Document:

<PAGE>   1
                                                                   Exhibit 10(g)

                                ESCROW AGREEMENT

                  This Escrow Agreement (the "AGREEMENT"), dated as of ________,
2000, by and among Koch Agriculture Company, a Nebraska corporation ("KOCH
AGRICULTURE"), Purina Mills, Inc. a Delaware corporation formerly known as PM
Holdings Corporation ("PURINA") and Bank One Trust Company, National
Association, a national banking association with its corporate trust office
located at 1 Bank One Plaza, Suite IL1-0126, Chicago, Illinois 60670-0126 (the
"ESCROW AGENT").

                                    RECITALS
                                    --------

A.       Prior to ________________________, 2000, Purina was known as PM
         HOLDING Corporation ("PM HOLDINGS") and owned one-hundred percent
         (100%) of the capital stock of the Delaware corporation known as Purina
         Mills, Inc. ("OLD PMI").

B.       On October 28, 1999, PM Holdings, Old PMI and certain of Old PMI's
         subsidiaries (collectively, the "DEBTORS") filed voluntary petitions
         for relief under Chapter 11 of the United States Bankruptcy Code.

C.       On November 9, 1999, Koch Industries, Inc. ("KOCH"), Koch Agriculture
         and certain holders of Old PMI's 9% Senior Subordinated Notes Due 2010,
         (the "Noteholders") entered into a settlement agreement, pursuant to
         which the parties reached an agreement with respect to the settlement
         of certain issues regarding Koch, Koch Agriculture and PM Holdings, Old
         PMI and their respective estates.

D.       On January 18, 2000, the Debtors filed a Joint Plan of Reorganization,
         a copy of which is attached hereto as EXHIBIT A (as the same may be
         amended in accordance with the terms thereof, the "PLAN") with the
         United States Bankruptcy Court for the District of Delaware (the
         "BANKRUPTCY COURT") embodying, among other things, the terms of the
         settlement between Koch, Koch Agriculture and the Noteholders, as
         modified by subsequent negotiations and agreements.

E.       Pursuant to the Plan and that certain Agreement and Plan of Merger
         dated as of __________, 2000, and concurrent with the effectiveness of
         this Agreement, Old PMI has merged with and into PM Holdings (the
         "MERGER"). PM Holdings survived the Merger and changed its name to
         Purina Mills, Inc.

F.       Pursuant to the Plan and in connection with the Merger, Koch
         Agriculture has agreed to deposit an amount equal to sixty million
         dollars ($60,0000,000) into an escrow account (the "ESCROW ACCOUNT").

         (i)      On the date the Plan becomes effective ("the EFFECTIVE DATE"),
                  the Escrow Agent shall distribute the Escrow Payment (as
                  defined herein) to Purina as a contribution

<PAGE>   2

                  to capital by Koch Agriculture and any Escrow Remainder (as
                  defined herein) to Koch Agriculture (the "EFFECTIVE DATE
                  DISBURSEMENT").

         (ii)     If the conditions to the Effective Date as set forth in the
                  Plan are not satisfied or duly waived as set forth in Article
                  IX of the Plan, Koch Agriculture, in its sole discretion, may
                  direct the Escrow Agent to return the Escrow Funds (as defined
                  herein) to Koch Agriculture (the "EFFECTIVE DATE FAILURE
                  DISBURSEMENT").

G.       Capitalized words and phrases used herein and not otherwise defined
         will have the same meanings as set forth in the Plan.

                                    AGREEMENT
                                    ---------

                  In consideration of the foregoing and the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:

         1.       MECHANICS OF THE ESCROW ACCOUNT.

                  (a)      CERTAIN DEFINITIONS.

                           (i) "ESCROW AMOUNT" shall mean sixty million dollars
                  ($60,000,000).

                           (ii) "ESCROW FUNDS" shall mean the amount of money in
                  the Escrow Account at any particular time pursuant to the
                  terms of this Agreement.

                           (iii) "ESCROW PAYMENT" shall mean the Escrow Amount
                  less the distributions required to be made therefrom pursuant
                  to Section 5(g).

                           (iv) "ESCROW REMAINDER" shall mean the Escrow Funds
                  less the Escrow Payment.

                           (v) "ESCROW ACCOUNT" shall mean the separate account
                  maintained by the Escrow Agent under the terms of this
                  Agreement.

                  (b)      ESTABLISHMENT OF ESCROW ACCOUNT AND RECEIPT OF ESCROW
                           AMOUNT.

                           (i) Koch Agriculture hereby deposits with the Escrow
                  Agent the Escrow Amount to be held in escrow by the Escrow
                  Agent. The Escrow Agent accepts said sum and agrees to
                  establish the Escrow Account therefor in its capacity as
                  Escrow Agent pursuant to the terms of this Agreement.

                           (ii) Koch Agriculture and Purina shall each execute
                  and deliver to the Escrow Agent a certificate of incumbency
                  substantially in the form of Exhibit B hereto for the purpose
                  of establishing the identity of the representatives

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<PAGE>   3

         of Koch Agriculture and Purina entitled to issue instructions or
         directions to the Escrow Agent on behalf of each such party. In the
         event of any change in the identity of such representatives, a new
         certificate of incumbency shall be executed and delivered to the Escrow
         Agent by the appropriate party. Until such time as the Escrow Agent
         shall receive a new incumbency certificate, the Escrow Agent shall be
         fully protected in relying without inquiry on any then current
         incumbency certificate on file with the Escrow Agent.

                  (c)      INVESTMENT OF ESCROW FUNDS.

                           (i) The Escrow Agent agrees to invest and reinvest
         funds in the Escrow Account, but only upon written instructions signed
         by an authorized agent of Koch Agriculture, in The One Group
         ______________ Fund, or other investments as outlined in Exhibit C
         hereto.

                           (ii) The parties recognize and agree that the Escrow
         Agent will not provide supervision, recommendations or advice relating
         to either the investment of moneys held in the Escrow Account or the
         purchase, sale, retention or other disposition of any permitted
         investment.

                           (iii) Interest and other earnings on permitted
         investments shall be added to the Escrow Account. Any loss or expense
         incurred as a result of an investment will be borne by the Escrow
         Account. In the event that the Escrow Agent does not receive directions
         to invest funds held in the Escrow Account, the Escrow Agent shall
         invest such funds in The One Group Treasury Money Market Fund Class I
         or a successor or similar fund.

                           (iv) The Escrow Agent is hereby authorized to execute
         purchases and sales of permitted investments through the facilities of
         its own trading or capital markets operations or those of any
         affiliated entity. The Escrow Agent shall send statements to each of
         the parties hereto on a monthly basis reflecting activity in the Escrow
         Account for the preceding month. Although Koch Agriculture and Purina
         each recognizes that it may obtain a broker confirmation or written
         statement containing comparable information at no additional cost, Koch
         Agriculture and Purina hereby agree that confirmations of permitted
         investments are not required to be issued by the Escrow Agent for each
         month in which a monthly statement is rendered. No statement need be
         rendered for the Escrow Account if no activity occurred for such month.

                           (v) Koch Agriculture and Purina acknowledge and agree
         that the delivery of the escrowed property is subject to the sale and
         final settlement of permitted investments. Proceeds of a sale of
         permitted investments will be delivered on the business day on which
         the appropriate instructions are delivered to the Escrow Agent if
         received prior to the deadline for same day sale of such permitted
         investments. If such instructions are received after the applicable
         deadline, proceeds will be delivered on the next succeeding business
         day.

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<PAGE>   4

         2. EFFECTIVE DATE DISBURSEMENT. On the Effective Date, if any, Koch
Agriculture and Purina shall deliver joint written instructions to the Escrow
Agent directing the Escrow Agent to disburse (a) the Escrow Payment to Purina
and (b) the Escrow Remainder to Koch Agriculture. The Escrow Agent will make
these disbursements promptly and prior to cancellation of Koch Agriculture's
ownership interest in Old PM Holdings.

         3. EFFECTIVE DATE FAILURE DISBURSEMENT.

                  (a) If the conditions to the Effective Date as set forth in
the Plan are not satisfied or duly waived pursuant to Article IX of the Plan,
Koch Agriculture, in its sole discretion, may deliver written instructions to
the Escrow Agent directing the release of the Escrow Funds to Koch Agriculture.
The Escrow Agent will make this release promptly.

                  (b) In these written instructions, Koch Agriculture will
certify, under penalty of perjury that:

                           (i) The conditions to the Effective Date of the Plan
                  have not been satisfied or duly waived in accordance with
                  Article IX of the Plan; and

                           (ii) Koch Agriculture therefore exercises its right
                  to recover the Escrow Funds from the Escrow Agent.

                  (c) A copy of the written instructions to be delivered to the
Escrow Agent pursuant to Sections 3(a) and 3(b) above shall be delivered to
Purina not less than two (2) business days prior to the delivery to the Escrow
Agent.

         4. TERMINATION. This Agreement will terminate on the earliest of the
Escrow Agent's receipt of (a) joint written instructions from Koch Agriculture
and Purina ordering the disbursement of the Escrow Funds pursuant to Section 2,
( b) written instructions from Koch Agriculture ordering the release of the
Escrow Funds pursuant to Section 3 and (c) a certificate signed by Koch
Agriculture and Purina stating that this Agreement has been terminated.

         5. PARTIES' DUTIES AND LIABILITY.

                  (a) The duties and obligations of the Escrow Agent shall be
determined solely by the terms of this Agreement. The Escrow Agent shall be
under no obligation to refer to any documents other than this Agreement (and the
Plan for definitional purposes) and shall not have any duties or
responsibilities except as provided in this Agreement. The Escrow Agent shall
not be obligated to recognize, and shall not have any liability or
responsibility arising under, any agreement to which it is not a party,
including, but not limited to, the Plan.

                  (b) The Escrow Agent shall not be liable to Koch Agriculture
or Purina except for its own negligence or willful misconduct. Except with
respect to claims based upon such negligence or willful misconduct that are
successfully asserted against the Escrow Agent, Koch Agriculture and Purina
shall jointly indemnify and hold harmless the Escrow Agent and any successor to
the Escrow Agent from and against any and all losses, liabilities, claims,
actions, damages and expenses, including, but not limited to, reasonable
attorneys' fees and

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<PAGE>   5

disbursements, arising out of and in connection with this Agreement. Such
indemnification shall survive the Escrow Agent's resignation or removal, or the
termination of this Agreement.

                  (c) The Escrow Agent shall have the right to perform any of
its duties hereunder through agents, attorneys, custodians or nominees. Any
banking association or corporation into which the Escrow Agent may be merged,
converted or with which the Escrow Agent may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Escrow Agent
shall be a party, or any banking association or corporation to which all or
substantially all of the corporate trust business of the Escrow Agent shall be
transferred, shall succeed to all the Escrow Agent's rights, obligations and
immunities hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

                  (d) Koch Agriculture and Purina may examine the Escrow Funds
and related records at the Escrow Agent's office during normal business hours.

                  (e) The Escrow Agent shall not be bound by any succession to
or assignment of the interests in this Agreement by Koch Agriculture or Purina
until Koch Agriculture or Purina, as applicable, provide the Escrow Agent with
written evidence of such succession or assignment in a form reasonably
satisfactory to the Escrow Agent.

                  (f) Except as set forth in those sections of this Agreement
which permit the Escrow Agent to act on the independent instructions of Koch
Agriculture, the Escrow Agent shall disregard all instructions, notices,
warnings or demands given or made by Koch Agriculture, Purina or any other
person, unless the notices, warnings or demands are jointly given or made by
Koch Agriculture and Purina. All joint instructions, notices, warnings and
demands may be executed in counterparts.

                  (g) If a controversy arises between Koch Agriculture and
Purina, then the Escrow Agent shall not be required to resolve the controversy
or take any action, and may await resolution of the controversy by joint
instructions from Koch Agriculture and Purina or by a final decision by a court
of competent jurisdiction (a "FINAL DECISION"). If the Escrow Agent becomes
involved in arbitration or litigation in connection with this Agreement, it
shall (i) have the right to retain counsel, (ii) have a lien on the Escrow Funds
for any and all reasonable costs, attorneys' fees, charges, disbursements and
expenses in connection with such arbitration or litigation and (iii) be entitled
to reimburse itself for such costs out of the Escrow Funds. If the Escrow Funds
are insufficient for the Escrow Agent to reimburse itself, Koch Agriculture and
Purina shall jointly indemnify the Escrow Agent for its reasonable costs,
attorneys' fees, charges, disbursements and expenses in connection with such
arbitration or litigation. If any controversy between Koch Agriculture and
Purina is resolved in favor of Koch Agriculture and the Escrow Funds are
delivered to Koch Agriculture pursuant to Section 3 above, Koch Agriculture
shall have an Allowed Administrative Claim against Purina in the amount equal to
the amount of the Escrow Funds utilized to reimburse the Escrow Agent pursuant
to this Section 5(g).

                  (h) The Escrow Agent does not have any interest in the Escrow
Funds and is serving only as a holder in possession. If any payments of income
attributable to the Escrow Funds are subject to United States tax withholding
regulations, Koch Agriculture and Purina shall provide the Escrow Agent with
W-9s and W-8s, as applicable, as well as other appropriate

                                       5

<PAGE>   6

Internal Revenue Service forms for and detailed written procedures concerning
the appropriate disbursement or retention of said funds. Koch Agriculture shall
be responsible for the payment of any and all taxes imposed in respect of income
attributable to the Escrow Funds. For all tax purposes, Koch Agriculture shall
treat any and all disbursements made pursuant to Section 2(a) of this Agreement
as a contribution to the capital of Purina.

                  (i) The Escrow Agent shall be entitled to rely upon any Final
Decision, certification, demand, notice, instrument or other writing delivered
to it hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. The Escrow Agent may act in reliance on any instrument or
signature reasonably believed by it to be genuine and, if reasonable, may assume
that the person purporting to give receipt or advice or make any statement or
execute any document in connection with the provisions hereof has been duly
authorized to do so. The Escrow Agent may conclusively presume that the
undersigned representative of any party hereto which is an entity other than a
natural person has full power and authority to instruct the Escrow Agent on
behalf of that party unless written notice to the contrary is delivered to the
Escrow Agent.

                  (j) The Escrow Agent may act pursuant to the advice of
competent outside counsel with respect to any matter relating to this Agreement
and will not be liable for any action taken or omitted by it in good faith in
accordance with such advice.

         6. COMPENSATION OF THE ESCROW AGENT. The Escrow Agent shall be entitled
to compensation for its services hereunder in accordance with Exhibit D attached
hereto, which is made a part hereof, and for reimbursement of its out-of-pocket
expenses, including, but not by way of limitation, the fees and costs of
attorneys or agents that the Escrow Agent may find necessary to engage in
performance of its duties hereunder, fifty percent (50%) of which shall be paid
by Purina when due and fifty percent (50%) of which shall be paid by Koch
Agriculture when due. The Escrow Agent shall have, and is hereby granted, a
prior lien upon any property, cash or assets of the Escrow Account solely with
respect to its unpaid fees and nonreimbursed expenses, which lien shall be
superior to the interests of any other persons or entities.

         7. SUCCESSOR ESCROW AGENT. The Escrow Agent may resign as escrow agent
by giving written notice to Koch Agriculture and Purina at least thirty (30)
calendar days in advance of the effective date of its resignation. On the
effective date of any resignation of any Escrow Agent, the Escrow Agent shall
thereafter deliver the Escrow Funds to any successor escrow agent that Koch
Agriculture and Purina jointly specify in writing to the Escrow Agent. If such
notice is not received by the Escrow Agent on or before the effective date of
its resignation, the Escrow Agent may deliver the Escrow Funds to any bank,
financial institution or trust company, having an office in the State of
Delaware and having capital, surplus and undivided profits of a total of at
least one hundred million dollars ($100,000,000) and which is willing to assume
the Escrow Agent's obligations under this Agreement. Until the Escrow Agent
delivers the Escrow Funds to a successor escrow agent, the Escrow Agent shall
hold the Escrow Funds in accordance with the terms of this Agreement and shall
comply with all of its obligations hereunder. Koch Agriculture and Purina have
the right, at any time and upon their mutual consent, to substitute a new escrow
agent by giving thirty (30) calendar days' prior written notice to the
then-current escrow agent.

                                       6

<PAGE>   7

         8.       MISCELLANEOUS.

                  (a) All notices, consents, requests, claims, demands,
instructions or other communications to be given hereunder by any party shall be
in writing. All such notices, consents, requests, claims, demands, instructions
or other communications may be given personally, by registered or certified mail
(with proof of receipt, postage and expenses prepaid, return receipt requested),
express package service or facsimile. All such notices shall be deemed to be
received as follows: (i) if delivered personally, when received, (ii) if mailed,
three (3) days after being mailed, (iii) if sent by express package service,
when signed for and (iv) if sent by facsimile, when the facsimile has been
transmitted over the telephone lines, as evidenced by a facsimile confirmation
report generated by the transmitting machine. Notices will be addressed as
follows:

                      (i)      if to Koch Agriculture, to:

                               Koch Agriculture Company
                               4111 East 37th Street North
                               Wichita, Kansas 67220
                               facsimile: (316) 828-3133
                               attention: Tye Darland, Esq.

                               with a copy to:

                               Skadden, Arps, Slate, Meagher & Flom (Illinois)
                               333 West Wacker Drive
                               Suite 2100
                               Chicago, Illinois 60606
                               facsimile: (312) 407-0411
                               attention:  David S. Kurtz, Esq.

                      (ii)     if to Purina, to:

                               Purina Mills, Inc.
                               1401 South Hanley Road
                               St. Louis, Missouri 63144
                               facsimile:  (314) 768-4470
                               attention:  David G. Kabbes, General Counsel

                               with a copy to:

                               Jones, Day, Reavis & Pogue
                               North Point
                               911 Lakeside Avenue
                               Cleveland, Ohio  44114
                               facsimile:  (216) 579-0212
                               attention:   Richard M. Cieri, Esq.

                                       7

<PAGE>   8

               (iii)  if to the Escrow Agent, to:
                      Bank One Trust Company, National Association
                      1 Bank One Plaza, Suite IL1-0126
                      Chicago, Illinois  60670-0126

                      facsimile: (312) 407-4232
                      attention: Leland Hansen, Global Corporate Trust Services

or such other addresses as the parties may have furnished to each other pursuant
to the provisions of this Section.

                  (b) This Agreement may be executed in one or more
counterparts, all of which taken together will constitute one instrument.

                  (c) The laws of the State of Delaware will govern the validity
and interpretation of this Agreement and the performance of the parties of their
respective duties and obligations without regard to conflict of laws principles.

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<PAGE>   9

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above.

                                               KOCH AGRICULTURE COMPANY

                                               By:______________________________
                                               Name:____________________________
                                               Title:___________________________

                                               PURINA MILLS, INC.

                                               By:______________________________
                                               Name:____________________________
                                               Title:___________________________

                                               BANK ONE TRUST COMPANY, NATIONAL
                                               ASSOCIATION, as Escrow Agent

                                               By:______________________________
                                               Name:____________________________
                                               Title:___________________________

                                       9

<PAGE>   10

                                    EXHIBIT A
                                    ---------

                                      Plan

<PAGE>   11

                                    EXHIBIT B
                                    ---------

                            Certificate of Incumbency

<PAGE>   12

                            CERTIFICATE OF INCUMBENCY

         The undersigned, ____________________, of ______________, hereby
certifies that the following named officers are duly appointed, qualified and
acting in the capacity set forth opposite his/her name, and the following
signature is the true and genuine signature of said officer.

<TABLE>
<CAPTION>
                Name                               Title                              Signature
<S>                                         <C>                                 <C>

         -----------------                  -----------------                   ---------------------

         -----------------                  -----------------                   ---------------------
</TABLE>

         Such officers are hereby authorized to furnish the Escrow Agent with
directions relating to any matter concerning this Escrow Agreement and the funds
and/or property held pursuant thereto.

         IN WITNESS WHEREOF, ____________________ has caused this Certificate of
Incumbency to be executed by its officer duly authorized this _____ day of
_______, 2000.

                                                     KOCH AGRICULTURE COMPANY

                                                     By_________________________
                                                     Name
                                                     Title

<PAGE>   13

                            CERTIFICATE OF INCUMBENCY

         The undersigned, ____________________, of ______________, hereby
certifies that the following named officers are duly appointed, qualified and
acting in the capacity set forth opposite his/her name, and the following
signature is the true and genuine signature of said officer.

<TABLE>
<CAPTION>
                Name                               Title                              Signature
<S>                                         <C>                                 <C>

         -----------------                  -----------------                   ---------------------

         -----------------                  -----------------                   ---------------------
</TABLE>

         Such officers are hereby authorized to furnish the Escrow Agent with
directions relating to any matter concerning this Escrow Agreement and the funds
and/or property held pursuant thereto.

         IN WITNESS WHEREOF, ____________________ has caused this Certificate of
Incumbency to be executed by its officer duly authorized this _____ day of
_______, 2000.

                                                  PURINA MILLS, INC.

                                                  By____________________________
                                                  Name
                                                  Title

<PAGE>   14

                                    EXHIBIT C
                                    ---------

                                 Investment Form

<PAGE>   15

                                    EXHIBIT D
                                    ---------

                          Schedule of Escrow Agent Fees<PAGE>   1
                                                                   Exhibit 10(h)

                           WARRANT PURCHASE AGREEMENT

                  This Warrant Purchase Agreement, dated as of , 2000 (this
"AGREEMENT"), is made and entered into by and between Koch Agriculture Company,
a Nebraska corporation ("KOCH"), and Purina Mills, Inc., a Delaware corporation
formerly known as PM Holdings Corporation ("PURINA").

                                    RECITALS

A.       Prior to _______________, 2000, Purina was known as PM Holdings
         Corporation ("PM HOLDINGS") and owned one-hundred percent (100%) of the
         capital stock of the Delaware corporation known as Purina Mills, Inc.
         ("OLD PMI").

B.       On October 28, 1999 (the "Petition Date"), PM Holdings, Old PMI and
         certain of Old PMI's subsidiaries (collectively, the "DEBTORS") filed
         voluntary petitions for relief under Chapter 11 of the United States
         Bankruptcy Code.

C.       On January __, 2000, the Debtors filed a Joint Plan of Reorganization
         (as the same may be amended in accordance with the terms thereof, the
         "PLAN") with the United States Bankruptcy Court for the District of
         Delaware (the "BANKRUPTCY COURT").

D.       Pursuant to the Plan and that certain Agreement and Plan of Merger
         dated as of , 2000, Old PMI has merged with and into PM Holdings (the
         "MERGER"). PM Holdings survived the Merger and changed its name to
         Purina Mills, Inc.

E.       Pursuant to the Plan and in connection with the Merger and this
         Agreement, Purina has agreed to grant Koch an option to purchase
         certain warrants entitling Koch to purchase certain shares of its
         common stock to be authorized and issued pursuant to the Plan (the "NEW
         COMMON STOCK").

                                    AGREEMENT
                                    ---------

                  In consideration of the foregoing and the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:

                  1. GRANT OF OPTION. Purina hereby grants to Koch an option
(the "OPTION) to purchase, subject to the terms hereof, warrants (the
"WARRANTS") entitling Koch to purchase up to ten percent (10%) of the aggregate
number of shares of the New Common Stock that are issued and outstanding
immediately after the Effective Date (as defined in the Plan) (after giving
effect to the exercise of the Warrant) for a purchase price of five-million
dollars ($5,000,000) (the "OPTION EXERCISE PRICE"). If the Option is not
exercised prior to or on the Effective Date, it will terminate and be of no
further force and effect.

<PAGE>   2

                  2. EXERCISE OF OPTION. (a) Koch may exercise the Option at any
time prior to and including the Effective Date of the Plan.

                           (b) In the event Koch desires to exercise the Option,
Koch shall send a written notice (the "EXERCISE NOTICE") to Purina declaring
that it is exercising the Option and specifying a date (the "CLOSING DATE"),
which shall be a business day which is no more than five (5) business days after
delivery of such notice, and place for the closing of such purchase but in any
event shall be on or before the Effective Date (the "CLOSING").

                  3.       CLOSING.   At the Closing:

                           (a) Koch shall deliver the Option Exercise Price to
Purina by wire transfer of immediately available funds to an account specified
in writing by Purina or by such other method as Purina may specify; and

                           (b) Purina and Koch shall execute an agreement that
sets forth the terms and conditions governing the Warrants in the form attached
hereto as EXHIBIT A (the "WARRANT AGREEMENT").

                  4. LOST OPTION. Upon receipt by Purina of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Purina shall execute and deliver a new Agreement of
like tenor and date.

                  5. REPRESENTATIONS AND WARRANTIES OF PURINA. Purina represents
and warrants to Koch that:

                           (a) Purina is a corporation organized, validly
existing and in good standing under the laws of the State of Delaware, and has
all requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement;

                           (b) the execution and delivery by Purina of this
Agreement and the consummation by Purina of the transactions contemplated by
this Agreement have been duly authorized by all necessary corporate action on
the part of Purina and have been approved by the Bankruptcy Court;

                           (c) this Agreement has been duly executed and
delivered by Purina and constitutes the valid and binding obligation of Purina,
enforceable against Purina in accordance with its terms;

                           (d) on or prior to the Effective Date, Purina shall
have taken all necessary corporate action to authorize and reserve and permit it
to issue, and, if the Option is exercised, at all times from the Effective Date
through the Expiration Date (as defined in the Warrant Agreement) shall have
reserved, all shares of New Common Stock issuable pursuant to the Warrant
Agreement; and

                                        2
<PAGE>   3

                           (e) the execution and delivery of this Agreement by
Purina does not, and the consummation by Purina of the transactions contemplated
by this Agreement will not

                           (i)      conflict with, or result in any violation or
                                    breach of any provision of the certificate
                                    of incorporation, as amended to date, or
                                    bylaws, as amended to date, of Purina,

                           (ii)     result in any violation or breach of, or
                                    constitute (with or without notice or lapse
                                    of time, or both) a default (or give rise to
                                    a right of termination, cancellation or
                                    acceleration of any obligation or loss of
                                    any benefit) under any of the terms,
                                    conditions or provisions of any
                                    post-Petition Date note, bond, mortgage,
                                    indenture, lease, contract or other
                                    post-Petition Date agreement, instrument or
                                    obligation to which Purina or any of its
                                    subsidiaries is a party or by which any of
                                    them or any of their properties or assets
                                    may be bound,

                           (iii)    conflict or violate any permit, concession,
                                    franchise, license, judgment, order, decree,
                                    statute, law, ordinance, rule or regulation
                                    applicable to Purina or any of its
                                    subsidiaries or any of its or their
                                    properties or assets, or

                           (iv)     except as may be required under the
                                    Hart-Scott-Rodino Antitrust Improvements Act
                                    of 1976, as amended, (the "HSR Act") (if
                                    applicable), do not require any filing or
                                    notification with, or authorization, consent
                                    or approval of, any governmental entity,

                  other than in the case of (ii) and (iii) for any such
violations, breaches, defaults, terminations, cancellations, accelerations,
conflicts, filings, notifications, authorizations, consent or approvals which
would not, individually or in the aggregate, have a material adverse effect on
Purina and the Debtors taken as a whole.

                  6. REPRESENTATIONS AND WARRANTIES OF KOCH. Koch represents and
warrants to Purina that:

                           (a) Koch is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nebraska, and has
all requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement;

                           (b) the execution and delivery by Koch of this
Agreement and the consummation by Koch of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of Koch;

                           (c) this Agreement has been duly executed and
delivered by Koch and constitutes the valid and binding obligation of Koch,
enforceable against Koch, in accordance with its terms;

                                      3

<PAGE>   4

                           (d) the execution and delivery of this Agreement by
Koch does not, and the consummation by Koch of the transactions contemplated by
this Agreement will not

                           (i)      conflict with, or result in any violation or
                                    breach of any provision of the certificate
                                    of incorporation, as amended to date, or
                                    bylaws, as amended to date, of Koch,

                           (ii)     result in any violation or breach of, or
                                    constitute (with or without notice or lapse
                                    of time, or both) a default (or give rise to
                                    a right of termination, cancellation or
                                    acceleration of any obligation or loss of
                                    any benefit) under any of the terms,
                                    conditions or provisions of any note, bond,
                                    mortgage, indenture, lease, contract or
                                    other agreement, instrument or obligation to
                                    which Koch or any of its subsidiaries is a
                                    party or by which any of them or any of
                                    their properties or assets may be bound,

                           (iii)    conflict or violate any permit, concession,
                                    franchise, license, judgment, order, decree,
                                    statute, law, ordinance, rule or regulation
                                    applicable to Koch or any of its
                                    subsidiaries or any of its or their
                                    properties or assets, or

                           (iv)     except as may be required under the HSR Act,
                                    do not require any filing or notification
                                    with, or authorization, consent or approval
                                    of, any governmental entity,

                  other than in the case of (ii) and (iii) for any such
violations, breaches, defaults, terminations, cancellations, accelerations,
conflicts, filings, notifications, authorizations, consent or approvals which
would not, individually or in the aggregate, have a material adverse effect, on
Koch Industries, Inc. and Koch.

                           (e) Koch is effecting the purchase contemplated
hereby for its own account, for investment and not with a present view to resale
or distribution except in compliance with federal and state securities laws.
Koch agrees not to sell or otherwise transfer the Option without registration
under federal and state securities laws or an exemption therefrom. Koch
acknowledges that the Option has not been registered under the Securities Act of
1933, as amended (the "Securities Act") or the securities laws of any state, and
that the issuance of the Option is being made in reliance upon an exemption from
registration under the Securities Act for an offer and sale of securities that
does not involve a public offering.

                           (f) Koch is qualified as an accredited investor
within the meaning of Rule 501(a) of Regulation D promulgated under the
Securities Act.

                  7. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement is
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.

                                       4
<PAGE>   5

                  8. ASSIGNMENT. Neither Koch nor Purina may assign any of its
rights or obligations under this Agreement or the Option created hereunder to
any other person, without the express written consent of the other party, which
may be withheld in such party's sole discretion.

                  9. AMENDMENT; WAIVER. This Agreement may not be amended except
by an instrument in writing signed by the parties hereto. Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby.

                  10. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect, insofar as the foregoing can be
accomplished without materially affecting the economic benefits anticipated by
the parties to this Agreement. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.

                  11. NOTICES. All notices, consents, requests, claims,
instructions or other communications to be given hereunder shall be in writing.
All such notices, consents, requests, claims, instructions or other
communications may be given personally, by registered or certified mail (with
proof of receipt, postage and expenses prepaid, return receipt requested),
express package service or facsimile. All notices will be deemed received as
follows: (a) if delivered personally, when received, (b) if mailed, three (3)
days after being mailed, (c) if sent by express package service, when signed for
and (d) if sent by facsimile, when the facsimile has transmitted over telephone
lines, as evidenced by a facsimile confirmation report generated by the
transmitted machine. Notices shall be addressed as follows:

                       (i)      if to Koch, to:

                                Koch Agriculture Company
                                4111 East 37th Street North
                                Wichita, Kansas 67220
                                facsimile: (316) 828-3133
                                attention: Tye Darland, Esq.

                                with a copy to:

                                Skadden, Arps, Slate, Meagher & Flom (Illinois)
                                333 West Wacker Drive
                                Suite 2100
                                Chicago, Illinois 60606
                                facsimile: (312) 407-0411
                                attention:  David S. Kurtz, Esq.

                       (ii)     if to Purina, to:

                                       5

<PAGE>   6

                                    Purina Mills, Inc.
                                    1401 South Hanley Road
                                    St. Louis, Missouri 63144
                                    facsimile:  (314) 768-4470
                                    attention:  David G. Kabbes, General Counsel

                                    with a copy to:

                                    Jones, Day, Reavis & Pogue
                                    North Point
                                    911 Lakeside Avenue
                                    Cleveland, Ohio  44114
                                    facsimile:  (216) 579-0212
                                    attention:   Richard M. Cieri, Esq.

                  12. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of Delaware, without regard to conflict of
laws principles.

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

                  14. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.

                  15. ENTIRE AGREEMENT. Except as otherwise expressly provided,
this Agreement contains the entire agreement between the parties with respect to
the transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereof, written or oral. The terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any party, other than
the parties hereto, and their respective successors and permitted assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided herein. This Agreement may not be
modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by the parties hereto.

                  16. FURTHER ASSURANCES. In the event that Koch exercises the
Option, Purina and Koch shall execute and deliver all other documents and
instruments, including, but not limited to, the Warrant Agreement, and take all
other action that may be reasonably necessary to the fullest extent permitted by
law in order to consummate the transactions provided for by such exercise.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above.

                                        6
<PAGE>   7
                                            KOCH AGRICULTURE COMPANY

                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                            PURINA MILLS, INC.

                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                      7

<PAGE>   8

                                    EXHIBIT A
                                    ---------

                                Warrant Agreement

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