<PAGE>

                                                                 EXHIBIT 10.6(b)


                        MANAGEMENT/OPERATING AGREEMENT
                        ------------------------------

          THIS AGREEMENT is made as of this 1st day of March, 1991, by and
between Orange-Madison Cooperative Farm Service, Inc. ("Orange-Madison"), a
nonstock corporation organized pursuant to the Virginia Agricultural Association
Act, and Southern States Cooperative, Inc. ("Southern States"), a corporation
organized pursuant to the Virginia Agricultural Cooperative Association Act.

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

               Orange-Madison is an agricultural cooperative association
          organized and operated for the mutual help and benefit of the members
          thereof.

               Orange-Madison owns and operates three retail stores located in
          Madison, Orange, and Gordonsville, Virginia and various other
          facilities and equipment.

               Southern States is an agricultural cooperative association
          organized and operated for the mutual help and benefit of the members
          thereof.

               Southern States, among other services that it provides to its
          members, has the ability and the expertise to provide management and
          related services to independent local agricultural cooperative
          associations in an efficient and cost-effective manner.

               Orange-Madison has experienced operating losses for the past
          several operating years and has been exploring and investigating
          various alternatives to eliminate future operating losses while
          continuing to provide a full range of services to its member-patrons.

               In an effort, and with the intention, to (i) retain ownership of
          its assets, (ii) retain its status as an independent local
          agricultural cooperative association, (iii) eliminate future operating
          losses, and (iv) continue to provide a full range of services to its
          member-patrons, Orange-Madison has discussed with Southern States
          various arrangements whereby Southern States would furnish supplies
          and render certain management and related services to certain
          activities of Orange-Madison.

               Southern States is willing to furnish supplies and to render
          management and related services to certain activities of Orange-
          Madison as set forth in this Agreement.
<PAGE>

               Orange-Madison desires to retain Southern States to furnish
          supplies and to render management and related services for certain
          activities of Orange-Madison as set forth in this Agreement.

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

          NOW, THEREFORE, in consideration of the mutual obligations and
covenants contained herein, Orange-Madison and Southern States agree as follows:

          1.   Definitions. As used herein, the following terms shall have the
               -----------
following meanings:

               a.   Advance Account Rate. The term "Advance Account Rate" shall
                    --------------------
mean the Co-Bank National Seasonal Variable Rate (as it exists from time to
time), plus one-quarter percent (1/4%).

               b.   Business. The term "Business" shall mean the activities and
                    --------
business directly associated with or relating to Managed Assets, including the
operations relating to the retail stores and the facilities included among the
Managed Assets but excluding the operations relating to the facilities included
among the Excluded Assets.

               c.   Claims. The term "Claims" shall include, without limitation,
                    ------
claims, demands, suits, causes of action for personal injury or property damage
(including any depreciation of property values, lost use of property,
consequential damages arising directly or indirectly out of Environmental
Conditions); actual or threatened damages to natural resources; claims for the
recovery of response costs or administrative or judicial orders directing the
performance of investigations, response or remedial actions under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986 ("CERCLA"),
42 U.S.C. (S) 9601, et seq.; the Toxic Substance Control Act ("TSCA"), 15 U.S.C.
                    -- ---
(S) 2601, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. (S)
          -- ---
1802, et seq.; the Resources Conservation and Recovery Act ("RCRA"), 42 U.S.C.
      -- ---
(S) 9601, et seq.; the Clean Water Act ("CWA"), 33 U.S.C. (S) 1251, et seq.; the
          -- ---                                                    -- ---
Safe Drinking Water Act, 42 U.S.C. (S) 300(f), et seq.; the Clean Air Act
                                               -- ---
("CAA"), 42 U.S.C. (S) 7401, et seq. or other Environmental Laws, including the
                             -- ---
laws and regulations promulgated by the Commonwealth of Virginia; a requirement
to implement "corrective action" pursuant to any order or permit issued pursuant
to RCRA; claims for restitution, contribution or equitable indemnity from third
parties or any governmental agency; fines, penalties, liens against property;
claims for injunctive relief or other orders or notices of violation from
federal, state or local agencies or courts; and, with regard to any present or
former employees, exposure to or injury from Environmental Conditions or
Environmental Noncompliance.

                                      -2-
<PAGE>

               d.   Effective Date. The term "Effective Date" shall mean March
                    --------------
1, 1991, on which date Southern States shall assume its duties with respect to
the management of the Business and the Managed Assets.

               e.   Environmental Conditions. The term "Environmental
                    ------------------------
Conditions" shall mean conditions of the environment, including the natural
resources (including flora and fauna), soil, surface water, ground water, any
present or potential drinking water supply, subsurface strata or the ambient
air, relating to or arising out of the use, handling, storage, treatment,
recycling, generation, transportation, off-site shipment, release, spilling,
leaking, pumping, pouring, emptying, discharging, injecting, escaping, leaching,
disposal, dumping or threatened release of Hazardous Materials by Orange-Madison
or Orange-Madison's predecessors in interest, agents, representatives, employees
or independent contractors.

               f.   Environmental Expenses. The term "Environmental Expenses"
                    ----------------------
shall include any liability, loss, cost or expense including, without
limitation, costs of investigation, cleanup, remedial or response action, the
costs associated with posting financial assurances for the completion of
response, remedial or corrective actions, the preparation of any closure or
other necessary or required plans or analyses or other reports or analyses
submitted to or prepared by regulating agencies, including the cost of health
assessments, epidemiological studies and the like, retention of engineers and
other expert consultants, legal counsel, capital improvements, operation and
maintenance testing and monitoring costs, power and utility costs and pumping
taxes or fees, and administrative costs incurred by governmental agencies.

               g.   Environmental Laws. The term "Environmental Laws" shall mean
                    ------------------
CERCLA, TSCA, the Hazardous Materials Transportation Act, 49 U.S.C. (S) 1802, et
                                                                              --
seq., RCRA, CWA, the Safe Drinking Water Act, 42 U.S.C. (S) 300(f), et seq.,
---                                                                 -- ---
CAA, and the plans, rules, regulations or ordinances adopted, or other criteria
and guidelines promulgated pursuant to the preceding laws or other similar laws,
regulations, rule or ordinance now or hereafter in effect, including laws and
regulations promulgated by the Commonwealth of Virginia.

               h.   Environmental Noncompliance. The term "Environmental
                    ---------------------------
Noncompliance" means, but is not limited to: (i) the release or threatened
release of any Hazardous Materials into the environment, any storm drain, sewer,
septic system or publicly owned treatment works, in violation of any effluent or
emission limitations, standards or other criteria or guidelines established by
any federal, state or local law, regulation, rule, ordinance, plan or order;
(ii) any noncompliance of physical structure, equipment, process or facility
with the requirements of building or fire codes, zoning or land use regulations
or ordinance, conditional use permits and the like; (iii) any noncompliance with
federal, state or local requirements governing occupational safety and health;
(iv) any facility operations, procedures designs, etc., which do not conform to
the statutory or regulatory requirements of CERCLA, CAA, CWA, TSCA, RCRA or any
other Environmental Laws, including the laws and regulations promulgated by the
Commonwealth of Virginia, intended to protect public health, welfare and the
environment; (v) the failure to have obtained permits, variances or other
authorizations necessary for the legal operation of any equipment, process,
facility or any other activity; and (vi) the operation of any facility or
equipment in violation of any permit condition, schedule or compliance,
administrative or court order and the like.

                                      -3-
<PAGE>

               i.   Escrow Agreement. The term "Escrow Agreement" shall have the
                    ----------------
meaning ascribed to it in Section 5 hereof.

               j.   Excluded Assets. The term "Excluded Assets" shall mean those
                    ---------------
assets and that property, plant, and equipment owned and/or operated by Orange-
Madison on the Effective Date and listed or described on Appendix I attached
hereto and incorporated herein by reference.

               k.   Existing Current Assets. The term "Existing Current Assets"
                    -----------------------
shall mean all cash, inventory, and accounts receivable on hand or otherwise
owned or held by Orange-Madison on the Effective Date; provided, however, that
such term shall not include the Excluded Assets.

               l.   Fixed Capital Requirements. The term "Fixed Capital
                    --------------------------
Requirements" shall mean payments for repairs, improvements, or additions to
property, plant, and equipment (which repairs, improvements, and additions
relate to the Business and the Managed Assets and are capitalized in accordance
with Southern States' policies and procedures as they exist from time to time).

               m.   Hazardous Materials. The term "Hazardous Materials" shall
                    -------------------
mean hazardous substances, hazardous constituents, toxic substances or related
materials, whether solids, liquids or gases, including but not limited to
substances defined as "hazardous wastes," "hazardous substances, "toxic
substances," "pollutants," "contaminants," "chemicals known to the State to
cause cancer or reproductive toxicity," "petroleum, crude oil or any fraction
thereof" or other similar designations in, or otherwise subject to regulation
under CERCLA, TSCA, the Hazardous Materials Transportation Act, 49 U.S.C. (S)
1802, et seq., RCRA, CWA, the Safe Drinking Act, 42 U.S.C. (S) 300(f), et seq.,
      -- ---                                                           -- ---
CAA, and in the plans, rules, regulations or ordinances adopted, or other
criteria and guidelines promulgated pursuant to the preceding laws or other
Environmental Laws; and any other substances, constituents or wastes subject to
environmental regulations under any applicable federal, state or local law,
regulation or ordinance now or hereafter in effect.

               n.   Managed Assets. The term "Managed Assets" shall mean all
                    --------------
assets and/or all property, plant, and equipment owned and/or operated by
Orange-Madison on the Effective Date other than the Excluded Assets.

               o.   Notice. The term "Notice" shall have the meaning ascribed to
                    ------
it in Section 19(e) hereof.

               p.   Savings or Loss Before Taxes. The term "Savings or Loss
                    ----------------------------
Before Taxes" shall mean the annual results derived from the operations of
Orange-Madison, prior to any (i) provision for income taxes, (ii) provision for
loss reimbursement under Section 6 hereof, and (iii) any patronage
distributions, and as reported to members or shareholders in reports compiled
and presented using generally accepting accounting principles ("GAAP").

                                      -4-
<PAGE>

               q.   Adjustments to Savings or Loss Before Taxes. The term
                    -------------------------------------------
"Adjustments to Savings or Loss Before Taxes" shall mean the sum of (s) the
excess of (i) calculated earnings on the proceeds of Existing Current Assets,
computed at the Advance Account Rate over (ii) any actual earnings from
investing the proceeds of the sale or disposition of the Existing Current
Assets, (t) any loss, cost, expense, gain, or earnings associated with or
relating, attributable, or allocable to Excluded Assets, (u) any loss, cost,
expense, gain or earnings not directly associated with or directly relating,
attributable, or allocable to the conduct of the Business or the Managed Assets,
(v) any loss resulting from any Environmental Expenses or Claims of the Managed
Assets (to the extent such Environmental Expenses or Claims relate to
Environmental Conditions or Environmental Noncompliance existing at the
Effective Date) or of the Excluded Assets, (w) any loss or gain resulting from
the sale or disposition of Excluded Assets, (x) any write-off or recoveries of
accounts receivable (to the extent such accounts receivable are included in
Existing Current Assets), (y) any other loss, cost, expense, gain, or earnings
of a non-operating nature, or (z) any other loss, cost, expense, gain, or
earnings that are associated with or relating, attributable, or allocable to
operations prior to the Effective Date or subsequent to the Termination Date,
and not previously adjusted in (s) through (y) hereof.

               r.   Operating Losses. "Operating Losses" shall mean Savings or
                    ----------------
Loss Before Taxes reduced or increased by Adjustments to Savings or Loss Before
Taxes.

               s.   Term. The term "Term" shall have the meaning ascribed to it
                    ----
in Section 16 hereof.

               t.   Termination Date. The term "Termination Date" shall have the
                    ----------------
meaning ascribed to it in Section 16 hereof.

               u.   Working Capital Requirements. The term "Working Capital
                    ----------------------------
Requirements" shall mean the funds required for, or invested in, accounts
receivable, inventory, cash on hand, or other current assets required for,
associated with, or relating to the conduct of the Business; provided, however,
that the term "Working Capital Requirements" shall not include funds required
for retirement of Orange-Madison patron equity.

          2.   Management and Services Generally.
               ---------------------------------

               a.   Southern States is hereby retained, under the direction of
the Board of Directors of Orange-Madison, to manage and operate the Business and
the Managed Assets. Southern States shall render the following services in
connection with its management and operation of the Business and the Managed
Assets: (i) management, management supervision, credit administration,
accounting, internal auditing, procurement and training of personnel, (ii)
general assistance in legal, real estate, engineering, traffic, information and
publicity, and merchandising matters, (iii) special marketing services, (iv)
distribution of patronage refunds and other patronage notices, and (v) such
other services as are expressly described herein, including, but not limited to,
services relating to Environmental Expenses, Claims, Environmental Conditions
and Environmental Noncompliance as provided in the Agreement or in the Escrow
Agreement.

                                      -5-
<PAGE>

               b.   Southern States shall compile financial data generated from
its management and operation of the Business and the Managed Assets and from
Orange-Madison's management and operation of the Excluded Assets for the
preparation of periodic financial reports and the preparation of tax returns for
the combined operations of Orange-Madison. Southern States will not be
responsible for the generation, analysis or review of such financial information
regarding the Excluded Assets and will have no control over the management of
the Excluded Assets in order to achieve certain accounting or tax results. Based
on and subject to the foregoing, Southern States shall make periodic reports
regarding the status of its compilation of such financial data to the Board of
Directors of Orange-Madison and shall prepare tax returns and periodic and/or
annual reports for Orange-Madison.

               c.   For the calendar year ended December 31, 1991, and in
consideration of the management of and the services provided to the Business and
Managed Assets by Southern States hereunder (including the employment by
Southern States of the General Manager described in Section 2(g) hereof),
Orange-Madison shall pay to Southern States an annual fee (the "Management Fee")
of $150,000.00, which fee shall be payable in equal monthly installments. At the
beginning of each calendar year thereafter, Southern States shall advise the
Board of Directors of Orange-Madison in writing of the charge to be made by
Southern States for the ensuing year as Southern States' management fee for such
year; provided, however, that in no event shall such fee be increased from year
to year by a percentage greater than the percentage increase in the similar fee
charged by Southern States to its managed local cooperatives.

               d.   In addition to the Management Fee described in Section 2(c)
hereof, Orange-Madison shall pay to Southern States (i) an annual fee (the "RSS
Rental Fee") estimated at $27,420.00 in connection with the rental by Orange-
Madison of certain retail support systems owned by Southern States and to be
installed at the Orange-Madison retail stores, and (ii) an annual fee (the "RSS
Maintenance Fee") estimated at $9,360.00 in connection with the agreement by
Southern States to service and maintain the retail support systems owned by
Southern States and to be installed at the Orange-Madison retail stores.

               e.   The Management Fee, the RSS Rental Fee, and the RSS
Maintenance Fee, which shall be included in the calculation of Savings or Loss
Before Taxes as such term is defined in Section 1 hereof, constitute all of the
fees payable by Orange-Madison to Southern States pursuant to this Agreement.

               f.   Special charges, such as local legal fees, local consulting
fees, appraisals, fees or expenses relating to permitting, advertising, etc.,
shall be for the account of Orange-Madison, are not included in the Management
Fee, and shall be included in the calculation of Savings or Loss Before Taxes as
such term is defined in Section 1 hereof; provided, however, that all such
charges, as a condition to their inclusion in the calculation of Savings or Loss
Before Taxes, must be (i) reasonable in amount, (ii) related to the operation of
the Business and the Managed Assets, (iii) unrelated to the Excluded Assets, and
(iv) reasonably acceptable in all respects (including the incurrence thereof) to
Southern States. All other special charges, including without limitation those
described in Section 2(i) hereof, shall be for the account of Orange-Madison and
shall be paid from the proceeds of the sale or other disposition of the Excluded
Assets or of the Existing Current Assets. In the event that special charges of
the

                                      -6-
<PAGE>

type described in the immediately preceding sentence and reasonable in amount
are incurred by Orange-Madison at the direction of the Board of Directors of
Orange-Madison after the proceeds of the sale or other disposition of the
Excluded Assets have been expended and the proceeds of the sale or other
disposition of the Excluded Assets have been expended and the proceeds of the
sale or other disposition of Existing Current Assets have been expended in
accordance with the provisions of Section 5 hereof, such special charges shall
be paid by Orange-Madison; provided, however, that such special charges shall
not be included in Working Capital Requirements or in the calculation of Saving
or Loss Before Taxes as such terms are defined in Section 1 hereof.

               g.   Following nomination by Southern States and approval by the
Board of Directors of Orange-Madison, Southern States shall employ, for and on
behalf of Orange-Madison, a general manager of the Business and the Managed
Assets. Such general manager shall secure such cooperation and working relations
between Orange-Madison and Southern States as is necessary for efficient and
satisfactory operations of the Business and the Managed Assets. If such general
manager is found by Southern States and the Board of Directors of Orange-Madison
to have mismanaged the Business and the Managed Assets, Southern States,
following consultation with the Board of Directors of Orange-Madison, shall
replace such general manager with another person nominated and approved in the
manner provided in this Section 2(g).

               h.   During the Term of this Agreement, in connection with the
presentation and discussion of the annual budget for the Business and the
Managed Assets, the Board of Directors of Orange-Madison, following consultation
with Southern States, shall determine and establish a merit fund to be used by
Southern States to effect compensation increases to the employees of the
Business and the Managed Assets. The compensation (including any increase in
compensation) of each of the employees of the Business and the Managed Assets
shall, with the advice of the Board of Directors of Orange-Madison, be
determined by Southern States.

               i.   Notwithstanding anything herein to the contrary, the Board
of Directors of Orange-Madison shall retain all corporate powers granted to them
by the Articles of Incorporation and By-laws of Orange-Madison or by applicable
law, including without limitation the power to retain attorneys, auditors,
engineers, and similar advisors.

          3.   Working Capital and Fixed Asset Requirements.
               --------------------------------------------

               a.   All Working Capital Requirements in connection with the
Business and Managed Assets shall be provided by Southern States at the Advance
Account Rate, which shall be the same rate of interest charged by Southern
States to other affiliated local cooperatives. All capital provided by Southern
States shall be, at Southern States' sole discretion, on open account or on the
basis of negotiable notes executed by Orange-Madison, and Orange-Madison,
through its officers and directors, agrees to furnish from time to time any
collateral for such advances that may be required by Southern States, including
without limitation a first lien security interest in inventory (other than that
included in Excluded Assets) and proceeds therefrom financed by working capital
provided by Southern States. Orange-Madison at all times shall have the
privilege of raising a part of all of its capital requirements by the sale of
its own investment stock or securities.

                                      -7-
<PAGE>

               b.   All Fixed Capital Requirements shall be advanced by Southern
States, upon the recommendation of the general manager and the approval of the
Board of Directors of Orange-Madison, provided that no year shall the amount
committed for, or advanced with respect to, Fixed Capital Requirements exceed
Orange-Madison's prior year depreciation expense associated with the Managed
Assets.

          4.   Calculation of Savings or Loss Before Taxes and Operating Losses.
               ----------------------------------------------------------------

               a.   Pursuant to, and in accordance with the provisions and
restrictions of Section 2(b) hereof, Southern States shall calculate Savings or
Loss Before Taxes and Operating Losses for each year during the Term and shall
submit such calculations for the review and approval of the Board of Directors
of Orange-Madison, or their duly appointed representative, within 120 days
following the end of each calendar year during the Term hereof. Southern States
will consult with the Board of Directors or its duly appointed representative
and provide them with such information as is reasonably necessary to permit such
a review of such calculations.

               b.   In the event that the Board of Directors of Orange-Madison,
or their duly authorized representative, in good faith reasonably dispute the
calculation of Savings of Loss Before Taxes and Operating Losses submitted by
Southern States pursuant to Section 4(a) hereof, such calculations shall be
submitted to an independent accounting firm, mutually acceptable to the Board of
Directors of Orange-Madison and to Southern States, with the cost being borne
equally by Southern States and Orange-Madison. The findings of such independent
accounting firm shall be conclusive and binding on both Southern States and the
Board of Directors of Orange-Madison.

          5.   Proceeds of Existing Current Assets.
               -----------------------------------

               a.   As soon after the Effective Date as shall be practicable,
not to exceed ten (10) days from the Effective Date, Southern States and
representatives of Orange-Madison shall take a physical inventory of the
merchandise inventory of Orange-Madison, other than that inventory which is a
part of the Excluded Assets (the "Inventory"). Only items that are normally
merchandised for resale are to be included in the Inventory. Southern States and
Orange-Madison shall value such Inventory that is in good, saleable condition at
cost or market (in quantities purchased by Orange-Madison), whichever is lower,
plus freight in. All damaged, obsolete, or unsaleable Inventory shall be
discounted and valued in accordance with its conditions, age, and potential
resale value.

               b.   On the Effective Date, Southern States shall advance to
Orange-Madison, pursuant to and in accordance with the provisions of Section 3
hereof (including without limitation the provisions thereof requiring the
execution of Orange-Madison of notes and such other documents as shall be
necessary to create a first lien security interest in favor of Southern States),
an amount equal to the sum of the following: (i) the amount of cash on hand or
otherwise owned or held by Orange-Madison on the Effective Date; and (ii) the
amount determined by multiplying the book value of the accounts receivable of
Orange-Madison on the

                                      -8-
<PAGE>

Effective Date by .85. Following completion of the inventory described in
Section 5(a) hereof, Southern States shall advance to Orange-Madison an amount
equal to the value of the Inventory of Orange-Madison as determined pursuant to
Section 5(a) hereof. The amounts thus advanced shall, in addition to all
proceeds from the sale or other disposition of Existing Current Assets, be held
and applied in accordance with Section 5(c) hereof. The valuations determined
for Inventory and accounts receivable shall be reflected in the financial
statements of Orange-Madison immediately prior to the Effective Date.

               c.   All proceeds derived form the sale or other disposition of
Existing Current Assets (except for proceeds of those Existing Current Assets
with respect to which Southern States has made an advance pursuant to Section
5(b) hereof which proceeds have been set aside pursuant to Section 5(b) hereof)
shall be set aside and held in escrow pursuant to, and in accordance with the
terms of the Escrow Agreement attached hereto as Appendix II and incorporated
herein by reference (the "Escrow Agreement"). The Escrow Agreement generally
shall provide that the proceeds derived from the sale or disposition of Existing
Current Assets shall be set aside and applied to (i) provide a $50,000.00 fund
for such purposes as the Board of Directors of Orange-Madison shall direct
pursuant to Section 2(i) hereof, (ii) pay down by $1,000,000.00 the working
capital loan extended to Orange-Madison by CoBank, (iii) pay down trade
creditors of Orange-Madison other than Southern States, (iv) provide a fund for
Environmental Expenses and Claims associated with the Managed Assets. Following
expiration or termination of the Escrow Agreement, the proceeds derived from the
sale or disposition of Existing Current Assets shall continue to be set aside by
Orange-Madison. Orange-Madison shall be solely responsible for applying such
proceeds (w) to provide a fund for Environmental Expenses and Claims associated
with the Excluded Assets, (x) repairs and improvements to property, plant, and
equipment (which repairs, improvements, and additions relate to the Excluded
Assets and are capitalized in accordance with Southern States' policies and
procedures as they exist from time to time) (y) to pay for all other costs or
expenses not described in, or funded pursuant to, Section 3 above, up to the
cumulative amount of $100,000.00, and thereafter (z) to pay down any loans
extended to Orange-Madison by CoBank.

          6.   Operating Losses. In the event Orange-Madison experiences
               ----------------
Operating Losses during the Term of this Agreement, Southern States shall cover,
bear, or otherwise absorb such losses. As defined in Section 1 hereof,
"Operating Losses" do not include Environmental Expenses and/or Claims relating
to any Environmental Conditions or Environmental Noncompliance existing at the
Effective Date or any Environmental Expenses and/or Claims relating directly or
indirectly to the Excluded Assets.

          7.   Commodities and Supplies.
               ------------------------

               a.   Southern States shall make available to Orange-Madison all
commodities and supplies manufactured, processed, assembled, handled, or
distributed by it. Orange-Madison agrees to use the wholesale facilities and
services of Southern States as its principal source of supply for all such
commodities and supplies, recognizing that farmers can perform such services for
themselves through their own wholesale plants at cost to Orange-Madison and its
members. Southern States' commodities and supplies shall be sold or furnished

                                      -9-
<PAGE>

to Orange-Madison at "service guide" prices (as established from time to time by
Southern States) or less.

               b.   This section shall in no way preclude Orange-Madison from
handling commodities and supplies manufactured, processed, assembled, handled,
or distributed by others or performing local custom services that may be
beneficial to local patrons.

          8.   Services and Operations of Orange-Madison. No new services or
               -----------------------------------------
operations shall be undertaken or existing services or operations discontinued
by, or on behalf of, Orange-Madison until the same have been approved by the
Board of Directors of Orange-Madison. In addition, no indebtedness secured by
any interest in the Managed Assets shall be incurred by Orange-Madison without
Southern States' prior written consent.

          9.   Purchases and Commodities. Southern States shall supervise and/or
               -------------------------
make purchases of commodities and supplies for the Business and Managed Assets,
which purchases shall be for the account of Orange-Madison and shall be charged
to Orange-Madison's account. Southern States may make contracts for the account
of the Business and Managed Assets of Orange-Madison in the regular course of
its Business, including contracts for marketing its products or the products of
members or patrons marketing through Orange-Madison, and contracts of agency,
including agreements whereby Orange-Madison shall act as agent for the sale of
farm machinery, farm, garden, orchard, and other supplies, materials, and
equipment used by farmers, and arrange all the terms thereof, all in accordance
with policies previously determined by the Board of Directors of Orange-Madison,
but without the necessity of specific authority from the Board for any
individual transaction or any series of transactions.

          10.  Operating Expenses and Accounts. Southern States shall be
               -------------------------------
authorized to draw upon funds of Orange-Madison (other than the funds described
in Section 5 above) as shall be required to properly carry on the operations of
the Business and Managed Assets of Orange-Madison, and Southern States shall at
all times keep accurate accounts of its receipts and disbursements with respect
to the Business and Managed Assets of Orange-Madison and shall repay any
advances made by Orange-Madison and not expended in its behalf by Southern
States in connection with the Business and Managed Assets within thirty (30)
days after demand by Orange-Madison, less any amount that may be due Southern
States from Orange-Madison.

          11.  Insurance. Unless Orange-Madison already has in full force and
               ---------
effect coverage satisfactory to Southern States covering all identifiable known
exposures, Orange-Madison authorizes and directs Southern States to obtain or
attempt to obtain, for and on behalf of Orange-Madison, all insurances and bonds
with respect to the Business and the Managed Assets usually carried by like
businesses providing local farm supply or petroleum services. Such insurance or
bonds will include, but not be limited to:

               a.   All risk or specified perils property insurance covering the
                    physical assets of buildings, machinery and equipment,
                    furniture and fixtures, and stocks of merchandise on an
                    actual cash value or replacement cost basis;

                                      -10-
<PAGE>

               b.   Workmen's Compensation;

               c.   All fidelity, license, and permit bonds;

               d.   Comprehensive general and automotive liability in limits not
                    less than $1,000,000 single limit bodily injury and property
                    damage;

               e.   Crime coverages to include burglary (merchandise and/or
                    safe) and robbery;

               f.   Automobile physical damage comprehensive and collision;

               g.   Owned cargo while being transported;

               h.   Director and officer liability; and

               i.   Such other coverages as needed for data processing equipment
                    or other unique exposures.

          Specific coverage shall be effected promptly by Southern States upon
notification of the necessity for same to the Board of Directors of Orange-
Madison. Southern States is hereby granted wide discretion in arranging for
insurance and bond coverage for Orange-Madison with respect to the Business and
Managed Assets and the selection of insurance or indemnity companies or other
means of effecting insurance coverage shall be also in the sole discretion of
Southern States. Orange-Madison agrees to pay all premiums and other costs of
said insurance coverage promptly upon receipt of the notice of the same, which
premiums and other costs shall be included in the calculation of Savings or Loss
Before Taxes as such term is defined in Section 1 hereof.

          12.  Payment of Patronage Refunds. Orange-Madison agrees that payment
               ----------------------------
of patronage refunds to patrons can have an important bearing upon the
operations of Orange-Madison, and that it will, therefor, first consult with
Southern States before such patronage refunds are authorized by the Board of
Directors of Orange-Madison.

          13.  Accounting. Pursuant to, and in accordance with, the provisions
               ----------
and restrictions of Section 2(b) hereof, Orange-Madison agrees (i) to follow all
accounting practices prescribed by Southern States with respect to the Business
and the Managed Assets, (ii) to conform its accounting practices with respect to
the Excluded Assets to those prescribed by Southern States with respect to the
Business and the Managed Assets, and (iii) to permit accountants, or other
persons designated by Southern States to audit and inspect its books and records
at such times as Southern States may deem advisable. Southern States shall be
required to make at least one audit of the affairs of the Business and the
Managed Assets (an "Internal Compliance Audit") during the Term of this
Agreement. Southern States shall review the results of such Internal Compliance
Audits with the Board of Directors of Orange-Madison from time to time. Any
audits other than the Internal Compliance Audits desired by the Board of
Directors of

                                      -11-
<PAGE>

Orange-Madison shall be paid by Orange-Madison and the cost thereof shall not be
included in the calculation of Savings or Loss Before Taxes as such term is
defined in Section 1 hereof.

          14.  Policy Against Conflicts of Interest. It shall be the policy of
               ------------------------------------
Orange-Madison to enter into no contract or agreement with any officer or
director whereby such officer or director would receive any financial benefits,
direct or indirect, differing in any way from the business relations accorded
regular members of Orange-Madison, or any other kind of contract differing from
terms generally current. Neither shall Orange-Madison purchase goods or services
from any officers or directors (except farm products produced by such officer or
director), nor shall it employ any spouse, parent, son or son-in-law, daughter
or daughter-in-law, of any officers or directors.

          15.  Credit Policy. Orange-Madison agrees that at the first meeting of
               -------------
its Board of Directors following the execution of this Agreement, the credit
policy described on Appendix III attached hereto and incorporated herein by
reference shall be duly adopted.

          16.  Term and Termination.
               --------------------

               a.   Term. The term of this Agreement (the "Term") shall commence
                    ----
on the Effective Date, and shall terminate, unless sooner terminated as provided
in Section 16(b) hereof on December 31, 1993 (the "Termination Date").

               b.   Termination. This Agreement may be terminated by mutual
                    -----------
consent of Orange-Madison and Southern States. In addition, either party may
immediately terminate this Agreement if the other party (i) is in default of any
material provision of this Agreement and continues in default for a period of
ten (10) days following notice by the nondefaulting party, or (ii) files a
petition for bankruptcy or reorganization under the Federal Bankruptcy Act or
makes an assignment for the benefit of creditors, or (iii) is guilty of any
fraudulent act or of willful withholding of any funds, payments or property of
the other party or to which the other party lawfully is entitled.

               c.   On or before the Termination Date or any sooner termination
hereof, all amounts and monies that may be due and owing to Southern States by
Orange-Madison shall be and become immediately due and payable.

               d.   As soon as practicable following the Termination Date,
Southern States shall use its reasonable efforts to deliver to Orange-Madison
all material records generated or maintained by Southern States with respect to
the Business and the Managed Assets during the Term hereof.

          17.  Treatment/Handling of Excluded Assets.
               -------------------------------------

               a.   Orange-Madison shall retain all responsibility for the
management and operation of the Excluded Assets. Such management and operation
shall include the following: (i) management, management supervision, credit
administration, accounting (including tax accounting), internal auditing,
procurement and training of personnel; (ii) general

                                      -12-
<PAGE>

management for legal, real estate, engineering, traffic, information and
publicity, marketing and merchandising matters; and (iii) other activities in
the management and operation of the Excluded Assets.

               b.   Any and all costs associated with the activities and
responsibilities described in Section 17(a) shall be paid, after the expiration
or termination of the Escrow Agreement, from the proceeds from the sale or other
disposition of the Existing Current Assets and shall not be included in the
calculation of Savings or Loss Before Taxes as such term is defined in Section 1
hereof.

               c.   Southern States shall have no control or authority over the
activities of the Excluded Assets and shall not participate in the management or
operation of the Excluded Assets. Upon request by Southern States, Orange-
Madison shall provide information to Southern States regarding Orange-Madison's
management and operation of the Excluded Assets for information purposes. Such
communication shall not be construed as control or authority by Southern States
over the Excluded Assets.

          18.  Treatment/Handling of Environmental Conditions and Environmental
               ----------------------------------------------------------------
Noncompliance Relating to the Managed Assets.
--------------------------------------------

               a.   The parties acknowledge that the Managed Assets, which will
be operated henceforth by Southern States by this Agreement, have certain
Environmental Conditions and/or Environmental Noncompliance as of the Effective
Date of this Agreement. With respect to existing Environmental Conditions or
Environmental Noncompliance, and without in any way limiting the scope of
Orange-Madison's obligations under Sections 19(a) and (b) hereof, Orange-Madison
will be responsible for all investigations, studies, cleanup, corrective action
or response or remedial action, including defense costs, required by any local,
state or federal government agency now or hereafter authorized to regulate
environmental matters (hereinafter "Governmental Entities"), or by any consent
decrees or court or administrative order now or hereafter applicable to the
Business and Managed Assets, or by any federal, state or local law, regulation,
rule or ordinance now or hereafter in effect.

               b.   Orange-Madison shall pay all costs in connection with any
investigations, studies, cleanup, repair and remedial action relating to the
matters acknowledged in 18(a) including, without limitation, all capital
improvements, installation, operation, maintenance, testing, monitoring costs,
preparation of plans, designs, applications, studies and reports by or for
Governmental Entities or other regulating agencies, the preparation of closure
or other required plans, the retention of legal counsel, engineers and other
expert consultants. The parties acknowledge that the proceeds held in escrow
pursuant to the Escrow Agreement shall be used, in part, to pay the costs listed
in the preceding sentence but further acknowledge that such proceeds shall not
limit or be deemed to limit the liability of Orange-Madison to pay all such
costs.

               c.   Southern States shall have the right to control and manage
all investigations and any environmental cleanup, remediation or related
activities relating to matters acknowledged in 18(a).

                                      -13-
<PAGE>

               d.   In the event that Environmental Conditions or Environmental
Noncompliance (other than that described in Section 18(a) hereof) arise at the
Managed Assets subsequent to the date hereof, Southern States shall promptly
notify Orange-Madison of any such Environmental Conditions or Environmental
Noncompliance, but Southern States shall have the exclusive right to control and
manage the resolution of such issues. Orange-Madison will pay all reasonable
costs incurred by Southern States in defending and correcting the conditions
that constitute Environmental Conditions or Environmental Noncompliance, which
costs shall be included in the calculation of Savings or Loss Before Taxes as
such term as defined in Section 1 hereof. The provisions of this Section 18 do
not diminish Orange-Madison's obligations under Section 19(a) and (b) hereof.

          19.  Miscellaneous.
               -------------

               a.   General Indemnification. Orange-Madison shall indemnify and
                    -----------------------
hold Southern States and its officers, directors, employees, agents, members,
and affiliates harmless from and against any and all losses, damages, costs, and
out-of-pocket expenses, including reasonable attorney's and other expert's fees,
incurred by them and arising out of or resulting from (i) the ownership or
operation of the Excluded Assets, (ii) the ownership or operation of the Managed
Assets either before or after the term of this Agreement, or (iii) the business
and operations of Orange-Madison, the management of which business and
operations are not expressly assumed by Southern States hereunder.

               b.   Environmental Indemnification. Orange-Madison agrees to
                    -----------------------------
indemnify, defend by counsel acceptable to Southern States and hold harmless
Southern States, its subsidiaries, affiliates, successors and assigns and their
respective directors, officers, employees, shareholders, representatives and
agents (hereinafter for the purposes of this Section referred to collectively as
"Southern States") from and without limitation, diminution in value, losses,
liabilities and expenses, lawsuits, deficiencies, interest, penalties,
attorneys' fees and all amounts paid in defense or settlement of the foregoing
whether or not arising out of third-party claims, which may be imposed upon or
incurred by Southern States or asserted against Southern States by any other
party or parties (including Governmental Entities), in connection with any
Environmental Conditions or Environmental Noncompliance arising out of,
resulting from or attributable to, the assets, business or operations of Orange-
Madison, Orange-Madison's predecessors in interest, including, without
limitation, any Claims, Expenses, losses, liabilities, etc., resulting from the
alleged exposure of any person to Environmental Conditions or Environmental
Noncompliance, regardless of whether such Environmental Conditions or
Environmental Noncompliance or exposure resulted from activities of Orange-
Madison or Orange-Madison's agents, representatives, employees or independent
contractors and the breach of any of Southern States' representatives and
warranties. Orange-Madison's obligations pursuant to this Section shall exist
regardless of whether Southern States is alleged or held to be strictly or
jointly and severally liable.

               c.   Southern States' Indemnification. Southern States shall
                    --------------------------------
indemnify and hold Orange-Madison and its officers, directors, employees,
agents, members, and affiliates harmless from and against any and all losses,
damages, costs, and out-of-pocket expenses,

                                      -14-
<PAGE>

including reasonable attorney's and other expert's fees, incurred by them and
arising out of or resulting from (i) Southern States' willful and continued
failure to substantially perform its obligations hereunder, or (ii) any willful
conduct by Southern States pursuant to this Agreement that is unlawful, illegal,
or otherwise prohibited by law. For purposes, hereof, no conduct shall be deemed
"willful" unless done or omitted to be done not in good faith and without
reasonable belief that the action or omission was in the best interests of the
Business or the Managed Assets.

               d.   Retail Support System. Upon the expiration or termination of
                    ---------------------
this Agreement, in the event that Orange-Madison is and remains an independent,
unaffiliated local cooperative and a customer of Southern States, Southern
States shall grant to Orange-Madison a non-exclusive, non-transferable license
for the use of the software associated with the retail support system described
in Section 2 hereof and shall sell, lease, or otherwise transfer to Orange-
Madison the hardware or other equipment associated therewith on substantially
the same terms as such software, hardware, or other equipment is made available
to other independent, unaffiliated, local cooperatives that are customers of
Southern States.

               e.   Notices. All notices, requests, demands, and other
                    -------
communications required or permitted to be given hereunder (a "Notice") shall be
deemed to have been duly given if in writing, signed by or on behalf of the
party giving them, and delivered by hand, or sent by first class, certified, or
registered mail, postage prepaid (and such Notice will be deemed to have been
given as of the date delivered by hand or as of the third (3rd) business day
after the date mailed), addressed:

               (1)  If to Orange-Madison, to:

                    W. W. Sanford, III
                    Post Office Box 165
                    Orange, Virginia 22960

               with a copy to:

                    Donald E. Showalter, Esquire
                    Wharton, Aldhizer & Weaver
                    100 South Mason Street
                    Harrisonburg, Virginia 22801

               (2)  If to Southern States, to:

                    Southern States Cooperative, Inc.
                    6606 West Broad Street
                    Richmond, Virginia 23260
                    Attn: N. Hopper Ancarrow, Jr., Esquire

          Such names and addresses may be changed by such a Notice.

                                      -15-
<PAGE>

               f.   Assignment. This Agreement and all rights and obligations
                    ----------
hereunder may not be sold, assigned, or transferred by Southern States or
Orange-Madison.

               g.   Entire Agreement Modification. This Agreement, including the
                    -----------------------------
Appendices referred to herein and which form a part hereof, contains the entire
understanding of the parties hereto with respect to the subject matter contained
herein. This Agreement may not be changed except by a writing signed by each of
the parties.

               h.   Governing Law. The interpretation and enforcement of this
                    -------------
Agreement will be in accordance with the laws of the Commonwealth of Virginia.

               i.   Waiver. The failure of any party to this Agreement at any
                    ------
time or times to require performance of any provisions of this Agreement shall
in no matter affect the right to enforce the same. No waiver by any party to
this Agreement of any condition, or of the breach of any term, provision,
warranty, representation, agreement, or covenant contained in this Agreement,
whether by conduct or otherwise, in any one or more instances shall be deemed or
construed as a further or continuing waiver of any such condition or breach or a
waiver of any other condition or of the breach of any other term, provision,
warranty, representation, agreement, or covenant contained in this Agreement.

               j.   Severability. In the event that any court of competent
                    ------------
jurisdiction shall determine that any provision of this Agreement is invalid,
such determination shall not affect the validity of any other provision of this
Agreement which shall remain in full force and effect and which shall be
construed as to be valid under applicable law.

               k.   Section Headings: Gender. The section headings or captions
                    ------------------------
contained herein are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement. The use of any gender herein
shall be deemed to be or include other genders and the use of the singular
herein shall be deemed to be or include the plural (and vice versa).

               l.   Counterparts. This Agreement may be executed by each party
                    ------------
upon a separate copy, and in such case one counterpart of this Agreement shall
consist of enough of such copies to reflect the signature of all of the parties
to this Agreement. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, and it shall not be necessary in
making proof of this Agreement or the terms of this Agreement to produce or
account for more than one of such counterparts.

               IN WITNESS WHEREOF, the parties hereof have caused this Agreement
to be executed on the day and year first above written.

                                     SOUTHERN STATES COOPERATIVE,
                                      INCORPORATED


(Corporate Seal)                     By:   /s/ John Hawkins
                                         --------------------------------------

                                      -16-
<PAGE>

                                     Its:  Sr. Vice President and Treasurer
                                          -------------------------------------

                                     ORANGE-MADISON COOPERATIVE FARM
                                      SERVICE, INC.


(Corporate Seal)                     By:   /s/ W. W. Sanford, III
                                         --------------------------------------
                                     Its:  President
                                          -------------------------------------

                                      -17-
<PAGE>

                                  APPENDIX I

                                EXCLUDED ASSETS

1.   Real estate and improvements, including grain bins, known as "Old Orange
     Feed Mill Property," which property is more specifically described as
     follows:

     All those four certain lots or parcels of land lying and being
     situate in the Town of Orange, Spotswood Magistrial District,
     Orange County, Virginia, at the southern Terminus of Mill Street,
     all as shown and described as lot #1 containing 0.6175 acres,
     more or less, Lot #2 containing 0.4054 acres, more or less, Lot
     #3 containing 0.9175 acres, more or less, and Lot #4 containing
     0.6293 acres, more or less, as containing 1.693 acres by a plat
     of a survey thereof by Stearns L. Coleman, C.L.S., dated December
     17, 1990.

     The said property as described includes the former Orange Milling
     Company property, with the flour mill and "tile warehouse"
     buildings still standing thereon in 1986, plus a tract of
     railroad property, shown on the plat appended to its deed of
     conveyance to the Cooperative to be 0.849 acre. Also conveyed but
     not shown or described above is all that right, title and
     interest of the Cooperative in and to all that strip of adjoining
     land lying between the car clearance line on the north side of
     the C & O Ry, siding noted in the description of the tract of
     land hereinabove described and the center line of the said C and
     O Ry, siding.

     Being the same tracts or parcels of land, title to which vested
     in Orange-Madison Cooperative Farm Service, Incorporated,
     together with and subject to certain rights of way, easements and
     covenants, under and by virtue of the following deeds:

               (1)  Deed from V. R. Shackelford and Peachy Lyne
          Shackelford, his wife, dated February 19, 1937, and recorded
          in Orange County Deed Book 110 at page 45. (Orange-Madison
          Cooperative Farm Bureau, Incorporated, the named Grantee in
          said deed, having changed its name by amendments to its
          charter filed with the State Corporation Commission of
          Virginia on October 15, 1951, to Orange-Madison Cooperative
          Farm Service, Incorporated.)

               (2)  Deed from V. R. Shackelford and Peachy Lyne
          Shackelford, his wife, dated January 15, 1946, and recorded
          in Orange County Deed Book 125 at page 321. (Orange-Madison
          Cooperative Farm Bureau, Incorporated, the Grantee in said
          deed, having changed its name as noted in (1) above.)
<PAGE>

               (3)  Deed from the Chesapeake and Ohio Railway Company
          dated May 14, 1958, and recorded in Orange County Deed Book
          181 at page 137.

               (4)  Deed from Henry C. DeJarnette, et ux, dated March
          28, 1969, and recorded in Orange County Deed Book 238 at
          page 392.

          This tract is subject to the reservation of a 10' easement
          along the northern portion of the land so conveyed, said
          reservation made and described in a deed from the said Henry
          C. DeJarnette to John Long in a deed dated June 15, 1936,
          and recorded in Orange County Deed Book 108 at page 238.

2.   Inventories consisting primarily of fee, grains and feed ingredients, which
     inventories are in amounts usual and customary and are located at the "Old
     Orange Feed Mill Property" on the Effective Date.

3.   Rapidan Mill note receivable (Mel Hall note) or the proceeds therefrom.

                                      -2-
<PAGE>

                          RECLASSIFICATION AGREEMENT

          THIS AGREEMENT is made as of this 1st day of September, 1991, by and
between ORANGE-MADISON COOPERATIVE FARM SERVICE, INC. ("Orange-Madison"), a
nonstock corporation organized pursuant to the Virginia Agricultural Cooperative
Association Act, and SOUTHERN STATES COOPERATIVE, INC. ("Southern States"), a
corporation organized pursuant to the Virginia Agricultural Cooperative
Association Act.

                                   RECITALS
                                   --------

          WHEREAS, Orange-Madison and Southern States are parties to a certain
Management/Operating Agreement, dated March 1, 1991 (the "Operating Agreement"),
through which Southern States renders management and related services with
respect to the Managed Assets but not with respect to the Excluded Assets.

          WHEREAS, the Excluded Assets are identified on Appendix 1 to the
Operating Agreement.

          WHEREAS, in accordance with the terms and conditions set forth herein,
the parties desire (i) to reclassify as a Managed Asset that parcel of real
property (and improvements thereon) lying and being situate in the Town of
Orange, Spotswood Magisterial District, Orange County, Virginia at the southern
Terminus of Mill Streets, shown and described as lot #1 containing 0.6175 acres
more or less, and more specifically described on Appendix 1 to the Operating
Agreement (the "Grain Facility"), and (ii) to grant Southern States a security
interest in the feed, grain, and feed ingredients, which Orange-Madison owns and
stores in the Grain Facility.

          WHEREAS, the parties desire that the Operating Agreement continue in
full force and effect in accordance with its terms in all other respects.

                                   AGREEMENT
                                   ---------

          NOW, THEREFORE, in consideration of the mutual obligations and
covenants contained herein, Orange-Madison and Southern States agree as follows:

          1.   Reclassification. Notwithstanding the provisions of the Operating
               ----------------
Agreement, (i) the parties hereby reclassify the Grain Facility as a Managed
Asset, effective September 1, 1991 (the "Effective Date"), to be operated by
Southern States in accordance with the Operating Agreement, and (ii) Orange-
Madison hereby grants Southern States a security interest in the inventory at
such facility, which inventory includes but is not limited to feed, grains, and
feed ingredients, which security interest the parties acknowledge is evidence
and perfected by the following financing statements: (a) financing statement
number 910310406, which was filed with the State Corporation Commission of the
Commonwealth of Virginia, on March 4, 1991, (b) financing statement number
45081, which was filed with the Circuit Court Clerk's Office in Madison County,
Virginia on March 1, 1991, and (c) financing statement
<PAGE>

number 910075, which was filed with the Circuit Court Clerk's Office in Orange
County, Virginia on March 1, 1991.

          2.   Term. The Grain Facility shall remain a Managed Asset and this
               ----
Agreement shall remain in effect for a period of twelve (12) months from the
Effective Date (the "Initial Term"). At the end of such Initial Term, this
Agreement shall be automatically renewed from year to year (each, a "Renewal
Term") until and unless terminated as provided herein. Notwithstanding the
foregoing, this Agreement shall not be renewed for any Renewal Term and shall
expire and terminate at and as of the end of the Initial Term if Southern States
shall have notified Orange-Madison, in writing, of its intent to terminate the
Agreement at the expiration of the Initial Term at least sixty (60) days prior
to the expiration of such Initial Term.

          3.   Termination. This Agreement may be terminated, effective at the
               -----------
end of the current Renewal Term, if any, by Southern States notifying Orange-
Madison, in writing, of its intent to terminate the Agreement at least sixty
(60) days prior to the expiration of such Renewal Term. In addition, this
Agreement will terminate immediately upon the termination of the Operating
Agreement as provided in Paragraph 16b thereof, without any notice or other
action by the parties hereunder.

          4.   Effect of Expiration or Termination.
               -----------------------------------

          a.   Upon the expiration of the Initial Term or, if applicable, a
Renewal Term, the Grain Facility shall cease being a Managed Asset and shall
convert back to an Excluded Asset.

          b.   In the event this Agreement is terminated, prior to the
expiration hereof, pursuant to Paragraph 3 above, the parties rights hereunder
shall be determined in accordance with Paragraph 16 of the Operating Agreement.

          5.   Miscellaneous.
               -------------

          a.   Defined Terms. All capitalized terms used herein and not
               -------------
otherwise defined shall have the meaning assigned to them in the Operating
Agreement.

          b.   Notices. All notices, requests, demands, and other communications
               -------
required or permitted to be given hereunder shall be deemed to have been duly
given if given in accordance with Section 19e of the Operating Agreement.

          c.   Assignment. This Agreement and all rights and obligations
               ----------
hereunder may not be sold, assigned, or transferred by Southern States or
Orange-Madison.

          d.   Entire Agreement: Modification. This Agreement contains the
               ------------------------------
entire understanding of the parties hereof with respect to the subject matter
contained herein. This Agreement may not be changed except by a writing signed
by each of the parties.

                                      -2-
<PAGE>

          e.   Governing Law. The interpretation and enforcement of this
               -------------
Agreement will be in accordance with the laws of the Commonwealth of Virginia.

          f.   Waiver. The failure of any party to this Agreement at any time or
               ------
times to require performance of any provisions of this Agreement shall in no
manner affect the right to enforce the same. No waiver by any part of this
Agreement of any condition, or of the breach of any term, provision, warranty,
representation, agreement or covenant contained in this Agreement, whether by
conduct or otherwise, in any one or more instances shall be deemed or construed
as a further or continuing waiver of any such condition or breach or a waiver of
any other condition or of the breach of any other term, provision, warranty,
representation, agreement, or covenant contained in this Agreement.

          g.   Severability. In the event that any court of competent
               ------------
jurisdiction shall determine that any provision of this Agreement is invalid,
such determination shall not affect the validity of any other provision of this
Agreement which shall remain in full force and effect and which shall be
construed as to be valid under applicable law.

          h.   Section Headings: Gender. The section headings or captions
               ------------------------
contained herein are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement. The use of any gender herein
shall be deemed to be or include other genders and the use of the singular
herein shall be deemed to be or include the plural (and vice versa).

          i.   Counterparts. This Agreement may be executed by each party upon a
               ------------
separate copy, and in such case one counterpart of this Agreement shall consist
of enough of such copies to reflect the signature of all of the parties to this
Agreement. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, and it shall not be necessary in making proof
of this Agreement or the terms of this Agreement to produce or account for more
than one of such counterparts.

                                      -3-
<PAGE>

          IN WITNESS WHEREOF, the parties hereof have caused their duly
authorized representatives to execute this Agreement on the day and year first
above written.

                                     SOUTHERN STATES COOPERATIVE,
                                     INCORPORATED

(Corporate Seal)

                                      By:  /s/ Thomas M. Kirkpatrick
                                         -------------------------------------
                                      Its: Vice President Retail Division II
                                          ------------------------------------

                                      ORANGE-MADISON COOPERATIVE FARM
                                      SERVICE, INC.

(Corporate Seal)

                                      By:  /s/ W. W. Sanford, III
                                         -------------------------------------
                                      Its: President
                                          ------------------------------------

                                      -4-
<PAGE>

                  AMENDMENT TO MANAGEMENT/OPERATING AGREEMENT


          THIS AGREEMENT is made as of this 20th day of November, 1992, by and
between ORANGE-MADISON COOPERATIVE FARM SERVICE, INC. ("Orange-Madison"), a
nonstock corporation organized pursuant to the Virginia Agricultural Cooperative
Association Act, and SOUTHERN STATES COOPERATIVE, INC. ("Southern States"), a
corporation organized pursuant to the Virginia Agricultural Association Act.

         WHEREAS, Orange-Madison and Southern States are parties to a certain
Management/Operating Agreement, dated March 1, 1991 (the "Operating Agreement"),
through which Southern States renders management and related services with
respect to the managed assets and provides all Working Capital Requirements in
connection with the Business and Managed Assets; and

         WHEREAS, the Operating Agreement excludes funds required for retirement
of Orange-Madison patron equity from the term Working Capital Requirements; and

         WHEREAS, the parties desire to amend the provisions of the Operating
Agreement (i) to permit a limited retirement of Orange-Madison patron equity
from Working Capital Requirements, and (ii) to require the repayment to Southern
States of all Working Capital Requirements used to retire Orange-Madison patron
equity from the proceeds derived from the sale of Existing Current Assets as a
cost under Section 5(c)(y) of the Operating Agreement; and

         WHEREAS, the parties desire that the Operating Agreement continue in
full force and effect in accordance with its terms in all other respects.
<PAGE>

                                   AGREEMENT
                                   ---------

          NOW, THEREFORE, in consideration of the mutual obligations and
covenants contained herein, Orange-Madison and Southern States agree as follows:

          1.   Notwithstanding the definition of Working Capital Requirements
contained in Section 1(u) of the Operating Agreement or any other provision of
the Operating Agreement, Working Capital Requirements shall include a maximum of
$30,000 in the aggregate to retire Orange-Madison patron equity to settle
estates during the Term, and any extensions or renewals thereof, of the
Operating Agreement. It is the intent of the parties that the funds available
for such retirements be limited to a maximum of $30,000 which shall be a
cumulative ceiling for the full term of the Operating Agreement, beginning March
1, 1991, and extending through December 31, 1993.

          2.   Section 5(c)(y) of the Operating Agreement is amended to require
that all Working Capital Requirements utilized for the retirement of patron
equity shall be repaid to Southern States out of the proceeds available from the
termination of the Escrow Agreement derived from the sale or other disposition
of Existing Current Assets. Working Capital Requirements advanced for the
retirement of patron equity shall be evidenced by a negotiable promissory note
in the amount of $30,000 which shall be executed by Orange-Madison and against
which existing and future advances for said retirements shall be made. The
parties agree that said note shall be repaid from funds remitted to Orange-
Madison pursuant to Section 8(b) of the Escrow Agreement dated as of March 1,
1991, by and between Southern States and Orange-Madison and applied by Orange-
Madison as permitted by Paragraph 2 of the Management of Excluded Asset Fund
Agreement dated as of March 1, 1991, by and between National Bank for
Cooperatives ("CoBank") and Orange-Madison.

                                      -2-
<PAGE>

     IN WITNESS WHEREOF, the parties hereof have caused their duly authorize
representatives to execute this Agreement on the day and year first above
written.

                                   SOUTHERN STATES COOPERATIVE,
                                   INCORPORATED

(Corporate Seal)


                                   By:  /s/ John Hawkins
                                      -----------------------------------
                                   Its: Sr. Vice President & Treasurer
                                       ----------------------------------

                                   ORANGE-MADISON COOPERATIVE FARM SERVICE, INC.

(Corporate Seal)


                                   By:  /s/
                                      -----------------------------------
                                   Its: Chairman
                                       ----------------------------------

     National Bank for Cooperatives joins in the execution of the above and
within Amendment to evidence its consent to same and to evidence its written
consent to the application of funds as required by Paragraph 2 of the Management
of Excluded Asset Fund Agreement, dated as of March 1, 1991, between National
Bank for Cooperatives and Orange-Madison.

                                   NATIONAL BANK FOR COOPERATIVES



                                   By:  /s/ Thomas C. Martin
                                      -----------------------------------
                                   Its:  Assistant Vice President
                                      -----------------------------------

                                      -3-
<PAGE>

               THIRD AMENDMENT TO MANAGEMENT/OPERATING AGREEMENT


     THIS AGREEMENT is made as of this 1st day of April, 1993, by and between
ORANGE-MADISON COOPERATIVE FARM SERVICE, INC. ("Orange-Madison"), a nonstock
corporation organized pursuant to the Virginia Agricultural Cooperative
Association Act, and SOUTHERN STATES COOPERATIVE, INC. ("Southern States"), a
corporation organized pursuant to the Virginia Agricultural Cooperative
Association Act.

     WHEREAS, Orange-Madison and Southern States are parties to a certain
Management/Operating Agreement, dated March 1, 1991, as amended in September
1991 and November 1992, (the "Operating Agreement"), through which Southern
States renders management and related services with respect to the managed
assets and provides all Working Capital Requirements in connection with the
Business and Managed Assets; and

     WHEREAS, the parties desire to amend the provisions of the Operating
Agreement (i) to provide for the adoption by Orange-Madison of certain of the
Southern States benefit plans and employee vacation and sick leave policies, and
(ii) to provide for the automatic renewal of the Operating Agreement from year
to year after December 31, 1993; and

     WHEREAS, the parties desire that the Operating Agreement, as amended,
continue in full force and effect in accordance with its terms in all other
respects.


                                   AGREEMENT

     NOW, THEREFORE, in consideration of the mutual obligations and covenants
contained herein, Orange-Madison and Southern States agree as follows:
<PAGE>

     1.   The Operating Agreement is amended to add the following provisions in
Section 19, to be designated as Sections 19(m), (n), and (p):

          19.  Miscellaneous.
               -------------

               m.   Welfare Benefit Plans. Effective as of the dates set forth
                    ---------------------
below, the Southern States Employee Welfare Benefit Plans heretofore adopted by
Southern States for the benefit of its employees shall be, and hereby are,
adopted (together with all the included plans) as the Employee Welfare Benefit
Plans of Orange-Madison for the benefit of its employees, (and Directors, in the
case of the Travel Accident Plan), and all amendments and modifications of said
Plans hereafter approved by the Board of Directors of Southern States (or where
appropriate, the Employee Benefits Administrative Committee [the "EBAC"]) shall
apply automatically to the employees (and Directors, where applicable) of
Orange-Madison; and Southern States shall advise Orange-Madison of any such
amendment hereafter adopted. Southern States is authorized to execute such
instruments and to perform any and all acts as may be necessary on behalf of
Orange-Madison to accept, continue in force, or amend said Plans. As of the date
of this Agreement, the following are included plans and the effective dates of
adoption by Orange-Madison are set forth below.

                                      -2-
<PAGE>

<TABLE>
<CAPTION>
                                                                 Orange-Madison
        Name of Plan                                             Effective Date
        ------------                                             --------------
<S>                                                              <C>
Southern States Medical Plan                                     April 1, 1993

Southern States Dental Plan                                      April 1, 1993

Southern States Term Life Plan                                   July 1, 1993

Southern States Special Accidental                               April 1, 1993
Death and Dismemberment Plan

Southern States Travel Accident Plan                             April 1, 1993

Southern States Long Term                                        April 1, 1993

Southern States Health Care                                      January 1, 1994
Spending Account

Southern State Dependent Care                                    January 1, 1994
Spending Account

Southern States Flexible Benefit Plan                            April 1, 1993

Southern States Employee Assistance Plan -                       April 1, 1993
(if applicable in geographic area)

Southern States Severance Plan                                   January 1, 1994
</TABLE>

     (n)  Retirement Plan. Effective January 1, 1994, the Retirement Plan for
          ---------------
Employees of Southern States Cooperative, Incorporated, as amended and restated
effective July 1, 1989, heretofore adopted by Southern States for the benefit of
its employees shall be and hereby is, adopted as the Retirement Plan of Orange-
Madison for the benefit of its employees, and all amendments and modifications
of said Plan hereafter approved by the Board of Directors of Southern States (or
where appropriate, the Employee Benefits Administrative Committee [the "EBAC"]
or the Employee Benefits Investment Committee [the "EBIC"]) shall apply
automatically to the employees of Orange-Madison; and Southern States shall
advise Orange-

                                      -3-
<PAGE>

Madison of any such amendment hereafter adopted. Southern States is authorized
to execute such instruments and to perform any and all acts as may be necessary
on behalf of Orange-Madison to accept, continue in force, or amend said Plan.

          (o)  Thrift Plan. Effective January 1, 1994, the Southern States
               -----------
Thrift Plan and Trust, as amended and restated effective January 1, 1987,
heretofore adopted by Southern States for the benefit of its employees shall be
and hereby is, adopted as the Thrift Plan of Orange-Madison for the benefit of
its employees, and all amendments and modifications of said Plan hereafter
approved by the Board of Directors of Southern States (or where appropriate, the
Employee Benefits Administrative Committee [the "EBAC"] or the Employee Benefits
Investment Committee [the "EBIC"]) shall apply automatically to the employees of
Orange-Madison; and Southern States shall advise Orange-Madison of any such
amendment hereafter adopted. Southern States is authorized to execute such
instruments and to perform any and all acts as may be necessary on behalf of
Orange-Madison to accept, continue in force, or amend said Plan.

          (p)  Vacation and Sick Leave Policies. Effective January 1, 1994, the
               --------------------------------
vacation and sick leave policies of Orange-Madison shall be the same as the
present vacation and sick leave policies of Southern States effective January 1,
1994. Changes to these policies shall be subject to the approval of the Board of
Directors of Orange-Madison.

     2.   Section 16(a) of the Operating Agreement is amended to read as
follows:

          (a)  Term. The term of this Agreement (the "Term") shall commence on
               ----
the Effective Date and continue in full force and effect through December 31,
1993, and shall continue, unless sooner terminated as provided in Section 16(b)
hereof, from year to year thereafter until terminated by either party hereto by
the giving of at least sixty (60) days' prior

                                      -4-
<PAGE>

written notice to the other party of its intention to terminate at the end of
the then current calendar year (the "Termination Date").

     IN WITNESS WHEREOF, the parties hereof have caused their duly authorized
representatives to execute this Agreement on the day and year first above
written.

                                     SOUTHERN STATES COOPERATIVE,
                                        INCORPORATED

(Corporate Seal)

                                     By:   /s/ M. T. Ragsdale
                                         --------------------------------------
                                     Its: Executive Vice President and Chief
                                          Operating Officer


                                     ORANGE-MADISON COOPERATIVE FARM
                                        SERVICE, INC.

(Corporate Seal)

                                     By:   /s/
                                        ---------------------------------------
                                     Its:  Chairman of Board
                                         --------------------------------------

                                      -5-
<PAGE>

              FOURTH AMENDMENT TO MANAGEMENT/OPERATING AGREEMENT


     THIS AGREEMENT is made as of this 1st day of February, 1994, by and between
ORANGE-MADISON COOPERATIVE FARM SERVICE, INC. ("Orange-Madison"), a nonstock
corporation organized pursuant to the Virginia Agricultural Cooperative
Association Act, and SOUTHERN STATES COOPERATIVE, INC. ("Southern States"), a
corporation organized pursuant to the Virginia Agricultural Cooperative
Association Act.

     WHEREAS, Orange-Madison and Southern States are parties to a certain
Management/Operating Agreement, dated March 1, 1991, as amended in September
1991, November 1992, and April 1993 (the "Operating Agreement"), through which
Southern States renders management and related services with respect to the
managed assets and provides all Working Capital Requirements in connection with
the Business and Managed Assets; and

     WHEREAS, the parties desire to amend the provisions of the Operating
Agreement to remove Southern States' obligation to cover, bear, or otherwise
absorb the Orange-Madison Operating Losses, as defined in the Operating
Agreement, after December 31, 1993; and

     WHEREAS, the parties desire that the Operating Agreement, as amended,
continue in full force and effect in accordance with its terms in all other
respects.

                                   AGREEMENT
                                   ---------

     NOW, THEREFORE, in consideration of the mutual obligations and covenants
contained herein, Orange-Madison and Southern States agree as follows:

     1.   The Operating Agreement is amended to delete in its entirety the
provisions of Section 6, effective January 1, 1994.
<PAGE>

     IN WITNESS WHEREOF, the parties hereof have caused their duly authorized
representatives to execute this Agreement on the day and year first above
written.

                                  SOUTHERN STATES COOPERATIVE,
                                  INCORPORATED

(Corporate Seal)
                                  By:  /s/ John Hawkins
                                     ---------------------------------
                                  Its: Sr. Vice President & CFO
                                      --------------------------------

                                  ORANGE-MADISON COOPERATIVE FARM
                                  SERVICE, INC.

(Corporate Seal)
                                  By:  /s/
                                     ---------------------------------
                                  Its: Board Chairman
                                      --------------------------------

                                      -2-
<PAGE>

               FIFTH AMENDMENT TO MANAGEMENT/OPERATING AGREEMENT


     THIS AGREEMENT is made as of this 1st day of May, 1994, by and between
ORANGE-MADISON COOPERATIVE FARM SERVICE, INC. ("Orange-Madison"), a nonstock
corporation organized pursuant to the Virginia Agricultural Cooperative
Association Act, and SOUTHERN STATES COOPERATIVE, INC. ("Southern States"), a
corporation organized pursuant to the Virginia Agricultural Cooperative
Association Act.

     WHEREAS, Orange-Madison and Southern States are parties to a certain
Management/Operating Agreement, dated May 1, 1991, as amended in September 1991,
November 1992, April 1993, and February 1994 (the "Operating Agreement"),
through which Southern States renders management and related services with
respect to the Managed Assets and provides all Working Capital Requirements in
connection with the Business and Managed Assets; and

     WHEREAS, the parties desire to amend the provisions of the Operating
Agreement to reclassify as a Managed Asset that parcel of real property,
together with the improvements thereon, lying and being situate in the Town of
Orange, Spotswood Magisterial District, Orange County, Virginia, at the southern
terminus of Mill Street, shown and described as Lot #2 containing 0.4054 acres,
more or less; Lot #3 containing 0.917 acres, more or less; and Lot #4 containing
0.6293 acres, more or less, as shown on a plat of survey thereof by Stearns L.
Coleman, dated December 17, 1990, and described in Appendix 1 to the Operating
Agreement (the "Mill Street Facility"). Said Mill Street Facility being adjacent
to the Grain Facility which was reclassified as a Managed Asset by a
Reclassification Agreement, effective as of September 1, 1991; and
<PAGE>

     WHEREAS, the parties desire that the Operating Agreement, as amended,
continue in full force and effect in accordance with its terms in all other
respects.

                                   AGREEMENT
                                   ---------

     NOW, THEREFORE, in consideration of the mutual obligations and covenants
contained herein, Orange-Madison and Southern States agree as follows:

     1.   The Operating Agreement is amended to reclassify the Mill Street
Facility as a Managed Asset to be managed by Southern States in accordance with
the Operating Agreement, effective May 1, 1994.

     IN WITNESS WHEREOF, the parties hereof have caused their duly authorized
representatives to execute this Agreement on the day and year first above
written.

                                  SOUTHERN STATES COOPERATIVE,
                                   INCORPORATED

(Corporate Seal)

                                  By:   /s/ John Hawkins
                                     -------------------------------------
                                   Its: Sr. Vice President & CFO
                                       -----------------------------------

                                  ORANGE-MADISON COOPERATIVE FARM
                                  SERVICE, INC.

(Corporate Seal)

                                  By:   /s/
                                     -------------------------------------
                                  Its:  Board Chairman
                                      ------------------------------------

                                      -2-
<PAGE>

               SIXTH AMENDMENT TO MANAGEMENT/OPERATING AGREEMENT


     THIS AGREEMENT is made as of this 2nd day of March, 1995, by and between
ORANGE-MADISON COOPERATIVE FARM SERVICE, INC. ("Orange-Madison"), a nonstock
corporation organized pursuant to the Virginia Agricultural Cooperative
Association Act, and SOUTHERN STATES COOPERATIVE, INC. ("Southern States"), a
corporation organized pursuant to the Virginia Agricultural Cooperative
Association Act.

     WHEREAS, Orange-Madison and Southern States are parties to a certain
Management/Operating Agreement, dated March 1, 1991, as amended in September
1991, November 1992, April 1993, February 1994, and May 1994 (the "Operating
Agreement"), through which Southern States renders management and related
services with respect to the Managed Assets and provides all Working Capital
Requirements in connection with the Business and Managed Assets; and

     WHEREAS, the Operating Agreement and the Amendment to Management/Operating
Agreement, dated November 20, 1992, limit and restrict funds required for
retirement of Orange-Madison patron equity from Working Capital Requirements;
and

     WHEREAS, the parties desire to amend the provisions of the Operating
Agreement to permit retirement of Orange-Madison patron equity in order to
settle estates (without limiting the aggregate maximum of such retirements to
settle patron estates); and

     WHEREAS, the parties desire that the Operating Agreement, as amended,
continue in full force and effect in accordance with its terms in all other
respects.
<PAGE>

                                   AGREEMENT
                                   ---------

     NOW, THEREFORE, in consideration of the mutual obligations and covenants
contained herein, Orange-Madison and Southern States agree as follows:

     1.   The $30,000 limitation on the retirement of Orange-Madison patron
equity to settle estates is removed. (Said $30,000 limitation was set forth in
the Amendment to Management/Operating Agreement, dated November 20, 1992.)

     2.   Section 1(u) of the Operating Agreement is amended to add the
following clause to the end of the section: ". . . except for redemptions to
settle estates of deceased patrons."

          IN WITNESS WHEREOF, the parties hereof have caused their duly
authorized representatives to execute this Agreement on the day and year first
above written.

                                  SOUTHERN STATES COOPERATIVE,
                                   INCORPORATED

(Corporate Seal)
                                  By:   /s/ John Hawkins
                                     --------------------------------------
                                  Its:  Sr. Vice President & CFO
                                      -------------------------------------

                                  ORANGE-MADISON COOPERATIVE FARM
                                  SERVICE, INC.

(Corporate Seal)
                                  By:   /s/
                                     --------------------------------------
                                  Its:  Board Chairman
                                      -------------------------------------

                                      -2-