<PAGE>
 
                                   WAIVER TO
                   POST-PETITION LOAN AND GUARANTY AGREEMENT


          WAIVER TO POST-PETITION LOAN AND GUARANTY AGREEMENT, dated effective
as of August 12, 1997 (this "Waiver"), among MONTGOMERY WARD & CO.,
                             ------
INCORPORATED, an Illinois corporation and a debtor and debtor in possession
("Borrower Representative"), MONTGOMERY WARD HOLDING CORP., a Delaware
  -----------------------
corporation and a debtor and debtor in possession ("Parent" or "Guarantor"), as
                                                                ---------
Guarantor, the other Guarantors signatory hereto (together with Parent and the
Borrower Representative, the "Credit Parties"), GENERAL ELECTRIC CAPITAL
                              --------------
CORPORATION, a New York corporation (in its individual capacity, "GE Capital"),
                                                                  ----------  
for itself, as Lender, and as Agent (the "Agent") for Lenders, and the other
                                          -----
Lenders signatory hereto.

                                   RECITALS
                                   --------

          WHEREAS, the Borrower Representative, the Guarantors, the Lenders and
the Agent are parties to that certain Post-Petition Loan and Guaranty Agreement,
dated as of July 8, 1997 (as amended by the terms of the Waiver and First
Amendment to Post-Petition Loan and Guaranty Agreement and as further amended,
supplemented or modified, the "Loan Agreement"). The Borrower Representative
                               --------------                                
and the Guarantors have requested that the Lenders agree to waive, for the
limited purposes set forth herein, certain provisions of the Loan Agreement. The
Borrower Representative, the Guarantors, the Lenders and the Agent have agreed,
upon the terms and conditions specified herein, to waive such provisions as
hereinafter set forth.

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

          SECTION 1.  Defined Terms and Interpretation.
                      -------------------------------- 

          (a)  The capitalized terms used herein which are defined in the Loan
Agreement, shall have the respective meanings assigned to them in the Loan
Agreement except as otherwise provided herein or unless the context otherwise
requires.

          (b)  Section headings in this Waiver are included herein for
convenience of reference only and shall not constitute a part of this Waiver for
any other purpose.

          (c)  No provision in this Waiver shall be interpreted or construed
against any Person because that Person or its legal representative drafted such
provision

          SECTION 2.  Waiver In Connection With Liquidation Sales. As of the
                      -------------------------------------------
date of this Waiver, Lenders hereby agree to waive the provisions of Section 6.3
of the Loan Agreement, for the limited purpose and solely in connection with,
the granting by Lechmere or the Borrower Representative of any Lien in favor of
any Person acting as a liquidation 

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agent of such Credit Party in connection with the liquidation or sale of
substantially all the assets of Lechmere or the assets and properties used in
connection with the business conducted by Borrower Representative under the name
"Electric Avenue and More" pursuant to a valid and enforceable order of the
Bankruptcy Court; provided that any such Lien shall not extend to any assets or
properties other than those being liquidated or sold and shall only secure the
fees and obligations owed to such Person by such Credit Party.

          SECTION 3.  Representations and Warranties True; No Default or Event
                      --------------------------------------------------------
of Default. The Credit Parties represent and warrant to the Agent and the
----------
Lenders that on the date of and after giving effect to the execution and
delivery of this Waiver (a) the representations and warranties set forth in the
Loan Agreement are true and correct in all material respects on the date hereof
as though made on and as of such date (unless any such representation or
warranty expressly relates to an earlier date); and (b) neither any Default nor
Event of Default has occurred and is continuing as of the date hereof.

          SECTION 4.  Reference to this Waiver and Effect on Loan Documents.
                      ----------------------------------------------------- 

          (a)  From and after the date hereof, each reference in the Loan
Agreement (including in any Exhibit thereto) to "this Agreement," "hereunder,"
"herein" or words of like import shall mean and be a reference to the Loan
Agreement, as affected hereby.

          (b)  From and after the date of this Waiver, each reference in the
Loan Documents to the Loan Agreement shall mean and be a reference to the Loan
Agreement, as affected hereby.

          (c)  The Loan Agreement, the Notes and the other Loan Documents, as
affected hereby, shall remain in full force and effect and the Loan Documents
are hereby ratified and confirmed in all respects.

          (d)  The effectiveness of the waiver evidenced by Section 2 hereof,
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the Lenders or the Agent under the Loan Agreement, or
constitute a waiver of any other provision of the Loan Agreement or any other
Loan Document.

          SECTION 5.  Governing Law; Binding Effect. In all respects, including
                      -----------------------------
all matters of construction, validity and performance, this Waiver shall be
governed by, and construed and enforced in accordance with, the internal laws of
the State of New York (without regard to conflict of law provisions) and any
applicable laws of the United States of America, and shall be binding upon the
parties hereto and their respective successors and permitted assigns.

          SECTION 6.  Execution in Counterparts. This Waiver may be executed in
                      -------------------------
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

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<PAGE>
 
          SECTION 7.  Consent of Guarantors. By their execution and delivery of
                      ---------------------
this Waiver, each Guarantor hereby consents to all of the terms and provisions
of this Waiver and ratifies and confirms that each of the Loan Documents to
which it is a party remains in full force and effect and enforceable in
accordance with their respective terms.

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<PAGE>
 
     IN WITNESS WHEREOF, this Waiver has been duly executed as of the date first
written above.


                                        BORROWER:

                                        MONTGOMERY WARD & CO., 
                                        INCORPORATED
 
                                   By:  /s/ Douglas V. Gathany
                                       ---------------------------------------
                                        Name:   Douglas V. Gathany
                                        Title: Treasurer
 
                                          GUARANTORS:
 
                                          LECHMERE, INC.
 
                                   By:  /s/ Douglas V. Gathany
                                       ---------------------------------------
                                        Name:   Douglas V. Gathany
                                        Title: Treasurer
 
                                          AMERICAN DELIVERY SERVICE COMPANY
 
                                   By:  /s/ Philip D.Delk
                                       ---------------------------------------
                                        Name:   Philip D. Delk
                                        Title: Vice President, Secretary and
                                               Assistant Treasurer
 
                                          CONTINENTAL TRANSPORTATION, INC.
 
                                   By:  /s/ Philip D. Delk
                                       ---------------------------------------
                                        Name:   Philip D. Delk
                                        Title: Vice President and Assistant
                                               Secretary
 
                                          JRI DISTRIBUTING, INC.
                                          STANDARD T CHEMICAL COMPANY, INC.
                                          WFL REALTY, INC.
 
                                   By:  /s/ Philip D.Delk
                                       ---------------------------------------
                                        Name:   Philip D. Delk
                                        Title: Vice President and Secretary
 
                                          M-W PRESTRESS, INC.
                                          MW DIRECT GENERAL, INC.

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                                 MW DIRECT LIMITED, INC.                       
                                                                               
                          By:  /s/ Philip D.Delk                               
                              ---------------------------------------          
                               Name:   Philip D. Delk                          
                               Title: Secretary                                
                                                                               
                                 MONTGOMERY WARD                               
                                 INTERNATIONAL, INC.                           
                                 MPI, INC.                                     
                                                                               
                          By:  /s/ Philip D.Delk                               
                              ---------------------------------------          
                               Name:   Philip D. Delk                          
                               Title: Assistant Secretary                      
                                                                               
                                 BARRETWARD PROPERTIES CO., INC.               
                                 BRANDYWINE DC, INC.                           
                                 BRANDYWINE PROPERTIES, INC.                   
                                 BRETTWARD PROPERTIES CO., INC.                
                                 FIRST MONT CORPORATION                         
                                 FOURTH WYCOMBE PROPERTIES, INC.          
                                 GABEWARD PROPERTIES CORPORATION          
                                 GARDEN GROVE DEVELOPMENT                 
                                   CORPORATION HUGA REALTY INC.             
                                 JOSHWARD PROPERTIES CORPORATION          
                                 LECHMERE DEVELOPMENT CORPORATION         
                                 M-W FAIRFAX PROPERTIES, INC.             
                                 M-W PROPERTIES CORPORATION               
                                 M-W RESTAURANTS REALTY CORPORATION       
                                 MARCOR HOUSING SYSTEMS, INC.             
                                 MARYWARD PROPERTIES CORPORATION          
                                 MF NEVADA INVESTMENTS, INC.         
                                 MICHAELWARD PROPERTIES CO., INC.         
                                 MONTGOMERY WARD DEVELOPMENT CORPORATION  
                                 MONTGOMERY WARD LAND CORPORATION         
                                 MONTGOMERY WARD PROPERTIES CORPORATION

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                                 MONTGOMERY WARD REALTY CORPORATION
                                 MW LAND CORPORATION
                                 NATIONAL HOMEFINDING SERVICE, INC.
                                 998 MONROE CORPORATION                      
                                 PAULWARD PROPERTIES CO., INC.             
                                 ROBERTWARD PROPERTIES CORPORATION         
                                 SACWARD PROPERTIES, INC.                  
                                 SECOND MONT CORPORATION                   
                                 7TH & CARROLL CORPORATION                 
                                 SEVENTH MONT CORPORATION                   
                                 618 CORPORATION
                                 619 CORPORATION
                                 THE 535 CORPORATION
                                 THIRD WYCOMBE PROPERTIES, INC.
                                 2825 DEVELOPMENT CORPORATION
                                 2825 REALTY CORPORATION
                                 UNIVERSITY AVENUE MARKETPLACE, INC.
                                 WFL DEVELOPMENT CORPORATION
                                 WYCOMBE PROPERTIES, INC.
 
                            By: /s/ G. Tad Morgan
                                ------------------------------------------
                                Name:   G. Tad Morgan
                                Title: Vice President and Secretary
 
                                  GOODE FURNITURE COMPANIES, INC.
                                  MONTGOMERY WARD SECURITIES, INC.
                                  R M P DEVELOPMENT CORPORATION
 
                            By: /s/ G. Tad Morgan
                                -----------------------------------------
                                Name:   G. Tad Morgan
                                Title: Secretary
 
                                  MONTGOMERY WARD HOLDING CORP.
                            By: /s/ G. Tad Morgan
                                -----------------------------------------
                                Name:   G. Tad Morgan
                                Title: Assistant Secretary
 

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<PAGE>
 
                                  JEFFERSON STORES, INC.
 
                            By: /s/ G. Tad Morgan
                                ------------------------------------   
                                Name:   G. Tad Morgan
                                Title: Vice President and Treasurer
 
                                  AGENT AND AS LENDER
 
                                  GENERAL ELECTRIC CAPITAL      
                                  CORPORATION                  
 
                            By: /s/ James C. Ungari
                                ------------------------------------   
                                Name:   James C. Ungari
                                Title: Its Authorized Signatory
 



                                  LENDERS:

                                  THE CHASE MANHATTAN BANK CORPORATION
 
                            By: /s/ William Repko
                                ------------------------------------   
                                Name:   William Repko
                                Title: Managing Director
 
                                  BANKAMERICA BUSINESS CREDIT, INC.
 
                            By: /s/ Thomas Sullivan
                                ------------------------------------   
                                Name:   Thomas Sullivan
                                Title: Vice President
 
 
                                  CITIBANK, N.A.
 
                            By: /s/ Claudia Slacik
                                ------------------------------------   
                                Name:   Claudia Slacik
                                Title: Vice President
 
 
                                  CITICORP USA, INC.
 
                            By: /s/ John Abate
                                ------------------------------------   
                                Name:   John Abate
                                Title: Vice President
 
 
 

                                       7
<PAGE>
 
                                  GBFC, INC.
 
                            By: /s/ Michael L. Pizette
                                ----------------------------------
                                Name:  Michael L. Pizette 
                                Title: Vice President  
 
 
                                  GOLDMAN SACHS CREDIT 
                                  PARTNERS L.P.
 

                            By: /s/ Stephen McGuiness
                                ----------------------------------
                                Name:  Stephen McGuiness  
                                Title: Vice President 
 
 
                                  HELLER FINANCIAL, INC.
 

                            By: /s/ John Buff
                                ----------------------------------
                                Name:  John Buff
                                Title: Vice President




                                  JACKSON NATIONAL LIFE
                                  INSURANCE COMPANY
                                        By: PPM FINANCE, INC.
                                        Its Attorney-in-fact


                            By: /s/ Jeffrey Podwika
                                ----------------------------------
                                Name:  Jeffrey Podwika
                                Title: Vice President

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