Announcements. Prior to the Closing, neither Buyer nor Seller shall issue any press release or make any public disclosure with respect to the transactions contemplated by this Agreement without the prior written approval of the other party, except (a) Buyer and Seller may make any disclosure as may be required by applicable Law or by obligations pursuant to any listing agreement with any securities exchange or any stock exchange regulations; and (b) Buyer and Seller may each continue such communications with employees, customers, suppliers, franchises, lenders, lessors, shareholders, and other particular groups as may be legally required or necessary or appropriate and not inconsistent with the best interests of the other party or the prompt consummation of the transactions contemplated herein.

10.4. No Premature Assumption of Control. Nothing contained in this Agreement shall give Buyer any right to, directly or indirectly, control, supervise or direct, or attempt to control, supervise or direct, the programming, operations, or any other matter relating to the Station prior to the Closing Date, and the Company shall have complete control and supervision of the programming, operations, policies and all other matters relating to the Station up to the time of the Closing.

ARTICLE 11
CONDITIONS OF CLOSING BY BUYER

The obligations of Buyer hereunder are, at its option (other than with respect to the condition that the FCC Consent shall have been issued, which condition may not be waived), subject to satisfaction at or prior to the Closing Date of all of the following conditions:

11.1. Representations and Warranties. All representations and warranties of Seller made in this Agreement or in any exhibit, schedule or document delivered pursuant hereto (a) if qualified by materiality, shall be true and complete in all respects and (b) if not so qualified, shall be true and complete in all material respects, in all events as of the date hereof and on and as of the Closing Date as if made on and as of that date, except for changes expressly permitted or contemplated by the terms of this Agreement and except those given as of a specified date.

11.2. Compliance with Agreement. All of the terms, covenants and conditions to be complied with and performed by Seller on or prior to the Closing Date shall have been complied with or performed in all material respects;

11.3. Third Party Consents and Approvals. Seller shall have obtained the landlord’s or any other necessary third-party consent under the Real Property Leases to transfer of control of the Company to Buyer (if such consent is required under the terms of such Real Property Leases).

11.4. Governmental Consents.

     (a) Except as otherwise provided by Article 3, the FCC Consent shall have been obtained and shall be effective without any conditions that are materially adverse to Buyer, and no court or governmental order prohibiting Closing shall be in effect;

     (b) All other material authorizations, consents, approvals, and clearances of any Governmental Entity required to permit the consummation of the transactions contemplated by this Agreement shall have been obtained;

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     (c) No injunction, order, stipulation, settlement, writ, decree or judgment of any court, agency or other Governmental Entity shall have been rendered against Seller or Buyer which would render it unlawful, as of the Closing Date, to effect the transactions contemplated by this Agreement in accordance with its terms;

     (d) No Law shall have been enacted, entered, promulgated or enforced by any Governmental Entity that prohibits the consummation of all or any part of the transactions contemplated by this Agreement, and no action or proceeding shall be pending or threatened by any Governmental Entity or other person seeking any such order or decree or seeking to recover any damages or obtain other relief as a result of the consummation of such transactions.

11.5. Closing Deliveries. Seller shall have delivered or caused to be delivered to Buyer, on the Closing Date, the documents specified in Section 12.1 below.

11.6. Inspection of Certain Purchased Assets. Seller shall have permitted Buyer and its employees, agents and contractors to enter onto the Real Property no later than three (3) Business Days prior to the Closing Date for the purpose of walking through and inspecting the Real Property and the Tangible Personal Property, and the results of such walk-through and inspection (including the condition of such assets) shall be reasonably acceptable to Buyer, in accordance with the representations and warranties of Seller and the Company contained in this Agreement.

11.7. Lien Payoff Letters. Buyer shall have received from Seller or the Company, payoff letters, in a form and containing terms reasonably acceptable to Buyer, setting forth the amounts necessary for payment in full of the debts associated with the Closing Liens (such amount, in the aggregate, the “Payoff Amount”), and providing for release of such Closing Liens by the lienholders thereto upon payment of the applicable portion of the Payoff Amount (the “Payoff Letters”); provided, however, that in no event shall the Payoff Amount be greater than the Closing Amount (as defined in Section 13.2(a)).

11.8. Other Documents. Buyer shall have received such other documents, certificates or instruments as it may reasonably request, and all actions and proceedings hereunder and all documents and other papers required to be delivered by Seller hereunder or in connection with the consummation of the transactions contemplated hereby, and all other related matters, shall be reasonably acceptable to Buyer as to their form and substance.

ARTICLE 12
CONDITIONS OF CLOSING BY SELLER

The obligations of Seller hereunder are, at its option (other than with respect to the condition that the FCC Consent shall have been issued, which condition may not be waived), subject to satisfaction at or prior to the Closing Date of all of the following conditions:

12.1. Representations, Warranties and Covenants. All representations and warranties of Buyer made in this Agreement or in any exhibit, schedule or document delivered pursuant hereto (a) if qualified by materiality, shall be true and complete in all respects and (b) if not so qualified, shall be true and complete in all material respects, in all events as of the date hereof and on and as of the Closing Date as if made on and as of that date, except for changes expressly permitted or contemplated by the terms of this Agreement and except those given as of a specified date;

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12.2. Compliance with Agreement. All the terms, covenants, and conditions to be complied with and performed by Buyer on or prior to the Closing Date shall have been complied with or performed in all material respects;

12.3. Governmental Approval.

     (a) The FCC Consent shall have been obtained and shall be effective and no court or governmental order prohibiting Closing shall be in effect; and

     (b) All other material authorizations, consents, approvals, and clearances of any Governmental Entity required to permit the consummation of the transactions contemplated by this Agreement shall have been obtained; and

     (c) No injunction, order, stipulation, settlement, decree, judgment, or writ of any court, agency or other Governmental Entity shall have been rendered against Buyer or Seller which would render it unlawful, as of the Closing Date, to effect the transactions contemplated by this Agreement in accordance with its terms.

12.4. Closing Documents. Buyer shall have delivered or caused to be delivered to Seller, on the Closing Date, the documents specified in Section 12.2 below.

ARTICLE 13
DELIVERIES AT THE CLOSING

13.1. Items to be Delivered by Seller. At the Closing, Seller will deliver to Buyer the following, at the expense of Seller and in proper form for recording when appropriate:

     (a) The certificate(s) representing the Closing Shares accompanied by stock power(s) duly endorsed in blank, sufficient to convey and transfer to Buyer title to the Closing Shares;

     (b) A certificate, dated as of the Closing Date, executed by an authorized officer of Seller, certifying that the conditions set forth in Article 10 have been fulfilled;

     (c) The Company’s stock book and records, and a copy of the bylaws and articles of incorporation of the Company, certified by an officer of the Company as being true and correct, in effect on the Closing Date;

     (d) A list of the Company’s bank or deposit accounts and the names of all individuals having signature authority over such accounts;

     (e) Duly executed resignation and releases of each of the officer(s) and director(s) of the Company;

     (f) a certificate of the Secretary of the State of Washington as of a date no earlier than five (5) days prior to the Closing Date regarding the due incorporation and good standing of the Company;

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     (g) Opinions of counsel issued by the Company’s corporate counsel, in substantially the form set forth in Exhibit A, and communications counsel, in substantially the form set forth in Exhibit B;

     (h) a certificate of the Secretary of the Company, dated as of the Closing Date, certifying a copy of the bylaws of the Company in effect as of such date;

     (i) a certificate, dated as of the Closing Date, executed by Seller, certifying that the conditions set forth in Section 3.1(a) have been fulfilled;

     (j) Such additional information and materials as Buyer shall reasonably request.

13.2. Items to be Delivered by Buyer. At the Closing, Buyer will deliver to Seller, at the expense of Buyer:

     (a) A wire transfer in immediately available funds of the amount specified in Section 2.2(b) (the “Closing Amount”), subject to any adjustments pursuant to the terms and subject to the conditions of this Agreement, provided, that Buyer shall wire (i) the Payoff Amount pursuant to the Payoff Letters and wire instructions provided in connection therewith, and (ii) to Seller an amount equal to the Closing Amount less the Payoff Amount;

     (b) Certified resolutions of the Board of Directors or similar body of Buyer approving the execution and delivery of this Agreement and each of the other documents delivered by Buyer pursuant hereto and authorizing the consummation of the transactions contemplated hereby and thereby;

     (c) A certificate, dated as of the Closing Date, executed by an authorized officer of Buyer, certifying that the conditions set forth in Article 11 have been fulfilled; and

     (d) Such additional information and materials as Seller shall reasonably request.

ARTICLE 14
TRANSFER TAXES: FEES AND EXPENSES

14.1. Expenses. Each party to this Agreement shall be solely responsible for all costs and expenses incurred by it in connection with the negotiation, preparation and performance of and compliance with the terms of this Agreement.

14.2. Transfer Taxes and Similar Charges. Any sales or transfer taxes incurred as a result of the closing of the transactions provided for in this Agreement shall be paid by Buyer.

14.3. FCC Filing Fee. The filing fee for the application seeking the FCC Consent shall be borne one half by Buyer and one half by Seller.

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ARTICLE 15
SURVIVAL; INDEMNIFICATION

15.1. Survival. The representations and warranties in this Agreement shall survive Closing for a period of eighteen (18) months from the Closing Date whereupon they shall expire and be of no further force or effect, except for claims under this Article 14 that relate to Damages (as defined in Section 14.2) for which written notice is given by the indemnified party to the indemnifying party prior to the expiration of such 18-month period, which shall survive until resolved. The covenants of the parties hereto shall survive indefinitely, unless otherwise expressly provided herein that any particular covenant is to be performed by the applicable party during a specified period of time. If a claim for indemnification is timely made, it may continue to be asserted beyond the corresponding date of termination of the representation or warranty claimed to be breached.

15.2. Indemnification.

     (a) From and after the Closing, Seller shall defend, indemnify and hold Buyer harmless from and against any and all losses, costs, damages, liabilities and expenses, including reasonable attorneys’ fees and expenses (“Damages”) incurred by Buyer arising out of or resulting from: (i) any breach of any representation or warranty of the Seller, or (ii) any breach or default by Seller of any covenant or agreement, under this Agreement or any certificates, schedules or other instrument or agreement or obligation of Seller contained in or made pursuant to this Agreement.

     (b) From and after the Closing, Buyer shall defend, indemnify and hold harmless Seller from and against any and all Damages incurred by Seller arising out of or resulting from: (i) any breach of any representation or warranty of Buyer hereunder; or (ii) any breach or default by Buyer of any covenant or agreement under this Agreement.

     (c) Notwithstanding anything to the contrary contained herein, no party shall have any liability to the other under this Article 14 until, and only to the extent that, such party’s aggregate Damages exceed Ten Thousand Dollars ($10,000.00), and (ii) the maximum liability of a party for Damages shall be limited to One Million Two Hundred Fifty Thousand Dollars ($1,250,000).

15.3. Procedures. The indemnified party shall give prompt written notice to the indemnifying party of any demand, suit, claim or assertion of liability by third parties or other circumstances that could give rise to an indemnification obligation hereunder against the indemnifying party (a “Claim”), but a failure to give such notice or delaying such notice shall not affect the indemnified party’s right to indemnification and the indemnifying party’s obligation to indemnify as set forth in this Agreement, except to the extent the indemnifying party’s ability to remedy, contest, defend or settle with respect to such Claim is thereby prejudiced. The written notice shall include information explaining the basis for such Claim in reasonable detail. The obligations and liabilities of the parties with respect to any Claim shall be subject to the following terms and conditions:

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     (a) The indemnifying party shall have the right to undertake, by counsel or other representatives of its own choosing, the defense or opposition to such Claim; provided, however, that the indemnified party shall have the right to employ, at its sole cost and expense, counsel to represent it, provided further that if, in the opinion of the indemnified party, it is advisable for the indemnified party to be represented by separate counsel due to actual or potential conflicts of interest, then in that event, the fees and expenses of such separate counsel shall be paid by the indemnifying party.

     (b) Subject to paragraph (a) above, in the event that the indemnifying party shall elect not to undertake such defense or opposition, or, within twenty (20) days after written notice of any such Claim from the indemnified party, the indemnifying party shall fail to undertake to defend or oppose, the indemnified party (upon further written notice to the indemnifying party) shall have the right to undertake the defense, opposition, compromise or settlement of such Claim, by counsel or other representatives of its own choosing, on behalf of and for the account and risk of the indemnifying party (subject to the right of the indemnifying party to assume defense of or opposition to such Claim at any time prior to settlement, compromise or final determination thereof);

     (c) Anything herein to the contrary notwithstanding: (i) the indemnified party shall have the right, at its own cost and expense, to participate in the defense, opposition, compromise or settlement of the Claim; (ii) the indemnifying party shall not, without the indemnified party’s written consent, settle or compromise any Claim or consent to entry of any judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the indemnified party of a release from all liability in respect of such Claim; and (iii) in the event that the indemnifying party undertakes defense of or opposition to any Claim, the indemnified party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to consult with the indemnifying party and its counsel or other representatives concerning such Claim and the indemnifying party and the indemnified party and their respective counsel or other representatives shall cooperate in good faith with respect to such Claim; and

     (d) All Claims that are not Disputed Claims shall be paid by the indemnifying party within thirty (30) days after receiving notice of the Claim. “Disputed Claims” shall mean claims for Damages by an indemnified party which the indemnifying party objects to in writing within thirty (30) days after receiving notice of the Claim. In the event there is a Disputed Claim with respect to any Damages, the indemnifying party shall be required to pay the indemnified party the amount of such Damages for which the indemnifying party has, pursuant to a final determination, been found liable within ten (10) days after there is a final determination with respect to such Disputed Claim. A final determination of a Disputed Claim shall be (i) a judgment of any court determining the validity of a Disputed Claim, if no appeal is pending from such judgment and if the time to appeal therefrom has elapsed; (ii) an award of any arbitration determining the validity of such Disputed Claim, if there is not pending any motion to set aside such award and if the time within which to move to set aside such award has elapsed; (iii) a written termination of the dispute with respect to such Claim signed by the parties thereto or their attorneys; (iv) a written acknowledgment of the indemnifying party that it no longer disputes the validity of such Claim; or (v) such other evidence of final determination of a Disputed Claim as shall be acceptable to the parties. No undertaking of defense or opposition to a Claim shall be

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construed as an acknowledgment by such party that it is liable to the party claiming indemnification with respect to the Claim at issue or other similar Claims.

15.4. Exclusive Remedies. From and after the Closing, Buyer’s and Seller’s rights to indemnification under this Article 14 are with respect to any Claim shall be their sole and exclusive remedy for money damages under and with respect to this Agreement or the transactions contemplated hereby. Neither party shall be entitled to pursue, and hereby expressly waives, any and all rights that might otherwise be available at law or in equity, including under federal or state securities Laws, exclusive of rights to or with respect to equitable relief, including injunctive relief or rights to specific performance.

ARTICLE 16
TERMINATION

16.1. Termination. This Agreement may be terminated at any time prior to Closing as follows:

     (a) by mutual written consent of Seller and Buyer;

     (b) by written notice of Seller to Buyer, if Buyer (i) does not satisfy the conditions or perform the obligations to be satisfied or performed by Buyer on the Closing Date; or (ii) otherwise (x) breaches in any respect any of Buyer’s representations or warranties that are qualified by materiality; (y) breaches in any material respect any of Buyer’s representation or warranties that are not qualified by materiality; or (z) defaults in any respect in the performance of any of Buyer’s covenants or agreements herein contained, and such breach or default is not cured within the Cure Period (defined below);

     (c) by written notice of Buyer to Seller, if Seller (i) does not satisfy the conditions or perform the obligations to be satisfied or performed by Seller on the Closing Date; or (ii) otherwise (x) breaches in any respect any of Seller’s representations or warranties that are qualified by materiality; (y) breaches in any material respect any of Seller’s representation or warranties that are not qualified by materiality; or (z) defaults in any respect in the performance of any of Seller’s covenants or agreements herein contained, and such breach or default is not cured within the Cure Period (defined below);

     (d) by written notice of either party to the other if the FCC denies the FCC Application by Final Order;

     (e) by written notice of Buyer to Seller if the FCC Consent includes a condition that is materially adverse to Buyer;

     (f) by written notice of Buyer to Seller under the circumstances specified in Section 17.2(b) dealing with Risk of Loss; and

     (g) by written notice of either party to the other if the Closing shall not have been consummated on or before the date twelve (12) months after the date of this Agreement and the party seeking to terminate this Agreement is not then in breach of this Agreement.

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16.2. Cure Period. The term “Cure Period” as used herein means a period commencing the date Buyer or Seller receives from the other written notice of breach or default hereunder and continuing for a period of thirty (30) days thereafter; provided, however, that if the breach or default cannot reasonably be cured within such period, but can be cured before the Closing Date, and if diligent efforts to cure promptly commence, then the Cure Period shall continue as long as such diligent efforts to cure continue, but not beyond the Closing Date.

16.3. Specific Performance. Seller agrees that the Stock is unique and cannot be readily obtained on the open market and that Buyer will be irreparably injured if this Agreement is not specifically enforced. Therefore, in the event that Buyer institutes any action specifically to enforce Seller’s performance under this Agreement, Seller agrees to waive the defense that Buyer has an adequate remedy at law and to interpose no opposition, legal or otherwise, as to the propriety of specific performance as a remedy.

16.4. Post-Termination Drag-Along Rights of Seller.

     (a) In the event that this Agreement is terminated by Seller pursuant to the terms and subject to the conditions of Section 16.1(b) and:

          (i) In the event that Seller shall Transfer (as hereinafter defined) or agree to Transfer the Closing Shares to a third party (the “New Transferee”) during the period commencing on the effective date of termination of this Agreement pursuant to the terms and subject to the conditions of Section 16.1(b) and ending on the first anniversary thereof, Seller shall have the right to require Buyer to sell all of the Initial Shares to such New Transferee pursuant to the terms and subject to the conditions of this paragraph (i) and paragraph (b) below, provided that that aggregate purchase price paid to Buyer for the Initial Shares shall be an amount equal to Four Million Dollars ($4,000,000); or

          (ii) In the event that Seller shall Transfer (as hereinafter defined) or agree to Transfer the Closing Shares to a New Transferee at any time following the first anniversary of the effective date of termination of this Agreement pursuant to the terms and subject to the conditions of Section 16.1(b), Seller shall have the right to require Buyer to sell all of the Initial Shares to such New Transferee pursuant to the terms and subject to the conditions of this paragraph (i) and paragraph (b) below.

     (b) The right of Seller provided under Section 16.4(a) hereof shall be exercisable by Seller by delivering written notice of the exercise thereof (a “Drag-Along Notice”) to Buyer, which Drag-Along Notice shall set forth all material terms of the proposed Transfer. Pursuant to the terms and subject to the conditions of this Section 16.4, Buyer shall be obligated to sell to the New Transferee all of the Initial Shares for the same price per share as paid to Seller by such New Transferee, except as otherwise provided by Section 16.4(a)(i), and otherwise on the terms and conditions specified in the Drag-Along Notice, at a closing to be held on the date of the closing of the Transfer of the Closing Shares by Seller to the New Transferee.

     (c) For purposes hereof, the term “Transfer” means any direct or indirect sale, transfer, exchange, assignment, pledge, encumbrance of any kind, disposition, hypothecation, gift or any contract for any of the foregoing or any voting trust or other agreement or

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arrangement respecting voting rights or any beneficial interest in a share of Stock, but not including a pledge or encumbrance permitted under Section 8.4(b) above.

     (d) This Section 16.4 shall survive termination of this Agreement in accordance with its terms.

16.5. Effect of Termination; Survival. Sections 8.2, 8.3, 8.4, and 16.4, shall survive in accordance with their terms.

ARTICLE 17
MISCELLANEOUS PROVISIONS

17.1. Casualty Loss. In the event any non material loss or damage of the Company’s assets exists on the Closing Date, the parties shall consummate the Closing and after Closing the parties shall cooperate to repair or replace (as appropriate under the circumstances) the lost or damaged items at Seller’s reasonable expense.

17.2. Risk of Loss. The risk of loss or damage to the Company’s assets shall be upon Seller at all times prior to Closing. In the event of such loss or damage, Seller will promptly notify Buyer and may cause the Company to repair, replace or restore the assets to their former condition. If material damage has occurred that precludes the operation of either of the Station within the terms of its license and the Company’s Assets have not been repaired or restored prior to the Closing Date, Buyer may, at its option:

     (a) elect to consummate the Closing and accept the Company’s assets in their then-current condition, in which event Buyer shall be entitled to receive any proceeds of insurance received by Seller or the Company and attributable to damage to the Company’s assets, in which case Seller will have no further obligation to repair, replace or restore the damaged property; or

     (b) elect to postpone the Closing Date for a period of up to forty-five (45) days, with prior consent of the Commission if necessary, to permit Seller, at his option, to cause the Company to make such repairs, replacements, or restoration as are required to restore the assets to the equivalent of its former condition. If after the expiration of the extension period the assets have not been repaired, replaced or restored in a manner sufficient to permit the Station to resume operation within the terms of its license, Buyer may terminate this Agreement. If the parties disagree whether the assets have been adequately repaired, replaced or restored, the matter will be referred to a mutually acceptable qualified consulting communications engineer, who shall be a member of the Association of Federal Communications Consulting Engineers, whose decision will be final, and whose fees and expenses will be split equally by the parties.

17.3. Further Assurances. After the Closing, each party shall from time to time, at the request of and without further cost or expense to the other, execute and deliver such other instruments and take such other actions as may reasonably be requested in order to more effectively consummate the transactions contemplated hereby to exchange assets and assume obligations as contemplated by this Agreement.

17.4. Assignment. Neither party may assign this Agreement without the prior written consent of the other party hereto, provided, however, that Buyer may assign this Agreement upon prior

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written notice to (but without having first received consent of) Seller if such assignment is to an entity controlled by Buyer’s owners at the time this Agreement is signed and such assignment does not cause delay in processing the FCC Application or delay the FCC Consent (apart from incidental delay in connection with the filing of an amendment to the FCC Application relating to such assignment). Notwithstanding the foregoing, no assignment of this Agreement shall relieve any party of its obligations hereunder. With respect to any permitted assignment, the parties shall take all such actions as are reasonably necessary to effectuate such assignment, including but not limited to cooperating in any appropriate filings with the FCC or other governmental authorities. All covenants, agreements, statements, representations, warranties and indemnities in this Agreement by and on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and permitted assigns of the parties hereto.

17.5. Amendments. No amendment, waiver of compliance with any provision or condition hereof or consent pursuant to this Agreement shall be effective unless evidenced by an instrument in writing signed by the party against whom enforcement of any waiver, amendment, change, extension or discharge is sought.

17.6. Headings. The headings set forth in this Agreement are for convenience only and will not control or affect the meaning or construction of the provisions of this Agreement.

17.7. Governing Law and Venue. The construction and performance of this Agreement shall be governed by the Laws of the State of Washington without giving effect to the choice of law provisions thereof.

17.8. Notices. Any notice, demand or request required or permitted to be given under the provisions of this Agreement shall be in writing, and shall be deemed to have been received on the date of personal delivery, on the third day after deposit in the U.S. mail if mailed by registered or certified mail, postage prepaid and return receipt requested, on the day after delivery to a nationally recognized overnight courier service if sent by an overnight delivery service for next morning delivery, and shall be addressed as follows (or to such other address as any party may request by written notice):

     (a) If to Seller:

Mr. Christopher J. Racine
875 Waimanu Street, Suite 110
Honolulu, HI 96813

With a copy (that shall not constitute notice) to:

Harry F. Cole, Esq.
Fletcher, Heald & Hildreth PLC
1300 North 17th Street, 11th Floor
Arlington, VA 22209

     (b) If to Buyer

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Fisher Communications, Inc.
100 Fourth Ave. N., Suite 510
Seattle, WA 98109
Attention: Chief Executive Officer

With a copy (that shall not constitute notice) to:

Eric D. Greenberg, Esq.
Covington & Burling
1201 Pennsylvania Ave., N.W.
Washington, DC 20004-2401

17.9. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. Signatures on this Agreement transmitted by facsimile or electronic transmission shall be deemed to be original signatures for all purposes of this Agreement.

17.10. No Third Party Beneficiaries. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or entity other than the parties hereto and their successors or permitted assigns, any rights or remedies under or by reason of this Agreement.

17.11. Severability. The parties agree that if one or more provisions contained in this Agreement shall be deemed or held to be invalid, illegal or unenforceable in any respect under any applicable Law, this Agreement shall be construed with the invalid, illegal or unenforceable provision deleted, and the validity, legality and enforceability of the remaining provisions contained herein shall not be affected or impaired thereby.

17.12. Entire Agreement. This Agreement, including its Schedules and Exhibits, together with the LMA, embody the entire agreement and understanding of the parties hereto and thereto and supersede any and all other prior agreements, arrangements and understandings relating to the matters provided for herein.

17.13. Interpretation. In this Agreement, the singular includes the plural and the plural the singular; the word “it” shall include all pronouns connoting other genders, as the context requires; the words “including,” “includes” and “include” shall be deemed to be followed by the words “without limitation;” references to Sections or Exhibits are to those of this Agreement unless otherwise indicated; references to laws and regulations, unless otherwise specified, shall be deemed to include all corresponding provisions of subsequent or superseding laws and regulations affecting the same; references to agreements and other contractual instruments, unless otherwise specified, shall be deemed to include all subsequent amendments and other modifications to such instruments in accordance with the terms thereof; “or” and “any” are not exclusive and use of the word “or” shall be deemed to mean “and/or” and shall be deemed to refer to the words both preceding and following the word “or” or either of such words; and “days” refers to calendar days unless otherwise indicated.

[The remainder of this page has been intentionally left blank.]

34

[Signature page of Seller and the Company to Stock Purchase Agreement.]

     IN WITNESS WHEREOF, each of the parties has caused this Stock Purchase Agreement to be duly executed and delivered as of the date first above written.

By:	/s/ Christopher J. Racine
	Christopher J. Racine, Individually
AFRICAN-AMERICAN BROADCASTING OF BELLEVUE, INC.
By:	/s/ Christopher J. Racine
	Christopher J. Racine, President

35

FISHER BROADCASTING COMPANY
By:	/s/ Colleen B. Brown
Name:	Colleen B. Brown
Title:	President & CEO

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EX-10.4

EXHIBIT 10.4

[Execution Version]

LOCAL MARKETING AGREEMENT

          This LOCAL MARKETING AGREEMENT (the “Agreement”), made as of this 26th day of June, 2006, by and between Fisher Broadcasting Company, a Washington corporation (“Fisher”), and African-American Broadcasting of Bellevue, Inc., a Washington corporation (“Operator”).

W I T N E S S E T H:

          WHEREAS, Operator is the owner of substantially all of the assets used or useful for the operation of the television station KWOG, Bellevue, Washington (the “Station”);

          WHEREAS, Fisher and Christopher Racine, an individual residing in the State of Washington, who owns 100% of the capital stock of Operator (“Racine”) have entered into a Stock Purchase Agreement, dated as of the date hereof, for the sale of all of the issued and outstanding capital stock of Operator to Fisher, a copy of which is attached hereto as Exhibit A (the “Purchase Agreement”);

          WHEREAS, Fisher desires to assist Operator in providing programming to be transmitted on the Station and to provide management and operation services with respect to the Station; and

          WHEREAS, Operator desires to accept Fisher’s assistance and transmit programming supplied by Fisher on the Station while maintaining ultimate control over the Station’s finances, personnel matters and programming, as well as continuing to broadcast Operator’s own public interest programming;

          NOW, THEREFORE, in consideration of these premises and the mutual promises, undertakings, covenants and agreements of the parties contained in this Agreement, the parties hereto do hereby agree as follows:

ARTICLE 1 — PROGRAMMING

     Section 1.1 Programming. Fisher hereby agrees to provide, and Operator agrees to transmit on the Station (including, without limitation, its subcarriers, vertical blanking intervals and any additional authorizations or spectrum allocated to the Station in the future, including, without limitation, its digital television channels), news, sports, informational, public affairs and entertainment programming and associated advertising, promotional and public service programming and announcement matter sufficient to program a substantial amount of each Station’s broadcast day on a daily basis beginning at the Commencement Time (defined below) and continuing thereafter throughout the term of this Agreement (hereinafter the “Fisher Programming”).

     Section 1.2 Operator Programming. Operator will retain ultimate responsibility for ascertaining the needs of the Station’s community of license and service area, including specifically the informational and educational needs of the children therein. Beginning at the Commencement Time and thereafter during the term of this Agreement (including, without limitation, any renewals), Fisher will consult regularly with Operator regarding Operator’s

ascertainment of community issues, including the educational and informational needs of children within the Station’s community of license. Based upon these consultations, the Fisher Programming will include news, public affairs and children’s programming relevant to the Station’s community of license and of sufficient quality to assist Operator in satisfying its obligations to respond to the needs of the community, including at least three (3) hours per week of core children’s programming consistent with the FCC’s rules. Operator shall have the right and obligation to broadcast at reasonably agreeable times such additional programming, either produced or purchased by Operator, as it in good faith determines appropriate to respond to the ascertained issues of community concern (“Operator Programming”), and to delete or preempt in its sole good faith discretion any Fisher Programming for the purpose of transmitting such Operator Programming. In all cases of deletion or preemption of Fisher Programming by Operator, except those involving breaking news, Operator shall make reasonable efforts to provide Fisher with not less than fifteen (15) days notice of Operator’s intention to delete or preempt Fisher Programming.

     Section 1.3 Preemption. In addition to the above right of Operator to delete or preempt Fisher Programming in order to transmit programming responsive to issues of concern to the Station’s community of license and service area, and to children, Operator maintains the independent right to preempt or delete any Fisher Programming which Operator reasonably believes in good faith to be unsatisfactory or unsuitable or contrary to the public interest, or to substitute programming which, in Operator’s reasonable determination, is of greater local or national importance.

     Section 1.4 Access to and Use of Assets. Operator hereby grants to Fisher, and Fisher hereby accepts from Operator, access to and the right to use, at any time and from time to time after the Commencement Time and continuing thereafter during the term of this Agreement and under the supervision and control of Operator, antennae, transmitters, equipment, assets, studio space, rights under leases and all other property owned or leased by Operator and used and useful in connection with the business and operation of the Station (collectively, the “Operator Assets”), pursuant to the terms and subject to the conditions of this Agreement.

     Section 1.5 Conditions to Use of Operator Assets.

          (a) Fisher shall use the Operator Assets only to perform its obligations under this Agreement.

          (b) The Operator Assets will, to the extent used by Fisher throughout the term of this Agreement, be used in all material respects in accordance with all applicable FCC rules and policies and subject to Operator’s ultimate oversight and control. Fisher may not, without Operator’s prior written consent or except as otherwise provided in this Agreement, make alterations in or modifications to the Operator Assets.

          (c) Fisher shall not use or permit the Operator Assets to be used in any manner or for any purpose for which the Operator Assets are not designed or reasonably suitable or otherwise in a manner that is inconsistent with good engineering practices. Fisher shall comply with all governmental laws, rules and regulations concerning the operation of the Operator Assets.

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          (d) Operator shall retain title to all of the Operator Assets throughout the term of this Agreement and nothing contained herein shall be deemed to effect any transfer of such title.

ARTICLE 2 — OPERATIONS

     Section 2.1 Compliance With FCC Regulations.

          (a) Operator will retain responsibility for and employ such personnel as is necessary to assure compliance with all FCC rules and policies, including, without limitation, all FCC rules and policies relating to (i) technical operations of the Station, (ii) programming content requirements, (iii) the maintenance of a main studio and a meaningful managerial and staff presence at that main studio, (iv) ascertainment of, and programming in response to, community needs and concerns and the needs and concerns of children, (v) political programming, (vi) sponsorship identification, (vii) lotteries and contests, (viii) the maintenance of the Station’s public and political files and (ix) the compilation of appropriate quarterly programs/issues lists, children’s programming lists and employment records.

          (b) Operator expressly acknowledges that its duty to maintain the Station’s public inspection files is non-delegable, and it retains sole responsibility for maintenance of the files. Fisher will provide to Operator monthly documentation of the programs it has provided to the Station that it believes address issues of concern to the Station’s community of license. Fisher also will forward to Operator, within twenty-four (24) hours of receipt by Fisher, any letter from a Station’s viewer addressing the Station’s programming and any documentation that comes into Fisher’s custody that Fisher believes is required to be included in the Station’s public inspection file.

          (c) Operator will be responsible for ensuring proper broadcast of the Station’s identification announcements; provided, however, that Fisher will provide appropriate identification announcements for the Station that comply with FCC rules and policies in a form reasonably acceptable to Operator.

          (d) Fisher agrees that neither it nor its agents, employees, consultants or personnel will accept any consideration, compensation, gift or gratuity of any kind whatsoever, regardless of its value or form, including, without limitation, a commission, discount, bonus, materials, supplies or other merchandise, services or labor (collectively, “Consideration”), whether or not pursuant to written contracts or agreements between Fisher and merchants or advertisers, unless the person or entity paying such Consideration is identified in the program for which the Consideration was provided as having paid or furnished such Consideration in accordance with the Communications Act of 1934, as amended (the “Communications Act”), applicable FCC rules and policies and any other applicable laws and governmental regulations.

          (e) Operator shall retain full responsibility for overseeing compliance with the FCC’s political programming rules and policies. At least ninety (90) days prior to the beginning of any primary or general election period, subject to Operator’s approval, Fisher shall propose reasonable rates to be charged to legally qualified political candidates which rates conform with applicable election law and FCC rules and policies. Fisher agrees to provide Operator with

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access to its documentation concerning the pricing of advertising sold on the Station as is necessary to permit Operator to ascertain that the political rate is appropriate. Within twenty-four (24) hours of any request to purchase time on a Station on behalf of a legally qualified candidate, Fisher will report to Operator the request and the disposition of such request. Operator shall be responsible for placing appropriate records in the Station’s political files.

     Section 2.2 Maintenance.

          (a) After the Commencement Time and thereafter during the term of this Agreement, Fisher shall use its commercially reasonable efforts to assist Operator, at all times under the supervision and ultimate control of Operator, in the operation the Station.

          (b) Operator shall retain ultimate operational control over the Station and shall retain full responsibility for ensuring compliance with all FCC technical rules and policies. Operator will employ a chief operator, as defined by the FCC rules and policies (and who may also hold the position of chief engineer), who will be responsible for, without limitation, ensuring compliance by the Station with the technical operating and reporting requirements established by the FCC, and overseeing maintenance of the Station’s transmission facilities. Operator shall also employ at least one other full-time employee of Operator’s choice, to be present at the Station’s main studio in compliance with the FCC’s rules and policies. Fisher shall not take any action, or fail to take any action which it is obligated to take under this Agreement, which will cause the Station not to comply with applicable law, and Fisher will provide reasonable assistance to Operator to ensure that the Station complies with applicable law.

          (c) After the Commencement Time and thereafter during the term of this Agreement, Operator will make available to Fisher at least ninety five percent (95%) of the Station’s effective radiated power (as operating as of the Commencement Date) for the entire time that such Station is broadcasting over the air, except for downtime required for occasional maintenance and other interruptions contemplated by Section 2.2(d) and events described in Section 7.1 hereof. Operator will use reasonable efforts to provide Fisher with at least forty eight (48) hours advance written notice of any routine or non-emergency maintenance work affecting the operation of the Station at full power. Operator will, to the extent possible, (i) schedule such maintenance work to be performed between the hours of 1:00 a.m. and 6:00 a.m., local time, and (ii) not schedule such maintenance to take place during a rating period.

          (d) After the Commencement Time and thereafter during the term of this Agreement, if the Station suffers any loss or damage of any nature to its transmission or studio facilities which results in the interruption of service or the inability of the Station to operate with its FCC licensed facilities (as operating as of the Commencement Date), Operator will immediately notify Fisher of such loss or damage and Operator will undertake such repairs as are necessary to restore full-time operation of the Station as expeditiously as reasonably possible following the occurrence of any such loss or damage. If Operator is unable to or fails to make such repairs as soon as reasonably possible after providing such written notice to Fisher, then Fisher may elect to undertake such repairs with written notice to Operator.

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     Section 2.3 Additional Affirmative Covenants.

          (a) Operator covenants and agrees that it will fully comply with all applicable federal, state and local laws, rules and regulations (including, without limitation, all FCC rules and policies) and pertinent provisions of all contracts, permits and other agreements to which it is a party or is otherwise bound related to the Station or this Agreement.

          (b) (i) Fisher covenants and agrees that it will fully comply with all applicable federal, state and local laws, rules and regulations (including, without limitation, all FCC rules and policies) in the provision of the Fisher Programming and other services to Operator pursuant to this Agreement and otherwise in connection with the performance of its obligations hereunder.

               (ii) In performing its obligations hereunder, Fisher shall use its commercially reasonable efforts to perform or discharge on behalf of Operator the obligations and liabilities under all contracts related to the business and operation of the Station to which Operator is a party or by which Operator may be bound (other than the ShopNBC Agreement, as defined herein) (the “Existing Contracts”) in accordance with the provisions hereof. In connection with the foregoing, Operator shall use all commercially reasonable efforts to provide Fisher with the benefits of any such Existing Contract.

               (iii) Except as the parties may otherwise agree, Fisher shall not designate or engage any agent or otherwise subcontract with any third party to perform its duties or obligations under this Agreement or delegate the performance of such duties or obligations to any third party, including, without limitation, its duties and obligations hereunder with respect to Fisher Programming and the advertising sold in connection therewith.

          (c) Operator covenants and agrees to (i) promptly cause the termination of the ShopNBC Agreement (as hereinafter defined) at soon as practicable; (ii) deliver to Fisher a copy of the notice of termination of Operator pursuant to the foregoing clause; and (iii) notify Fisher of the effective date of termination of the ShopNBC Agreement.

ARTICLE 3 — FEES AND OTHER CONSIDERATION

     Section 3.1 LMA Fee. From and after the Commencement Time, in consideration of the right to perform the services contemplated under this Agreement, Fisher will pay to Operator a monthly fee in an amount equal to $150,954.38 (the “LMA Fee”). The LMA Fee will be due and payable by Fisher each calendar month following the Commencement Date through the expiration or termination hereof (including a pro rated portion of the LMA Fee for any partial calendar month), and shall be due and payable on or before the tenth day of each calendar month for such calendar month (provided, however, that the first payment of the LMA Fee shall be due and payable within ten (10) days following the Commencement Date).

     Section 3.2 Expenses.

          (a) Except as otherwise provided in Section 3.2(b), and without limiting the scope of Section 3.2(c), Operator shall be solely responsible for paying any and all of Operator’s expenses in connection with the business and operation of the Station, including Monthly Costs

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(as defined in Exhibit B) and those expenses contemplated in Section 2.2(b), consistent with the operations of the Station in the ordinary course and past practice, and Fisher shall have no obligation to reimburse Operator for such expenses independent of the payment obligation of Fisher pursuant to the terms and subject to the conditions of Section 3.1; provided, however, that Operator shall not be responsible for paying (and Fisher shall be responsible for) any such expenses to the extent that such expenses increase by a material amount due directly to the performance or exercise of its rights by Fisher under this Agreement.

          (b) Notwithstanding anything in Section 3.2(a) to the contrary, upon a Triggering Termination Event (as hereinafter defined) and thereafter and during the Extension Period (as hereinafter defined), Fisher shall pay to Operator, in addition to the LMA Fee due and payable pursuant to the terms and subject to the conditions of Section 3.1, the amounts described on Exhibit B hereto pursuant to the terms and subject to the conditions set forth therein.

          (c) Fisher shall be responsible for any and all fees charged by ASCAP, BMI, SESAC or similar performing rights societies on Fisher Programming, whether such fees are assessed against Fisher based on the Fisher Programming or against Operator based on the ownership of the Station. Fisher shall not disseminate or authorize dissemination by other parties of information concerning the ratings of the Station issued by Nielsen Media Research, the Arbitron Company or any other entity, other than as permitted under Fisher’s valid license with such parties. Operator shall not be required to purchase a license to receive ratings information but will cooperate with Fisher in Fisher’s efforts to obtain such a license, provided that any consideration payable under such a license is paid by Fisher.

ARTICLE 4 — FISHER RETAINED REVENUE AND RELATED MATTERS

     Section 4.1 Retained Revenue. Without limiting the obligations of Fisher pursuant to the terms and subject to the conditions of Article 3, Fisher shall retain all revenues resulting from the sale of advertising and other time on the Station from and after the Commencement Time and thereafter during the term of this Agreement, including all revenue from the sale of advertising and other time during the Operator Programming or otherwise resulting from the operation of the Station during the term of this Agreement.

     Section 4.2 Advertising Sales. Beginning at the Commencement Time and thereafter during the term of this Agreement, Fisher shall have the sole right to (a) sell advertising to be placed in all programming broadcast on each of the Station, including, without limitation, Operator Programming; (b) bill for and collect the payments for all programs and commercials aired on the Station; (c) negotiate for and receive all compensation (if any) due to the Station from (i) cable television systems pursuant to the “retransmission consent” provisions of the Cable Television Consumer Protection and Competition Act of 1992, as amended, and the FCC’s rules and policies enacted pursuant thereto, and (ii) satellite service providers pursuant to the Satellite Home Viewer Improvement Act of 1999, as amended, and the FCC’s rules and policies enacted pursuant thereto. Operator will take, or refrain from taking, any action as to matters related to clause (c) above in accordance with Fisher’s commercially reasonable requests.

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     Section 4.3 [Intentionally blank.]

     Section 4.4 Bank Accounts. Fisher may deposit any sums it is entitled to retain pursuant to this Agreement or otherwise with respect to the Station into one or more bank accounts of Fisher, established by Fisher in Fisher’s name for this purpose (the “Fisher Accounts”), and the funds in the Fisher Accounts will be the property of Fisher except as otherwise provided in this Agreement or the Purchase Agreement. Solely with respect to payments relating to the Station which Fisher is authorized to retain under this Agreement, Fisher is authorized to endorse payments received in names other than Fisher’s (e.g., “KWOG”) in order to deposit such payments into the Fisher Accounts.

ARTICLE 5 — TERM, TERMINATION AND ASSIGNMENT

     Section 5.1 Term. This Agreement shall become binding and effective between the parties as of the date first set forth above. Subject to the provisions contained herein, the programming rights and obligations of the parties shall commence on the day immediately following the date on which that certain Programming Agreement (Renewal), by and between Operator and Value Vision Media, Inc., dated effective as of December 1, 2005, for ShopNBC shop at home programming (the “ShopNBC Agreement”) expires or is terminated, or such other date as may be agreed upon in writing by the parties (such date, the “Commencement Date”) at 12:01 a.m. local time at the Station (the “Commencement Time”); provided, however, that in no event shall the Commencement Date be less than thirty (30) days from the date hereof. The term of this Agreement shall expire upon the earlier to occur of (a) the Closing (as defined in the Purchase Agreement), or (b) termination of this Agreement pursuant to Section 5.2 or Section 5.3 hereof; provided, however, that in the event that the Purchase Agreement is terminated by Racine pursuant to the terms and subject to the conditions of Section 16.1(b) of the Purchase Agreement (a “Triggering Termination Event”), the term of this Agreement shall be deemed extended, subject to Section 5.2 hereof, for a period ending on the second anniversary of the date of the Triggering Termination Event (such period, the “Extension Period”).

     Section 5.2 Termination; Effect of Termination.

          (a) In the event that either party shall be in breach of this Agreement for the nonperformance of a material obligation, the non-breaching party may, in addition to pursuing any other remedies available at law or in equity, terminate this Agreement if such breach shall continue for a period of fifteen (15) days following the receipt of written notice from the non-breaching party, which notice shall set forth and describe the nature of such breach, except if the breaching party has commenced a cure of such breach within such fifteen (15) day period and continues to act in good faith to cure and such breach is cured within a reasonable time not to exceed thirty (30) days. A breach by Fisher or by Racine (which shall be considered to be a breach by Operator solely in connection with the termination provisions of this Agreement) of the Purchase Agreement shall be considered a breach of this Agreement, provided, however, that the cure periods for such breach shall be governed by the Purchase Agreement and not the foregoing cure periods set forth above in this subsection (a).

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          (b) In the event that the Purchase Agreement is terminated pursuant to Section 16.1(g) thereof, then Fisher shall have the right, on ninety (90) days advance written notice to Operator, to terminate this Agreement.

          (c) In the event that the sale of the Closing Shares and the Initial Shares pursuant to the terms and subject to the conditions of Section 16.4 of the Purchase Agreement is consummated (a “Drag-Along Closing”), this Agreement shall terminate automatically upon such Drag-Along Closing.

          (d) In the event of termination of this Agreement as a result of a breach by Fisher pursuant to Section 5.2(a), Fisher shall cooperate in good faith with Operator and shall take such actions at no additional cost to Fisher as may be reasonably necessary in order to transition the programming of the Station from Fisher Programming and to permit Operator to program the Station’s broadcast day on a daily basis for at least the minimum operating schedule specified in Section 73.1740 of the FCC’s rules including, without limitation, by (i) assigning to Operator any agreements for the provision of any Fisher Programming as Operator may reasonably request and (ii) prior to the effectiveness of such assignment or to the extent that such assignment cannot be made or an attempted assignment of any contract related to the Fisher Programming is ineffective, taking all reasonably necessary actions to provide Operator with the benefits of any such contract, provided that to the extent Operator is provided with the benefits of such contract, Operator shall perform or discharge on behalf of Fisher the obligations and liabilities under such contract in accordance with the provisions thereof. With respect to any actions in connection with the foregoing that would result in any additional cost or fee to Fisher, Fisher shall only be required to take such actions to the extent Operator agrees, in writing, to pay or reimburse Fisher for such additional cost or fee in advance of the incurrence of such cost or fee.

          (e) [Intentionally blank.]

          (f) In the event of termination of this Agreement (other than by reason of the Closing (as defined in the Purchase Agreement)), the parties shall pro rate the revenues, expenses, and liabilities attributable to the Station, including the power and utilities, ad valorem property taxes (upon the basis of the most recent assessment available), rents, income and sales taxes, and similar accruing, prepaid and deferred items, in accordance with the principles that Fisher will be allocated revenues earned or accrued, and expenses, costs and liabilities incurred in or allocable with respect to the business and operation of the Station from the Commencement Time through the effective time at which this Agreement terminates (the “Termination Time”) and Operator will be allocated revenues earned or accrued, and expenses, costs and liabilities incurred in or allocable, with respect to the business and operation of the Station after the Termination Time.

          (g) In the event of termination of this Agreement (other than by reason of the Closing (as defined in the Purchase Agreement)), Operator shall reimburse Fisher for any capital expenditures paid by Fisher (or reimbursed by Fisher to Operator) to the extent that (i) such capital expenditure relates to the repair or replacement of any of the assets relating to the Station and (ii) Operator consented in writing to such capital expenditures prior to the incurrence thereof after written notice to Operator seeking such consent and describing in reasonable detail the basis

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therefor (such capital expenditures the “Approved Expenditures”). Any Approved Expenditures shall be payable by Operator after the Termination Time and within ten (10) days following receipt of written notice from Fisher with a final accounting of all Approved Expenditures, including a certificate executed by an officer of Fisher setting forth the Approved Expenditures actually incurred by Fisher with attached thereto reasonable documentation in support thereof.

          (h) In the event of termination of this Agreement (other than by reason of the Closing (as defined in the Purchase Agreement)), Fisher shall assign to Operator all right, title and interest it shall have or may have in and to (i) any assets acquired or leased by Fisher pursuant to any Approved Expenditure and (ii) any other fixture or improvement owned or leased by Fisher, and Fisher and Operator shall execute and deliver all instruments necessary to effectuate the foregoing.

     Section 5.3 Renegotiation Upon FCC Action.

          (a) Should a change in FCC rules or policies make it necessary to obtain FCC consent for the implementation, continuation or further effectuation of any element of this Agreement, the parties hereto shall use their commercially reasonable efforts diligently to prepare, file and prosecute before the FCC all petitions, waivers, applications, amendments, rulemaking comments and other related documents necessary to secure or retain FCC approval of all aspects of this Agreement. Operator and Fisher shall each bear their own costs incurred in connection with the preparation of such documents and prosecution of such actions. Notwithstanding anything in this Agreement to the contrary, it is understood that no filing shall be made with the FCC with respect to this Agreement unless each party hereto has had an opportunity to review such filing and to provide comments thereon. Each party shall use its commercially reasonable efforts to incorporate the comments (whether in whole or in part) of the other parties to any filing to be made with the FCC with respect to this Agreement.

          (b) If any court or federal, state or local government authority (including the FCC) orders or takes any action which becomes effective and which requires the termination or material modification of this Agreement to comply with such action or otherwise with applicable law (a “Permissibility Determination”), the parties shall use their commercially reasonable efforts to renegotiate this Agreement in good faith and recast this Agreement in terms that are likely to cure the defects caused by the Permissibility Determination while maintaining the benefit of the bargain to the parties hereunder and to return a balance of benefits to both parties comparable to the balance of benefits provided by the Agreement in its current terms. If the parties are unable to recast this Agreement in a manner that cures such defects and otherwise is mutually agreeable to the parties, this Agreement will terminate effective on such date as the parties’ activities are required to terminate pursuant to the Permissibility Determination. Upon such termination of this Agreement, Operator will reasonably cooperate with Fisher to the extent permitted in order to enable Fisher to fulfill advertising or other programming contracts then outstanding, and Fisher will reasonably cooperate with Operator in order to effectuate a reasonable transition period from the Fisher Programming to other programming on the Station.

     Section 5.4 Assignability. No party hereto may assign this Agreement without the prior written consent of the other parties; provided, however, that this Agreement shall be

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assigned in connection with any assignment by any party of its rights and obligations under the Purchase Agreement that is permitted under the terms of the Purchase Agreement. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

ARTICLE 6 — INDEMNIFICATION

     Section 6.1 Indemnification by Fisher. Fisher will indemnify, defend and hold harmless Operator, its affiliates and all officers, directors, employees, stockholders, partners, members and agents of Operator and their affiliates (individually, an “Operator Indemnitee”) from and against any and all claims, demands, costs, damages, losses, liabilities, joint and several, expenses of any nature (including, without limitation, reasonable attorneys’, accountants’ and experts’ fees and disbursements), judgments, fines, settlements and other amounts (collectively, “Damages”) arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative (collectively, “Claims”) in which an Operator Indemnitee may be involved, as a party or otherwise, arising out of: (a) the activities, acts or omissions of Fisher, or Fisher’s employees, agents or contractors, under or in connection with this Agreement or with respect to the Station which activities, acts or omissions involve or result in, among other things, (i) libel and slander; (ii) infringement of trade marks, service marks or trade names; (iii) violations of law, rules, regulations, or orders (including the FCC’s rules and policies); or (iv) invasion of rights of privacy or infringement of copyrights or other proprietary rights; or (b) any breach by Fisher of its obligations under this Agreement.

     Section 6.2 Indemnification by Operator. Operator will indemnify, defend and hold harmless Fisher, its affiliates and all officers, directors, employees, stockholders, partners, members and agents of Fisher and their affiliates (individually, a “Fisher Indemnitee”) from and against any and all Damages arising from any and all Claims in which a Fisher Indemnitee may be involved, as a party or otherwise, arising out of: (a) the activities, acts or omissions of Operator, or Operator’s employees, agents or contractors, under or in connection with this Agreement or with respect to the Station which activities, acts or omissions involve or result in, among other things, (i) libel and slander; (ii) infringement of trade marks, service marks or trade names; (iii) violations of law, rules, regulations, or orders (including the FCC’s rules and policies); or (iv) invasion of rights of privacy or infringement of copyrights or other proprietary rights; or (b) any breach by Operator of its obligations under this Agreement.

     Section 6.3 Insurance. Fisher will maintain broadcasters’ liability insurance policies covering libel, slander, invasion of privacy and the like, general liability, blanket crime, property damage, business interruption, automobile liability, and workers’ compensation insurance in forms and amounts customary in the television broadcast industry (to the extent commercially reasonable, for example, Fisher shall not be required to obtain insurance specifically with respect to property it does not own), and Operator will maintain the existing insurance policies on the Station or other policies providing substantially similar coverages, and each of the parties hereto will name the other as an additional insured under such policies to the extent that their respective interests may appear and will provide for notice to the other party prior to cancellation thereof. Upon request, each party will provide the other with certificates evidencing such insurance, and will further provide certificates evidencing renewal thereof prior to the expiration of such policies.

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ARTICLE 7 — MISCELLANEOUS

     Section 7.1 Force Majeure. Notwithstanding anything contained in this Agreement to the contrary, no party shall be liable to another party for failure to perform any obligation under this Agreement if prevented from doing so by reason of fires, acts of terrorism, strikes, labor unrest, embargoes, civil commotion, rationing or other orders or requirements, acts of civil or military authorities, acts of God or other contingencies, including, without limitation, equipment failures, beyond the reasonable control of the parties, and all requirements as to notice and other performance required hereunder within a specified period shall be automatically extended to accommodate the period of pendency of such contingency which shall interfere with such performance.

     Section 7.2 Confidentiality and Press Releases.

          (a) Each party shall hold in strict confidence all documents and information concerning the other and its business and properties and, if this Agreement is terminated, such confidences shall be maintained, and all documents and information (in written form) shall immediately thereafter be returned to the party originally furnishing such documents and information.

          (b) No press release or public disclosure, either written or oral, of the existence or terms of this Agreement or the transactions contemplated hereby shall be made by either party to this Agreement without the consent of the other (which consent shall not be unreasonably withheld, conditioned or delayed), and each party shall furnish to the other advance copies of any release which it proposes to make public concerning this Agreement or the transactions contemplated hereby and the date upon which such party proposes to make public such press release.

          (c) Notwithstanding anything contained herein to the contrary, no party shall be prohibited from (i) making any disclosures to any governmental authority that it is required to make by law, including, without limitation, the filing of this Agreement with the FCC and placing a copy of this Agreement in the Station’s public inspection files, (ii) disclosing this Agreement or its terms to its attorneys, accountants, agents or advisors, (iii) filing this Agreement with, or disclosing the terms of this Agreement to, any institutional lender to such party or (iv) disclosing to its investors and broker/dealers such terms of this transaction as are customarily disclosed to them in connection with similar transactions.

     Section 7.3 Trademarks. Operator hereby grants Fisher an unlimited, royalty-free license to use in connection with providing programming on the Station any and all trademarks, service marks, patents, trade names, jingles, slogans, logotypes and other intangible rights owned and used or held for use by Operator in conjunction with the Station. Operator agrees to execute such additional documentation as may be necessary or desirable to effectuate the license granted under this paragraph.

     Section 7.4 Notices. All notices, demands and requests required or permitted to be given under the provisions of this Agreement shall be (i) in writing, (ii) delivered by personal delivery or sent by commercial delivery service or certified mail, return receipt requested,

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(iii) deemed to have been given on the date of personal delivery or the date set forth in the records of the delivery service or on the return receipt and (iv) addressed as follows:

          (a) If to Operator:

African-American Broadcasting of Bellevue, Inc.
875 Waimanu Street, Suite 110
Honolulu, HI 96813
Attention: Christopher J. Racine

with a copy to (which shall not constitute notice):

Fletcher Heald & Hildreth, PLC
1300 North 17th Street
11th Floor
Arlington, VA 22209
Attention: Harry F. Cole, Esq.

          (b) If to Fisher:

Fisher Broadcasting Company
100 4th Avenue North
Suite 510
Seattle, WA 98109
Attention:

with a copy to (which shall not constitute notice):

Covington & Burling
1201 Pennsylvania Ave., NW
Washington, DC 20004-2401
Attention: Eric D. Greenberg

or to any other or additional persons and addresses as the parties may from time to time designate in a writing delivered in accordance with this Section 7.4.

     Section 7.5 Severability. If any covenant or provision hereof is determined to be void or unenforceable in whole or in part, it shall not be deemed to affect or impair the validity of any other covenant or provision, each of which is hereby declared to be separate and distinct. If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable. If any provision of this Agreement is declared invalid or unenforceable for any reason other than overbreadth, the offending provision will be modified so as to maintain the essential benefits of the bargain among the parties hereto to the maximum extent possible, consistent with law and public policy.

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     Section 7.6 Payment of Expenses. Except as otherwise provided, Operator and Fisher shall pay their own expenses incident to the preparation and carrying out of this Agreement, including, without limitation, all fees and expenses of their respective counsel.

     Section 7.7 Relationship and Dealings with Third Parties. Each of the parties hereto is an independent contractor, and no party is, nor shall be considered to be, the agent of another party for any purpose whatsoever. No party has any authorization to enter into any contracts nor assume any obligations for another party nor make any warranties or representations on behalf of another party, other than as expressly authorized herein. Nothing in this Agreement shall be construed as establishing an agency, partnership, fiduciary relationship or joint venture relationship between the parties hereto. No party is nor shall hold itself out to be vested with any power or right to bind contractually or act on behalf of another party as another party’s contracting broker, agent or otherwise for committing, selling, conveying or transferring any of another party’s assets or property, contracting for or in the name of another party or making any representations contractually binding another party.

     Section 7.8 Conflict. Nothing in this Agreement is intended to modify or amend the rights and obligations of the parties or Racine under the Purchase Agreement, including, without limitation, the treatment of and disputes regarding the Initial Payment (as defined in the Purchase Agreement).

     Section 7.9 Further Assurances. Subject to the terms and conditions of this Agreement, from time to time each party hereto will use commercially reasonable efforts to take, or cause to be taken, all such actions and to do or cause to be done, all things necessary, proper or advisable under the FCC’s rules and policies or other applicable law to consummate and make effective the transactions contemplated by this Agreement, including, without limitation, executing and delivering such documents as the other party may reasonably request in connection with the performance of this Agreement and the consummation of the other transactions contemplated hereby.

     Section 7.10 Governing Law. This Agreement and the rights and obligations of the parties hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Washington without regard to its conflict of law rules, as though entered into by Washington residents and to be performed entirely within the State of Washington.

     Section 7.11 Waiver of Compliance; Consents. Except as otherwise provided in this Agreement, any failure of any of the parties to comply with any obligation, representation, warranty, covenant, agreement or condition herein may be waived by the party entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but such waiver shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any party hereto, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth in this Section 7.11.

     Section 7.12 Survival. The covenants and agreements of the parties contained herein to be performed in any respect after the expiration or termination of this Agreement shall survive the expiration or termination of this Agreement until fully discharged and performed. Any

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payments, due to Operator by Fisher that shall have accrued during the term hereof and that are due and outstanding after the Closing (as defined in the Purchase Agreement) shall be paid to Racine as full satisfaction of any such payment obligation.

     Section 7.13 Headings. The headings in this Agreement are for the sole purpose of convenience of reference and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Agreement.

     Section 7.14 Entire Agreement. This Agreement, the Schedules and Exhibits hereto, the Purchase Agreement and all documents, certificates and other documents to be delivered by the parties pursuant hereto or thereto, collectively represent the entire understanding and agreement between Buyer and Operator with respect to the subject matter of this Agreement. This Agreement supersedes all prior negotiations between the parties and cannot be amended, supplemented or changed except by an agreement in writing that is signed by the parties hereto.

     Section 7.15 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document. Each party hereto will receive by delivery or facsimile or other electronic transmission a duplicate original of the Agreement executed by each party, and each party agrees that the delivery of the Agreement by facsimile or other electronic transmission will be deemed to be an original of the Agreement so transmitted.

     Section 7.16 Required Certifications.

          (a) Operator hereby certifies that it has, and shall maintain ultimate control over the Station’s facilities, including specifically control over the finances, personnel, and program content of the Station. Operator represents and warrants that this certification may be relied upon by the FCC, as well as by Fisher.

          (b) Fisher certifies that the arrangement with Operator as set forth in this Agreement and as contemplated in all aspects of operation is and shall remain in compliance with 47 C.F.R. § 73.3555(b) and (c), and that it will provide to the FCC any documents, exhibits, or other material necessary to demonstrate such compliance. Fisher represents and warrants that this certification may be relied upon by the FCC, as well as by Operator.

     Section 7.17 Payola/Plugola. Upon Operator’s reasonable prior request, Fisher shall provide Operator with anti-payola/plugola affidavits, substantially in the form attached hereto as Exhibit C, signed by such of Fisher’s employees engaged in production of the Fisher Programming and its broadcast on the Station, and at such times, as Operator may reasonably request in writing, and Fisher shall notify Operator promptly of any violations it learns of relating to the Communications Act, including Sections 317 and 508 thereof.

[Remainder of Page Intentionally Left Blank]

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[Execution Version]

          IN WITNESS WHEREOF, this Local Marketing Agreement has been executed by the duly authorized officers of Fisher and Operator as of the date first written above.

African-American Broadcasting of Bellevue, Inc.

By:	/s/ Christopher J. Racine
	Name: Christopher J. Racine
	Title: President

Fisher Broadcasting Company

By:	/s/ Colleen B. Brown
	Name: Colleen B. Brown
	Title: President & CEO

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EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Colleen B. Brown, President and Chief Executive Officer of Fisher Communications, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fisher Communications, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2006

/s/ Colleen B. Brown

Colleen B. Brown

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, Jodi A. Colligan, Vice President Finance and Acting Chief Financial Officer of Fisher Communications, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fisher Communications, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2006

/s/ Jodi A. Colligan

Jodi A. Colligan

Vice President Finance

Acting Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fisher Communications, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q), I, Colleen B. Brown, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2)	The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 8, 2006

/s/ Colleen B. Brown

Colleen B. Brown

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fisher Communications, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, Jodi A. Colligan, Vice President Finance and Acting Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2)	The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 8, 2006

/s/ Jodi A. Colligan

Jodi A. Colligan

Vice President Finance

Acting Chief Financial Officer