SALE AND LICENSING AGREEMENT

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

                   (FOR CERTAIN TECHNOLOGY IN CONNECTION WITH

                 ANIMAL FEED, FERTILIZER, AND RELATED PRODUCTS)



This Sale and Licensing  Agreement  (the  "Agreement")  is made  effective as of

March 31, 2003 (the  "Effective  Date") by and between  AGWAY,  INC., a Delaware

corporation  with  offices  at 333  Butternut  Drive,  De Witt,  New York  13214

("Agway"), and PLANET POLYMER TECHNOLOGIES,  INC., a California corporation with

offices  at 9985  Businesspark  Avenue,  Suite A, San  Diego,  California  92131

("Planet").



         1.       BACKGROUND OF THE TRANSACTION.



                  a. Agway  originally  licensed  from  Planet,  pursuant to the

November 12, 1998 License Agreement between Planet and Agway Consumer  Products,

Inc. (the "License Agreement"),  certain technology owned by Planet (the "Planet

Technology"),  including  the  Patent  Rights  and the  Animal  Feed  Technology

(defined below). Agway Consumer Products, Inc. subsequently assigned the License

Agreement, including all of its rights, duties, privileges and obligations under

the License Agreement, to Agway as of March 16, 1999.



                  b. Agway and Planet subsequently  entered into a March 1, 2000

agreement entitled  "Sub-Agreement to License Agreement (Animal Feed)" (referred

to in this  Agreement as the "Animal Feed  Sub-Agreement")  that defines a Sales

Royalty as  consideration  for the grant of certain  licenses,  a Minimum Annual

Royalty as consideration for the exclusivity of such licenses, and related terms

and conditions in connection with Agway's license under the License Agreement to

use certain of the Planet Technology to create and sell Products.



                  c. Agway also licensed from Planet, pursuant to the August 16,

1999 license  agreement  between  Planet and Agway Consumer  Products,  Inc., as

amended  August  31,  1999,  (the  "Fertilizer  License   Agreement"),   certain

Fertilizer Technology (defined below) owned by Planet.



                  d. Planet,  Agway, Inc. and Agway Holdings,  Inc. subsequently

entered into a letter agreement dated November 14, 2000 (the "Letter Agreement")

for,  inter alia,  (i) the sale,  assignment  and transfer by Planet to Agway of

certain patents and patent  applications  referred to in Exhibit A to the Letter

Agreement (collectively the patents and patent applications to be sold, assigned

and transferred by Planet to Agway pursuant to the Letter Agreement are referred

to as the  "Patent  Rights"  and  are  listed  in  Exhibit  A  attached  to this

Agreement),  including  the animal feed  related  Patent  Rights  referred to in

Exhibit B attached to this  Agreement (the "Animal Feed Patent  Rights"),  for a

price of $250,000 cash at closing and  continuation of royalty payments equal to

the payments that Planet would otherwise be entitled to receive  pursuant to the

License  Agreement;  and (ii) the grant to Planet of an irrevocable,  exclusive,

worldwide,  royalty  free  license to use and  commercially  exploit  all rights

related  to the Patent  Rights  for all uses  other  than food and  agricultural

initiatives, in consideration of the payment of $150,000 by Planet to Agway.





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                  e. The Letter Agreement  required that the sale and assignment

be  consummated  by Planet's  delivery to Agway by November 17, 2000 (or as soon

thereafter as reasonably  practicable)  of (i) patent  assignments  in usual and

customary  form,  together  with (ii) such other  documents and  instruments  of

conveyance as Agway deemed reasonably necessary and appropriate,  including sale

agreements evidencing the transaction  contemplated by the Letter Agreement that

would  include  such   representations,   warranties  and  covenants  (including

indemnification  of Agway by Planet) as are usual and customary of  transactions

of the type contemplated by the Letter Agreement.



                  f. On or about  November  19,  2000,  Agway paid  $250,000  to

Planet for the Patent  Rights and Planet  paid  $150,000 to Agway for the Planet

License (referred to above and further defined below).



         2. PURPOSE. This Agreement is one of the "sale agreements" contemplated

by the Letter Agreement for the sale,  assignment and transfer of certain of the

Patent Rights by Planet to Agway.  Specifically,  this  Agreement  addresses the

sale,  assignment  and  transfer of the Animal Feed Patent  Rights;  licenses to

Agway certain  technology and "know-how" of Planet related to the use of certain

of the Patent Rights in connection with animal feed and fertilizer  products and

related products in Agway's "Field of Business" (as defined below);  defines the

royalty  rights in favor of Planet;  confirms  the  "license-back"  to Planet by

Agway of the  right to use  certain  of the  Patent  Rights in  connection  with

products  outside of Agway's Field of Business;  and includes  related terms and

conditions.  This  Agreement  contains  certain  terms and  conditions  that the

parties have negotiated  since executing the Letter Agreement that are different

than  certain of the terms and  conditions  of, or  contemplated  by, the Letter

Agreement.



         3.  DEFINITIONS.  In  addition  to the terms  defined  throughout  this

Agreement, the following terms as used in this Agreement are defined as follows:



             a.  "Agway's   Field  of  Business"  shall  mean  the  development,

production,  sale,  distribution  and/or marketing of (i) animal feeds and other

products intended for animal consumption; (ii) all fertilizer,  agronomy, crops,

turf (e.g.,  golf courses and commercial lawn care) and lawn and garden nutrient

products; and (iii) any other products as may be mutually agreed upon in writing

by Agway and Planet.



             b. "Products" shall  mean  coated  controlled release urea products

developed, produced, distributed or marketed in or for Agway's Field of Business

that are made from,  incorporate,  or utilize in any way the Animal  Feed Patent

Rights and/or the Licensed Technology.



             c. "Animal Feed Technology" shall include any technology  developed

or acquired by Planet before or after the  Effective  Date that (i) is necessary

or useful to develop and  commercialize  Products  that are animal  feeds and/or

other products intended for animal  consumption;  and (ii) has not been assigned

to Agway or agreed to be assigned to Agway pursuant to this Agreement. By way of

example  and not by way of  limitation,  "technology"  as used in the  preceding

sentence  shall  include,  but not be limited to, all know-how;  trade  secrets;

inventions;  data; processes;  techniques;  procedures;  compositions;  devices;





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methods; formulas;  protocols;  information,  including, without limitation, all

chemical,  biochemical,  toxicological,  and  scientific  research  information;

compositions  of  matter;   chemical  complexes,   including  improved  chemical

complexes;  association compounds;  blends,  mixtures or compositions of coating

materials;  polymer  materials;  and new products or processes relating thereto;

whether or not patentable and whether developed by Planet alone or with Agway or

a third party,  including,  but not limited to, carnuba wax/stearic acid coating

technology.



             d.  "Fertilizer Technology" shall include any technology  developed

or acquired by Planet before or after the  Effective  Date that (i) is necessary

or useful to develop and  commercialize  Products that are fertilizer  products,

agronomy, crops, turf (e.g., golf courses and commercial lawn care) and lawn and

garden nutrient  products,  and (ii) has not been assigned to Agway or agreed to

be  assigned  to  Agway.  By  way of  example  and  not  by  way of  limitation,

"technology" as used in the preceding sentence shall include, but not be limited

to, all  know-how;  trade  secrets;  inventions;  data;  processes;  techniques;

procedures;  compositions;  devices; methods; formulas; protocols;  information,

including,  without limitation, all chemical,  biochemical,  toxicological,  and

scientific  research  information;  compositions of matter;  chemical complexes,

including improved chemical complexes;  association compounds;  blends, mixtures

or compositions of coating materials; polymer and non-polymer materials; and new

products or processes  relating  thereto;  whether or not patentable and whether

developed  by Planet alone or with Agway or a third  party,  including,  but not

limited to, carnuba wax/stearic acid coating technology.



             e.  "Licensed  Technology"  shall  mean the Animal Feed  Technology

and the Fertilizer Technology.



             f. "Net Sales and  Revenues"  shall mean  Agway's  gross  sales and

revenues  from (i)  Products,  less  adjustments  for  returns,  allowances  and

discounts,  as recognized  under generally  accepted  accounting  principles and

under methods  historically  used and consistently  applied by Agway for its CPG

Nutrients  business or any of its successors;  and (ii) sublicenses of, or other

rights  granted  with  respect  to, the Animal  Feed  Patent  Rights  and/or the

Licensed Technology to third parties. Proceeds and/or revenues received from the

assignment,  sale or other transfer of this  Agreement  shall not be included in

Net Sales and Revenues,  so long as the  transferee in Agway's  transfer of this

Agreement expressly assumes all of Agway's obligations under this Agreement.



             g. "Pre-Tax  Earnings/(Loss) Before Sales Royalty" shall  mean  net

income or loss from Products  Before Sales Royalty and any provision for federal

income tax liability determined in accordance with generally accepted accounting

principles and with methods  historically used and consistently applied by Agway

for its CPG Nutrients business.



             h. "Full Fiscal Year" shall mean the accounting and reporting cycle

of  Agway,  which  begins  on the  first day of July and ends on the last day of

June.



             i. "Affiliate" shall mean any company that, directly or indirectly,

is  controlled  by or  controls a party to this  Agreement,  or is under  common





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control with a party to this  Agreement.  Ownership of 50% or more of the voting

stock of, or membership interest in a company shall be regarded as control.



              j.   "Final  Clearance"  shall  mean  either a United  States Food

and Drug  Administration  ("FDA")  letter of no objection for the Product or the

coating  currently used for the Product or written approval by the FDA of a Feed

Additive  Petition  submitted by Agway for the Product or the coating  currently

used for the Product.



         4.  ASSIGNMENT OF PATENT RIGHTS.



             a.  Planet  has  executed and  delivered to Agway an  assignment of

certain of the Patent  Rights,  including  the Animal Feed Patent  Rights,  (the

"Assignment")  a copy of which  Assignment  is  attached as Exhibit C; and Agway

confirms that the  Assignment  has been recorded in the United States Patent and

Trademark Office.



             b.  Planet confirms the assignment  of the  patents  listed  in the

Assignment.  Planet shall execute and deliver to Agway further  assignments,  in

substantially  the same form as the  Assignment,  of (i) any  subsequent  patent

applications  derived from current research initiatives related to the Products,

not including  products  related to and/or  incorporating  lysine;  and (ii) any

international patent applications related to the Animal Feed Patent Rights.



             c. Planet will  execute all such  further  assignments  and related

documents, prepared by or for Agway, as may be reasonably necessary to secure to

Agway its ownership of the Animal Feed Patent Rights throughout the world.



             d. The parties  acknowledge  and agree that the  assignment  of the

Animal  Feed  Patent  Rights by Planet  to Agway is final,  and that no  breach,

termination  or expiration of this Agreement  and/or the License,  or failure to

pay  royalties,  shall  invalidate  the  Assignment or cause or give rise to any

claim for any reversion of the Patent Rights to Planet, provided,  however, that

Planet may reacquire  the Animal Feed Patent  Rights  pursuant to Section 10a of

this Agreement.



            e. Planet hereby fully and forever releases and waives any agreement

by Agway to grant to Planet an option to repurchase the Patent  Rights.  Nothing

contained  in the  previous  sentence  shall  be  interpreted  or  construed  as

indicating  that the parties ever entered into an agreement  granting  Planet an

option to repurchase the Patent Rights.



         5.  LICENSE OF THE LICENSED TECHNOLOGY.



             a.  Subject  to  the  terms  and  conditions  of  this   Agreement,

including  the payment of  royalties  to Planet as  provided in this  Agreement,

Planet hereby grants to Agway an exclusive,  perpetual,  irrevocable,  worldwide

license  (the  "License")  to use  any  and all of the  Licensed  Technology  to

develop,  have developed,  make, have made, use, offer to sell and sell Products

in  Agway's  Field  of  Business.  The  License  includes  the  right  to  grant

sublicenses to third parties to use the Licensed Technology to make, use or sell

Products in Agway's  Field of  Business.  Agway shall  notify any  sub-licensees

under this paragraph of all rights and obligations of Agway under this Agreement

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