WAIVER UNDER

                                CREDIT AGREEMENT
                                ----------------


     THIS  WAIVER  (this  "Waiver"),  dated as of May 13,  2002,  to the  Credit
                           -------
Agreement  referred to below among  Agway,  Inc., a Delaware  corporation,  Feed
Commodities  International LLC, a Delaware limited liability  company,  Brubaker
Agronomic  Consulting Service LLC, a Delaware limited liability  company,  Agway
General  Agency,  Inc.,  a New York  corporation,  Country  Best  Adams,  LLC, a
Delaware limited liability company, Country Best-DeBerry LLC, a Delaware limited
liability  company,  Agway Energy  Products  LLC, a Delaware  limited  liability
company ("AEP"),  Agway Energy Services-PA,  Inc., a Delaware  corporation,  and
         -----
Agway Energy Services, Inc., a Delaware corporation, (the foregoing entities are
sometimes collectively referred to herein as the "Borrowers" and individually as
                                                  ---------
a  "Borrower");  the other Credit Parties  signatory  hereto;  GENERAL  ELECTRIC
    --------
CAPITAL CORPORATION,  a Delaware  corporation (in its individual  capacity,  "GE
                                                                              --
Capital"),  for  itself,  as  Lender,  and as Agent for  Lenders,  and the other
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Lenders signatory hereto from time to time.

                               W I T N E S S E T H
                               - - - - - - - - - -

     WHEREAS, Borrowers,  the other Credit Parties signatory thereto, Agent, and
Lenders signatory thereto are parties to that certain Credit Agreement, dated as
of March 28, 2001 (including all annexes, exhibits and schedules thereto, and as
amended,  restated,  supplemented  or otherwise  modified from time to time, the
"Credit Agreement"); and
 ----------------

     WHEREAS, Agent  and Lenders  have agreed to waive certain violations of the
Credit Agreement,  in the manner, and on the terms and conditions,  provided for
herein.

     NOW THEREFORE, in  consideration  of  the  premises  and for other good and
valuable  consideration,  the  receipt,  adequacy and  sufficiency  of which are
hereby acknowledged, the parties hereto hereby agree as follows:

        1. Definitions.     Capitalized terms not otherwise defined herein shall
           -----------
have the meanings ascribed to them in the Credit Agreement or Annex A thereto.
                                                              -------

        2. Waiver.          Agent  and  Lenders  hereby  waive  as of the Waiver
           ------
Effective  Date (as  hereinafter  defined) all Events of Default  arising solely
from  Borrowers'  failure to comply  with  Section  (d) of Annex G of the Credit
Agreement by their failure to meet the Minimum EBITDA (Agriculture) threshold in
the amount of  $(500,000)  for the Fiscal  Quarter  ended  March 31, 2002 by the
amount of $1,800,000.
<PAGE>


        3. Representations and Warranties.  To induce Agent and Lenders to enter
           ------------------------------
into this Waiver, Borrowers make the following representations and warranties to
Agent and Lenders:

          (a)    The execution, delivery  and  performance  of  this  Waiver  by
Borrowers: (a) are within each Borrower's organizational  power; (b)  have  been
duly authorized by all necessary or proper corporate and shareholder action; (c)
do not  contravene  any  provision  of  any  Borrower's  charter  or  bylaws  or
equivalent  organizational  documents; (d) do not violate any law or regulation,
or any  order or  decree  of any  court or  Governmental  Authority;  (e) do not
conflict with or result in the breach or  termination  of,  constitute a default
under or accelerate or permit the  acceleration of any performance  required by,
any indenture,  mortgage, deed of trust, lease, agreement or other instrument to
which any Borrower is a party or by which any Borrower or any of its property is
bound;  (f) do not result in the creation or  imposition of any Lien upon any of
the property of any Borrower  other than those in favor of Agent pursuant to the
Loan  Documents; and  (g)  do  not  require  the  consent  or  approval  of  any
Governmental Authority or any other Person.

          (b)    This Waiver  has  been  duly  executed  and  delivered by or on
behalf of Borrowers.

          (c)    This Waiver  constitutes  a legal, valid and binding obligation
of each Borrower and each of the other Credit Parties party thereto, enforceable
against  each in  accordance  with its terms,  except as  enforceability  may be
limited by  applicable  bankruptcy,  insolvency,  reorganization,  moratorium or
similar laws  affecting  creditors'  rights  generally and by general  equitable
principles (whether enforcement is sought by proceedings in equity or at law).

          (d)    No  Default (other  than  those  waived  pursuant  hereto)  has
occurred and is continuing after giving effect to this Waiver.

          (e)    No action, claim, lawsuit, demand, investigation or  proceeding
is now pending or, to the knowledge of any Credit Party,  threatened against any
Credit  Party,  at law,  in  equity  or  otherwise,  before  any  court,  board,
commission,  agency or instrumentality of any Governmental  Authority, or before
any arbitrator or panel of arbitrators,  (i) which challenges any Borrower's or,
to the extent applicable,  any other Credit Party's right,  power, or competence
to enter into this Waiver or perform any of their respective  obligations  under
this Waiver, the Credit Agreement or any other Loan Document, or the validity or
enforceability  of this Waiver,  the Credit Agreement or any other Loan Document
or any action  taken under this Waiver,  the Credit  Agreement or any other Loan
Document or (ii) except for items on Disclosure Schedule (3.13) or notifications
                                     --------------------------
sent to Agent  since  the  Closing  Date,  which  if  determined  adversely,  is
reasonably  likely to have or result in a  Material  Adverse  Effect  Except for
items on Disclosure  Schedule  (3.13) or  notifications  sent to Agent since the
         ----------------------------

                                       2
<PAGE>

Closing Date, to the knowledge of each Borrower, there does not exist a state of
facts which is reasonably likely to give rise to such proceedings.


          (f)    The representations  and  warranties  of  each Borrower and the
other  Credit  Parties  contained  in the Credit  Agreement  and each other Loan
Document  shall be true and correct on and as of the Waiver  Effective  Date (as
hereinafter  defined)  with  the  same  effect  as if such  representations  and
warranties  had  been  made  on  and as of  such  date,  except  that  any  such
representation  or warranty  which is expressly made only as of a specified date
need be true only as of such date.

        4. No Other Waivers. Except  as  expressly  waived  herein,  the  Credit
           ----------------
Agreement and the other Loan Documents shall be unmodified and shall continue to
be in full force and effect in accordance with their terms. In addition,  except
as specifically provided herein, this Waiver shall not be deemed a waiver of any
term or condition of any Loan  Document and shall not be deemed to prejudice any
right or rights which Agent, for itself and Lenders, may now have or may have in
the  future  under  or in  connection  with  any  Loan  Document  or  any of the
instruments or agreements  referred to therein,  as the same may be amended from
time to time.

        5. Outstanding Indebtedness; Waiver of Claims.  Each  Borrower  and  the
           ------------------------------------------
other Credit Parties hereby  acknowledges and agrees that as of May 13, 2002 the
aggregate  outstanding  principal amount of the Revolving Loan is $38,356,315.14
and that such  principal  amount is payable  pursuant  to the  Credit  Agreement
without  defense,  offset,  withholding,  counterclaim or deduction of any kind.
Borrowers  and each other  Credit  Party hereby  waives,  releases,  remises and
forever discharges Agent, Lenders and each other Indemnified Person from any and
all claims, suits, actions,  investigations,  proceedings or demands arising out
of or in connection with the Credit Agreement (collectively,  "Claims"), whether
                                                               ------
based in contract, tort, implied or express warranty, strict liability, criminal
or civil statute or common law of any kind or character, known or unknown, which
any Borrower or any other Credit Party ever had, now has or might hereafter have
against Agent or Lenders which relates,  directly or indirectly,  to any acts or
omissions of Agent,  Lenders or any other Indemnified  Person on or prior to the
Waiver  Effective  Date,  provided,  that no Borrower nor any other Credit Party
                          --------
waives any Claim  solely to the extent such Claim  relates to the Agent's or any
Lender's gross negligence or willful misconduct.

        6. Expenses.  Each  Borrower  and  the  other   Credit   Parties  hereby
           --------
reconfirms its respective  obligations  pursuant to Sections 1.9 and 11.3 of the
                                                    ------------     ----
Credit Agreement and pursuant to the GE Capital Fee Letter, to pay and reimburse
Agent, for itself and Lenders, for all reasonable costs and expenses (including,
without limitation,  reasonable fees of counsel) incurred in connection with the
negotiation,  preparation,  execution  and delivery of this Waiver and all other
documents and instruments delivered in connection herewith.


                                       3
<PAGE>


        7. Effectiveness. This  Waiver shall become effective as of May 13, 2002
           -------------
(the "Waiver Effective Date") only  upon satisfaction in full  in  the  judgment
      ---------------------
of Agent of each of the following conditions:

          (a)  Waiver.  Agent shall have  received  six (6) original  copies  of
               ------
this Waiver duly  executed  and  delivered  by  Agent, the Requisite Lenders and
Borrowers.

          (b)  Payment of Expenses. Borrowers  shall  have  paid  to  Agent  all
               -------------------
costs, fees and expenses owing in connection with this Waiver and the other Loan
Documents and due to Agent (including, without limitation, reasonable legal fees
and expenses).

          (c)  Representations   and   Warranties.   The    representations  and
               ----------------------------------
warranties of or on behalf  of the  Credit Parties in this Waiver shall be shall
be true and correct on and as of the Waiver Effective Date.

        8. GOVERNING LAW. THIS WAIVER  SHALL  BE GOVERNED BY, AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

        9. Counterparts. This Waiver may be executed by  the  parties  hereto on
           ------------
any number of separate  counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.


                           [SIGNATURE PAGES FOLLOW]


                                       4
<PAGE>

       IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be duly
executed and delivered as of the day and year first above written.

                              BORROWERS

                              AGWAY, INC.
                              FEED COMMODITIES INTERNATIONAL LLC
                              BRUBAKER AGRONOMIC CONSULTING
                                  SERVICE LLC
                              COUNTRY BEST-DEBERRY LLC
                              AGWAY ENERGY PRODUCTS LLC
                              AGWAY ENERGY SERVICES-PA, INC.
                              AGWAY ENERGY SERVICES, INC.
                              COUNTRY BEST ADAMS, LLC



                              By:  /s/ Karen J. Ohliger
                                   ----------------------
                              Name:    Karen J. Ohliger
                                   ----------------------
                              Title:   Treasurer
                                   ----------------------


                              AGWAY GENERAL AGENCY, INC.


                              By:  /s/ Karen J. Ohliger
                                   ----------------------
                              Name:    Karen J. Ohliger
                                   ----------------------
                              Title:   Asst. Treasurer
                                   ----------------------

                              LENDERS

                              COBANK, ACB


                              By:  /s/ Kenneth E. Hide
                                   ----------------------
                              Name:    Kenneth E. Hide
                                   ----------------------
                              Title:   Vice-President
                                   ----------------------


<PAGE>

                              COOPERATIEVE CENTRALE RAIFFEISEN-
                              BOERENLEEN BANK B.A., "Rabobank Nederland"
                              New York Branch


                              By:
                                   ----------------------
                              Name:
                                   ----------------------
                              Title:
                                   ----------------------

                              GMAC BUSINESS CREDIT, LLC


                              By:
                                   ----------------------
                              Name:
                                   ----------------------
                              Title:
                                   ----------------------

                              GENERAL ELECTRIC CAPITAL CORPORATION,
                              as Agent and Lender


                              By:  /s/ Pieter H. Smit
                                   ----------------------
                              Name:    Pieter H. Smit
                                   ----------------------
                              Title:  Its Duty Authorized Signatory