Membership Purchase Agreement

EXHIBIT 10.1


MEMBERSHIP PURCHASE AGREEMENT


THIS MEMBERSHIP PURCHASE AGREEMENT ("Agreement") is made and entered into as of the _____ day of May, by and between KOCH AGRICULTURE COMPANY, a Nebraska corporation formerly known as Koch Agriculture, Inc. ("Seller"), FISHER MILLS INC., a Washington corporation ("Fisher Mills") and Fisher Companies Inc., a Washington corporation ("Fisher Companies") (collectively, "Buyer").


RECITALS


A. Seller and Fisher Mills are the sole members of Koch Fisher Mills L.L.C., a Washington limited liability company (the "Company") pursuant to the terms of that certain Limited Liability Company Operating Agreement of Koch Fisher Mills L.L.C. dated July 17, 1996 (the "LLC Agreement"). The purpose of the Company is to own, operate and sell the products produced by the flour mill located in Blackfoot, Idaho, on the real property more particularly described on Exhibit A attached to this Agreement (the "LLC Property").


B. Seller owns fifty percent (50%) of the Company Interest, and Fisher Mills owns fifty percent (50%) of the Company Interest. Seller and Buyer desire to provide for and set forth the terms of Buyer's purchase of all of the Company Interest held by Seller (the "Sale").


C. All capitalized terms used in this Agreement but not defined shall have the meanings attributed to them in the LLC Agreement.


AGREEMENT


1. Purchase and Sale.


1.1 Sale. Subject to the terms set forth herein, Seller shall sell, and
Fisher Mills as to forty-nine percent (49%) of the Company Interest,
and Fisher Companies as to one percent (1%) of the Company Interest,
shall purchase, for the consideration described herein, all of the
Company Interest owned by Seller (the "LLC Interest").


1.2 Purchase Price. The purchase price payable for the LLC Interest (the
"Purchase Price") is Eighteen Million Two Hundred Thousand Dollars
($18,200,000.00), plus Eight Hundred Thousand Dollars ($800,000.00) as
Seller's share of the working capital account of the Company, which
shall be deemed to be one-half of the balance of the working capital
account as of May 31, 1999, and as of the Closing Date (defined
below).


2. Closing.


2.1 Time and Place of Closing. The closing ("Closing") shall be deemed to
have occurred when Seller has transferred the LLC Interest to Buyer as
evidenced by a duly executed Closing Certificate representing Seller's
fifty percent (50%) interest


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in the Company (the "Closing Certificate") in the form attached hereto
as Exhibit B, and Buyer has paid the Purchase Price to Seller. The
Closing shall occur on or before July 1, 1999, on a date mutually
agreeable to Buyer and Seller (the "Closing Date"). On or before the
Closing Date, Buyer shall have satisfied itself that all conditions
precedent to its obligation to purchase the LLC Interest have been
satisfied, or shall have provided to Seller written notice that Buyer
has waived any such conditions that remain unsatisfied. The Closing
shall occur in the offices of Graham & Dunn, 1420 Fifth Avenue, 33rd
Floor, Seattle, Washington.


2.2 Joint Obligations to Be Performed Prior to Closing. Prior to Closing,
Seller and the Company shall have executed the following agreements:


(a) Grain Storage Tank Usage Agreement, in substantially the form
attached to this Agreement as Exhibit C (the "Tank Usage
Agreement");


(b) Wheat Handling Agreement, in substantially the form attached to
this Agreement as Exhibit D (the "Wheat Handling Agreement");


(c) Easement, License and Utility Agreement, in substantially the
form attached to this Agreement as Exhibit E;


2.3 Buyer's Closing Obligations. In consideration for the LLC Interest,
Buyer shall deliver the Purchase Price to Seller by wire transfer of
immediately available funds as directed by Seller.


2.4 Seller's Closing Obligations. In consideration for the purchase of
the LLC Interest, Seller:


(a) shall deliver to Buyer the Closing Certificate evidencing the
transfer of the LLC Interest; and


(b) shall deliver to Buyer any and all books and records concerning
the Company or the business and operations of the Company
currently in Seller's possession; and


(c) Seller's Member Representative shall resign.


3. Buyer's Obligation to Fund Working Capital Account. Commencing June 1,
1999, Buyer shall be responsible for funding one hundred percent (100%) of
the working capital account of the Company.


4. Seller's Continuing Obligations for Mill Construction Costs. In connection
with the construction of the conventional mill located on the LLC Property
(the "Mill"), Seller and Buyer, in accordance with the terms of that
certain Unanimous Written Consent Resolution of Members in Lieu of Special
Meeting dated as of November 4, 1997, agreed to make equal capital
contributions as necessary to pay the costs incurred by the Company


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in the completion of the Mill. The Mill is substantially complete, and the
contractor retained by the Company to design, construct and equip the Mill
(the "Contractor") has prepared a punchlist dated ________________, which
has been accepted by Buyer and Seller as all that is required for the Mill
to meet remaining requirements of the contract for the design, construction
and equipping of the Mill. The Company has funded a retainage for the
payment of the remaining funds due to the Contractor upon final completion
of all punchlist items. Seller hereby agrees that the funds held as
retainage shall remain on deposit with the Company until Buyer and Seller
are satisfied that the punchlist items have been completed, at which time
Buyer is authorized to transfer such funds to the Contractor. If, for any
reason, the cost of completing items on the punchlist, for which the
Company is obligated to pay the contractor, exceeds the amount held as
retainage, then Seller shall, within five (5) days following written demand
therefor from Buyer (including evidence of the full additional amount
payable by the Company), remit to Buyer for payment to Buyer or the
Contractor its one-half share of such additional amount. The obligation of
Seller to pay its one-half share of all costs incurred for the construction
of the Mill shall survive the Closing of the transaction contemplated by
this Agreement for a period of three (3) months after which time all
obligations of Seller regarding the Mill shall cease.


5. Representations.


5.1 Seller's Representations. Seller represents and warrants to Buyer
that:


(a) Organization, Good Standing, and Power of Seller. Seller is a
corporation duly organized, validly existing, and in good
standing under the laws of its state of incorporation, with all
requisite corporate power and authority to carry on its business.
Seller is duly qualified or licensed and in good standing to do
business in the respective jurisdictions in which such
qualification or licensing is necessary. Seller has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby.


(b) Authority Relative to this Agreement. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the
Board of Directors of Seller and no other corporate proceedi ...